Petersen v. Natera, Inc.

Background

Shannon Petersen and Erin Vedrode sued Natera, Inc. over the company’s advertising and marketing of preimplantation genetic testing for aneuploidy, or PGT-A, which Natera markets as Spectrum. The plaintiffs alleged that Natera made false or misleading claims about the testing’s accuracy and its ability to improve embryo implantation, pregnancy, live-birth, and miscarriage outcomes. They also alleged that Natera omitted material information, including information about studies questioning PGT-A’s effectiveness and accuracy.

The plaintiffs asserted claims under California’s Unfair Competition Law and Consumers Legal Remedies Act, the Michigan Consumer Protection Act, warranty theories, fraud, fraud by concealment, and unjust enrichment. They sought to represent a nationwide consumer class and classes of consumers in California and Michigan. Petersen allegedly paid $700 for the testing, and Vedrode allegedly paid $2,250 plus additional costs.

Documents Considered on the Motion

The court concluded that the complaint incorporated the plaintiffs’ consent forms and seven scientific sources by reference. It considered those documents, but it did not treat the statements in the consent forms as true evidence or use the scientific sources to resolve competing factual theories against the complaint. The court also took judicial notice of clinical laboratory licenses issued to Natera by the California Department of Public Health.

Rule 9(b) Pleading Deficiency

The court held that all of the plaintiffs’ claims were based on a unified course of allegedly fraudulent conduct and therefore had to satisfy Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity. The complaint identified categories of allegedly misleading statements and approximate purchase dates, but it did not say when the plaintiffs saw the statements or where they saw them, such as on a website, in a brochure, or elsewhere. The complaint also relied on different versions of Natera’s brochure and website pages without clearly alleging that the cited statements appeared before the plaintiffs’ purchases or that the plaintiffs viewed them before purchasing the testing. Some supporting sources postdated the purchases as well.

The court therefore concluded that the allegations did not meet Rule 9(b)’s heightened pleading requirement and dismissed the plaintiffs’ claims with leave to amend.

Other Arguments

The court declined to dismiss the claims on the ground that the scientific sources contradicted the complaint. It found that the sources did not plainly refute the allegations and that Natera’s arguments required inferences favoring Natera, even though the court had to draw reasonable inferences in the plaintiffs’ favor at the motion-to-dismiss stage.

The court also rejected Natera’s argument that the plaintiffs had no basis to claim that Natera had a duty to disclose information. The complaint sufficiently alleged that Natera made partial representations about Spectrum’s accuracy and benefits while omitting information that allegedly qualified those representations.

The court declined to apply the learned-intermediary doctrine, which can limit a manufacturer’s duty to warn a patient by requiring warnings to be given to the patient’s healthcare provider, to the plaintiffs’ California consumer-fraud claims. The court reasoned that the claims generally alleged misrepresentations about PGT-A’s capabilities, reliability, and limitations rather than disguised failure-to-warn claims. The court stated, however, that if the plaintiffs amended the complaint to allege an undisclosed safety risk from embryo biopsy, they should address the doctrine in framing that allegation.

For the Michigan Consumer Protection Act claim, the court held that if Natera is certified under the federal Clinical Laboratory Improvement Amendments, the Act’s exemption for conduct specifically authorized by law would appear to apply. The court could not resolve Natera’s certification status on the materials properly before it, but it explained that the alleged conduct occurred while Natera was performing laboratory tests on materials derived from the human body, which could fall within the exemption if Natera had the required certification.

The court found that Natera’s arguments about whether PGT-A testing is a service rather than a good, and whether the warranty claims required pre-suit notice, were not fully developed or were not adequately addressed at that stage. It noted that the plaintiffs alleged notice of California Consumers Legal Remedies Act violations but did not allege that they gave pre-suit notice of warranty violations.

Punitive Damages and Disposition

The court concluded that Natera is a healthcare provider under California law because its licenses were issued under the relevant division of the California Business and Professions Code. The plaintiffs had not obtained the required court order before including a punitive-damages claim. The court therefore dismissed the plaintiffs’ requests for punitive damages without prejudice to filing, at an appropriate time, a motion seeking permission to include such a claim in an amended pleading.

The court granted Natera’s motion to dismiss. It dismissed the punitive-damages claim without prejudice to the procedure described above and dismissed all other claims with leave to amend. The plaintiffs had 21 days from the date of the order to file an amended complaint. The order stated that failure to file a timely amended complaint would result in dismissal of the case with prejudice. The court also continued the case-management conference to November 18, 2025, and denied Natera’s motion to continue as moot.