Corker v. Costco Wholesale Corp.

• Decision Date: 13 February 2023
• Docket Number: C19-0290RSL
• Parties: BRUCE CORKER d/b/a RANCHO ALOHA. et al., Plaintiffs, v. COSTCO WHOLESALE CORPORATION, et al., Defendants.
• Court: U.S. District Court — Western District of Washington

BRUCE CORKER d/b/a RANCHO ALOHA. et al., Plaintiffs,
v.
COSTCO WHOLESALE CORPORATION, et al., Defendants.

No. C19-0290RSL

United States District Court, W.D. Washington, Seattle

February 13, 2023

ORDER CERTIFYING CLASS

Robert S. Lasnik United States District Judge

This matter comes before the Court on “Plaintiffs' Motion for Class Certification.” Dkt. # 568. Having reviewed the memoranda, declarations, and exhibits submitted by the parties,^[1] the Court finds as follows:

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I. BACKGROUND

The named plaintiffs grow Kona coffee in the Kona District of the Big Island of Hawaii. They filed this lawsuit alleging that various distributors, wholesalers, and retailers sell ordinary commodity coffee labeled as "Kona" coffee, to the detriment of those who grow actual Kona coffee. Defendant MNS Ltd., the only defendant who has not settled or declared bankruptcy, is a retailer who, plaintiffs allege, has violated the Lanham Act by jointly marketing coffee products that are falsely labeled as originating from Kona without making any effort to verify the grade, purity, or origin of the coffee.

Plaintiffs seek to certify a class of all persons and entities who farmed Kona coffee in the Kona District and sold their coffee from February 27, 2015, to the present. Defendants L&K Coffee Co., LLC, Kevin Kihnke, Mulvadi Corporation, and MNS Ltd. oppose certification on various grounds. L&K and Kihnke have reached a settlement agreement with plaintiffs, and Mulvadi has filed a bankruptcy petition. Thus, the issue is whether certification of a class to pursue the Lanham Act claims against MNS is appropriate.

II. DISCUSSION

A. Legality of Conduct and Sufficiency of Allegations

As a preliminary matter, MNS argues that plaintiffs' allegations, taken as true, cannot establish a Lanham Act violation because Hawai'i law permits the sale of coffee labeled “Kona blend coffee” or “blended Kona coffee” as long as the coffee contains not less than ten percent Kona coffee by weight. MNS further asserts that plaintiffs have not adequately alleged that the Hawaiian Isles' Kona Coffee products sold in its ABC Stores contained less than the requisite 10% Kona coffee. Neither the adequacy of the pleadings nor whether the retailer sold or sells deceptively labeled “Kona” coffee produced and packaged by one or more of the supplier defendants in violation of the Lanham Act are before the Court in the context of this motion for class certification. Rather, the issue is whether the evidence in the record shows that the Lanham Act claim should be resolved on behalf of a class of Kona coffee farmers.

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B. Jurisdiction and Venue

L&K and Kihnke argue that the Court lacks personal jurisdiction over them. Kihnke previously raised this argument in a motion to dismiss filed shortly after he was added as a defendant in this litigation. Dkt. # 488. The Court rejected the argument, finding that Kihnke was a central figure in the challenged corporate activity and that the corporate activity was expressly aimed at the State of Washington. Dkt. # 606 at 5-9. The Court's exercise of personal jurisdiction over L&K is based on the same findings and, in any event, the corporation's objection has been waived. Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 705 (1982) (“[T]he failure to enter a timely objection to personal jurisdiction constitutes, under Rule 12(h)(1), a waiver of the objection.”).

To the extent L&K and Kihnke are arguing that the Court lacks jurisdiction to hear the claims of putative class members who reside outside the forum, they rely on Bristol-Myers Squibb Co. v. Superior Court, U.S., 137 S.Ct. 1773 (2017). Bristol-Myers Squibb was a mass tort action filed in state court under state law. In that context, the Supreme Court instructed courts to evaluate each plaintiff's claims to determine whether they arose out of defendant's contacts with the forum before exercising specific personal jurisdiction over that plaintiff's claims. There is significant doubt whether Bristol-Myers Squibb applies to class actions at all, particularly class actions seeking relief in federal court under federal law. See Lyngaas v. Ag, 992 F.3d 412, 434-35 (6th Cir. 2021) (following “[t]he vast majority” of lower courts and the only other circuit court in concluding “that Bristol-Myers Squibb does not extend to federal class actions”); Mussat v. IQVIA, Inc., 953 F.3d 441, 447 (7th Cir. 2020) (characterizing absent class members as non-parties for jurisdictional purposes, refusing to extend Bristol-Myers Squibb to class actions, and affirming personal jurisdiction over a nationwide class); Burchfield v. Prestige Consumer Healthcare, Inc., 534 F.Supp.3d 1192, 1208 (C.D. Cal. 2021) (following the “majority position” and concluding that “Bristol-Myers Squibb has no impact on class action practice”); Massaro v. Beyond Meat, Inc., 2021 WL 948805, at *11 (S.D. Cal. Mar. 12, 2021) (recognizing an intra-district split, but finding no reason to assume that the Supreme Court

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would apply Bristol-Myers Squibb to the exercise of jurisdiction by a federal court over a federal claim or would conclude that absent class members are parties for jurisdictional purposes); Lacy v. Comcast Cable Commc 'ns, LLC, 2020 WL 1469621, at *2 (W.D. Wash. Mar. 26, 2020) (declining to apply Bristol-Myers Squibb to class actions because “[t]his Court will not upend the traditional approach to personal jurisdiction in class actions absent an express ruling from the Supreme Court”); King v. Bumble Trading, Inc., 2020 WL 663741, at *4 (N.D. Cal. Feb. 11, 2020) (holding Bristol-Myers Squibb did not apply to the class action at hand and stating “[a]lthough the Court agrees that the due process and federalism concerns in Bristol-Myers are relevant to class actions ..., there are significant procedural differences between class and mass actions that address those concerns”).^[2] But see Carpenter v. PetSmart, Inc., 441 F.Supp.3d 1028, 1035 (S.D. Cal. 2020) (“That the Supreme Court did not consider whether its holding in Bristol-Myers Squibb would apply to class actions is hardly supportive of a holding that it does not apply to class actions. On the other hand, the rationale for the holding in Bristol-Myers Squibb indicates that if and when the Supreme Court is presented with the question, it will also hold that a state cannot assert specific personal jurisdiction over a defendant for the claims of unnamed class members that would not be subject to specific personal jurisdiction if asserted as individual claims.”); Chizniakv. CertainTeedCorp., 2020 WL 495129, at *5 (N.D.N.Y. Jan. 30, 2020) (“Like the other courts in this District, the Court interprets Bristol-Myers Squibb to extend to nationwide class actions and declines to exercise specific personal jurisdiction...