Is it "fraud" when you sell bad sperm as good?

A donor profile features a man in tip top health with a stellar career. A sperm bank promotes his product. If the man is actually mentally ill, unemployed and has a criminal record, is that consumer fraud?

A lot happened last week in the department of problem sperm. 

For one thing, the Supreme Court of Georgia decided that a case against Xytex, a large sperm bank based in Atlanta, could proceed. 

The case involves Donor 9623, who claimed in his donor profile that he had an IQ of 160, was working on his PhD in neuroscience engineering and had no health problems. But when Donor 9623's name was accidentally released to some families in 2014, and those families looked him up, the truth came out: he was a college dropout who had been diagnosed with schizophrenia and jailed for burglary. 

Early in his donor career, Donor 9623's sperm was sold to Wendy and Janet Norman, who used it to conceive their son, A.A., born in 2002. According to court filings, A.A. has experienced multiple episodes of suicidal and homicidal ideation, takes ADHD, anti-depressant and anti-psychotic medications, and has needed several extended hospitalizations. A.A. and his parents only learned about the donor's health and personal issues in 2017, when they did an internet search.

The Normans allege that Xytex claimed to carefully screen a donor's health, criminal history and family history, to rigorously interview and physically examine their donors, and to require a donor to update his medical history every six months; any "medically significant" information would be passed on to families, they allege Xytex said. It turns out, however, that the donor lied. And when Xytex learned of the discrepancies years later, in 2014, they did not inform the Normans. 

Donor 9623 has been the subject of more than a dozen lawsuits. Cases in California and Florida have settled, but those in Georgia have been dismissed as nothing more than "wrongful birth" cases — and the state doesn't recognize wrongful birth.

What happened last Monday, however, was that Georgia's Supreme Court decided that  there may be something more than wrongful birth going on here. "[T]hose principles do not create blanket immunity for reproductive service providers and do not preclude all claims relating to the birth of a child," the decision says.

The Normans allege they relied on Xytex when it said it screened its donors, for instance. They relied on the alleged promise that they would be notified if anything "medically relevant" came up. They also claim that Xytex misrepresented the quality of its goods and services. Under the Fair Business Practice Act, you can't say that goods are of one standard, quality or grade when they are really of another. "At a minimum, the Normans may have paid more for Donor 9623's sperm than it was really worth," the decision says.

"Wendy and Janet Norman allege that Xytex Corporation, a sperm bank, sold them human sperm under false pretenses about the characteristics of its donor, and that the child conceived with that sperm now suffers from a variety of impairments inherited from the sperm donor...," the decision says. "We...hold that claims arising from the very existence of the child are barred, but claims arising from specific impairments caused or exacerbated by defendants' alleged wrongs may proceed, as may other claims that essentially amount to ordinary consumer fraud."

"That was a big, big, big victory," says Nancy Hersh, the San Francisco-based lawyer who is representing the family. 

But the Georgia Supreme Court decision was not the only sperm story to hit the news last week. There was another bad sperm lawsuit, involving yet another Xytex donor. 

Seven Canadian families are suing Outreach Health Services, a (former) Canadian distributor for Xytex, alleging that the sperm they used to conceive their children, from Donor 3116, had a genetic problem that the sperm bank should have detected. 

Five of the seven families have children who have tested positive for the disorder, known as Charcot-Marie-Tooth disease. The disease causes nerve damage, which can affect mobility, sensation in the arms and legs, and physical appearance, among other things. The severity can vary. 

One of the mothers, Louise Frame, told me that her son, who has tested positive for the disorder, seems to fall over a lot. "At this point, we're not sure if it's a normal two-year-old falling over, or something that might be a symptom," she says. Frequent tripping or falling is a hallmark of the disease, and Frame has heard from support groups that it can be an early indicator.

The disorder was discovered when a mother in Australia had an amniocentesis and her fetus tested positive. She informed Xytex, and Xytex contacted the American purchasers of the sperm to let them know. Frame, who lives in Canada, says she first learned about the potential problem through social media. About a month later, Outreach contacted the Canadian recipients, she says. 

The parents allege that the donor has visible signs of the disorder and that a physical examination by a qualified professional would have identified it. They also allege that Donor 3116's credentials were exaggerated: rather than being a cytogeneticist with an advanced degree, he is a lab technician. Among other things, the parents are suing for fraud and negligent misrepresentation.

Frame says that when they first found out about the disorder, they didn't grasp the severity. "We didn't realize that every child conceived using this donor had a 50 percent chance of having the disease and that our son could have it," she says. "Our biggest concern was that we were in the process of using the donor again to have another child." That pregnancy ended in miscarriage. 

"What has happened in this case can't happen again," says James Fireman, the Toronto lawyer representing the Canadian families. "And yet it seems to be repeatedly happening."

Many of us on the sidelines have wondered for some time what it will take for sperm banks to start doing full fact-checks on their donors. And many of us have been betting on lawsuits. 

Note: None of the above allegations have been proven in court. Neither Xytex nor Outreach responded to my requests for comment. 

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Related stories and links

Theresa Boyle. "He was the perfect sperm donor. Then 26 families found out he wasn't." Toronto Star. 2016.

Christine Van Dusen. "A Georgia sperm bank, a troubled donor, and the secretive business of babymaking." Atlanta. 2018. 

Sarah Rieger. "Sperm bank misled families about donor's genetic disorder, $30M lawsuit claims." CBC. 2020. 

Is it fair to screen a donor's genes?

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