Roe et al v. CNTP MCB Inc.

Filing 25

ORDER DENYING THE MOTION FOR ENTRY OF A DEFAULT JUDGMENT AND OUTLINING THE ISSUES THAT WILL NEED TO BE ADDRESSED AT SUCH INQUEST re: 16 MOTION for Default Judgment as to . filed by Baby "B" Roe, Jane Roe, Baby "A" ; Roe, Mary Roe. The motion for a default judgment is denied. This constitutes a written opinion. The Clerk is directed to remove the motion at Docket #16 from the court's list of open motions. (As further set forth in this Order.) (Signed by Judge Colleen McMahon on 6/3/2021) (cf)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
_________________________________________x
BABY “A” ROE, et al.,
Plaintiffs,

21 Civ. 468(CM)(GWG)

-againstCNTP MCB INC.,
Defendant.
________________________________________x
ORDER DENYING THE MOTION FOR ENTRY OF A DEFAULT JUDGMENT
AND OUTLINING THE ISSUES THAT WILL NEED TO
BE ADDRESSED AT SUCH INQUEST
McMahon, J.:
The complaint in this action alleges that the parents of Babies “A” and “B” Roe, who have
been permitted to sue sub nom Jane Roe and Mary Roe in order to protect the identity of the minor
children (see Docket # 8), were damaged as a result of receiving “defective” sperm from the
defendant sperm bank, which is located here in New York City. The Roe Family lives in Northern
California. The babies, twin boys, suffer from “various ailments” including gastro-esophageal
reflux; at least Baby A suffers from autism. The twins were conceived using the sperm of “Donor
121.” Neither the Plaintiff Mothers nor the Defendant sperm bank had any of Donor 121’s sperm
left after the births of the children, so it could not be tested at that time for “defects” and cannot be
tested now.
The complaint alleges both breach of contract and fraud arising out of the same facts.
Paragraph 4 of the Sperm Purchase Agreement between Plaintiff Mothers and Manhattan
Cryobank, the predecessor in interest of Defendant, provides as follows:

Manhattan Cryobank acknowledged that they [sic] have performed a complete
and thorough screening of the donor(s) for inheritable birth defects, inheritable serious
illnesses that could be fatal, life threatening, or could result in permanent impairment
of a body function or permanent damage to a body structure and for infectious
diseases and, further, that they [sic] have found no evidence of such inheritable
birth defects, serious illness or infectious disease in the donor’s whose semen will
be used in the RECIPIENT’s reproductive procedure.
Plaintiffs allege both that Manhattan Cryobank breached its contract with them (I assume by failing
to perform the promised “complete and thorough screening,” since that is the only promise made
in Paragraph 4 that is capable of being performed), and that it defrauded them (by representing to
them that it found no evidence that Donor 121 was a carrier of “inheritable birth defects, serious
Illness or infectious disease”). In support of these allegations, it is alleged that an employee of a
sperm bank in California, which is/was somehow related to the Defendant sperm bank, advised
the plaintiff parents that another baby born using sperm from Donor 121 suffered from a speech
delay.
The Plaintiff mothers seek damages for the emotional and physical distress they have
suffered and are suffering as a result of having less-than-perfect children, as well as damages to
redress the cost of raising developmentally impaired children. They also seek injunctive relief of
an unspecified nature.
Service of Process and Entry of Default
This action was commenced by the filing of a complaint on January 19, 2021. The docket
sheet reflects that Defendant was served on February 2, 2021, by serving a copy of the summons
and complaint on the Secretary of State of New York. (Docket #9.) No appearance having been
entered within 21 days (Fed. R. Civ. P. 12(a)), the Clerk issued a Certificate of Default on February
24, 2021 (Docket # 13) – even though it is highly unlikely, given the pandemic, that the Secretary
of State had managed to forward process to the defendant during that period.

