Laboratory Corp. of America v. Hood

WILNER, J. We have before us three questions of law certified by the United States District Court for the District of Maryland pursuant to the Maryland Uniform Certification of Questions of Law Act (Maryland Code, §§ 12-601 through 12-613 of the Cts. & Jud. Proc. Article). The questions arise from an action by Karen and Scott Hood, Maryland residents, against two North Carolina corporations — Laboratory Corporation of America and Laboratory Corporation of America Holdings, which we shall refer to collectively as LabCorp.

The action is one that is often, but misleadingly, denominated as “wrongful birth.” The Hoods complain that the defendants were negligent in misreading a chromatograph of the DNA from an amniotic fluid specimen extracted from Ms. Hood and erroneously reporting that the fetus was not likely to be affected by cystic fibrosis (CF). Relying on the erroneous report, Ms. Hood elected to continue with the pregnancy, .and that resulted in the birth of their son, Luke, who does ⁶¹¹ have CF. The Hoods now seek to recover damages for the cost of raising and caring for Luke. The questions certified to us are: 1.

In a case where a medical laboratory receives a specimen from a Maryland physician and erroneously interprets the specimen in another State, causing injury in Maryland to Maryland residents, should this court follow the “standard of care” exception in the Restatement (First) of Conflicts of Law § 380(2) and apply the substantive law of the State where the erroneous interpretation took place? 2. Does denying Maryland residents the right to bring a wrongful birth action by applying North Carolina law violate the public policy of the State of Maryland? 3. Where a laboratory analyzes a mother’s amniocentesis specimen and the results are provided to the mother’s physician, but relied upon by both parents, does the laboratory have a sufficient relationship with the father that gives rise to a duty of care? The problem underlying the first two certified questions, and to some extent the third, is that, while Maryland recognizes an action of this kind by the parents, North Carolina apparently does not, and the District Court, which must apply Maryland law, including the Maryland law on conflicts of law, desires to know whether, in the situation at hand and if the action were filed in a Maryland court, we would apply the substantive law of Maryland, where the injury occurred, or of North Carolina, where the negligent acts or omissions took place.

We cannot answer the third question precisely as presented, for to do so might require us to assume certain subsidiary facts that are for the District Court to resolve, but we shall respond in the most helpful way that we can. The basic facts underlying these questions are set forth by the District Court in its Certification Order and in its Memorandum responding to cross motions for summary judgment. The Hoods are Maryland residents. Their first child, Zachary, was born in 1997 and was diagnosed with CF when he ⁶¹² was two.

In the present state of medical science, persons with CF are doomed to suffer from lung, gastrointestinal, pancreatic, heart, and other organ diseases, and rarely live beyond their mid-30s. In order to develop CF, a child must receive a particular gene mutation from both parents. After Zachary was diagnosed, the Hoods learned that they both carry the recessive delta F508 gene mutation that causes one of the most severe forms of CF. Because they are both carriers of that mutation, each of Karen’s pregnancies carries a 25% risk of the child having CF.

In 1999, Ms. Hood became pregnant again, and she and her husband were referred by Ms. Hood’s obstetrician to a genetic counselor. Genetic testing performed on the fetus revealed that it had CF, whereupon Ms. Hood terminated the pregnancy. In August, 2001, she became pregnant the third time and again decided to have the fetus tested. The Hoods had already made the decision to terminate the pregnancy if the fetus tested positive for CF.

On November 27, 2001, Ms. Hood had an amniocentesis performed, in Maryland, by her obstetrician, Thomas Pinkert. LabCorp operates a nationwide network of 35 primary testing locations and more than 1,100 patient service centers, eight of which are located in Maryland. Although it receives specimens from physicians and from its various patient service centers throughout the country, LabCorp performs all of its genetic testing on amniotic fluid at its Center for Molecular Biology and Pathology in North Carolina. The company markets genetic testing services to couples such as the Hoods.

