I like coffee and keep up on coffee-related items.  While a frequent patron of Starbucks, I think small, individual coffee shops bring a fresh perspective to the coffee experience.  And so we watch with sadness as many small operators are shut out by the coffee juggernaut.

Now a federal judge has declared that coffee shop owner Penny Stafford can go to trial in an attempt to prove that Starbucks “cluster-bombs” neighborhoods — the practice of adding more and more stores to compete against each other and drive off competition.

The court concluded that Stafford has offered plausible evidence that the company’s leasing deals in Seattle and Bellevue may violate antitrust law and illegally blocked her from opening competing stores in those buildings. Stafford claims the15,000-store empire cannibalizes its own stores by adding other company outlets nearby, keeping competitors out.

Stafford contends she was repeatedly told by leasing agents for Class A buildings in Seattle and Bellevue where Starbucks operates that she couldn’t rent available space because, “if any space opened up, Starbucks would get the lease” under an exclusivity agreement.  One major U.S. office-property firm told her it has a nationwide arrangement to rent only to Starbucks, she claims.  Stafford has already collected almost 44,000 pages of Starbucks’ internal papers.

Starbucks is now opening new stores at the average rate of seven a day, or one every 3.4 hours. 

Trial has been tentatively set to begin Nov. 20, 2008.

More here.

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One Comment

  1. Great lawsuit! This is an excellent example of why it’s actually important for people to sue one another. The USA is often criticized for solving too many problems with litigation. But the alternative is generally backroom deals, intimidation, and continuing injustice. Here’s a private-party lawsuit that, if the plaintiff turns out to be right, really functions for the public good. Good luck, Penny.