Your "Kona" coffee . . . probably isn't. Especially if you bought it at Costco, Marshalls, Albertsons, Bed Bath & Beyond, CostPlus/WorldMarket, Safeway, or Kroger.
(March 9, 2021, 7:05 PM EST) -- Costco, Marshalls and Gold Coffee Roasters have reached agreements with Hawaiian coffee farmers to settle out of a proposed class action that accused them of selling ordinary coffee under the name "Kona," including a $6 million payment from Gold.
Under a proposed settlement filed Monday in Washington federal court, Gold Coffee Roasters Inc. would pay the money to more than 600 class members who grow Kona coffee, depending on how much product each sold during the proposed class period. The company also agreed to new labeling that will adhere to Hawaii's "more stringent labeling laws."
Costco Wholesale Corp. and Marshalls of MA Inc. will not pay any money under their proposed settlements, but the retailers agreed to follow new labeling guidelines that will also apply to vendors required to go through a certification process.
The settlements "deliver substantial monetary relief to the settlement class and include injunctive terms that will accomplish one of the primary objectives of this litigation: to bring about changes in the labeling of coffee described as containing coffee from the Kona region, thus preventing further economic harm to the growers of legitimate Kona coffee," the farmers said.
Under the deal with Gold, the farmers would receive attorney fees of no more than 25% of the settlement amount.
The lawsuit was filed in 2019 on behalf of "farmers who grow the entire worldwide supply of authentic Kona coffee," and claimed that only coffee grown in the Kona District of the Big Island of Hawaii can be legally labeled as "Kona."
In addition to Costco, Marshalls and Gold, the suit also targeted Albertsons Cos. Inc., BCC Assets LLC, Bed Bath & Beyond Inc., Cameron's Coffee and Distribution Co., Copper Moon Coffee LLC, CostPlus/WorldMarket, Hawaiian Isles Kona Coffee Ltd. LLC, Java LLC, MNS LLC, Marmaxx Operating Corp., Mulvadi Corp., Pacific Coffee Inc., Safeway Inc., Sprouts Farmers Market Inc. and The Kroger Co.
In February, U.S. District Judge Robert S. Lasnik approved preliminary settlements the farmers reached with Cameron's, Copper Moon, BCC, Pacific and Cost Plus that totaled just over $7 million.
By using the Kona name on other coffee, the farmers claimed the companies violated the Lanham Act and its ban on false designations of origin.
"The term 'Kona' tells consumers their coffee comes from this distinctive geographic region," the farmers said in their suit. "Defendants' deceptive practices have flooded the market with counterfeit 'Kona' coffee products, injuring honest Kona farmers."
Though filed under the federal trademark statute, the Hawaiian farmers don't claim trademark rights to the name. Instead, the lawsuit is more akin to efforts by groups of European food exporters to enforce "appellations of origin" over geographic names like "Champagne."
Under U.S. law, groups of food producers can register a "certification mark" for a protected geographical term and only allow sellers to use it if their product meets certain standards. Idaho potato growers have such a registration, but the coffee farmers who filed the lawsuit do not have that kind of registration.
According to the lawsuit, only 2.7 million pounds of coffee is grown in the Kona region each year, but more than 20 million pounds of coffee is labeled with the name, which hurts the farmers of authentic Kona coffee