In what may be one of the largest verdicts in U.S. history against a medical-device maker, a federal jury on Friday hit Kimberly-Clark and Halyard Health with a $454 million fraud verdict after finding the companies misled California buyers about the impermeability of their MicroCool surgical gowns.
The class-action lawsuit, Bahamas Surgery Center, LLC v. Kimberly-Clark Corp et al, was filed in Los Angeles in United States District Court in October 2014 by more than 400 hospitals and health centers in California, alleging that the defendants had committed fraud in the marketing and sale of their MicroCool Breathable High Performance gowns.
The suit claimed that the companies had falsely represented to the FDA, healthcare workers and the public that MicroCool gowns were impermeable and protected against such blood-borne diseases as Ebola and HIV despite the fact that the companies had known since 2012 that the gowns were defective, failed industry tests and didn't meet relevant standards.
K-C introduced its MicroCool brand in 1998, and in 2012 it unveiled the MicroCool Breathable High Performance gown. The company claimed the gown met the requirements for the Association for the Advancement of Medical Instrumentation's Level 4 designation completely impervious throughout the "critical zone" in the front of the gown.
Rashel Campos, RN, administrator of the Bahamas Surgery Center in Bakersfield, Calif., which is a plaintiff in the case, testified in her deposition that in her center, surgeons experienced strike-through several times. "There were times when our surgeons had removed their gowns, and they were wet or bloody and then (had) to shower and put on new scrubs," says Ms. Campos.
An 8-person jury rendered the unanimous verdict after the 2-week trial. Among the damning evidence were internal e-mails and documents from the companies in which employees described the manufacturing process as "crap" and admitted that they were knowingly using defective and substandard equipment to make the gowns in Honduras, says attorney Michael Avenatti of the firm Eagan Avenatti.
"Instead of recalling the gowns and disclosing the truth, the companies concealed what they knew, fired employees who knew too much and continued promoting, marketing and selling the gowns by stating they were impermeable, even going so far as to recommend that the gowns be used when treating patients with serious infectious diseases," says Mr. Avenatti.
Halyard will cover the entirety of the $454 million award under an indemnification agreement between the 2 defendants. Kimberly-Clark said in a statement yesterday that it would appeal the verdict, which it called baseless and excessive. The company says nearly 70 million MicroCool gowns have been sold without a single injury complaint.