In short
- A federal class action filed in Portland accuses Costco Wholesale of selling hundreds of products tied to child and forced labor while marketing itself as an ethical sourcer.
- The case is Brunker et al v. Costco Wholesale Corporation, No. 3:26-cv-02035 in the US District Court for the District of Oregon, entered on the docket as filed October 1, 2026 and first reported a day later.
- The money claim runs to roughly $220m in statutory damages alone: $200 for each of more than 1.1 million Oregon members, plus punitive damages and an injunction.
- Three product lines carry the complaint: cocoa from West Africa, cashews from Brazil, Vietnam and Guinea-Bissau, and shrimp processed in India, all cross-referenced to the US Department of Labor list of goods.
- Costco has beaten this theory before, in the Sud shrimp case, so the real question is whether Oregon consumer law and Costco’s own Kirkland Signature control claims clear the bar that California law did not.
Costco Wholesale Corporation is facing a federal class action in Oregon that attacks the retailer at the point where its brand promise meets its sourcing book. The suit alleges that hundreds of items on Costco shelves are produced with child or forced labor, and that selling them alongside claims of ethical and sustainable sourcing is a deceptive trade practice. According to a report by The Oregonian, the 95-page complaint was filed in Portland and seeks class status for Oregon members. The retailer had not responded to the allegations at the time the first reports were published.
The filing lands in a quarter when forced labor has moved from a compliance footnote to the centre of US trade policy. Customs enforcement, tariff policy and now state consumer law are converging on the same question: who carries the legal risk when a supply chain cannot be fully traced. For a warehouse club that reported $303.2bn in net sales in fiscal 2026, the dollar exposure in this single case is small. The precedent risk is not.
What exactly does the Costco lawsuit allege?
The core allegation is a mismatch between marketing and sourcing. The complaint asserts that Costco brands itself as a retailer of ethically sourced and sustainable goods, and makes explicit promises that child and forced labor are prohibited in its supply chains. It then alleges that hundreds of products sold in Costco warehouses originate in production systems where those practices are documented. The claim is not that Costco employs such labor directly, but that it sells the output and charges members for access to it.
Per the reporting on the filing, the complaint grounds its product list in the US Department of Labor’s published list of goods produced by child labor or forced labor, citing the September 2024 update. That matters procedurally. Rather than asking a court to make fresh factual findings about overseas labor conditions, the plaintiffs lean on an existing federal government determination as the evidentiary anchor.
The three product categories named
Three categories do the work in the complaint. Chocolate is alleged to rest on cocoa illegally farmed by children in West Africa. Cashews are alleged to have been harvested by underage and forced laborers in Brazil, Vietnam and Guinea-Bissau. Shrimp is alleged to have been processed by exploited workers in India.
Each of those pairings maps onto a well-documented listing. Cocoa from Côte d’Ivoire and Ghana has appeared on the Department of Labor list since 2009, and cocoa paste, cocoa butter and cocoa powder were added as separate listed goods in the 2024 update. Indian shrimp was added for forced labor, with the department citing debt bondage, restricted movement and harsh conditions among migrant workers in Andhra Pradesh. The 2024 list covers 204 goods across 82 countries.
| Product category | Sourcing countries alleged in the complaint | Labor practice alleged | Federal list context |
|---|---|---|---|
| Chocolate and cocoa | West Africa | Illegal farming by children | Cocoa beans listed since 2009; cocoa paste, butter and powder added in the 2024 update |
| Cashews | Brazil, Vietnam, Guinea-Bissau | Underage and forced labor in harvesting | Cashews appear on the Department of Labor list; country coverage differs from the complaint’s list |
| Shrimp | India | Exploited labor in processing | Added for forced labor, with debt bondage reported among migrant workers in Andhra Pradesh |
Why the word “hundreds” is doing heavy lifting
The complaint does not confine itself to Costco private label. Per the reporting, it also challenges national and international brands sold at Costco, products that sit on competitors’ shelves too. That widens the theory considerably and is the reason plaintiffs’ counsel described the action as the first of its kind he was aware of.
It also creates a tension the defence will exploit. A claim that spans hundreds of third-party branded items across three continents invites the argument that no single member relied on any particular representation when paying a membership fee. Class certification tends to live or die on exactly that question.
Who filed the case and what do they want?
