MANHATTAN (CN) - A Mexico-based Internet yellow pages company sued Yahoo and the Baker & McKenzie law firm for $2.7 billion, claiming they conspired to "pervert" the Mexican legal system to duck a legal judgment by bribing the chief judge of the Mexican Federal District Court.
Worldwide Directories and Ideas Interactiv sued Yahoo, Yahoo de Mexico, and Baker & McKenzie, on Wednesday in Federal Court.
The Mexican judge is identified in the 33-page lawsuit, but is not a defendant in the RICO complaint.
Worldwide claims that the defendants "colluded to mastermind and carry out a conspiracy to avoid and/or nullify a $2.7 billion dollar judgment in favor of plaintiffs and against defendants Yahoo-US and Yahoo-Mexico that was entered by the Mexican courts. The non-parties comprising the U.S. based enterprise that actively assisted with carrying out the scheme include Dr. Edgar Elias Azar ('Azar'), President of Mexico's District Federal Superior Courts, and Edgar Raul Rodriguez ('Rodriguez'), a clerk in the Mexico appellate court, and likely several others."
Worldwide says it sued Yahoo in 2011 in a contract complaint involving its Internet and print directory service.
"To ensure a successful outcome, rather than mount a legitimate legal challenge to the bona fide judgment, plaintiffs allege that the evidence shows that RICO defendants conspired to unlawfully obtain a positive judgment through a series of criminal acts, including bribery, money laundering, mail fraud, and wire fraud, among others, in order to corrupt the Mexican judiciary," the complaint states.
Nonetheless, Worldwide says, in 2012 the Mexican court ordered Yahoo to pay $2.7 billion in damages.
The Mexican judicial system is notoriously corrupt. It can be bewildering to North Americans, as it is based upon the Napoleonic Code, which grants defendants far fewer rights than the British-based U.S. system.
Torture is regularly used to extract confessions. One Mexican federal judge told Courthouse News that even if he found a defendant's rights had been violated by unconstitutional torture, he could not spring him from jail. "All I can do is say it was illegal," the judge said in an interview in his chambers.
Worldwide claims in its lawsuit: "During the underlying litigation, Yahoo did not fully disclose to its investors the extent of the potential judgment against Yahoo. Getting the judgment overturned was imperative if Yahoo would continue to compete in the Internet communication services industry, and not pay a substantial sum to satisfy the judgment. Accordingly, having failed to intimidate and corrupt the trial judge, the RICO defendants set out to corrupt the appeals process and overturn the judgment.
"In order to accomplish this common purpose, the RICO defendants committed repeated acts of obstruction of justice and coercion of judicial officials aimed at pressuring plaintiffs to drop their suit or accept a settlement that is substantially less than the amount of Yahoo US's exposure, and ultimately to illegally obtain a favorable judgment."
In doing so, Worldwide claims, the defendants obstructed justice, violated the Foreign Corrupt Practices Act, committed extortion in violation of the Hobbs Act, and wire fraud and money laundering.
It claims that nonparty Azar, chief judge of the Mexican Federal District Court, "is known throughout Mexico for his willingness to influence the disposition of cases in exchange for money. As the ultimate supervisor of the judges involved in making these decisions, Judge Azar had substantial influence over members of the Mexican judiciary."