The opinion of the court was delivered by: William C. Conner, Senior District Judge.
This litigation was started as three separate antitrust class
actions against GE and De Beers, two of the actions being
brought in this Court respectively by American Diamond Tool &
Gauge, Inc. (92 Civ. 5130) and Zollner Corp. (94 Civ. 3809) and
one in the Southern District of Ohio by Cold Spring Granite Co.
(92 CV 511). The latter action was transferred to this Court by
the Judicial Panel on Multidistrict Litigation for consolidated
discovery with the two actions pending here. De Beers did not
answer or otherwise appear in either of the New York actions and
default judgment was entered against it on April 4, 1994 in Case
No. 92 Civ. 5130 and on January 20, 1995 in Case No. 94 Civ.
3809. De Beers was not named as a defendant in the Ohio action.
Plaintiffs in all three actions moved under FED.R.CIV.P. 23(a)
and 23(b)(3) for class certification and, in a decision filed
July 10, 1996 and reported at 167 F.R.D. 374, this Court
certified a plaintiff class consisting of:
all persons and entities located in the United States
that purchased industrial diamond products for which
the defendants set list prices directly from one of
the defendants, or a corporation or other person
owned or controlled by one of the defendants, at any
time during the period of November 1, 1987, through
May 23, 1994 (excluding (i) any federal, state or
local government purchaser, and (ii) any defendant or
other manufacturer of industrial diamonds, and any
parent, subsidiary or affiliate of any defendant or
other manufacturer of industrial diamonds).
Following extensive discovery and negotiation, GE settled all
claims asserted against it by the plaintiff class by agreeing to
pay plaintiffs' attorneys fees and expenses ($1,850,000 and
$500,000 respectively) and to give each class member an in-kind
rebate of free diamonds of like grade and quality to their
purchases of industrial diamonds from GE during a "claim period"
of 20 months after the settlement became final, in an amount
equal to 3% of the diamonds purchased by the member from GE
during the claim period. If a class member purchased no diamonds
from GE during the claim period, it was given the option of
either transferring a share of its right to such in-kind rebate
to another entity or of receiving from GE a cash payment of
$1,000. After notification of the class members and a fairness
hearing, the settlement was approved by the Court on July 23,
The Court conducted an inquest to fix damages against the
defaulting defendant De Beers on July 26, 2000. The only witness
was Dr. Michael C. Keeley, plaintiffs' economics expert. De
Beers was not represented at the hearing. An attorney for its
Irish subsidiary, De Beers Industrial Diamonds (Ireland),
attended the hearing, but declined the Court's invitation to
cross-examine the witness or otherwise actively participate.
Because all of the court reporters in the courthouse were
occupied on other cases at the time, counsel agreed to have the
proceedings recorded by machine. Unfortunately, it was later
discovered that the recording machine had malfunctioned and that
a readable record had been made of only a short portion at the
end of the hearing. However, there was no prejudice because,
along with their post-hearing memorandum, plaintiffs submitted
an affidavit of Dr. Keeley repeating the substance of his
While a default constitutes an admission of all the facts
"well pleaded" in the complaint, it does not admit any
conclusions of law alleged therein, nor establish ...