Williams v. Athena Motion to Dismiss Hearing—SC Supreme Court May Be Asked to Decide Whether a Diagnostic Laboratory Qualifies as a Healthcare Provider
Foreword by John Conley
Back on May 31, 2016, Contributing Editor Jennifer Wagner wrote a lengthy report on the newly filed case of Williams v. Quest Diagnostics, et al. As Jen recounted, plaintiff Amy Williams sued Athena Diagnostics and its corporate parent, Quest Diagnostics, alleging that Athena negligently misclassified a genetic variant it identified in testing the DNA of her late son. Ms. Williams claims that the misclassification caused the boy’s doctors to prescribe a potentially dangerous course of treatment that ultimately led to his death. The case was originally filed in a South Carolina state court and was then removed to federal court by the defendants, which they were able to do because the parties are citizens of different states.
As Jen also reported, the defendants responded by filing a motion to dismiss the complaint. Their principal argument was that the case is actually a medical malpractice case, rather than an ordinary negligence, and as such is barred by the applicable statute of limitations. Federal Judge Margaret B. Seymour conducted a lengthy hearing on that motion on January 4, 2017. There has been no ruling as yet, nor any timetable for one.
Laurel Coons, a Duke University Ph.D. student, is working on the case with GLR Contributor Robert Cook-Deegan, M.D., formerly of Duke and now of Arizona State University, who has filed an expert affidavit on behalf of Ms. Williams. Laurel attended the hearing, and she and I have reviewed the transcript. Laurel’s report and analysis of what happened follows. I add a few legal comments at the end of Laurel’s post.
Williams v. Athena Motion to Dismiss Hearing—SC Supreme Court May Be Asked to Decide Whether a Diagnostic Laboratory Qualifies as a Healthcare Provider
By Laurel Coons
The South Carolina Supreme Court may be asked to certify whether a diagnostic lab should be classified as a health care provider under state law. South Carolina federal Judge Margaret Seymour appeared to be contemplating this during a January 4 hearing on the defendant’s motion to dismiss in the Williams v. Quest Diagnostics, Inc. lawsuit. The answer will determine whether this lawsuit will move toward a jury trial.
The Complaint – March 2016
Christian Millare was born in August 2005 and beginning at the age of 4 months started having seizures. His doctors treated his seizures with sodium channel inhibitor medications: oxcarbazepine (Trileptal®), carbamazepine (Tegretol®), and lamotrigine (Lamictal®). These are standard treatments for epileptic seizures not caused by Dravet syndrome (SMEI). In January 2007, Christian’s DNA was sent to Athena Diagnostics (a subsidiary of Quest starting in 2011) for a DNA analysis of the SCN1A gene—that is, the detection and diagnosis of any DNA variants within the SCN1A gene. DNA mutations in SCN1A are associated with a spectrum of epilepsy phenotypes, the most severe being Dravet syndrome. For patients with SCN1A mutations, sodium channel inhibitor medications are to be avoided because they exacerbate the seizures. The DNA sequencing of Christian’s DNA took place in May 2007. The results were sent to the ordering physician, John Shoffner, on June 30, 2007. This report indicated that Christian possessed a DNA variant in the SCN1A gene that was classified as a “variant of unknown significance” or VUS (i.e., not specifically known to be either pathogenic or benign). Relying on the information in this report (which did not identify any DNA variants as being pathogenic or warn of any treatments to avoid), Christian’s doctors continued to treat him with increasing doses of multiple sodium channel inhibitor medications. Athena did not issue a copy of the June 2007 report directly to the patient or the patient’s family. Christian’s condition worsened, even as doses of the sodium channel inhibitor medications were increased in attempts to manage his seizures. Christian suffered a severe and ultimately fatal seizure resulting in his death on January 5, 2008.
His mother, Amy Williams, sued Athena and Quest, its parent company, in a South Carolina state court in March 2016. The defendants were able to “remove” the case to the South Carolina federal court because the plaintiff and defendants are citizens of different states. Nonetheless, South Carolina state law will continue to apply.
The complaint alleges that Athena was negligent and breached the applicable standard of care by (1) failing to provide a genetic confirmation that Christian had Dravet syndrome and (2) failing to adhere to its own DNA variant classification criteria. The alleged negligent misclassification of Christian’s DNA variant originates from the fact that in 2007, Christian’s DNA variant had been reported, studied, and known in a patient with Dravet syndrome. Specifically, a genotype-phenotype association between his variant and Dravet syndrome had been established in two clinical publications, Berkovic et al., 2006, and Harkin et al., 2007. Per Athena’s DNA variant classification criteria as defined in the June 2007 report, the requirement for deeming a variant to be a “known disease-associated mutation” was whether it was reported in the literature to be associated with the disease. Thus, the plaintiff alleges, the existence of Berkovic et al., 2006 and Harkin et al., 2007 made Athena’s classification of Christian’s variant as VUS (i.e., “has not been correlated with clinical presentation and/or pathology in the current literature”) demonstrably false. According to the June 2007 report, “the results of this analysis cannot be definitively interpreted due to the absence of published studies correlating these variant(s) with clinical presentation and/or pathology.”
Christian’s June 2007 report was signed off by Sat Dev Batish, chief director of genetics at Athena, and also an author of the Harkin et al., 2007 publication. According to the complaint, Christian’s DNA variant was cited as an SCN1A DNA mutation that “disrupts the functioning of an assembled ion channel so as to produce an epilepsy phenotype” in a patent for SCN1A testing. This patent originated from the laboratory that produced the Berkovic et al., 2006 and Harkin et al., 2007 publications—the same laboratory that also licensed use of the patent for SCN1A testing to Athena in 2004. Thus, the information used to gain patent rights of SCN1A testing included a citation of Christian’s variant causing an epilepsy phenotype. Finally, the June 2007 report lists a manuscript that was published in 2005 as “pending,” suggesting that Athena’s integration of the biomedical literature into their DNA variant database was at least two years behind.
