Karlin v. IVF America, Inc., 1999 N.Y. Int. 0063 (May 4, 1999).

CONSUMER FRAUD - MEDICAL SERVICES - MEDICAL MALPRACTICE

ISSUE & DISPOSITION

Issue

Whether general fraud statutes apply to medical services.

Disposition

Yes. Where the claims are of fraud or deception, not malpractice, consumer fraud law applies to medical service providers.

SUMMARY

Jayne and Kenneth R. Karlin, and couples like them, their lawyer alleged, were victims of "garden-variety marketing fraud in the luring of vulnerable couples to undertake, and repeatedly pursue, costly and predominantly unsuccessful infertility treatment, with (undisclosed) significant health risks to mother and child...." The Karlins said that IVF America, United Hospital of Port Chester, Dr. John J. Stangel of Mt. Kisco, IVF founder Vicki L. Baldwin the other unidentified defendants in the case, concealed or misrepresented failure rates of 90% or more, high miscarriage rates, ovarian cancer risks and other problems to promote their in vitro fertilization business.

Westchester County Supreme Court Justice Rosato denied the Karlins' motion for class action certification, and denied in part and granted in part the defendants' motions to dismiss. The Appellate Division, Second Department, affirmed the denial of class action certification, and modified the Supreme Court's order by dismissing additional causes of action, stating in part that "We decline to extend the application of consumer fraud statutes to the providers of medical services...."

The Karlins asked the Court of Appeals to reverse the Appellate Division, restore various causes of action, and remand the class action questions for further discovery and review by the trial court in light of such reversal.

The Court of Appeals did restore their causes of action based on general consumer fraud provisions. It noted that the consumer fraud statutes relied on by the plaintiffs, General Business Law §§ 349 and 350 had historically been used to combat fraud in the medical context and rejected defendants' argument that plaintiffs' claims must be governed exclusively by New York's informed consent statute, Public Health Law § 2805-d. The Court viewed the plaintiffs' deceptive acts and false advertising claims as quite different from malpractice claims for lack of informed consent.