De Beers Buyers to Get $295 Million After All

     PHILADELPHIA (CN) – The full 3rd Circuit has recertified settlement classes for a $295 million fund De Beers will pay to direct and indirect purchasers of diamonds.



     A year after the world’s No. 1 diamond producer pleaded guilty to price-fixing charges in 2004, it settled civil claims that it “exploited its market dominance to artificially inflate the prices of rough diamonds … [causing] reseller and consumer purchasers of diamonds and diamond-infused products to pay an unwarranted premium for such products.”
     A New Jersey federal judge initially certified the settlement, but a three-judge panel of the 3rd Circuit vacated the deal in July 2010, finding the claims too varied to merit class certification.
     Following another hearing before the full court, a majority of judges said they did not need to ensure that each class member possessed a viable or “colorable legal claim” when deciding whether to certify a class.
     “We believe that the predominance inquiry should be easily resolved here based on De Beers’s conduct and the injury it caused to each and every class member, and that the straightforward application of Rule 23 and our precedent should result in affirming the District Court’s order certifying the class,” according to the 116-page decision signed by Judge Marjorie Rendell.
     The plaintiffs in the class, consolidated from seven separate price-fixing lawsuits filed in federal courts as early as 2001, fall within one of two types of purchaser classes. Direct purchasers of gem diamonds bought directly from De Beers or one of its competitors. Indirect purchasers, consisting of consumers, jewelry retailers and other middlemen, bought rough or cut-and-polished diamonds diamonds from sightholders or other direct purchasers.
     The settlement allots $22.5 million to direct purchasers and to $272.5 million to indirect purchasers.
     One of the majority signers, Judge Anthony Scirica, wrote a 17-page concurring opinion to address “the evolving law on settlement classes.”
     Judge Kent Jordan, a member of the original three-judge panel, wrote a 38-page dissent, joined by Judge D. Brooks Smith. They said the majority’s “remarkable declaration sets the class action ship in our circuit badly adrift.”

%d bloggers like this: