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BIGIO v. COCA-COLA COMPANY

February 3, 2005.

RAPHAEL BIGIO, BAHIA BIGIO, FERIAL SALMA BIGIO, and B. BIGIO & CO., Plaintiffs,
v.
THE COCA-COLA COMPANY and THE COCA-COLA EXPORT CORPORATION, Defendants.



The opinion of the court was delivered by: BARBARA JONES, District Judge

Opinion

This case arises out of a seizure and confiscation of foreign property allegedly in violation of New York State law. The Plaintiffs, Raphael Bigio, Bahia Bigio, Ferial Salma Bigio and B. Bigio & Co. (collectively, "the Bigios") seek damages from the Defendants, The Coca-Cola Company and The Coca-Cola Export Corporation (collectively, "Coca-Cola"), for their conduct in connection with the nationalization of the Bigios' property by the Egyptian government in the early 1960s. Specifically, Plaintiffs seek damages for conversion. Defendants move to dismiss the Complaint on the grounds of: (1) international comity; (2) forum non conveniens; (3) failure to state a claim; (4) failure to join two indispensable parties; (5) and that the claims are time barred. Page 2

BACKGROUND

  The factual history of this action is set forth at length in a previous district court opinion, Bigio v. Coca-Cola Co., 1998 U.S. Dist. LEXIS 8295 (S.D.N.Y. June 5, 1998), dismissing Plaintiffs' complaint because Plaintiffs had not satisfied the prerequisites for jurisdiction under the Alien Tort Claims Act, and because the act of state doctrine barred the court's exercise of jurisdiction despite the parties' diversity of citizenship. The Court of Appeals subsequently affirmed that Plaintiffs had no claims under the Alien Tort Claims Act, but reversed the District Court's holding that the act of state doctrine barred the claims. Finding diversity jurisdiction, the Circuit Court remanded for consideration of whether the principle of international comity barred consideration of the case. Bigio v. Coca-Cola Co., 239 F.3d 440 (2d Cir. 2001). Familiarity with those opinions is assumed, and only a brief summary of the facts appears here.

  Plaintiffs Raphael Bigio, his sister Ferial Salma Bigio, and their mother Bahia Bigio are citizens and residents of Canada. Plaintiff B. Bigio & Co. is a company owned by the Bigio family, organized in Egypt in the early 1930s. Defendants the Coca-Cola Company and the Coca-Cola Export Company are incorporated in the State of Delaware and headquartered in Atlanta, Georgia. The Coca-Cola Export Company is a wholly owned subsidiary of the Coca-Cola Company.

  The property that is the subject of this action consists of Page 3 land and factories located in Heliopolis, Egypt, a suburb of Cairo. The Bigios contend that the Egyptian government under President Gamal Abdel-Nasser sequestered and nationalized their property in 1962 because they were Jewish. The Bigios left Egypt in 1965 without having received compensation.

  Once the Egyptian government seized Plaintiffs' property it transferred ownership to the Misr Insurance Company ("Misr"), a company wholly owned by the Egyptian government. Misr in turn leased the property to the El-Nasr Bottling Company ("ENBC"), another company wholly owned by the Egyptian government.

  In 1977, after the death of President Nasser, the Egyptian government apparently issued an edict revoking the contracts of sale that had effected the transfer of the Bigios' property to Misr. In 1979, purportedly pursuant to this edict, the Egyptian Ministry of Finance issued Decision Number 335, which ordered Misr to return the Bigios' property, along with any rental burden and active occupants, or to forward to the Bigios the proceeds of any sale of the property that might have occurred. However, Misr did not return the property.

  The Bigios brought suit in Egypt in 1980 against Misr, ENBC, and various government agencies. Plaintiffs do not claim that they have ever sued Coca-Cola in Egypt. Coca-Cola asserts that the 1980 claims were dismissed for failure to prosecute. The Plaintiffs do not dispute this. (Declaration of Ahmed Abou Ali, August 19, 1997, Chart A.) Page 4

  Coca-Cola began doing business with the Bigio family in 1938. Coca-Cola leased land from the Bigios for its bottling plants and gradually bought bottle caps and other marketing elements from Bigio factories until the family was dispossessed in 1962. From 1967 to 1979 Coca-Cola was barred from doing business in Egypt because it did business in Israel. After the peace treaty between Egypt and Israel, Coca-Cola reentered the Egyptian market. (Defendants' Answers to Interrogatories at 20.) In 1993, Coca-Cola sought to invest in the privatization of ENBC, the Egyptian beverage company.

  In 1993, ENBC consisted of a number of distribution and warehousing facilities throughout Egypt and thirteen bottling plants, one of which was located on the Bigios' former property. Two subsidiaries of Coca-Cola Export Company invested in ENBC and currently own 42% of the company. (Defendants' Renewed Motion at 8.)

  In February 1994, when Coca-Cola was seeking to buy ENBC, Raphael Bigio contacted Coca-Cola to discuss the Bigios' claims regarding the Heliopolis property. Correspondence and two meetings between the Bigios and the company followed. In July 1995, Coca-Cola advised Mr. Bigio that it would not compensate him. Coca-Cola asserts that its investigation prior to the acquisition led it to conclude that ENBC, which leased the land from Misr Insurance Company, had no liability to the Bigios.

  The plaintiffs filed this lawsuit in the United States Page 5 District Court for the Southern District of New York on April 21, 1997, seeking compensatory and punitive damages for the defendants' allegedly improper conduct in "converting plaintiffs' assets." Their complaint alleged that Coca-Cola engaged in wrongdoing by "acquiring the assets of ENBC, knowing that plaintiffs had been deprived of their rights to the property solely because of their religious faith."

  Judge Martin, in his earlier district court opinion, held that the act of state doctrine applied. The act of state doctrine is an element of abstention doctrine, which refers to a district court's decision not to exercise jurisdiction it has. The Second Circuit examined the abstention issues and disagreed with Judge Martin's holding on the act of state doctrine. Instead, they remanded for this Court to determine whether another abstention doctrine, international comity, applied. Bigio v. Coca-Cola Co., 239 F.3d 440, 451-455 (2d Cir. 2000).

  ...


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