Professional Jeweler Archive: W.B. David Sues De Beers and Others

August 2004

First Run

W.B. David Sues De Beers and Others

Asks for $100 million in damages

W.B. David & Co., New York City, seeks $100 million in damages from 90 defendants – including various De Beers entities and principals and many De Beers clients – in a lawsuit filed July 1 in U.S. District Court for the Southern District of New York. The suit also asks the court to attach – or seize – De Beers’ U.S. assets, including trademarks and intellectual property such as the slogan “A Diamond is Forever,” along with a long list of other assets potentially held by various defendants.

“The De Beers cartel and its confederates and coconspirators have inflicted serious injury on us. We are prepared to pursue this matter vigorously to a successful conclusion,” according to W.B. David.

De Beers supplied W.B. David with rough diamonds until last year, when the company was eliminated from the group’s client, or sightholder, list. The 140-page filing includes these complaints:

u De Beers eliminated W.B. David from its list of Supplier of Choice clients not because it was a poor applicant, but because it wants to “increase its downstream, vertical monopoly power by gaining further control over retail sales of diamonds.” W.B. David claims “De Beers has targeted U.S. diamantaires [for elimination from its client list] who manufacture and distribute two carat and larger rough diamonds, which are in the greatest shortage, which are key to De Beers’ aspirations to sell diamonds.”

u De Beers stole W.B. David’s proprietary U.S.-based Leading Jewelers of the World program and is using it with a group of retail jewelers in Japan, where W.B. David says it planned to introduce the program. Leading Jewelers of the World, which W.B. David introduced in 2001, is an organization of elite retail jewelers who agree to adhere to high standards in diamonds, service and other areas. The suit says De Beers’ termination of W.B. David’s client status precluded the company from meaningfully continuing the program because it no longer has the kinds of diamonds needed to supply members.

u De Beers further controls the distribution of rough diamonds and illegally strengthens its monopoly by giving only certain non-sightholding diamantaires a supply of rough diamonds through its subsidiary Diamdel.

u De Beers is tightening its control of the markets and taking the actions specified in the lawsuit to “optimize the chances of success, and profits to be made, in its current and future De Beers retail stores worldwide and in the U.S.”

At press time, a De Beers press office representative told Professional Jeweler the company had not yet been served with the suit, making it inappropriate to comment.

– by Peggy Jo Donahue

Copyright © 2004 by Bond Communications