United States District Court, N.D. California
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE.
wrongful-birth action involving the sale of human semen for
artificial insemination, one defendant moves to dismiss. For
the foregoing reasons, the motion is Granted in part and
Denied in part.
Jane Doe One & Jane Doe Two.
Jane Doe One and Jane Doe Two, a same-sex couple, resided and
continue to reside in San Francisco. In 2004, they registered
to use xytex.com, a website operated by defendant Xytex
Corporation. Xytex, through its website, sold human semen for
use in artificial insemination. At the time, Xytex's
website declared that it is “an industry leader in
reproductive services with a commitment to unsurpassed
quality controls, ” and that the donors' personal
health and family history are carefully screened through a
comprehensive medical process developed by the Centers for
Disease Control and Prevention. Additionally, the website
proclaimed that Xytex's “FDA-mandated screening and
testing also ensures our donors' continued good
health.” It further represented that the screening
process was so thorough that a mere “1 percent of the
men that inquire about being a donor candidate are evaluated,
” and, ultimately, “[f]ewer than 5 percent of the
candidates become donors” (Compl. ¶¶ 2, 17).
plaintiffs heard about Xytex through friends and visited
Xytex's website. Plaintiffs were impressed by the
aforementioned screening procedures described on the website.
From looking at the website, plaintiffs got the impression
that Xytex seemed to be the sperm bank with the most rigorous
qualification standards. Plaintiffs reached out to Xytex and
spoke with Mary Hartley, a Xytex representative. They asked
her if she knew of any Xytex sperm donors that had a
particularly impressive health and education history. Hartley
immediately singled out a specific sperm donor, Donor #9623,
and stated that although Xytex has not yet published his
profile on their website, his sperm had already been used to
successfully inseminate women and it would be sold out as
soon as his profile was published. Hartley also claimed that
Donor #9623 was “ultra intelligent” and that he
looked “like a model.” “Moments
after” the phone conversation, Jane Doe One and Jane
Doe Two purchased sperm from Donor #9623 (id.
Xytex sent the sperm to San Francisco, licensed independent
medical professionals introduced sperm from Donor #9623 into
plaintiff Jane Doe One in an artificial insemination
procedure. Approximately nine months later, Jane Doe One gave
birth to P.S. At the time of the complaint, P.S. was nine
years old (id. ¶ 33).
April 2015, Jane Doe One and Jane Doe Two saw an article on
the website for the Associated Press that discussed a lawsuit
that had been filed against Xytex, specifically referencing
to Donor #9623. The article revealed that their sperm donor,
Xytex Donor #9623, was a mentally ill schizophrenic felon,
who had pled guilty to residential burglary. Plaintiffs
learned that Donor #9623 had dropped out of college and held
no degrees whatsoever. They also discovered that Xytex had
altered Donor #9623's photos, removing a large facial
mole (id. ¶ 34).
to plaintiffs' discovery of Donor #9623's medical and
criminal history, Jane Doe One sent an email to Ronda Drake,
an agent of Xytex and expressed her concern regarding the
fact that Donor #9623 was a diagnosed schizophrenic. In
response, Drake said that she was not aware “of any
reported medical issues, ” related to Donor #9623.
Additionally, Jane Doe One received an email from J. Todd
Spradlin, the Chief Medical and Laboratory Director for
Xytex, in which Dr. Spradlin said that he had “received
no information to confirm that Donor #9623 has
schizophrenia.” Spradlin also said, in the same email,
that it “would be irresponsible of Xytex to notify
clients of unsubstantiated claims” (id.
Xytex and Donor #9623.
#9623 first came to the Xytex office in late 2000. At that
time, he worked as a janitor/waiter, who had dropped out of
school. Prior to selling his sperm to Xytex, Donor #9623 had
been hospitalized, as an adult, for mental health reasons on
at least two separate occasions. During these
hospitalizations, which sometimes lasted for more than two
weeks, the medical staff of two different hospitals diagnosed
Donor #9623 with psychotic schizophrenia, narcisstic
personality disorder, and significant grandiose delusions
(id. ¶¶ 21-22).
