Court revives suit over coffee pod ‘knockoffs’

A U.S. appeals court on Friday reinstated a lawsuit by consumers who
said they were duped into buying substandard single-serve coffee
cartridges made by Sturm Foods Inc for use in popular Keurig brewing
machines.

The
7th U.S. Circuit Court of Appeals said a lower court had been too hasty
in denying plaintiffs’ request to sue as a group and dismissing their
claims against Sturm and its parent company Oak Brook-based TreeHouse
Foods, the makers of Grove Square Coffee. The ruling reinstated the case
and ordered the lower court to reconsider whether to certify a class of
customers from eight states who bought the product.

Sturm
and TreeHouse had attempted to jump into the lucrative market for
Keurig-compatible coffee pods, or K-cups, in 2010, two years before
Keurig’s patent on a design for the filter for the cartridge expired,
the ruling said.

To
steer clear of Keurig’s patent, Sturm made its Grove Square Coffee
cartridges without a filter, although that prevented the company from
using fresh coffee grounds, the ruling said. Instead, Sturm used
“soluble” freeze-dried brewed, or instant, coffee mixed with fresh
grounds, according to the ruling.

The public response to the
product was “awful,” the ruling said. In 2011, four lawsuits were filed
by customers accusing Sturm and TreeHouse of violating state
consumer-protection laws by misleading them about the cartridge’s
contents, calling them “cheap knockoffs” of premium K-cups, according to
court filings.

The
cases were consolidated, and plaintiffs asked the judge to certify a
class of all consumers in eight states – including New York, California
and Illinois – who bought the cartridges.

Sturm said it had
clearly stated on its labeling that the cartridges contained “soluble”
coffee. Last year, a federal judge in Illinois agreed with the company
that the packaging was not misleading, rejected plaintiffs’ request for
class certification and dismissed the individual plaintiffs’ claims.

The
plaintiffs appealed, and the 7th Circuit agreed that the district court
had not given enough credence to plaintiffs’ claims before tossing
them.

“A jury should have decided the question whether the
packaging was likely to mislead reasonable consumers,” U.S. Circuit
Judge Diane Wood wrote. She also said the lower court had erred in
finding that there was not enough in common among plaintiffs to let them
sue as a class.

That decision overlooked the common question
shared by plaintiffs – namely, whether Grove Square Coffee packaging was
misleading to a “reasonable consumer,” Wood wrote.

A lawyer
for the plaintiffs, Peter Burke, said he was pleased with the decision. A
spokesman for TreeHouse, Ron Bottreel, said the company had received
the decision and is evaluating its next steps.

The case is Suchanek v. Sturm Foods, 7th U.S. Circuit Court of Appeals, No. 13-3843.