Laboratory Corp. of America v. Hood

Facts

Defendants, Laboratory Corporation of America and Laboratory Corporation of America Holdings (LabCorp), are North Carolina corporations that operate a network of primary testing locations and patient service centers. While it receives specimens for testing from all over the United States, LabCorp performs all of its genetic testing on amniotic fluid in North Carolina.

Plaintiffs, Karen Hood and Scott Hood (the Hoods), were Maryland residents. Their first child, Zachary, was born in 1997 and was diagnosed with cystic fibrosis (CF). After Zachary was diagnosed at two years old, the Hoods learned that they both carry a recessive gene mutation that causes one of the most severe forms of CF. In 1999, Karen became pregnant and her doctor referred her to a genetic counselor. She underwent genetic testing, and it was determined that the fetus had CF. As a result, Karen terminated the pregnancy.

In 2001, Karen was pregnant for the third time and underwent genetic testing once again. The Hoods had already determined that if the fetus tested positive for CF, Karen would terminate the pregnancy. The Hoods’ genetic counselor informed LabCorp that both Karen and Scott carried the CF gene prior to sending the specimen taken from Karen to LabCorp’s North Carolina testing facility. In North Carolina, Karen’s specimen was analyzed by two LabCorp employees. LabCorp reported to Karen’s doctor that the amniotic fluid was negative for 31 common CF genetic mutations, and stated that the fetus was not expected to be a carrier of CF or be affected by CF. The Hoods received the report, and elected to continue the pregnancy. Karen gave birth to Luke on May 3, 2002. Three months later, the child tested positive for CF. In September 2002, LabCorp issued a corrected report that noted that the fetus was positive for the genetic mutation that causes CF.

The Hoods brought suit against LabCorp in federal district court in Maryland for wrongful birth, arguing that LabCorp was negligent in misreading the results of the genetic testing performed on Karen’s specimen and erroneously reporting that the fetus was not likely to be affected with CF. LabCorp argued that the district court should apply North Carolina law because the standard of care exception in the Restatement (First) of Conflicts of Law §380(2) applied. The district court applied Maryland choice of law rules and Maryland substantive law, and issued a partial ruling. The district court then certified two questions to the Court of Appeals of Maryland.