Third Circuit reinstates $295 million DeBeers class action
PHILADELPHIA (Legal Newsline) - The U.S. Court of Appeals for the Third Circuit has reversed an earlier three-judge panel's decision, reinstating a $295 million settlement of a price-fixing class action against DeBeers diamond company.
The full court, in a 7-2 decision, also reinstated attorneys' fees of approximately $72 million.
The issue appealed in the case of Sullivan v. De Beers was the propriety of the U.S. District Court of New Jersey's certification of two classes comprising purchasers of De Beers customers. The settlement established a fund of $295 million to be distributed to direct and indirect purchasers of the diamonds. The direct purchasers receive $22.5 million and the indirect purchasers receive $272.5.
Various plaintiffs sued for price fixing, monopolization, anti-trust and unjust enrichment. They alleged that De Beers artificially inflated the prices of rough diamonds as a result of its market dominance.
Five suits were transferred to and consolidated in U.S. District Court for the District of New Jersey.
The majority ruled that the lower court properly considered the relevant factors and determined that they were all present in this case "supporting the higher award: ―complex and/or novel legal issues, extensive discovery, acrimonious litigation, and tens of thousands of hours spent on the case by class counsel."