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Global health and hygiene giant Kimberly-Clark Corp. has agreed to pay $4.15 million to settle a long-running False Claims Act lawsuit that accused the company of misrepresenting the protective capabilities of its surgical gowns. The settlement resolves allegations made by Dr. Hrayr Shahinian, a Los Angeles-based surgeon who filed the case on behalf of the federal government.

The stipulation and proposed order, filed Wednesday, outlines that $2.77 million of the total amount is to be paid as restitution to the U.S. government. Shahinian’s share—commonly known as a relator award—will be determined in a separate agreement.

Allegations of Medical Misrepresentation

Shahinian, the whistleblower, alleged that Kimberly-Clark falsely marketed its AAMI Level 4 MicroCool surgical gowns as providing full protection against infectious diseases and bodily fluids—even though internal data allegedly showed the gowns failed industry safety tests and didn’t meet regulatory benchmarks.

Filed initially in 2014, the complaint painted a picture of corporate recklessness in medical device claims, especially poignant in light of public health crises where PPE efficacy is paramount.

Kimberly-Clark, for its part, denied all wrongdoing in the settlement and emphasized that the case involved a healthcare business unit it sold over a decade ago.

“We are pleased to have reached a settlement to resolve this civil matter filed in 2014,” the company said in a statement. “Kimberly-Clark is deeply committed to the safety and quality of our products.”

Government Stayed but Watched

Although the U.S. government initially declined to intervene in 2016, it took a renewed interest in January 2021, requesting and receiving a court-ordered stay—indicating an ongoing internal probe into similar allegations.

Court documents reveal the stay was sealed, but Shahinian moved to lift it in 2023, citing a need for case progression. The prolonged silence from the government suggested behind-the-scenes evaluation that may have added pressure for settlement talks.

Legal Firepower on All Sides

Kimberly-Clark tapped Covington & Burling LLP for its defense, with a team including Matthew J. O'Connor, Matthew F. Dunn, and Teresa S. Park. Representing Shahinian were whistleblower specialists Andrew Stolper and Jason M. Frank of Frank Sims & Stolper LLP.

The U.S. government’s interests were safeguarded by Bilal A. Essayli, David M. Harris, Jack D. Ross, and Hunter B. Thomson of the U.S. Attorney’s Office for the Central District of California.