Gina Kim liked the $428 handbag she bought with her employee discount at a Coach Inc. store in San Francisco for its pillowed bottom and striped, colorful strap.
But she hardly used it: It was white and she didn’t want it to stain. So she ultimately did what many other people do with luxury items they no longer want.
She put it up for sale on eBay.
That decision earned Kim a “cease and desist” letter from a law firm representing Coach that accused her of selling counterfeit goods in violation of state and federal law. The letter threatened her with up to $2 million in penalties, instructed her to sign a statement admitting wrongdoing, and demanded she pay Coach $300.
Now that letter – and the removal of her eBay ad – has prompted Kim to sue Coach for state Consumer Protection Act violations, defamation and other claims. It also raises questions about whether Coach and other companies have been overzealous in pursuit of a legitimate objective, cracking down on the massive U.S. market for counterfeit goods.
“If Coach wants to send letters threatening $2 million lawsuits against their own customers, they should at least do minimal investigation to see whether those claims are accurate,” says Jay Carlson, one of Kim’s attorneys. “What we’re interested to see through discovery is how many people got this letter, got scared, signed it and simply paid Coach.”