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Kimberly-Clark and Halyard Health Face Class Action Filed Over Defective Surgical Gowns

Jul 19, 2016

Halyard Health and Kimberly-Clark Corporation have been hit with a class action lawsuit on behalf of people who purchased or otherwise acquired Kimberly-Clark and Halyard securities from February 2013 through April 2016. The class action, filed in United States District Court, Southern District of New York, seeks to recover damages caused by the defendants' violations of the federal securities laws.

Halyard sells health care supplies worldwide through its surgical and infection prevention and medical devices divisions, Globe Newswire reports. Halyard markets products directly to hospitals and other health care providers and through third-party distributors. Before October 2014, Halyard was the health care division of Kimberly-Clark. Kimberly-Clark, best known for such products as Kleenex tissues and Huggies disposable diapers, spun off the health care segment as Halyard Health, Inc.

In late 2013, Guinea, followed by Liberia, Sierra Leone, and other West African nations, experienced an outbreak of the deadly Ebola virus. As awareness grew of how Ebola is transmitted, demand surged for personal protective equipment for health care workers and workers who handled the bodies of those who died. They needed eye shields, face masks, and disposable gowns. Halyard produces MICROCOOL surgical gowns.

The legal complaint in the class action says that the defendants failed to disclose that the MICROCOOL surgical gowns consistently failed effectiveness tests and failed to meet industry standards for protection. Surgical gowns must be impermeable so that a patient's blood containing dangerous viruses like Ebola cannot seep through the gown, particularly at the seams. Further, the suit alleges Kimberly-Clark and Halyard knowingly provided defective MICROCOOL surgical gowns to U.S. workers during the Ebola crisis.

On a May 1, 2016, the news magazine 60 Minutes reported that Kimberly-Clark and Halyard knowingly provided defective surgical gowns to U.S. workers at the height of the Ebola crisis. Whistleblower Bernard Vezeau claimed that Halyard's MICROCOOL surgical gowns were prone to leaks and did not consistently meet the industry safety standards for use when treating Ebola patients. Vezeau said that poor safety results, Kimberly-Clark and Halyard "aggressively" marketed the MICROCOOL gowns to hospitals during the epidemic.

Vezeau was the global strategic marketing director for MICROCOOL and other products from 2012 to early 2015. He told Anderson Cooper of 60 Minutes that the MICROCOOL gowns "would leak when we pressure tested them, especially at the seams."

The MICROCOOL gown is supposed to provide the highest level of protection against blood-borne bacteria and viruses. The gown's label says it meets a rigorous industry standard known as AAMI Level 4, which means it is impermeable to blood that could contain not only Ebola virus but also viruses like hepatitis and HIV.

Vezeau said the MICROCOOL gowns did not meet the AAMI Level 4 standards but, to his knowledge, the company did not notify the Food and Drug Administration of the quality issues. Nor were hospitals and other customers warned about the rate of test failures. Vezeau told 60 Minutes that Kimberly-Clark knew that if they informed customers, the company would lose a lot of business.

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