Costco has asked a federal judge to throw out a proposed class-action lawsuit that accuses the warehouse retailer of misleading millions of shoppers about its famous $5 rotisserie chicken, and the company's legal filing does not hold back about the weakness of the case against it.
Attorney Charles Sipos, representing Costco, filed a motion in the U.S. District Court for the Southern District of California calling the false-advertising allegations "fatally flawed." The motion targets a lawsuit brought in January by two California customers who claim the Kirkland Signature Seasoned Rotisserie Chicken is deceptively marketed as containing "no preservatives" while actually including carrageenan and sodium phosphate.
The case, filed by the Almeida Law Group on behalf of the two unnamed plaintiffs, alleges Costco violated Washington's Consumer Protection Act, California's Consumers Legal Remedies Act, and other California statutes. It seeks to bar Costco from advertising the chicken as preservative-free and to open a class action allowing any U.S. customer who purchased the product to seek monetary damages.
Costco's core argument is straightforward. Sipos told the court that carrageenan and sodium phosphate are not classified as preservatives under U.S. Food and Drug Administration regulations. Instead, Costco says both substances are used as part of the chicken's seasoning mix, not to extend shelf life or preserve the product.
If the FDA does not treat carrageenan and sodium phosphate as preservatives, then labeling the chicken "no preservatives" is accurate under federal food-labeling standards. That distinction matters, because the plaintiffs' entire theory rests on the premise that Costco hid something from consumers.
The motion to dismiss also challenges the plaintiffs' claim that the "no preservatives" label let Costco charge a premium price. Sipos's filing puts it bluntly:
"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 alone undercuts the economic logic of the lawsuit. If no competitor sells a comparable product for less than $4.99, then the "premium" the plaintiffs claim to have paid is imaginary. Costco's chicken has been priced at $4.99 for years, a price so low the company has reportedly treated it as a loss leader to drive foot traffic. The notion that a "no preservatives" label inflated that price requires evidence the plaintiffs apparently have not produced.
The Almeida Law Group's amended complaint argues that the presence of carrageenan and sodium phosphate in the seasoning mix contradicts the "no preservatives" claim on the packaging. Because both substances can function as preservatives in other food applications, the plaintiffs contend that including them while advertising "no preservatives" constitutes false advertising under state consumer-protection laws.
The lawsuit does not claim anyone was physically harmed by eating the chicken. It does not allege the product is unsafe. The complaint is about labeling, specifically, whether the marketing language misled shoppers into paying more than they otherwise would have.
Costco's motion argues the plaintiffs fail to demonstrate any concrete harm caused by the labeling. That is a significant legal hurdle. In federal court, a plaintiff generally must show standing by proving an actual injury, not just a theoretical one. If the court agrees the plaintiffs cannot point to measurable economic harm, the case could end before discovery.
Few grocery items carry the cultural weight of Costco's rotisserie chicken. The company sells the birds at $4.99 each, a price it has held steady even as food costs have climbed across the industry. That commitment to value is part of what makes Costco a destination for budget-conscious families.
Costco has built its brand on a handful of signature products that signal value to members. The $1.50 hot dog combo is another example, a price point the company has defended for decades as a matter of institutional pride.
That context matters when evaluating a lawsuit that claims shoppers were overcharged for a $4.99 chicken. The plaintiffs' attorneys must convince a judge that consumers suffered real financial harm from buying one of the cheapest prepared-food items in American retail.
Costco has also made headlines recently for cutting prices on Kirkland products and home goods as shoppers push back on rising costs. The company's track record on pricing does not exactly fit the profile of a retailer gouging customers through deceptive labeling.
This case fits a familiar template. Plaintiffs' firms have increasingly targeted major food companies over label language, "natural," "no artificial ingredients," "no preservatives", using state consumer-protection statutes to build class actions that can extract settlements even when the underlying claims are thin. The economics of class-action litigation often favor plaintiffs' attorneys, who collect fees from settlements, while individual class members receive modest payouts or coupons.
The question for the court in San Diego is whether the Almeida Law Group's complaint clears the basic threshold of stating a plausible claim. Costco's motion argues it does not, on multiple grounds: the FDA does not classify the substances as preservatives, the plaintiffs cannot show they paid a premium, and they cannot identify concrete harm.
None of those arguments guarantee dismissal. Judges sometimes allow consumer-protection claims to proceed past the motion-to-dismiss stage even when the defendant raises strong objections. But Costco's filing reads like a company confident it is on solid regulatory and factual ground.
Several details remain unclear. The names of the two California plaintiffs have not been publicly identified in available reporting. The case number and docket information are not specified. And the court has not yet ruled on Costco's motion, so the lawsuit's fate is still in the judge's hands.
The warehouse giant's iconic product lineup has drawn plenty of attention over the years, from its hot dog combo to its food-court pizza to its rotisserie chicken. Lawsuits over label language are a cost of doing business for any major retailer. But the strength of this particular complaint looks questionable when the plaintiffs cannot name a single competitor selling a whole rotisserie chicken for less than $4.99.
When a $5 chicken is the target of a class-action shakedown, and the plaintiffs cannot show they overpaid or that the FDA disagrees with the label, the case tells you more about the litigation industry than it does about Costco.