Shareholders hit Costco with animal abuse lawsuit

Costco Wholesale Corp. shareholders, Krystil Smith and Tyler Lobdell, filed a lawsuit against the grocery chain this week alleging livestock neglect.

A gavel and a name plate with the engraving Lawsuit
A gavel and a name plate with the engraving Lawsuit
Zerbor | BigStock.com

Costco Wholesale Corp. shareholders, Krystil Smith and Tyler Lobdell, filed a lawsuit against the grocery chain this week alleging livestock neglect. 

The suit filed June 13 in Washington state alleges that Costco directors and officers have knowingly broken animal abuse laws in Nebraska and Iowa and failed their fiduciary duty by ignoring unlawful practices. 

“Costco’s directors and officers have violated their fiduciary duty by knowingly causing Costco to neglect and abandon chickens in violation of state laws,” according to the lawsuit. “Costco’s illegal neglect and abandonment is an integral part of the company’s poultry production strategy (and its business model).”

Costco is a bulk grocery store with one of its most well-known features being $4.99 rotisserie chickens. This product is the company’s loss leader – with 106 million rotisserie chickens sold in 2021 – which it uses to bring customers into its stores. 

The lawsuit lists various forms of alleged neglect that occur at Costco’s Lincoln Premium Poultry plant in Nebraska as well as contract growers in Iowa including death by starvation and dehydration and untreated illness and injury. 

Much of this information was derived from undercover footage by, international nonprofit animal protection organization, Mercy for Animals in 2021. The organization has also released other videos and documentaries about animal abuse including “Walmart Cruelty: An Undercover Investigation by Mercy for Animals” and undercover footage of Mexican dairy farms.

While Costco denied the allegations at the time, the National Chicken Council, a U.S. poultry trade association, issued a statement saying, “the conditions described in the article are not an accurate representation of the health and welfare of today’s broiler chickens.”

The lawsuit also alleges poor farm conditions primarily due to the neglect of inexperienced and untrained growers. 

For example, at the Lincoln Premium Poultry plant in Fremont, Nebraska, in January 2020, approximately 30,500 chickens were allegedly denied food and water for over 24 hours which resulted in 1,622 deaths. 

Smith and Lobdell will be represented by attorney Adam P. Karp with Animal Law Offices, PLLC. Lobdell is also an attorney with Legal Impact for Chickens and sits on the board of Crate Free USA. 

According to the Nebraska Animal Welfare Act, “a defendant commits unlawful neglect if the defendant intentionally, knowingly or recklessly fails to provide a livestock animal in the defendant’s care, whether as owner or custodian, with feed, water or other care as was reasonably necessary for the animal’s health.” 

And under the Iowa Livestock Neglect Law, “a person who impounds or confines livestock in any place and deprives the livestock of necessary sustenance commits the offense of livestock neglect.”
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