Chipotle Dodges Investor Lawsuit Over Portion Size Complaints

Chipotle Mexican Grill has faced numerous lawsuits over the years, from food safety crises to wage and hour disputes to shareholder claims.

This month, the fast-casual restaurant chain emerged victorious in court.

A federal judge dismissed a securities class-action lawsuit that accused Chipotle of misleading investors about portion sizes and customer dissatisfaction, as first reported on Bloomberg Law.

In the ruling, the judge said the complaint did not show that Chipotle had made “materially false or misleading statements.”

Investors accused Chipotle of misleading them about portion sizes and customer dissatisfaction.Sullivan/Getty Images

On November 11, 2024, investor Michael Stradford filed a lawsuit on behalf of shareholders. The case, Stradford v. Chipotle Mexican Grill, Inc., et al., was filed in the United States District Court for the Central District of California (Case No. 24-cv-02459).

Stradford’s complaint focused on shareholders who purchased Chipotle stock or certain options between February 8 and October 29, 2024. He claimed that Chipotle had downplayed internal issues related to inconsistent portion sizes.

Stradford said the complaints were causing negative reactions from customers, mainly on social media. In his complaint, Stradford referenced viral posts that showed customers accusing the chain of “skimping” on portions and alleged that inconsistent portion sizes would impact margins and profits.

Last year, then-CEO Brian Niccol disputed allegations of skimpy portions.

“First of all, there was never a directive to offer less to our customers,” he said during a July 2024 earnings call, a few months before the lawsuit was filed. “Generous serving is a core value of the Chipotle brand. It always has been and always will be.”

However, Niccol said the complaints had led him to reexamine Chipotle’s practices across its operations.

“To be more consistent across the 3,500 restaurants, we’ve focused on those with outlier portion scores based on consumer surveys,” he said. “We are re-emphasizing training and mentoring to ensure we are preparing bowls and burritos correctly on a consistent basis.”

On December 18, Judge Sherilyn Peace Garnett of the United States District Court in Los Angeles sided with Chipotle and dismissed the lawsuit.

Garnett said the plaintiff did not meet the legal standard for securities fraud, noting that consumer complaints and social media criticism (even when posts go viral) did not prove that Chipotle knowingly misled investors or made false statements with the intent to deceive.

Related: Chipotle sees worrying trend in customers

“The alleged facts do not show that Niccol and (Laurie) Schalow (head of food safety) made a false or misleading statement in denying that the Company had reduced its portion sizes,” Garnett wrote, according to a report by The Independent.

Judge Garnett was also skeptical that the lawsuit relied on anonymous confidential sources as a reason for her dismissal, writing that the allegations did not have enough details to support claims of intentional misconduct.

Dismissal eliminates the risk of a costly settlement or damages award tied to portion size claims. Company executives named in the lawsuit also avoided personal liability.

Had the case moved forward or resulted in a settlement, investors who purchased Chipotle securities during the class period could have sought compensation for alleged losses tied to stock price movements.

While the company prevailed in this case, Chipotle has faced numerous lawsuits over the past decade, including:

• Food safety cases: Following norovirus and E. coli outbreaks across the country between 2015 and 2018, Chipotle paid a $25 million criminal fine and entered into a federal compliance agreement, according to a statement from the Department of Justice.

• Labor and employment trials: Chipotle has faced several wage and scheduling lawsuits in several states. One of the most recent involved the city of Seattle, where Chipotle agreed to a nearly $3 million settlement with the Bureau of Labor Standards. The case involved alleged violations of the city’s paid sick and safe scheduling ordinances, according to an April 2024 report in HR Dive. Chipotle did not admit wrongdoing.

• Consumer-focused complaints: Chipotle has faced lawsuits alleging deceptive practices or pricing issues. In one case, Chipotle agreed to pay $6.5 million to its customers after it was accused of falsely advertising that its foods did not contain genetically modified ingredients, according to a report from Restaurant Business Online.

The firing for securities fraud came during a period of growth for Chipotle.

The company reported more than $11 billion in revenue for 2024 and posted quarterly revenue close to $3 billion throughout 2025, according to the company’s most recent earnings report.

Like many of its competitors, Chipotle is experiencing slower comparable-store sales growth due to changing consumer habits, reduced discretionary spending and rising costs. However, Chipotle remained profitable and continues to expand its restaurant presence.

Related: Taco Bell, Chipotle’s rival chain closes hundreds of restaurants

This story was originally published by TheStreet on January 1, 2026, where it first appeared in the Restaurants section. Add TheStreet as a preferred source by clicking here.