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Snyder v. American Ass'n of Blood Banks

June 04, 1996


On certification to the Superior Court, Appellate Division, whose opinion is reported at 282 N.J. Super. 23 (1995).

The opinion of the court was delivered by: Pollock, J.

Argued November 6, 1995

Plaintiff William Snyder contracted Acquired Immune Deficiency Syndrome (AIDS) from a transfusion of blood that the Bergen Community Blood Center (BCBC), a non-profit blood bank, had provided to St. Joseph's Hospital. The BCBC is a member of defendant, the American Association of Blood Banks (AABB), an association of blood banks and blood-banking professionals. The primary issue is whether the AABB owed a duty of care to Snyder. A further issue is whether the AABB is entitled to charitable immunity under N.J.S.A. 2A:53-7.

In the Law Division, a jury found the AABB thirty-percent liable for Snyder's damages of $1,350,000, or $405,000. The Appellate Division affirmed. 282 N.J. Super. 23 (1995). We granted the AABB's petition for certification, 142 N.J. 517 (1995), and now affirm.


On August 23, 1984, Snyder underwent open-heart surgery at St. Joseph's Hospital in Paterson. During the surgery he received transfusions of several units of blood platelets, including unit 29F0784, which BCBC had supplied to St. Joseph's.

At the time, no direct test existed to determine whether blood was infected with Human Immunodeficiency Virus (HIV), the cause of AIDS. Other means of making that determination, however, were available. Starting in 1985, the enzyme-linked immunoabsorbent-assay-screening test (the ELISA test) enabled blood banks to screen for HIV.

Under a nation-wide "look-back" program instituted that year, blood banks could determine whether a prospective donor who tested positive for HIV had donated blood before the development of the ELISA test. As part of the "look-back" program sponsored by the AABB, BCBC ascertained in 1986 that the donor of unit 29F0784 was HIV positive. That same year BCBC so informed St. Joseph's Hospital. St. Joseph's, in turn, informed Snyder's doctor, who notified him in 1987. Snyder, who was not otherwise at risk, tested HIV positive. He has since contracted AIDS.

In February 1989, Snyder and his wife, Roslyn (collectively referred to as "plaintiffs"), filed a complaint in the Law Division against St. Joseph's, various physicians and other individuals, BCBC, and the AABB (collectively described as "defendants"). Plaintiffs asserted claims sounding in strict liability, breach of warranty, negligence, and consumer fraud. In the strict-liability claim, Snyder alleged that he had been transfused with a defective blood product that could have been made safe through available blood tests and donor-screening techniques. According to the plaintiffs, the AABB, however, resisted implementation of those tests and techniques. Snyder further alleged that BCBC and the AABB negligently had enhanced his risk of contracting AIDS by failing to implement procedures to prevent HIVinfected donors from giving blood. The AABB denied plaintiffs' essential allegations and asserted the affirmative defense of charitable immunity.

In an earlier proceeding, the Law Division entered an order allowing plaintiffs to proceed with their negligence claim against the AABB. Further, the court ruled that plaintiffs were not entitled to discovery of BCBC'S blood-donor records.

The Appellate Division agreed that plaintiffs could maintain their negligence action. Snyder v. Mekhjian (Snyder I), 244 N.J. Super. 281, 290-93 (1990). Overruling the trial court, the Appellate Division allowed plaintiffs' discovery of the donor's records. We affirmed. 125 N.J. 328 (1991).

Ultimately, all defendants other than the AABB either settled or obtained dismissals. At the trial, the critical issue was whether the AABB had breached a duty of care to Snyder. Hence, the trial focused on the AABB's role in the blood-banking industry and the reasonableness of its response to increasing evidence that blood or blood products could transmit AIDS.

At the Conclusion of an eight-week trial, the jury found that the AABB had been negligent in not recommending surrogate testing. Surrogate testing refers to identifying people at risk for a disease by testing for some symptom or characteristic manifested by a majority of people who have contracted or are at risk of contracting the disease. In the early 1980s, one available surrogate test for HIV infected blood was that for the antibody to the hepatitis B core antigen (the HBc antibody).

