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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
I’m sorry you are going through this, Costco.
While I bought this coconut oil, I will not be seeking the $3 per jar. Coconut oil is healthy. What a ridiculous money grubbing lawsuit. Well, off to Costco, I hope they haven’t run out of this coconut oil.
This is the reason for why Lawyers are held in such poor regard. Disgraceful.
Whatever happened to people exercising due diligence and accepting personal responsibility for food choices?
I got the postcard today and upon reading the basis for this lawsuit, I am appalled. I thought perhaps there had been a REAL issue with the product.
This lawsuit speaks volumes about the decline of society. All consumers end up paying for these frivolous lawsuits.
This is so wrong. Costco is a good company that takes good care of their customers and employees. What gives you the right to pick on something so trivial?
Cheerios cereal’s slogan is “be happy, be healthy”, and Cheerios are made with GMOs. I would wager that a tub of coconut oil is a whole heck of a lot healthier than a box of sugary GMOs. Just sayin.
This is nothing more than a bunch of lawyers trying to make a buck. Stupidest thing I ever heard of! People should not rely on a company to tell them if a product is “healthy” or not! As long as the correct ingredients are listed, the consumer has the responsibility to make the health judgement. This does nothing but raise the prices at Costco and clog up our court system.
Agreed.
Saturated fats ARE the good fats. Trans fats are man made that are bad for you.
Yet indigenous islanders that eat mostly Coconuts for generations have no heart issues.
Everybody always looking for an easy buck! Of course its saturated fat…its solid in the jar. I use it for my hair and body not to cook with. If you’re looking for healthy, use olive oil but do research on that as well because all are not healthy or genuine. Canola oil was said to be healthy and is NOT!
Wrong! It IS healthy for inside and out.
Even olive oil solidifies at a certain temperature. Coconut oil is far more healthy than many other oil products.
Who comes up with this stuff?!!! Get a life people and find something important to do with your time! To make matters worse coconut oil vs. canola oil which caused you more harm? Because one had the word healthy on the jar they need to be sued? What? Really? What is this world coming to?