A preliminary injunction was entered against Performance Supply LLC, which has been alleged to have used 3M's trademarks to market medical-grade face masks at inflated prices. The defendant didn’t appear at the proceedings.
A Manhattan federal judge on Monday barred a New Jersey-based company from touting any kind of association with 3M, after the firm failed to respond to a price-gouging lawsuit over its alleged attempt to sell N95 respirators at as much as six times the recommended list price amid the COVID-19 pandemic.
U.S. District Judge Loretta A. Preska of the Southern District of New York entered a preliminary injunction against Performance Supply LLC, which was accused in an April 10 complaint of using 3M’s trademarks to market the medical-grade face masks at inflated prices.
Performance Supply had not acknowledged the lawsuit prior to a show-cause hearing Monday morning, and no attorneys for the company entered an appearance during a the proceeding, which was held via teleconference.
Carmine Zarlenga, a Mayer Brown partner who represents 3M, told Preska during the four-minute hearing that his team had served all the necessary papers in the case, but had not received any response from Performance Supply, which was identified in court filings as a Delaware LLC based in Manalapan, New Jersey.
“We have gone to great lengths to do that, and we have not received any communications from the defendant,” Zarlenga said.
Performance Supply could not be reached for comment on Monday. No website, phone number or email address for the company appeared to be listed online.
Preska’s order prevented the company and its agents from using 3M’s trademarks or otherwise representing itself as a distributor or vendor for its products.
According to the lawsuit, Performance Supply emailed a $45 million quote to the New York City’s Office of Citywide Procurement at the end of March, using 3M’s logo and leading officials to believe it was an authorized distributor of the N95 masks,which are considered essential for health care workers who treat COVID-19 patients.
The suggested list price of the two types of 3M N95s involved in this case is $1.02 to $1.31, but Performance Supply offered to sell 7 million masks to the city at a rate of more than $6 per mask, according to court papers.
John Mancini of Mayer Brown wrote in the complaint that as demand for the masks grew amid the pandemic, 3M increased production of N95s, but had not increased prices. The company has created a hotline to combat price gouging and published the list price of its masks so that potential buyers can easily check it, according to court papers.
“The mere association of 3M’s valuable brand with such shameless price-gouging harms the brand, not to mention its more serious threat to public health agencies that are under strain in the midst of a worldwide pandemic,” Mancini wrote in the 26-page filing.
According to the complaint, any damages 3M secures through the lawsuit will be donated to a charitable organization of its choosing.
The case is captioned 3M v. Performance Supply.
Reprinted with permission from the May 4, 2020 edition of New York Law Journal © 2020 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.