It was a shocking case, once featured on “60 Minutes” -- A world-renowned medical supply company was accused of knowingly marketing faulty medical gowns that were used in performing critical surgeries and even treating Ebola and HIV victims.
The class action suit, brought against Kimberly-Clark and a spin-off company in federal district court in Los Angeles in late October 2014, accused the two companies of misleading healthcare workers, the U.S. Food and Drug Administration and the public regarding the safety of their “MicroCool Breathable High-Performance Surgical Gowns.”
Lawyers from the firm of Eagan Avenatti who brought the class action suit described the Dallas-based Kimberly-Clark -- best known for manufacturing Kleenex -- as willing to put profits ahead of the lives of thousands of doctors and medical staff and first responders throughout the country and the world.
They demanded a guilty verdict and $500 million in compensation.
Late last Friday, a jury came back with a unanimous verdict: Kimberly-Clark Corp. and Halyard Health Inc., the spin-off company, had indeed misled the medical profession with its faulty gowns and would have to pay $454 million in penalties.
The verdict by an eight-person federal court jury came after the presentation of extensive evidence in a two-week trial. The lawsuit charged that during lab tests the gowns failed at rates that “greatly exceeded” acceptable levels, allowing liquid, bacterial and viral pathogens to penetrate the products, risking the lives of doctors, nurses, medical technicians and other hospital professions.
Kimberly-Clark executives knew about the problems since at least 2013 and yet continued to sell the flawed medical gowns. Indeed, internal company e-mails and documents from the companies revealed employees describing the manufacturing process as "crap" and acknowledging that they were knowingly using defective and substandard equipment to make the gowns in Honduras.
But instead of recalling the tens of millions of flawed gowns and revealing the truth to the public, the lawsuit claimed the companies concealed the information.
On Monday, Kimberly-Clark announced that it would challenge last week’s verdict. The company said in a statement that it believes the jury’s verdict was contrary to the evidence presented at trial and that the punitive damages awarded were baseless and excessive. “Nearly seventy million MicroCool gowns have been sold without a single complaint of an injury,” Kimberly-Clark insisted.
Lawyers say the damages may be among the largest ever awarded to a plaintiff in a case brought against a U.S. medical device manufacturer. Undoubtedly, the verdict has given Kimberly-Clark a huge public relations black eye.
But the mega-manufacturer may escape having to pay even a dime in penalties. That’s because, pursuant to an indemnification agreement between the two defendants, Halyard Health is obligated to pay the entirety of the $454 million awarded by the jury.