A justice of the British Columbia Supreme Court has ruled that an alleged worldwide diamond cartel led by rough diamond seller De Beers had sufficient anticompetitive impact on Canadian consumers to enable a price-fixing class action to survive a motion to dismiss at the pleading stage.

The plaintiff alleges that De Beers and the other defendants sought to eliminate competition in the sale of gem grade diamonds in British Columbia, Canada, and elsewhere, by fixing the price of gem grade diamonds and allocating the market for gem grade diamonds.

De Beers had argued that the court lacked jurisdiction of the claims in Fairhurst v. Anglo American PLC because only one of the defendants did any business in British Columbia.  And all defendants traded only in rough diamonds, not the gem grade diamonds purchased by consumers like the plaintiff.  De Beers argued that the defendants were far higher in the “diamond pipeline.”  In the words of its expert, “any connection between the Defendant’s sales of rough diamonds on the one hand and the Plaintiff, other Proposed Class Members and any diamond jewelry purchases made in British Columbia on the other hand, is remote in the extreme.”

Madam Justice B.J. Brown, however, concluded that De Beers was not only higher in the “diamond pipeline”– it more or less owned the pipeline.  The court noted that De Beers was long the largest producer of rough diamonds in the world, acted historically as the “diamond industry custodian,” and “possessed a degree of monopoly power in the rough diamond market for over a century.”

Drawing upon jurisdictional authority to hold foreign manufacturers liable for knowingly sending hazardous products into the stream of commerce in Canada, the court ruled that a “tortious conspiracy” such as the alleged worldwide diamond cartel is said to occur wherever damage from the conspiracy is suffered:  “The defendants do not suggest that ‘their’ diamonds were not sold in British Columbia.  The diamonds arrived in British Columbia in the ordinary course of De Beers’ business, and the defendants knew or ought to have known that the product would be sold in British Columbia.”

The court deemed allegations of a diamond cartel whose aim was to “creat[e] an overcharge” that would necessarily harm consumers was sufficient to give the court jurisdiction at this stage in the litigation.

The United States Court of Appeals for the Ninth Circuit has affirmed the dismissal of a purported class action against television programmers and distributors alleging that the programmers’ practice of selling multi-channel cable packages violates Section 1 of the Sherman Act.

In Brantley v. NBC Universal, Inc., plaintiffs claimed that defendants derived market power from offering “must-have,” high-demand television channels, and exploited this market power by tying or bundling low-demand channels with the sales of the high-demand channels.

Judge Ikuta, writing for a unanimous appellate panel, called the case a “consumer protection class action masquerading as an antitrust suit,” noting that although plaintiffs alleged antitrust injury in the form of reduced choice and increased prices, they failed to allege any harm to competition.  In other words, plaintiffs failed to show that other sellers of low-demand channels were excluded from the market.

Savant alleges that Crestron is the largest supplier of high-end home automation systems – equipment that controls everything from audio/video and lighting systems to climate and security, and costs from $25,000 to $100,000 to install – with a market share of over 80 percent. 

According to Savant, the market is particularly constrained by the fact that automation products are not sold directly to consumers, but through local dealer networks.  The vast majority of these dealers – 80 to 90 percent – are Crestron dealers.  Savant says Crestron offers discounts to dealers who refuse to carry Savant and penalizes those who do.  According to the complaint, Crestron’s misconduct is exemplified by a recent guide telling dealers, “Remember, you can’t be a Crestron dealer and also sell Savant products.” 

Savant has alleged that these and other exclusionary activities are designed to restrain competition by precluding Savant’s access to the dealer network and protect Crestron’s monopoly.  The suit also alleges that Crestron published false information about Savant, such as “asserting that only Crestron has an exclusive relationship with Apple . . . .”  Other allegedly false statements include Crestron’s warning to customers that “when you buy Savant, you buy Savant – a one-room storefront on Cape Cod – not Apple.” 

Judge Harrington of the U.S. District Court for the District of Massachusetts rejected Crestron’s arguments in a two-paragraph order, setting the stage for full-blown discovery and inevitable re-examination at summary judgment.  The market for programmable home (and commercial) automation technology, currently more than $200 million annually, appears to be growing rapidly.

A concert fan challenging Live Nation’s practice of charging fans without cars fees for parking spaces that don’t exist is fighting to keep his case alive.

Live Nation has now filed a motion to dismiss the complaint in the case of Batson v. Live Nation Entertainment, Inc. et al., in the U.S. District Court for the Northern District of Illinois.  As we reported in a previous post, the plaintiff accuses Live Nation of illegally imposing on event goers mandatory parking fees that they “did not need, use, want, or voluntarily contract for,” in violation of the Sherman Act and California’s Unfair Competition Law

In its motion, the entertainment company argues the plaintiff’s antitrust tying claims fail to allege “antitrust injury,” since the plaintiff was not in the market for event parking the evening he attended the concert at issue – the plaintiff walked to the concert.  In addition, Live Nation states that there is neither foreclosure nor a danger that it will acquire market power in the market for event parking as Live Nation does not provide event parking to consumers. 

With respect to the plaintiff’s claim under California’s Unfair Competition Law, Live Nation argues that dismissal is appropriate under Illinois’ conflicts-of-law rules because California does not have the “most significant relationship” with the alleged injury, which occurred in Illinois.  Live Nation also includes the constitutional arguments of Due Process and the Full Faith and Credit Clause to support dismissal.