“rigorous qualification procedure” included
filling out a questionnaire on his first visit and undergoing
a ten-minute physical examination, in which the examining
physician did not discuss Donor #9623's physical or
mental health history. Donor #9623 told Hartley that he
thought his IQ was about 130, but Hartley “suggested to
him that he was a genius with an IQ of about 160.”
Hartley further told him that the more educated donors did
well selling their sperm, and that Xytex usually dealt with
donors with higher education. Two weeks after the initial
visit in 2000, Donor #9623 won approval to be a Xytex sperm
donor (id. ¶¶ 22-23).
Xytex represented Donor #9623 as a healthy, intelligent, and
highly educated sperm donor, he underwent hospitalization for
mental health problems and got arrested on numerous occasions
for burglary, trespassing, DUI, and disorderly conduct. In
2002, Donor #9623 was found to be disabled for his
schizophrenia and placed on full Social Security Disability
(id. ¶ 24). Xytex alleged that it had no
knowledge of either Donor #9623's medical or criminal
Jane Doe One and Jane Doe Two have come to discover that
“their child needs counseling.” Additionally,
Jane Doe One and Jane Doe Two have each attended conferences
regarding best practices “for parents in their
situation, ” suffered stress and worry, and been
required to, and will be required to, expend funds to
evaluate and care for their child to ensure that should she
become schizophrenic, she will have the best care possible
(id. ¶ 37).
* * *
April 2016, plaintiffs filed their complaint in San Francisco
County Superior Court. Plaintiffs alleged claims for
intentional misrepresentation, negligent misrepresentation,
strict products liability, products liability based on
negligence, breach of express warranty, breach of implied
warranty of merchantability, battery, negligence, false
advertising, wrongful birth, specific performance, punitive
damages, and violations of the California Unfair Competition
action was removed to federal court here in San Francisco on
June 1, 2016, based on diversity jurisdiction (Dkt. No. 1).
One defendant moved to enforce a forum-selection clause in
the usage agreement on its website (Dkt. No. 11). An order
rejected defendant's argument that they had provided
reasonable notice of the usage agreement but allowed
discovery into whether plaintiffs had actual notice of the
agreement (Dkt. No. 27). The parties' briefs following
that discovery revealed inappropriate conduct at the
deposition of one of the plaintiffs by counsel for both
sides, so the Court held an evidentiary hearing to complete
the testimony, then invited supplemental briefing (Dkt. No.
45). After the evidentiary hearing, while the supplemental
briefing proceeded, defendant brought a motion to stay
discovery pending review of its petition to consolidate this
action with several others in multi-district litigation which
was granted in part (Dkt. No. 60). The Judicial Panel on
Multidistrict Litigation decided not to institute a
multidistrict litigation and the partial stay was lifted
(Dkt. No. 69). Now Xytex moves to dismiss. This order follows
full briefing and oral argument.
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face. Ashcroft v.
Iqbal, 556 U.S. 662 (2009). A claim is facially
plausible when there are sufficient factual allegations to
draw a reasonable inference that the defendant is liable for
the conduct alleged. While a court “must take all of
the factual allegations in the complaint as true, ” it
is “not bound to accept as true a legal conclusion
couched as a factual allegation.” Id. at
1949-50 (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007)) (internal quotation marks omitted).
“[C]onclusory allegations of law and unwarranted
inferences are insufficient to defeat a motion to dismiss for
failure to state a claim.” Epstein v. Wash. Energy
Co., 83 F.3d 1136, 1140 (9th Cir. 1996) (citation
California recognizes the tort of “wrongful
birth.” Turpin v. Sortini, 31 Cal.3d 220
(1982). The essence of the tort is negligence by a
professional service provider leading to a problematic birth.
Before addressing the challenge to the wrongful birth claim
for relief, however, this order will address the challenge to
plaintiffs' intentional and negligent ...