The lawsuits claim that the largest suppliers of diamonds in the world—De Beers S.A. and its associated companies—violated antitrust, unfair competition, and consumer-protection laws by monopolizing diamond supplies, conspiring to fix, raise, and control diamond prices, and disseminating false and misleading advertising...And the company will pay millions of dollars -
...the Settlement provides that the Defendants will pay a total of $295 million for the benefit of Class Members plus up to $7 million for the costs of providing notice of the Settlement terms to the Indirect Purchaser Class.. The Settlement provides that $22.5 million will be paid to Direct Purchaser Class Members who submit valid claims, and $272.5 million will be paid to Indirect Purchaser Class Members who submit valid claims.The payments go to resellers and customers, the latter defined as -
All persons located in the United States who purchased any diamond or diamond jewelry or other products containing gem diamonds for personal use and not for resale between January 1, 1994 and March 31, 2006. For example, Consumers include people who purchased diamond jewelry to wear or to give as a gift.However, while the "sightholders" (companies reselling the diamonds) get an estimated US $173,000 each, consumers fare less well -
"...consumers are estimated to receive US $1.15 each... But here is the real insult: The court agreed that any payout under $10.00 does not have to be paid..."The funds designated for consumers ($135 million) but not paid out reverts to the general settlement fund, 25% of which goes to the lawyers in legal fees.
Class-action lawsuits really suck (unless you are an attorney). I wasn't involved in this one, but I've been a "participant" in a couple during my life, and they are never worth the time and effort.
Via the newsletter of the Madison Gem and Mineral Club.
I used to visit their diamond sorting rooms at the Central Selling Organisation in Hatton Garden, London. I was repairing sound systems there - the sight of uncut diamond spread all across light-boxes built into mahogany benches was fascinating. Do you remember when toughened car windscreens used to shatter, before laminated ones became common? That's what uncut diamond looks like. Shapeless and often rather grubby.
ReplyDeleteThey had a wonderful art collection - got chatting to one of the security guards one day and found they had some Bridgit Rileys. He took me to see them, though I don't suppose he should have done - they were in an upper floor corridor - amazing, examples I'd never seen in any books of her work.
+1 for class action being only for the lawyers.
ReplyDeleteAnd anybody who'd pay more than $100 for a polished rock is crazy.
While working at a rapidly expanding home center, a woman sued for sexual discrimination - 'class action' but we were told to all sign up (I did not) because 'we' were going to settle fast and 'we' wanted to make sure the woman (who obviously did not 'bleed orange') walked away with nothing to show for her whistleblowing.
When people ask how big secrets are kept when so many people are involved, this is one of my own examples; the 'entrepenurial spirit' had each of us duck stepping with the hopes of early retirement.
"De Beers S.A. and its associated companies—violated antitrust, unfair competition, and consumer-protection laws by monopolizing diamond supplies, conspiring to fix, raise, and control diamond prices, and disseminating false and misleading advertising..."
ReplyDeleteBut no mention whatsoever about the countless billions worth of blood diamonds they've marketed over the years and still have squirreled away in their vaults. Scumbags.
Yeah, they're scumbags. Unlike every other company that ever put something up for sale and tried to control the pricing. Don't want their products? Don't buy them. That'll teach 'em.
ReplyDeleteAntitrust and other class action suits so rarely do any good for any of the real injured parties that it is a wonder that the government does not step in and take over the causes of action. Then again, when they do, like the tobacco litigation, which did nothing more than enrich a relative handful of lawyers beyond any reasonable level, the results still don't help the injured parties. The tobacco money (the billions in settlement dollars) comes from new sales, and is being spent on everything but healthcare and prevention.
Even among lawyers, there is a pecking order of prestige. These guys, while financially successful, are regarded as bottom feeders.
Er, the "scumbags" comment had to do with their involvement in the merchandising of blood diamonds, not their well-known monopoly over the diamond industry at large. And it's not quite as simple a matter of "don't buy their product" as your snotty comment suggests: deBeers controls nearly ALL the diamonds sold in the world, thanks to their monopoly.
ReplyDeleteIt IS possible to "not buy their product." My wife and I chose an emerald for her wedding ring.
DeleteGood choice! I wish more people showed your enlightened attitude, Stan. Most people have bought the "diamonds are forever" hype, however, without giving a thought to where those diamonds might be sourced. My wife is a goldsmith, and she has been sourcing her diamonds from Northern Canada for years now. She's also working on sourcing "green" (ie. recycled) gold as much as possible, too. Gold mining (except for 'artisinal' processes like hand-panning or placering) is a hideously destructive process, and she's trying to do her little bit to put her money where it will do the least harm.
DeleteSmithsonian magazine has an article this month re your comment on the devastation brought about by gold mining -
Deletehttp://www.smithsonianmag.com/people-places/The-Devastating-Costs-of-the-Amazon-Gold-Rush.html
Turning the Amazon forest into total wasteland for a couple ounces of gold per day. It's worse than burning, because they dig/wash down many feet, totally removing the landscape. Makes you want to cry.
Thanks for the "Smithsonian" heads-up - one of my favourite magazines! Unfortunately, the destruction continues even after the mining process itself. Refining and processing is really nasty, too - viz. the collapse of that retaining dam years ago which released millions of gallons of cyanide-tainted water. Yeah, it's a terribly destructive industry: sadly ironic that such beauty is created from its product.
DeleteI love your blog, but you're wrong about class actions. There's a debate to be had about how much of each settlement should go to lawyers, and anonymous above makes some good points, but he misses the central point - where massive corporations are screwing over large numbers of consumers, in such a way that it's uneconomic for any of them individually to take legal action, who is going to step in and do something about it? The government? We've seen how useless the SEC has been over the past 4 years. It's not a 'wonder' that the government doesn't step in and take over the cause of action - it's a logical result of regulatory capture and one party that is endlessly hostile to even the most beneficial forms of regulation. Even if the injured parties don't get much out of them, they're still getting more than they would have otherwise, right?
ReplyDelete"Even if the injured parties don't get much out of them, they're still getting more than they would have otherwise, right?"
ReplyDeleteNote in the case I cited that "The court agreed that any payout under $10.00 does not have to be paid..." They get nothing. Nada. Despite taking the time to gather documents and submit paperwork.
Well, I don't condone their practices, and they were unknown to me upon diamond purchase. It has taken years, but I did get my cut this month. $300.00 is nothing to sneeze at!
ReplyDelete