Before the specimen taken from Ms. Hood was sent to Lab-Corp for testing, the Hoods’ genetic counselor, Amy Kimball, who worked in Dr. Pinkert’s office in Maryland, informed LabCorp that both Karen and Scott Hood carried the CF gene. The sample was sent to the LabCorp facility in North Carolina, where the DNA in it was subjected to a chromatograph that was analyzed by two LabCorp employees, Marcia Eisenberg and Nicholas Brown. ⁶¹³ In conformance with the analysis done by Eisenberg and Brown, LabCorp reported to Dr. Pinkert that, although both parents were carriers of the delta F508 mutation, the amniotic fluid was negative for 31 common CF genetic mutations, and “[t]his fetus is not expected to be a carrier of cystic fibrosis or be affected by cystic fibrosis.” Pinkert sent the report to the Hoods. Based on the LabCorp report, the Hoods elected to continue the pregnancy, resulting in the birth of Luke on May 3, 2002. Three months later, the child was found to be positive for CF.

In September, 2002, LabCorp issued a corrected report which noted that the original chromatograph did, indeed, demonstrate that the fetus was positive for the delta F508 mutation that causes CF — the box containing the word “del F508” was marked with an asterisk, indicating that the fetus had CF — and stated that Eisenberg and Brown had misread the chromatograph. The District Court issued a partial ruling on the cross-motions for summary judgment. In that ruling, the court held that, under Maryland law, the Hoods’ action was for negligence, not breach of contract, and that the Maryland law of negligence therefore applied. The court observed that, in diversity cases, such as the one at hand, it was obliged to apply Maryland’s choice of law rules and determined that Maryland adheres to lex loci delicti principles for all tort claims, i.e., we apply the law of the place where the tort or wrong was committed.

It concluded that, under our application of those principles, the place where the last event required to give rise to the tort occurred determines the law that should apply, that in personal injury claims the last event required to give rise to the tort is the injury, and that the injury in this action occurred in Maryland, where Luke was born. LabCorp asserted in the District Court that, even if lex loci delicti principles apply, the court should recognize the exception to those principles enunciated in Restatement (First) of Conflict of Laws, § 380(2). Section 380(2) states: “Where by the law of the place of the wrong, the liability-creating character of the actor’s conduct depends upon the ⁶¹⁴ application of a standard of care, and such standard has been defined in particular situations by statute or judicial decision of the law of the place of the actor’s conduct, such application of the standard will be made by the forum.” Labcorp’s argument was that its potential liability flows from the issuance of the erroneous report by Eisenberg and Brown, that any breach of the standard of care therefore occurred in North Carolina, and that, under § 380(2), North Carolina law should dictate whether those employees breached a duty owed to the Hoods. Labcorp posited, and the court acknowledged, that the U.S. Court of Appeals for the Fourth Circuit had assumed that Maryland would recognize the § 380(2) exception in negligence cases.

See Farwell v. Un, 902 F.2d 282 (4th Cir.1990). The District Court pointed out, however, that this Court had never determined whether that exception should apply, and that is what led it to certify the first question. Whether Maryland or North Carolina law applies is critical to the Hoods’ case. In Azzolino v. Dingfelder, 315 N.C. 103 , 337 S.E.2d 528 (1985), the North Carolina Supreme Court held that the parents of a child born with even severe birth defects did not suffer any legally cognizable injury, and thus the Hoods’ action could not succeed under North Carolina law.