Two named plaintiffs carry the case. Leslie Brunker, described as a resident of Southeast Portland, and Jeremy Parra of Tigard both began paying annual membership fees within the past year, according to the reporting. That recency is deliberate: a fresh membership shortens the causation chain between the marketing they encountered and the fee they paid.
They are represented by the Portland firm Larkins Vacura Kayser, with attorney Brian de Haan named in the coverage. The relief sought has three parts: statutory damages of $200 for each eligible Oregon member, punitive damages, and an injunction barring Costco from continuing the practices the complaint calls unlawful. The docket lists Magistrate Judge Youlee Yim You in connection with the case.
The class is defined around Oregon Costco members, estimated in the reporting at more than 1.1 million people. That estimate is what converts a $200 per-head claim into a figure with corporate significance. At 1.1 million members, the statutory damages component alone reaches about $220m before any punitive award.
Why Oregon law makes this a $220m question
The choice of Oregon is not incidental. Oregon’s Unlawful Trade Practices Act gives private plaintiffs a statutory damages floor that most state consumer statutes do not. Under ORS 646.638(1), a person who suffers an ascertainable loss of money or property from a practice declared unlawful may recover actual damages or statutory damages of $200, whichever is greater.
That floor removes the hardest part of a consumer case. Plaintiffs do not have to prove what a chocolate bar would have cost in an ethically clean market, or how much a member overpaid. They have to establish the violation and an ascertainable loss, and the statute supplies the number.
The reckless-or-knowing bar for class claims
The statute is less generous to classes than to individuals. For an individual action, willful use of an unlawful practice triggers the $200 entitlement. In a class action, statutory damages may be recovered on behalf of class members only if plaintiffs establish that members sustained an ascertainable loss as a result of a reckless or knowing use of a practice declared unlawful.
That is the pressure point. The plaintiffs must show not just that listed goods reached Costco shelves, but that Costco’s handling of the risk was reckless or knowing. This is precisely why the complaint reportedly dwells on Costco’s own published commitments rather than only on overseas conditions.
The Eddie Bauer precedent widens “ascertainable loss”
Oregon’s own high court has recently made the loss element easier to plead. In Clark v. Eddie Bauer LLC, decided in 2023 on a certified question from the Ninth Circuit, the Oregon Supreme Court addressed whether a consumer can suffer an ascertainable loss based on a retailer’s misrepresentation about price history or comparative prices. The court concluded that a purchase made on false information about past or sale prices can represent a quantifiable loss under the Act.
The significance is the reasoning rather than the subject matter. The decision confirms that ascertainable loss is not restricted to misrepresentations about a product’s attributes or quality. A plaintiff arguing that an ethical-sourcing representation induced a purchase now has Oregon authority that non-attribute misrepresentations can count.
Why the attorney-fee rule matters to the economics
One further provision shapes the risk calculus. The Act bars a court from awarding attorney fees to a prevailing defendant where the action is maintained as a class action under Oregon’s class procedure rule. A defendant that wins therefore does not recoup fees from the class representatives.
That asymmetry lowers the cost of bringing speculative consumer classes in Oregon. It is one reason the state has become a venue of choice for retail consumer litigation, and one reason a $220m claim can be filed against a company of Costco’s size by two individual members.
How Costco’s own sourcing promises became the evidence
The complaint’s most dangerous feature for Costco is that it is built largely from Costco’s own documents. Costco publishes a Supplier Code of Conduct that prohibits forced labor, human trafficking, child labor, discrimination and unsafe working conditions, and states that all employees shall work on a voluntary basis and shall not be subject to forced, bonded or indentured labor. Costco also publishes a disclosure addressing human trafficking and anti-slavery in its supply chain.
Those documents are compliance assets in a customs context and litigation exposure in a consumer context. The more specific and absolute the public commitment, the easier it is for a plaintiff to frame a gap between the promise and the sourcing reality as a deceptive representation rather than aspirational corporate language.
The Kirkland Signature control claim
According to the reporting, the complaint singles out a Costco statement that it controls every element of its Kirkland Signature supply chains. For a private label programme that is a selling point. In a courtroom it is close to an admission of knowledge.
A defendant arguing that it could not reasonably have known what happened five tiers upstream is in a weaker position if it has told the market it controls every element of that chain. Expect the defence to characterise the statement as puffery about vertical integration rather than a representation of audited labor conditions. Expect the plaintiffs to read it literally.