Hearing on Defendant’s Motion to Dismiss – January 4, 2017
During the oral argument on the defendant’s motion to dismiss held on January 4, 2017, Quest/Athena argued that Williams’s allegations of negligence are in fact allegations of medical malpractice, and, as a result, are time-barred. In South Carolina, plaintiffs have three years to bring a medical malpractice suit against a licensed healthcare provider (who has a direct fiduciary duty to a patient) from the time they discover they were harmed, but they lose the right to sue entirely after six years. This absolute six-year bar is called a statute of repose. Williams’s lawyer, however, argued that her claims allege not medical malpractice but ordinary, common law negligence, which is not subject to the statute of repose. The specific negligence alleged is Athena’s failure to reference (in the June 2007 report) the published studies associating Christian’s specific mutation and SMEI in another patient (Berkovic et al., 2006 and Harkin et al., 2007). Williams further alleges that Athena’s failure to abide by its DNA variant classification criteria, as defined in the June 2007 report, constituted a breach of general laboratory duty, which subsequently led to Christian’s physician failing to discontinue potentially harmful medications. As noted above, Quest/Athena’s own standard for deeming a DNA variant to be pathogenic, or disease-causing, as defined in the June 2007 report, was whether that DNA variant was reported in the literature to be associated with the disease in question.
At the hearing, Williams’s lawyer argued that these are acts of ordinary negligence, with a three-year statute of limitations that didn’t start to run until she discovered the negligence. Williams claims she was unaware of the June 2007 report until September 2014, at which time the June 2007 report was requested and received from Athena. During this 2014 interaction with Quest/Athena, Williams learned that the variant had now been deemed disease-causing and the report would be revised. Quest/Athena subsequently issued a revised report with the new classification of “known disease-associated mutation” on January 30, 2015. Williams contends that she had no opportunity to discover the defendants’ error until she had both the June 2007 and January 2015 reports in hand. Quest/Athena argued that it doesn’t matter whether or not the plaintiff herself knew or did not know about the 2007 report, because “the actual knowledge is imputed to the principal by virtue of [her] agent’s notice”—the agent in this case being the physician, John Shoffner, who ordered the test and received the June 2007 report. Williams also contends that Athena’s failure to notify anyone of the reclassification of Christian’s DNA variant prior to January 30, 2015 was a daily, recurring failure to comply with CLIA regulations, and thus represents a continuous and ongoing injury, each instance allowing for a new claim and thus starting a new clock.
How the judge decides this matter depends on whether Quest/Athena, a CLIA-certified clinical laboratory and “one of the leading genetics testing laboratories in the world,” is a licensed healthcare provider under South Carolina law. Specifically, can a lab that doesn’t deal directly with a patient have a professional, fiduciary relationship with the patient triggering a malpractice standard? Quest/Athena further explained that they “weren’t permitted to do so [communicate individually with patients],” and that consequently “it would have been completely inappropriate for Athena to communicate directly with any patient.”
At the hearing, Judge Seymour asked both the plaintiff and the defendants whether the question of malpractice versus ordinary negligence should be certified to the South Carolina Supreme Court. Certification is a procedure whereby a federal court may pose an undecided question of state law to a state supreme court. Since South Carolina state law will govern this case, the federal judge would then have to follow the South Carolina Supreme Court’s answer.
a) Initial Report – June 2007: Variant of Unknown Significance
According to the complaint, Williams believes that because a genotype-phenotype association between Christian’s DNA variant and Dravet syndrome had been established in two clinical publications (Berkovic et al., 2006 and Harkin et al., 2007), the June 2007 report should have classified Christian’s mutation as a “known disease-associated mutation” rather than a VUS. The existence of these two clinical publications would apparently satisfy the requirements of a “known disease-associated mutation” per Athena’s own DNA variant classification criteria as defined in the June 2007 report. (The requirement for deeming a variant to be disease-causing was whether it was reported in the literature to be associated with the disease.) Williams further alleges that classifying Christian’s DNA variant as a VUS in 2007 was incorrect per these same DNA variant classification criteria: “Variants of unknown significance are DNA sequence variants that are detected reproducibly, but have not been correlated with clinical presentation and/or pathology in the current literature.”
At the hearing Athena’s lawyer argued that “the patient that is identified (in Berkovic et al., 2006 and Harkin et al., 2007) as having the same genetic mutation” had, in both papers, a de novo” mutation. That is, the mutation was not inherited but instead arose during cell division of egg or sperm or early embryonic development. The defense further contended that parental testing is required to determine whether a mutation is de novo, and thus “within the classification that was in those two published reports because the patients in those reports had a de novo mutation.” According to this argument, Athena has no way to know “whether or not this serious disease is present in this mutation unless we test the parents.” The lawyer’s point was that Athena could not have known whether Christian’s mutation was de novo—and thus the same as the mutation in the published papers—because his parent did not undergo genetic testing. As noted above, however, Williams contends that, because she was unaware of the June 2007 report, she was unaware that testing of the biological parents (de novo determination) was recommended.
Athena’s lawyer pointed to patient #15 on Supplement Table 2 of Harkin et al., 2007 (a female who possessed the same mutation as Christian whose mutation was confirmed to be de novo) to illustrate that a conclusive diagnosis could be reached only by additional parental testing and de novo determination. It is intriguing that the next patient listed (#16), along with thirteen other patients on this table, had the same classification as patient number #15 but de novo status was not determined. According to Harkin et al., 2007, “in cases with missense changes, where DNA from parents is unavailable…the case for pathogenicity rests on circumstantial evidence provided by evolutionary conservation of protein structure.” Further, if parental testing was never done on Christian because his parents were unaware of this recommendation, and de novo determination was required for the DNA variant to be classified as a “known disease-associated mutation,” it is hard to understand how and why his DNA variant was reclassified to a “known disease-association mutation” sometime after the June 2007 report and before September 29, 2014.
b) Revised Report – January 2015: Known Disease-Associated Mutation
During the hearing, Judge Seymour seemed particularly interested in understanding the origin and details of the revised January 2015 report. Although the January 2015 report reclassified Christian’s variant from VUS to disease-causing, it did not list any new references or data supporting that reclassification, it did not list the Berkovic et al., 2006 or Harkin et al., 2007 papers, nor did it identify the date when the reclassification occurred or who corrected the misclassification.
