De Beers now has one less legal headache.
The now-seven-year-old lawsuit from defrocked sightholder W.B. David against De Beers was dismissed Sept. 29 by a federal judge.
David had been a Diamond Trading Co. client for more than 35 years, but lost the designation in 2003 when De Beers launched Supplier of Choice. The company sued for $100 million soon after, charging antitrust violations and restraint of trade, in a case built around its claim that Supplier of Choice was an attempt to increase De Beers’ “monopolistic” control of the market.
The suit divided the New York diamond community, especially since the initial filing also targeted other New York sightholders, although they were later dropped from the case.
When the company went out of business in 2006, the legal proceedings were taken over by its Chapter 7 trustee.
The suit appears to have been decided on procedural grounds. According to the ruling by Judge Kimba Wood, U.S. District Court, Southern District of New York, an amended complaint filed in 2007 included a different set of facts than the original complaint, focusing on what it said was De Beers’ “conspiracy … to control the diamond market.” But those antitrust issues, Wood ruled, were covered in the trade and consumer class action suit against De Beers, which resulted in a $300 million settlement. (Update on the De Beers antitrust settlement.)
Meanwhile, because the first amended complaint “abandoned” the allegations about Supplier of Choice, they now fall outside the statute of limitations, Wood ruled, even if plaintiff lawyers resurrected them in a second amended complaint filed in 2010.
Wood noted that David could conceivably re-launch part of its case, should the antitrust settlement fall apart.
De Beers spokeswoman Lynette Gould told JCK the company “welcomes” the ruling.
Judge Wood was briefly poised to be named U.S. Attorney General by then-President Bill Clinton in 1993.