A judge, deferring to Mexico's authority over tequila regulation, dismissed a proposed class-action lawsuit claiming that Costco’s Kirkland tequilas labeled 100% agave" are mixed with low-grade booze.

The law firm Hagens Berman filed the lawsuit in federal court in Seattle in November on behalf of 13 people who had purchased the Costco-brand tequila.

Tequila can be made legally only in Mexico, where the law allows the spirit to contain up to 49% alcohol from non-agave sources, such as cane sugar or corn syrup. But the lawsuit claimed private tests found that some of the Kirkland-brand tequilas were so adulterated that they didn’t qualify as tequila under Mexican law.

The lawsuit claimed Costco violated the federal Racketeer Influenced and Corrupt Organizations, or RICO, Act and various state laws, including the Washington state Consumer Protection Act.

In return, Costco argued in legal filings that a U.S. court taking the case would interfere with Mexico’s exclusive authority to decide what counts as 100% agave tequila.

The judge agreed with that argument in an opinion filed Friday, noting that Mexican authorities had looked at similar claims of adulteration and rejected them.

A criminal complaint filed in September 2025 in Mexico accused several businesses selling tequila, including Costco’s Mexican subsidiary, of falsely advertising their spirits as 100% agave. The Mexican prosecutor contacted the Tequila Regulatory Council, the authority that regulates tequila, which said the tequilas met its standards and that private testing didn't count as proof.

The Tequila Regulatory Council has faced criticism in recent years from those who claim the authority looks the other way when distilleries cut tequila with cheaper products.

Mexican agave farmers led a protest last year claiming just that, according to reports in Mezcalistas.com, a mezcal-focused trade organization.

The farmers have said that distilleries are paying growers far less for agave due to overproduction of the crop while charging consumers the same or more, pocketing the difference.

Costco did not respond to a request for comment.

Steve Berman, one of the Hagens Berman lawyers representing the plaintiffs, said in an email to The Seattle Times Monday that they believe the court's ruling is "dead wrong" and intend to appeal.

Berman said the court ignored the "sophisticated" private testing showing that the label was false.

"Instead, it deferred to a non-governmental agency that is in part made up of the tequila manufacturers that have disputed plaintiffs’ testing methods. Such a dispute has to be tried here on the facts, and the court should not have assumed the Mexican findings as true," he said.

Berman argued that for a U.S. court to enforce the country's laws against a product sold in the U.S. isn’t intruding on Mexican authority.

"If a company sells products in the United States, profits from American consumers, and puts claims on its labels, it should be required to answer in an American courtroom, he said.

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