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3M Continues Blitz With 4 More Price-Gouging Cases

By Bill Donahue · 2020-05-01 15:21:32 -0400

3M Company filed four more federal trademark lawsuits Thursday against companies that it claims are reselling N95 masks at drastically increased prices, bringing the total to 10 cases filed during the coronavirus pandemic.

In three complaints filed in Florida and a fourth in Indiana, the industrial giant accused a series of small entities of falsely claiming to be affiliated with 3M in order to sell masks to desperate government agencies at jacked-up prices.

In one of the cases, 3M accused an Indiana company of falsely claiming to work directly with 3M and having a whopping 5 billion masks to sell at more than double their shelf price.

"We will continue to take legal action in cases like these and are working closely with national and international law enforcement to help stop the perpetrators of these unlawful and unethical schemes," 3M general counsel Ivan Fong said in a statement Friday.

The cases are the latest in a nationwide litigation campaign from 3M — the country's largest producer of N95 masks — that aims to use trademark law to fight price-gouging during the pandemic.

Like previous cases, the new lawsuits claim the companies are using misleading tactics to falsely suggest that they are authorized vendors of 3M masks, meaning their inflated prices are approved or endorsed by the company.

In one of the new cases, 3M accused a Georgia entity called 1 Ignite Capital LLC of using misleading language in an attempt to sell 10 million masks to Florida's Division of Emergency Management at more than four and a half times their actual price.

"To confuse and deceive the DEM, defendants claimed that 3M had implemented intricate procedural steps that required the DEM to engage one or more defendants as an escrow agent and deposit DEM funds into an escrow account if the DEM wanted to buy 3M masks," the company wrote. "This included 3M purportedly wanting a proof of funds from the DEM and that '3M will perform a background check' on the DEM."

1 Ignite Capital did not immediately return a message Friday seeking comment on 3M's accusations.

In another case, 3M accused a company called Zenger LLC and owner Zachary Puznak of even more egregious behavior.

Puznak allegedly offered to sell as many as 5 billion N95 masks to the Indiana Economic Development Corporation by claiming to be in direct contact with "executives from 3M." When pressed for verification, he allegedly accused IEDC of "paranoid irrationality."

In Thursday's complaint, 3M called Puznak's efforts "a criminal scheme to defraud." The company also pointed out that it produces a total of just 1.1 billion masks globally.

"These representations and others like them are entirely false," the company wrote. "3M has no affiliation whatsoever with defendants, whose fraudulent scheme during a global pandemic represents not only a new low in rapacious profiteering, but also endangers lives by diverting state officials from legitimate sources of much-needed respirator."

Puznak did not immediately respond to a message Friday seeking comment on 3M's accusations.

In the other two lawsuits, 3M accused two other Florida companies called TAC2 Global LLC and King Law Center, Chartered of similar behavior in Florida.

The new complaints come as 3M is pushing forward in its other price-gouging cases. In a lawsuit filed in California, a federal judge issued a temporary restraining order Thursday against an alleged price-gouger; 3M won a similar order in Manhattan federal court earlier in the week.

3M has now filed 10 such lawsuits. It's filed federal cases in New York, California, Wisconsin, and Indiana, plus three in Florida; it's also filed a case in Texas state court and another in Canada.

In the Florida cases, 3M is represented by Wilson Chu, Michael Chu, Michael Weaver, Joseph Wasserkrug, Colin Stalter and Kristin Taylor of McDermott Will & Emery LLP. In the Indiana case, 3M is represented by John W. Ursu, Kerry Bundy, Isaac Hall, Kathy Osborn and Louis Perry of Faegre Drinker Biddle & Reath LLP.

The cases are 3M Company v. 1 Ignite Capital LLC et al, case number 4:20-cv-00225, in the U.S. District Court for the Northern District of Florida; 3M Company v. Puznak et al, case number 1:20-cv-01287, in the U.S. District Court for the Southern District of Indiana; 3M Company v. King Law Center, Chartered, case number 6:20-cv-00760 in the U.S. District Court for the Middle District of Florida ; and 3M Company v. TAC2 Global LLC, case number 8:20-cv-01003, in the U.S. District Court for the Middle District of Florida.

--Editing by JoVona Taylor

For a reprint of this article, please contact reprints@law360.com.

Documents

Case Information

Case Title

3M Company v. King Law Center, Chartered

Case Number

6:20-cv-00760

Court

Florida Middle

Nature of Suit

Trademark

Date Filed

April 30, 2020


Case Title

3M Company v. TAC2 Global LLC

Case Number

8:20-cv-01003

Court

Florida Middle

Nature of Suit

Trademark

Date Filed

April 30, 2020


Case Title

3M COMPANY v. 1 IGNITE CAPITAL LLC et al

Case Number

4:20-cv-00225

Court

Florida Northern

Nature of Suit

Trademark

Date Filed

April 30, 2020


Case Title

3M COMPANY v. PUZNAK et al

Case Number

1:20-cv-01287

Court

Indiana Southern

Nature of Suit

840(Trademark)

Date Filed

April 30, 2020