The jury further found that the AABB's negligence was a substantial factor in causing Snyder to contract HIV. It also found that the AABB was thirty-percent liable for plaintiffs' injuries.

The Appellate Division affirmed. Writing for the court, Judge Pressler stated that, on the interlocutory appeal, the court had determined that the AABB owed Snyder a duty of care, and that the law of the case precluded a different determination. 282 N.J. Super. at 43.

The Appellate Division explained that the "unique and dominant role of the AABB in blood-banking and the extent of its control over its institutional members" established the requisite relationship between the AABB and blood-product recipients, "whose safety is its avowed paramount concern." Id. at 43. Considering the risk involved and the "public policy concerns implicit in the blood-banking industry's methods of operation," the court determined that the "AABB is reasonably chargeable with a duty of care owed to those recipients whose life and health depend on the reasonableness and prudence of its actions." Id. at 43-44.

On the charitable-immunity issue, the court reasoned that "although [the AABB] is a non-profit corporation engaged in necessary and useful services, [it] is not `organized exclusively for religious, charitable, educational, or hospital purposes.'" Id. at 41 (quoting N.J.S.A. 2A:53-7). Accordingly, the court denied the AABB's claim of charitable immunity.



Crucial to the assessment of the AABB's alleged duty of care is its role in the blood-banking industry in 1983-84. The blood-banking industry consists of a voluntary sector, which depends on voluntary donors, and a commercial sector, which depends on paid donors. Generally speaking, the voluntary sector provides whole blood and blood components, and the commercial sector provides plasma and plasma derivatives.

Central to the voluntary sector is the American Red Cross with its blood banks, community and hospital blood centers, and the AABB, which includes almost every blood bank in the United States. These voluntary blood banks rely on public-spirited donors for their blood supply. Voluntary blood banks commonly separate donated blood into three components: plasma, platelets, and red cells.

Dominating the commercial sector are manufacturers or fractionators of plasma derivatives. In the early 1980s, fractionators collected approximately eighty percent of plasma from paid donors. The voluntary sector provided the remaining twenty percent. Fractionators pool plasma from thousands of donors and process it to produce large batches of plasma derivatives, such as clotting factors for hemophiliacs. Each batch contains enough clotting factor to treat thousands of patients. Institute of Medicine, HIV and the Blood Supply: An Analysis of Crisis Decisionmaking 15 (1995) (the IOM Report).

State and federal regulations apply to both sectors of the blood-banking industry. The Food and Drug Administration (FDA), an agency of the Public Health Service (PHS) in the United States Department of Health and Human Services (DHHS), inspects and licenses blood banks and other blood facilities. See 21 U.S.C.A. § 321(g)(1)(B) (broadly defining "drugs" to include "articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease," which includes blood and blood products); 21 U.S.C.A. § 360(b) (requiring processing establishments, including blood banks, to register with the FDA); 42 U.S.C.A. § 262(c) to (d) (requiring inspection and licensing by the FDA (as delegated by secretary of DHHS) of blood or blood-product facilities that participate in interstate commerce); 21 C.F.R. 5.10(a)(1) and (5) (1995) (delegating to FDA authority vested in the secretary, DHHS, and PHS in the Food, Drug and Cosmetic Act (21 U.S.C.A. § 301-95) and in 42 U.S.C.A. § 262 and 263); 21 C.F.R. 607.3(b) (1995) (defining blood as a drug). In New Jersey, the Department of Health (DOH) discharges similar responsibilities. See N.J.S.A. 26:2A-1 (authorizing DOH to regulate collection, processing and distribution of blood). A blood bank in New Jersey cannot operate without licenses from both the FDA and DOH. 42 U.S.C.A § 262(a); N.J.S.A. 26:2A-4.

Against this background, we consider the role of the AABB. According to the AABB's certificate of incorporation, the purpose of the AABB is

"to foster the exchange of ideas and information relating to blood banks and blood transfusion services[;] . . . to advance and incorporate high standards of performance and service by blood banks[;] . . . to function as a clearing house for the exchange of blood and blood credits . . . [and] to encourage the development of blood banks through education, public information and research."

