By Costco is facing one of its most significant legal challenges in recent memory and it has nothing to do with the price of a rotisserie chicken. A class-action lawsuit filed in early 2026 accuses the warehouse giant of violating California’s Automatic Renewal Law (ARL), potentially affecting millions of Gold Star and Executive members across the country.
If you are a Costco member and your annual membership has auto-renewed in the past year, this lawsuit may directly apply to you. Here is a complete breakdown of what happened, who filed the suit, what laws Costco allegedly broke, and what comes next.
What Is the Costco Lawsuit About?
The Costco membership lawsuit was filed in March 2026 by a California resident named Russel George II in the U.S. District Court for the Northern District of California. George holds a $65 Gold Star membership he originally purchased online in 2023. By late 2025, he had started rethinking whether the membership made financial sense for him.
Before he could cancel, his payment card was charged $65 on January 2, 2026 a full membership renewal he says he never properly agreed to. His argument is not that Costco failed to send a warning. The company did send an email. The problem, according to the lawsuit, is when and how that warning was sent.
How Costco Violated California’s Automatic Renewal Law
California’s Automatic Renewal Law is one of the strongest consumer protection statutes in the United States. It exists to ensure that subscription and membership-based businesses cannot quietly roll customers into another billing cycle without giving them a genuine opportunity to cancel.
The law is specific: businesses must notify customers no earlier than 45 days and no later than 15 days before the automatic charge. Costco’s 60-day advance notice falls outside that window on the front end, making it a technical but meaningful violation.
But the timing issue is only part of the complaint. The lawsuit also alleges that Costco’s renewal notice failed to include information the ARL specifically requires:
- The exact dollar amount that would be charged
- The specific terms of the membership renewal
- A clear and accessible method for canceling before the charge
- The length of the renewal term
George’s legal team argues that because Costco’s notice did not include these disclosures, he was deprived of a real, informed choice. Had he received a compliant notice, the complaint says, he would have canceled the membership before being billed.
What Laws Is Costco Accused of Breaking?
The Costco membership lawsuit targets multiple California statutes simultaneously. This is a common legal strategy in consumer class actions because it layers remedies and makes the case harder to dismiss on a single technicality.
- California Automatic Renewal Law (ARL) — the primary claim, centering on the untimely and incomplete renewal notice
- California False Advertising Law (FAL) — for allegedly misleading members about the terms and timing of renewal
- California Consumers Legal Remedies Act (CLRA) — a broad consumer protection statute that covers deceptive business practices
- California Unfair Competition Law (UCL) — which prohibits any unlawful, unfair, or fraudulent business act or practice
The multi-statute approach means that even if one claim does not survive a motion to dismiss, others may carry the case forward toward class certification.
What Did Costco Do After George Filed a Complaint?
George did not go straight to court. In January 2026 the same month his card was charged he sent Costco a formal demand letter asking the company to acknowledge the issue and take corrective action. Costco responded in February 2026 but declined to change its practices or offer any resolution.
That refusal triggered the class-action filing in March 2026. A preliminary hearing in the case is currently scheduled for June 2026. Costco has not issued a public statement addressing the membership lawsuit.
Is This the Only Costco Lawsuit in 2026?
No and that context matters. The Costco membership auto-renewal lawsuit is one of several active legal battles the company is navigating simultaneously in 2026. Each lawsuit targets a different part of Costco’s business, raising broader questions about how the company handles transparency with its customers.
Costco Rotisserie Chicken Lawsuit
In January 2026, Costco was sued over its famous $4.99 rotisserie chicken. The lawsuit alleged that Costco falsely advertised the product as containing “no preservatives.” Three weeks later, a second chicken-related complaint was filed this time by an animal rights nonprofit alleging that Costco’s chicken processing plant in Nebraska has a salmonella contamination problem.
Costco Tariff Price Lawsuit
A separate class-action lawsuit, filed following a February 2026 U.S. Supreme Court ruling that invalidated tariffs imposed under the International Economic Emergency Powers Act (IEEPA), accuses Costco of passing those illegal tariff costs on to consumers. The complaint estimates that Costco stands to receive hundreds of millions potentially over a billion dollars in tariff refunds from the federal government, while consumers who already paid elevated prices during the tariff period receive nothing. The lawsuit seeks to cover all U.S. Costco shoppers who purchased goods subject to IEEPA tariffs between February 1, 2025 and February 24, 2026.
Who Qualifies for the Costco Membership Lawsuit?
