3M gains another victory in efforts to thwart N95 price gouging, fraud

3M has used several strategies to thwart thousands of cases of possible price gouging or fraud regarding its N95 face masks that are considered state of the art for protecting against COVID-19.

The company recorded its latest victory with an announcement this week that it had gotten a judgment and injunction against several companies in California for selling "fake, defective or damaged respirator products" at what 3M said were "grossly inflated prices."

The lawsuit against KM Brothers Inc., KMJ Trading Inc., Supreme Sunrise Inc., Mao Yu and third-party Zhiju USA led to the recovery of $192,000 that will be donated to Direct Relief, a group that provides personal protective gear to front-line health workers facing risk of COVID-19 infection.

"3M and Amazon collaborated to identify and stop the fraudulent scheme and pursue legal action against the defendants," 3M said in a news release.

While the Maplewood-based company has filed 18 lawsuits, including the one in California, it has also delivered dozens of cease-and-desist letters, many times resulting in the desired action of shutting down the false N95 operation, 3M said.

So far, more than 11,000 false or deceptive media posts, 8,000 fraudulent e-commerce offerings and 180 deceptive internet addresses have been shut down as a result of the actions, 3M said in a statement.

For example, Colt International Inc., a company founded by one of President Donald Trump's biggest fundraisers, received a cease-and-desist letter from 3M in July.

Founder Eric Beach had claimed a relationship with 3M that would provide access to millions of N95 masks at $2.20 a piece, a 93-cent markup over 3M's list price.

After a media report and the 3M letter, Colt stopped misrepresenting its efforts, 3M said.

Beach could not be reached for comment. In a statement to CBS, Beach said that he had no formal relationship with 3M.

"Our legal action is focused on stopping fraud in 3M's name and deterring those who would profiteer from the pandemic, causing challenges for those procuring PPE [personal protective equipment] for those on the front line," the company said.

Besides the cease-and-desist letters and lawsuits it undertakes, 3M said it also refers reports to law enforcement.

William McGeveran, who teaches civil procedure and trademark law at the University of Minnesota, said parties like 3M must weigh whether there would be a financial judgment in a lawsuit and whether the cost of the lawsuit is worth the protection of its branding.

In some cases, once behavior is stopped, the goal has been reached, he said.

Jim Spencer • 202-662-7432