A US district judge has granted 3M's injunction against a company acting as one of its distributors. The Minnesota-based conglomerate launched the injunction against Performance Supply LCC from Englishtown, New Jersey, who was apparently selling its facial masks at very high prices.
On Monday, US District Judge Loretta Preska ruled in favor of 3M and its injunction. The decision effectively blocked Performance Supply from using 3M name and logo and barred it from acting as its authorized distributor. 3M is currently the world's largest manufacturer of N95-certified facial masks, which are now in high demand across the globe due to the continued spread of the coronavirus pandemic.
In her decision, Judge Preska argued that Performance Supply's actions would have likely done irreparable damage to 3M's reputation if it was allowed to continue. She added that the decision was also in the best interest of the public, the governments, hospitals, and healthcare workers who are fighting in the front lines. The judge wrote that while lives are at stake and time is of the essence, there still needs to be accountability.
3M filed its lawsuit against Performance Supply after it found out that the company was trying to sell 7 million units of its mask to the Office of Citywide Procurement in New York City. Performance Supply priced the deal at $43.85 million, which equates to an average price of $6.26 per mask. 3M sells its masks at a price range of $1.02 to $1.31 per piece, which means that Performance Supply's markup was roughly five times the listing price of the product.
3M stated in its filing that the markup was a clear act of price gouging and it accused Performance Supply of taking advantage of the dire situation. The company has also filed at least 10 similar lawsuits against companies that it found were overpricing its products. The decision made against Performance Supply is its first successful injunction.
The company's senior counsel, William Childs, mentioned in an interview that the goal of the suit was to halt the practice of price gouging and misleading offers made to procurement offices. He added that such practices only end up making it difficult for its product to get into the hands of those who need it the most.
Since January, 3M has more than doubled its annual production rate of the life-saving N95 masks. The company projects that it will be able to produce up to 1.1 billion units before the year ends. 3M chief executive officer, Mike roman, mentioned last week that the company is working the US Department of Defense to help it boost production to at least 2 billion.
