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(From left, top row) Thomas L. Hamlin, Melissa Goodman, Katie Crosby Lehmann, Mathew Korte, (bottom row) William Bornstein, David Beehler, Michael Reif (inset) Michael Ciresi
(From left, top row) Thomas L. Hamlin, Melissa Goodman, Katie Crosby Lehmann, Mathew Korte, (bottom row) William Bornstein, David Beehler, Michael Reif (inset) Michael Ciresi

Attorneys of the Year: Kraft Foods trial team

Robins, Kaplan, Miller & Ciresi

Michael Ciresi, Thomas L. Hamlin, Melissa Goodman, Katie Crosby Lehmann, Mathew Korte, William Bornstein, David Beehler, Michael Reif

Sometimes old contacts – even adversarial ones – pay off.

That was the case when Mike Ciresi, partner at Robins, Kaplan, Miller & Ciresi, received a phone call from Marc Firestone, the former associate general counsel at Phillip Morris tobacco, who Ciresi famously helped battle during the late ’90s lawsuit against American tobacco companies.

The counsel, since moved on to Kraft Foods, “called us and wanted to know if we’d be interested in representing Kraft,” recalled Ciresi. “I had not talked to him since 1998.”

Kraft had come calling over a dispute with Starbucks, for whom it had developed a line of roast-and-ground bagged coffee to be sold in consumer packaged goods (CPG) channels such as Costco, Target and grocery stores.

Kraft built the product line up to $500 million, and it became a highly profitable line for Starbucks.

“They had a contract with Kraft,” said Ciresi. “Kraft had an exclusive right to sell and they agreed to give up its right to develop a super-premium coffee to sell via the same channels.”

In the meantime, former Starbucks CEO Howard Schultz had returned to that post in 2008, and one of his first acts was to take back the CPG channels. Starbucks’ contract provided that they could terminate by buying back the CPG business at its fair market value — or if there were material breaches. After sale negotiations failed, Starbucks claimed a litany of material breaches – “a whole laundry list, going back a number of years,” said Robins partner David Beehler.

Kraft sued Starbucks in Southern District of New York and lost, then took the case to the 2nd Federal Circuit. It lost again.

“But they had an arbitration clause that allowed for full relief,” said Ciresi. “That’s when we were hired.”

After about a year of discovery and depositions, the Robins team’s strategy took shape. They wanted to demonstrate that Starbucks’ claims of material breach were only an attempt to leverage a lower purchase price rather than one at fair market value, while also illustrating the high level of performance of Kraft.

Robins’ team was small but focused – “that’s the way we do it, so that everyone knows everything about the case and we can rapidly deploy our resources where they’re needed,” said Ciresi.

“I worked out of home base coordinating between Mike and David,” added Robins partner Katie Crosby Lehmann. “I made sure they had all the key documents and did legwork for pretrial — while they were taking depositions I was writing briefs and coordinating for the next stage of the litigation.”

Last November, an arbitrator awarded Kraft’s parent company $2.23 billion in damages and $557 million in interest, further solidifying Robins’ reputation as a giant slayer

“We had a small team, but that’s how we prefer it,” said Ciresi.

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