US jurist won’t stay denial of forced arbitration in fertility clinic litigation

A federal jurist said Thursday she will not stay her order denying forced arbitration sought by a fertility clinic accused of gross negligence after losing thousands of frozen eggs in a cryogenic tank malfunction.

U.S. Magistrate Judge Jacqueline Scott Corley of the Northern District said those who have potentially lost their eggs must now make timely reproductive decisions and could suffer irreparable harm if the trial is put on hold while defendants appeal her order denying forced arbitration.

While Pacific Fertility Center has an existing arbitration agreement with patients, two other defendants seeking to compel arbitration, do not, according to the order.

"Unlike defendants, the harm to plaintiffs is not economic -- it is time and information," Corley wrote in her order, "information regarding the viability of their eggs and embryos and a finite period of time in which they can make reproductive related decisions based on that information."

Hundreds of potential class members learned in March 2018 a cryopreservation tank at Pacific Fertility holding thousands of their frozen eggs and embryos malfunctioned and their preserved tissue had likely been permanently destroyed, according to the proposed class action. In Re Pacific Fertility Center Litigation, 18-CV01586 (N.D. Cal. Filed March 13, 2018)

Representing the proposed class is Adam E. Polk and Dena Sharp of Girard Sharp LLP, as well as attorneys from Lieff Cabraser Heimann and Bernstein LLP, Peiffer Wolf Carr & Kane, and the Gibbs Law Group LLP.

"We are pleased the court denied the defendants' motion to stay and look forward to continuing to prosecute these important claims to conclusion," Polk said in phone interview Thursday.

The co-defendants without arbitration agreements are Prelude Fertility Inc. -- Pacific's parent company as of 2017 -- and Chart Industries Inc., which makes cryopreservation tanks. Under a theory of equitable estoppel, they argued they should be able to join Pacific Fertility in filing a motion to compel. Prelude also argued, it should be able to enforce arbitration agreements as a third-party beneficiary, based on its status as an assignee or as "designated staff," according to Thursday's order.

Corley disagreed.

She reasoned since plaintiffs' claims against Prelude and Chart are not "founded in," "intertwined with" or "intimately connected to" the agreements they signed with Pacific Fertility, she rejected their attempt to "take advantage of an arbitration agreement to which they are not parties," according to the order.

Filing a motion to stay her order, Prelude and Chart insisted they would be irreparably harmed if proceedings continue while they appeal to the 9th U.S. Circuit Court of Appeals.

Prelude argued it would "irrevocably lose the chance to reap the advantages of arbitration" and Chart insisted, "he potential advantages of arbitration will be lost should litigation continue pending appeal," wrote Corley.

Citing U.S. Supreme Court case, Sampson v. Murray, Corley said a monetary loss in this instance would not be considered "irraparable."

"Key word in this consideration is irreparable,'" wrote Corley. "'Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay are not enough.'" Sampson v. Murray, 415 U.S. 61, 90 (1974).

David Frank McDowell of Morrison & Foerster LLP, who represents Prelude, said he was unable to comment at this time.