United States District Court, N.D. California
IL FORNAIO (AMERICA) CORPORATION, OLIVETO PARTNERS, LTD. and THE FAMOUS ENTERPRISE FISH COMPANY OF SANTA MONICA, INC., on behalf of themselves and all others similarly situated, Plaintiffs,
LAZZARI FUEL COMPANY, LLC, CALIFORNIA CHARCOAL AND FIREWOOD, INC., CHEF'S CHOICE MESQUITE CHARCOAL, RICHARD MORGEN, ROBERT COLBERT, MARVIN RING, and WILLIAM W. LORD, Defendants.
TENTATIVE ORDER GRANTING PRELIMINARY APPROVAL OF PROPOSED CLASS SETTLEMENT AND ORDER RE PLAN OF ALLOCATION
WILLIAM ALSUP, District Judge.
All parties in this civil antitrust class action involving direct purchasers of mesquite lump charcoal move for preliminary approval of a proposed class settlement. For the reasons stated herein, the motion is TENTATIVELY GRANTED, subject to the following guidance.
This is a civil antitrust class action following a guilty plea to a per se violation of Section 1 of the Sherman Antitrust Act. Now follow the details.
In 2011, defendant Lazzari Fuel Company, LLC reached a conditional agreement with the Department of Justice regarding leniency and cooperation in connection with an alleged violation of the antitrust laws for the sale of mesquite lump charcoal in the United States.
More than a year later, defendant William Lord, the owner of Chef's Choice, pled guilty to a violation of Section 1 of the Sherman Act. United States v. Lord, No. 3:12-cr-00326-WHA (N.D. Cal.). Mr. Lord admitted to an agreement with all defendants herein not to compete for customers for the sale of mesquite lump charcoal in the United States. He served prison time and paid a $100, 000 fine.
In April 2013, Lazzari offered purchase rebates to eleven customers in "restitution." Those eleven customers were offered discounts that could be taken through deductions from future customer remittances (Colbert Decl. ¶¶ 4-6, 11). Mr. Colbert has recently stated, however, that "[m]any of the eleven customers have not yet applied the rebates... but we expect that they may do so at some point" (Dkt. No. 154-1).
In November 2013, this action and another putative class action were commenced. The actions were consolidated and Attorney Elizabeth Pritzker was appointed as interim counsel.
Three defendants (Lazzari, Mr. Morgen, and Mr. Colbert) then moved for preliminary approval of a partial class settlement. That proposal was rejected but the parties, as they requested, were provided guidance at the hearing.
Two more defendants (California Charcoal and Mr. Ring) then reached a partial class settlement. A class was certified (Dkt. No. 138).
Now, all defendants have reached a proposed class settlement. This order follows full briefing, supplemental submissions, and oral argument. Fact discovery closes December 19, 2014, and trial would begin in March 2015 (Dkt. No. 57).
1. PROPOSED SETTLEMENT.
All parties move for preliminary approval of a proposed class settlement. In October 2014, the following class was certified under Rule 23(b)(3):
All persons and entities in the United States who, between January 1, 2000 and September 30, 2011, directly purchased mesquite lump charcoal from any defendant. Mesquite lump charcoal is defined as charcoal derived from the mesquite tree that is sold for restaurant or food-service use. Specifically excluded from the class are defendants; the officers, directors, or employees of any defendant; and the legal representatives, heirs, successors, or assigns of any defendant. Also excluded are any judicial officer and juror assigned to this action.
Under the settlement proposal, the key terms would be as follows.
Net Settlement Fund: The net settlement fund would be $4.575 million plus interest minus attorney's fees, expenses, taxes, and some costs. All payments would go to an escrow account and the last payment would be paid by December ...