Facts

Kathleen Smith brought a consumer class action against Keurig Green Mountain, Inc. The class included all persons in the United States who purchased Keurig's K Cup coffee pods for personal, family or household purposes within the class period.

PLAINTIFF'S CONTENTIONS: Plaintiff asserted causes of action for breach of express warranty; violations of California's Consumers Legal Remedies Act; violations of California's Unfair Competition Law (UCL) based on fraudulent acts and practices; violations of the UCL based on unfair acts and practices; and unjust enrichment. Plaintiff contended that defendant's "recyclable" labeling on its plastic single-serve coffee pods was false and misleading. Plaintiff claimed that despite the fact that defendant advertised, marketed, and sold the coffee pods as recyclable, municipal recycling facilities were not properly equipped to handle the coffee pods, which were small and inevitably contaminated with foil and food waste. Plaintiff argued that even to the extent facilities existed that could segregate the products and then clean any contamination, the coffee pods ended up in landfills anyway as there was no market to reuse the products or convert them into a material that could be reused. Plaintiff contended that if she had known that the coffee pods were not recyclable, she would not have purchased them, or would have paid less for them.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions.

Settlement Discussions

The parties engaged in settlement negotiations, including two full-day mediation sessions with the Honorable Morton Denlow (Ret.), which ultimately resulted in the execution of a settlement agreement.

Result

The case settled for $10 million. Pursuant to the settlement agreement, Keurig will not represent that K Cup pods are recyclable without clearly and prominently including the following statement: "Check Locally--Not Recycled in Many Communities." Keurig must also increase the font size of its qualifying statement on all labels and packaging.