An ‘Indiana Jones Moment’: Mayer Brown’s John Nadolenco and Kelly Kramer on the 10-Year Legal Saga of the Bahia Emerald

In 2014, John Nadolenco, a managing partner at Mayer Brown’s Los Angeles office, received a startling dispatch from Brazil.

The letter, sent from Brazil’s attorney general, detailed an international dispute then being litigated in a Los Angeles state court: the illegal smuggling of a massive emerald, excavated in 2001 from Brazil’s Bahia region, to the United States.

At first, Nadolenco assumed the letter was a “total hoax” in the vein of a “Nigerian prince” email phishing scam. “I threw it away,” he said.

Later, after conferring with the firm’s Brazilian offices, he determined it was legitimate, and Mayer Brown suited up to represent the Brazilian government in a convoluted, decade-long jewel heist saga that reads as one-part Raiders of the Lost Ark and one-part Lord of the Rings.

The gem’s lore preceded it. Said to contain the largest single crystal ever discovered, it had also attained a legendary status as a “cursed object.” Per the Los Angeles Times, those claiming ownership of the emerald testified to having barely escaped calamities running the gamut from Hurricane Katrina to kidnappings by Brazilian warlords to home-razing fires.
The reputed size of the stone, known as the “Bahia Emerald,” is somewhat a point of contention—various sources peg it at 836 or 752 pounds. Its estimated value—which oscillates from virtually worthless to north of $900 million—is almost comically indeterminate. The jury is still out on its aesthetic appeal: one drolly unimpressed reporter at Wired dubbed it “a petrified Jello mold made by Wilma Flintstone for a dinosaur.”

But Nadolenco said that it’s impossible to calculate the “true value” of the emerald.

“It’s priceless, because it's the largest emerald in the world,” he said. “And that’s how Brazil sees it. It sees it as part of its cultural heritage that was improperly stolen and exported out of the country. So it wants it back, not because it thinks it's worth $384 million, but because it's a priceless gem that's the largest emerald in the world that should be on display in a museum, not being used as collateral for security for loans.”

And now, said Kelly Kramer, a partner in the firm’s D.C. office, it is likely the stone will do just that. U.S. District Judge Reggie B. Walton of the District of Columbia approved a motion by the Justice Department to order the emerald’s forfeiture on Nov. 21.

Kramer predicts that the emerald will soon be repatriated to a museum in Rio de Janeiro following a ceremonial hand-off from the U.S. government, adding that if there’s no appeal, all of this could happen as soon as the first quarter of 2025. “Fingers crossed, this could be in place by March,” he said.

Nadolenco joined forces with Kramer in 2015, when Mayer Brown had to decide whether the firm would go to bat for Brazil in the case before the California Superior Court in Los Angeles, where a judge was about to adjudicate who had the best claim to the emerald—or if the firm would forge a different path. Kramer, notably, already had experience with cases involving forfeiture statutes—he had represented a Cayman Island hedge fund challenging a restraining order issued at a foreign government’s request under the USA Patriot Act.

“Brazil, being a national sovereign, was of the view that it should deal with the United States federal government and that it should not be intervening in a state court case among these claimants,” said Nadolenco. “And we made the decision that Brazil was not going to intervene and instead we were going to pursue relief under this mutual legal assistance treaty.”

Added Kramer: “We were concerned that once that state court decision was made, the emerald … could get moved, potentially damaged, broken up to try to use it for the actual jewel parts inside.”

After that, said Kramer, they collaborated with Brazilian prosecutors and the attorney general's office on a strategy that involved obtaining a restraining order over the emerald, having the Department of Justice certify that enforcing the order was in the interest of justice and entering it in federal court—which they managed to accomplish about four days before the state court decision came down in 2015. “We got the order just in the nick of time,” he said.

The next step was to enforce the order. “There’s a procedure to do that under federal law, but what it requires is that the order has to be final and not subject to appeal in Brazil,” said Kramer. He added that it wasn’t until 2021, when the criminal defendants charged by Brazilian prosecutors with illegally smuggling the emerald out of the country exhausted their appeals, that the Mayer Brown team had an order that was “theoretically enforceable.”

The DOJ filed a motion requesting the forfeiture of the emerald with the D.C. federal court under a mutual legal assistance treaty with Brazil in April 2022, which Judge Walton approved two years later.

“Judge Walton wasn't deciding whether or not there should have been a forfeiture of the emerald as a matter of Brazilian law,” explained Kramer. “He wasn't deciding whether or not it should be enforceable under some other standards in U.S. law. He was just applying the statute. And what the statute says is that once the attorney general has certified an order as being in the interest of justice, then the court has to enforce it.”

Nadolenco said his most salient memory of the 10-year saga was waiting on pins and needles at an unlikely place—his daughter’s soccer game—to hear whether a judge had granted a restraining order to keep the stone safe during criminal proceedings in Brazil.

“We were just waiting, and it was out of our hands,” he said. “There was nothing Kelly or I could do to make this happen any faster. And as a litigator, that's the worst feeling you ever want to be in—when you don't control the outcome. And I'm just sitting there trying to enjoy my daughter's soccer game, and I wasn't. And then Kelly called and said, ‘They got the order.’”

Kramer described the nail-biting experience as an “Indiana Jones moment” and said that Walton’s ruling clearing the path for the emerald’s return is “pretty significant” for a country like Brazil, which has historically had recurrent problems with illegal mining and the misappropriation of “cultural patrimony.”

“So that’s big picture,” he said. “It means countries can cooperate to return these sorts of properties.”

He added that the case shows that the process of countries using these statutes to recover stolen property is “workable,” but is not without its complications.

“It’s really hard for countries to talk to one another about how their legal systems work and don't work and to figure out ways to mesh what are otherwise incompatible systems. And so getting all that to translate that was one of the biggest legal challenges to the case,” he said.

“It also shows us how long and slow that process is going to be.”

Reprinted with permission from the December 19th edition of Litigation Daily © 2024 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.