Reprinted with permission.
IMS ExpertServices periodically sends me e-mails that highlight recent key court cases that
can significantly affect the effectiveness of expert testimony, both for the plaintiff and for
This article by Joshua Fruchter, writing for
IMS ExpertServices, tells an interesting tale of what can happen when a powerful megacorporation,
in this case Apple Computer, decides to match wits with a 10-year-old child prodigy who, by no
coincidence, was named Dilbert by his adoring engineer father. The few minutes it will take you
to read will leave you with a sense that yes, there is still a bit of sanity remaining in today's
Daubert v. Merrell Dow Pharmaceuticals, for the uninitiated, is a landmark legal decision
regarding expert testimony in damage liability litigation.
Joshua Fruchter, Esq. is the principal of eLawMarketing, a leading provider since 2002
of website development, email marketing, blogging, search engine optimization (SEO), and social
media services to law firms of all sizes. Joshua is a graduate of NYU School of Law, a member
of the New York Bar Association, and a former attorney at a large NYC firm. Joshua combines
his legal background and marketing technology expertise to help law firms generate leads and
business from Internet marketing. Joshua has published articles on legal marketing technologies
in numerous law-related periodicals, and has presented on legal marketing technologies before
various bar and legal marketing associations. Joshua is also the editor of LawyerCasting,
a blog covering "best practices" in online marketing for lawyers and law firms.
April 01, 2014
Expert Testimony Central to Coffee Class Decision
September 01, 2014
If you love coffee (or loved the
Seinfeld episode in which Kramer sues Java World), then
this case is for you – a 7th Circuit decision reversing a denial of class certification in an action by coffee
drinkers against a manufacturer that allegedly violated consumer protection laws in its efforts to gain a foothold
in the K-Cup market. Suchanek v. Sturm Foods, Inc., 2014 WL 4116493 (10th Cir., August 22, 2014).
readers are undoubtedly aware, K-Cups are pods filled with coffee grounds that can be dropped into Keurig coffee
machines to quickly produce a high quality cup of fresh-brewed coffee. For many years, Keurig held a patent
over the filtering technology used in K-Cups, thereby barring competitors from selling their own Keurig-compatible
pods. Anticipating the expiration of Keurig’s K-Cup patents in 2012, the defendants hatched a plan to gain first
mover advantage in the post-patent K-Cup market.
The centerpiece of the strategy was a pod (branded “Grove
Square Coffee” or “GSC”) introduced by the defendants in 2010 that mimicked the K-Cup design. Except that to avoid
infringing Keurig’s still-valid patent, the GSC pods lacked a filter, thereby making the use of fresh coffee
grounds impossible. Instead, the defendants filled their pods primarily with “instant” coffee (for readers
unfamiliar with the difference between “instant” coffee and coffee grounds, the former quickly dissolves in hot
water (and costs less), while the latter must be “brewed” (and costs more due to perceptions of higher quality);
see Wikipedia for further details).
Defendants’ packaging glossed over the crucial distinction between the innards of their GSC pods versus Keurig’s
pods, featuring images of K-Cups and fresh roasted coffee beans, and stating that the GSC pods contained
“naturally roasted soluble and microground Arabica coffee.” What the packaging didn’t explain is that “soluble
coffee” is “instant coffee,” and that the amount of coffee grounds in the pods was trivial (added primarily to
dust the chunks of instant coffee).
Defendants hoped consumers wouldn’t notice the difference, but that
expectation did not come to pass. Within days after the launch of the GSC pods, complaints started rolling in with
one retailer calling GSC the “poorest performing introductory product that we have had in our 12 year history.”
Several angry consumers subsequently filed class action lawsuits charging defendants with violations of state
consumer protection laws prohibiting deceptive advertising and marketing.
The district court denied class
certification on the ground, among others, that there were no questions common to the class, as required under
Rule 23(a)(2) of the Federal Rules of Civil Procedure to maintain a class action in federal court. The 10th
Circuit disagreed, ruling that whether the GSC packaging was likely to mislead a reasonable consumer was a
question common to the claims of all putative class members. In support, the 10th Circuit referenced three expert
surveys in the record – all of which concluded that few consumers understood the true nature of the GSC product.
One survey, conducted by the plaintiffs’ expert, found that only 14% of respondents understood that the GSC
product contained primarily instant coffee. A second survey by defendants’ expert found that only one out of 151
respondents equated “soluble coffee” with “instant coffee.” Finally, a third expert found that nearly all GSC pod
purchasers expected the product to yield filtered ground coffee, and almost none of those purchasers expected the
product to contain instant coffee.
The district also denied class certification on the ground that
individual issues related to causation would predominate over common questions of law or fact, in violation of
Federal Rule 23(b)(3). Again, the 10th Circuit reversed, observing that “[e]very consumer fraud case involves
individual elements of reliance or causation.” Instead, the 10th Circuit instructed that the appropriate initial
inquiry is whether class damages can be accurately measured. On this point, the Court cited the report of
plaintiffs’ expert suggesting that “damages might be computed by taking the difference between the actual value of
the package [plaintiffs] purchased (instant coffee) and the inflated price [plaintiffs] paid (thinking the pods
contained real coffee grounds).”
Based on its analysis, the 10th Circuit vacated the lower court’s denial
of class certification and remanded for further proceedings consistent with its opinion. Clearly, trouble is
brewing for the defendants.
Rather than seeking commentary on the Court’s legal analysis, we’re actually
curious, how many of you are coffee drinkers? For those who are, how many of you were “victims” of the GSC pods
masquerading as fresh coffee grounds?
This article was originally published in
a newsletter distributed by IMS ExpertServices™.
IMS Expert Services is the premier
expert witness search firm in the legal industry, focused exclusively on providing custom
expert witness searches to attorneys. To read this and other legal industry
publications, please visit IMS Expert Services' recent articles. For your next expert witness
search, call us at 877-838-8464 or visit our website.
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Posted September 9, 2014