In an important decision which may impact a variety of lawsuits, the
California Fourth District Court of Appeal ruled in a decision handed down on
April 23, 2008 that wide ranging media coverage of facts or circumstances or an
event which might result in the basis for a potential lawsuit will not trigger the
statute of limitations for any particular plaintiff unless the defendant can
demonstrate that the plaintiff had a reasonable suspicion of the basis of a claim
based on what that plaintiff was actually aware of.
The decision in question was issued in Unruh-Haxton v. The Regents of
the University of California (2008) DJDAR 5802 (Westlaw 1810341) (the “Unruh-
Haxton” case). The Unruh-Haxton case involved eight lawsuits brought by
patients who received fertility treatments from two doctors in the late 1980s at a
clinic in Garden Grove, California. In 1995, it was widely reported from several
news sources that the two doctors had been selling human genetic material from
patients receiving fertility treatments. The patients alleged in their complaints
that they were unaware that they were potential victims until after 2000 and filed
lawsuits within one year of allegedly discovering their claims. In each case, suit
was filed more than ten years after the plaintiffs last received fertility treatments .
The defendants, which included the Regents of the University of
California and Tenet Healthcare (the latter acquired the medical practice in
which the two doctors had worked), filed demurrers on the basis that the actions
were time barred under Code of Civil Procedure section 340.5. The trial court
sustained the defendants’ demurrers after taking judicial notice of approximately
100 news articles and press releases regarding the scandal involving the doctors.
The trial court determined, as a matter of law, that the couples should have
suspected wrongdoing, i.e., that they had “constructive suspicion”, and could
not claim facts that they had only become aware of their claims within one year
of filing suit.
On appeal, the Court of Appeal reversed.
In its decision, the Court of Appeal acknowledged the “discovery rule”
which postpones accrual of a cause of action until the plaintiff discovers, or has
reason to discover, the cause of action citing Norgart v. Upjohn Co. (1999) 21
Cal.4th 383, 397. The Court of Appeal further commented that the discovery rule
focuses on “whether the plaintiffs have reason to at least suspect that a type of
wrongdoing has injured them” and cited Fox v. Ethicon Endo-Surgery, Inc.
(2005) 35 Cal.4th 797, 807 (basically, a “suspicion standard”).
With this backdrop, the Court of Appeal discussed the recent decision in
Nelson v. Indevus Pharmaceuticals, Inc. (2006) 142 Cal.App.4th 1202, 1206, a diet
pill case involving Fen-phen, where the Court of Appeal ruled that the statute of
limitations would not begin to run when the danger of the diet pill was
publicized but instead would commence when the particular plaintiff had a
“suspicion” of wrongdoing. The Court of Appeal also acknowledged another,
prior decision, McKelvey v. Boeing North America, Inc. (1999) 74 Cal.App.4th
151, where the trial court had sustained demurrers based on statute of limitations
involving claims that plaintiffs in a class action suit were injured after being
exposed to contaminated soil and groundwater. As to that decision, the Court of
Appeal noted that the state legislature subsequently modified Code of Civil
Procedure section 340.8(c)(2) to provide that media coverage, by itself, will not
result in placing a reasonable person on inquiry notice in cases involving mass
torts arising from hazards or toxic substances and distinguished McKelvey by
narrowly construing its facts in regard to media coverage in that case.
The Court of Appeal then reasoned that inquiry notice in the Unruh-
Haxton case should be based on each individual plaintiff’s knowledge and
further ruled that the trial court erred in finding that the plaintiffs could not state
facts that they had filed suit within one year of having a suspicion of their claims.
The Court of Appeal further ruled that the trial court erred in taking judicial in
the manner it did in sustaining the demurrers.
The Unruh-Haxton case presents a milestone of sorts for potential
claimants. Going forward, wide ranging media coverage of facts and
circumstances or an event will not, by itself, result in the trigger of the statute of
limitations unless the defendant can demonstrate individual knowledge on the
part of the plaintiff of facts demonstrating that the plaintiff had or should have
had a “suspicion” of a claim. Given that, judicious defense counsel should well
consider facts concerning how a plaintiff receives news, such as through
newspaper subscriptions, television or electronic media.