Citizens of Humanity, LLC v. Costco Wholesale Corp.

A manufacturer of high-end apparel discovered that some of its current season products were being sold at a low-price warehouse store. The manufacturer asked the warehouse store to disclose its source for the products; the warehouse store refused. The manufacturer then sued the warehouse store for the sale of stolen property. The trial court ultimately denied the manufacturer discovery of the warehouse store’s sources, and sustained the warehouse store’s demurrer to the operative complaint. The manufacturer appeals. While we conclude the manufacturer is not entitled to the discovery it sought, and we further harbor substantial doubts as to the evidentiary support for the manufacturer’s complaint, we conclude that the manufacturer has alleged a cause of action for the sale of stolen property, and therefore reverse.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff and appellant Citizens of Humanity, LLC, the successor in interest to D.A.D.S. Denim, Inc. (Citizens), is a manufacturer of “high end denim apparel products.” According to the operative complaint, Citizens “only sells its current season apparel to retailers that [it] believes will provide a high level of customer…