On Dec. 20, 2011, the 3rd Circuit, meeting en banc, approved a classwide antitrust settlement between the diamond manufacturer De Beers and a large class of both direct and indirect purchasers, some of whom did not have legal claims in the states in which they filed.
In the seven suits filed between 2001 and 2005, plaintiffs accused De Beers of anti-competitive activity that resulted in purchasers being overcharged for diamonds. The Luxembourg-based company, which has a long history of claiming U.S. courts have no jurisdiction over it, initially refused to show up for court. But after courts entered default judgments against it in six of the seven cases, De Beers decided to settle the suits.
It is improbable that a court would certify a similar class, in which there were members with no standing, in a litigation context. But in this case, De Beers wanted the settlement, likely because it would prevent class members from suing it individually for the same conduct. The court’s reasoning suggests that “it doesn’t matter if some of the people weren’t entitled in the first place, because De Beers itself doesn’t seem to care,” says Andrew Trask, counsel at McGuireWoods specializing in class action. Trask supposes that the court may have approved the settlement since De Beers did not challenge the certification— only members of the class did.