Fashion label says Cuomo administration stiffed it out of $10.4M for PPE

Fashion

The CEO of a New York fashion company says the Cuomo administration fleeced her out of $10.4 million — refusing to pay for an order of PPE she delivered during the height of the COVID-19 pandemic, according to a lawsuit filed Thursday.

State representatives allegedly used “bullying” and misogynistic tactics to rip off Laws of Motion, a woman-run, NY-based label — leaving it on the brink of collapse, the filing states.

“The Cuomo administration had been deliberately obstructionist — all in a very clear attempt to avoid payment and systemically work to silence and destroy anyone they felt superior to,” CEO Carly Bigi told The Post.

Her company struck a $26.4 million deal with the administration in early April 2020 for an expedited order of 2.4 million surgical gowns, according to the suit, filed in the New York State Court of Claims.

At the time, the Empire State was facing a critical shortage of PPE and some health care workers were even forced to wear trash bags as gowns, The Post reported then.

“We were going to do everything we could to help,” Bigi said.

Her staff worked at “rocket speed” to prepare a proposal and samples to send to the state, she said. Payment terms required the state to pay 75 percent up front and 25 percent upon delivery of the gowns.

Carly Bigi, the CEO of Laws of Motion.
Laws of Motion CEO Carly Bigi is seeking at least $33M for breach of contract and other claims.
Laws of Motion

Initial payment terms required the state to pay 50 percent up front upon contracting and 50 percent upon delivery of the gowns. The state then quickly added a second order, with terms requiring the state to pay 75 percent up front and 25 percent upon delivery of the gowns.

By June 3, the company had completed the orders, overcoming “significant logistical hurdles in order to make the expedited delivery needed by NYS,” the filing states.

Under the contract, the state had two weeks to inspect the gowns upon receipt, and if any defects were found, Laws of Motion would have the opportunity to recall, inspect and fix them. 

But after allegedly accepting and using the gowns for weeks, the state claimed that there were “quality issues” with the goods and refused to pay out its balance of $10.45 million.

Bigi, a Columbia Business School graduate, said the behavior was emblematic of the Cuomo administration’s alleged culture of bullying and intimidation.

“This is all part of their strategy … and their culture of bullying women and small business owners,” she said. “This is all a very clear tactic and part of their obstructionist behavior — we won’t stand for it.”

The state’s actions caused her company to “lose other customers and business opportunities, resulting in significant financial and reputational damages,” the suit states.

She is seeking at least $33 million for breach of contract and other claims.

“Laws of Motion has repeatedly offered to replace any defective gowns to the extent any quality issues are actually identified and proven,” the filing states.

However, the state instead filed a complaint with the US Food and Drug Administration about the gowns — leading the agency to issue an alert in August, saying there was a “potential safety issue” with the goods, the suit alleges.

“As a result of the FDA alert instigated by NYS and the other actions of NYS described herein, Laws of Motion lost existing customers and prospective business relationships.”

Even before claiming the gowns were faulty, state reps “acted with particular animosity” towards Laws of Motion in an effort to “intimidate” the business into discounting the already agreed-upon contracts, the court document says.

Rolls of material Laws of Motion used to make PPE for New York State.
Rolls of material Laws of Motion used to make PPE for New York state.
Laws of Motion

Sean Carroll, the Chief Procurement Officer for the state’s Office of General Services, allegedly had a call with Bigi in late May in which he “used a “bullying and condescending posture” to get the company to accept a lower or delayed payment on its invoices, according to the lawsuit.

“I’ve never been spoken to like that in my life,” Bigi recalled. “He assumed because I was a woman I was unfit to run my company.”

Michael Pasinkoff, the Special Counsel for Ethics, Risk and Compliance with the state Division of Human Rights, also allegedly referred to Bigi “in a condescending manner as ‘that woman’” during the dispute over the gowns, the court docs allege.

A spokesman for Gov. Andrew Cuomo said the gowns failed to meet requirements agreed upon in the contracts.

“The products delivered by this company were not only nonconforming to the requirements of the contract, but were also largely unusable for any medical purpose,” Rich Azzopardi said in a statement.

“This is a gross misrepresentation of both the contract and the quality of the gowns delivered, and [Laws of Motion] repeatedly offered to repalce any gowns that the parties agreed was potentially non-conforming. But the state was more interested in smearing our company and denying us payment, than ever engaging in a good faith discussion about delivering more PPE to New York’s healthcare workers,” Bigi told The Post when asked for a response.