Kimberly-Clark has reportedly filed a Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit against the recycling company it hired to dispose of more than 1 million tampons that failed to meet Kimberly-Clark’s specifications and quality standards, alleging that the recycler fraudulently diverted the products to the "grey market" where they were offered for sale on resellers’ Websites. Kimberly-Clark Global Sales LLC v. Balcones Recycling Inc., No. 13-262 (U.S. Dist. Ct., E.D. Ark., filed April 30, 2013).
According to a news source, the materials that Kimberly-Clark provided to Balcones were intended to be recycled into fuel cubes, and Balcones assured the tampon maker that all of the products had been destroyed by means of secure disposal methods. Kimberly-Clark apparently discovered instead that "defendant Balcones facilitated and/or enabled the Doe defendants to sell the tampons to unknowing consumer[s] on the grey market, including over the Internet … [and thus] engaged in a pattern of fraudulent conduct" that defrauded both Kimberly-Clark and consumers "who believed they were purchasing Kotex products that met Kimberly-Clark’s demanding safety standards." The company claims that it began purchasing cases of the tampons once it learned of the improper Internet sales to remove them from the market. It seeks at least $2.4 million in actual damages, as well as punitive damages for RICO violations, fraud, breach of contract, and deceptive trade practices. See Courthouse News Service, May 2, 2013.