On March 11, 2021, plaintiff’s counsel failed a notice of motion for a default judgment. To
guard against inadvertent defaults (such as those that might occur during a pandemic, when the
Secretary of State’s office is not operating at full capacity, such that things might fall through the
cracks), this court’s Individual Rules provide that service of such a motion must be on 30 (not 21)
days’ notice to the defaulting party, and that the motion papers must be served in the same manner
as service of the summons and complaint. This plaintiff’s counsel did not effect such service until
April 13, 2021. (Docket #22.) Predictably, service of the motion was accomplished by going back
to the Secretary of State’s office and leaving two sets of the default judgment papers with a clerk
there.
Thirty days and more have passed since the second trip to Albany. No one has yet entered
an appearance for the defendant. Plaintiffs ask that their motion for a default judgment be granted.
Salient Procedural Facts
The contract between Plaintiffs and Defendant provides in no uncertain terms for
arbitration. (Complaint ¶ 9.) Plaintiffs commenced an arbitration before the designated disputed
resolution forum (JAMS) in May 2020, and even paid the filing fee for Defendant as well as for
themselves. JAMS was allegedly unable to contact the Defendant and it never appeared.
(Complaint ¶ 11.) Plaintiffs discontinued the arbitration in November 2020 in favor of bringing
this action.
DISCUSSION
A court may, but is not required to, enter a default judgment against a defendant who has
been properly served, but failed to appear. Pinaud v. County of Suffolk, 52 F.3d 1139, 1152 n. 11
(2d Cir. 1995). The Second Circuit has noted that “dispositions of motions for entries of defaults
and default judgments. . . are left to the sound discretion of a district court.” Shah v. N.Y. State

Dep’t of Civil, Serv., 168 F.3d 610, 615 (2d Cir. 1999) (quoting Enron Oil Corp. v. Diakuhara, 10
F.3d 90, 95 (2d Cir. 1993)).
The mere fact that no answer has been filed is insufficient to allow the court to enter a default
judgment. “Rule 55 sets forth a two-step process for an entry of default judgment.” GuideOne
Specialty Mutual Ins. Co. v. Rock Community Church, Inc., 696 F. Supp. 2d 203, 208 (E.D.N.Y.
2010) (citing Enron, 10 F.3d at 95-96)). Plaintiffs seeking default must clear two hurdles: they
must both prove that the court has jurisdiction over the defendant, and establish that the facts
pleaded entitle them to relief as a matter of law.
First the plaintiff must establish to the court’s satisfaction that a defendant again whom
default is sought has in fact been served with process. “[S]ervice of [process] is the procedure by
which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction
over the person of the party served." Mississippi Publ'g Corp. v. Murphree, 326 U.S. 438, 444-45
(1946). “Before a federal court may exercise personal jurisdiction over a defendant, the procedural
requirement of service of [process] must be satisfied.” Omni Capital Int'l, Ltd. v. Rudolf Wolff &
Co., 484 U.S. 97, 104 (1987). Ergo the movant must file an affidavit demonstrating that the party
against whom default judgment is sought has been properly served and has failed to defend. At
that point the Clerk of Court “must” note the party’s default on the record. Fed. R. Civ. P. 55(a);
Local Rule 55.1. This is done by issuing a certificate of default.
At the second step, the plaintiff applies to the court for a judgment. “[A]fter the clerk of
the court enters default against a party, if that party fails to appear or otherwise move to set aside
the default pursuant to Rule 55(c), the court may enter default judgment.” GuideOne Specialty
Mut. Ins. Co., 696 F. Supp. 2d at 208 (citing Fed. R. Civ. P. 55(b)). The operative word in that
sentence is “may.” A court retains discretion to determine whether a final default judgment is

appropriate. See Enron 10 F.3d at 95. In light of the Second Circuit's “oft-stated preference for
resolving disputes on the merits,” default judgments are “generally disfavored.” See Enron, 10
F.3d at 95-96.
Thus, despite a defendant's default, the plaintiff bears the burden of demonstrating that the
unchallenged allegations and all reasonable inferences drawn from the evidence provided establish
the defendant's liability on each asserted cause of action. See City of New York v. Mickalis Pawn
Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65
(2d Cir. 1981). 1 If liability is established as to a defaulting defendant, then the Court must conduct
an analysis to establish damages to a “reasonable certainty.” Credit Lyonnais Sec. (USA), Inc. v.
Alcantara, 183 F.3d 151, 155 (2d Cir. 1999).
As there seems to be no question that defendant was duly served in compliance with the
rules (though the court is unsure whether it has actually received notice of the lawsuit), we turn to
step two of the default process: whether the unchallenged assertions entitle the plaintiffs to
judgment.
They do not.
The Motion Is Denied Because The Well Pleaded Facts of the Complaint Do Not Entitle
Plaintiff To Relief Without the Introduction of Additional Evidence
The well-pleaded facts establish the following:
1.

