BEVERIDGE & DIAMOND, P

Case 2:20-cv-08892-PA-AFM Document 42 Filed 01/28/21 Page 1 of 31 Page ID #:268

1 Kaitlyn D. Shannon (SBN 296735)

BEVERIDGE & DIAMOND, P.C 2 456 Montgomery Street, Suite 1800

3

San Francisco, California 94104-1251 Phone: (415) 262-4000

4 kshannon@

5 Bryan J. Moore (pro hac vice)

6

BEVERIDGE & DIAMOND, P.C. 400 West 15th Street, Suite 1410

7 Austin, Texas 78701-1648

Phone: (512) 391-8030

8 bmoore@

9 Attorneys for Plaintiff 10 3M Company

11

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

12

13 3M COMPANY,

14 Plaintiff,

15 v.

16 G7 ENVIRONMENT, LLC, AURIE

17 GALVEZ, THOMAS FORBES, AND KEVIN ALLYN,

18 Defendants.

19

CASE NO. 2:20-CV-08892-PA-AFM

FIRST AMENDED COMPLAINT FOR TRADEMARK INFRINGEMENT, UNFAIR COMPETITION, TRADEMARK DILUTION, AND FALSE ADVERTISING

20

21

DEMAND FOR JURY TRIAL

22 Based on its knowledge, and on information and belief as to all other matters,

23 Plaintiff 3M Company ("3M") alleges as follows against G7 Environment, LLC,

24 Aurie Galvez, Thomas Forbes, and Kevin Allyn (collectively, "Defendants"):

25

26

I. INTRODUCTION

27

1. This lawsuit is brought to further 3M's efforts to combat the fraudulent

28 exploitation of the surge in demand for 3M-brand personal protective equipment

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Case 2:20-cv-08892-PA-AFM Document 42 Filed 01/28/21 Page 2 of 31 Page ID #:269

1 ("PPE") during the pandemic. This fraud diverts legitimate efforts to secure genuine

2 PPE to protect front-line workers, including healthcare workers, first responders,

3 and critical infrastructure operators. In its efforts to profiteer from the pandemic,

4 Defendants have repeatedly made intentionally false and misleading claims to be a

5 bulk buyer and distributor of respirators from 3M; to have purchased, to have a

6 prospective transaction to purchase, or to otherwise have the ability to purchase

7 billions of respirators from 3M; and that 3M has a "mutual interest" in supplying

8 Defendants with up to 10 billion respirators and is among G7 Environment's

9 "Partners In The Fight" to combat COVID-19. All these statements are lies to

10 perpetuate Defendants' false and deceptive ploy to defraud unwitting customers

11 seeking essential PPE to safeguard their health and the health of others during the

12 COVID-19 pandemic. 3M is suing to end the fraud, to protect the brave frontline

13 workers in the fight against COVID-19, to end Defendants' ongoing attempts to

14 falsely claim an affiliation with 3M, and to end Defendants' unauthorized use of

15 3M's name and famous trademarks.

16

2. Defendants operated and continue to operate an illegal scheme to

17 defraud individuals, businesses, and institutions by conning them into transferring

18 significant sums of money to Defendants for substantial purported quantities of 3M-

19 brand respirators that Defendants cannot and could never obtain or deliver.

20 Defendants promised to deliver quantities far exceeding 3M's entire annual

21 production of respirators. Defendants have no business relationship with 3M and

22 do not have the ability to fulfill the orders for 3M-brand respirators that Defendants

23 receive and for which Defendants are paid, or solicit payment, in advance.

24

3. While Defendants' scheme is conceptually simple, its execution can

25 have devastating impacts. Defendants target healthcare workers, first responders,

26 critical infrastructure operators, and consumers seeking essential PPE to safeguard

27 their health and the health of others during the pandemic. Defendants fabricate

28 documents and other materials to con prospective purchasers into believing that

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1 Defendants have access to billions of 3M-brand respirators. Defendants solicit

2 advance payment for substantial purported quantities of 3M-brand respirators that

3 Defendants cannot obtain or deliver, or can only obtain and deliver from illicit

4 sources in substantially lower quantities and at significantly higher prices than the

5 published list prices for which 3M sells its respirators. Defendants are unlawfully

6 enriched while their "customers" are still lacking the critical PPE that they so

7 desperately need. And, having been defrauded, Defendants' "customers" are now

8 in even more dire straits ? they now have less funds to purchase their needed

9 respirators from legitimate sources and they have wasted precious time seeking

10 nonexistent PPE from Defendants.

11

4. Defendants falsely associate 3M and its reputation and goodwill with

12 Defendants' fraudulent scheme ? purportedly as a "partner" with "mutual interests"

13 aligned with Defendants. Defendants falsely advertised for sale, and continue to

14 advertise, respirators with 3M's famous trademarks, trading on 3M's brand and

15 reputation for products that consumers around the world trust for their superior

16 quality and reliability. Defendants further engaged in price-gouging and other

17 unfair and fraudulent sales techniques in order to take advantage of vulnerable

18 consumers desperately in need of this critical PPE.

