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Chipotle has emerged victorious from a lawsuit that claimed it lied to investors about reducing its part size to cut component costs.
In a ruling last week, a federal judge in California found there was no evidence that executives of the fast casual chain lied to shareholders about its stake, despite much “viral criticism.”
The company was embroiled in controversy last year when many customers complained of receiving less food.Especially when ordering online rather than in person.
Chipotle denied this and then-CEO Brian Niccol denied it A TikTok video was widely mocked in which he insisted that “the portions have not gotten smaller.”
On Thursday last week, U.S. District Court Judge Sherrilyn Peace Garnett sided with Chipotle and dismissed the lawsuit, which was filed last November by disgruntled investor Michael Stradford.
“The alleged facts do not show Nicole and [food safety officer Laurie] Shallow made false or misleading statements by denying that the company had reduced the size of its share,” Garnett wrote.
The whistleblower’s testimony cited by Stradford’s lawyers was “vague hearsay”, he said, and not enough to show that Chipotle had systematically reduced portions.
Garnett concluded, “Instead, the most plausible conclusion from the allegations made in the complaint is that Defendants honestly believed that the Company did not change the size of its share.”
It is not yet clear whether Stratford will appeal the decision.
Chipotle portions began to be criticized via social media in late 2023 and 2024 Epidemic of corporate “shrinkage” spread due to rising supply costs,
“Hey Chipotle, we need to talk,” said TikTok comedian and consumer advocate Ryan Lynch. A video from October 2023 5.5 million people watched. “Your portion control is letting people down… and we’re all taking it out on your employees personally.”
Barstool Sports sarcastically stated, “Chipotle’s CEO may have never ordered online before.” on X last June In response to Nicole’s refusal.
There was a man from Detroit sentenced to 12 years in prison For sneaking behind the counter and shooting a Chipotle employee because he thought his guacamole portion was too small.
Many other customers approached the employees filming with their smartphones while their orders were being prepared, based on viral tips claiming this would ensure they got a larger portion (although Chipotle denied this).
Some reports indicate that the problem was more one of stability than pure size. A financial analyst at Wells Fargo ordered 75 burrito bowls from eight different New York City Chipotles, and found that portion sizes varied wildly.
On an earnings call last July, Niccol acknowledged the discrepancies, and promised that customers would get “generous portions” in the future. “We’re putting a re-emphasis on training and coaching to make sure we’re consistently making bowls and burritos correctly,” he said.
In the lawsuit, Stradford’s lawyers argued that this and other pledges by Chipotle executives were evidence that they lied when they said the company had not reduced portions across the board.
They cited “confidential sources” who alleged that between 2020 and 2022, company managers decided they were serving too many meals to customers, and sought to cut costs by pressuring individual restaurants to adhere to strict limits on ingredient use.
“According to a former Chipotle field leader and regional training manager, the easiest way to get accepted [ingredient usage] Stradford’s amended complaint in April 2025 alleged that there was skimping on portions, which Chipotle employees did all the time because they feared losing their jobs.
But Judge Garnett ruled that these claims were not enough to show that portion sizes were actually “systematically reduced”, or that executives knew about the problem and lied to investors about it.