Health Network Sues Promo Distributor for $1.2M Over Alleged Undelivered and Counterfeit N95 Masks
Kettering Health Network is suing a Fully Promoted franchisee for more than $1.2 million after the company allegedly failed to deliver masks Kettering ordered last spring, and then finally delivered counterfeit N95 masks in December.
According to the Dayton Daily News, Kettering Health filed the lawsuit on May 3 against Jade Designs LLC, dba Fully Promoted, and manager Jennifer Snyder.
Last spring, as the COVID-19 pandemic swept the U.S. and put a strain on health care systems, Kettering experienced a shortage of N95 masks. This was a common issue at the time, as supply struggled to meet demand and prices skyrocketed.
Kettering was looking to purchase masks for nine of its hospitals across Ohio: Fort Hamilton, Grandview, Greene, Kettering Behavioral, Kettering Medical, Soin, Southview, Sycamore and Troy.
In March 2020, just as shutdowns and mask mandates among the public began, Kettering reportedly asked Jade Designs about buying 30,000 N95 masks. This was reportedly the first time Kettering had done business with the distributor.
According to Court Documents, Jade Designs responded on March 19, 2020, saying that it had the “official word on N95 masks,” and Kettering proceeded to wire $86,7000 a few days later with the expectation that masks would arrive in about two weeks. Kettering claims in the lawsuit that the masks never arrived.
After that initial order, Kettering again went to Jade Designs about buying an additional 300,000 N95 masks, which the distributor said it could fulfill in partial shipments by the end of April. Kettering agreed, and sent an additional $1.08 million.
From there, Kettering claims that the distributor employed “a months-long campaign of stall and delay tactics,” citing issues with transportation and getting in contact with the supposed manufacturers, 3M and Honeywell.
The two companies went back and forth throughout the summer. In August, Kettering had enough and went elsewhere for N95 masks, and told Jade Designs it wanted a full refund. Kettering alleged in the lawsuit that it only got a partial refund, and is still waiting on a remaining $46,700 of the initial purchase amount.
Jade Designs came back to Kettering, claiming that it now had 3M N95 masks in the U.S., which could be shipped to Kettering in a matter of days. Once the second wave hit the U.S. in late 2020, Kettering was again in need of PPE for employees, so it went back to the Fully Promoted franchisee, believing that it was finally able to secure what it promised.
Kettering contacted the distributor in December 2020, and ended up placing an order for 300,000 masks for $1.19 million.
Once the masks arrived, Kettering employees had concerns that the masks were counterfeit, which would pose an enormous risk to health care workers if they did not adequately filter particles as intended. One employee reportedly had an allergic reaction to the mask. Kettering then traced the shipment lot number to a site listed in a 3M counterfeit warning. After contacting 3M about it, 3M called Jade Designs “suspicious,” and confirmed later that the product Kettering received was counterfeit.
Kettering again demanded a refund, and noted that the fit tests cost $20,000.
“Despite clear confirmation from 3M that the masks are counterfeit, Fully Promoted continues to insist that the masks could somehow still be legitimate and refuses to refund KHN until Fully Promoted has the opportunity to resell these counterfeit masks to unsuspecting third-parties,” Kettering said, according to the Dayton Daily News. “KHN has refused to be a part of Fully Promoted’s scheme to double-down on its fraud and sell these masks to yet another unsuspecting victim.”
Unfortunately, this isn’t a new tale anymore. The unprecedented demand for masks presented opportunities for fraud. There have been multiple cases of people posing as distributors affiliated with companies like 3M, and the Dayton Daily News reported that from March 2020 through March 31, 2021, U.S. customs has seized more than 34.6 million counterfeit masks.
This also highlights the perilous situation many distributors found themselves in early in the pandemic, where even those with good intentions had difficulty securing stock and fulfilling large orders of medical-grade PPE.