The third-party audit stack cuts both ways
Costco’s published approach relies on independent third-party audits, working with programmes such as Amfori BSCI, Sedex and the Ethical Trading Initiative, which inspect against international protocols covering labor practices, workplace conditions and environmental management. Enforcement is graduated: depending on severity, or where continuous improvement is absent, Costco may cancel a purchase order or terminate the relationship.
Costco’s stated preference is to remediate with suppliers rather than apply sanctions that harm the workers and families who depend on that employment. That is a defensible position in sustainability practice. It is also a documented policy of continuing to buy from facilities after violations are identified, which a plaintiff will put in front of a jury as evidence on the reckless-or-knowing question.
What earlier forced-labor cases tell us about Costco’s odds
Costco has defended this theory before and won. In Sud v. Costco, consumers alleged that farmed shrimp sold by the retailer was tied to slave labor in Thailand. The district judge dismissed the claims, finding that the plaintiffs had not established that Costco was bound to inform customers that modern slavery could form part of its supply chain, and the dismissal was upheld on appeal.
That ruling is the central obstacle. It establishes, in a comparable consumer-deception posture, that a retailer’s silence about upstream labor risk is not automatically actionable. The Oregon plaintiffs appear to be routing around it by pleading affirmative misrepresentation rather than pure omission, which is a materially different claim.
Why the trafficking statute route has narrowed
The parallel federal route has also tightened. In Ratha v. Phatthana Seafood Co., reported at 35 F.4th 1159, the Ninth Circuit in 2022 affirmed summary judgment for the defendants in a case brought by Cambodian villagers who alleged they were trafficked into Thailand and subjected to forced labor at seafood processing factories. The court held that civil liability under the trafficking statute’s remedy provision does not extend to those who merely attempt to benefit from forced labor.
That closes off the most direct federal theory against downstream buyers. The practical consequence is that plaintiffs’ firms have migrated to state consumer protection statutes, where the claim is about what the retailer told domestic shoppers rather than what happened to overseas workers. The Oregon filing is a clean example of that migration.
The deception framing is the whole strategy
Read together, the precedent explains the shape of the Oregon complaint. A claim that Costco should have disclosed upstream labor risk runs straight into Sud. A claim that Costco actively represented ethical sourcing, charged a membership fee for access, and knew its listed goods told a different story is a different case.
Whether that framing survives a motion to dismiss is the first real test. Costco’s response is likely to argue that the representations are non-actionable corporate aspiration, that no member relied on them in paying a fee, and that an Oregon-only class cannot be certified around hundreds of heterogeneous products.
How this fits the wider forced-labor enforcement push
Consumer litigation is now the fourth active track against forced labor in retail supply chains, and it is the only one a private plaintiff can start. The other three are federal and have all moved in 2026. Customs enforcement under Section 307 of the Tariff Act of 1930 continues to bar goods made with convict, forced or indentured labor, with Customs and Border Protection acting through withhold release orders and findings.
That machinery has been visibly busy. Late in September, CBP issued withhold release orders on two Indonesian palm oil growers, exposing retailers to detentions on an ingredient that appears across packaged food and personal care. A product that is detained at the border is also a product a consumer lawyer can point to in a complaint.
The tariff track is still unresolved
The most aggressive federal move is the tariff route. Duties imposed under the forced-labor Section 301 investigations took effect in July 2026 at 10% or 12.5% depending on whether a trading partner maintains an import prohibition, reaching more than 99% of US goods imports. The American Action Forum has estimated the annual cost at about $58.3bn.
Those duties are now under judicial review, and the trade court heard argument on the forced-labor tariffs at the end of September with a written ruling expected within weeks. Diplomatically the picture is thinner: the G20 trade ministerial in Milwaukee ended without consensus on forced labor, with only Mexico and Argentina signing the US-led supply-chain statement.
| Enforcement track | Who acts | What triggers it | Remedy or exposure |
|---|---|---|---|
| Section 307, Tariff Act of 1930 | Customs and Border Protection | Information that goods were made with convict, forced or indentured labor | Withhold release order or finding; shipments detained or excluded |
| Uyghur Forced Labor Prevention Act | Customs and Border Protection | Goods with a nexus to Xinjiang | Rebuttable presumption of exclusion; importer must rebut |
| Forced-labor Section 301 tariffs | US Trade Representative | Failure to impose and enforce an import prohibition | 10% or 12.5% ad valorem duty; under review at the trade court |
| State consumer protection law | Private plaintiffs and state AGs | A retailer’s own sourcing representations | Statutory and punitive damages, injunctions; no import nexus required |
Why the private track is the hardest to manage
The three federal tracks share a feature that makes them manageable: they attach to imports. A compliance team can map entries, trace tiers, and build documentation against a known legal standard. Exposure is bounded by what crosses the border.
