August 14, 2008
A 20-year-old article by Professor Frank Gevurtz may have inspired a legal battle in a federal court that involves a major international scandal.
Citing Gevurtz’s “Using the Antitrust Laws to Combat Overseas Bribery by Foreign Competitors,” 27 Va. J Int’l L. 211 (1987), a group of American wheat farmers filed a lawsuit last year arising out of the discovery of corruption in the United Nations-sponsored program.
The class-action RICO antitrust suit claims that wheat prices in the U.S. were lower as the result of Australian sellers using bribery to obtain the rights to sell wheat to Iraq while that country was under strict United Nations sanctions following the first Gulf war. The wheat farmers alleged that AWB Limited, an Australian wheat exporter, bribed the Saddam Hussein regime under the UN Oil for Food Program in exchange for a monopoly in the Iraqi wheat market and the exclusion of American wheat from the Iraqi market.
The U.S. District Court, Southern District of New York, recently dismissed the claim. The court said Gevurtz’s scholarship did not apply since the framers failed to claim they would have exported their wheat to Iraq but for the bribery. The suit only alleged that they were the indirect victims of lower prices in the U.S. market.
There is no word yet on whether Cohen Milstein Hausfeld & Toll, lead attorneys for the plaintiffs, will amend their suit and refile it. The case is Boyd et al. v. AWB Limited, 544 F.Supp.2d 236 (S.D.N.Y. 2008)