Is a settlement a diamond company’s best friend? The answer to that question will have to wait for De Beers, the world’s biggest diamond producer. On July 13, a federal appeals court refused to approve the settlement in a class action suit against De Beers by diamond purchasers who have claimed the company broke anti-trust laws. The settlement has been sent back to a lower court for reconsideration.
According to a report by Reuters, De Beers plead guilty in 2004 to a price fixing charge. The company came to an agreement in 2005 to set up a fund worth $272.5 million to compensate indirect purchasers of De Beers diamonds.
Reuters reports that the 3rd Circuit found the class members’ claims to be widely varying and based upon a number of differing state laws. Judge Kent Jordan said that the settlement did not recognize the disparities of the claims and sent the case back to the District Court to further consider and clarify which claims are subject to the treatment as a class.
The settlement, wrote Judge Jordan, “is akin to suggesting that a really good cook, by means of superior kitchen management, can make a cake out of nothing.”
De Beers did not immediately return a call for comment from Reuters.
Related Resources:
- Court rejects De Beers class-action settlement (Reuters)
- Diamond Class Action Settlement Website (DiamondsClassAction.com)
- In Settlements We Trust (FindLaw’s KnowledgeBase)
- Class Action Cases (FindLaw)
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