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Image: WGACA

Since its founding in 2014, What Goes Around Comes Around (“WGACA”) has “sold hundreds of thousands of products without ever selling a counterfeit,” the luxury reseller’s counsel asserts in a recent letter in the case that Chanel filed against it in March 2018. In a May 17 letter addressed to Judge Louis Stanton of New York’s Southern District Court, counsel for WGACA Thomas Kidde pushed back against Chanel’s requests for certain evidence, namely, any communications between WGACA and its third party vendors about Chanel branded products.

According to Mr. Kidde’s letter, WGACA has refused to provide Chanel’s counsel with such documentation because it “has absolutely no relevance” in the case, which centers on Chanel’s allegations that WGACA has “built its business by piggybacking on the reputation of a handful of select luxury brands – including Chanel,” and has, “on more than one occasion,” sold counterfeit Chanel products.

“Chanel seeks to justify its request [for supplier information] by asserting that it is relevant with respect to any counterfeits that may arise,” but such reasoning falls flat, per WGACA, because it “has never sold a single counterfeit item, ever.” The letter asserts that “Chanel mistakenly identified in its complaint an alleged counterfeit, but that item was not sold by WGACA, and WGACA has nothing to do with the sale.” Chanel “knows this,” the letter continues, “and has never offered any evidence to suggest that the allegation has any merit.”

Instead, such claims are part of Chanel’s “quest to paint a far darker picture of the resale market for its goods than actually exists.”

“In sum, counterfeiting is NOT an issue,” Kidde states, “and [it] never has been.” In fact, the letter goes on the assert that “WGACA itself examines every product it acquires to confirm its authenticity, [as the reseller] has every incentive to insure no counterfeit items are sold since it would be detrimental to its own business plan.”

With that in mind, WGACA’s counsel states that Chanel’s attempt to force the WGACA to identify its suppliers – which is “one of WGACA’s most valuable trade secrets” – is for no purpose other than “to harass and/or intimidate such sources to discourage their sales to [it].” More than that, the “zeal with which [Chanel] is pursuing this plainly irrelevant information suggests that this entire lawsuit is a pretext to find out WGACA’s sourcing so that it can make a collateral attack,” per Kidde. And that, he asserts, “would be a misuse of the litigation process.”

Kidde’s letter comes a week after Chanel’s counsel asserted that information about the identities of WGACA’s suppliers would help it to determine whether the reseller had “ignored evidence as to the source of [its Chanel] goods, which might suggest a counterfeit or illegal scheme.”

* The case is Chanel, Inc. v. What Goes Around Comes Around, LLC, et al., 1:18-cv-02253 (SDNY).