Lawyer at Center of Overgrading Cases Has License Suspended

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.”