Paraiba seller sues over same-name stones

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Paraiba seller sues over same-name stones

By Teresa Novellino

April 09, 2008

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Santa Cruz, Calif.—Paraiba.com has filed a $120 million lawsuit against two gemological labs and an African tourmaline seller, alleging that the naming and selling of non-Brazilian stones as "Paraiba tourmaline" has cost the producers of the rare, Windex-blue gemstones millions of dollars in business.

The suit was filed on Tuesday in the Superior Court of the State of California, Santa Cruz, Calif., by Paraiba.com and its owner, David Sherman, the developer of the Brazilian mine that produces Paraiba tourmalines. It names the following as plaintiffs: the American Gem Trade Association (AGTA), members of AGTA's board of directors, the Gemological Institute of America (GIA) and gem company Brazil Imports of Fallbrook, Calif., which sells African tourmaline.

The suit accuses the parties of "intentional interference for prospective business advantage," among other causes of action, and demands $20 million in general damages for lost sales and $100 million in punitive damages.

Sherman is the developer of a mine in the Sao Jose de Batalha area of Brazil in the Paraiba province that was discovered in 1987 and produces a type of copper-bearing elbaite that is prized for its blue-green color and known as Paraiba tourmaline. Enamored by the rare stones, the gem and jewelry community paid $22,000 to $30,000 per carat for them, a price that's well above that of most fine rubies, emeralds and sapphires.

"The fact that a stone was a Paraiba stone imputed a value to the stone simply because of the place of origin of the stone," the suit says.

After copper-bearing tourmaline from Mozambique and Nigeria entered the market in blue-green colors that gem dealers felt were comparable to the Paraiba tourmalines several years ago, the Laboratory Manual Harmonization Committee, whose members include the world's top labs, including AGTA and the GIA, came together to issue a ruling on what to call the stones.

The committee decided before the 2007 Tucson shows that copper-bearing tourmalines of color comparable to that of Paraiba tourmaline could be called Paraiba on laboratory grading reports, but the reports would have to note that the name is not an origin determination, and that the type of stones originally found in Brazil are now found in other parts of the world.

The suit says that the stones should not have been considered on par with the Brazilian stones, and that AGTA, Brazil Imports and other defendants were acting in their own interest by permitting the stones to be named as such.

"Whereas the Paraiba stones have 2 to 3 percent copper concentration, the African stones have only trace amounts of copper, in rare cases, copper content of approximately 1 percent," the suit says. "Furthermore, the stones do not have the same innate luminescence that so characterizes the Paraiba stone."

The GIA and AGTA did not immediately respond to requests for comment and a message left for Brazil Imports was not immediately returned.

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