Starbucks, we've learned, 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. Eastsider Penny Stafford was set to go to trial in October in attempts to prove that billionaire Chairman Howard Schultz and his 15,000-store empire illegally blocked her from opening competing stores in Bellevue and Seattle.
Stafford, who had obtained more than 50,000 pages of Starbucks documents, argued 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 said 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.
Starbucks apparently blinked when federal judge John Coughenour ruled that Schultz himself would have to answer questions in the case - he had resisted giving a deposition, claiming he didn't have the time and had no "personal and direct involvement in growth and marketing strategy" (honest!). 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 siting 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 is confidential. In court files, Starbucks belittled Stafford's experience and portrayed her as a barista wanna-be. But a person familiar with the case called the settlement a "clear victory" for the solo defendant who pours the espresso and works her own till.