Consumer litigation has no such boundary. It attaches to what the retailer says on its website, in its code of conduct and on its packaging, and it can be brought in any state whose consumer statute supports it. A company can hold a clean customs record and still face a deception claim over the language it used to describe that record.
What the claim means for Costco’s numbers
Against Costco’s financial scale, the headline exposure is immaterial. The company reported fiscal 2026 net sales of $303.2bn, up 10.1%, and net income of $9.2bn, up 13.9%. Fourth-quarter net sales were $93.87bn, an increase of 11.2% from $84.43bn a year earlier.
Membership, which is where the alleged harm sits, remains the engine. Costco reported 84.1 million paid members and 150.4 million cardholders at year end, growth of 3.8% and 3.6% respectively, with 42.3 million paid executive members, up 9.4%. Membership fee income reached $1.849bn, an increase of $125m or 7.3%. The company ended the year with 939 warehouses after 28 openings and 25 net new buildings.
| Measure | Figure | Claim in context |
|---|---|---|
| FY2026 net sales | $303.2bn, up 10.1% | $220m statutory claim is under 0.1% of annual sales |
| FY2026 net income | $9.2bn, up 13.9% | Claim equals roughly 2.4% of a single year’s profit |
| FY2026 membership fee income | $1.849bn, up 7.3% | Claim equals about 12% of one year of fee income |
| Paid members | 84.1 million, up 3.8% | Oregon class of 1.1 million is about 1.3% of paid members |
| Oregon statutory damages exposure | About $220m | 1.1 million members at the $200 floor, before punitive damages |
The real exposure is replication, not Oregon
The number that should concern Costco is not $220m. It is what happens if the theory survives a motion to dismiss and is copied into every state with a comparable statutory damages provision. An Oregon class of 1.1 million members represents about 1.3% of Costco’s 84.1 million paid members.
Scaled across the US member base at the same per-head figure, the arithmetic moves into the billions. That is a hypothetical, not a forecast, and it assumes a uniformity of state law that does not exist. It is nonetheless the calculation that drives early settlement decisions in consumer class litigation.
Which retailers are exposed next?
Any retailer that pairs a high-volume private label programme with absolute public sourcing commitments carries the same structural risk. The combination matters: a vague commitment is hard to call deceptive, and a retailer with no private label has a weaker control narrative to be held to. Warehouse clubs and grocers sit squarely in the overlap.
The complaint’s reach into national and international brands sold at Costco is the detail competitors should read closely. If branded products are the hook, then every retailer carrying the same cocoa, cashew and shrimp SKUs faces the same allegation, and the plaintiff’s choice of defendant becomes a matter of venue and class size rather than conduct.
Private label is the pressure point
Private label has been the margin story in US grocery for a decade, and the control claims used to sell it are now a liability. Kirkland Signature is the most successful example in the sector, which is why the complaint reportedly targets its control language directly.
The practical lesson for legal and sourcing teams is to align marketing copy with what the audit programme actually verifies. A claim to control every element of a supply chain should be supported by tier-level traceability, or it should be rewritten.
The consumer-class playbook is already running elsewhere
Costco is not the only large retailer answering consumer classes over how it describes its own conduct. The retailer is already contesting tariff-refund litigation, and a parallel consumer class action over Target’s $994m tariff refund shows the same mechanic applied to pricing rather than sourcing. In both, the claim is that the retailer collected money from shoppers on a representation that later looked wrong.
Costco’s handling of the tariff question offers a contrast worth noting. The company routed its $184m tariff refund into member prices across produce, meat and other categories rather than retaining it. Passing a windfall to members is a far easier fact pattern to defend than retaining one.
