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Court Dismisses Conversion Claim Against Coca-Cola

By Robyn Hagan Cain | Last updated on

The Second Circuit Court of Appeals dismissed a conversion claim against Coca-Cola this week in a dispute over expropriated property.

The appellate court ruled that an Israeli family that lost its land to the Egyptian government during an anti-Jewish campaign failed to state a cause of action against Coca-Cola for wrongful possession of the property.

The Bigio family began purchasing land in Heliopolis, (a Cairo suburb), in 1929. Coca-Cola started leasing land and buildings from the Bigios to establish its first bottling plant in Egypt in the 1940s. The Bigios' manufacturing companies, R.N. Bigio & Co. and B. Bigio & Co., also manufactured various products for Coca-Cola.

Beginning in 1962, the Egyptian government sequestered and then nationalized property belonging to the Bigio family, including the land on which Coca-Cola operated its bottling plant, the Bigios' factory equipment, and the manufacturing companies R.N. Bigio & Co. and B. Bigio & Co.

The Bigios allege that the Egyptian government's sequestration and nationalization of the Bigios' property were the product of "the anti-Jewish policies of its then President Gamal Abdel Nasser." They were later expelled from Egypt.

The Bigios' properties were consolidated with other nationalized bottling companies into a single entity doing business as El Nasr Bottling Company (ENBC), which operated on the Bigios' former property. (ENBC leased the property from Misr insurance, which got the Bigios' land from the government, according to The Blaze.) The Bigios allege that Coca-Cola knew that the property at issue had been unlawfully taken, but still continued to do business with ENBC.

Two Coca-Cola subsidiaries later acquired a 42 percent interest in ENBC, and a joint venture between Coca-Cola and MAC Beverages acquired another 53 percent. Since 1994, Coca-Cola has continued at all times to hold an ownership interest in ENBC.

The Bigios have been unsuccessfully asserting their claim to ENBC property in U.S. federal courts since 1997. This week, the Second Circuit Court of Appeals dismissed the Bigios' claims against Coca-Cola for a third time.

In 2009, the Bigios alleged that Coca-Cola engaged in unlawful taking and exclusion through its stake in ENBC. The District Court dismissed the claim principally on the basis of the assertion of the defendants' expert that, under Egyptian law, "acquiring stock in a joint stock company like ENBC does not constitute a trespass to personal property that is occupied or held by the joint stock company."

The Second Circuit affirmed dismissal, finding that there is no claim for 'unlawful taking and exclusion.' To the extent that the Bigios stated a trespass or conversion claim, the court reasoned that such claims were identical to the family's previously dismissed claims.

If the Bigios' version of the events in Egypt is correct, then it seems they should be entitled to some kind of relief. Could a Supreme Court expansion of Alien Tort Statute recovery in Kiobel v. Dutch Petroleum offer the Bigios the relief that has evaded them in federal court for 15 years?

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