Suit Against Liquor Giants Will Be Heard in Brooklyn

A suit by the Colombian government alleging that some of the world's largest liquor companies were colluding with narcotics traffickers cleared its first legal hurdle when a federal judge ruled yesterday that the case could be heard in Brooklyn.

The suit claims that the liquor companies, including Diageo, the largest liquor company in the world and the maker of Smirnoff, Tanqueray, and Johnnie Walker, Seagram, and Pernod Ricard, were at the center of a moneylaundering scheme. The country alleges that the liquor companies gave shipments of alcohol to drug traffickers in Colombia in return for drug money.

The shipments of alcohol were then sold on the Colombian black market, undermining the domestic liquor market there, the suit alleges. The Colombian government is bringing the suit on behalf of state-owned liquor companies.

The defendants asked that the case be dismissed on the grounds that American courts didn't have jurisdiction and that the statute of limitations for racketeering had already expired.

A federal judge in Brooklyn, Nicholas Garaufis of U.S. District Court, denied those requests. However, the judge did dismiss a part of the suit, deciding that Colombia could not sue in this country for lost revenue from unpaid import taxes. But the bulk of the claims against the liquor giants were allowed to proceed.

Lawyers representing both the Colombian government and Seagram did not return calls for comment. A Diageo spokesman, Gary Galanis, said the company is reviewing the decision. When the suit was first filed in 2004, the liquor companies denied any wrongdoing.