Independents

Lawyer at Center of Overgrading Cases Has License Suspended

IndependentsOct 02, 2018

Lawyer at Center of Overgrading Cases Has License Suspended

The Tennessee Board of Professional Responsibility has temporarily suspended Brian Manookian from practicing law in the state.

Brentwood, Tennessee—The attorney at the center of the lawsuits and public campaigning regarding overgraded diamonds that roiled the industry a few years ago has lost the right to practice law, at least for now.

According to a Sept. 21 notice from the Tennessee Supreme Court’s Board of Professional Responsibility (BPR), the court has opted to temporarily suspend Brian Phillip Manookian after finding that he “poses a threat of substantial harm to the public.” The BPR oversees lawyers’ conduct in the state.

The Nashville-based attorney is immediately banned from accepting new cases, and must cease representing existing clients by Oct. 21. After that date, “Mr. Manookian shall not use any indicia of lawyer, legal assistant or law clerk nor maintain a presence where the practice of law is conducted,” the BPR statement reads.

William C. Moody, the attorney with the BPR who is handling the case, said the main impetus for the suspension was an email that Manookian wrote to opposing counsel that the recipient and the board “took to be threatening.”

He added that there have been past court cases in Tennessee involving Manookian that indicate his actions should not be taken as idle threats, including allegations made by a fellow student back in 2004, his ex-wife and his ex-business partner at a Nashville gun store.

“We (the board) felt no lawyer should have to practice law and be threatened by his adversary,” Moody said.

He said Manookian—who did not respond to multiple calls and emails requesting comment—already has filed a petition to dissolve his suspension. The BPR is working to set a hearing date for the petition.

Manookian first became known in the jewelry industry back in 2014.

After buying a diamond at Nashville jeweler Genesis Diamonds that he allegedly later discovered was not properly graded, he led a legal charge against the retailer. Manookian sued Genesis on behalf of multiple consumers who were sold dimonds that were overgraded by EGL International—they had been given a color and/or clarity distinction that was more than a couple grades above what other labs, like GIA, would assign the same diamond.

At that time, diamond overgrading was the jewelry industry’s 800-pound gorilla du jour and the string of lawsuits forced the industry to deal with it.

In October 2014, Rapaport pulled all EGL reports from RapNet, while Polygon banned stones with EGL International reports only. The moves led to reorganization of EGL

labs outside the United States, with the company dropping the EGL International name, hiring Menahem Sevdermish as global manager and vowing to homogenize their grading practices.

In mid-December 2014, Manookian told National Jeweler that a “major national [law] firm” would be filing a class-action lawsuit within 60 days against EGL International as well as “major retailers” in the U.S. for selling diamonds allegedly overgraded by the lab.

He said at the time that the intention was for the lawsuit to target the big chains, not small, independent jewelers.

The class action against the majors never materialized, but Manookian, along with other attorneys, launched public campaigns in an effort to find plaintiffs to file a class actions against five independent jewelers.

The campaigns involved physical fliers and online ads calling the retailers in question “a scam” and asking consumers if they were sold a “fraudulent ring.”

Though many in the industry acknowledged the need to confront the issue of diamond overgrading and applauded the dismantling of EGL International, Manookian’s plaintiff-attracting tactics were met with disdain, with two attorneys interviewed by JCK describing them as “unusual.”

And one retailer, the now-closed Diamond Doctor in Dallas, fired back, suing Manookian, his Nashville law partner Brian Cummings and their firm, Cummings Manookian, in a Texas federal court for violations of the RICO Act, business disparagement and injury to business reputation.

The lawsuit alleged that the public campaigns—purportedly launched in the interest of finding consumers who had been sold overgraded diamonds and helping them to right that wrong—were nothing more than a “cunning shakedown operation” to extort money from the jewelers.

“Manookian and his firm Cummings Manookian selectively target and systematically attack prominent, successful retail jewelers around the country as ‘fraudsters’ perpetrating ‘scams’ accusing them—without any evidence—of selling poor-quality diamonds at inflated prices,” the original complaint, filed in February 2016, reads.

“Manookian utilizes slickly produced internet websites with videos featuring Manookian himself and social media campaigns plastered with the victim’s trademarks and logos. The targeted jeweler (in this case, The Diamond Doctor) naturally contacts Manookian directly or indirectly and demands a stop to the disparaging and harassing campaigns. Manookian … quickly gets to the point: the victim has the choice of retaining Manookian and his firm as outside counsel at a cost of millions of dollars or face further intimidation, unsubstantiated allegations and harassment.”

In August 2017, the parties reached a settlement. Though terms of the settlement were largely confidential, one of the Diamond Doctor’s attorneys, Randy Johnston of Dallas firm Johnston Tobey Baruch, described all the twists and turns that led up to the “crazy” finale of the case in a blog post published on JohnstonTobey.com.

Reached last week, Johnston declined to comment on Manookian’s suspension.

The notice from the Tennessee BPR said the temporary suspension of Manookian’s law license will remain in effect “until dissolution or modification by the [Tennessee] Supreme Court.”

The BPR defines an attorney who has been suspended as “not in good standing and cannot practice law in Tennessee, subject to reinstatement to active status.”

It is separate classification from disbarred, which “terminates the individual’s status as a lawyer, though the individual is permitted to apply for reinstatement after five years.”
Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

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