3M's legal battle to keep price gougers from profiting on sales of its N95 face masks during the coronavirus pandemic grew on two new fronts in recent days.
On Monday, Maplewood-based 3M targeted a third-party seller on Amazon.com for using its trademark to sell $350,000 worth of masks at up to 20 times list prices.
KM Brothers Inc., a California company trading under several different business names, "claimed to be reselling authentic N95 respirators, while actually selling damaged and fake goods at highly inflated prices," 3M said.
The action against KM Brothers came on the heels of a different suit filed late last week in which 3M alleged that an Ohio company lied about ties to 3M to convince another business to act as its selling agent for 10 million 3M masks at $4.95 apiece. The seller, Preventative Wellness Consultants LLC, sought a nondisclosure agreement as well as full payment up front for any purchases, 3M said.
KM Brothers and Preventative Wellness Consultants could not be reached for comment on Monday.
After customer complaints, Amazon pulled the KM Brothers ads from its online shopping forum.
3M's federal court lawsuit against Mao Yu, the owner and operator of KM Brothers, explains a strategy that uses multiple business names to carry on selling if a single business gets taken down.
3M said that on Feb. 20, various business under KM Brothers control began selling "what were purported to be 3M-branded N95 respirators across three connected accounts on Amazon.com."
The company also "maintained at least 45 different Amazon Standard Identification Numbers."
The two lawsuits offer a glimpse into the depth and breadth of attempts to profit from a national shortage of N95 masks, said to be among the most effective in blocking airborne COVID-19 molecules.
The new legal actions bring to 14 the number of suits 3M has filed since January to try to control price gouging for its product by what the company calls "pandemic profiteers."
3M said it "has won five temporary restraining orders and three preliminary injunction orders from courts across the country that put a stop to other defendants' unlawful and unethical profiteering from the pandemic."
It has shut down more than 3,000 websites and 4,000 social media posts that try to expropriate the 3M brand for profit, the company explained.
3M said it discovered Preventative Wellness as it pursued an earlier case in which Utah-based RX2Live tried to sell masks to a California health care system at several times their list price.
"Preventative Wellness was a ringleader in representing to RX2Live and others that they represented 3M and had access to 3M brand N95 respirators," 3M said in a statement. "3M has no relationship with Preventative Wellness or Rx2Live."
3M described Preventative Wellness as "a national health care network which consists of independent consultants ranging from LPNs, licensed physicians, medical reps and other health care professionals who are willing to reach out to hospitals, urgent care, government agencies, and physician offices to provide needed tests and PPE [personal protective equipment] supplies."
The lawsuit charges that Preventative Wellness told others that its N95 masks came "direct from 3M," implying it was a 3M wholesale distributor. That is not true, 3M said.
3M charged that Preventative Wellness attempted to hide its role in the alleged price gouging scheme by making all parties to any sale sign a nondisclosure agreement.
In its suit, 3M asks for a court order that stops Preventative Wellness from claiming ties to 3M in order to sell masks. It also asks the court judge to make Preventative Wellness pay for court costs and to pay three times normal damages from any money it profited from its scheme. 3M says the money will be donated to a COVID-19 charitable organization of 3M's choice.
3M asks the court to shut down KM Brothers' mask-selling operations and to force the company to repay any profits derived from by claiming the resale of 3M masks when it was instead "selling counterfeit, damaged, deficient, or otherwise altered masks."
The seller charged Amazon customers up to $23.21 for a single mask that normally listed for prices ranging from 60 cents to $3.40 each. Customer complaints tipped off Amazon.