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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.
Allegations
editThe 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 as 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
editIn 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 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 a 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] Commenting on the case, plaintiff's counsel Eric B. Fastiff of Lieff Cabraser 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]
On May 21, 2012, the U.S. Supreme Court denied the final petition for review. Pursuant to an Order of the Court, Initial Distribution checks were mailed to Authorized Reseller Claimants on August 31, 2012. The remaining proceeds of the Reseller Subclass Net Settlement Fund were distributed to Authorized Reseller Claimants on March 15, 2013. As of November 24, 2015, distribution of settlement funds has been completed and the case is now closed.
See also
editReferences
edit- ^ 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).
- ^ "Diamond rebates may be coming," The Chicago Tribune, January 22, 2008, p. 10.