Judge: 3M should win COVID-19 price-gouging lawsuit
Judge enters default judgment as New Jersey-based firm failed to respond to suit | Defendant allegedly sought to sell 3M-branded masks at inflated prices during the pandemic.
Multinational conglomerate 3M has been awarded a default judgment in a price-gouging lawsuit against a New Jersey company accused of selling 3M-branded masks at inflated prices to exploit the COVID-19 pandemic.
3M took legal action in April 2020 against Performance Supply, alleging illegal price gouging and “deceptive trade practices” in the sales of N95 respirators, which are designed to filter 95% of airborne particles.
In its complaint, the company said Performance Supply “falsely claimed a business affiliation with 3M” and offered to sell seven million masks to New York City’s procurement office for $45 million,
The quoted price per mask allegedly amounted to around five times 3M’s list price for the item.
As Performance Supply failed to respond to the civil lawsuit, Magistrate Judge Jennifer Willis recommended a default judgment award to 3M on Wednesday (26 April) .
In May 2020, a Manhattan district judge banned Performance Supply from using 3M’s name and logo, or posing as an authorised 3M distributor. Judge Loretta Preska said that Performance Supply’s conduct would “likely irreparably harm 3M’s reputation if it continued”.
She also held that the injunction was in the interest of the public, Reuters reported at the time.
‘Fake authorisation letter’
Ronald Romano, the man behind Performance Supply, was sentenced to five years’ probation for price-gouging in September last year.
At the time of his arrest in 2020, the US Attorney’s Office for the Southern District of New York released a statement saying that Romano “committed this scheme in an attempt to exploit NYC as it was trying to manage the impact of the COVID-19 pandemic and obtain these resources to help protect the lives of hospital and other frontline workers”.
According to the allegations against him, Romano began attempting to obtain large quantities of personal protective equipment (PPE) in February 2020. Following this, he “created a fictitious authorisation letter in March 2020, which falsely represented that Romano’s company was authorised to sell millions of 3M-brand PPE”.
Shortly after this, brokers acting on his behalf approached New York City’s procurement office to supply N95 respirators. In its complaint against Performance Supply, 3M requested injunctive relief and damages, with any damages recovered being donated to COVID-19 related non-profit organisations.
