Chipotle has emerged victorious from a lawsuit claiming that it lied to investors about shrinking its portion sizes to cut ingredient costs.
In a ruling last week, a federal judge in California found there was no evidence the fast casual chain’s executives had lied to shareholders about its portions, despite much “viral criticism”.
The company was engulfed by controversy last year after numerous customers complained of smaller meals, especially when ordered online rather than in person.
Chipotle denied it and then-CEO Brian Niccol was widely mocked for a TikTok video in which he insisted “the portions have not gotten smaller.”
On Thursday last week Judge Sherilyn Peace Garnett of the U.S. District Court sided with Chipotle and dismissed the lawsuit, which was filed last November by disgruntled investor Michael Stradford.
“The facts alleged do not show Niccol and [food safety officer Laurie] Schalow made a false or misleading statement by denying that the Company had reduced the size of its portions,” wrote Garnett.
Whistleblower testimony cited by Stradford’s attorneys amounted to “vague hearsay”, she said, and were not sufficient to show that Chipotle had systematically reduced portions.
“Instead, the most plausible inference from the allegations set forth in the complaint is that Defendants honestly believed the Company had not changed the size of its portions,” Garnett concluded.
It’s not yet clear whether Stradford will appeal the verdict.
Criticism of Chipotle’s portions began to bubble up through social media in late 2023 and 2024, after rising supply costs caused an epidemic of corporate “shrinkflation”.
“Hey Chipotle, we need to talk,” said TikTok comedian and consumer advocate Ryan Lynch in an October 2023 video watched by 5.5 million people. “Your portion control is causing people to be very frustrated… and we all are personally taking out on your employees.”
“The CEO of Chipotle must have never gotten an online order before,” snarked Barstool Sports on X in June last year in response to Niccol’s denials.
One Detroit man was even sentenced to 12 years in prison for barging behind the counter and shooting a Chipotle employee because he felt that his guacamole portion was too small.
Many other customers took to filming staff with their smartphones while their orders were being prepared, based on viral tips claiming it would ensure they got bigger portions (though Chipotle denied this).
Some reports indicated the problem was consistency more than pure size. One Wells Fargo financial analyst ordered 75 burrito bowls from eight different New York City Chipotles, and discovered that portion sizes had varied wildly.
On an earnings call last July, Niccol acknowledge the inconsistencies, and promised that customers would get “generous portions” in future. “We are reemphasizing training and coaching around ensuring we are consistently making bowls and burritos correctly,” he said.
In the lawsuit, Stradford’s attorneys argued that this and other vows from Chipotle executives were evidence that they had 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 giving too much food for customers, and sought to cut costs by pressuring individual restaurants to obey strict limits on ingredient usage.
“According to a former Chipotle Field Leader and Regional Training Manager, the easiest way to achieve an acceptable [ingredient usage] was by skimping on portions, which Chipotle employees did all the time because they were afraid of losing their jobs,” Stradford’s amended complaint in April 2025 alleged.
But Judge Garnett ruled that these claims were not enough to show that portion sizes had actually been “systematically reduced”, or that executives had known about the problem and lied to investors about it.
