Safeway Settles Kona Coffee Blend Mislabeling Lawsuit.

Safeway Stores has settled a federal court lawsuit brought by a California consumer alleging damages from deceptive labeling of “Safeway Select Kona Blend Coffee”.

In August of 2011, California resident Chanee Thurston filed a class action complaint stating that she and other consumers had been mislead by the labeling of “Safeway Select Kona Blend Coffee ” packages which did not disclose that any of the coffee contained in the packages was grown in regions other than Kona on the Island of Hawaii.  The plaintiff alleged that, in fact, these Kona Blend packages contained only a small proportion of Kona beans, if any, and that the vast majority of the coffee was from other unidentified regions.   The complaint sought recovery of more than $5,000,000 for consumers who purchased “Safeway Select Kona Blend Coffee” after August 30, 2007.

Safeway in response asserted that use of the words “Kona Blend” did not indicate that a majority of the beans in the package were grown in Kona and that those words fairly alerted consumers that the packages contained a mix of other different types of unidentified coffees in addition to Kona beans. Safeway also contended that the relief sought by Ms. Thurston should be limited because in 2012 (in response to actions of the Kona Coffee Farmers Association) Safeway had increased the Kona coffee in the blend to a minimum of 10% and changed the labels to reflect that minimum 10% and to disclose that up to 90% of the contents was Latin American-grown coffee.

After almost two years of litigation, including extensive discovery and expenditure of considerable legal resources by both sides, the parties have reached an agreed resolution of the case.  With a hearing on potentially dispositive cross motions for summary judgment scheduled for June 7, 2013, the lawyers for Ms. Thurston and for Safeway filed an agreed stipulation for dismissal of the case on March 21, 2013.  The papers in the court file do not disclose the terms—monetary or otherwise–agreed by Safeway and Ms. Thurston in connection with the settlement of the lawsuit.

The stipulated dismissal settles only the claims between Ms. Thurston and Safeway–and prevents the court from proceeding to decide important legal issues raised by the class action allegations in the Complaint.  Dismissal of the case leaves thousands of consumers (other than Ms. Thurston) who purchased “Safeway Select Kona Blend Coffee” after August 30, 2007, with no recovery for the damages described in the Complaint.

Kona coffee growers are disappointed that the stipulated dismissal leaves unresolved what they believe is the key question raised by the lawsuit—that is, Does use of the name “Kona” on packages of coffee containing little, if any, coffee actually grown in Kona violate federal and state consumer protection and fair marketing laws?

Kona Coffee Farmers Association President Cecelia Smith observed, “Kona coffee growers had hoped that a court decision on the legal issues in the Safeway case would encourage the Hawaii Legislature and the Hawaii Attorney General to begin providing the types of protections that, for example, California provides to Napa Valley Wine, Idaho to Idaho Potatoes, and Georgia to Vidalia Onions.  We are disappointed that there was no court decision on the issues presented by this case.”

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