The Judge Has Spoken: Costco's Kirkland Signature Tequila Lawsuit Is Dead — But the Bigger Questions Are Not
When a federal judge in Seattle tossed out a class-action lawsuit against Costco on October 16, 2026, the decision landed with considerably more weight than the average courtroom dismissal. It wasn't just about whether the big-box retailer's Kirkland Signature tequila is genuinely made from 100% Blue Weber agave. It was about who has the authority to decide that question in the first place — and the answer the judge gave will echo through every spirits aisle in America for years to come.
A Seattle federal judge dismissed the class-action lawsuit challenging the labeling of Costco's Kirkland Signature tequila, which had challenged the company's claim that the spirit was 100% agave tequila. The ruling arrived fifteen days after a parallel case against Diageo — the British spirits behemoth behind Don Julio and Casamigos — was similarly killed in a New York federal court. Two dismissals, one month, two different justifications. Together, they represent a decisive, if complicated, courtroom season for the multi-billion-dollar tequila industry.
What Hagens Berman Alleged — and What the Testing Claimed to Show
The Costco lawsuit did not appear out of thin air. The class action was filed by Seattle-based consumer-rights law firm Hagens Berman, accusing the retailer of knowingly selling adulterated tequila that contains "significant presence of non-agave sugars." The suit was filed November 14, 2025, in the U.S. District Court for the Western District of Washington, arguing that despite Costco labeling its Kirkland Signature tequila as "100% DE AGAVE" and as "100% AGAVE AZUL," attorneys had uncovered evidence — including scientific testing — that the product was adulterated and not pure agave as marketed.
Affected products named in the complaint included Costco Kirkland Blanco Tequila, Reposado Tequila, Añejo Tequila, Añejo Cristalino Tequila, and Extra Añejo products. In other words, the entire Kirkland Signature tequila lineup was on trial, at least in the eyes of the plaintiffs.
The specific numbers the law firm put forward were striking. The suit, brought by Hagens Berman under federal racketeering law and state consumer statutes, alleged lab testing showed Kirkland Blanco at 60% to 80% agave ethanol and Reposado at 5% to 25%. Those were allegations; Costco denied them. If accurate, those figures would suggest that what's sitting in the oversized bottles on Costco's shelves — sold with the reassuring "100% Agave" stamp — is something far closer to a mixto, the industry term for tequilas blended with non-agave sugars, than the premium product consumers are paying for.
The testing methodology at the center of the Costco case relied on carbon isotope analysis. This type of testing can identify whether the methanol and ethanol in a spirit originated from agave plants or from cheaper sugar sources like cane. When results show that a bottle labeled "100% agave" contains significant amounts of cane-derived alcohol, that is a scientifically meaningful finding — which is why multiple law firms have used it as the foundation for lawsuits not just against Costco but against other major tequila brands as well.
The Judge's Reasoning: International Comity and Mexico's Regulatory Turf
Despite what appeared to be substantive factual allegations backed by laboratory science, the case never got to the merits. The judge dismissed the lawsuit based on the doctrine of international comity, under which courts recognize the authority of other nations. The ruling deferred to Mexico's authority to regulate tequila.
This legal doctrine is rarely invoked in consumer product cases, which makes the ruling all the more significant. International comity is typically the province of trade disputes and diplomatic conflicts, not grocery store shelves. But the judge's logic was straightforward: tequila is a protected designation of origin product. Its definition — what it can and cannot contain, how it must be produced, what goes on its label — is governed by Mexican law and enforced by Mexican institutions. An American federal court second-guessing that system would essentially be asserting jurisdiction over a sovereign nation's regulatory apparatus.
Kirkland Signature's tequila offerings received approval from Mexico's Tequila Regulatory Council before reaching store shelves, and the judge cited that approval in deciding not to adjudicate the labeling allegations in the U.S. court. More specifically, the decision also cited a Mexican government body's rejection of similar adulteration claims.
In plain terms, the court was being asked to find that tequila certified as 100% agave by the Mexican system was not 100% agave, on the strength of private testing, after the Mexican authorities had looked at similar claims and rejected them. The court was not willing to go there.
What the Consejo Regulador del Tequila Actually Does — and Why Critics Don't Trust It
The organization responsible for certifying tequila purity is the Consejo Regulador del Tequila, commonly known as the CRT. It functions as Mexico's official tequila watchdog, certifying distilleries, auditing production, and verifying that anything stamped "100% Agave" actually meets that standard before it leaves Mexican soil. On paper, it is a robust system. In practice, critics have raised persistent questions about whether it can truly operate independently.
Hagens Berman has been vocal about those doubts. The firm has questioned the council's independence and handling of such allegations, alleging in a 2025 release that "the nonprofit organization could be heavily influenced and controlled by the interests of leading tequila manufacturers." That's a pointed accusation — essentially arguing that the very body the judge cited as the authoritative regulator is too beholden to the industry it polices to function as a genuine check on adulteration.
