Keurig contests 'windfall' sanctions order in U.S. antitrust case

File photo: Dr Pepper soda cans at a grocery store in Pasadena, California. REUTERS/Mario Anzuoni
  • Keurig calls order in K-Cup antitrust case "contrary to law"
  • Judge hits beverage company over missing evidence in long-running litigation

(Reuters) - Keurig Dr Pepper Inc on Monday said it will challenge a Manhattan federal judge's order that rebuked the beverage company for failing to preserve certain evidence in a long-running antitrust case and also awarded attorneys' fees and costs to the plaintiffs' lawyers.

U.S. Magistrate Judge Sarah Cave's 119-page ruling, unsealed on Monday, said Keurig "sloppily implemented" a directive to employees to preserve material amid the litigation, which began in 2014 over claims that Keurig was asserting monopoly power in the market over the disposable cups that are used in single-serve coffee brewers.

Cave said the missing evidence included three laptops and a set of handwritten notes. The plaintiffs' lawyers will be allowed to present evidence to the jury about missing information, Cave ruled. But she declined to allow the jury to hear an "adverse inference" that the missing or destroyed evidence would have been unfavorable to Keurig.

Keurig's attorneys at Buchanan Ingersoll & Rooney and Cleary Gottlieb Steen & Hamilton in a court filing called the sanctions order "contrary to law." The sanctions will provide a "broad windfall" in fees and costs for the plaintiffs' lawyers, the defense lawyers said.

Cave's ruling said the plaintiffs will be allowed to seek legal fees and expenses for months of work focused on various discovery matters.

Lawyers for Keurig did not immediately respond to a request for comment on Tuesday. Lawyers for plaintiffs including food and beverage company TreeHouse Foods Inc and supply chain servicer McLane Co Inc also did not immediately respond to requests for comment.

A U.S. district court judge has the power to review Cave's findings. Cave heard arguments in January on the plaintiffs' bid for sanctions against Keurig.

The judge found "plaintiffs suffered prejudice from the loss of evidence that should have been preserved."

Still, Cave did not find Keurig intended to conceal information from the plaintiffs, and she noted Keurig broadly has complied with its evidence-sharing obligations, preserving nearly 100 hard drives and disclosing millions of pages.

"This is not, therefore, a case in which plaintiffs are bereft of evidence to support their claims," Cave wrote.

Keurig last year agreed to pay $31 million to settle related antitrust claims from consumer purchasers of the company's "K-Cups." The company denied liability then.

The case is In re Keurig Green Mountain Single-Serve Coffee Antitrust Litigation, U.S. District Court for the Southern District of New York, MDL No. 2542.

For plaintiff TreeHouse Foods Inc: Aldo Badini of Winston & Strawn

For plaintiff McLane Co Inc: B. Parker Miller of Alston & Bird

For direct purchasers: William Reiss of Robins Kaplan

For Keurig: Wendelynne Newton of Buchanan Ingersoll & Rooney; Leah Brannon of Cleary Gottlieb Steen & Hamilton

Read more:

Facebook, Gibson Dunn face $854K sanctions demand in Cambridge Analytica class action

California ordered to pay $80K fee sanction in drug antitrust MDL

Endo, Arnold & Porter deny deliberately withholding opioid evidence

Walmart makes a bad bet, gets hit with discovery sanctions in opioid MDL

Our Standards: The Thomson Reuters Trust Principles.