In Re Pacific Fertility Center Litigation

District Court, N.D. California·Decided June 23, 2020·No. 3:18-cv-01586·Unknown

Opinion

IN RE: PACIFIC FERTILITY CENTER Case No. 18-cv-01586-JSC

ORDER RE: PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION AND CHART’S MOTION TO EXCLUDE Re: Dkt. Nos. 302, 350, 411, 413

Plaintiffs filed this putative class action against Pacific Fertility Center (“Pacific Fertility”), Prelude Fertility, Inc. (“Prelude”), and Chart Industries (“Chart”) alleging various state law claims and jurisdiction under the Class Action Fairness Act. Plaintiffs thereafter filed a First Amended Complaint which added Pacific Fertility MSO, LLC, (Pacific MSO) a Prelude subsidiary, as a defendant. (Dkt. No. 143.) The Court compelled Pacific Fertility’s claims to arbitration. (Dkt. No. 192.) Plaintiffs’ motion for class certification of their claims for negligence and premises liability as to Prelude and Pacific MSO, and strict liability and negligent failure to recall as to Chart is now pending before the Court. (Dkt. No. 302.) After the motion was argued, the parties requested the Court delay issuance of a decision while they engaged in private mediation. The Ninth Circuit Court of Appeals then issued an order reversing the Court’s order denying Prelude and Pacific MSO’s motion to compel arbitration. (Dkt. No. 446.) Thus, at the moment, Chart is the only party whose claims are proceeding here rather than in arbitration and the parties have requested that the Court rule on the pending motion for class certification. Having Plaintiffs’ motion for class certification. A. Factual Background Pacific Fertility provides fertility services including egg and embryo cryopreservation. (Dkt. No. 267 at ¶ 39.) Cryopreservation involves preservation of tissue using cooling techniques. (Id. at ¶ 3.) Plaintiffs engaged Pacific Fertility’s services to cryopreserve their eggs and embryos between 2010 and 2016. (Id. at ¶ 5.) In 2017, Prelude, which runs a national network of egg and embryo storage facilities, took over operation of Pacific Fertility’s egg and embryo storage facilities through its newly created operating subsidiary Pacific MSO. (Dkt. No. 283 at ¶ 31; Dkt. No. 301-14 at 2, 4.1) On March 4, 2018, Pacific Fertility laboratory director Dr. Joseph Conaghan observed liquid on the floor directly beneath one of the clinic’s storage tanks: Tank 4. (Dkt. No. 301-15.) After removing the lid of the tank, the laboratory staff observed that the metal around the neck of tank was “broken and twisted and distorted.” (Dkt. No. 301-7, Conaghan Depo. at 19:19-20.) Staff also discovered that the “liquid nitrogen level in the tank was very low.” (Id. at 109:7-8.) Staff members added liquid nitrogen to Tank 4 and moved the eggs and embryos inside it to a back-up tank. (Dkt. No. 301-15 at 2-3.) Alden Romney, Pacific MSO’s CEO and corporate designee described the tank as “look[ing] like there had been an explosion in the tank. The tank -- a tank would normally have flat walls vertically. And this tank had huge protrusions from those flat walls, extreme distortions of the metal which was shocking.” (Dkt. No. 301-9, Romney Depo. at 42:3-7.) At the time of the incident, Tank 4 contained eggs and embryos from 608 Pacific Fertility customers. (Dkt. No. 301-15 at 5.) All these eggs and embryos were exposed to the temperature increase. (Id.) According to Pacific MSO’s CEO, “the number of successful thaws from frozen embryos [in Tank 4] is lower than historical averages of thaws of frozen embryos at PFC.” (Dkt. No. 301-9, Romney Depo. at 231:23-25; see also Dkt. No. 301-23 at 2 (“[e]mbryos from the affected tank have a lower survival rate when compared against historical thaw data.”) According to Pacific Fertility’s president, the Tank 4 embryos and eggs that remain viable face “additional risks.” (Dkt. No. 301, Exhibit D, Herbert Depo at 236:15-239:8.) On March 11, 2018, Plaintiffs were notified via email of “‘a very