In Re Pacific Fertility Center Litigation

Background

Plaintiffs in the consolidated Pacific Fertility Center litigation received fertility services involving the freezing and storage of eggs and embryos. On March 4, 2018, Pacific Fertility Center’s laboratory director discovered that Tank 4 had lost liquid nitrogen. The tank contained approximately 2,500 embryos and 1,500 eggs, including the plaintiffs’ eggs and embryos.

An earlier group of plaintiffs—A.B., C.D., E.F., G.H., and I.J.—brought claims against Chart Industries for manufacturing and design defects and negligent failure to recall. Their claims went to trial after the court denied class certification. On June 10, 2021, a jury found for those plaintiffs on all claims. The court entered judgment on August 13, 2021, and later denied Chart’s motion for a new trial and its motion for judgment as a matter of law.

The claims of the next group—A.J., N.J., L.E., L.F., M.C., M.D., O.E., Y.C., and Y.D.—were scheduled for trial on January 31, 2022. Those plaintiffs sought partial summary judgment, which is a ruling without a trial when the relevant facts and law are sufficiently clear, to prevent Chart from relitigating eight issues concerning Tank 4, including misuse, manufacturing and design defects, causation, failure to recall or retrofit, and Chart’s percentage of responsibility.

Issue Preclusion

The plaintiffs relied on issue preclusion, a rule that can prevent a party from arguing an issue that was already decided in an earlier proceeding. Under the governing law, the issue must be identical, actually litigated, necessarily decided, and resolved by a final decision on the merits; the parties must also be the same or legally connected, and applying preclusion must be consistent with specified public policies.

The court held that the earlier judgment was based on diversity jurisdiction. Under federal common law, the court therefore applied California’s preclusion law to determine whether the judgment was final. California law does not treat a judgment as final for preclusion purposes while it remains open to direct attack, including an appeal. Because appeals from the earlier judgment had not been completed, the court concluded that the finality requirement was not satisfied.

The plaintiffs argued that the federal rule for judgments involving federal questions should apply instead, under which a judgment is final when the trial court enters it. The court rejected that argument, explaining that the United States Supreme Court requires state preclusion rules to govern the effect of federal diversity judgments. The court also rejected the plaintiffs’ argument that federal interests in judicial efficiency justified treating the judgment as final immediately.

Disposition

The court concluded that California law governed all aspects of the issue-preclusion analysis and that the earlier judgment was not final under that law. It therefore held that issue preclusion did not apply at that time and DENIED the plaintiffs’ motion for partial summary judgment.

The court additionally ordered the parties to file separate statements by December 1, 2021, addressing whether the consolidated related cases should be stayed while Chart’s appeal from the earlier judgment was pending. It scheduled a video status conference for December 7, 2021, and stated that the order disposed of Docket No. 908.