{BLR 1066} Symposium on Moore v. Regents of the University of California

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<ul><li><p>9 Biotechnology Law Report 245 (Number 4, 1990)It bears emphasis that principles of restitution and unjust enrichment do not</p><p>automatically lead to restitution and apportionment of profits in every case in which aperson's tissue leads to the development of a profitable cell line. Enrichment alone is notenough. The enrichment must be unjust, i.e., it must result from or bear a reasonablerelationship to the claimant's loss or infringement of the claimant's rights. Ordinarily, adefendant's enrichment is not unjust unless the defendant is liable for breach of duty to theplaintiff or the plaintiff is the victim of a remediable mistake. Accordingly, to obtain arestitutionary remedy, Moore must establish his claim for breach of fiduciary duty or lackof informed consent or other basis for liability.</p><p>Conclusion</p><p>Given existing precedent and principle in the law of restitution and unjust enrichment,particularly the principle of fair apportionment, Moore's claim for unjust enrichment mayafford the parties and the court the basis for a reasonable solution. The availability of eitherrestitution of a share of net profit or damages for loss gives the court and the parties twoalternatives for fashioning a fair remedy in a case such as Moore's. The restitutionaryremedy may allow Moore, if he was wronged, a fair and adequate recovery but not awindfall, and it may allow the court to recognize the defendants' other contributions withoutallowing any defendants held liable to be unjustly enriched.</p><p>Michael Traynor is a partner with Cooley Godward Castro Huddleson &amp; Tatum, San Francisco,California. He served as Adviser to the Restatement (Second) of Restitution, Tent. DraftsNo. 1(1983) and No. 2 (1984). He serves as Lecturer at Boalt Hall School of Law. He holdsa J.D. (1960) from Harvard Law School and a BA. (1955) from the University of California atBerkeley. He co-authored the amicus curiae briefof the Industrial BiotechnologyAssociation inthe Moore case. Along with Brian C. Cunningham he wrote Emerging Product Liability Issuesin Biotechnology, 3 High TechnologyLawJournal 149 (1988) and served as planning co-chairman of the ALI-ABA Course ofStudy on Biotechnology Law in San Francisco November8-9, 1990.</p><p># # # #</p><p>{BLR 1066} Symposium on Moore v. Regents of the University of California.COMMENT:</p><p>BLINDED BY SCIENCE2</p><p>by George J. AnnasThe California Supreme Court opinion in the case of John Moore is likely to satisfy</p><p>neither party, and likely to produce both more litigation and legislation. This is because theholding regarding a physician's duty to disclose possible financial conflicts of interest to his</p><p>2 Adapted from the author's article Outrageous Fortune: Selling Other People's Cells,Hastings Center Report, Nov/Dec, 1990.</p></li><li><p>9 Biotechnology Law Report 246 (Number 4, 1990)patient is not well articulated, and the holding regarding conversion is simply not persuasive.</p><p>The Doctor-Patient Relationship and Conflicts of Interests</p><p>The California Supreme Court has been the nation's leader in the area of informedconsent, deciding in 1972 that a physician had a "fiduciary" responsibility to the patient todisclose the nature of the proposed treatment, its alternative, risks, and problems ofrecuperation.3 Past cases have all concentrated on the patient's choice and enhancing thatchoice by providing "material" information to the patient, information that might cause thepatient to accept or reject the proposed treatment. The California Supreme Court has nowruled that the doctrine of informed consent requires a full financial disclosure because failureto make a financial disclosure is a violation of trust that undermines patient autonomy.</p><p>The goal is to protect patients from physicians whose judgment might be influencedby profit, and who might thus be in a conflict of interest position with their own patients.In the Court's words:</p><p>... a physician who treats a patient in whom he also has aresearch interest has potentially conflicting loyalties . . . Thepossibility that an interest extraneous to the patient's health hasaffected the physician's judgment is something a reasonablepatient would want to know in deciding whether to consent toa proposed course of treatment. It is material to the patient'sdecision and, thus, a prerequisite to informed consent.</p><p>Selling Cells</p><p>The nonphysician defendants have no independent fiduciary duty to the patient. Theappeals court had found them all potentially liable for conversion of Moore's propertyinterest in his cells. The California Supreme Court gave three reasons for reversing: nocase had ever decided that a patient had a continuing property interest in excised cells,California statutes drastically limit the patient's interest in excised cells, and the patented cellline is "both factually and legally distinct from the cells taken from Moore's body."