It's a critique that resonates in an industry where many of the largest tequila producers have immense financial and political leverage inside Mexico. If the biggest players in a market effectively control the entity auditing them, the certification on the label may be less meaningful than consumers assume. But the court wasn't asked to audit the CRT's institutional integrity — it was asked whether an American lawsuit should override a certification that body had already issued. On that narrow question, the judge's answer was no.
A Critical Distinction: Dismissed Is Not the Same as Exonerated
Anyone tempted to read this ruling as proof that Kirkland Signature tequila is exactly what it says it is should pump the brakes. The court was explicit on this point. The dismissal does not establish whether the testing allegations were accurate; it reflects the court's decision to defer to Mexico's regulatory process.
That distinction matters enormously. The dismissal does not prove Kirkland tequila is 100% agave. It means the legal challenge did not survive the court's review. The lab results that Hagens Berman submitted were never evaluated on their scientific merits by the American court. No expert witness took the stand, no tequila chemist was cross-examined, and no judge weighed in on whether carbon isotope testing is a reliable method for detecting adulteration. The case was eliminated on jurisdictional and doctrinal grounds before any of that could happen.
Two Cases, Two Dismissals, Two Very Different Justifications
The Costco ruling didn't happen in isolation. Just fifteen days earlier, in Brooklyn, a separate federal judge dispatched the class-action case against Diageo over its Don Julio and Casamigos tequila brands. But that dismissal operated on a completely different legal theory — and the contrast is instructive.
On October 1, US District Judge LaShann DeArcy Hall in Brooklyn dismissed the class action lawsuit accusing liquor giant Diageo of selling adulterated tequila. The case had been filed in May 2025 by Hagens Berman's consumer rights legal team, who alleged that Diageo's flagship tequila brands, Casamigos and Don Julio, were not "100% Blue Weber Agave" as marketed.
Judge DeArcy Hall said that the plaintiffs failed to prove the systemic or widespread adulteration of Diageo's tequilas. The lawsuit, first filed in May 2025 by a group of individual buyers and restaurants, claimed that Don Julio and Casamigos contained a significant amount of non-agave alcohol despite being labeled as "100% agave."
The Diageo case collapsed on evidentiary grounds, not doctrinal ones. The complaint relied on lab testing of five samples, and the judge questioned how that could support an inference of ubiquitous, systemic mislabeling. The court also found the plaintiffs had not shown that the named buyers themselves purchased affected bottles. Five samples is, by any scientific standard, a remarkably thin foundation for claiming that an entire global brand's product line is fraudulently labeled.
The Diageo case against Don Julio and Casamigos failed on October 1 because five samples could not support claims of systemic mislabeling. The Costco case turned on a completely different axis — a question of who decides. That difference has real implications for how future lawsuits in this space might be constructed and argued.
Why the Jurisdictional Argument Could Be the More Durable Defense
Of the two dismissal rationales, the international comity argument deployed in the Costco case may prove harder for plaintiffs to overcome in subsequent litigation. A thin evidentiary record can be corrected — you can run more lab tests, purchase more bottles, establish clearer chains of custody between tested products and purchased products. But challenging a court's willingness to defer to Mexico's regulatory authority is a structural problem, not a factual one. It can't be solved by spending more money at a laboratory.
If the international comity precedent takes hold — if other courts adopt the same reasoning — it would effectively insulate any tequila brand certified by the CRT from American consumer-fraud litigation, regardless of what independent laboratory testing shows. That's a sobering outcome for anyone who believes private scientific testing should have a role in holding food and beverage companies accountable.
The Wider Industry: Kirkland, Don Julio, and a Dozen Other Brands in the Crosshairs
The Diageo lawsuit was one of nearly a dozen filed against prominent tequila distillers over the past year and a half, and its outcome may set the precedent for future rulings against the likes of Dwayne "The Rock" Johnson's Teremana and Kendall Jenner's 818.
Similar lawsuits have been filed against Don Julio, Casamigos, Cincoro, and Kendall Jenner's 818 Tequila — all alleging the same issue: tequila labeled 100% agave that test results suggest contains non-agave alcohol. Celebrity tequilas, in particular, represent a rich target for this kind of litigation: high-profile, heavily marketed on purity and authenticity claims, and selling at premium prices that magnify the financial harm to consumers if those claims are false.
The law firm at the center of all this activity, Hagens Berman, has made no secret of its ambitions. The firm stated it believes Costco made false claims about its Kirkland Signature tequila products while hiding alleged adulteration from consumers, and is seeking potential compensation for consumers and business owners that bought the affected products, as well as an injunction to end Costco's alleged actions. With the Costco case now dismissed, the firm's strategy across the broader tequila litigation campaign will need to adapt.
