HONOLULU (AP) — Matson Inc. will pay $10 million to settle a lawsuit alleging the company misapplied fuel surcharges on military household goods shipped between the mainland and Hawaii or Guam.
The company announced Tuesday it signed a settlement agreement with the U.S. Department of Justice and Mario Rizzo, who filed the lawsuit in California in 2010 on behalf of the federal government.
The shipments were paid for by the Department of Defense.
Under terms of the settlement, Matson will pay the government $9 million and Rizzo will receive about $2.6 million of that.
Matson also will pay Rizzo $950,000 in legal expenses.
“This agreement is neither an admission of liability by Matson nor a concession by the United States or (Rizzo) that their claims are not well-founded,” the company said in a statement.
Rizzo’s lawsuit also includes Horizon Lines LLC as a defendant. That shipping company has said it intends to fight the suit.
The two shipping companies combined fuel surcharges for ship and rail transportation on bills to freight forwarders contracted to move household items for the military, Rizzo alleged. The federal government prohibits rail fuel surcharges on military household goods shipped to the mainland from Hawaii and Guam.
Matson said in February that it planned to settle and reserved $10 million from its fourth-quarter earnings. At the time, the agreement was pending approval from the federal government.