Search results for: kona

  • As we reported in 2019, a group of 600 Hawaiian coffee farmers sued a group of coffee sellers, including Walmart, Costco, Amazon, Safeway, Kroger, Cost Plus/World Market, and Bed Bath & Beyond for falsely advertising coffee as “Kona” that did not originate in the Kona region of Hawaii in violation of the Lanham Act. A sister class action was filed by consumers against the same coffee sellers under the same facts, alleging breaches of implied and express warranties, Common Law fraud and intentional misrepresentation. Both complaints centered on the allegation that true Kona-grown coffee is a premium product sought out by consumers for its distinct flavor profile.
  • While the consumer-brought case was voluntarily dismissed without prejudice in May 2019, the farmer-brought suit has reached settlement agreements with the defendants. Most recently, Costco, Marshalls, and Gold Coffee Roasters reached an agreement (Law360 subscription required) on March 9, 2021, approved by the U.S. District Court for the Western District of Washington. In addition to monetary compensation and attorney fees from some sellers, the settlement requires the defendant coffee sellers to follow new labeling guidelines and require vendors to go through a certification process when labeling their coffee as originating in the Kona region. The requirements would bring the sellers into compliance with Hawaii’s strict labeling laws specific to Hawaiian-grown coffee. Earlier this year, the same court approved preliminary settlements with other defendants totaling over $7 million.
  • Kona coffee has been at the center of other claims, most of which have also avoided trial. A March 2019 suit filed against L & K Coffee Co. alleged the defendant’s Magnum Exotics Kona Blend Coffee product could not be characterized as “Kona” because it did not contain enough Kona coffee (the suit was later voluntarily dismissed with prejudice for undisclosed reasons). An April 2020 suit filed against Hawaiian Isles Kona Coffee Company brought on behalf of consumers alleged that testing of the products showed they did not originate from Kona.
  • These claims further highlight the importance of reviewing your labels and advertising to ensure that you accurately portray the geographic origin of your food and ingredients so as to avoid misleading consumers and increasing risk of challenge, especially when the foods and ingredients are considered value-added. Keller and Heckman will continue to monitor and report on activity surrounding such claims.

Amazon, Walmart, Costco Sued Over Fake ‘Kona’ Coffee (subscription to Law360 required)

  • Section 43(a) of the Lanham Act (15 U.S.C. 1125) permits a civil action for, among other reasons, “false designation of origin.”  To prevail, a plaintiff must prove the designation of origin is false, that it is used in a commercial advertisement (e.g., a label) in interstate commerce, that it deceives or is likely to deceive in a material way, and it has caused or is likely to cause competitive or commercial injury to the plaintiff.
  • A group comprising all of the coffee farmers in the Kona District of the Big Island of Hawaii filed a class action on February 27, 2019 in the U.S. District Court for the Western District of Washington against the producers and sellers of 19 brands of coffee that are identified as “Kona” but allegedly contain no Kona coffee or only trace amounts.  Defendants include sellers such as Walmart, Costco, Amazon, Safeway, Kroger, Cost Plus/World Market, and Bed Bath & Beyond as well as several producers based in Hawaii and in the mainland.  The plaintiffs point out that only 2.7 million pounds of coffee are grown in the Kona region each year, but more than 20 million pounds of coffee are labeled with the name and they offer a report on analytical testing of trace metals in the allegedly counterfeit coffee to prove that it was not produced in the Kona region (which is said to yield coffee with a distinct flavor profile that commands premium prices).
  • A Hawaiian newspaper reports that the attorneys representing the Kona coffee growers in the Lanham Act lawsuit also plan to file another class-action lawsuit based on the same claims on behalf of consumers who bought allegedly fraudulent Kona coffee.
  • The designation of origin for Kona coffee can be distinguished from the use of common cheese names which, as reported here, have been the subject of longstanding trade disputes between the United States and the European Union.  Whereas “Kona” is clearly used to indicate coffee grown in the Kona region of Hawaii, parmesan and other some other names are used generically to indicate a specific style of cheese and are not necessarily geographical indicators that imply the cheese is produced in a certain place, such as Parma, Italy.

 

 

  • On January 23, 2021, plaintiffs filed a putative class action complaint in the United States District Court Southern District of New York against Icelandic Provisions, Inc. (“Company”), which sells Skyr, a traditional Icelandic cultured dairy product.  Plaintiffs allege that the Company’s marketing and advertising misleads consumers to believe that the Skyr is made in Iceland when actually it is produced in Batavia, New York.
  • The complaint alleges fraud, negligent misrepresentation, unjust enrichment, and violation of state consumer-protection statutes.  Plaintiffs claim that the depiction of the Icelandic countryside with a snow covered backdrop, the statement “Traditional Icelandic Skyr,” and Company’s name, “Icelandic Provisions” misleads consumers to believe that the product is made in Iceland.  Additionally, the plaintiffs claim that Company’s inclusion of “Developed in partnership with MS Iceland Dairies, Reykjavik, ISL” is misleading because it furthers the impression that the Skyr is made in Iceland.
  • The plaintiff’s counsel is Sheehan & Associates, a firm that has become known in recent years for its pursuit of class action litigation claiming harm to consumers from allegedly misleading food labeling.  The Sheehan firm has represented a number of class action plaintiffs in recent flavor labeling challenges.  Origin and geographic claims have drawn scrutiny from the Federal Trade Commission, state regulators, and most recently, class action plaintiffs’ lawyers.