Bucking Up

Starbucks has quietly settled an antitrust lawsuit brought by a Bellevue coffee-shop operator who says the designer-coffee giant tried to squash her mom-and-pop expansion plans. Penny Stafford, who had obtained more than 50,000 pages of Starbucks documents, was set to go to trial in October in an attempt to prove that Howard Schultz and his 15,000-store empire illegally blocked her from opening competing stores in Bellevue and Seattle, arguing that 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." She also claimed the powerful corporation was able to persuade property owners not to lease to her by threatening to pull their own stores out of some buildings.

In court files, Starbucks belittled Stafford's experience and portrayed her as a barista wannabe. But the company apparently blinked when federal judge John Coughenour ruled that Schultz himself would have to answer questions in the case. (The Starbucks chairman had resisted giving a deposition, claiming he didn't have the time and had no "personal and direct involvement in growth and marketing strategy.") Coughenour agreed Schultz was a busy man and limited the deposition to four hours, but said there was at least "some evidence" the Starbucks CEO "is a person with unique personal knowledge about Starbucks store sighting decisions."

Following that March ruling, the two sides quickly agreed to mediation. Late last month, mediator Terry Lukens reported "the case is now resolved." On April 29, the case was closed out. Thomas Boeder, a Starbucks attorney, says the settlement amount is confidential. But a person familiar with the case calls the settlement a "clear victory" for the solo defendant, who pours the espresso and works her own till.