It’s strange to buy something that says it’s organic and plant-based and then find out months later that a lawsuit says it contains lead, arsenic, and cadmium while you were mixing it into your morning smoothie and feeling sure that you were doing the right thing by your body. After a proposed class-action suit made its way to the federal court for the Western District of Washington earlier this year, that’s pretty much where thousands of Costco shoppers are now.
The complaint is about Costco selling Orgain’s organic plant-based protein powder. This is a product that fits in well in the health supplement aisle and comes in a package that looks clean and natural, which is a sign of trustworthiness. The lawsuit says that Costco knew the product was tainted with dangerous heavy metals but didn’t tell customers. Costco hasn’t said anything about the claims in public.
It’s important to think about who exactly buys this item. That was made very clear by the lawyers for the plaintiffs—these aren’t casual snackers. People like these read ingredient lists and pay attention to claims about where the products come from. They chose organic protein powder because they thought it was cleaner than other options. The lawyers at Hagens Berman said that the people involved were health-conscious and “unknowingly ingested alarming levels of toxic heavy metals — lead, cadmium and arsenic — over and over again, trusting that Costco’s quality assurance would not let something like this happen.” The lawsuit says that trust was put in the wrong person.
Of course, Orgain fought back with a response that seemed calm and well-thought-out. A spokesperson for the company said that its products meet all food safety standards and that small amounts of heavy metals in plant-based ingredients are normal because plants grow in soil that contains these metals. That’s not just a deflection. Consumer Reports said that plants like peas, which are often used in protein powders, can take in metals from the ground very easily. Further down the line, manufacturing equipment can add them. The science behind this is really hard to understand, and it’s still not clear if the levels in question hurt most adults in a way that can be measured.
In fact, the 2020 study that was used to support the case found that eating protein powder with trace amounts of heavy metals did not significantly increase the risk of bad health effects in the situations that were tested. In this lawsuit, none of the named plaintiffs say they were hurt physically. The complaint, on the other hand, quotes the FDA as saying that there is no known safe level of lead exposure. That is the main tension in this case, and it doesn’t end easily.
The lawsuit might not be about the science in the end. It’s the telling. They say that they would not have paid an average of $30 per container if they knew about the heavy metal content. The Clean Label Project is a nonprofit that tests food and supplements for contaminants. They have found protein powders that don’t have any of these trace metals. This, according to the complaint, suggests that this isn’t a problem that can’t be fixed across the whole industry. There are ways to make things that are cleaner. What is being asked is whether Costco had to let customers know that Orgain wasn’t using them.
California stores are usually more open about putting up warnings about this kind of contamination. The lawsuit was filed in Washington under the state’s Consumer Protection Act, but it doesn’t require the same level of information. Washington is home to Costco. The packaging for Orgain doesn’t say anything about heavy metals. That difference between what a consumer might have thought was there and what was actually there is what the plaintiffs are arguing in court.
From an investor’s point of view, the case makes things more difficult for a stock that was already going through some rough patches. Costco’s stock price went down in the weeks before these legal news stories. The company’s long-term fundamentals are still strong, but questions about product oversight tend to stick around in ways that earnings reports can’t fully answer. To keep members coming back to Costco, lawsuits that make people doubt that the warehouse checks out the things it sells can be more important than analysts think.
The goods are still in stores. There has been no recall. However, it’s now much harder to avoid talking about what’s in the supplements people buy and who is responsible for telling them.
