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Costco proposes to pay a $775,000 settlement to resolve claims in a class action lawsuit alleging the grocery wholesaler misleads customers by advertising its Kirkland coconut oil as healthy.
Lead plaintiffs allege in their class action lawsuit that coconut oil is made up of unhealthy saturated fat, but Costco advertises huge quantities of the product as “healthy and delicious.”
According to the proposed settlement, the terms “healthy” and “health benefits” will be removed from the coconut oil packaging. Additionally, Costco will put $775,000 into a settlement fund to cover claims and other expenses.
“Following more than a year of discovery, multiple motions, and many informal settlement discussions, at a February 23, 2017 mediation, the parties reached a class action Settlement Agreement that provides substantial relief to the Class,” said the preliminary settlement approval motion filed with the federal court.
Consumers will be able to submit claims for purchases of 42.3 ounce jars of Kirkland coconut oil made between March 1, 2014 and June 30, 2016. The coconut oil was sold in a package made up of two jars. Costco will pay up to $3 per jar claimed by the consumer. According to documentation filed with the court, 1.72 million consumers may be entitled to make a claim.
“[D]efendants have agreed to no longer use the term ‘healthy’ (or variations) to advertise Kirkland Coconut Oil on the product’s label,” the settlement documentation states.
According to the motion for preliminary approval of the settlement, Costco will email approximately 790,000 Class Members and also send notice via regular mail.
“The Postcard and Email Notices will include a link to the Settlement Website, www.CostcoCoconutOilSettlement.com, where class members can view the Long-Form Notice, case documents, important dates, frequently-asked questions, and other information about the case and Settlement, and where they can make a claim or download an opt-out form,” said the motion.
The plaintiffs alleged in their class action lawsuit that Costco marketed Kirkland Signature Organic Coconut Oil as a healthy alternative to butter and other oils, but coconut oil is made of saturated fat that is inherently unhealthy and increases the risk of cardiovascular disease and other illnesses.
Costco asked the California federal court to dismiss the class action in June of last year. Costco argued that since the plaintiffs did not show that the coconut oil caused them any harm, they could not claim that the labeling of the product caused them to suffer.
U.S. District Judge David O. Carter rejected Costco’s motion noting that the plaintiffs had sufficiently established standing and had properly alleged that they relied on the label’s claims and lost money because of it.
Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.
The plaintiffs are represented by Paul K. Joseph of the Law Office of Paul K. Joseph and Jack Fitzgerald, Trevor M. Flynn and Melanie Persinger of The Law Office of Jack Fitzgerald.
The Costco Coconut Oil Class Action Lawsuit is Boswell, et al. v. Costco Wholesale Corp, Case No. 8:16-cv-00278, in the U.S. District Court for the Central District of California.
UPDATE 3: September 2017, the Costco coconut oil class action settlement is now open. Click here to file a claim.
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63 thoughts onCostco Will Pay $775K to Settle Coconut Oil Class Action Lawsuit
What an incredibly stupid lawsuit. Now consumers will have to pay for this.
this can only happen in America. healthy foods are labeled as bad while white bread, sugar and processed carbs are nutritious? No wonder we have an obesity epidemic.
Received my card to enter this bogus class action lawsuit, but I definitely don’t want to be included. The people filing this claim should be ashamed. What has happened to personal responsibility?
Should we sue Costco for sales of cigarets , bulk size candy no label saying to only eat 1 , god forbid 36 pack Coca Cola . And any other super size item . It’s the consumer responsibility . Now this had really made me unhappy maybe all of us cocunut oil users should sue the law firm for even pursuing this claim . And to top it off this is one of the ways we the consumer will be paying for this lawsuit , higher prices. And don’t forget the hotdogs they serve in the food court . The picture menu is offensive
Absolutely Ridiculous! Everyone knows that fat doesn’t make you fat and unhealthy. Carbohydrates do that. Carbs cause the body to produce insulin and insulin causes the body to store fat. Do your research James Boswell. You should be ashamed of yourself. People like you will cause prices to go up at Costco. Are you going to return all the money to Costco when the USDA admits they had it all wrong and that a low fat diet and lots of whole grains way of eating is killing us???
Agree!! People are stupid and sue hungry!!
I also eat organic coconut oil every day. I’m wondering who was behind this lawsut–could it be the corn, canola and the other gmo producing oil manufacturers (Monsanto? as an example)?
I bet that if someone could dig a lot deeper it would reveal shenanigans. Talk about frivolous lawsuits, the judge is about 15 years behind on the research regarding saturated fats.
Coconut oil is one of the healthiest things you can ingest. But I did not throw away my card. To my understanding, you have to opt OUT to not be included in the lawsuit.
I find this so upsetting… Makes me sick to my stomach… I love Costco’s coconut oil and I think that this is a bunch of BS. They advertise Canola oil as healthy. What about the GMO oils? I wouldn’t dare jump on this lawsuit. And I will continue to purchase and consume loads of Kirkland Coconut oil.
This lawsuit is absolutely ridiculous. I, too, threw my postcard away. I don’t understand why a judge wouldn’t fine the plaintiff for such a waste of time and money and dismiss the case. There are tons of products containing high fructose corn syrup that claim to be “healthy” and that’s OK but coconut oil isn’t? Whatever. The system is messed up.
I agree with the many appalled citizens that feel that Costco is being ripped off!! Coconut Oil is healthy because it is a medium chain triglyceride and is metabolized differently than other saturated fats! Spot on Kelli! What is going on with this country that we are suit happy about everything! What a fraudulant suit!! I ripped up my card and threw it where it belonged, in the trash!