Judge Seymour wanted to know why the 2007 report was revised. Athena’s lawyer said that “there was an update to the classification of the mutation in Athena’s database,” and that “as soon as the information became known that it was applicable to this situation, the update was provided to the requesting individual.” Athena’s lawyer further explained,
“the plaintiff’s genetic counselor called Athena in 2014 and asked Athena to re-look up the variant. Athena did so and saw that the variant, the mutation, had been reclassified since then in its database, and based on additional information that was available since June of 2007—remember, this is an incredibly fast-paced field—more than seven years later when the variant was looked up in the database to see how it’s classified. Classifications of variants do change based on new information, and that is what happened here. It’s not a reclassification based on an error. It was just based on new information” [Of note, according to the complaint, Athena was contacted in 2014 to in order to obtain the 2007 report for the first time, not to “re-look up” a variant.]
Athena’s lawyer did not explain what “new information” was obtained between June 2007 and September 2014 that resulted in the reclassification of Christian’s DNA variant (1237T>A, Y413N) from a “variant of unknown significance” to a “known disease-associated mutation.” According to the January 2015 report, “analysis of this individual’s SCN1A gene identified a DNA sequence variant that has been reported in the literature to be associated with SMEI or SMEB, the severe phenotypes associated with SCN1A mutations.”
Event timeline was prepared and presented by Laurel Coons and Robert Cook-Deegan for the Committee on Science, Technology and Law of the National Academies of Science, Engineering and Medicine for their session on Diagnostics Labs and Legal Liability on October 17, 2016.
Afterword by John Conley
I appreciate Laurel’s careful and accurate reporting, and I think her analytical points are all well taken. I’d add just a few points from a legal perspective:
1. Judge Seymour did an excellent job in conducting the hearing. She was very well prepared and had an impressive understanding of the medical and scientific issues. She pressed both sides on their respective vulnerabilities, and both lawyers were sometimes wobbly in responding. That’s not a criticism of them, but a reflection of the fact that—as Laurel points out—both sides face some hard issues. In any event, if the case goes forward from here, all indications are that Judge Seymour is the right judge to manage it, with all its complexities.
2. Don’t try to predict the outcome from the judge’s questions. Judge Seymour was just doing her job, very effectively: forcing both sides to deal squarely with their hardest issues. To me, she seemed absolutely evenhanded in her questioning. I see no basis for predicting how she’s leaning.
3. What happens from here? This is complicated. An initial point to keep in mind is that (under a 1937 U.S. Supreme Court case) the federal judge must apply South Carolina state law—not federal law—to all of the key issues in this case. So, a big part of Judge Seymour’s job here is to determine what South Carolina law says about those issues.
Let’s break down the possibilities:
(a) Judge Seymour decides on her own that the case is or is not a malpractice case and then applies the applicable statute of limitations. If she decides that it is a malpractice case, then the likely outcome is that it will have to be dismissed under the six-year statute of repose that Laurel describes. The plaintiff could then appeal to the U.S. Court of Appeals for the Fourth Circuit, which covers Maryland, Virginia, West Virginia, and North and South Carolina. If Judge Seymour decides it isn’t a malpractice case, she would apply the ordinary negligence statute, which doesn’t have a statute of repose, and the plaintiff might well (although not necessarily) avoid dismissal. If that happens, the parties will begin discovery and the case will begin moving slowly toward trial.
(b) In this scenario, Judge Seymour doesn’t decide the malpractice versus ordinary negligence issue herself, but certifies that question (as Laurel explains) to the South Carolina Supreme Court for an answer. If she does that, and the South Carolina court accepts the question, that would add a minimum of several months to the process. Depending on the South Carolina court’s answer (which Judge Seymour would be bound to follow), the case would unfold as described in paragraph (a).
4. Regardless of which way the decision goes, what will be the legal impact? Surprisingly, perhaps, the strictly legal significance of the case will be limited. A number of scientific and medical people have suggested to me that, because the case is in federal court, it will have national impact. That’s not true, at least from a legal perspective. Again, let’s review the possibilities.
If the South Carolina Supreme Court decides the malpractice versus negligence question (or any other question in the case that may be certified to it), its answer will be binding on all South Carolina state courts, and, indirectly, on other courts, state or federal, that have to decide that same question under South Carolina law (not many, I’d think).
Any decision made by Judge Seymour on this or any other issue in the case won’t be binding on any other court. Any rulings made on appeal by the Fourth Circuit will be binding on all federal courts within the circuit’s five states. But here again, those rulings would apply only in federal cases that happened to be deciding the very same questions under South Carolina law. A final point is that this case is very unlikely to be taken by the U.S. Supreme Court because it does not seem to present a significant question of federal or constitutional law.
This all adds up to minimal significance. Note, however, that I keep stressing that I’m referring to strictly legal significance. It could be highly significant in other respects. First, if Judge Seymour’s rulings on all the issues the case presents seem well reasoned and persuasive, then other courts facing similar issues might choose to follow her. This happens often, with the first case on a novel problem becoming the model for later decisions elsewhere. So, if Judge Seymour ultimately rules on, for example, the respective standards of care for labs, medical geneticists, and primary care physicians in this factual context, judges in later cases will look carefully at her reasoning and may follow it, even though they won’t have to.
In addition, as legislators and regulators think about how to regulate genomic testing, they will be looking for any precedent that might provide guidance. If this case gets past the statute of limitations issue and Judge Seymour issues rulings on substantive issues, lawmakers (or their staffs) will look closely at what she says.