In Reed v. Campagnolo, 332 Md. 226 , 630 A.2d 1145 (1993), responding to a certified question from the U.S. District Court, we adopted a completely opposite point of view, noting that “[t]he Azzolino analysis does not recognize even the economic impact on the parents and, in that respect, is contrary to Maryland law.” Id. at 238 , 630 A.2d at 1151 . That divergence forms the basis of the second certified question. If application of Restatement § 380(2) would ordinarily cause North Carolina law to be applicable in this case, would Maryland nonetheless refuse to apply that law on the ground that it would be contrary to Maryland public policy to deny a Maryland resident, suing in a Maryland court for a wrong committed in Maryland, a remedy recognized in this State. ⁶¹⁵ Finally, for our purposes, LabCorp contended that, even if Maryland law were to apply, that law would provide a remedy only to Karen, not to her husband, Scott — that the decision whether to terminate the pregnancy was Karen’s alone and that, in any event, a physician’s duty runs only to his or her patient and the physician owes no cognizable duty to a patient’s spouse. Uncertain whether our decision in Dehn v. Edgecombe, 384 Md. 606 , 865 A.2d 603 (2005) would preclude a cause of action by Scott, the court certified the third question.

Standard of Care Exception in Restatement § 380(2) Unlike most other States, which have abandoned the lex loci delicti approach espoused in §§ 378-390 of the Restatement (First) of Conflict of Laws in favor of the “significant contacts” test enunciated in §§ 6, 145, and 146 of the Restatement (Second) of Conflict of Laws, Maryland continues to adhere generally to the lex loci delicti principle in tort cases. Under that approach, where the events giving rise to a tort action occur in more than one State, we apply the law of the State where the injury — the last event required to constitute the tort — occurred. See Philip Moms v. Angeletti, 358 Md. 689, 744-47 , 752 A.2d 200, 230-32 (2000); Hauch v. Connor, 295 Md. 120, 123-25 , 453 A.2d 1207, 1209-10 (1983); White v. King, 244 Md. 348, 352 , 223 A.2d 763, 765 (1966). In maintaining our allegiance to the lex loci delicti approach, we have continued to follow the principles stated in the Restatement (First) of Conflict of Laws.

See Philip Morris, supra, 358 Md. at 745, n. 25 , 752 A.2d at 231, n. 25 , confirming the observation of the Court of Special Appeals in Black v. Leatherwood, 92 Md.App. 27, 41 , 606 A.2d 295, 301 , cert. denied, 327 Md. 626 , 612 A.2d 257 (1992) that “[bjecause Maryland is among the few states that continue to adhere to the traditional conflict of laws principle of lex loci delicti, the First Restatement of Conflict of Laws, while of merely historical interest elsewhere, continues to provide guidance for the determination of lex loci delicti questions in Maryland.” Our articulation of the doctrine mirrors that of the initial version of ⁶¹⁶ the Restatement, and we have often cited to that work as authority for our holdings. Section 380 is part of the series of sections articulating the doctrine. Section 377 defines the “place of wrong” as the place where the last event necessary to make an actor liable for an alleged tort takes place, which in this case, as the District Court correctly determined, is Maryland. Section 378 declares that the law of the place of wrong determines whether a person has sustained a legal injury; § 379 makes that law determinative of whether a person is responsible for unintended harm; § 383 applies that law in determining causation; § 385 applies that law in determining whether contributory negligence precludes recovery in whole or in part; § 386 applies that law with respect to the “fellow servant” rule; § 387 applies it in determining vicarious liability; § 388 applies it to defenses; § 390 applies it to whether an action survives the death of the tortfeasor or the injured person.

In this mix is § 380, which deals with standard of care. Section 380(1) states the general rule that “where by the law of the place of wrong, the liability-creating character of the actor’s conduct depends upon the application of a standard of care, the application of such standard will be made by the forum in accordance with its own rules of evidence, inference and judgment.” In other words, the substantive standard of care to be applied is that of the place of wrong, but its application to the facts presented to the forum court is to be determined in accordance with the rules of evidence, inference, and judgment of the forum State. Section 380(2) carves out a limited exception to that rule. If, under the law of the place of wrong, the liability-creating character of the actor’s conduct depends upon the application of a standard of care “and such standard has been defined in particular situations by statute or judicial decision of the law of the place of the actor’s conduct, such application of the standard will be made by the forum.” (Emphasis added).