Plaintiffs purchased Donor 121’s sperm from the defendant and used the same to

conceive their sons in 2017. The babies were born in February 2018. (Complaint ¶¶ 13, 15.)
2.

One of Plaintiff’s sons (Baby A) has autism; the other (Baby B) has delayed speech

and anemia; both boys have had GERD from an early age. (Id. ¶¶ 16, 18, 24.)

1

Interestingly – and significantly – JAMS has a similar requirement. It will not simply enter judgment after a
default, but requires a claimant to “submit such evidence as the Arbitrator may require for the rendering of an
Award.” JAMS Rule 22(j).

3.

Plaintiffs have been unable to contact the Defendant sperm bank despite multiple

attempts to do so. (Id. ¶ 28.)
4.

Plaintiffs obtained a profile of Donor 121 from a California sperm bank that had a

“working relationship” with Defendant. (Id. ¶ 29.)
5.

There were missing pages in the profile and at least one (unspecified) question was

not answered. (Ibid.)
6.

The manager of the California sperm bank told Plaintiff Jane Roe that the sperm

donor had originally donated in 2008; that “sufficient testing” had not been done at that time; and
that the donor’s sperm had not been retested. (Id. ¶ 30.) Obviously, this testimony would not be
admitted at trial – at least without a rather extensive voir dire – since as pleaded, the information
was received from someone who did not work at the Defendant sperm bank, not from the
Defendant or from its business records, and so is rank hearsay if offered for the truth of the matter
asserted.
7.

The donor’s “long profile” showed that he had a history of anemia. 2 (Id. ¶ 32.)

8.

The manager in California told Jane Roe that another child conceived with Donor

121’s sperm had a speech delay. (Id. ¶ 31.) This, too, runs afoul of the hearsay rule.
Those are the pleaded facts. At least Facts 6 and 8 are not “well pleaded” if offered for the
truth of the matter asserted.
The well pleaded facts do not in and of themselves entitle the plaintiffs to relief.
The court will not grant the motion for a default judgment because I cannot say, even
drawing inferences in favor of the Plaintiffs, that the well-pleaded facts entitled Plaintiffs to relief.

2

The complaint says that “at a minimum” he had a history of anemia, but the complaint pleads no other facts that
would shed any light on whether there were any other medical conditions from which Donor 121 suffered.

In fact, I would not grant the motion even if I were to consider Facts 6 and 8 (the hearsay
statements) to be true.
Basically, what Plaintiffs want me to do is fall victim to the post ergo propter hoc fallacy:
since Y happened after X, X must have caused Y. Or, putting it in terms of the facts of this case:
Babies A and B Roe were conceived with Donor 121’s sperm; Baby A has autism and GERD and
Baby B has delays in speech, anemia and GERD; ergo Donor 121 must have had defective sperm
and that sperm caused these disorders. However, the conclusion does not necessarily follow from
the complaint’s premise.
There is much missing from the complaint that would be needed before the court could
conclude that Donor 121’s sperm caused Baby A to suffer from autism (to take what I perceive to
be the most serious allegation) or from any other medical or developmental condition that could
have been uncovered via appropriate and available genetic testing . The contract that was allegedly
breached in this case required MCB to test for “inheritable birth defects, inheritable serious
illnesses that could be fatal, life threatening, or could result in permanent impairment of a body
function or permanent damage to a body structure and infectious diseases.” It is far from apparent
that autism falls within this definition. While experts agree that a tendency to autism can be
inherited (a fact not pleaded in the complaint, but which the court will not ignore for purposes of
this motion), over 100 different genes have been identified that are thought to contribute to autism. 3
The complaint does not allege either that (1) Baby A carries any of those genes, or that (2) the
genetic mother of the child 4 does not carry any of those genes. Lacking any paternal sperm that

3
4

Jessica Wright, Analysis of sequences pegs 102 top autism genes, Spectrum (Jan. 24, 2020)
https://www.spectrumnews.org/news/analysis-sequences-pegs-102-top-autism-genes/.
The complaint does not allege whether Jane Doe, Mary Doe, or a third party is the genetic mother of Babies A
and/or B.

