Kona Coffee Farmers and Kroger Accuse Each Other of Breaching $13.5 Million Settlement

“Coffee Plantation in Kona” by LaurenBacon is licensed under CC BY 2.0.

In a case that has produced more than 900 court documents and more than $5.8 million in attorneys’ fees since 2019, lawyers representing a group of coffee producers in Hawaii are accusing grocery giant Kroger of breaching a $13.5 million settlement agreement. 

Lawyers representing Kroger and its subsidiaries, meanwhile, are arguing that the plaintiffs are trying to “shortcut their way to damages” without providing sufficient evidence of a breach, according to court documents filed late last week. 

The original complaint, in March 2019, presented the results of laboratory testing on 19 different coffee products that were marketed and sold as Kona coffee but allegedly contained little or no coffee that was actually produced in Kona, a well-known coffee-growing region in Hawaii. 

The plaintiffs invoked the Lanham Act, a 1946 U.S. trademark act designed to protect from “false designation of origin” in the sale of consumer products.

Along with coffee roasting companies and other online and physical grocers, Kroger was named as one of 21 defendants in the suit. The company agreed to contribute $13.5 million to a settlement fund in Feburary of 2022, while also agreeing to injunctive provisions regarding the labeling of coffees with the Kona name. 

Now the plaintiffs are arguing that Kroger breached that agreement by selling bulk coffees under the Kivu Kona Blend name, and also marketing coffees for sale online under the Private Selection Kona Blend name. 

Roasted coffee. Stock photo.

According to court documents, Kroger has offered nearly $22,000 in estimated profits and $10,000 in attorneys’ fees associated with the previous sale of the Kivu Kona Blend coffees at Kroger-owned QFC stores. The plaintiffs, however are seeking to recoup profits using actual sales records, and they claim that the grocery company was aware of the breach for a period of months, yet did not take the appropriate steps to remedy it. 

“Plaintiffs simply request an order compelling Kroger’s sales records to determine their damages,” the plaintiffs wrote in a Nov. 17 motion. 

Kroger, meanwhile, is counter-claiming that the plaintiffs are in breach of the settlement agreement by insisting on sales records, among other requests. 

“Plaintiffs’ drumbeat demanding documents to establish damages disregards their failure to meet the Settlement Agreement’s prerequisites and attempts to shortcut their way to damages without ever proving a breach,” lawyers representing the company wrote on Nov. 17. 

In September of this year, U.S. District Court Judge Robert S. Lasnik of the Western District of Washington approved a $12 million settlement between plaintiffs and the last remaining defendant in the Kona labeling case. In that order, Lasnik approved a request for more than $5.8 million in attorney’s fees for firms working on behalf of the plaintiffs.

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