De Beers Antitrust Deal Rejected by Appeals Court over Technicality

A U.S. federal appeals court rejected on Tuesday the De Beers antitrust deal over what seems like a technical issue. The 3rd U.S. Circuit Court of Appeals ruled that the settlement must be vacated because the lower court had improperly certified a nationwide class of indirect purchasers.

In a 75 page ruling, Judge Kent A. Jordan accepted the appeal made by 34 of the indirect purchasers, saying the purchasers had claims under widely varying state laws and therefore, they could not easily qualify as a class.

The judge retuned the case to U.S. District Court in New Jersey for further consideration.

In a drive to end antitrust and monopoly claims brought against it, De Beers reached a $250 million settlement over price fixing of gem quality diamonds and in 2005 establish a $272.5 million fund for indirect purchasers of its diamonds.

Jordan ruled that the lower court “grouped antitrust claims under the laws of all 50 states and the District of Columbia into a single class.”

“There can be no certification of a nationwide class of state indirect purchaser plaintiffs because there is no common question of law or material fact,"

Jordan wrote.

De Beers spokeswoman Lynette Gould told IDEX Online that the company is considering the implications of yesterday’s ruling.