51 Cal.3d 120, S006987, Moore v. Regents of University of California
|Citation:||51 Cal.3d 120, 271 Cal.Rptr. 146, 793 P.2d 479|
|Opinion Judge:|| Panelli|
|Party Name:||Moore v. Regents of University of California|
|Attorney:|| Gage, Mazursky, Schwartz, Angelo & Kussman, Sanford M. Gage, Christopher E. Angelo and Jonathan T. Zackey for Plaintiff and Appellant.  Lori Andrews and Marjorie M. Schultz as Amici Curiae on behalf of Plaintiff and Appellant.  James E. Holst, Allen B. Wagner, John F. Lundberg, George L...|
|Case Date:||July 09, 1990|
|Court:||Supreme Court of California|
Rehearing Denied Aug. 30, 1990.
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Gage, Mazursky, Schwartz, Angelo & Kussman, Sanford M. Gage, Beverly Hills, Christopher E. Angelo, Los Angeles, and Jonathan T. Zackey, Beverly Hills, for plaintiff and appellant.
Lori Andrews and Marjorie M. Schultz as amici curiae on behalf of plaintiff and appellant.
James E. Holst, Allen B. Wagner, John F. Lundberg, George L. Marchand, Oakland, Ball, Hunt, Hart, Brown & Baerwitz, Anthony Murray, Donn Dimichele, Los Angeles, Horvitz, Levy & Amerian, Horvitz & Levy, Ellis J. Horvitz, Peter Abrahams, Encino, Coleman & Marcus, Richard M. Coleman, Michael D. Marcus, Los Angeles, Hale & Dorr, John G. Fabiano, Ian Crawford, Covington & Crowe, Robert E. Dougherty and Robert H. Reeder, Ontario, for defendants and respondents.
Cooley, Godward, Castro, Huddleson & Tatum, Michael Traynor, Brian C. Cunningham, Lloyd R. Day, Louis M. Lupin and Gary H. Ritchey, Palo Alto, as amici curiae on behalf of defendants and respondents.
We granted review in this case to determine whether plaintiff has stated a cause of action against his physician and other defendants for using his cells
in potentially lucrative medical research without his permission. Plaintiff alleges that his physician failed to disclose preexisting research and economic interests in the cells before obtaining consent to the medical procedures by which they were extracted. The superior court sustained all defendants' demurrers to the third amended complaint, and the Court of Appeal reversed. We hold that the complaint states a cause of action for breach of the physician's disclosure obligations, but not for conversion.
Our only task in reviewing a ruling on a demurrer is to determine whether the complaint states a cause of action. Accordingly, we assume that the complaint's properly pleaded material allegations are true and give the complaint a reasonable interpretation by reading it as a whole and all its parts in their context. (Phillips v. Desert Hospital Dist. (1989) 49 Cal.3d 699, 702, 263 Cal.Rptr. 119; Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718; Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 170, 164 Cal.Rptr. 839.) We do not, however, assume the truth of contentions, deductions, or conclusions of fact or law. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713, 63 Cal.Rptr. 724.) For these purposes we briefly summarize the pertinent factual allegations of the 50-page complaint .
The plaintiff is John Moore (Moore), who underwent treatment for hairy-cell leukemia at the Medical Center of the University of California at Los Angeles (UCLA Medical Center). The five defendants are: (1) Dr. David W. Golde (Golde), a physician who attended Moore at UCLA Medical Center; (2) the Regents of the University of California (Regents), who own and operate the university; (3) Shirley G. Quan, a researcher employed by the Regents; (4) Genetics Institute, Inc. (Genetics Institute); and (5) Sandoz Pharmaceuticals Corporation and related entities (collectively Sandoz).
Moore first visited UCLA Medical Center on October 5, 1976, shortly after he learned that he had hairy-cell leukemia. After hospitalizing Moore and "withdr[awing] extensive amounts of blood, bone marrow aspirate, and other bodily substances," Golde 1 confirmed that diagnosis. At this time all
defendants, including Golde, were aware that "certain blood products and blood components were of great value in a number of commercial and scientific efforts" and that access to a patient whose blood contained these substances would provide "competitive, commercial, and scientific advantages."
On October 8, 1976, Golde recommended that Moore's spleen be removed. Golde informed Moore "that he had reason to fear for his life, and that the proposed splenectomy operation ... was necessary to slow down the progress of his disease." Based upon Golde's representations, Moore signed a written consent form authorizing the splenectomy.
