In another win for Kona Coffee Farmers, a Washington federal judge Thursday approved convenience store chain MNS Ltd.’s (ABC Stores) $12 million settlement over claims that the chain sold products that were falsely advertised as authentic Kona coffee.
With the latest approval of the MNS settlement, a class of farmers has reached deals for more than $33 million from claims alleging about two dozen companies sold beans and ground coffee as Kona without buying from actual Kona growers.
The Settlement Class, as defined in each of the Settlement Agreements, includes all persons and entities who, between February 27, 2015, and the date of Court’s order granting preliminary approval to the settlement (April 25, 2023), farmed Kona coffee in the Kona District and then sold their Kona coffee.
The Court’s Preliminary Approval Order concluded that the Settlement appeared to be “fair, reasonable, and adequate.”
The plaintiffs explained, and the Court determined, that approval of the Settlement will bestow a substantial economic benefit on the Settlement Class, result in substantial savings in time and money to the litigants and the Court and will further the interests of justice, and that the Settlement is the product of good-faith arm’s length negotiations between the Settling Parties according to the Settlement Approval.
The final approval of a $7.78 million settlement to end claims that the now- bankrupt Mulvadi Corp. wrongly sold coffee using the Kona name remains in the case.
As with previous settlements in this case, the farmers and MNS Ltd. mutually agreed to the settlement, which includes an injunctive provision that requires the company to “accurately and unambiguously” label the “minimum percentage of authentic Kona coffee beans” contained in its products.
Law 360 reported Jason L. Lichtman of Lieff Cabraser Heimann &Bernstein LLP, representing the growers, said MNS also agreed to require its suppliers to provide proof that their coffee is 100% Kona coffee or provide proof of the accurate percentage of Kona coffee in a blend.
Lichtman told U.S. District Judge Robert Lasnik that was a big deal for the farmers, noting that MNS operates ABC Stores in Hawaii, a chain popular with tourists.
“That means the consumers who come to Hawaii know they are getting the real thing when they are buying Kona coffee,” Lichtman said. “This is exactly what the class wanted at the outset of this litigation.”
Judge Lasnik said he was impressed to see MNS “step up and say, ‘We don’t want to deceive our customers at all,” and support the coffee growers.
“There’s a real harm here and a real result that makes people whole again,” Judge Lasnik said.
He also approved the class counsel’s motion for $5.8 million in attorney fees and $662,000 in costs and expenses.
The farmers sued in 2019, claiming that only coffee harvested from Hawaii’s Big Island is actually Kona coffee. Though filed under the federal trademark statute, the Hawaiian farmers don’t claim trademark rights to the name. Instead, the lawsuit is more akin to efforts by groups of European food exporters to enforce “appellations of origin” over geographic names like Champagne.
The farmers relied on scientific testing that confirmed the coffee marketed and sold by defendants as Kona coffee contained little or no coffee grown by the Kona farmers, according to court documents.
Costco reached a settlement with the coffee growers in March 2021. The agreement did not require the retailer to pay any money. But Costco did agree to labeling guidelines that also apply to vendors required to go through a certification process.
The coffee farmers also previously agreed to drop their claims against several retailers, including Amazon.com Inc., Walmart Inc. and Bed Bath &Beyond Inc.
Some 600 Kona coffee farmers included in the 2019 class action lawsuit filed by Bruce Corker, Colehour and Melanie Bondera and Robert and Cecelia Smith against 18 defendants including major retailers like Walmart, Costco, Amazon and Safeway, and other distributors, wholesalers, and sellers.
In spring 2021, settlements were reached and approved by the U.S. District Court for the Western District of Washington for eight of the defendants: BCC Assets, Cameron’s Coffee and Distribution Company, Copper Moon Coffee, Cost Plus Inc., Pacific Coffee, which does business as Maui Coffee Company, Costco, Marshalls and Gold Coffee Roasters totaling $13.1 million.
In February 2022 Kona coffee farmers each began receiving their share of a $13.1 million settlement reached in a 2019 class action lawsuit against retailers that falsely labeled commodity coffee beans as premium “Kona” coffee.
“The importance of the federal Lanham Act in protecting Hawaii coffee farmers—and the producers of geographically identified agricultural products throughout the county—cannot be overstated,” siad Corker. “Court approval of the MNS/ABC Stores settlement, together with the pending Court approval of a $7.775 million settlement agreed to by Hawaii-based Mulvadi Corporation, will bring the total of settlement payments in the lawsuit to more than $40 million. This case highlights protections for producers and consumers provided by the Lanham Act—and the disincentives for use of deceptive labeling practices.”
