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Cases & Deals

September 22, 2017

Texas Judge Throws Out Qui Tam Whistleblower Case Against Kimberly-Clark and Halyard Health

On September 22, 2017, a federal court in Texas dismissed a qui tam suit brought against Kimberly-Clark and Halyard Health by a former employee alleging that the companies defrauded various federal and state agencies by selling defective surgical products, including MicroCool and Ultra surgical gowns. The employee, Keith Edgett, is a former Global Director of Research and Development at Kimberly-Clark. In moving to dismiss the Edgett suit, King & Spalding argued that the FCA’s first-to-file bar deprived the Court of subject-matter jurisdiction in light of an earlier-filed lawsuit. Although the Edgett complaint contained additional factual allegations about MicroCool, named a new defendant (Halyard Health), and included allegations about a different product (Ultra), Judge Jane Boyle ruled that the earlier filed suit put the government on notice of the purported fraud and alleged “the same material or essential elements.” The Court also agreed with K&S that Mr. Edgett’s allegations concerning non-gown products failed to pass muster under Rule 12(b)(6)’s plausibility standard or Rule 9(b)’s particularity requirement. Lastly, the Court declined to exercise supplemental jurisdiction over Mr. Edgett’s state-law claims and thus dismissed the complaint in its entirety