The AABB describes itself as a "professional, non-profit, scientific and administrative association for individuals and institutions engaged in the many facets of blood and tissue banking, and transfusion and transplantation medicine." It is "the only organization devoted exclusively to blood banking and blood transfusion services." In the early 1980s, the AABB centers collected about half of the nation's blood supply and transfused eighty percent of the blood to patients. Its institutional members were mainly hospitals and non-profit blood centers.

According to the AABB's executive director, Joel Solomon, the general purpose of the AABB is "to develop and recommend standards on the practice of blood banking, to help promote the public health, . . . and to conduct numerous programs for communication and education among organization members and the public at-large." The AABB discharges its educational mission by conducting workshops and seminars, and by publishing books, newsletters, pamphlets, and a peer-review journal, Transfusion. Additionally, the AABB lobbies the United States Congress and state legislatures and participates in federal and state administrative rulemaking procedures.

Significantly, the AABB annually inspects and accredits member institutions. It conditions accreditation on compliance with standards published in its Standards for Blood Banks and Transfusion Services and procedures outlined in its Technical Manual. According to the annual report, AABB standards often become FDA standards. As the AABB has declared, it "leads the industry in setting policy and establishing standards of practice for its member blood banks in excess of the FDA." Both the state and federal government, as well as the blood-banking industry, generally accept AABB standards as authoritative. Consequently, blood banks throughout the nation rely on those standards. For example, BCBC relied on the AABB standards in developing its own operating procedures. In the words of Anthony Passaro, Executive Director of BCBC, the AABB's standards in 1984 "were basically the Bible of the blood center."

AABB's inspections complement the annual inspection by the FDA. If a blood bank loses its AABB accreditation but retains its FDA and New Jersey licenses, it can continue to operate, but only with significant practical problems. Hospitals and other blood banks prefer to work with AABB accredited institutions.

The AABB also issues advisory recommendations and guidelines. The BCBC, which had only a part-time medical director, relied on the AABB for guidance in assuring the safety of its blood supply. According to Dr. Wilkinson, the BCBC's medical director, and Anthony Passaro, its executive director, the BCBC in 1984 followed the AABB's recommendations on AIDS screening. Furthermore, the BCBC would have followed any other AABB recommendations. Dr. Wilkinson testified:

Q: If the A.A.B.B. had recommended that you use a laboratory test for screening aids, would you have done so?

A: Yes.

To the same effect, Mr. Passaro testified:

Q. Mr. Passaro: If the American Association of Blood Banks had recommended that you -- not you personally -- that the Bergen County Community Blood Center do a certain laboratory test for screening donors, would it have been done at the Blood Center?

A. Yes.

In the early 1980s, the AABB led the blood industry. Dr. George F. Grady, an expert in blood-banking procedures and transfusion-related viruses, testified that the AABB had established itself as the leader in setting blood-banking standards. The AABB, moreover, was an active member of the FDA's influential Blood Products Advisory Council and advised the FDA on issues concerning the blood industry. In a recent study of the FDA's response to the threat of AIDS, the Committee to Study HIV Transmission Through Blood and Blood Products (the Committee) of the Institute of Medicine found that "in the early 1980s, the FDA appeared too reliant upon analyses provided by industry-based members of the Blood Products Advisory Council." IOM Report, supra, at 15.

Others also noted governmental deference to the AABB. Dr. Edgar Engleman, the director of the Stanford Blood Bank, testified that in 1984 the FDA took a passive role in developing standards and guidelines, essentially deferring to the AABB in determining the blood-banking industry's response to AIDS. Dr. Thomas Asher, a microbiologist and blood expert who runs a blood-products company, testified that "most state . . . governments incorporate into their state regulations the AABB standards, [which] are, in most cases, the state standards for licensing."

At the state level, the DOH, when renewing blood-bank licenses, accepted reports of AABB inspections in lieu of its own inspections. N.J.A.C. 8:8-1.4(b) (May 21, 1984). DOH also accepted AABB's standards for obtaining medical histories and conducting physical examinations of donors. N.J.A.C. 8:8-5.2 (May 21, 1984).