can be tested, one would need to know both of these things in order to attribute inheritance of
autism-associated genes to the father.
Moreover, it is far from clear to the court that even knowing these two facts would admit
of an inference that Donor 121’s sperm “caused,” for example, Baby A’s autism. Maternal and
environmental factors may come into play as well. 5 One of two identical twins can have autism
and the other not, or not to the same degree, even though identical twins have the same genetic
profile, which is all that a sperm donor can provide. 6 I cannot tell from the complaint whether
Babies A and B are identical or fraternal twins, but if they are identical and only one has autism,
then something other than genetic factors could well be at play. This may also be the case with
the other disorders identified in the complaint. These issues would have to be addressed – quite
possibly with expert testimony – in order to develop enough facts to allow for a finding that Donor
121’s sperm was the cause of the various medical and developmental conditions exhibited by
Babies A and B.
Testimony would also be needed to establish the meaning of the terms “inheritable birth
defects” or “inheritable serious illnesses that could be fatal, life threatening, or could result in
permanent impairment of a body function or permanent damage to a body structure,” as used in
the contract between plaintiffs and Manhattan Cryobank. 7 Not every medical condition that
manifests in an infant or young child would necessarily fall within the court’s understanding of

5

6
7

See, e.g, Identical twins with autism differ significantly in severity of social traits, Autism Speaks (Jan. 14, 2020),
www.autismspeaks.org/science-news/identical-twins-autism-differ-significantly-severity-social-traits (positing
that environmental factors early in life are a significant influence on the development and manifestation of
autism).
Studies appear to show that when one monozygotic twin has autism, the other is somewhere on the autism
spectrum between 60-90% of the time.
I do not understand any of the medical conditions identified in the complaint to qualify as “infectious diseases,”
which are diseases passed from one person to another via bacteria, viruses, fungi or parasites – herpes simplex
being an example of an infectious disease that is not genetic in nature but that can be passed, albeit from mother
to child, during the birth process. It may be that there are “infectious diseases” carried in sperm, but as I cannot
infer that from my understanding of the term, someone would have to testify about it.

those terms. For example, delayed speech would not seem to qualify as either a birth defect or
permanent impairment of any bodily function; the same is true of GERD, which is not generally
thought to be either a birth defect or life threatening.
It seems to me that there are two aspects to this question. One is whether there is a general
understanding in the medical community about what the terms used in the contract mean; the other
is whether there is an understanding specific to the sperm donor industry, since these are conditions
for which the sperm bank agreed to test. The meaning of these terms is certainly not self-evident
or unambiguous. I do not know whether it is possible to do a screening test on sperm for “autism”
or “GERD” or “delayed speech.” If there is no test that would uncover the conditions that afflict
Babies A and B, then it may well be that those terms as used in this contract could not be interpreted
to cover those conditions – otherwise, performance of the contract would be impossible. It may be
that the sperm bank tested the sperm for all the defects for which it was possible to test, in which
case there was no breach of contract. The fact that the children have medical or developmental
conditions does not establish that all the testing that was possible was not performed; neither does
the hearsay statement of an employee at a different sperm bank. And what the sperm bank
represented to the parents about the type of testing that was being done would of course play into
the fraud claim – assuming that a misrepresentation claim is legally cognizable, since what is
alleged is essentially a breach of contract.

Inheritance is a complicated matter. The court is willing to receive evidence that would
support the conclusion plaintiffs wish me to draw – namely, that sperm from Donor 121 was the
but for cause of the conditions from which Babies A and B suffer. If the defendant continues to
absent itself from these proceedings, plaintiffs may well prevail, even if there were contradictory
evidence that could be introduced. But the text of the complaint simply does not admit of the
inference that Donor 121’s sperm is the reason that the twins have medical or developmental
conditions. Therefore, even assuming the well-pleaded (non-hearsay) facts to true, the motion for
a default judgment must be denied, because those facts, without more, are insufficient to establish
liability. If plaintiffs want to recover from defendant, they will have to prove their case – just as
they would have had to at JAMS in light of the defendant’s default (see n.1, supra).
The motion for a default judgment is denied. This constitutes a written opinion. The Clerk
is directed to remove the motion at Docket #16 from the court’s list of open motions.

Dated: June 3, 2021

_______________________________________
U.S.D.J.

BY ECF TO COUNSEL