CLEVELAND—China Tire Holdings Ltd., China's second largest tire maker, has filed a racketeering and libel lawsuit against Goodyear, seeking $3.5 billion in actual and punitive damages related to Goodyear's dealings in 1994 to establish a joint venture in Dalian, China. The suit alleges Goodyear officials used favors to entice factory and city officials in Dalian to renege on a manufacturing and distribution agreement with China Tire Holdings, and instead enter into a joint venture pact with Goodyear.
The suit, filed Dec. 27 in Cleveland, is China Tire Holdings' second attempt to extract compensation for the lost business. The firm filed a similar suit four years ago in California, but it was dismissed earlier this year by a judge for jurisdictional reasons and lack of evidence.
CTH claims to have new evidence now. Goodyear called the allegations "baseless."