Before the operation, Golde and Quan "formed the intent and made arrangements to obtain portions of [Moore's] spleen following its removal" and to take them to a separate research unit. Golde gave written instructions to this effect on October 18 and 19, 1976. These research activities "were not intended to have ... any relation to [Moore's] medical ... care." However, neither Golde nor Quan informed Moore of their plans to conduct this research or requested his permission. Surgeons at UCLA Medical Center, whom the complaint does not name as defendants, removed Moore's spleen on October 20, 1976.
Moore returned to the UCLA Medical Center several times between November 1976 and September 1983. He did so at Golde's direction and based upon representations "that such visits were necessary and required for his health and well-being, and based upon the trust inherent in and by virtue of the physician-patient relationship...." On each of these visits Golde withdrew additional samples of "blood, blood serum, skin, bone marrow aspirate, and sperm." On each occasion Moore travelled to the UCLA Medical Center from his home in Seattle because he had been told that the procedures were to be performed only there and only under Golde's direction.
"In fact, [however,] throughout the period of time that [Moore] was under [Golde's] care and treatment, ... the defendants were actively involved in a number of activities which they concealed from [Moore]...." Specifically, defendants were conducting research on Moore's cells and planned to "benefit financially and competitively ... [by exploiting the cells] and [their] exclusive access to [the cells] by virtue of [Golde's] on-going physician-patient relationship...."
Sometime before August 1979, Golde established a cell line from Moore's T-lymphocytes. 2 On January 30, 1981, the Regents applied for a patent on the cell line, listing Golde and Quan as inventors. "[B]y virtue of an established policy ..., [the] Regents, Golde, and Quan would share in any royalties or profits ... arising out of [the] patent." The patent issued on March 20, 1984, naming Golde and Quan as the inventors of the cell line and the Regents as the assignee of the patent. (U.S. Patent No. 4,438,032 (Mar. 20, 1984).)
The Regent's patent also covers various methods for using the cell line to produce lymphokines. 3 Moore admits in his complaint that "the true clinical potential of each of the lymphokines ... [is] difficult to predict, [but] ... competing commercial firms in these relevant fields have published reports in biotechnology industry periodicals predicting a potential market of approximately $3.01 Billion Dollars by the year 1990 for a whole range of [such lymphokines]...."
With the Regents' assistance, Golde negotiated agreements for commercial development of the cell line and products to be derived from it. Under an agreement with Genetics Institute, Golde "became a paid consultant" and "acquired the rights to 75,000 shares of common stock." Genetics Institute also agreed to pay Golde and the Regents "at least $330,000 over three years, including a pro-rata share of [Golde's] salary and fringe benefits, in exchange for ... exclusive access to the materials and research performed" on the cell line and products derived from it. On June 4, 1982,
Sandoz "was added to the agreement," and compensation payable to Golde and the Regents was increased by $110,000. "[T]hroughout this period, ... Quan spent as much as 70 [percent] of her time working for [the] Regents on research" related to the cell line.
Based upon these allegations, Moore attempted to state 13 causes of action. 4 Each defendant demurred to each purported cause of action. The superior court, however, expressly considered the validity of only the first cause of action, conversion. 5 Reasoning that the remaining causes of action incorporated the earlier, defective allegations, the superior court sustained a general demurrer to the entire complaint with leave to amend. In a subsequent proceeding, the superior court sustained Genetics Institute's and Sandoz's demurrers without leave to amend on the grounds that Moore had not stated a cause of action for conversion and that the complaint's allegations about the entities' secondary liability were too conclusory. In accordance with its earlier ruling that the defective allegations about conversion rendered the entire complaint insufficient, the superior court took the remaining demurrers off its calendar.
With one justice dissenting, the Court of Appeal reversed, holding that the complaint did state a cause of action for conversion. The Court of Appeal agreed with the superior court that the allegations against Genetics Institute and Sandoz were insufficient, but directed the superior court to give Moore leave to amend. The Court of Appeal also directed the superior court to decide "the remaining causes of action, which [had] never been expressly ruled upon."
A. Breach of Fiduciary Duty and Lack of Informed Consent
Moore repeatedly alleges that Golde failed to disclose the extent of his research and economic interests in Moore's cells 6 before obtaining consent to the medical procedures by which the cells were extracted. These allegations, in our view, state a cause of action against Golde for invading a
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