What happens next and what to watch
The immediate milestones are procedural. Costco’s response is the first substantive event, most likely a motion to dismiss arguing that the sourcing statements are non-actionable, that reliance cannot be established across a heterogeneous product set, and that the Sud ruling controls. A ruling on that motion will determine whether the case reaches discovery.
Discovery is where the real risk sits. A plaintiff with access to Costco’s audit findings, supplier corrective action records and internal risk assessments gains exactly the material the reckless-or-knowing standard requires. Most retailers settle before that record is built, which is why the dismissal ruling tends to function as the de facto resolution.
Four signals worth tracking
- Costco’s first filing and whether it pleads the Sud precedent as controlling or distinguishes the omission and misrepresentation theories.
- Copycat filings in other statutory-damages states within 60 to 90 days, which would confirm the theory is being treated as replicable.
- Any change to Costco’s published sourcing language, particularly the Kirkland Signature control claim, which would read as risk management.
- The trade court’s forced-labor tariff ruling, which will shape how much federal attention the issue keeps through the rest of 2026.
For retail legal teams the actionable item is narrower than the headlines suggest. The exposure created here is not a sourcing failure but a drafting failure, and it is fixable without changing a single supplier. Audit the public sourcing claims against what the audit programme verifies, and close the gap in the copy before a plaintiff closes it in a complaint.
Readers who want the underlying federal determination can consult the Department of Labor’s List of Goods Produced by Child Labor or Forced Labor, the document the complaint reportedly uses to anchor its product allegations.
FAQ: the Costco forced labor lawsuit
What is the case number and which court is hearing it?
The case is Brunker et al v. Costco Wholesale Corporation, No. 3:26-cv-02035, in the US District Court for the District of Oregon, sitting in Portland. The docket records the filing date as October 1, 2026, and lists Magistrate Judge Youlee Yim You in connection with the case. The first press reports appeared on October 2.
Is Costco accused of using child or forced labor itself?
No. The allegation is that Costco sells products made with child or forced labor upstream in its supply chains while representing to members that such practices are prohibited. The legal theory is consumer deception under Oregon trade practice law, not direct employment of exploited workers.
How much money is at stake?
The statutory damages component is $200 per eligible Oregon member. With the class estimated at more than 1.1 million members, that is about $220m before punitive damages. The complaint also seeks injunctive relief, which carries operational rather than financial cost.
Which products are named?
Three categories carry the complaint: chocolate tied to cocoa allegedly farmed by children in West Africa, cashews allegedly harvested by underage and forced laborers in Brazil, Vietnam and Guinea-Bissau, and shrimp allegedly processed by exploited workers in India. The complaint reportedly alleges hundreds of products in total, including national and international brands sold at Costco.
Why was the case filed in Oregon rather than Washington, where Costco is headquartered?
Oregon’s Unlawful Trade Practices Act provides statutory damages of $200 or actual damages, whichever is greater, which removes the need to quantify per-member overcharge. The Act also bars attorney fee awards to a prevailing defendant in class actions. Both features make Oregon an efficient venue for consumer classes.
Has Costco faced this kind of claim before?
Yes. In Sud v. Costco, consumers alleged that farmed shrimp sold by the retailer was linked to slave labor in Thailand. The district court dismissed the claims, finding the plaintiffs had not shown Costco was obliged to tell customers that modern slavery could be part of its supply chain, and the dismissal was upheld on appeal.
What makes this filing different from the earlier shrimp case?
The earlier case was framed largely around a duty to disclose, which the court rejected. This complaint is reportedly framed around affirmative representations: that Costco markets itself as an ethical sourcer, publishes prohibitions on child and forced labor, and states it controls every element of its Kirkland Signature supply chains. Misrepresentation and omission are treated differently in consumer law.
How does this relate to US customs enforcement on forced labor?
It runs parallel to it. Section 307 of the Tariff Act of 1930 lets Customs and Border Protection bar imports made with forced labor, and the forced-labor Section 301 tariffs added a duty layer in July 2026 that is now under review at the trade court. Consumer litigation needs no import nexus: it attaches to what the retailer told domestic shoppers.
What has Costco said about the lawsuit?
Costco had not responded to the allegations at the time the first reports were published. Its published Supplier Code of Conduct prohibits forced labor, human trafficking and child labor, and the company says suppliers are subject to independent third-party audits under programmes including Amfori BSCI, Sedex and the Ethical Trading Initiative.