Keurig Must Face K-Cups Antitrust Class Action Lawsuits

UPDATE: 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.

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

U.S. District Judge Vernon S. Broderick denied Keurig’s request to dismiss four separate antitrust lawsuits among others in a consolidated multidistrict litigation.

Plaintiffs in the MDL accuse Keurig of an array of anticompetitive practices allegedly conducted in the marketing of its K-Cups – single-serve packs of roasted and ground coffee packaged for use in Keurig coffee machines.

Among other claims, the plaintiffs say Keurig has violated federal and state antitrust laws by proposing to market a new brewer, the Keurig 2.0, designed to brew coffee only from Keurig K-Cups and not from similar cups produced by unlicensed third parties.

The Keurig 2.0 would restrict the pool of usable coffee packs through the use of digital rights management technology – the same technology used to restrict the use of media like DVDs and e-books.

One of the four Keurig lawsuits challenged for dismissal is itself a consolidation of several class action lawsuits from more than two dozen indirect purchasers of Keurig products. Judge Vernon denied Keurig’s motion for dismissal with respect to all claims except five claims brought by the indirect purchaser plaintiffs.

All told, the indirect purchasers assert claims under the antitrust and unfair competition laws of 21 states and the District of Columbia, the unfair trade practices laws of six states, and claims under the federal Sherman Act that are also being brought by the other plaintiffs.

It’s not clear from Judge Vernon’s order which of the indirect purchasers’ claims have been dismissed. A full explanation of the order is forthcoming in a memorandum opinion to be published later.

The Keurig antitrust MDL was set up in June 2014, when eight separate Keurig antitrust lawsuits were consolidated and transferred to a single federal court in New York. At the time of consolidation, the federal Judicial Panel on Multidistrict Litigation identified 17 other Keurig antitrust lawsuits as potential tag-along actions.

Other plaintiffs in the Keurig MDL include direct purchasers of Keurig products and companies that make or market competitor products. These plaintiffs allege Keurig bought out its competition, compelled distributors to enter into exclusive distribution agreements, and pressured retailers to restrict access to competitiors’ products.

Plaintiff Rogers Family Company, the maker of OneCup single-serve packs that compete with K-Cups, accuses Keurig of falsely claiming that using OneCup packs in a Keurig 2.0 could cause the machine to fail.

Keurig is also accused of filing frivolous patent infringement claims against companies that attempt to produce similar products.

The size and complexity of the Keurig antitrust litigation reflects the volume of business at stake. In fiscal 2015, sales of K-Cups and other Keurig beverage pods reached more than $3.6 billion.

The direct purchaser plaintiffs are represented by attorneys Kellie Lerner, Bernard Persky and Meegan Hollywood of Robins Kaplan LLP.

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