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Corker v. Costco: A Complaint Brewing Over Kona Coffee

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Corker et al v. Costco Wholesale Corporation et al, No. 2:19-cv-00290 (W.D. Wash. Feb. 27, 2019). Complaint hosted by Law360.

On February 27, 2019, five individual Kona coffee growers from three Hawaii-based coffee farms filed a class action suit against Costco, Amazon, Walmart, and others in the U.S. District Court for the Western District of Washington. The Complaint is filed on behalf of “the Kona coffee farmers who grow the entire worldwide supply of authentic Kona coffee,” alleging that the retailers violated the Lanham Act, 15 U.S.C. § 1125, by selling ordinary commodity coffee as Kona coffee. The Complaint alleges that, by selling counterfeit Kona products with inferior quality and taste, the defendants have deceived and confused the consumer, damaged the market price of authentic Kona coffee, and “harmed the reputation of authentic Kona coffee as a premium product.” The plaintiffs seek compensatory and injunction, among other remedies.

The complaint asserts that modern chemistry can now determine whether a given bag of coffee beans is authentic Kona coffee. That is because due to the distinctive soil composition, certain chemical elements like barium or nickel are present in high concentrations in Kona coffee beans. Because the roasting process will not impact the absolute amount of these chemical elements in coffee beans, the relative concentration of these elements will stay constant. The plaintiffs sampled coffee beans from ten coffee products with “Kona” label sold by the defendants and examined the cobalt-to-zinc (“Co/Zn”) ratio, manganese-to-nickel (“Mn/Ni”) ratio, strontium-to-zinc (“Sr/Zn”) ratio, and the barium-to-nickel (“Ba/Ni”) ratio in each sample. Plaintiffs include both the Sr/Zn vs. Ba/Ni plot and the Co/Zn vs. Mn/Ni plot from the testing for each sampled product and conclude that the observed element ratios do not match those observed from over one hundred samples of authentic Kona coffee. Thus, the Complaint alleges, the designation of Kona as the origin in these products is false.

Citing Hawaii Administrative Rules §4-143-3, the plaintiffs claim that “only coffee grown in the Kona District can be sold as Kona coffee.” There are estimated 600 to 1000 Kona coffee growers in the Kona district and in total, they produce only produce 2.7 million pounds of authentic green Kona coffee annually. Yet over 20 million pounds of coffee labeled as “Kona” is sold at retail. As Bill Donahue of Law360 explains, under U.S. law, a group of food producers can register a “certification mark” for a protected geographical term and limit the use of it to products that meet certain standards. According to Bill, the Kona coffee growers in this case do not have such registration.

Among the defendants, Maui Coffee Co. is a Hawaii-based coffee producer.  Andrew Gomes from West Hawaii Today, reported that John Sheveland, the president of Maui Coffee Co., was surprised by the lawsuit, because Sheveland believes he pays Kona coffee farmers for the relatively little Kona Coffee he sells. He stated that he “buy[s] Kona coffee from the Big Island, and for all I know it’s 100 percent Kona coffee,” and “spend[s] good money on it.”

The nineteen named defendants are Costco Wholesale Corp., Amazon.Com, Inc., Hawaiian Isles Kona Coffee Ltd. LLC, CostPlus/WorldMarket, BCC Assets LLC, Java LLC, Mulvadi Corp., Copper Moon Coffee LLC, Gold Coffee Roasters Inc., Cameron's Coffee and Distribution Co., Pacific Coffee Inc., The Kroger Co., Walmart Inc., Bed Bath & Beyond Inc., Albertsons Companies Inc., Safeway Inc., MNS LLC, Marmaxx Operating Corp., and Sprouts Farmers Market Inc.

According to Andrew Gomes, Karr Tuttle Campbell plans to file a class action lawsuit on behalf of consumers who bought allegedly counterfeit Kona coffee.