On January 2, 2026, Russell George’s credit card statement showed a $65 transaction from Costco for an additional year of his Gold Star membership. He was already debating whether or not to keep it by that time. He wasn’t making enough purchases at Costco to think the annual membership cost was worthwhile. He had intended to cancel. Before he had made any decisions at all, the money had already been disbursed, discreetly, on the first working day of the new year. A proposed federal class action lawsuit filed in the U.S. District Court for the Northern District of California centers on that moment, which is minor in monetary terms but frustrating in the unique manner that automated charges on forgotten accounts tend to be.
The legal theory is particular, and it is important to comprehend it thoroughly. According to California’s Automatic Renewal Law, businesses must provide clients at least 15 but no more than 45 days’ notice before charging them for a membership renewal or recurring subscription. The timeframe is specifically designed to provide customers with a meaningful opportunity to opt out prior to the charge—not so early that they forget about it, nor so late that they are unable to take action. The lawsuit claims that 60 days prior to charging George’s card, Costco sent its renewal email. It’s too early. Technically, by 15 days, although there is no grading curve for the legal threshold.
Important Information
| Field | Details |
|---|---|
| Case Name | George II v. Costco Wholesale Corp. (Case No. 3:26-cv-02369) |
| Court | U.S. District Court for the Northern District of California |
| Filed | March 2026 |
| Lead Plaintiff | Russel George II — California resident; Gold Star membership holder since 2023 |
| Defendant | Costco Wholesale Corporation — headquartered in Issaquah, Washington |
| Membership Tiers | Gold Star: $65/year; Executive: $130/year |
| What Happened | Costco sent renewal notice 60 days before charging George’s card — California law requires notice between 15 and 45 days before renewal |
| Charge Date | January 2, 2026 — $65 debited without what plaintiff considers adequate notice |
| California Law Cited | Automatic Renewal Law (ARL), False Advertising Law, Consumers Legal Remedies Act, Unfair Competition Law |
| Notice Deficiencies Alleged | Renewal amount not clearly stated; terms not disclosed; cancellation instructions absent |
| Costco’s Cancel Method | Phone or in-store only — plaintiffs argue this may not meet California’s “same method as enrollment” requirement for online sign-ups |
| Preliminary Hearing | Scheduled for June 2026 |
| Plaintiff’s Attorney | Matthew Smith of Migliaccio & Rathod LLP |
Attorney Matthew Smith of Migliaccio & Rathod LLP filed the case, which claims that Costco’s notification had other issues besides the timing infraction. The plaintiffs contend that the renewal email also omitted details that California law expressly mandates, such as the amount that would be charged, the duration and conditions of the renewal, and a clear description of how to cancel. George claims that after learning of the charge in January 2026, he wrote Costco an official demand letter. The complaint states that although the corporation reacted in February, it refused to take appropriate action. Soon after, George and all other California class members who received similarly inadequate renewal notices were sued for damages.
As is common in early-stage litigation, Costco has not made any public comments about the lawsuit outside of the case docket. Costco runs at least 133 shops in California alone, and membership fees significantly boost the company’s bottom line in ways that go beyond the fee revenue itself. The company’s membership strategy is fundamental to its overall business operation.
People enter the warehouse by membership, and while inside, they often make purchases. For a company of Costco’s size, a legal mandate to change renewal notification procedures would not be existential, but it would necessitate real operational change. The case is gaining attention outside of California because the fundamental issue—when must you notify someone before charging them again—applies to subscription businesses worldwide.
This scenario also involves a cancellation dilemma, which could be just as important as the time problem. Currently, members of Costco can cancel by visiting a store or by phoning a toll-free hotline. According to the complaint, this might not meet California’s requirement that customers who signed up online be able to cancel using the same means. It is argued that if you joined Costco in 2023 via its website, as George did, you ought to be able to cancel via the same channel rather than just calling or visiting a warehouse in person. Regarding this type of restriction for other firms, the California Attorney General’s Office has adopted a similar stance. How the court will apply it to Costco’s particular configuration is still unknown.
It is important to consider the larger circumstances surrounding this lawsuit. The Federal Trade Commission attempted to enact a national regulation in 2024 known as the “click-to-cancel rule,” which would have mandated that cancellation be at least as easy as registration. Opponents claimed the government had not followed the correct rulemaking procedures, and a federal appeals court overturned that rule in July 2025.
After the rule was overturned, customers’ main options were a patchwork of state-level protections, one of which was California’s Automatic Renewal Law. In this way, George’s lawsuit against Costco is a direct result of the void left by the federal rule’s overturning; a California plaintiff, a California law, and a California court filled the void left by a federal framework.
A preliminary hearing on the case is set for June 2026. Additionally, Costco is currently handling a number of lawsuits pertaining to rotisserie chicken contamination and alleged improper tariff pass-through to customers. These consumer protection lawsuits are coming in quick succession, which is, at the very least, unusual for a business that has long cultivated an image of straightforward consumer trust. The court’s interpretation of California’s notification requirements will determine whether the auto-renewal lawsuit goes to trial, settles, or is dismissed. At the very least, the plaintiffs appear to be confident enough in their interpretation to request a jury.
