Kona class action over false labeling settled for $6.15M

(March 1, 2019)

On Wednesday, a group of Hawaiian coffee growers filed a class action lawsuit against Walmart, Amazon, Costco and other retailers, claiming they improperly use the name “Kona” to market their coffee.

According to the growers, the term “Kona” can only be used to describe coffee grown in the Kona District of the Big Island of Hawaii.

The retailers have been using this name to market coffee grown elsewhere, in violation of federal law, the coffee class action lawsuit states. The coffee growers say that the Latham Act bans false designation of origin.

The class action lawsuit was filed by Bruce Corker, Colehour and Melanie Bondera, Robert and Cecelia Smith on behalf of their coffee farm businesses. The coffee growers aim to represent all “farms who grow the entire worldwide supply of authentic Kona coffee.”

According to the class action lawsuit, improperly labeling the coffee hurts true Kona coffee growers.

Reportedly, only 2.7 million pounds of coffee is produced in the district every year. However, the plaintiffs claim that more than 20 million pounds of coffee is sold as Kona coffee.

The coffee growers say the counterfeit coffee drives down the price of all Kona coffee because the market is “overwhelmed with counterfeit ‘Kona’ products.”

The growers go on to argue that the quality of the counterfeit Kona coffee damages the reputation of the real thing, saying “the counterfeit products taste like run-of-the-mill commodity coffee, causing consumers to erroneously conclude that Kona coffee is nothing special.”

The full list of retailers that the coffee growers accuse of improperly using the name is: Amazon, Costco, Walmart, Albertsons Companies Inc., BCC Assets LLC, Bed Bath & Beyond Inc., Cameron’s Coffee and Distribution Co., Copper Moon Coffee LLC, CostPlus/WorldMarket, Gold Coffee Roasters Inc., Hawaiian Isles Kona Coffee Ltd. LLC, Java LLC, MNS LLC, T.J. Maxx, Marshalls, Mulvadi Corp., Pacific Coffee Inc., Safeway Inc., Sprouts Farmers Market Inc. and The Kroger Co.

In their class action lawsuit, the plaintiffs stress they are not claiming trademark to the name Kona, though they are filing their claims under the federal trademark statute.

They say their efforts are similar to groups of European food producers and exporters who enforce “appellations of origin” that prevent producers in other regions from using the name of their region to label and advertise their foods. One well-known example of this is the wine producers of the Champagne region of France.

“Just as only sparkling wine originating from the Champagne region of France can be sold as ‘Champagne,’ only coffee grown in the Kona District can be sold as Kona coffee,” according to the coffee growers.

Currently, the coffee growers do not have a certification mark that prohibits other sellers to their geographical name, though such certification exists. Idaho potato growers do have a certification.

The Kona class action lawsuit is Corker, et al. v. Costco Wholesale Corp., et al., Case No. 2:19-cv-00290, in the U.S. District Court for the Western District of Washington.