Costco Wholesale Corporation will pay $14 million to settle a class-action lawsuit alleging that the retailer sent Washington residents misleading marketing emails, following final approval by a King County Superior Court judge in October 2026.
The settlement resolves claims involving promotional subject lines that allegedly misrepresented how long certain discounts would remain available.
Costco has denied wrongdoing and did not admit liability as part of the agreement.
What Is the Costco Email Lawsuit About?
The lawsuit, Aaland v. Costco Wholesale Corporation, was filed in King County Superior Court in June 2025.
The plaintiffs alleged that Costco violated Washington’s Commercial Electronic Mail Act (CEMA) and Consumer Protection Act by sending commercial emails with allegedly false or misleading subject lines.
Examples cited in the case included emails stating that it was the βlast dayβ to access member-only savings and that certain βHot Buysβ were available for only five days.
The plaintiffs argued that these messages could create a false sense of urgency by suggesting that discounts would expire sooner than they actually did.
These claims remain allegations resolved through a settlement, rather than a court finding that Costco committed the alleged violations. Source: Official settlement website.
Who Was Eligible for the Costco Settlement?
The settlement covers people who received qualifying commercial emails sent by Costco, or on its behalf, between June 2, 2021, and July 7, 2026, while residing in Washington.
Approximately 3 million potentially eligible shoppers were contacted after the court granted preliminary approval on June 23, 2026. The deadline to submit a claim was August 24, 2026.
According to court documents cited in published reporting, 313,275 claim forms were deemed valid by the deadline, while five class members objected to the settlement.
Judge Janet Helson granted final approval on October 2, 2026, according to Law360’s report.
The claim deadline has passed. Consumers should consult the official settlement website for authoritative information about the settlement’s status and any remaining procedures.
How Will the $14 Million Settlement Be Distributed?
The $14 million fund will cover eligible claimant payments and court-approved expenses.
Approximately $4.6 million is allocated to attorneys representing the class, while the class representative, Michael Aaland, will receive a $2,500 service award.
Any remaining funds will go to the Legal Foundation of Washington, a Seattle-based nonprofit.
Eligible claimants’ payments will be distributed equally under the settlement’s terms after applicable deductions.
The final individual payment depends on the approved expenses and the number of valid claims.
The settlement amount does not mean every eligible shopper will receive a fixed payment of $14 million divided by the total number of potentially eligible consumers.
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Why Washington’s Email Marketing Law Matters
Washington’s Commercial Electronic Mail Act prohibits certain commercial emails containing false or misleading subject-line information.
In April 2025, the Washington Supreme Court ruled in Brown v. Old Navy that the law prohibits false or misleading information in commercial email subject lines, including statements about promotional deadlines.
That ruling helped establish the legal context for a wave of litigation targeting retailers’ promotional email practices.
A 2026 amendment to CEMA also changed the law for subsequent cases, making the timing of a lawsuit relevant to its legal framework.
The Costco settlement illustrates why retailers need to ensure that promotional deadlines accurately reflect their offers.
However, the agreement does not establish that Costco acted unlawfully, and the settlement terms do not require the company to change its email subject lines.
For consumers, the case highlights the importance of accurate advertising.
For retailers, it underscores the potential legal and financial consequences of marketing language that allegedly misrepresents a promotion’s duration.
Sources: Official Costco settlement website | Law360 settlement report | Washington Supreme Court decision in Brown v. Old Navy
This article is for informational purposes and does not constitute legal advice.
