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Keurig Settles Consumers’ K-Cup Antitrust Claims for $31 Million

Sept. 30, 2020, 10:31 PM

The consumers leading an antitrust lawsuit against Keurig Dr Pepper asked a federal judge in Manhattan on Wednesday to approve a $31 million settlement of claims that the beverage company cornered the single-serve brewer market by designing its machines to accept only K-Cup coffee pods.

“The settlement came about through extensive, lengthy, arm’s-length negotiations that lasted months,” culminating in a deal that “mitigates risk by providing an immediate and certain” payout, the plaintiffs say in their court filing. “The settlement class is no longer placing its eggs in the risky basket of continued litigation.”

The agreement comes about a year and a half after Judge Vernon S. Broderick dismissed the consumers’ federal antitrust allegations while letting them move forward with most of their state law claims in the U.S. District Court for the Southern District of New York.

Broderick cited the bar on federal antitrust damages for downstream “indirect purchasers” in his April 2019 ruling. He also gave a green light to parallel claims by two Keurig rivals and a proposed “direct purchaser” class of distributors and retailers.

The case then entered the discovery phase, which ended in June.

In their motion for approval of the proposed deal, the consumer plaintiffs tout their “substantial” haul. Any money remaining in the settlement fund will go to Consumer Reports, a nonprofit devoted to consumer advocacy, according to the filing.

“No part of the $31 million will revert to Keurig” under any circumstances, the motion says.

It also asks Broderick to certify an indirect purchaser class for settlement purposes.

The consumers’ proposed class counsel—Kaplan Fox & Kilsheimer LLP, Pearson, Simon & Warshaw LLP, and Wolf Haldenstein Adler Freeman & Herz LLP—will make their fee request after the judge gives the deal his tentative blessing, according to the filing.

Keurig is represented by Cleary Gottlieb Steen & Hamilton LLP and Buchanan Ingersoll & Rooney PC.

The case is In re Keurig Green Mtn. Single-Serve Coffee Antitrust Litig., S.D.N.Y., No. 14-md-2542, motion for preliminary settlement approval filed 9/30/20.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Meghashyam Mali at mmali@bloombergindustry.com