Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Charcoal producers agree to settle price fixing class action for $2.375M, (Oct 28, 2014)

By Linda O’Brien, J.D., LL.M.

In two consolidated class action suits by restaurant companies against producers and distributors of mesquite charcoal for allegedly conspiring to fix prices, two of the charcoal producers, Lazzari Fuel Company and California Charcoal and Firewood, have agreed to settle the action for a total of $2.375 million, according to a motion for preliminary approval filed in the federal district court of San Francisco (Il Fornaio Corporation v. Lazzari Fuel Company, LLC, Case No. 3:13-cv-05197).

Chef’s Choice Mesquite Charcoal, Lazzari Fuel Company LLC, and California Charcoal and Firewood, Inc. are leading manufacturers and distributors of mesquite charcoal typically used in the restaurant industry to grill meat, fish, and poultry. Il Fornaio Corporation, Oliveto Partners, Ltd., The Famous Enterprise Fish Company of Santa Monica, Inc., and Lazzari Fuel Company operate restaurants that purchase mesquite charcoal.

In November 2013, the restaurant companies filed suit against the charcoal manufacturers, alleging that the producers conspired to fix the prices of mesquite charcoal. The plaintiffs are seeking preliminary approval of a proposed settlement under which defendants California Charcoal and Firewood and its owner will pay $1.55 million to a settlement fund and defendant Lazzari Fuel Company and two shareholders will make a $825,000 payment to the settlement fund. The settling defendants have also agreed to assist in the prosecution of the case against the remaining defendants.

According to the plaintiffs’ motion, the proposed settlement meets the standards for preliminary approval. The settlement was reached after substantial discovery and briefing on class certification, approaches the maximum amount they could realistically obtain from the settling defendants, and is fair, reasonable, and in the best interests of the class.

Additionally, the settlement was reached after vigorous arms-length negotiations by experienced class counsel and had the participation by representatives from each plaintiff. The proposed settlement amount was fair and adequate in comparison to other analogous cases and in light of the difficulties proving the case. Finally, the defendants have sufficient assets to pay the proposed settlement on schedules listed in the settlement based on financial analysis, and the plaintiffs had legitimate concerns that either one of the defendants could pay more that the settlement demands.

Attorneys: Elizabeth C. Pritzker, Bethany L. Caracuzzo, and Shiho Yamamoto (Pritzker Levine LLP) for Il Fornaio Corporation, Oliveto Partners, Ltd., and The Famous Enterprise Fish Company of Santa Monica, Inc.

Companies: Il Fornaio Corporation; Oliveto Partners, Ltd.; The Famous Enterprise Fish Company of Santa Monica, Inc.; Lazzari Fuel Company, LLC; California Charcoal and Firewood, Inc.; Chef’s Choice Mesquite Charcoal; Darbar Cuisine, Inc.

News: Antitrust CaliforniaNews