Costco has agreed to a $14,000,000 settlement to resolve a class action lawsuit that alleged the wholesaler sent Washington consumers commercial emails with false or misleading subject lines. The emails landed in inboxes with lines like “Today is the last day to access Member-Only Savings.” According to the lawsuit, Costco allegedly already knew those deadlines weren’t real.
Washington state residents who received Costco’s promotional emails at any point in the last five years may be eligible for compensation. For retailers operating anywhere in the country, the case demonstrates how aggressively one state is now policing the language that lands in your inbox.
The case, formally titled Aaland v. Costco Wholesale Corporation, is currently before the King County Superior Court and moving toward a final decision this fall.
Executive Summary
The $14 million Costco email settlement received preliminary approval from the court on June 23, 2026, and covers anyone who received a commercial email transmitted by Costco Wholesale Corporation, or someone acting on its behalf, from June 2, 2021 through July 7, 2026, and who was a Washington resident at the time of receipt. Costco membership is not required to be eligible, and valid claimants are entitled to a pro rata share of the settlement fund with no documentation of purchase needed to qualify. The court will decide whether to grant the settlement final approval following a hearing on October 2, 2026.
The Lawsuit: What Costco Was Accused Of
The case, Michael Aaland v. Costco Wholesale Corporation, Case No. 25-2-16392-0 SEA, is pending in the Superior Court of Washington for King County, before the Honorable Janet Helson.
The lawsuit alleges Costco violated Washington’s Commercial Electronic Mail Act (CEMA) and Consumer Protection Act (CPA) by advertising time-limited promotions in email subject lines when, the complaint claims, Costco knew it would extend those promotions past the stated deadline. The “today only” and “5 days only” language in Costco’s subject lines was, according to the plaintiffs, a manufactured pressure tactic, not an accurate reflection of when the sale would actually end.
The court-approved settlement notice states that Costco was accused of sending emails that “advertised temporary or time-limited promotions to consumers, when in fact Costco knew it was going to extend those promotions past the stated time frame.” Examples cited in the case include subject lines such as “Today is the last day to access Member-Only Saving” and “Hot Buys available for 5 Days Only.”
Creating artificial urgency around a sale that is actually ongoing is a routine tactic in retail email marketing. What made it legally actionable in Washington was the state’s unusually strict approach to commercial email, which does not require plaintiffs to prove they were financially harmed by the message. Unlike many consumer protection statutes, CEMA focuses exclusively on the subject line of commercial emails and does not require proof of actual or reasonable reliance, materiality, or financial harm before invoking statutory damages.
Costco has denied any wrongdoing but agreed to settle to avoid the cost and uncertainty of continued litigation. Costco maintains it complied with the law, and no court has found that Costco did anything wrong.
The Legal Foundation: Washington’s Commercial Electronic Mail Act
CEMA was enacted in 1998, during the internet’s dial-up era, to address an increasing number of consumer complaints about commercial electronic mail. For most of its existence it sat on the books, enforced infrequently. That changed sharply in 2025.
Litigation under CEMA flooded courts following a ruling from the Washington Supreme Court on April 17, 2025, which held that email subject lines containing false or misleading information were violative of CEMA and per se violations of the Consumer Protection Act. The case that triggered the wave was Brown v. Old Navy, in which the Washington Supreme Court clarified that even routine promotional language around “limited-time” sales could constitute a false or misleading subject line if the promotion was later extended.
Plaintiffs argued that each individual email constitutes a separate violation, meaning a single consumer who receives one unlawful message per week for just one year could claim $26,000 in statutory penalties. Scaled across a retailer’s subscriber base and the four-year limitations period, the potential exposure could easily reach trillions of dollars. In the six months after the Washington Supreme Court issued Brown v. Old Navy, CEMA quickly emerged as one of the most significant litigation threats to online retail in years, with more than thirty CEMA class-action lawsuits filed in Washington. The Costco email settlement is one of the most high-profile to reach the settlement stage from this wave.
The 2026 Amendments to CEMA
The volume of CEMA lawsuits eventually prompted the Washington state legislature to act. A legislative amendment, HB2274, was signed into law on March 22, 2026, and instituted three changes to CEMA: requiring senders to have actual knowledge that the email contains false or misleading information; reducing statutory damages from $500 to $100; and specifying that the amendments do not apply retroactively to causes of action commenced prior to June 11, 2026.
Because the Costco lawsuit was filed in June 2025, before the amendment’s cutoff date, it falls under the original $500-per-violation framework, not the reduced $100 figure that applies to future cases. Prior to the 2026 amendments, CEMA permitted statutory damages of $500 per recipient of each false or misleading email. The amended law softens exposure going forward, but it does nothing to reduce Costco’s liability for the emails at issue in this case.
Who Qualifies for the Costco Email Settlement
Class members must have received at least one commercial electronic mail message sent from or on behalf of Costco between June 2, 2021, and July 7, 2026; resided in Washington state at the time they received the email; and received the email at an address that appears in Costco’s records.
Eligible consumers may have already received an email about their eligibility to file a claim. The fact that Costco’s records identify the email address is a practical requirement; it’s how the class is defined and how the settlement administrator verifies membership.
Active Costco membership is not a condition of eligibility. If you were a Washington resident who received Costco commercial emails at any point in the class period, whether you shopped regularly, occasionally, or not at all, that is sufficient to file a claim.
No receipts, purchase records, or documentation of financial harm are required. Settlement class members who submit a timely, valid claim form can receive a pro rata cash payment with no proof required.
How Much Could You Receive?
