Georgia Supreme Court revives some false advertising claims against sperm bank

Norman v. Xytex Corp., — S.E.2d —-, 2020 WL 5752325,
S19G1486 (Ga. Sept. 28, 2020)

Reversing
the court of appeals
, the Georgia Supreme Court allows plaintiffs to bring
false advertising claims against a sperm bank that supplied allegedly falsely
advertised sperm. Even though Georgia rejects any damages in tort “that
necessarily presume that life itself can ever be an injury,” that was not the
plaintiffs’ sole claim. The Normans alleged that Xytex “sold them human sperm
under false pretenses about the characteristics of its donor, and that the
child conceived with that sperm now suffers from a variety of impairments
inherited from the sperm donor.” Result: “claims arising from the very
existence of the child are barred, but claims arising from specific impairments
caused or exacerbated by defendants’ alleged wrongs may proceed, as may other
claims that essentially amount to ordinary consumer fraud.”

Xytex allegedly misrepresented the donor’s educational,
medical, and criminal history, while representing  that it carefully screened the personal
health, criminal history, and family history of all donors; that donors were
put through rigorous physical exams and interviews to confirm the accuracy of
the information donors provided; and that because of its thorough screening
process, fewer than five percent of candidates became donors. Xytex also
represented that it required sperm donors to update their medical history every
six months; that the company would update the donors’ profiles with any new
information; and that, if the company received “medically significant”
information about a donor, it would notify patients who used that donor’s
sperm.  Xytex promoted the donor as one
of its “best” sperm donors “on account of his profile in which he represented
that he was a Ph.D. candidate with an IQ of 160 and had no history of mental
health issues or criminal activity.”

Xytex’s employee allegedly told the donor on his initial
visit that intelligent donors with high levels of education were more popular
sperm donors and encouraged him to exaggerate his IQ and education. Before he
began selling his sperm to Xytex, he had been hospitalized for mental health
treatment and diagnosed with psychotic schizophrenia, narcissistic personality
disorder, and significant grandiose delusions. The child conceived with his
sperm has various medical conditions, including “suicidal and homicidal
ideations, requiring multiple periods of extended hospitalizations.”

Under Georgia law, damages that “categorize life as the
injury” are not cognizable. Claims for the expense of raising a child—even one
with profound disabilities requiring expensive care—are not cognizable because
such damages would have to be premised on the child’s life as the injury. However,
claims for tortious injury sustained prenatally are cognizable, and sometimes
that’s true even for pre-conception injuries.

Some of the damages claimed by plaintiffs were cognizable;
others weren’t. The core theory that they wouldn’t have purchased sperm from
the donor had Xytex revealed the true facts was “a classic wrongful birth claim
because the necessary and direct result of not buying Donor #9623’s sperm is
that A.A. would not exist”; this was barred. [This strikes me as inconsistent
with allowing some claims for pre-conception injuries, but I guess genetic
determinism might do the work here of distinguishing those if you handwave
causation problems (that is: a person who didn’t have teratogenic chemical
exposure before conceiving a child also might not have had sex at the same time
or with the same person, or the specific gametes might have been different, but
they can still make a claim under Georgia law for damage done by that chemical
exposure).]

In addition, other claims deriving from the child’s life are
also barred, such as the costs of pregnancy and raising the child. However,
some damages would be available as long as there was sufficient proof of
causation other than the child’s life. Some damages might stem from plaintiffs’
alleged reliance on Xytex’s representations that it screened the medical and
mental health history of its donors and that it would notify patients who used donor
sperm if the company received any “medically significant” information about the
donor.  “[W]e must accept at this
procedural stage that there may exist some evidence that the Normans relied on
Xytex’s representations in failing to obtain a diagnosis or treatment sooner.”
That could have “exacerbated pain and other symptoms suffered” by the child.

There could also be damages “for the difference in price
between the cost of the sperm they received and the fair market value of the
sperm that Xytex told them they were getting.”  Also, the consumer protection claim “does not
depend on life as an injury.” Georgia’s Fair Business Practice Act prohibits
unfair or deceptive trade practices that harm consumers. “An individual
bringing suit under the FBPA may seek injunctive relief and general damages, as
well as exemplary damages for intentional violations of the Act.” Given the
alleged misrepresentations about the quality of Xytex’s product (sperm) and
services (screening process) to the public, plaintiffs may have suffered
cognizable injury—at a minimum, paying more for the sperm than it was worth.
[Was it worth zero dollars? Could it have been worth negative $100,000?] And
they might be able to enjoin Xytex, or get punitive damages based on the
allegations that a Xytex employee’s “encouraged, if not aided,” the donor to
falsify his background.  

 

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