De Beers Diamond Settlement Rejected

If you’ve been waiting for that check from the De Beers diamond class action lawsuit settlement, you might as well stop checking your mailbox. You have a lot longer to wait. On Tuesday, a U.S. appeals court rejected the $272.5 million class action settlement between De Beers and purchasers of the company’s diamonds who claimed they were harmed by the company’s antitrust behavior. This is just the latest in a long series of appeals that have plagued this class action settlement since it was approved in May 2008.

De Beers, the world’s top diamond producer, reached the settlement in 2005 to end a class action lawsuit that accused the company of monopolizing the supply of diamonds and price-fixing. As part of the class action lawsuit settlement, anyone who purchased a diamond or diamond jewelry from January 1, 1994 to March 31, 2006 could make a claim for potentially thousands of dollars, including consumers and indirect and direct purchasers. Apparently 34 of the indirect purchasers (including retailers, consumers and some middlemen) objected to the deal. U.S. Court of Appeals for the Third District Judge Kent A. Jordan accepted their appeal and ruled that the lower court had improperly certified the nationwide class of indirect purchasers, saying the purchasers had claims under widely varying state laws and, therefore, could not easily qualify as a class.

We were told in October 2009 that payments could go out as early as spring 2010, but this rejection obviously tacks on more time to the already five-year-old settlement. No payments will be made on eligible claims until all appeals are resolved. Keep checking back at our Closed Settlements section for more updates as we get them.