</p><p>Probably because none of these reasons is terribly persuasive the court went on atlength to discuss the public policy reasons that it believed supported the denial of Moore'sproperty claim. Again there were three: a fair balancing of interests counsels againstrecognizing the claim, the legislature should solve this problem, and Moore's rights can beprotected by a suit against the physician. Of these three, the centerpiece of the opinion isthe first. The court essentially concluded that the biotechnology industry is both wonderfuland fragile. Since it is wonderful, we must all do our part to foster it; and since it is fragile,</p><p>3 Cobbs v. Grant, 502 P.2d 1, 104 Cal.Rptr. 505 (1972).</p></li><li><p>9 Biotechnology Law Report 247 (Number 4, 1990)we must protect it from harm.</p><p>Research on human cells plays a critical role in medicalresearch . .. Products developed through biotechnology thathave already been approved for marketing in this countryinclude treatments and test for leukemia, cancer, diabetes,dwarfism, hepatitis-B, kidney transplant rejection, emphysema,osteoporosis, ulcers, anemia, infertility, and gynecologicaltumors, to name but a few . . . The extension of conversionlaw into this area will hinder research by restricting access tothe necessary raw materials.</p><p>In the court's flowery words, recognizing conversion would threaten "to destroy theeconomic incentive to conduct important medical research...with every cell sample aresearcher would purchase a ticket in the litigation lottery." On the other hand, denyingMoore's property claim "will only make it more difficult for Moore to recover a highlytheoretical windfall."</p><p>Justice Arabian concurred because he thought a market in human flesh would"commingle the sacred with the profane." On the other hand, he favored a legislatively-created licensing scheme which would establish a fixed rate of profit sharing betweenresearcher and subject.4 He seemed to genuinely regret the lack of compensation toMoore, but concluded his opinion with a quotation from Hamlet, noting that "Courts cannotand should not fashion a remedy for every 'heartache and the thousand natural shocks thatflesh is heir to."1</p><p>The Dissenting OpinionsJustice Broussard argued that the majority confused the right to control one's body</p><p>parts after removal with the right to control them prior to removal. More important,Broussard noted persuasively that the majority's conclusion cannot rest on the propositionthat there is no ownership or right of possession in removed body parts because if anotherdrug company or medical center now stole the cells from UCLA, "there would be noquestion but that a cause of action for conversion would properly lie against the thief."</p><p>Justice Mosk's dissent made it painfully clear that the majority had virtually norational basis for its opinion other than its view that upholding Moore's claim would be badfor business. For example, the majority relied on statutes that permit the "scientific" use ofbody parts after donation or autopsy. But Mosk argued that this does not extend to</p><p>4 Relying on Mary Taylor Danforth's recommendations in Cells, Sales, And Royalties:The Patient's Right to a Portion of the Profits, 6 YALE LAW &amp; POLICY REV. 179-202(1988).</p></li><li><p>9 Biotechnology Law Report 248 (Number 4, 1990)commerce. In his words, the distinction I draw ... is between a truly scientific use andthe blatant commercial exploitation of Moore's tissue . . ." Whatever the statutes on thedisposition of human tissues, Mosk concludes, "at the time of its excision he [Moore] had atleast the right to do with his own tissue whatever the defendants did with it . . .."</p><p>The core of the dissent is its discussion of the nature and future of the biotechnologyindustry. Mosk noted that the "rush to patent for exclusive use has been rampant," and withit has come "a drastic reduction in the formerly free access of researchers to new cell linesand their products." The biotechnology and pharmaceutical companies have also "demandedand received exclusive rights in the scientist's discoveries, and frequently placed thosediscoveries under trade secret protection ... Secrecy as a normal business practice is alsotaking hold in university research laboratories." Mosk argued that public policy actuallyrequires an acceptance of Moore's claim for reasons: (1) the deep respect we accord to thehuman body "as the physician and temporal expression of the unique human persona" and(2) principles of equity and fairness.</p><p>Discussion</p><p>There are many ways to look at this case. As is clear from its text, the majoritysimply accepts the "chicken little" argument that if John Moore's property interests in hiscells is upheld, the biotechnology industry's sky will fall on them and medical progress willsuffer a major setback. In this regard the justices seem to have been blinded by science, andunable or unwilling to distinguish it from commerce. They were blinded in another way aswell, as Justice Mosk noted, when they adopted complex molecular biology terms which theyproceeded to use in ways that are at the very least unclear, and can be termed eitherincorrect or irrelevant. Since the court will not permit these issues to even be tried in court,there will be no occasion for any fair presentation of the science actually involved in creatingand maintaining cell lines. Even a "law and economics" approach would have required givingsome value to Moore's cells, and would have insisted that it be taken into account as a costof doing business in the biotechnology arena.