5. This leads to my final point: a message for the medical and scientific communities. Everyone involved in developing a legal framework for genomic testing—judges, legislators at the state and federal levels, and state and federal regulators—is and will be looking for guidance. Help them out! It would be very useful for interested expert bodies—the Association for Molecular Pathology, for instance—to promulgate guidelines for resolving such critical questions as the respective responsibilities of primary care physicians, specialists, and testing labs in situations such as that presented by the Williams case. If you do, I can almost guarantee that the relevant legal constituencies will take your recommendation very seriously. But if judges, legislators, and regulators are left to make it all up on their own, you probably won’t like the outcome. And act now, not later. Plaintiffs’ lawyers are given to herd behavior, so the Williams case may be only the first.
About a year ago we reported on a case involving allegations of genetic discrimination by a school district in California. According to the allegations, in fall 2012 the Palo Alto Unified School District used genetic information regarding cystic fibrosis in deciding to transfer a student away from his neighborhood school to another school.
Genetic nondiscrimination laws are stronger in California than anywhere else in the United States. CalGINA (S.B. 559), which took effect five years ago, extended genetic nondiscrimination rights beyond the narrow scope of the federal statute known as GINA, the Genetic Information Nondiscrimination Act of 2008, which prohibits genetic discrimination in employment and health insurance contexts. However, this case was interesting to Genomics Law Report largely because the plaintiffs did not rely on CalGINA in their complaint against PAUSD but instead focused on protections against “perceived disability” provided under the Americans with Disabilities Act or ADA (42 U.S.C.A. §§12131 et seq.) and Section 504 of the Rehabilitation Act of 1973 (29 U.S.C.A. § 794). The school district had convinced a federal district court to dismiss the complaint, but the plaintiffs filed an appeal in January 2016.
What’s happened since the appeal was filed in January 2016?
The U.S. Court of Appeals for the Ninth Circuit heard arguments on October 19, 2016, and issued a decision on November 15, 2016. The court’s ruling overturned the district court’s dismissal of the ADA and Section 504 claims and remanded the case to the district court for further proceedings. While the court issued an unpublished judgment, which “is not precedent except as provided by Ninth Circuit Rule 36-3,” the plaintiffs’ attorney, Stephen R. Jaffe, publicly announced on LinkedIn that it was “a great victory for personal privacy.” The Ninth Circuit Court of Appeals is allowing the ADA and Section 504 genetic discrimination claims to move forward, all based on the student’s genetic information being a “perceived disability.”
The court made its decision by determining that the district court erred in two ways. The first error was the district court’s finding that there was a “direct threat” defense available under the facts presented in the complaint. The school district had argued that it made its decision out of concern for the health or safety of other students at the school who do have cystic fibrosis and that it had made a reasonable judgment that the student posed a “direct threat” to those other students. According to the Ninth Circuit, the error in allowing a direct threat defense was twofold: (1) such a defense requires an individual assessment of the threat but, as per the facts in the complaint (which must be taken as true in evaluating a motion to dismiss), no such individual assessment was made; and (2) the school district’s decision that the student posed a direct threat was contrary to “reasonable judgment” with “best available objective evidence.” The district court’s second error was finding that the plaintiff had not shown the requisite intent to establish a claim for discrimination. Establishing a claim for discrimination, the Court of Appeals noted in its decision, does not require the plaintiff to show “bad motive, will, or animosity” or even an intent to cause harm. Rather, the action or decision to exclude someone categorically (e.g., because of protected class status) is “facial discrimination” and sufficient, even if no harm or injury was intended.
The case moves forward
The Ninth Circuit’s rejection of the motion to dismiss means that the case is back on track toward eventual trial. There are no apparent signs that the school district will settle the case. On December 21, 2016, the school district’s attorneys filed an answer to the amended complaint and raised a litany of affirmative defenses, including:
• failure to state a claim,
• lack of jurisdiction,
• lack of intent,
• defendant acted in conformity with law,
• equity (e.g., unclean hands and equitable estoppel),
• res judicata,
• statute of limitations,
• lack of standing,
• remedies not supported by claims, and
• no damages attributable to the defendant.
The defendant did not provide any details about these affirmative defenses to explain how or why they might be applicable. Because some affirmative defenses can be waived if not asserted, it is reasonable to treat these defenses for the moment as mere boilerplate—that is, inserted as a matter of lawyerly self-protection.
The court has ordered mediation to resume before March 14, 2017 and has since appointed a mediator to the case.
Keep this case on your watch list
Courts have never directly acknowledged a person’s genotype or carrier status as sufficient to pursue a “perceived disability” claim under the ADA or Section 504 protections against discrimination. A plaintiff’s victory would clarify (at least for people who live in the Ninth Circuit—CA, WA, OR, ID, MT, NV, AZ, AK, and HI) that those who are victims of genetic discrimination in areas of society other than employment or health insurance (the areas covered by GINA) are not left unprotected by federal law and are able to seek remedies under the Americans with Disabilities Act and Section 504.
The case is an important reminder that even if the PAUSD’s actions were permissible under federal law, state law (CalGINA) applicable at the time and applicable today prohibits school districts in California from using genetic information to make decisions about its students. The PAUSD’s decision to continue defending this case signals one or both of two things. The first is that defense attorneys believe that they can successfully slam the door on a broad ADA precedent that would allow “perceived disability” claims against those who discriminate based on genetic information. That seems somewhat unlikely, given the willingness of the Ninth Circuit to allow the case to proceed and the strength of the facts alleged by the plaintiff’s attorneys. The second is that the school district is focused solely on the money—either trying to minimize the size of any settlement or court award or trying to make sure an insurer is responsible for covering the payment of that settlement or award. Perhaps the PAUSD is showing its willingness to roll the dice if a reasonable court award is perceived as having a good chance of being substantially lower than any settlement amounts under consideration.
