- De Beers Diamonds Antitrust Litigation
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The De Beers diamonds antitrust class action sought to end an alleged 60-year conspiracy to fix the price of rough diamonds in the U.S. by the De Beers group of companies. The litigation includes several cases including Hopkins v. De Beers Centenary A.G., et al., No. CGC-04-432954, which commenced on July 24, 2004, and Sullivan v. DB Investments, No. 04-cv-02819, and earlier related cases that commenced in 2001.
Contents
Allegations
The complaints charged that De Beers had created a global cartel in the markets of rough and polished diamonds – with a market share that reached nearly as high 90% - through aggressive management of supply and prices, and collusive agreements with competitors, suppliers, and distributors. This was a quintessential antitrust violation of the Sherman Act.[1]
Settlement Agreement
In October 2005, the parties reached a preliminary agreement to settle the claims of all indirect purchasers nationwide, with Sullivan serving as the procedural vehicle for seeking court approval of the settlement, notice and claims administration. Working out the details took three hard-fought years between Plaintiffs' Counsel and De Beers.[2] On April 14, 2008, the Court conducted a fairness hearing and on May 27, 2008, granted final approval to the settlement.[3]
The settlement provides $295 million to purchasers of diamonds and diamond jewelry, including $130 million to consumers. In addition, De Beers consented to an historic injunction that prohibits De Beers from monopolizing the world supply of rough diamonds and from fixing the price of polished diamonds. The injunction also requires De Beers to submit to the continuing jurisdiction of the United States District Court for enforcement of the injunction.[4][5] Commenting on the case, plaintiff's counsel Eric B. Fastiff of Lieff Cabraser Heimann & Bernstein stated that De Beers' offer to settle "showed that our strategy was correct. If you put litigation pressure and represent your client vigorously, eventually a guilty defendant will recognize that it needs to resolve its problems."[2]
The case is now on appeal to the Third Circuit Court of Appeals. No proceeds from the settlement will be distributed to class members until all appeals are resolved.
References
- ^ Hopkins v. De Beers Centenary AG, No. CGC-04-432954, 2005 WL 1020868 (Cal. Sup. Ct., Apr. 15, 2005).
- ^ a b "Global diamond cartel is cut down to size," Special to the National Law Journal, Oct. 6, 2008.
- ^ Sullivan v. DB Invs., Inc., 2008 U.S. Dist. LEXIS 81146 (D.N.J., May 22, 2008).
- ^ Information website for DeBeers Diamond Class Action Settlement
- ^ "Diamond rebates may be coming," The Chicago Tribune, January 22, 2008, p. 10.
External links
Categories: Lawsuits | United States antitrust case law
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