</p><p>It is not necessarily wrong for courts to base their ultimate conclusions on theirinterpretation of public policy. On the other hand, courts have an obligation to analyze andstruggle with novel questions of law as part of our common law tradition. It is thus verydisappointing to see the majority simply ignore the insightful and powerful analysis of theappeals court on the issue of conversion.5 Instead of searching for possible analogies in thelaw that might illuminate the conflict, the court simply dismisses the conversion claimsummarily with the statement that Moore is invoking "a tort theory originally used todetermine whether the loser of the finder of a horse had the better title _" This, and thefact that this is a case of first impression, seemed sufficient to justify to the court the</p><p>5 See George J. Annas, Whose Waste is it Anyway? The Case ofJohn Moore,Hastings Center Report, Oct/Nov 1988, 37-39.</p></li><li><p>9 Biotechnology Law Report 249 (Number 4, 1990)conclusion that conversion should not apply.</p><p>This approach should be embarrassing to the court. Perhaps conversion is not theproper remedy; but the court makes no attempt to demonstrate why. Suppose Moore hada mare that was sick, and perhaps dying, and he asked his neighbor to take care of the horseso that it would not infect other animals on his farm. And suppose that the horse did notdie, but not only got better, but also had a prize colt. Instead of telling Moore about therecovery and the prize colt, assume the neighbor tells him that his mare has died, and thensells both the mare and the colt the $100,000. Should Moore be able to recover the$100,000 (less the cost of care) from the neighbor if he finds out that he has been lied to?The majority would probably say that because horses are involved, Moore should be ableto recover; but if cells were involved, he should not. But without giving us a reason todistinguish cells from horses, we are left with a very unsatisfactory opinion.</p><p>Fiduciary Nature of Doctor-Patient RelationshipEven though most of the commentators on this case have concentrated on the</p><p>conversion/property aspects of it, and have correctly argued that it is a major victory for thebiotechnology industry, the most important aspect of the opinion deals with the expansionof the informed consent requirements based on the fiduciary nature of the doctor-patientrelationship. The court has no problem with a biotechnology industry that breathlesslypursues profits. This is the way American business operates. But physicians are anothermatter altogether: when physicians are in a position to personally profit from their owntreatment recommendations, they must disclose this financial or research aspect to theirpatient as part of informed consent. Of course this applies to Dr. Golde and John Moore.But it would also apply to physicians who recommend a procedure or treatment that will paythem more than an alternative treatment or procedure. Incentives need not be just financial,any "interest extraneous to the patient's health" that might affect the recommendation mustbe disclosed.</p><p>The California court seems to be thinking about physicians who might own stock inor profit directly from biotechnology companies. But physicians generally make money muchmore directly from their patients by performing procedures on them. Informed consent hasin the past focused on the procedure itself, rather than the financial rewards physiciansobtain by performing it. The Moore ruling would seem to suggest that physicians disclosetheir annual incomes, together with the percentage of it that is based on performing therecommended procedure, and the amount of money the physician stands to make from therecommended procedure as opposed to an alternative procedure. The California courtseems to imply that patients should also be told about any financial squeeze the physicianis in (e.g., kids in college, mortgage on a new boat) that might influence the physician'sjudgment about the appropriateness of a recommended treatment.</p><p>The expansion of the informed consent doctrine in this manner requires much moreanalysis than the court presents, and will undoubtedly be the subject for many cases in the</p></li><li><p>9 Biotechnology Law Report 250 (Number 4, 1990)future. For example, does the physician's personal interest in the treatmentrecommendation ever become so overwhelming as to disqualify the physician altogether asa potential advisor to the patient, and under what circumstances might a second, neutral,opinion be required? In the organ and tissue transplantation we already have two exampleswhere ethical standards, although not law, counsel that even the appearance of a...</p></li></ul>