Keurig Settles Single-Serving Coffee Pods Class Action Lawsuits for $31M

Keurig has agreed to a $31 million class action settlement to resolve claims that the company monopolized the single-serve coffee pod market.

The $31 million proposed settlement would benefit individuals who purchased Keurig K-Cup portion packs between September 2010 and August 2020. Hundreds of thousands of consumers could be included in this proposed settlement Class.

According to the motion for preliminary settlement approval from the plaintiffs, the deal helps indirect buyers avoid the risks of litigation through to a trial and ensures affected consumers will get a payout.

The plaintiffs also noted Keurig may not be able to fund such a large settlement in the future due to other lawsuits from competitor companies and direct purchasers. Between the potential of a settlement in these cases and the ongoing strain of the coronavirus pandemic, the plaintiffs argue that securing a deal is a time-sensitive issue.

“While Keurig is undoubtedly a large corporation and seemingly healthy, the presence and potential impact of the COVID-19 pandemic adds a layer of uncertainty and risk that could adversely affect the company’s financial footing,” the plaintiffs note in their motion.

In their motion for preliminary approval, the indirect buyers noted it would be hard to calculate exactly how much estimated damages would be in the case – making it near impossible to compare the $31 million to this value.

However, despite this, the plaintiffs argue that the court should deem the settlement to be fair and “well within the range of reasonableness.”

“Although Keurig sold billions of Keurig K-Cup Portion Packs during the relevant period, the damages calculation is extremely complex,” they said.

“During the mediation, Keurig took the position that, after an assessment of risk, damages were de minimis and the value of the case was well below the settlement amount.”

Plaintiffs in the Keurig single-serve coffee class action lawsuits claim the company unfairly holds a monopoly over the coffee pods. Allegedly, Keurig routinely suppresses competition and ensures it stays in control of the market — allowing the company to charge its indirect purchasers a higher price.

Competitors and direct purchasers have also filed claims against the company, challenging distributer exclusivity agreements, unnecessary patent infringement lawsuits and alleging other attempts to suppress competition.

Keurig allegedly further harmed competitors by misleading indirect purchasers into thinking competitor single-serve coffee pods wouldn’t work in their Keurig 2.0 machines. Keurig reportedly intentionally designed later models of the machines to not work with competitor pods.

In 2014, eight class action lawsuits were consolidated into a multidistrict litigation in New York federal court. The claims under this case involve competitors, direct purchasers and indirect purchasers. However, the recently proposed Keurig single-serve coffee pod settlement would only resolve indirect purchaser claims.

Competitors were reportedly less than thrilled about having their claims consolidated with the purchasers. Although direct and indirect purchasers have nearly identical claims, the competitor’s claims were not as similar. However, the panel which consolidated the cases said that, “[w]hile we agree that these actions present some individualized factual issues, the existence of such issues does not negate the common ones.”

In late 2017, U.S. District Judge Vernon S. Broderick ruled Keurig must face the multidistrict litigation against them and denied the company’s motion for dismissal. Keurig tried to escape the claims, but Judge Broderick only agreed to dismiss claims from one indirect purchaser. The rest of the class action lawsuit claims were allowed to continue.

The recently proposed settlement provides one way for Keurig to escape the single-serve coffee pod class action lawsuits against them without admitting wrongdoing or facing potentially catastrophic damages.

Although a $31 million payout is significant, it may be less than the company would be forced to pay should it lose at trial. Additionally, the settlement helps the company avoid the costs associated with litigating the issue for several more years.

Have you purchased Keurig single-serve coffee pods? Share your thoughts on this settlement in the comment section below.

The plaintiffs and proposed Class are represented by Robert N. Kaplan, Gregory K. Arenson, Hae Sung Nam and Jason A. Uris of Kaplan Fox & Kilsheimer LLP; Mark C. Rifkin, Thomas H. Burt and Patrick Donovan of Wolf Haldenstein Adler Freeman & Herz LLP; and Clifford H. Pearson, Daniel L. Warshaw and Matthew A. Pearson of Pearson Simon & Warshaw LLP.

The Keurig Single-Serve Coffee Class Action Lawsuit is In re: Keurig Green Mountain Single-Serve Coffee Antitrust Litigation, Case No. 1:14-md-02542, in the U.S. District Court for the Southern District of New York.

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