$300,000,000—that’s how much De Beers is paying to make its American legal problems go away. (See sidebar for description.)
If you’re a trade member—which includes retailers—who has bought or sold diamonds over the last 13 years, you are entitled to part of that $300 million. Here is how it breaks down: Some $27 million is going to direct purchasers from De Beers and other rough suppliers. That leaves $270.25 million, which will be split 50–50 between consumers and the trade.
Trade members likely will share about $140 million, minus about 20 percent for attorney fees, as well as a couple of million for administrative costs. The money is divided according to how much was bought, so high-volume buyers get the most.
Even so, there is money coming your way. To get it, class members must file a claim form and submit it to the legal authority that’s distributing the money. Those claim forms were not available at press time but are expected to be ready around December.
Here are some frequently asked questions about the De Beers antitrust settlement:
How do I file a claim? When they’re ready, the claim forms will be mailed to a list of jewelry retailers and trade members. In addition, they will be posted on a new site, www.diamondsclassaction.com, as well as on the Jewelers Vigilance Committee site, www.jvclegal.org. Both sites will include guidance on how to complete the form and where to send them.
Class members can direct questions about the forms to the claims administrator for the class-action suit, Rusk Consulting, (800) 760-5431, or to Cecilia Gardner, JVC’s president, CEO, and general counsel, at firstname.lastname@example.org. The lawyers intend to allow six months for the forms to be completed.
The forms require you to list two years during which you made diamond purchases in the period between Jan. 1, 1994, and March 31, 2006. The two years need not be consecutive. Obviously, you’re advised to show your two highest-purchase years.
When will I get the money? Joseph J. Tabacco, one of the attorneys behind the suit, thinks that, given the complexities involved, settlement checks probably won’t be mailed until late 2008.
Should I use a service to help me fill out the forms? Doing the most to publicize the settlement are services that offer to help class members file their claims, in exchange for a percentage of the settlement. The lawyers behind the settlement say they don’t think the services are necessary. “I would not recommend them,” Tabacco says. “When people see the claim forms, they will see it’s a relatively simple process to fill them out. If they have trouble, the claims administrator is going to be available to help them. We understand some of these [services], who have no connection with anybody, are charging up to a third [of the settlement]. If there is a problem, the same people who want a third are also going to have a problem filling it out.”
JVC offers no opinion on the value of these services but agrees the forms will be easy to fill out and notes the services cannot provide the most important information—your two years of diamond sales. “You are going to have to do your own homework,” Gardner says. “No one is going to be able to come up with your sales figures. You are the only one who can provide that information.”
Will this get me a lot of money? Probably not, Gardner says. “People often get stars in their eyes when they hear they are getting a share of $290 million,” she notes. “Obviously the bigger players will get the bigger pieces. It all depends on how many people apply. But I do think there are going to be a lot of claims being made.”
Tabacco says, “We think it’s a large number of potential class members. Usually only about 10 percent make claims, but we can’t predict how many people will fill out the forms. [The checks] will only likely be a modest percentage of their overall purchases.”
Gardner adds that while no one is likely to get rich off this settlement, everyone eligible should file a claim, since it is money they are legally entitled to.
What about the consumer component? The settlement allots $140 million for consumers who bought diamonds during the period. Although jewelers are not directly involved in this, some fear they could be drawn in peripherally. “Consumers may be confused as to how to go about making their claim and may approach their local retailer,” Gardner says. “This would be incorrect—they have to make the claim against the fund, as the instructions will provide.” She also worries that consumers might think the problem was with their retailer. “Of course, the retailer had nothing to do with the claims settled in the lawsuit,” she notes.
Tabacco doesn’t expect a problem. “We are not directing consumers to contact retailers, and I don’t think they will,” he explains.
Other concerns have been raised about public relations implications, especially since the settlement will be widely advertised in magazines and newspapers. This is an industry whose image has taken some hits, and many worry about the fallout when reports about a “diamond antitrust suit” begin appearing in the media.
De Beers spokeswoman Lynette Gould doesn’t anticipate a problem. “There is bound to be some noise during the notice period, but this is pretty inevitable,” she says. “In our view, the fact of this settlement does not make diamonds less attractive, less aspirational, or less valuable.”
Tabacco, the company’s courtroom antagonist, agrees. “It’s a pretty esoteric issue—monopolization of the trade in rough diamonds,” he says. “There is some concern that some journalists will write articles about this, but the story of De Beers and their monopolization of the diamond industry has been out there for some time. And they are the ones with the stores on Fifth Avenue.”