unfortunate incident’ in which the storage tank containing their cryopreserved eggs and embryos ‘lost liquid nitrogen for a brief period of time,’ [and] that a ‘preliminary analysis’ suggested some of the eggs and embryos in the tank may have been destroyed.” (Dkt. No. 301-18 at 3.) A month later, Plaintiffs received a second email stating that a preliminary analysis suggested that the incident “likely involved a failure of the tank’s vacuum seal.” (Dkt. No. 301-19.) Chart designed, manufactured, and sold Tank 4. (Dkt. No. 284 at ¶¶ 27-30.) Chart was aware of prior vacuum failures with its products prior to the March 4 incident. (Dkt. No. 301-12, Bies Depo. at 99:13-16, 101:3-5.) Chart was also aware of issues with the TEC controller in the Tank 4 system which it designed. (Id. at 222:24-223:4.) Prior to the March 4 incident, Pacific MSO staff had disabled the TEC 3000 controller in Tank 4 because “it produced erroneous alarms and did not properly record the amount of liquid nitrogen.” (Dkt. No. 301-15 at 6.) In February 2018, staff noted that the eggs and embryos in Tank 4, “the malfunctioned tank,” needed to be safely transferred to another tank and they were getting a spare tank ready for installation. (Dkt. No. 301-24 at 3.) In the meantime, staff manually monitored and refilled the liquid nitrogen in Tank 4 as necessary. (Dkt. No. 301-15 at 4.) B. Procedural Background Following the March 11 notification, Plaintiffs filed this putative class action, which was later consolidated with two other actions pending in the Northern District of California: Bauer, et al. v. Pacific Fertility Center, et al., No. 3:18-cv-01634 (N.D. Cal. filed Mar. 15, 2018) and A.B., et al. v. Pacific Fertility Center, et al., No. 3:18-cv-02298 (N.D. Cal. Filed April 17, 2018). (Dkt. No. 17.) These actions are now known as the In re: Pacific Fertility Litigation. Shortly after the actions were consolidated, Pacific Fertility filed a motion to compel arbitration in which Prelude and Chart filed separate joinders. (Dkt. Nos. 52, 56, 67.) While those motions were pending, the Court granted Plaintiffs leave to file the FAC which added Pacific MSO, Prelude’s subsidiary, as a defendant. After several rounds of briefing, the Court issued its Fertility MSO, and Chart’s joinders, as well as their motions to stay proceedings pending arbitration of the claims against Pacific Fertility. (Dkt. No. 192.) A month later, Prelude, Pacific Fertility MSO, and Chart filed notices of appeal and motions to stay pending appeal, which the Court denied. (Dkt. Nos. 201, 202, 204, 208, 250.) Prelude, Pacific MSO, and Chart thereafter moved to dismiss which the Court granted in part and denied in part. (Dkt. No. 262.) Plaintiffs then filed the now operative second amended complaint pleading 10 claims for relief: (1) strict products liability-failure to warn as to Chart; (2) strict products liability-manufacturing defect as to Chart; (3) strict products liability-design defect-consumer expectations test as to Chart; and (4) strict products liability-design defect-risk utility test as to Chart; (5) negligent failure to recall as to Chart; (6) negligence and/or gross negligence as to Prelude and Pacific MSO; (7) premises liability as to Prelude and Pacific MSO; (8) violation of California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq. as to all Defendants; (9) violation of California’s Consumer Legal Remedies Act (CLRA), Cal. Civ. Code § 1750 et seq. as to Pacific Fertility; (7) fraudulent concealment as to Pacific Fertility. (Dkt. No. 280.) Chart then filed a third-party complaint against Pacific Fertility, the laboratory director, and several Pacific Fertility physicians for contribution and equitable indemnity. (Dkt. No. 288.) The Court granted a motion to dismiss the third-party complaint with leave to amend. (Dkt. No. 406.) On October 15, 2019, Plaintiffs filed the underlying motion for class cert

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