These principles are clarified in two comments to § 380. Comment a., which explains the general principle in § 380(1), begins by recalling that, under the rule stated in § 379, the ⁶¹⁷ liability-creating character of the actor’s conduct is determined by the law of the place of wrong. The comment then notes the obvious proposition that, where the law of the place of wrong prescribes a standard of care by which the actor’s conduct is to be judged, “the application of such standard to the facts in a particular case must necessarily be made by a fact-finding body at the forum in accordance with local procedure.” Thus: “[I]f the general standard of the conduct of a reasonable man has not been defined by statute or judicial decision of the [Sjtate of acting, the question whether the actor’s conduct is negligent is decided by the forum in accordance with its own rules of evidence, inference and judgment. Negligence is lack of due care under the circumstances; and what care should be given under certain circumstances is a question for adjudication in each particular case.

The tribunal at the forum will decide this question and will not be influenced by the fact that another court, even the court of the [Sjtate where a defendant acted, would have come to a different conclusion on the facts proved.” Comment b., captioned “Negligence per se and breach of statutory duty,” explains the exception in § 380(2): “If, by the law of the place of the actor’s conduct, the general standard of due care has been defined by judicial decision so as to pronounce certain conduct, as specific acts or omissions, to be or not to be negligent, the forum will apply the standard in the same manner although under the local law the case would have been for the judgment of the jury on the facts in question. So too, if by statute or other legislative enactment of the [Sjtate of the actor’s conduct the general standard of due care has been narrowed in a particular situation, the forum will make a similar application of the standard of care although under the local law the case would have been one for the jury because no such statute there existed.” (Emphasis added). As explicated in these comments, for a State that follows the lex loci delicti rule, both the general provision in ⁶¹⁸ § 380(1) and the limited exception in § 380(2) make perfectly good sense. If the standard of care under the law of the place of acting is simply that of reasonableness, either general reasonableness or reasonableness for a person in the defendant’s position, and there is no more particular guidance under that law with respect to the application of that standard to the facts at hand, the forum court would have to determine from the facts presented to it and in accordance with its own procedures whether that standard has been met.

If, on the other hand, the State where the acts were committed has determined, either by judicial decision or statute, that a person who commits those acts either has, or has not, breached the applicable standard of care and therefore either is, or is not, negligent as a matter of law, the forum court must act in conformance with that judicial decision or statute, even if its own law, or the law of the place of wrong, is different. 1 LabCorp suggests an unfairness to that approach, but we perceive no unfairness. A person who commits a tort in another State should, as a general rule, be hable in accordance with the law of that State — where the harm was done. The narrow exception, that requires looking to the law of the State where the conduct was committed, applies only where the existence and nature of the duty or its breach depends on a standard of care and that State, by statute or judicial ruling, has defined the particular conduct as either complying or not complying with the applicable standard of care. The exception gives deference to the notion that, where the law of the place of conduct is so clear and particular, persons in that ⁶¹⁹ place have a right to rely on that law and should not suffer adverse consequences for conforming their conduct to it.

Accordingly, our specific answer to the first certified question is that, where applicable, Maryland does recognize and would apply § 380(2) of the Restatement (first). The question, as framed, is somewhat broader than that, however. It asks whether the District Court should follow the standard of care exception in § 380(2) “and apply the substantive law of the state where the erroneous interpretation took place.” That aspect of the question assumes that, if Maryland would adopt § 380(2), the substantive law of North Carolina would apply. That is not necessarily the case.

We would apply North Carolina law only if and to the extent that such law, by statute or judicial decision, specifically determines the effect of applying the applicable North Carolina standard of care to the facts at hand. If there is a statute or judicial decision in North Carolina that would dictate whether the conduct of LabCorp, through its employees, did or did not breach the applicable standard of care, we would, subject to our conclusion with respect to the second certified question, act in conformance