• by Ray Schultz , Columnist, July 31, 2026

A $14 million legal settlement may not be all that much for a company the size of Costco. But it could have serious consequences for firms of all sizes. 

Costco, a Washington-based retailer with a national footprint, was sued in a class action for allegedly sending misleading emails. It has settled the case, out of court, as they say, and apparently views the settlement as a cost of doing business. 

The company’s offense? Reportedly using subject lines like, "Today is the last day to access Member-Only Saving" and "Hot Buys available for 5 Days Only." These deadlines were purportedly not real—the company had extended the sales, the suit charges.  

The complaint alleges that these emails violated the state’s  Commercial Electronic Mail Act and Consumer Protection Act. 

Costco settled without admitting wrongdoing, It just wanted to get rid of the nuisance.  

So-called victims—people who received emails from Costco from June 2021 to July 2026—could receive payments of an estimated $500. They don’t have to prove they bought anything.  

This is not an isolated case. Sketchers, the giant sneaker firm, was hit with a class action suit, which is now in federal court in Washington. The judge denied a motion to throw out the case.  

Another suit was filed against Pods, a moving and storage firm, was similarly sued.   

Subject lines implying urgency are part of the standard email toolkit. And the state has recognized this by softening its Consumer Electronic Mail Act to protect legitimate defendants who did not intend to violate the act. That presumably includes Lands’ End, which was merely “suspected” of sending misleading emails several months ago. 

The danger is that lawyers on the make, seeing the Costco settlement, will drum up more class action suits. There is money to be made. 

And brands like Costco should not expect consumer loyalty. Who will turn down a $500 payment? 

Plaintiffs will “likely continue pairing CEMA claims with Washington Consumer Protection Act theories that seek fees, injunctive relief, and treble damages,” the law firm of McDermott Will & Schulte.