Costco Settles Environmental Lawsuit for $3.6 Million

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June 7, 2012

Costco Wholesale Corp., has agreed to pay $3.6 million to settle a lawsuit filed by 29 district attorneys in California that alleged the retailer failed to properly store and dispose of hazardous materials at dozens of outlets in the state.

According to the lawsuit, over a five-year period Costco employees did not label or sort hazardous materials that had sat unsold on shelves or that customers had returned for long periods of time. This included such items as oven cleaner, bleach, pool chlorine and nicotine patches. The lawsuit also claims some materials were discarded in the trash, while California state law requires that all hazardous materials be properly disposed of within 90 days.

The lawsuit was filed in Alameda County Superior Court on June 30 and was settled two days later.

"Costco officials cooperated with prosecutors and quickly came into compliance with hazardous waste management regulations," Ken Mifsud, senior deputy district attorney in Alameda County told the San Francisco Chronicle.

District Attorney Nancy O'Malley said that "as a result of this investigation and prosecution, regulated waste produced by Costco stores in California must now be properly stored, handled, transported and disposed of."

Prosecutors said the violations were first discovered in San Joaquin County, and occurred between 2007 and 2012 at Costco stores and distribution centers across the state, according to an Associated Press report.

The $3.6 million settlement includes civil penalties, costs and funds for environmental projects.

Costco has declined to comment on the case since it was filed was settled.

GRD Views: All retailers operating in California should be aware of similar exposure in their operations and take note of Costco’s quick and decisive handling of the matter. -- John Failla for Green Retail Decisions

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