Finally, in a December 1983 memorandum on potential blood-bank liability from transfusion-related AIDS, the AABB's general counsel advised AABB members that "courts have frequently cited AABB's standards as evidence of appropriate practice, and we believe that the courts will give credence to the recommendations made jointly by AABB and other blood banking organizations."

The picture that emerges is of a private, tax-exempt organization with substantial power over the operation of blood banks, including BCBC. That the blood banks would accept direction from the AABB is understandable: it was their organization. We turn next to the AABB's exercise of that power during the early years of the AIDS crisis.


The first report of severe immune deficiency among homosexuals surfaced in 1981. In 1985, the DHHS approved the ELISA test. Snyder received his transfusion in 1984. Our initial inquiry is whether the BCBC should have known in 1984 that blood and blood products could carry the HIV virus. Answering that question requires consideration of the information available to the AABB about the nature, cause, and transmission of AIDS. It also involves consideration of the roles of the AABB and of the Centers for Disease Control (CDC), a public-health branch of DHHS, in investigating and warning of diseases, such as AIDS.

The CDC first sounded the alarm about AIDS. In 1981, in response to a rapidly spreading and often fatal immunological disorder among homosexual males, the CDC formed a group, subsequently known as the AIDS Task Force. The Task Force consisted of epidemiologists knowledgeable about hemophilia, hepatitis, and sexually-transmitted diseases. From 1982 to 1984, the Task Force played a pivotal role in publicizing the threat of AIDS to the nation's blood supply.

The CDC's primary means of alerting the medical and public-health communities of new diseases is through the publication of the Morbidity and Mortality Weekly Report (MMWR). Between June 1981 and July 1982, the CDC reported in the MMWR a rapidly increasing number of cases, totaling 355, of previously rare immunosuppression-related ailments among homosexual men and intravenous drug users in New York, California, New Jersey, and Florida. The disease, now known as AIDS, had an extremely high mortality rate: forty percent of its victims had died. Data indicated, moreover, that the longer a patient suffered from the disease, the higher the mortality rate climbed. Initially, AIDS occurred only in gay men. By June 1982, however, other groups were at risk. Seventy-five percent of AIDS patients were gay men, twenty percent were intravenous (IV) drug users, and five percent were not readily classifiable.

The AIDS Task Force began to compile a composite description of the disease. Health officials had learned that AIDS victims exhibited persistently swollen lymph nodes long before the onset of other symptoms. One common symptom was depressed T-lymphocyte helper-to-suppressor ratios, an immunological abnormality that reflects a reduced count of a certain lymphocyte, or white blood cell. Another symptom was a low absolute lymphocyte count, which indicates suppression of the immune system.

The two most prominent AIDS-associated diseases were pneumocystis pneumonia and Kaposi's sarcoma. Before their occurrence in AIDS patients, both pneumocystis pneumonia and Kaposi's sarcoma had been extremely rare. Pneumocystis pneumonia is a type of pneumonia that previously had occurred only in severely immunosuppressed patients, such as those undergoing cancer chemotherapy. Kaposi's sarcoma is a skin malignancy that previously had appeared almost exclusively in elderly men. Other AIDS-related ailments included a form of lymphatic cancer known as non-Hodgkins lymphoma and tuberculosis.

Not all patients suffered from the same diseases. Some had pneumocystis pneumonia; others, Kaposi's sarcoma; and still others suffered from both. Almost all, however, displayed the T-cell ratio abnormality and depressed lymphocyte counts. The clustering of the symptoms among homosexual men and IV drug users and the shared abnormality in white blood cell counts led the CDC to conclude in 1982 that the evidence pointed to a single disease with a common underlying factor.

Plaintiffs presented several expert witnesses who explained the evolution of the discovery that blood and blood products could carry the AIDS virus. Dr. Donald Francis, a virologist and epidemiologist, served as director of the AIDS Task Force laboratory in the early 1980s and as assistant director of the CDC's hepatitis-B effort in the 1970s. He testified that in 1982 the CDC detected a pattern in the transmission of AIDS and in the identification of the persons at risk. The pattern revealed that early homosexual AIDS patients were infecting others through sexual contact. Also apparent was an incubation period varying from several months to several years. The CDC postulated in June 1982 that the cause of the disease was an infectious agent, such as a virus.