Hagens Berman's Next Move
Hagens Berman has not signaled that it intends to fold. In the wake of the Diageo ruling, plaintiffs' lawyer Steve Berman said the ruling gets the record wrong and signaled they may seek reconsideration. Whether the same aggressive posture applies to the Costco dismissal remains to be seen, but the firm's track record — it has pursued major class actions against pharmaceutical companies, automakers, and tech giants — suggests it won't quietly accept two consecutive defeats in a campaign it has invested significant resources in.
The core of its argument — that consumers are being defrauded at scale by brands selling non-agave alcohol inside "100% agave" bottles — has not been disproven. It simply hasn't been allowed to play out in open court. As the plaintiffs have framed it, "Consumers pay a premium for tequila labeled '100% agave,' and they deserve to get what they pay for," adding that "independent laboratory testing of Diageo tequilas found none came close to being made entirely from 100% agave." That argument hasn't been refuted — it's been procedurally sidestepped.
What This Means If You're Buying Tequila at Costco
For the average guy standing in the Costco liquor section, trying to figure out whether the Kirkland Añejo is genuinely worth picking up, this ruling changes very little in practical terms. The bottle still says "100% Agave." Mexico's Tequila Regulatory Council still certified it. A U.S. federal judge has now decided that the American legal system won't second-guess that certification.
But none of that is the same as the contents of the bottle being confirmed pure. The lab results that Hagens Berman commissioned — suggesting Kirkland Reposado might contain as little as 5% agave-derived ethanol — were never evaluated by the court. They sit in the court record, uncontested on their scientific merits, a question mark that the dismissal did not erase.
What consumers can say with confidence is this: the Costco tequila met the approval of Mexico's regulatory authority, which is the same standard applied to every other tequila brand sold globally. Whether that standard is rigorously enforced, and whether the CRT's certifications mean what its website says they mean, is a question that extends far beyond any single lawsuit or any one retailer.
The Larger Stakes: Designation of Origin, Regulatory Trust, and the Premium Spirits Market
Tequila is more than a drink. It is a protected designation of origin — a legally defined category, like Champagne or Parmigiano-Reggiano, where geography and production standards are inseparable from the product's identity. The "100% agave" label isn't just a marketing claim. It's a legal statement that carries specific meaning under Mexican law and international trade agreements. When that claim is allegedly violated at scale, the damage isn't just financial. It undermines the entire framework of protected origin products.
Agave farming is itself a grueling, long-cycle agricultural business. Blue Weber agave takes anywhere from seven to ten years to mature before it can be harvested. Farmers who grow it carry enormous financial risk across that entire period. When tequila producers allegedly substitute cheaper non-agave alcohols for the real thing, they're not just cutting corners for consumers — they're potentially undercutting the livelihoods of farmers who bet their operations on genuine demand for agave. As Hagens Berman argued, it's not fair to consumers if they pay a premium price for tequila but receive an inferior substitute product — and it's also not fair to agave farmers because major tequila brands would be using cheap substitute alcohols rather than 100% agave as required by United States and Mexican law.
The outcome of the Costco case, and the Diageo case before it, does nothing to resolve that deeper concern. It determines only that American courts, at least for now, are not going to be the arena where the tequila industry's authenticity questions get answered. Whether Mexico's regulatory system is up to that job — independently, rigorously, and free from industry capture — is the question that matters most. And it's one that no judge in Seattle or Brooklyn has yet been asked to answer.
What Comes Next
This is the second major tequila authenticity case to fail in a month, and it fell for a different reason from the first. That reason may matter more for the future of these lawsuits than either verdict. The jurisdictional argument — the idea that Mexico, and Mexico alone, has the authority to say what is and isn't 100% agave tequila — is a legally coherent position that plaintiffs' attorneys will now have to build a strategy to overcome if they want to get a tequila adulteration case to trial in the United States.
Cases against other brands, including the celebrity-backed labels that have flooded the market over the past decade, remain active or in various stages of litigation. Related cases had been paused pending the Diageo ruling, and it's likely that the Costco dismissal will prompt similar procedural reviews across the broader litigation campaign. The pressure is now on Hagens Berman and other plaintiff-side firms to either construct a case that survives both the evidentiary and the comity hurdles — or take a different approach entirely.
For the industry, these dismissals offer a temporary exhale. For regulators in Mexico, they represent a significant affirmation of authority. And for everyone who pays good money for a bottle labeled "100% Agave" — at Costco, at a bar, at a duty-free counter — they represent a reminder that a court ruling is not the same as the truth. The bottle says what it says. Whether the liquid inside matches the label is a question that remains stubbornly, inconveniently open.
