Mesquite Charcoal Companies Fined $4.6M

SAN FRANCISCO (CN) - Three mesquite charcoal companies will pay $4.6 million to settle a federal antitrust suit accusing them of overcharging restaurants for lump charcoal.

U.S. District Judge William Alsup on Thursday tentatively granted a settlement in Il Fornaio (America) Corp. et al. v. Lazzari Fuel Co. et al.

The defendants, and their owners, were accused of overcharging customers more than $8 million on millions of pounds of mesquite charcoal.

Under the settlement, Chef's Choice Mesquite Charcoal will pay $2.2 million, California Charcoal and Firewood $1.55 million, and Lazzari Fuel $825,000 - for a total of $4,575,000.

The class accused the defendants of overcharging them a combined $8.26 million on 306 million pounds of mesquite charcoal.

The lower penalty for Lazzari Fuel is due its "weak financial condition" and equals more than 82 percent of its total equity, Alsup wrote.

The defendants must deposit all of the settlement funds into a trust account by Dec. 15, 2015. Lazzari Fuel and Chef's Choice can make several payments over the next year while California Charcoal must pay its settlement within 90 days of the preliminary approval, Alsup ruled.

Once the companies pay their settlements, they no longer will be liable for any class, individual or other claims regarding the sale of mesquite lump charcoal, Alsup said.

The tentative settlement saves money on the substantial "risk, expense, and complexity of continued litigation and trial" and enables about 1,500 class members to collect settlement money sooner and avoid the cost and risk of going to trial, Alsup said.

The class action commenced in November 2013 on behalf of "all persons and entities in the United States who, between Jan. 1, 2000, and Sept. 30, 2011, directly purchased mesquite lump charcoal from any defendant."

The class defines mesquite lump charcoal as charcoal derived from the mesquite tree and sold for food-service or restaurant use.

Named plaintiffs were Il Fornaio, Oliveto Partners and The Famous Enterprise Fish Company of Santa Monica.

Named as defendants are the three companies and their owners Richard Morgen, Robert Colbert, Marvin Ring and William W. Lord.

Lord, who owns Chef's Choice, in 2012 pleaded guilty to violating the Sherman Act, paid a $100,000 fine and served time in prison, according to Alsup's ruling.

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