Keurig Coffee Monopoly Class Action Lawsuits Consolidated

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UPDATE 2: Sept. 30, 2020, Keurig agreed to a $31 million class action settlement to resolve claims that the company monopolized the single-serve coffee pod market.

UPDATE: On Nov. 29, 2017, Keurig Green Mountain will continue to face multiple claims of anticompetitive behavior, following a judge’s denial of the company’s motion to dismiss.

A new Keurig coffee brewer expected to be launched later this year has sparked a flurry of class action lawsuits from consumers who accuse Keurig Green Mountain Inc. of engaging in anticompetitive behavior to stifle the competition.

A total of eight class action lawsuits that allege Keurig plotted to monopolize the market for single-serve coffee packs were centralized in New York federal court last week by the U.S. Judicial Panel on Multidistrict Litigation (JPML).

U.S. District Judge Vernon S. Broderick of the Southern District of New York will preside over the consolidated Keurig antitrust class action lawsuit, which could include up to 17 additional “tag-along” class actions, the JPML said in its June 3 Order.

Plaintiffs in the Keurig class action lawsuit list a number of alleged anticompetitive practices they claim the single-serve coffeemaker has engaged in, including acquiring its competitors to eliminate their competing business; negotiating and entering into exclusive agreements with suppliers and distributors so other coffeemakers could not enter the market; engaging in what plaintiffs call “sham patent infringement litigation”; and redesigning the company’s product so it will allegedly “lock-out” other coffeemaker’s single serve packets.

The JPML determined that the eight Keurig class action lawsuits and many of the potential tag-along cases had common factual allegations. The panel wrote, “[a]ll of the actions… raise virtually identical factual questions concerning the conduct of Keurig Green Mountain Inc., and its predecessors in allegedly monopolizing the market for single-serve coffee cups used in Keurig brewing machines. Additionally, most of the complaints challenge defendant’s alleged plans to introduce a product redesign later this year…”

The Keurig class action lawsuit cases involve three proposed Classes: direct purchasers, indirect purchasers, and competitors. While the direct purchasers and indirect purchasers have nearly identical claims, the competitors of Keurig were less enthusiastic about consolidation, according to the filing. The panel wrote, however, “[w]hile we agree that these actions present some individualized factual issues, the existence of such issues does not negate the common ones.”

“On the basis of the papers filed and the hearing session held, we find that the [Keurig class action lawsuits] involve common questions of fact, and that centralization will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation.”

Keurig’s single-serve coffee brewing machine, like that of its major competitor, Tassimo, uses single-serve coffee packs that can only fit its machines, and use of the machine requires that consumers also purchase single-serve coffee packs produced by Keurig partners, called K-cups. The industry term for these coffee brewers is a “closed brewing system,” meaning that it is closed to any coffee, tea or other hot beverage brand not specifically produced in partnership with the manufacturer. In fact, Keurig was the first company to use the closed brewing system model for the home brewing market.

While existing models of the Keurig brewing system could be “hacked,” and competitors could simply produce cups that were the same size and shape as K-cups with their own product inside, the new brewing system in the works would use so-called “digital rights management,” or DRM, the same technology that limits whether DVDs can be played on machines outside the country of origin; prevents Amazon e-book downloads from being read on other devices; and once limited iTunes songs to play on Apple devices. The new machine would only accept Keurig-licensed K-cups.

The Keurig Coffee Monopoly Class Action Lawsuit is In re: Keurig Green Mountain Single-Serve Coffee Antitrust Litigation, MDL No. 2542, in U.S. Judicial Panel on Multidistrict Litigation.