Case 1:14-md-02542-VSB-SLC Document 631 Filed 06/21/19 Page 1 of 130 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x : IN RE: KEURIG GREEN MOUNTAIN SINGLE-SERVE No. 1:14-md-02542 (VSB) COFFEE ANTITRUST LITIGATION : No. 1:14-mc-02542 (VSB) : This Relates to the Indirect-Purchaser Actions x THIRD CONSOLIDATED AMENDED INDIRECT PURCHASER CLASS ACTION COMPLAINT DEMAND FOR JURY TRIAL Case 1:14-md-02542-VSB-SLC Document 631 Filed 06/21/19 Page 2 of 130 TABLE OF CONTENTS Page I. NATURE OF THE ACTION .......................................................................................................1 A. Portion Pack Brewers .......................................................................................................2 B. Keurig Compatible Cups ..................................................................................................2 (i) Keurig K-Cups .........................................................................................................2 (ii) Cup Competitors and Competitive Cups..................................................................3 C. Coffee ...............................................................................................................................4 D. Machinery and Components ............................................................................................5 E. Distribution and Retail .....................................................................................................6 F. Effects ..............................................................................................................................7 II. PARTIES .....................................................................................................................................9 A. Plaintiffs ...........................................................................................................................9 B. Defendant .......................................................................................................................18 C. Agents and Co-Conspirators ..........................................................................................19 III. JURISDICTION AND VENUE ..............................................................................................20 IV. RELEVANT MARKETS ........................................................................................................21 A. Relevant Product Market: The Manufacture, Distribution, and Sale of Portion Pack Brewers ..................................................................................................................21 B. Relevant Product Market: The Manufacture, Distribution, and Sale of Keurig Compatible Cups ............................................................................................................24 C. Relevant Geographic Market: The United States ..........................................................27 V. INTERSTATE AND INTRASTATE COMMERCE ...............................................................27 VI. FACTS BEHIND THE SCHEME TO CONTROL, RESTRAIN, EXCLUDE, AND ELIMINATE COMPETITION IN THE SALE OF KEURIG COMPATIBLE CUPS .................28 A. GMCR Acquired Control Over Keurig K-Cup Technology ..........................................28 B. Keurig Systematically Acquired Competing Major Coffee Brands for Use in Keurig Compatible Cups ................................................................................................29 C. Keurig Substantially Raised K-Cup Prices Twice in the Middle of an Economic Downturn for a Total Increase of Between 19% and 28% Without Sustaining Any Material Loss of Market Share ...............................................................................30 D. Keurig Used Patent Litigation as Part of Its Overall Plan To Monopolize and Restrain Competition .....................................................................................................30 (i) The TreeHouse Patent Infringement Case .............................................................30 (ii) The Rogers Family Patent Infringement Case .......................................................31 E. Keurig Announces Lock-Out Technology That Will Prevent Competitive Cups from Working in Keurig Portion Pack Brewers .............................................................32 VII. UNLAWFUL CONDUCT .....................................................................................................33 - i - Case 1:14-md-02542-VSB-SLC Document 631 Filed 06/21/19 Page 3 of 130 TABLE OF CONTENTS Page A. Keurig Entered Into Exclusionary Agreements to Block Cup Competitors from Being Able to Enter or Meaningfully Compete in the Keurig Compatible Cup Market ............................................................................................................................33 (i) Keurig Entered into Anticompetitive Agreements with Suppliers of Machinery Used To Manufacture Traditionally-Designed Keurig Compatible Cups ....................................................................................................33 (ii) Keurig Blocked Components Used To Manufacture Keurig Compatible Cups 34 B. Keurig Conspires with Its Horizontal Roaster Competitors to Preserve and Expand Keurig’s Market Position by Restraining Competition and Foreclosing Competitors’ Access to Roaster Competitors’ Products, Business, and Distribution Channels ....................................................................................................35 C. Keurig Enters into Unlawful Agreements with Distributors and Retailers to Preserve and Expand Keurig’s Market Position by Foreclosing Cup Competitors’ Access to Distribution and Retail Channels .............................................40 D. Keurig Uses Its Market Power in the Portion Pack Brewer Market to Coerce Purchasers of Keurig Portion Pack Brewers to Purchase Only Keurig K-Cups, or at Least to Not Purchase and Sell Competitive Cups ................................................45 E. Keurig’s Unlawful Conduct Has Harmed and Will Continue to Harm Competition and Consumers in the Keurig Compatible Cup Market ............................46 VIII. CLASS ALLEGATIONS .....................................................................................................46 A. Nationwide Class Under the Laws of the State of Vermont for Monetary, Equitable, and Injunctive Relief, and Under Federal Law for Injunctive Relief Only ................................................................................................................................47 B. State Law Indirect-Purchaser Classes ............................................................................48 IX. CLAIMS FOR RELIEF ...........................................................................................................63 FIRST CLAIM FOR RELIEF .......................................................................................................63 Vermont Antitrust Violations ........................................................................................................63 SECOND CLAIM FOR RELIEF ..................................................................................................65 Vermont Unlawful Tying Violations .............................................................................................65 THIRD CLAIM FOR RELIEF ......................................................................................................67 Violation of Vermont Common Law Unjust Enrichment ..............................................................67 FOURTH CLAIM FOR RELIEF ..................................................................................................67 Violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 ............................................................67 FIFTH CLAIM FOR RELIEF .......................................................................................................69 Violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 ............................................................69 SIXTH CLAIM FOR RELIEF .......................................................................................................71 Violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 and Section 3 of the Clayton Act, 15 U.S.C. § 14 ........................................................................................................................71 - ii - Case 1:14-md-02542-VSB-SLC Document 631 Filed 06/21/19 Page 4 of 130 TABLE OF CONTENTS Page SEVENTH CLAIM FOR RELIEF ................................................................................................72 Violation of Section 2 of the Sherman Act, 15 U.S.C. § 2 ............................................................72 EIGHTH CLAIM FOR RELIEF ...................................................................................................74 Violation of Section 2 of the Sherman Act, 15 U.S.C. § 2 ............................................................74 NINTH CLAIM FOR RELIEF ......................................................................................................75 Violation of Other State Antitrust and Unfair Competition Laws .................................................75 Arizona ...........................................................................................................................................76 California .......................................................................................................................................77