Two California shoppers want a federal judge to certify a class action against Costco over the "no preservatives" label on its Kirkland Signature Seasoned Rotisserie Chicken. Costco says the case rests on a misunderstanding of food-science definitions, and it wants the suit thrown out.
The retail giant filed a motion to dismiss in the U.S. District Court for the Southern District of California, calling the plaintiffs' false-advertising allegations "fatally flawed." The dispute centers on two ingredients, carrageenan and sodium phosphate, that the lawsuit treats as preservatives and that Costco insists the FDA does not.
The case matters because the $4.99 rotisserie chicken is one of the most recognizable loss-leader products in American retail. Millions of Costco members grab one on nearly every trip. If a court agreed the labeling is deceptive, the damages class could include every U.S. customer who ever bought the bird, a staggering potential pool.
The proposed class action landed in January. Two unnamed California customers, represented by the Almeida Law Group, alleged that Costco's packaging tells shoppers the rotisserie chicken contains "no preservatives" while the seasoning mix actually includes carrageenan and sodium phosphate, substances the plaintiffs call preservatives.
The complaint invokes Washington's Consumer Protection Act, California's Consumers Legal Remedies Act, and additional California statutes. It asks the court to bar Costco from advertising the product as preservative-free and to open the door for U.S. customers who purchased the chicken to seek monetary damages.
At the heart of the plaintiffs' theory is a price argument. The Almeida Law Group alleges the "no preservatives" claim let Costco charge a premium for the chicken, a claim Costco's legal team dismantled with a single observation.
Attorney Charles Sipos, representing Costco, laid out the company's defense in the motion filed last week. He argued that carrageenan and sodium phosphate are not classified as preservatives under U.S. Food and Drug Administration regulations and that both substances serve a different function in the seasoning mix.
Sipos zeroed in on the premium-pricing allegation:
"They allege that Costco's 'No Preservatives' statement enabled the company to charge more for Rotisserie Chicken. Yet, the Amended Complaint does not identify a single 'competitor' who prices a whole rotisserie chicken for sale for less than $4.99."
That line lands hard. Costco's rotisserie chicken has been famously priced at $4.99 for years, even as grocery inflation has pushed comparable products well past that mark at rival chains. The warehouse club has faced broader pressure from shoppers on rising costs, but the chicken's price has stayed put, a fact that undercuts any claim that the labeling let the company gouge customers.
Costco also argued the plaintiffs fail to show any concrete harm from the labeling. In legal terms, no harm means no standing, and no standing means no class action.
The entire case turns on whether carrageenan and sodium phosphate count as preservatives. Costco says the FDA does not classify them that way. The plaintiffs apparently disagree, but the motion to dismiss frames their position as legally unsupported.
Carrageenan is a thickening agent derived from seaweed. Sodium phosphate is commonly used to retain moisture in poultry. Both appear in thousands of processed foods. Whether they "preserve" a product in the regulatory sense, as opposed to performing a texture or moisture function, is the kind of distinction that matters in food-labeling law, even if it seems like splitting hairs at the dinner table.
If the court sides with Costco on the FDA classification issue, the complaint's foundation collapses. The "no preservatives" label would be accurate under federal standards, and the state-law claims built on top of it would have nowhere to stand.
Lawsuits targeting food labels have become a cottage industry. Plaintiffs' firms file complaints alleging that common marketing language, "natural," "no artificial flavors," "no preservatives", misleads consumers, then seek class certification to maximize settlement pressure. Many of these cases settle quietly for modest sums. Others get dismissed when courts find the labeling complies with federal standards.
Costco is not the only retailer to deal with product-related complaints from its massive customer base. Shoppers have pushed back on everything from how quickly Costco bananas ripen to broader quality concerns about warehouse-club staples.
What sets this case apart is the target. The $4.99 rotisserie chicken is not just a grocery item, it is a cultural artifact of the Costco shopping experience, a product the company has reportedly sold at a loss to drive foot traffic. Suing over it is a bit like suing a gas station for advertising cheap gas while also selling windshield-washer fluid.
The broader trend, though, should concern anyone who buys groceries. Every food-labeling lawsuit that survives a motion to dismiss adds legal cost that eventually gets passed to consumers. When real food-safety problems arise, like recent recalls of products sold at major retailers, the legal system needs to be focused on genuine threats, not ingredient-classification debates over a five-dollar chicken.
The court has not yet ruled on Costco's motion. If the judge grants the dismissal, the case dies unless the plaintiffs can amend their complaint to fix the deficiencies Costco identified. If the motion is denied, the case moves forward toward discovery and potential class certification, a stage that dramatically increases litigation costs and settlement pressure.
No ruling date has been set, and neither the case number nor the names of the two California plaintiffs have been made public in available filings.
Costco, for its part, has not changed the chicken's price, its labeling, or its place in the center aisle of every warehouse. The company has shown a willingness to evolve beloved food-court items when it sees fit, but it clearly does not believe this lawsuit gives it any reason to budge.
The Almeida Law Group has not publicly commented beyond the allegations in the complaint. Whether the firm can identify a single competitor selling a whole rotisserie chicken for less than $4.99, the challenge Costco's attorney put squarely on the table, remains an open question.
If carrageenan and sodium phosphate are not preservatives under FDA rules, then the "no preservatives" label is accurate, and two California shoppers and their lawyers are asking a federal court to punish a company for telling the truth. That is not consumer protection. That is litigation for its own sake.
Costco sells roughly 100 million rotisserie chickens a year. The idea that the company tricked all those buyers into paying a "premium" of $4.99, a price no competitor has apparently matched, deserves exactly the skepticism the motion to dismiss delivers.
When the courts spend time on cases like this, the people who pay are the same people who always pay: the shoppers standing in line, hoping the chicken is still warm.