A 30-year-old dispute over interests in an Iranian dairy — a case that the U.S. Court of Appeals for the D.C. Circuit dubbed a "Sisyphean labor" — is nearing a settlement, according to statements filed by both sides this week.
The case began in 1982, when McKesson Corp. sued the Iranian government in U.S. District Court for the District of Columbia. McKesson, an American company, had partnered with Iranian investors in the 1960s to create a dairy in Iran, but McKesson personnel fled the country during the Iranian Revolution in 1979. The company claimed Iranian officials later illegally withheld dividends issued by the dairy and expropriated McKesson's interests.
After decades of litigation and at least a half dozen trips to the D.C. Circuit, the appeals court ruled in February that the U.S. courts do have jurisdiction over the case. The court overturned U.S. District Judge Richard Leon's award of compound interest, but affirmed his judgment against Iran. According to statements filed by both sides on Monday, they're close to a settlement.
Attorneys for both sides could not be reached today for comment. McKesson's lead counsel is Mark Bravin of Winston & Strawn. In its statement, Iran notified the court that its counsel on appeal, Christopher Wright and Charles Kimmett of Wiltshire & Grannis, would now be serving as lead counsel at the trial level.
McKesson, in its statement (PDF) on Monday, said that it wanted the court to enter a final judgment determining how much Iran owes in light of the D.C. Circuit's ruling. Leon awarded $43 million in damages and prejudgment interest, but the D.C. Circuit struck more than $20 million in compound interest from that amount. Instead, the court ordered Iran pay simple interest at a rate of 9 percent.
"The parties have been in settlement negotiations for more than a year, and by determining the final amounts that Iran owes to McKesson the Court will either facilitate a settlement by the parties or enable McKesson to move forward with enforcement against Iranian assets abroad," McKesson said in its filing.
According to McKesson's statement, Iran notified the appeals court that it planned to ask for a rehearing in March, but asked for an extension of the deadline to file such an appeal so both sides could have time to work out a settlement. McKesson said that Iran's negotiators have said that they're seeking approval from Tehran for a settlement, but that the company is concerned about the amount of delay.
McKesson also has two pending motions for attorney fees and costs, covering the period from 2000 to 2010. There's also a pending appeal before the D.C. Circuit on a 2000 judgment awarding McKesson $2.9 million for attorney fees from 1986 to 2000. That was put on hold as the courts considered the merits of the case.
Iran, in its statement (PDF) to the court, acknowledged the possible agreement and said that it "is seeking to finalize that settlement." If the parties don't reach a settlement, though, Iran's attorneys asked the court to wait to schedule briefing or deal with the issues raised in McKesson's statement until the D.C. Circuit rules on the latest request to extend the deadline to petition for a rehearing on the February ruling.
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