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Choice-of-Law Analysis for Defendants in Different States; Tay-Sachs Disease Testing


Prior to their marriage, a couple sought genetic testing to determine whether they were Tay-Sachs carriers. The husband was told he was not a Tay-Sachs carrier. The couple was married and had a daughter. When the daughter was seven months old, the girl was diagnosed with Tay-Sachs disease, a genetically inherited, incurable neurological disorder. At the age of three, the girl died of Tay-Sachs disease.

 

The girl’s parents, who were residents of New Jersey at the time they filed suit, but lived in New York during the pregnancy and at the time of their daughter’s birth, sued a New Jersey-based medical testing company. The complaint alleged that the medical testing company’s New York laboratory negligently failed to provide correct blood test results to the father. The medical testing company asserted a third-party claim for indemnification, contribution, and breach of contract against a New York hospital, based on the allegation that the hospital tested the father’s blood sample in New York pursuant to a contract between the hospital and the medical testing company.

 

The girl’s parents also sued several New Jersey domiciled defendants. The complaint alleged that a physician failed to review the father’s genetic testing results and that he negligently advised and treated the mother in New Jersey. The complaint also claimed that a genetic counselor, hospital, and the genetics service division of the hospital negligently advised and treated the mother in New Jersey. The complaint contended that the negligence of the physician, genetic counselor, hospital, and genetics service division deprived the parents of critical information about the father’s status as a Tay-Sachs carrier. The plaintiffs alleged they were consequently denied the opportunity to seek prenatal testing for Tay-Sachs disease and to terminate the mother’s pregnancy. The complaint asserted claims for wrongful birth, wrongful life, negligence, negligent hiring, and medical malpractice.

 

New York law and New Jersey law differ significantly with respect to damages available for wrongful birth claims. A wrongful birth claim, premised on a plaintiff’s lost opportunity to terminate a pregnancy when it is anticipated that the child will suffer from congenital defects, is recognized in the laws of both states. New Jersey recognizes damages for the emotional injury of the parents and the special medical expenses attributable to raising a child with a congenital impairment but not for damages for the birth defect or congenital impairment itself. New York limits damages in wrongful birth cases to the pecuniary expense that the parents have born and must continue to bear for the care and treatment of their infant. New York specifically bars damages for psychic or emotional harm resulting from the birth of the child in an impaired state.

 

The genetic testing company, New York hospital, physician, genetic counselor, New Jersey hospital, and genetics service division moved for a determination that New York law governed the parents’ claims against them.

 

When a conflict of law question arises in the setting of a personal injury case, New Jersey courts use a three-step determination process. First, the court determines whether there is a genuine conflict between the laws of two or more relevant states with regard to a material issue in the case. Second, if there is such a conflict, the court identifies the state that is the place of injury and presumes that the law of that state governs the action. Third, the court determines whether the presumption in favor of the law of the place of injury has been overcome by virtue of the competing state’s more significant relationship to the parties and issues. In assessing the relationship between the competing state and the parties and issues, the court considers four types of contacts and seven factors. The four types of contacts are: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile, residence, nationality, place of incorporation, and place of business of the parties; and (4) the place where the relationship, if any, between the parties is centered. The seven factors are: (1) the needs of the interstate and international systems; (2) the relevant policies of the forum; (3) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue; (4) the protection of justified expectations; (5) the basic policies underlying the particular field of law; (6) certainty, predictability, and uniformity of result; and (7) ease in the determination and application of the law to be applied.

 

The Superior Court, Law Division, Essex County, applied the three step, four contact, and seven factor test to all of the defendants collectively. The trial court considered itself constrained to apply the law of a single state to all of the claims and defenses asserted in this case. The trial court denied the motion to apply New York law.

 

The Superior Court, Appellate Division, reversed. The appellate court undertook separate choice-of-law analyses for the New Jersey and New York defendants. The appellate court reasoned that New York was the state of the couple’s domicile during the pregnancy, the state in which prenatal testing would have been conducted had they been aware of the father’s status as a Tay-Sachs carrier, the state in which the pregnancy would likely have been terminated, and the state in which the baby was born. The appellate court found that the presumption in favor of New York law was overcome with regard to the New Jersey defendants, but not with regard to the medical testing company and the New York hospital. The appellate court concluded that New York law should apply to the claims against the medical testing company and the New York hospital and New Jersey law should apply to the claims against the physician, genetic counselor, New Jersey hospital, and genetics service division.

 

The Supreme Court of New Jersey affirmed. The court held that courts should undertake a defendant-by-defendant choice-of-law analysis when the defendants are domiciled in different states. Also, the court determined the New Jersey defendants’ concern that they could be liable for a disproportionate share of an award of damages for emotional harm was unfounded.

 

Courts should undertake a defendant-by-defendant choice-of-law analysis when the defendants are domiciled in different states. The court reasoned that the three step, four contact, and seven factor test focuses on the state’s relationship to the parties. Where those parties reside in different states, the court’s inquiry under the three step, four contact, and seven factor test may lead to different results. Three of the four contacts direct a court’s attention to each defendant as an individual, not defendants in the aggregate. When a court applies the factors it necessarily considers the nexus between the state and each defendant. For different defendants, a court’s analysis under the contacts and factors could lead to different conclusions. A defendant-by-defendant approach is unlikely to prove impractical, as the trial court would be required to instruct the jury about several different claims even if no choice-of-law issue had arisen. In a complex case with many parties from different states, the trial court retains the discretion to decline a defendant-by-defendant approach.

 

The New Jersey defendants’ concern that they could be liable for a disproportionate share of an award of damages for emotional harm was unfounded. In accordance with the New Jersey comparative negligence act, in negligence actions in which liability is disputed, the factfinder makes two determinations: (1) the assessment of damages and (2) the extent in the form of a percentage of each party’s negligence or fault. Any verdict in the parents’ favor for emotional distress damages could be molded in accordance with the jury’s allocation of fault to all defendants and a New Jersey defendant’s liability for noneconomic damages could be limited in accordance with its percentage share of fault under New Jersey law.

 

The Supreme Court of New Jersey affirmed the appellate court’s defendant-by-defendant choice-of-law analysis.

 

See: Ginsberg v. Quest Diagnostics, Incorporated, et al, 2016 WL 6276914 (N.J., October 26, 2016) (not designated for publication).

 

See also Medical Law Perspectives, July 2016 Report: Unlocking Genetic Secrets: Liability Risks for Genetic Testing and Information Providers

 

See also Medical Law Perspectives, February 2016 Report: Problematic Procreation: Liability Risks in Diagnosing and Treating Infertility

 

See also Medical Law Perspectives, August 2015 Report: Pediatrician Liability for Childhood Disease Complications 

 

 

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