De Beers Gets More Legal Issues

By Rob Bates, Senior Editor -- JCK Online, 7/1/2005 2:00:00 AM

De Beers has been hit with—and defaulted on—another class-action lawsuit from consumers complaining that the company's control of the diamond market has inflated prices.

De Beers did not answer the suit, as is its custom, because it has no legal presence in America, according to a report in the Madison County Record. The case has therefore been rendered an automatic default judgment for the plaintiffs.

Stephen Tillery, lawyer for plaintiffs Emert and Katie Null, did not return a call from JCK for comment. The Record called Tillery and partners "heavyweights among class-action plaintiff's attorneys."

De Beers has been hit with several of these suits recently. One, similar to this one, is largely moribund because the plaintiffs could not get their class certified by the court. (See "De Beers Wins Victory, But Keeps Defaulting," JCK, April 2005, p. 36.)

Lynette Hori, De Beers spokeswoman, said she is aware of the suit but says it's "without merit."

De Beers has said this rash of lawsuits is preventing it from establishing a legal U.S. presence. It contends it is otherwise compliant with U.S. antitrust law.

In related news, the United Diamond Association of South Africa, a group of small diamond buyers, has taken De Beers to court for allegedly violating South Africa's Diamond Act, press reports say.

The buyers complain that De Beers is not supplying enough of its production to local factories.