19

5. Defendants have repeatedly claimed false affiliations with 3M that

20 violate not only 3M's rights under the Lanham Act, but also criminal law, and

21 Defendants' behavior continues to persist. Defendant G7 Environment, LLC,

22 maintains a website where it purports to list its "Partners In The Fight" to combat

23 COVID-19 and displays there on its webpage the 3M logo among the logos of other

24 purported "partners." See G7 Environment, About Us, available at

25 . 3M has no affiliation with

26 Defendants ? no partnership of any kind ? and has not authorized Defendants to use

27 or display the 3M logo.

28

6. Defendants not only claim false affiliations with 3M, but have also

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1 fabricated and distributed a "Letter of Intent" that purports "to provide a written

2 expression of the mutual interest" of Defendants and 3M to transfer up to 10 billion

3 3M N95 1860 respirators from 3M to Defendants at a price of $2.53 per respirator.

4 There is no such intent; no such "mutual interest." 3M has never expressed any

5 interest in selling or intent to sell its respirators to Defendants, and 3M cannot ?

6 even in theory ? supply Defendants or any prospective buyer with respirators in

7 such quantities. As noted below, 3M has dramatically increased its production of

8 respirators such that, by the end of 2020, it will be producing respirators at a rate of

9 2 billion annually (roughly tripling 2019's total). Thus, Defendants either claim to

10 have access to more 3M respirators than 3M has ever produced in a given year, or

11 claim to have sole access to the next 5 years of 3M production. Obviously,

12 Defendants' claims are wholly fictitious.

13

7. Defendants are not authorized 3M distributors or resellers and are not

14 an authorized channel for the placement of an order for 3M-brand respirators.

15 Defendants do not have access to any 3M-brand respirators directly from 3M, much

16 less 10 billion, and there is no authorized 3M distributor that can supply Defendants

17 with anywhere near the quantity of respirators that Defendants claim to be able to

18 access.

19

8. As 3M has stated from the outset of the COVID-19 pandemic, it has

20 not and will not raise its respirator prices as a result of the pandemic, and 3M has

21 published the single-case list prices for the most common 3M-brand N95 respirators

22 so that purchasers can identify and avoid inflated prices. The 3M-published list

23 price for a 3M N95 1860 respirator is $1.27 per respirator. Defendants' fabricated

24 "Letter of Intent," however, states that they would be purchasing billions of 3M-

25 brand 1860 respirators from 3M for $2.53 per respirator (i.e., twice 3M's published

26 list price), in an obvious attempt to hide and justify Defendants' price-gouging.

27 Defendants use their fabricated "Letter of Intent" to con individuals, businesses, and

28 institutions into giving Defendants substantial sums of money for grossly over-

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1 priced respirators in quantities that Defendants cannot obtain and deliver. It is a

2 simple fraud scheme perpetuated on a grand scale with devastating impacts. And to

3 associate 3M and its valuable name and marks with such fraud, price-gouging, and

4 despicable conduct just adds to Defendants' unlawful misconduct.

5

9. 3M has never had any affiliation whatsoever with Defendants, whose

6 fraudulent ploy during a global pandemic represents not only a new low in

7 predatory profiteering, but also endangers lives and wastes precious time and

8 resources ? financial and otherwise ? by diverting buyers from legitimate sources of

9 much-needed respirators.

10

10. 3M filed this suit to shut down Defendants' unlawful activity, protect

11 the public from Defendants' ongoing fraud, and protect 3M's name, reputation, and

12 trademarks from being associated with Defendants' unlawful and unethical efforts

13 to profiteer from the pandemic.

14

11. 3M respectfully requests that this Court preliminarily and permanently

15 order Defendants to cease using 3M's name and trademarks; to cease falsely

16 claiming to be affiliated or associated with 3M in any capacity; and to cease making

17 false representations concerning 3M. 3M also seeks damages and other relief to

18 remedy and deter Defendants and other would-be fraudsters, and any monetary

19 recovery in this case will be donated by 3M to charitable COVID-19 relief efforts.

20

12. In addition to the damages and injunctive relief sought in this

21 complaint, 3M intends to refer this matter to law enforcement.

22

II. BACKGROUND

23

13. Throughout its history, 3M has provided state-of-the-art, industry-

24 leading scientific and medical products to consumers throughout the world under its

25 famous 3M name and trademarks. Based on this longstanding, continuous use,

26 consumers associate the 3M trademarks uniquely with 3M. Now, more than ever,

27 consumers are also relying on the famous 3M name and trademarks to indicate that

28 the products offered thereunder are of the same superior quality that consumers

FIRST AMENDED COMPLAINT FOR DAMAGES AND EQUITABLE RELIEF - 5

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