Fast-casual restaurant chain Chipotle has successfully defended itself in a US court against allegations it systematically reduced portion sizes to cut costs and misled investors about the practice.
The Lawsuit and the Ruling
In a ruling on Thursday last week, Judge Sherilyn Peace Garnett of the U.S. District Court in California dismissed the lawsuit filed by investor Michael Stradford in November 2024. The judge found no evidence that Chipotle's executives, including then-CEO Brian Niccol, had made false or misleading statements to shareholders by denying that the company had reduced its portion sizes.
Judge Garnett stated that whistleblower testimony presented by Stradford's legal team amounted to "vague hearsay" and was insufficient to prove a systematic, company-wide reduction. "Instead, the most plausible inference... is that Defendants honestly believed the Company had not changed the size of its portions," she concluded.
Background of the Portion Size Controversy
The legal action followed a wave of viral criticism on social media in late 2023 and 2024, where customers widely complained of receiving smaller meals, particularly from online orders. The trend coincided with a period of high inflation and widespread "shrinkflation" across the retail sector.
Chipotle's former CEO, Brian Niccol, was heavily mocked for a TikTok video in which he insisted "the portions have not gotten smaller." Public frustration escalated, with some customers filming staff during preparation in an attempt to secure larger servings, and one incident in Detroit tragically led to a shooting over a perceived small guacamole portion.
On a July 2024 earnings call, Niccol acknowledged inconsistencies in serving sizes and promised improved training to ensure "generous portions." Stradford's lawsuit argued that this admission was evidence previous denials were false.
What the Whistleblowers Alleged
The investor's amended complaint in April 2025 cited confidential sources, including a former Field Leader and Regional Training Manager. They alleged that between 2020 and 2022, company managers decided restaurants were giving away too much food.
To control costs, individual branches were reportedly pressured to meet strict limits on ingredient usage. The lawsuit claimed employees frequently skimped on portions because they "were afraid of losing their jobs." However, Judge Garnett ruled these claims did not demonstrate that portion sizes had been "systematically reduced" with the knowledge of top executives.
It remains unclear whether investor Michael Stradford will appeal the court's verdict.
