Peruvian Medical Co. Says German Co. Can’t Ditch Virus Suit

Gary E Davidson

Partner, Diaz Reus

By Lauren Berg

Law360 (June 14, 2021, 8:51 PM EDT) — A Peruvian medical equipment wholesaler who claims it was duped into buying counterfeit 3M-branded masks during the pandemic has told a Florida federal judge that the alleged North American arm of a German product-testing company can’t seek dismissal because it isn’t a party to the suit.

THI Medical SAC, based in Santiago de Surco, Peru, said Thursday that TÜV Rheinland of North America Inc. has no right to move for dismissal of the lawsuit because it isn’t named in the dispute nor has it shown that its alleged parent company TÜV Rheinland Group can’t be the entity responsible for responding to the suit.

THI sued Filmore Management Trading LLC and TÜV Rheinland Group in April, alleging that Filmore knowingly sold the Peruvian company $1.7 million worth of counterfeit 3M-branded medical masks as the deadly coronavirus swept around the world. The company said TÜV prepared a fraudulent inspection report, falsely confirming that the masks were authentic.

THI found out it had been duped after 3M filed a complaint with Peru’s National Institute for the Defense of Competition and the Protection of Intellectual Property and the masks were confiscated, according to the complaint. The Peruvian company said it now faces civil penalties and fines, is being sued by its clients and is out millions of dollars.

TÜV Rheinland of North America moved to dismiss the suit in May, arguing that TÜV Rheinland Group is not a legal entity and that TÜV Rheinland of North America is not a subsidiary, according to the motion. But even if TÜV Rheinland Group were a legal entity, THI can’t serve the complaint through TÜV Rheinland of North America, the motion states.

If THI wants to serve a German corporation, it has to do so by following the strictures of the Hague Service Convention, TÜV argued.

But in its opposition Thursday, THI asserts that it has properly named TÜV Rheinland Group as a defendant, saying a simple search of Google and the company’s own website yields several results referring to “TÜV Rheinland Group.”

“The German entity presents itself to the public as ‘TUV Rheinland Group’ and is properly referred to as such,” THI said. “Taking plaintiff’s well-pled allegations in the complaint and simple Google searches of ‘TUV Rheinland Group,’ it is clear that the German entity exists and is therefore on notice of the claims against it.”

THI also argues that it properly served TÜV Rheinland Group by going through its alleged subsidiary, TÜV Rheinland of North America, according to the opposition. The company said Florida allows substitute service on a foreign parent company through its subsidiary company when the plaintiff shows the parent corporation exercised such control over its subsidiary “that the activities of the subsidiary were in fact the activities of the parent within the state.”

TÜV Rheinland of North America is responsible for running all of TÜV Rheinland Group’s North American operations and acts as the parent company’s agent in the U.S., THI asserts.

THI urged the court to deny the motion to dismiss.

Arnd von Waldow of Reed Smith, an attorney for TÜV, told Law360 on Monday that THI’s opposition is “factually and legally misplaced and unavailing: it addresses none of the factual and legal basis for the motion as required.”

Counsel for THI declined to comment.

THI Medical is represented by Michael Diaz Jr., Gary E. Davidson, Roland Potts and Audriana Rodriguez of Diaz Reus & Targ LLP.

TÜV Rheinland of North America Inc. is represented by Sujey S. Herrera, Noah S. Goldberg and Arnd von Waldow of Reed Smith LLP.

The case is THI Medical SAC v. Filmore Management Trading LLC et al., case number 1:21-cv-21632, in the U.S. District Court for the Southern District of Florida.