The class in this lawsuit has not yet been certified by a court which means the exact eligibility criteria are still being defined. That said, based on the complaint as filed, the case is likely to cover:
- Current and former Costco members in California whose memberships auto-renewed within the relevant period
- Members who received renewal notices outside the 15-to-45-day window required by California law
- Members whose renewal notices did not include all required disclosures under the ARL
If you are a Costco member and your card was charged for a renewal without a proper notice in the legally required timeframe, it is worth keeping a close eye on this case as it progresses toward class certification.
What Could Happen if Costco Loses?
The plaintiff is asking the court for several forms of relief. If the court rules in the plaintiff’s favor or if Costco settles the outcome could include:
- Monetary damages for George and all qualifying class members
- Declaratory relief confirming that Costco’s notices violated California law
- Injunctive relief requiring Costco to overhaul its entire membership renewal notification process going forward
There is also a notable provision in California’s Automatic Renewal Law that could affect settlement math: a non-compliant automatic charge may be treated as an unconditional gift. In practical terms, that means the entire amount charged to members could be subject to refund. For a $65 Gold Star membership multiplied across a large class of California members, the exposure is meaningful.
No settlement amount has been proposed or approved. No claim form is currently available. This case is still in its earliest stages.
What Should Costco Members Do Right Now?
Even if you are not sure whether you are part of the class, there are practical steps you can take immediately:
- Log into your Costco account at Costco.com and review your auto-renewal settings
- Check your email inbox for any renewal notices you received from Costco in the past 12 months and note the dates
- Cross-reference those dates with your credit card statements to see how far in advance you were notified before being charged
- If the gap was more than 45 days or less than 15 days, document it that detail becomes important if a class is eventually certified
- Call Costco member services if you want to manually manage or cancel your auto-renewal
You do not need to do anything formal to potentially join a class action at this stage. Class membership, if certified, is typically automatic for qualifying individuals.
The Bottom Line
The Costco lawsuit of 2026 is not a frivolous complaint. It targets a real and verifiable gap between what California law requires and what Costco actually sent its members a 60-day advance notice that is two weeks too early to comply with the ARL’s window, plus alleged missing disclosures that consumers need to make an informed decision.
Whether this case ends in a settlement, a judgment, or a dismissal will depend on how courts interpret the ARL’s requirements and whether the class gets certified. But the broader pattern Costco simultaneously fighting four separate lawsuits covering its membership model, its food products, and its pricing practices signals that 2026 is a year when the company’s relationship with transparency is under serious scrutiny.
If you are a Costco member, the most practical thing you can do right now is review your renewal history, verify your notification dates, and keep records. If you were charged without proper notice, you may eventually have a claim worth pursuing.
Frequently Asked Questions (FAQ)
What is the Costco lawsuit about in 2026?
The primary Costco lawsuit in 2026 involves a class-action complaint filed by California member Russel George II. He alleges that Costco violated California’s Automatic Renewal Law by sending a membership renewal notice 60 days before charging his card outside the legally required 15-to-45-day window. The notice also allegedly lacked required information about the charge amount, renewal terms, and cancellation methods.
Did Costco violate California law?
According to the lawsuit, yes. The complaint alleges that Costco violated four California statutes: the Automatic Renewal Law, the False Advertising Law, the Consumers Legal Remedies Act, and the Unfair Competition Law. The court has not yet ruled on these claims. The case is in its early stages and no class has been certified.
How much is the Costco auto-renewal lawsuit worth?
No settlement amount has been announced or proposed. The plaintiff is seeking monetary damages for all class members, plus injunctive relief requiring Costco to change its renewal notification practices. Under California’s ARL, improperly charged amounts could be treated as unconditional gifts meaning full refunds may be possible. The actual per-person payout, if any, is not yet determined.
Is Costco facing other lawsuits in 2026?
Yes. In addition to the membership auto-renewal lawsuit, Costco is simultaneously facing lawsuits over its rotisserie chicken (“no preservatives” labeling claim), a salmonella contamination allegation at its Nebraska chicken processing plant, and a separate class action claiming it passed the costs of now-illegal import tariffs on to shoppers.
How do I cancel my Costco auto-renewal?
You can manage or cancel your Costco membership auto-renewal by logging into your account at Costco.com, visiting the membership section, or calling Costco’s member services line. Canceling the auto-renewal does not immediately end your membership it simply prevents the next annual charge.
Does this lawsuit apply outside of California?
The lawsuit was filed under California law and is currently scoped to California members. However, if the case expands or inspires similar lawsuits in other states, consumers outside California could see related legal action. Several other states have similar automatic renewal laws, though the notice windows and disclosure requirements vary.