There has been very little public discussion of the case since initial interest when the appeal was filed last year. The plaintiff’s case has now survived a motion to dismiss, but the case has yet to be decided on the merits. For genetic rights advocates, this case should remain high on the watch list in 2017 with the Ninth Circuit Court of Appeals poised to strengthen genetic nondiscrimination rights through ADA and Section 504 case law.
Just about everyone interested enough in genomics and the law to read this post will know that the American Civil Liberties Union waged a long and ultimately successful legal campaign to invalidate Myriad Genetics’ patent claims to isolated BRCA genes, mutations of which are linked to breast and ovarian cancer. Now the ACLU has launched a second front, this time attacking Myriad’s post-patent business model of maintaining its vast and unique database of genotype-phenotype associations as a trade secret. GLR reported on that evolving strategy two years ago.
The new ACLU attack has, thus far, received modest attention in the scientific press, and some of what has been reported is inaccurate. In this post I will briefly review what has actually happened and then try to sort out fact from fiction in the reportage. The bottom line is that the federal government has not created new stealth regulations dealing with the disclosure of genomic data to patients. It has, however, used the practice of governance-by-guidance to make significant new policy, which is problematic enough in its own right.
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Seeking Accountability from Clinical Genomics Laboratories
A wrongful death case pending in a federal court in Columbia, SC—Williams v. Quest Diagnostics, Inc., et al.—demonstrates the very high stakes involved with clinical genomics testing. The case also underscores the ongoing struggle to (1) establish accountability when mistakes happen and (2) establish a reasonable and effective level of governmental oversight for the laboratories performing such tests. The case could have dramatic implications for the future practice of genomic medicine, and regardless of how this specific case ultimately plays out in the courtroom, the allegations should serve as a serious wake up call to those involved in genomics for clinical purposes in any way.
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Chadam v. PAUSD, as previously covered on Genomics Law Report, is a case in which parents of a school boy are alleging that a school district violated their son’s rights when it made the decision that it would transfer the boy to another school because of his genetic information. Specifically, the allegation is that when the boy moved to the area and registered for school, (1) the school district learned of the boy’s genetic information related to cystic fibrosis, (2) the boy was regarded as disabled by the school district, and (3) on the basis of this perceived disability, the school district decided to transfer the boy to another school to protect two other students at the school who have cystic fibrosis. The school district’s decision was apparently based on the idea that the boy, because of his genetic markers, posed a cross-infection risk to the students with cystic fibrosis. Individuals with cystic fibrosis, because their respiratory symptoms create host environments favorable to microbiological pathogens, are often separated from one another to minimize risk of spreading germs to one another. Mere carriers of the genetic markers associated with cystic fibrosis do not pose such cross-infection risks.
This case unequivocally does not involve GINA, a federal nondiscrimination statute that has very limited scope and does not protect individuals from discrimination in education. While the facts alleged could have supported a clear claim for violation of California’s genetic nondiscrimination statute, CalGINA, which affords broader protections than the federal statute, the attorney for the Chadams did not raise that claim. Instead, this case alleges violations of two federal antidiscrimination statutes, the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act. Title II of the ADA requires public education to be free from discrimination, and Section 504 requires all federally funded programs and activities to be free from discrimination. Under both provisions, individuals cannot be excluded from participating in or enjoying the benefits of education because of disability. The statutes protect three basic classes of individuals: (1) those who have a disability (i.e., those who have a physical or mental condition that substantially limits a major life activity); (2) those with a history or record of having a disability; and (3) those with a perceived disability (i.e., those “regarded as” having a disability). (For more information, see A Guide to Disability Rights Laws published by the Civil Rights Division of the US Department of Justice)
The plaintiffs in Chadam have appealed the trial court’s decision to grant the school district’s motion to dismiss the case (a Rule 12(b)(6) motion). In granting the school district’s motion, the court basically decided that even if it assumed all of the facts alleged by the plaintiffs to be true and drew all reasonable inferences in favor of the plaintiffs, there would not be a valid claim upon which relief could be granted. On appeal, the United States Court of Appeals for the Ninth Circuit, which covers California, will focus on whether the district court erred in reaching that decision. The court of appeals will consider the motion de novo—that is, will give no deference to the trial court’s decision—and determine whether the facts alleged in the pleadings, when read in the light most favorable to the plantiffs, state a claim for relief that is plausible. The amicus brief filed by the United States (Department of Justice and Department of Education) urges the Ninth Circuit to reverse the district court’s decision and remand the case, stating that the plaintiffs have alleged sufficient facts to support a claim of intentional discrimination under Title II of the ADA and Section 504.
Is there judicial precedent for ADA protection of genetic information?
About 15 years ago, long before Congress passed the Genetic Information Nondiscrimination Act, there was a case in which individuals sought ADA protection from genetic discrimination. That case involved the Burlington Northern Santa Fe Railroad (BNSF), which allegedly had been using employees’ genetic information in connection with work-related carpal tunnel syndrome claims. The case was never decided by a court, however. In 2001 the Equal Employment Opportunity Commission (EEOC) and BNSF settled the EEOC’s request for injunctive relief to stop the company’s genetic testing, and in 2002 the EEOC and BNSF settled the request for damages with an agreement to compensate individuals with up to $2.2 million. While the settlement agreement was subject to approval by the Eastern District of Wisconsin (see 2002 WL 32155386), this case did not set judicial precedent that the ADA protects individuals from decisions based on genetic information.
Does the relevant legislative history suggest that individuals are protected from genetic discrimination because of “perceived disability”?
To answer this question, it is useful to start with legal scholar Mark Rothstein’s thorough 1992 analysis of the law regarding genetic discrimination and possible protection under the ADA as it existed at that time. See Mark A. Rothstein, Genetic Discrimination in Employment and the Americans with Disabilities Act, 29 Hous. L. Rev. 23 (1992).
