Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Cal.: $4.575M settlement tentatively approved in mesquite lump charcoal case, (Dec 5, 2014)

By Greg Hammond, J.D.

Purchasers of mesquite lump charcoal have received temporary approval of a $4.575 million settlement in a class action alleging that manufacturers engaged in a price-fixing conspiracy, in violation of the Sherman Act. The federal district court in San Francisco determined that the settlement was fair and reasonable, but requested additional information and a revised proposed release, claim form, and class notice (Il Fornaio (America) Corp. v. Lazzari Fuel Company, LLC, December 4, 2014, Alsup, W.).

Background. Mesquite charcoal is typically used by restaurants and individuals to grill meats and fish. Plaintiffs filed a complaint against manufacturers Lazzari Fuel Company, LLC, California Charcoal and Firewood, Inc., Chef’s Choice Mesquite Charcoal, and their individual owners, alleging that the manufacturers engaged in a conspiracy to fix the prices of mesquite charcoal. Lazzari previously reached a conditional agreement with the Justice Department regarding leniency and cooperation in 2011, and the owner of Chef’s Choice later pleaded guilty to violating the Sherman Act by agreeing with the other defendants not to compete for customers. The parties have now reached a proposed class settlement and moved for preliminary approval.

Proposed settlement. Under the proposed agreement, the net settlement fund would be $4.575 million plus interest, minus attorney’s fees, expenses, taxes, and some costs. Lazzari agreed to pay $825,000 in total; California Charcoal agreed to pay $1.55 million; and Chef’s Choice agreed to pay $2.2 million. In addition, Lazzari would pay half of the cost of administering the settlement fund, apart from its $825,000 contribution, and the settlement would provide no reversion to defendants.

The court determined that it might be in the best interest of the class to receive some payment soon, rather than face additional expenses and risk of trial. However, it requested the following information: (1) an explanation on how Lazzari would prevent class members from seeking both purchase rebates and settlement money for the same mesquite charcoal purchases, since it has already offered purchase rebates; (2) whether California Charcoal and Chef’s Choice would consider paying 25 percent portions of administering the settlement fund and notice, beyond their current contributions; (3) a reworded release that is limited to only the asserted certified class claim; (4) an average claim amount and the amount each named plaintiff expects to claim; (5) what would happen to any unclaimed amounts and a time schedule for dealing with that possibility; (6) a revised proposed claim form; and (7) a revised proposed class notice.

The case number is C 13-05197 WHA.

Attorneys: Elizabeth Cheryl Pritzker (Pritzker Levine LLP) for IL Fornaio Corp. David C. Brownstein (Farmer Brownstein Jaeger LLP) for Lazzari Fuel Company, LLC. Jean Pierre Nogues, Jr. (Mitchell Silberberg and Knupp) for California Charcoal and Firewood, Inc. Jeffrey Scott Sanger (Sanger Swysen and Dunkle) for Chef's Choice Mesquite Charcoal.

Companies: IL Fornaio Corp.; Lazzari Fuel Company, LLC; California Charcoal and Firewood, Inc.; Chef's Choice Mesquite Charcoal

Cases: Antitrust CaliforniaNews