A jury in a U.S. district court ruled that Kimberly-Clark Corp. and Halyard Health Inc. were together liable to pay about $454 million in punitive and compensatory damages, as part of a class-action lawsuit involving their Microcool surgical gowns.
Halyard, which sells Microcool surgical gowns, was spun off from consumer products company Kimberly-Clark at the end of 2014.
While Kimberly-Clark was slapped with $350 million in punitive damages and $3.9 million in compensatory damages, Halyard was held liable to pay $100 million in punitive damages and $261,445 in compensatory damages excluding prejudgment interest.
Bahamas Surgery Center LLC filed the class-action lawsuit in 2014 in the U.S. district court for the Central District of California, alleging that the companies concealed certain information on Microcool resulting in purchasers paying more for the product.
"We believe the verdict is not supported by the facts or the law, and we intend to challenge it through post-trial motions and, if necessary, on appeal to a higher court," Halyard said in a statement.
Halyard expects the court to reduce the award of punitive damages to align with constitutional limits.
Kimberly-Clark also said it intends to challenge the verdict, adding that it has an indemnification agreement with Halyard, under which Halyard must cover Kimberly-Clark's losses, claims and expenses related to the litigation.