In the early 1990s, in a letter to a Congressional committee chair, the EEOC actually rejected the idea that the ADA prohibits genetic discrimination against asymptomatic individuals, instead taking the position that the ADA would only protect an individual once the condition existed and symptoms were present. The EEOC’s technical assistance manual in 1992 also noted that genetic predisposition and family history are not “impairments” protected by the ADA. Nearly 10 years later, following the issuance of the Executive Order 13145 in 2000 that protects federal employees from genetic discrimination, the EEOC provided guidance indicating that instances of disparate treatment on the basis of genetic test results or family medical history would support a claim that an individual was “regarded as” having a disability and thus protected under the ADA and Rehabilitation Act.
As a matter of history, Congress and advocates alike did not believe that the ADA or Section 504 were sufficient to protect individuals from genetic nondiscrimination. In the statutory text of GINA, Congress found, “Federal law addressing genetic discrimination…is incomplete in both the scope and depth of its protections.” (PL 110-233, Finding 5).
To date, there are no direct cases on point deciding that genetic information is a “perceived disability” under the ADA and Section 504 or, conversely, ruling out that possibility.
What are the implications of this case?
Ultimately, a broad ruling in Chadam that genetic information alone is a sufficient basis to bring an action for “perceived disability” could dramatically expand individual genetic nondiscrimination protection—at least in the Ninth Circuit. Courts in other federal circuits would not be bound by a Ninth Circuit decision and could choose whether or not to follow it. That reality, combined with the strong public reactions to this case, suggests that Congress has important work to do to strengthen genetic nondiscrimination protections in education and other sectors of society currently not addressed directly by federal statutes.
The Patent Dispute Over Gene Editing Technologies: The Broad Institute, Inc. vs. The Regents of the University of California
The patent dispute already called “the biggest in biotech history” is only getting started. On January 11, 2016, Administrative Law Judge (ALJ) Deborah Katz officially declared an interference over patents for the CRISPR-Cas gene editing technologies. An interference is a U.S. Patent and Trademark Office (USPTO) administrative proceeding conducted to determine which of multiple claimants to a particular invention has priority rights. Since the patents in question were filed before the March 2013 effective date of the America Invents Act, priority will be awarded to the claimant who was the first to invent the technology in question. This dispute pits Feng Zhang, the Broad Institute, and MIT against Jennifer Doudna and the University of California-Berkeley as well as Emmanuelle Charpentier, Krzysztof Chylinski, and the University of Vienna. Law professor Jacob S. Sherkow has followed the case closely and has provided useful background information on Stanford’s Law and Biosciences Blog.
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In a 106-page opinion issued on March 10, 2014, Judge Robert Shelby of the federal district court in Salt Lake City denied Myriad Genetics’ Motion for Preliminary Injunction in its lawsuit against Ambry Genetics Corporation. For reasons I’ll try to explain, this is a significant development from a practical standpoint, but not earth-shaking from a legal point of view. Above all, it is not surprising. Reluctant as I am to say “I told you so,” well, I told you so.
As we previously reported, after the Supreme Court decided AMP v. Myriad Genetics, a number of competitors, including Ambry, jumped into the BRCA testing market. Myriad started suing them in the Utah federal district court, beginning with Ambry (filed July 9, 2013) and Gene by Gene (July 10). The cases were soon consolidated, to be handled together by Judge Shelby. In both cases, Myriad alleged that the defendant’s testing would infringe patent claims that had not been struck down by the Supreme Court’s AMP decision, which had held that DNA that had merely been isolated from the body was not patentable subject matter. In both cases, Myriad sought a preliminary injunction: a pre-trial order that the defendant must cease its testing activity for the duration of the case. If Myriad then prevailed at trial, the injunction would become permanent. The defendants denied Myriad’s allegations, opposed the preliminary injunction, and filed massive antitrust counterclaims alleging that Myriad has used its patents in unlawful ways to monopolize the BRCA testing market.
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As if the FDA warning letter wasn’t enough, 23andMe, Inc. now has a lawsuit on its hands. The suit, known as Casey v. 23andMe, was initiated on November 27, 2013, in federal court for the Southern District of California (Case 3:13-cv-02847-H-JMA). The suit is being brought as a class action and on the general basis of breach of implied warranties, unjust enrichment, and misrepresentation.
The Proposed Class
John Conley described this as a “Revolt” of the “Cs,” the consumers of the Direct-to-Consumer (DTC) genetic/genomic industry. As of now, the class relates to one named consumer, Lisa Casey. The Complaint avers that she purchased the test in September after exposure to the 23andMe advertising and received an email in November, just before the FDA’s warning letter was issued, alerting her that her results were ready. It is pure chicken-and-egg speculation as to whether the alleged victim found an attorney willing to take her case or, alternatively, whether the attorney of record found a victim willing to become representative for the class.
It is unclear how many individuals are “similarly situated” and will fit as members of the proposed class. While estimates placed those genotyped by 23andMe at 400,000 individuals, it is unclear how many of those individuals were customers (i.e., those who purchased the PGS®) as opposed to recipients of complimentary analysis from 23andMe or a third-party. For now, saying there is a “revolt” of the “Cs” may be a bit premature.
The causes of action set forth in the complaint include unfair and fraudulent practices, unlawful practice, false and misleading advertising, misrepresentation, breach of the implied warranty of merchantability and fitness for a particular purpose, unjust enrichment, deceit by concealment, and negligent misrepresentation.
The Plaintiff is seeking injunctive relief to prevent 23andMe from “continuing to engage, use, or employ its unfair and fraudulent practice of advertising the sale and use of the PGS products.” (Complaint Paragraph 49) Plaintiff is also seeking restitution (i.e. return of her $99 + tax), attorney’s fees, punitive damages allowable by the consumer protection statutes cited, court costs, applicable interest, and any further relief deemed just and proper. (Complaint Page 25).
