Hospital Surgical Gown Provider Convicted in $454 Million Fraud Case.

Date posted: April 28, 2017

The Los Angeles Times recently reported that a Los Angeles federal jury convicted Kimberly-Clark Corp. and its medical technology firm Halyard Health Inc. of fraudulent misrepresentation involving their MicroCool surgical gowns.  The class-action lawsuit was filed on October, 2014 on behalf of persons and entities in California.  The verdict was issued on April 7, 2017, after a nine-day trial.  Over 400 California hospitals and health centers claimed that the gowns were falsely represented as providing the highest level of liquid barrier protection.  The gowns were marketed as “impermeable” and protective against deadly pathogens such as Ebola.  The trial verdict resulted in a jury award of $454 million in compensatory and punitive damages.  The jury ordered Kimberly-Clark to pay $3,889,327 in compensatory damages and $350 million in punitive damages.  Additionally, Halyard Health was required to pay $261,445 in compensatory damages and $100 million in punitive damages.

An attorney for the class, Michael Avenatti, told jurors that many Kimberly-Clark Corp. employees knew that the gowns were not compliant with safety standards and posed a risk to users.  During the trial, the class presented an array of internal company documents stating concerns about the quality of the gowns.  These included e-mails, chat messages and a 2013 presentation to the chairman and CEO indicating that 80 compliance challenges were posed by the gowns.

Kimberly-Clark said in a recent statement that it would appeal the verdict, which it called baseless and excessive.  The company stated that nearly 70 million MicroCool gowns have been sold and that there are “zero” reported incidents in which their gown failure resulted in an injury or infection.

The News Article can be found at:

http://www.latimes.com/business/la-fi-hospital-gowns-20170410-story.html.

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