Madison County Circuit Judge George Moran Jr.

Stephen Tillery

Madison County Circuit Judge George Moran Jr. entered a default judgment order against diamond giants De Beers Centenary A.G. and DB Investments May 3 after the duo failed to respond to a class action lawsuit filed against them by Emert and Katie Null of Madison County.

Attorneys Stephen Tillery, Donald Flack and Eugene Barash of Korein Tillery of St. Louis--heavyweights among class action plaintiffs' attorneys--filed suit against them the day before President George W. Bush signed the Class Action Fairness Act into law, Feb. 17.

The suit alleges DeBeers has a monopoly on the diamond market. The Swiss company is accused of restraining trade, increasing prices, controlling inventory, limiting supply, restricting purchase and falsely advertising the scarceness of diamonds.

“These actions have caused both the price and demand for diamonds to remain artificially high and thus have caused diamond purchasers actual damages,” the complaint states.

Moran stated in his order that he will set hearings on class certifications and damages, but has yet to set a date.

The class action names DB Investments of Luxembourg, which owns De Beers S.A.; De Beers S.A. of Luxembourg which owns Consolidated Mines; Consolidated Mines of South Africa; De Beers Centenary A.G. of Switzerland; and Diamond Trading Company--the marketing arm of the De Beers Group of the United Kingdom.

De Beers does have the option to file a motion to set aside the default judgment, however no such motion has been filed yet.

The Nulls claim in October of 1999, De Beers chairman Nicky Oppenheimer, speaking at a gathering of Harvard alumni, went so far as to boast about De Beers illegal monopolistic behavior. According to the suit he stated De Beers “likes to think of itself as the world’s longest running monopoly…and seeks to manage the diamond market, to control supply, to manage prices and to act collusively with our partners in the business.”

The class action is brought on behalf of diamond purchasers to recover damages for violations of the Illinois Consumer Fraud and Deceptive Business Practice Act and for unjust enrichment.

“The Court has jurisdiction over the defendants as they either maintain their principal place of business within Illinois, are registered to do business in Illinois, or conduct substantial business within Illinois," the suit claims. "In addition, the acts giving rise to the causes of action stated occurred in the State of Illinois.

“Venue is proper in this Court pursuant to 735 ILCS 5/2-101 as defendants’ liability arose, in part, in this county, and they may be found here,” the complaint continues.

The complaint also states the action is not based on federal law and the Nulls do not seek and will not accept recovery in excess of $75,000 exclusive of costs and interest.

The Nulls claim that for more than a century the De Beers "cartel" has dominated the market for rough diamonds in the United States and worldwide controlling as much as 80 percent of the world diamond supply.

Currently, De Beers controls 50 percent of the world’s diamond supply, and an even greater percentage of the world’s supply of two-carat and larger rough diamonds, according to the suit.

In 2003 alone, the Nulls claim De Beers sold $5.52 billion worth of rough diamonds, and used its market dominance to raise the price of rough diamonds three times during the year, allegedly creating a 10 percent hike in rough diamond prices.

“Over the years including presently, De Beers has used its monopolistic power to illegally and artificially restrain trade and increase the price of diamonds by controlling inventory,” the complaint states.

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