As part of her second cause of action, the Plaintiff alleges 23andMe’s activities violate the FD&CA, 21 USC §§301, et seq. (as the FDA asserted in its warning letter but has not yet been adjudicated), the California Sherman Law, Health & Safety Code §110100, et seq., numerous sections of the CLRA, Civil Code §1750, et seq., and the California Business & Professions Code §17500. (Complaint Paragraph 56). And Plaintiff further alleges, in her third cause of action, that 23andMe engaged in a series of misrepresentations, including about its “characteristics, ingredients, uses, and benefits, which it does not have” (Complaint Paragraph 79a); that 23andMe’s PGS “is of a particular standard, quality, or grade, which it is not” (Complaint Paragraph 79b); that the PGS was advertised “with an intent not to sell the PGS as advertised” (Complaint Paragraph 79c); and that 23andMe “represented that the subject of the sale of the PGS has been supplied in accordance with a previous representation when it has not” (Complaint Paragraph 79d).
Burdens of Proof
Generally, the burden of proof rests on the Plaintiff to establish each of the essential elements for a cause of action. To prove fraud, generally speaking, the Plaintiff must prove with clear and convincing evidence that there was a misrepresentation uttered fraudulently, that the maker of the statement intended for the recipient of the utterance to be induced to act, that the recipient justifiably relied upon the misrepresentation thereby damaging the recipient. To prove fraudulent or negligent misrepresentation, it is necessary for the Plaintiff to demonstrate that the Defendant made statements that the Defendant knew were false or made statements recklessly without knowledge as to their truth or falsity and without making reasonable investigation into the veracity of the statements. Furthermore, to prove unjust enrichment, the Plaintiff must show not only that the Defendant was enriched at her expense but also that it would be unjust for the Defendant to keep that benefit without compensating her for it.
How will the Plaintiff meet those burdens of proof?
Plaintiffs sometimes satisfy the first element of such unfair and deceptive trade practice claims (i.e., that there was an unfair or deceptive practice) by pointing to the Defendant’s violation of another statute or regulation and advocating a per se theory of liability. In other words, the Plaintiff argues that the Defendant, by violating the specifically cited statute or regulation, has per se engaged in an unfair and/or deceptive practice. The conclusory statements excerpted by the Plaintiff from the FDA’s warning letter alone will not be sufficient to establish a case. The Plaintiff seems to be trying to use 23andMe’s failure to provide the FDA with information supporting their claims to prove absence of such information. Such an implication is nonsequitur. The authority of the FDA over 23andMe’s activities has not been established and has been seriously questioned by many. Moreover, 23andMe’s acts or omissions with regard to FDA requests have not been adjudicated. Just because the FDA claims something is true does not make it so.
The Plaintiff will face additional challenges in proving her case. For example, she will have to find a way to overcome several provisions of the Terms of Service (ToS) to demonstrate that the advertising claims were anything more than acceptable puffery.
23. Disclaimer of Warranties
YOU EXPRESSLY ACKNOWLEDGE AND AGREE THAT: (1) YOUR USE OF THE SERVICES ARE AT YOUR SOLE RISK. THE SERVICES ARE PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS. 23ANDME EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. (2) 23ANDME MAKES NO WARRANTY THAT (a) THE SERVICES WILL MEET YOUR REQUIREMENTS; (b) THE SERVICES WILL BE UNINTERRUPTED, TIMELY, UNFAILINGLY SECURE, OR ERROR-FREE; (c) THE RESULTS THAT MAY BE OBTAINED FROM THE USE OF THE SERVICES WILL BE ACCURATE OR RELIABLE; (d) THE QUALITY OF ANY PRODUCTS, SERVICES, INFORMATION, OR OTHER MATERIAL PURCHASED OR OBTAINED BY YOU THROUGH THE SERVICES WILL MEET YOUR EXPECTATIONS AND (e) ANY ERRORS IN THE SOFTWARE WILL BE CORRECTED. (3) ANY MATERIAL DOWNLOADED OR OTHERWISE OBTAINED THROUGH THE USE OF THE SERVICES IS DONE AT YOUR OWN DISCRETION AND RISK AND THAT YOU WILL BE SOLELY RESPONSIBLE FOR ANY DAMAGE TO YOUR COMPUTER SYSTEM OR LOSS OF DATA THAT RESULTS FROM THE DOWNLOAD OF ANY SUCH MATERIAL. (4) NO ADVICE OR INFORMATION, WHETHER ORAL OR WRITTEN, OBTAINED BY YOU FROM 23ANDME OR THROUGH OR FROM THE SERVICES SHALL CREATE ANY WARRANTY NOT EXPRESSLY STATED IN THE TOS. (5) YOU SHOULD ALWAYS USE CAUTION WHEN GIVING OUT ANY PERSONALLY IDENTIFYING INFORMATION ABOUT YOURSELF OR THOSE FOR WHOM YOU HAVE LEGAL AUTHORITY. 23ANDME DOES NOT CONTROL OR ENDORSE ANY ACTIONS RESULTING FROM YOUR PARTICIPATION IN THE SERVICES AND, THEREFORE, 23ANDME SPECIFICALLY DISCLAIMS ANY LIABILITY WITH REGARD TO ANY ACTIONS RESULTING FROM YOUR PARTICIPATION IN THE SERVICES.
6. User Representations
By accessing 23andMe Services, you agree to, acknowledge, and represent as follows:
a.You understand that information you learn from 23andMe is not designed to independently diagnose, prevent, or treat any condition or disease or to ascertain the state of your health in the absence of medical and clinical information. You understand that the 23andMe services are intended for research, informational, and educational purposes only, and that while 23andMe information might point to a diagnosis or to a possible treatment, it should always be confirmed and supplemented by additional medical and clinical testing and information. You acknowledge that 23andMe urges you to seek the advice of your physician or other health care provider if you have questions or concerns arising from your Genetic Information.
