Largest verdict against device maker? $454 million awarded in hospital gown lawsuit

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Kimberly-Clark Corporation, known for its Kleenex tissues and Huggies diapers, has been hit with a $454 million jury verdict over a lawsuit claiming a former subsidiary misled buyers about the impermeability of its MicroCool surgical gowns.

The gown was made by Halyard Health, which Kimberly-Clark spun off in 2014. It supposedly provided protection against blood-borne diseases like the Ebola virus and HIV. The lawsuit from more than 400 California hospitals and health systems alleged the company knew since 2012 these claims were false and failed to alert consumers or recall the gowns.

“Internal emails and documents from the companies showed employees describing the manufacturing process as ‘crap’ and admitting that they were knowingly using defective and substandard equipment to make the gowns in Honduras,” said a press release from Eagan Avenatti, one of the law firms representing the hospitals. “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, including Ebola and HIV.”

Those safety claims led to the gowns being used by medical professionals in West Africa during the 2014 Ebola outbreak, according to Courthouse News Services.

The jury sided with the hospitals on April 7 in what the plaintiffs call “likely one of the largest verdicts in U.S. history against a medical device maker.”

Kimberly-Clark no longer owns Halyard Health, and its indemnification agreement states Halyard must cover Kimberly-Clark’s losses related to the ruling. Nonetheless, Kimberly-Clark said it will appeal the ruling.

“Nearly 70 million MicroCool gowns have been sold without a single complaint of an injury. The company believes the jury's verdict is contrary to the evidence presented at trial and that its punitive damages award is baseless, excessive and not consistent with California and federal laws. The company therefore intends to challenge the verdict in post-judgment motions in the district court and, depending upon the rulings on those motions, to appeal to the United States Court of Appeals for the Ninth Circuit,” the company said in a press release.