According to the Complaint, Costco Wholesale Corporation ("Costco") engages in the operation of membership warehouses in the United States and Puerto Rico, Canada, United Kingdom, Mexico, Japan, Australia, Spain, France, Iceland and through majority-owned subsidiaries in Taiwan and Korea. As of September 3, 2017, Costco operated 741 warehouses worldwide. Through the membership warehouses, Costco aims at offering low prices on a limited selection of national products in certain categories to produce high sales volumes and rapid inventory turnover.

The Complaint alleges that Costco misrepresented and failed to disclose adverse facts pertaining to the Company’s business, operations, and prospects, which were known to Defendants or recklessly disregarded by them. Specifically, Defendants failed to disclose that: (i) Costco lacked effective internal control over financial reporting; (ii) as a result of the foregoing, Defendants’ statements about Costco’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.

On January 30, 2019, the Court issued an Order consolidating cases and appointing Lead Plaintiff and Counsel. Lead Plaintiff filed a consolidated amended Complaint on April 16. Defendants filed a Motion to Dismiss the consolidated amended Complaint on June 7. On November 26, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to amend the Complaint.

On February 24, 2020, Lead Plaintiff filed a second consolidated amended Complaint. On March 9, Lead Plaintiff filed a corrected second consolidated Complaint. Defendants filed a Motion to Dismiss the second amended Complaint on April 23. On August 19, the Court issued an Order granting Defendants' Motion to Dismiss. The case was dismissed with prejudice. Lead Plaintiff filed a notice appealing the Court's Dismissal Order on September 17.

On July 20, 2021, the Court of Appeals affirmed the District Court's Dismissal Order.