23andMe Services are for research, informational, and educational use only. We do not provide medical advice. The Genetic Information provided by 23andMe is for research, informational, and educational use only. This means two things. First, many of the genetic discoveries that we report have not been clinically validated, and the technology we use, which is the same technology used by the research community, to date has not been widely used for clinical testing. Second, in order to expand and accelerate the understanding and practical application of genetic knowledge in health care, we invite all genotyped users to participate in 23andWe Research. Participation in such research is voluntary and based upon an IRB-approved consent document. As a result of the current state of genetic knowledge and understanding, our Services are for research, informational, and educational purposes only. The Services are not intended to be used by the customer for any diagnostic purpose and are not a substitute for professional medical advice. You should always seek the advice of your physician or other health care provider with any questions you may have regarding diagnosis, cure, treatment, mitigation, or prevention of any disease or other medical condition or impairment or the status of your health.
23andMe does not endorse, warranty or guarantee the effectiveness of any specific course of action, resources, tests, physician or other health care providers, drugs, biologics, medical devices or other products, procedures, opinions, or other information that may be mentioned on our website. If we provide to you on our website any recommendations that identify for you, based on your Genetic and Self-Reported Information and scientific literature or research, potentially actionable information, this information is intended for informational purposes only and for discussion with your physician or other healthcare provider. As explained on our website, 23andMe believes that (a) genetics is only part of the picture of any individual’s state of being, (b) the state of the understanding of Genetic Information is rapidly evolving and at any given time we only comprehend part of the picture of the role of genetics, and (c) only a trained physician or other health care provider can assess your current state of health or disease, taking into account many factors, including in some cases your genetics as well as your current symptoms, if any. Reliance on any information provided by 23andMe, 23andMe employees, others appearing on our website at the invitation of 23andMe, or other visitors to our website is solely at your own risk.
While it is possible, it is very unlikely that a court would find the features of the Terms of Service unconscionable (and therefore unenforceable) because they are so one-sided that they “shock the conscience” (See UCC §2-302). After all, is it reasonable for a consumer to rely upon advertising claims and disregard the terms of the consumer contract governing the purchase or warnings made by the manufacturer? Puffery is permissible (e.g., is Snapple® really made from “the best stuff on Earth®”? Does Coast® soap’s scent really “open your eyes”? Are Wheaties® still “the Breakfast of Champions”? Does Weight Watchers® really have “the power to lose weight like never before”?).
Even if the consumer doesn’t read the contract, generally contractual terms are enforceable. [Now might be a good time for you to review those store receipts from purchases you made on Black Friday, Small Business Saturday, or even Cyber Monday!]
Potential for Civil Litigation = A Means of Shaping Industry Behaviors without Specific Regulation
If this case were to proceed to trial, we can expect a collision of scientific fact, legal fact, and societal belief. Where do those categories overlap? Did the advertising claims cross the line? How would reasonable jurors decide? The jury pool could conceivably contain genomophobes, genomophiles, and individuals with perspectives on personal genomics everywhere in between. An all-star cast of expert witnesses could be called to testify for either side, raising never-old questions about whether a scientific expert is a pure educator, an assistant advocate, a hired gun, or a provider of good data for a favored cause (See Science and the Law: Standards, Statistics and Research Issues by David L. Faigman, David H. Kaye, Michael J. Saks, and Joseph Sanders, American Casebook Series, 2002).
Civil suits are an effective way to shape industry practices incrementally. They are a form of policymaking based on actual harms rather than speculations and mere possibilities of harm. As such, the industry behaviors shaped by the threat of litigation and by resolution of litigation can be preferable to the adoption of specific regulations, driven by genetic exceptionalism and paternalism (and occasionally also genetic determinism) and made in the absence of data demonstrating harms of the technology or service. Given the low levels of genetic literacy generally, the dangers of advertising (regardless of technical veracity and acceptable puffery of the claims used) were bound to catch the industry at some point. (Coincidentally, advertising is risk, too, because business can fall victim to the opportunist element of society, regardless of whether the opportunity sought is financial gain or greater regulation or consumer protection). A serious question will be what should a reasonable person understand about genetic claims by a DTC company. It’s often said that tortfeasers find their victims as they are (i.e., the “eggshell skull” or “eggshell plaintiff” rule) and are liable for the damages their actions cause even if those resulting damages are magnified in an unforeseeable way due to the particular characteristics of the victim. Just how far will a bench or jury allow that doctrine to apply in situations of misunderstanding the meaning of scientific communications notwithstanding substantial efforts by some members of the personal genomics industry to educate the public? Only time will tell.
Myriad Genetics is once again embroiled in litigation over its BRCA-related patents. But this time Myriad is the defendant. Counsyl, Inc., a San Francisco-based company that focuses on genetic carrier testing, sued Myriad in U.S. District Court for the Northern District of California on September 20, 2013. As we noted in an earlier post, Myriad — as a plaintiff — has recently sued two small companies, Ambry and Gene By Gene, that have entered the BRCA testing market in response to the Supreme Court decision invalidating Myriad’s gDNA patent. Myriad presumably filed those suits — against vulnerable defendants — to send a message that it would maintain its testing monopoly by enforcing patent claims that had survived the earlier litigation. But it took the risk that the defendants might succeed in invalidating those surviving claims. Now, with the Counsyl suit, the BRCA controversy has entered a new stage, with a prospective competitor launching a preemptive strike against Myriad and its patents.
On April 15, the Supreme Court heard oral arguments in Association for Molecular Pathology v. Myriad Genetics. This was another significant step—probably the penultimate one—in the long-running Myriad drama. It began with a group of plaintiffs (including researchers, doctors, and breast cancer patients) joining an American Civil Liberties Union-organized lawsuit to invalidate Myriad’s patents on two breast cancer susceptibility genes (BRCA1 and 2) as well as patents on methods of interpreting genetic test results and testing anti-cancer drug efficacy. In a shocking decision, the federal district court in New York threw out all of Myriad’s patents. The Federal Circuit then reversed the district court’s rulings on the gene patents, with the three-judge panel holding unanimously that cDNA is patentable subject matter and holding 2-1 that isolated genomic DNA is patentable as well. The Federal Circuit affirmed the district court’s ruling that Myriad’s methods of interpreting mutations are not patentable, but reversed it in reinstating Myriad’s claims to methods of testing drug efficacy.
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