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Costco Doesn’t Have to Reveal High-End Supplier

(CN) - The high-end clothing manufacturer Citizens of Humanity, whose current season products appeared on the shelf at Costco, is not entitled to find out who supplied the merchandise, a California appeals court ruled.

Citizens of Humanity, the successor-in-interest to D.A.D.S. Denim, discovered that Costco was selling its clothes without consent. Its investigation revealed that the clothes came from a single retailer.

Costco refused to divulge where it got the merchandise, and the trial court ruled that Citizens was not entitled to that information in discovery. The 2nd District Court of Appeals affirmed that aspect of the decision.

"We conclude that the identity of Costco's suppliers is a protectable trade secret and the court did not err," Justice Croskey wrote.

However, Croskey did rule that Citizens had a case against Costco for the sale of stolen property.

"As Citizens properly alleged all elements of a cause of action," Croskey ruled, "the judgment of dismissal must therefore be reversed."

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