According to Dr. Francis, the epidemiology of AIDS, which affected primarily homosexuals and IV drug users, bore a remarkable resemblance to that of hepatitis B. Hepatitis B is a liver disease that is transmitted perinatally (from a mother to her fetus) or by either sexual contact or blood. In an outbreak of hepatitis B in the 1970s, the major high-risk populations were homosexual men, IV drug users, and hemophiliacs. Because it could be transmitted by blood, transfusion-related hepatitis B had become a serious public-health concern, particularly to the blood-banking industry.

Dr. Ernest Simon, an expert in blood-banking and transfusion medicine, as well as the deputy director of the FDA's blood division from 1976 to 1980, also testified. He stated that during the early 1980s, "[s]even to ten percent of individuals who were transfused . . . would [subsequently] show evidence of liver dysfunction probably related to transmissibility of viral hepatitis." Members of the AIDS Task Force, noting the epidemiological similarity between AIDS and hepatitis B, feared that blood and blood products could carry AIDS.

On July 16, 1982, after three hemophiliacs had developed AIDS, the CDC published a landmark report. According to Dr. Francis, the report "brought much of our speculation about the disease to . . . a Conclusion about its transmissibility." The three hemophiliacs, unlike the average AIDS patient, were heterosexual men who did not use IV drugs. Furthermore, they did not fit within the observed New York-California geographic distribution of AIDS patients. They shared, however, one potential risk: all three treated their hemophilia with the blood product known as Factor VIII, a concentrated clotting factor. The CDC focused on that factor.

In its July 16, 1982, report in the MMWR, the CDC concluded that "[a]lthough the cause of [AIDS] is unknown, the occurrence among the three hemophiliac cases suggests the possible transmission of an agent through blood products." Study of the Factor VIII manufacturing process led CDC researchers to believe that a virus caused AIDS. In producing Factor VIII, fractionators would filter out larger infectious agents, such as bacteria, to reduce the likelihood of contamination. The filters, however, could not trap smaller agents, such as viruses. Dr. Francis explained that the realization that the infectious agent was a virus that could be transmitted by blood "was a red flag and concerned us greatly about the potential for blood-borne transmission of other therapeutic blood products."

On July 27, 1982, the PHS held a national meeting of blood and blood-product collectors to discuss the threat of AIDS. At that meeting, members of the CDC Task Force reported their findings to blood-industry organizations, including the AABB.

In September 1982, Dr. Edward N. Brandt, Jr., the assistant secretary for health at DHHS, issued a directive incorporating the Conclusions of the July meeting. In that directive, Dr. Brandt stated that

"the recent occurrence of [pneumocystis pneumonia] in three patients with hemophilia raises the question whether the underlying immunodeficiency seen in these patients has the same etiology as among other groups with [pneumocystis pneumonia]. There is need to determine if certain blood products, particularly Factor VIII, are risk factors for AIDS."

Dr. Brandt instructed PHS agencies, including CDC, FDA, and the National Institutes of Health (NIH), to increase their efforts to combat AIDS and to focus on the threat to hemophiliacs from the use of factor concentrate.

In November 1982, the CDC became concerned about the special risk that AIDS posed to doctors, nurses, and other hospital personnel who were exposed regularly to blood. Consequently, the CDC alerted them that "hepatitis-B virus infections occur very frequently among AIDS cases." The CDC warned that "[a]t present, it appears prudent for hospital personnel to use the same precautions when caring for" AIDS patients as when caring for patients with hepatitis B.

Throughout 1982, evidence continued to accumulate that a blood-borne agent caused AIDS. The CDC reported that, as with the spread of the hepatitis virus among gay men, the AIDS virus was transmitted sexually and by blood. Vaccination specialists from the CDC, the FDA, and the NIH noted that the "epidemiology of AIDS suggests an unidentified and uncharacterized blood-borne agent as a possible cause of the underlying immunologic defect." Moreover, the total number of ...

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