Bellevue Barista's Antitrust Suit Against Starbucks Heading to Court

[Omaha Steve]

Source: Seattle Weekly

Coffee giant's leases may violate antitrust laws.

By Rick Anderson
November 28, 2007

Federal court documents filed here recount how coffee giant Starbucks "cluster-bombs" neighborhoods, adding ever more stores to compete against each other and drive off the competition. Now, that saturation strategy has itself taken a surprise hit. A federal judge says Eastside coffee shop owner Penny Stafford, who pours the espresso and works her own till, can go to trial next year and attempt to prove that billionaire Chairman Howard Schultz and his 15,000-store empire thwarted her expansion plans.

Stafford has offered plausible evidence that the company's leasing deals in Seattle and Bellevue high-rises may violate antitrust law, the court concluded. She asserts that Starbucks illegally blocked her from opening competing stores in those buildings, hurting her financially. It's all part of the saturation strategy, Stafford claims, which includes Starbucks' intense cannibalizing of its own stores by adding other company outlets nearby, keeping aspiring interlopers like her at bay. She is seeking unspecified damages and a federal injunction to end Starbucks' exclusive lease deals with major landlords.


Karie Hamilton
Stafford at the till: squeezed out?


In a Nov. 9 order, U.S. District Court Judge John Coughenour didn't decide the merits of Stafford's claims but did turn down Starbucks' motion to have the one-woman action dismissed. The corporation argued that Stafford lacked legal standing and was unharmed by the actions—her three-year-old Belvi Coffee & Tea Exchange continues to operate in another building in Bellevue.

Stafford argued that company documents confirm Starbucks' "long-term strategy has been to destroy its competition by in-filling downtown Seattle and Bellevue with Starbucks stores and sealing off that market." Coughenour said that claim and others raise a "genuine issue of material fact" that should be resolved at a trial. That includes whether she was economically injured by Starbucks' actions and whether the company's actions were unlawful.

FULL story at link.

Read more: http://www.seattleweekly.com/2007-11-28/news/bellevue-barista-s-antitrust-suit-against-starbucks-heading-to-court.php

[Selatius]

1. Mr. Schultz needs his ass busted by Mr. Sherman (aka Mr. Sherman Anti-Trust Act)

And if he gets his ass broken, maybe the market will improve with better competition leading to lower prices and a more diverse coffee culture.

[PSPS]

2. Ain't that the truth!

All you have to do is drive around downtown, or even most residential neighborhoods, and you'll find that there is almost always a Starbucks within sight of another Starbucks. In my residential neighborhood, there are four Starbucks within a ten-square-block area. Go downtown and you'll see one on almost every block.

There was a Simpson's episode years ago that showed Bart walking through a mall. You could see the various names of the stores as he walked by them. Every other one was a Starbucks, and Bart was drinking a Starbucks coffee. The humor in it is that it was reflecting the truth, albeit exaggerated a little.

[FourScore]

3. That's funny.

I hope this brave barista wins. In my small town, 2 Starbuck's opened within a couple of months of each other. The original barista shops here are such favorite hangouts, though, that it didn't even make a dint in their sales, thank goodness. But that is not always the case.

[Reno.Muse]

4. I agree. She is a brave woman and I like the angle she is taking.

I hope she wins.

[Mr_Monday]

5. Will this make them stop burning their coffee?

[Peace Patriot]

6. Yup, we need to apply a little "free trade" medicine to our corporations...

and bust their monopolistic robber baron global corporate predator asses!

Kudos and laurel wreaths to Penny Stafford! Another new American hero!