The coronavirus pandemic has proven that some people will try to take advantage of others even during the worst of times. On July 9, 2020, multinational conglomerate company 3M announced that it resolved an Indiana-based federal court case against ZeroAqua, stopping an N95 respirator mask scheme in its tracks. The scheme included the promise of billions of N95 masks that did not exist.
This lawsuit was one of many that were filed by 3M against similar schemes across the nation several months ago. The Minnesota-based giant manufacturing company is on a mission to combat the price gouging of masks and bring down fraudulent players. Respirators and face masks remain an important part of personal protective equipment for healthcare workers who are treating COVID-19 patients. They are also becoming increasingly important as masks are now being required in public places, like grocery stores and shopping centers. Some businesses have the right to refuse service to anyone not wearing a mask inside their establishment.
3M stated that they plan to donate all damages from these lawsuits to nonprofits aimed at helping people deal with the pandemic. The case against ZeroAqua was resolved through a count-entered permanent injunction, a payment to 3M that can be used as a donation to a COVID-19 related charity, and consent judgment. According to one of the defendants in the case, Zachary Puznak, the creators of the scheme tricked him and tried to sneak $14.25 billion out of Indiana officials for N95 respirator masks that did not exist.
Puznak stated that he testified under oath and that the people who contacted him were trying to take advantage of his best intentions. He told the court that they used him as a vehicle for their fraudulent attempt on the State of Indiana. He is cooperating with authorities and turned over all of his communication with the schemers to 3M, who is sharing them with police.
Puznak also sat for a deposition and told his story on record to help educate healthcare administrators, the general public, and public officials. He hopes to ensure that no one else falls victim to similar fraudulent cases in the future. He also included a public apology statement, which was printed in 3M’s news release on July 9, 2020. 3M plans to take additional court action against all of the people Puznak identifies. 3M senior counsel William Childs stated that the company will continue to fight fraud and work with police to help take down criminals.
This isn’t the first time 3M has worked to take down criminals. Back in May, the company filed lawsuits against five organizations that allegedly claimed to have billions of N95 respirator masks for sale to emergency officials in three different states. A defendant in one of the cases stated that the company claimed to have five billion masks available. 3M stated that they do not have any connections to any of the defendants, nor do they have access to the respirators that these companies attempted to sell in Florida, Indiana, and Wisconsin at incredibly inflated prices.
3M filed lawsuits against these organizations in federal courts located in each state. The company stated that they have not changed their prices for respirators since the COVID-19 pandemic began. In fact, 3M won a temporary restraining order in April against a company in New Jersey that was accused of trying to sell 3M’s N95 respirators at inflated prices. 3M sued Performance Supply in federal court for misrepresenting their business relationship. The company tried to charge the city of New York price increases of up to 600% higher than what 3M normally charges for their masks.
Judge Loretta Preska of the United States District Court granted a temporary restraining order against Performance Supply and gave the company only a few days to explain why the order shouldn’t be made permanent. Judge Preska also ordered the company to come back to court on May 4. 3M claimed that Performance Supply sent a formal quote to New York City’s Office of Citywide Procurement on March 30 that included an offer for millions of 3M-branded N95 respirator masks at an increased price of nearly $45 million. According to 3M’s lawyers, Performance Supply is not an authorized distributor of the 3M products and had no right to use the company’s logo.
Additionally, 3M accused Performance Supply of state and federal trademark infringement, false association, unfair competition, false designation of origin, false endorsement, false advertising, trademark dilution, and deceptive practices and acts. According to 3M’s vice president and associate general counsel for litigation, Courtney Enloe, the lawsuit is one of several legal actions that 3M is taking to protect the public against counterfeiting and price gouging of N95 masks.
Enloe continued by stating that the company is pleased that the United States District Court for the Southern District of New York has temporarily taken action against Performance Supply and hopes it becomes permanent. The company continues to take legal action when appropriate to support the state and federal government while they prevent improper business practices, such as price gouging, during the coronavirus pandemic.
The Performance Supply case is one of several that 3M is taking on amidst the pandemic. According to 3M’s SVP and general counsel member Ivan Frog, the company is grateful that all of these false cases were reported to 3M and the attempts to deceive public officials were not successful. Frog stated that they will continue to work closely with international and national law enforcement to stop unlawful and unethical schemes by taking immediate legal action. The following cases were filed back in May and 3M is seeking injunctive relief to get these companies to stop performing illegal activities:
Overall, 3M filed ten lawsuits in April and pledged to donate any recovered money to nonprofit organizations that are dedicated to helping people during the pandemic. In the meantime, 3M has been busy working on a paper-based COVID-19 rapid test. The company is pairing with researchers at Massachusetts Institute of Technology (MIT) in hopes of making millions of tests per day. The test would be able to deliver exceptionally accurate results in minutes by detecting viral antigens using a paper-based device. The test can be given on the spot and does not need to be sent to a lab for results.
The rapid COVID-19-detecting tests were selected for accelerated commercialization and development support by the National Institutes of Health (NIH) after it was reviewed by an expert panel. The project received $500,000 in funding from the Rapid Acceleration of Diagnostic Tech (RADx TECH) program, which is a brand of the NIH’s National Institute of Biomedical Imaging and Bioengineering specializing in coronavirus diagnostics. Researchers are trying to determine if it’s possible to mass produce the tests. The research team at 3M is made up of scientists and regulatory and manufacturing experts from its health care business group and research laboratories. The team at MIT is run by Professor Hadley Sikes from the college’s Department of Chemical Engineering.
According to 3M’s CTO John Banovetz, the company is excited to work with Professor Sikes and the rest of the team at MIT. Banovetz recognizes that they are taking an aggressive approach, but states that their combined expertise can help people all over the world. He stated that the company owes it to themselves and the rest of society to make this project succeed. Banovetz stated that the company is trying to improve the affordability, speed, and accessibility of testing for COVID-19, which can help stop the spread.
RADx Tech’s innovation is projected to support a four-week period of research to determine whether the test concept works and can be used on a large scale basis. The project may be eligible for more funding from the government. According to Professor Sikes, this collaboration has greatly enhanced the efforts towards detection of the virus, and serves as a tool to help contain the public health crisis. She stated that there is a pressing need for this test and is working with 3M to overcome challenges that would prevent moving this project out of the research phase.