Costco is fighting back against a proposed class action lawsuit that accuses the warehouse giant of falsely advertising its famous $4.99 Kirkland Signature Seasoned Rotisserie Chicken as containing "no preservatives." In a court filing dated June 4, lawyers for the retailer told a federal judge in San Diego that the plaintiffs' legal theory collapses under the weight of its own evidence, and that they plan to formally seek dismissal in mid-August.
The company's blunt assessment, laid out in the filing: "This theory is fatally flawed. Plaintiffs' own sources contradict it, the regulations of the U.S. Food and Drug Administration (FDA) discredits it, and the product's label dispels it."
Two women from California filed the suit in January, alleging that Costco "systemically cheated customers out of tens, if not hundreds, of millions of dollars" by marketing its rotisserie chicken as preservative-free while the product allegedly contained sodium phosphate and carrageenan. As USA TODAY reported, the case is set for a court appearance at 10 a.m. on Aug. 13 before the United States District Court for the Southern District of California.
The lawsuit targets Costco's in-store signage and online advertising, which the plaintiffs say told customers the rotisserie chicken had "no preservatives." They argue that two ingredients in the chicken's seasoning mix, sodium phosphate and carrageenan, function as preservatives. Sodium phosphate, the plaintiffs contend, controls pH and reduces fat oxidation, slowing microbial growth and spoilage. Carrageenan, they claim, is used "to preserve food texture and extend shelf life."
The proposed class would include all U.S. customers who purchased Costco's rotisserie chicken, with a subclass of California buyers. The plaintiffs seek class certification, unspecified monetary damages, and an order requiring Costco to stop advertising the chicken as preservative-free.
It is the kind of lawsuit that has become familiar in consumer law: take a product millions of people buy without complaint, identify a technical labeling argument, and try to turn it into a nine-figure payday. The legal battle over Costco's rotisserie chicken labeling raises a straightforward question, did the company actually deceive anyone, or did two plaintiffs and their lawyers find a creative reading of an ingredient list?
Costco's June 4 filing pushes back on every major claim. The company says its rotisserie chicken contains three basic ingredients: whole chicken, water, and a seasoning mix. That seasoning mix, Costco notes, is printed on the product's packaging and broken down for customers. It includes salt, sodium phosphate, modified food starch made from potato and tapioca, potato dextrin, carrageenan, sugar, dextrose, and spice extractives.
In other words, the ingredients the plaintiffs call hidden preservatives are listed right on the label, as seasoning components.
"The Rotisserie Chicken label unambiguously describes these ingredients as components of the product's seasoning," Costco stated in the filing. The company also cited FDA regulations, arguing that the agency classifies carrageenan as an emulsifier, stabilizer, or thickener, not a preservative. If the FDA does not treat carrageenan as a preservative, Costco's position is that advertising the chicken as preservative-free was accurate, not misleading.
Costco also denied violating any of the three laws cited in the complaint: Washington's Consumer Protection Act, California's Unfair Competition Law, and California's False Advertising Law. California's Unfair Competition Law prohibits unlawful, unfair, or fraudulent business practices and misleading advertising.
One of the more telling details in Costco's response targets the plaintiffs' claim that consumers paid a "price premium" because they believed the chicken was preservative-free. For anyone who has ever walked through a Costco, the idea that the $4.99 rotisserie chicken carries a premium price is difficult to take seriously. The bird has been a loss leader for years, a product the company sells at or below cost to draw shoppers into the store.
Costco's filing makes the point directly: "The Rotisserie Chicken's price remains unchanged at its well-known $4.99." The company then drives the argument home: "This admission is fatal: there is no price premium, and there never was one."
That $4.99 price tag is one of the most recognized deals in American retail. Costco has famously held the line on that price even as the company has adjusted prices on other Kirkland products in response to inflation and member pushback. The chicken's price has not budged. If there is no premium, there is no overcharge, and the damages theory starts to look hollow.
Shortly after the plaintiffs filed suit in January, Costco told USA TODAY that it removed the "no preservatives" signage. That might seem like a concession. But the company's latest filing makes clear it does not view the removal as an admission of wrongdoing. Costco said it plans to ask the court to dismiss the plaintiffs' request for an injunction banning the signage entirely.
The distinction matters. Pulling signage voluntarily is different from a court ordering a company to stop using it. Costco appears to want the legal record to reflect that its advertising was accurate, that it chose to remove the signs, not that a judge forced it to.
Costco's filing summarized its position plainly: "Costco sells accurately labeled fully cooked and seasoned chicken." That is a company preparing to defend its product on the merits, not one looking to settle quietly.
USA TODAY contacted lawyers representing the plaintiffs on June 11 to ask for comment but did not immediately receive a reply. The plaintiffs' legal team, the Almeida Law Group, has shared information about the lawsuit on its website.
Lawsuits like this one thrive in a legal environment where class action attorneys can find a technical labeling dispute and scale it into a massive damages claim. The plaintiffs here do not allege anyone got sick. They do not claim the chicken tasted different than expected. They claim that ingredients listed on the packaging should have been categorized differently, and that this labeling choice entitles millions of consumers to money.
For the average Costco member who grabs a rotisserie chicken on the way out of the store, the lawsuit probably sounds disconnected from reality. Shoppers have plenty of real frustrations with warehouse-club products, from bananas that ripen too fast to crowded sample stations. But a class action over whether carrageenan is a preservative or a stabilizer is not the kind of consumer protection most people have in mind.
Costco's defense leans heavily on the FDA's own classifications. If the federal agency that regulates food labeling does not call carrageenan a preservative, it is hard to argue that a retailer committed fraud by agreeing with the FDA. The plaintiffs will need to explain why their reading of the science should override the regulatory framework that governs every food label in the country.
The case also highlights a tension in modern consumer law. Companies like Costco invest heavily in keeping prices low and product information accessible. The legendary $1.50 hot dog combo and the $4.99 rotisserie chicken are not products designed to gouge anyone. They exist to get people through the door. Suing over the labeling of a below-cost chicken requires a certain creative ambition.
The Aug. 13 hearing in San Diego will be the next major milestone. Costco's lawyers told the court they plan to formally move for dismissal in mid-August. If the judge grants that motion, the case ends, at least at the trial-court level. If the motion fails, the lawsuit moves forward toward discovery and potentially a trial.
The plaintiffs' attorneys have not publicly responded to Costco's filing. Whether they can overcome the FDA classification argument and the price-premium problem will determine whether this case has legs or becomes another example of ambitious litigation that could not survive contact with the facts.
When a $4.99 chicken with its ingredients printed on the label becomes the basis for a hundred-million-dollar lawsuit, the system is not protecting consumers. It is enriching lawyers.