Declaration of Derek McAfee — 3M Company v. TAC2 Global LLC (Dkt. 20)

Summary

Declaration of Derek McAfee in 3M Company v. TAC2 Global LLC, Document 20, filed 05/11/20 in Case 8:20-cv-01003-MSS-CPT. The declarant states that counsel for 3M sent an email on or about Friday May 8, 2020 with a copy of 3M's Motion for Temporary Restraining Order and Preliminary Injunction and the Court's order denying ex parte relief, and that on May 11, 2020 the declarant received an email informing of a hearing on Tuesday, May 12, 2020 at 10:00 a.m. It states that the allegations related to price gouging are false and that Tac2 has contracted for a gross margin of approximately 10%. It also states that the price initially charged to Tac2 by the supplier was $4.965 per mask.

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Case 8:20-cv-01003-MSS-CPT   Document 20   Filed 05/11/20   Page 1 of 5 PageID 341

4.
On or about Friday May 8, 2020 at approximately 2:30 PM, counsel for 3M sent an email
to me with a copy of 3M's Motion for Temporary Restraining Order and Preliminary
Injunction, and the Court's order denying ex parte relief because we did not have notice of
the motion.
5.
On or about 9:30 AM, Monday, May 11, 2020, I received an email from 3M's counsel
with this Court's order from Friday, May 8, 2020, informing me of a hearing that is to
take place tomorrow, Tuesday, May 12, 2020, at 10:00 a.m. I did not have notice of this
hearing prior to receiving this email from 3M's counsel Monday morning. I see that it
contained an Order that was issued by the Court last Friday. I did not have notice of it when
it was filed, nor did my counsel (to the best of my knowledge).
6.
I have reviewed the Complaint and the request for a Temporary Restraining Order and
Motion for Preliminary Injunction filed against Tac2.
7.
The allegations related to price gouging are false. Tac2 has contracted for a gross margin
of approximately 10%. This 10% must cover Tac2' s expenses such as salaries, logistics
and shipping to the final destination, bank and payment fees, escrow fees, and intermediary
fees, among other things. This leaves Tac2 around a 5% margin left to pay its sales'
representatives, customer representatives, and itself. While the retail price in the market of
$5.49-5.50 may appear higher than what 3M purports as its "list price," 3M's constrained
production has created a market for importing 3M masks that are manufactured outside the
United States because they come faster and customers need masks now.
8.
The price initially charged to Tac2 by the supplier of the product was $4.965 per mask.
Tac2 has expressed to customers that if we were able to obtain the masks at a lower price
in the future, Tac2 would pass those savings on to the customer in full. I do not know what
Tac2's supplier pays for the product. When one adds-in the upstream supply-chain mark
ups both for things such as insurance, shipping and logistics, as well as their own profit
margins, the price can indeed appear irillated. However, the inflation is neither Tac2's
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