The actual payout from the settlement is currently unknown and will depend on the number of valid claims submitted. The $14 million is a fixed pool. Every eligible person who files a valid claim gets an equal pro rata share of whatever remains after attorneys’ fees, litigation costs, and any service awards are deducted from that total.
The more people who file, the smaller each individual payment becomes. If relatively few people claim, individual payments could be substantial. If tens of thousands file, each payout will be modest.
If the settlement receives final approval, the case will end without Costco being found liable under Washington’s Commercial Electronic Mail Act, which means eligible customers should not expect to receive the law’s maximum statutory damages of $500 per qualifying email. What the settlement provides is a share of the fixed fund, not full statutory damages.
Payments can be distributed via PayPal, Venmo, Zelle, or mailed check.
Key Deadlines and How to File
The court-approved website for the Costco class action settlement is WashingtonCommercialEmailSettlement.com.
The deadline to opt out is August 24, 2026. The deadline to file a claim is also August 24, 2026. The final approval hearing is scheduled for October 2, 2026. The settlement administrator will issue payments to eligible class members approximately 61 days after the court resolves any appeals and grants final approval of the settlement.
If you want to be excluded from the settlement, for example, because you would prefer to file your own lawsuit, you need to opt out by that same August 24 deadline. Consumers who opt out retain the right to file their own lawsuit or object to the settlement.
Payments will not go out until final approval has been granted and any appeals resolved. Given the October 2 hearing date and the standard appeals window, checks are unlikely to arrive before late 2026 at the earliest, and could extend into 2027 depending on whether any objections or appeals arise.
The Broader CEMA Litigation Wave
The Costco email settlement doesn’t exist in isolation. It’s one of dozens of cases working through Washington’s courts following the Brown v. Old Navy ruling. Washington courts are seeing a surge in class action lawsuits alleging violations of CEMA for sending commercial emails with false or misleading subject lines, with these lawsuits primarily targeting “false sense of urgency” emails, such as “Sale Ends Tonight – Save 30%” when the sale in fact continues.
On January 14, 2026, Judge Robart of the Western District of Washington ruled that the federal CAN-SPAM Act does not preempt CEMA and that Washington state law applies to false and misleading email subject lines. That ruling, in Ma v. Nike, Inc., shut down one of the most commonly used defenses by corporate defendants: the argument that federal law supersedes Washington’s stricter standards.
If a company sends promotional emails that reference key elements of a promotion, such as discounts, timing, or availability, and those statements are not strictly accurate at the moment the email is sent, it may face exposure under Washington law, even if its emails otherwise comply with federal CAN-SPAM requirements.
CEMA applies broadly to all commercial emails sent to Washington residents, regardless of whether a retailer maintains a physical presence in the state. That scope makes the litigation threat relevant to virtually every U.S. retailer with an email marketing program. If any subscriber on your list has a Washington address, the statute applies.
Although the increase in litigation activity prompted the Washington State Legislature to amend CEMA in 2026, the recent statutory amendments do not alter the features that have driven the high volume of class action lawsuits brought under the statute. The reduction from $500 to $100 per violation modestly reduces future exposure but doesn’t eliminate the risk, and as the Costco case demonstrates, even settled cases under the original $500 framework involve nine-figure potential liability before a settlement is reached.
Costco’s Legal History and Consumer Context
The email case is not Costco’s first encounter with class action litigation, and it likely won’t be its last. A class action lawsuit came for Costco’s $5 rotisserie chicken in January 2026 in California. The company is also facing separate litigation on other fronts, reflecting the elevated legal environment that large retailers operate in generally.
What sets the Costco email settlement apart from typical consumer fraud claims is the specificity of the underlying law. Most false advertising cases require plaintiffs to show they actually relied on a misleading claim and suffered some financial consequence. CEMA requires neither. The subject line doesn’t even need to have been opened, let alone acted upon.
In the putative class action lawsuits filed to date, plaintiffs have repeatedly alleged that retailers sent emails with allegedly deceptive subject lines, regardless of whether class members opened those emails, read them, or even knew they arrived. That standard makes the law remarkably easy to invoke and correspondingly difficult for large email marketers to defend against without settling.
What to Do With All of This
If you were a Washington state resident at any point between June 2, 2021 and July 7, 2026, and received a commercial email from Costco at an address in their records, you have until August 24, 2026 to file a claim at WashingtonCommercialEmailSettlement.com, with no proof of purchase and no Costco membership required. The individual payout is unknowable until the claim period closes and the total number of valid claims is counted. What is fixed is the pool: $14 million, minus attorneys’ fees and costs, divided equally among all valid claimants.
For businesses, the case is a concrete data point on how an obscure 1998 state anti-spam law has become one of the most potent litigation tools in American retail law. The Washington legislature’s 2026 amendment reduces future statutory exposure from $500 to $100 per email, but the core features of CEMA (no proof of financial harm required, per-message penalties, and automatic classification as a Consumer Protection Act violation) remain intact. Any company sending promotional emails to Washington residents with language about limited-time offers, countdown sales, or deal expiration dates needs to treat subject-line accuracy as a legal compliance question, not a copywriting preference. If a deadline appears in a subject line, the offer has to end when it says it does.
The October 2, 2026 final approval hearing is the next critical milestone. If the court signs off and no significant appeals follow, settlement payments begin flowing to claimants approximately 61 days later.
Disclaimer: This information is not intended to be a substitute for professional medical advice, diagnosis, or treatment and is for information only. Always seek the advice of your physician or another qualified health provider with any questions about your medical condition and/or current medication. Do not disregard professional medical advice or delay seeking advice or treatment because of something you have read here.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.