Judge: Daniel S. Murphy, Case: 25STCV04012, Date: 2025-04-30 Tentative Ruling

Case Number: 25STCV04012    Hearing Date: April 30, 2025    Dept: 32

BACKGROUND

            On February 13, 2025, Plaintiff Christine Nemitz filed this action against Defendants Biomat USA, Inc; Grifols USA, Inc.; Grifols USA, LLC; and Grifols Worldwide Operations USA. The complaint asserts causes of action for (1) negligence, (2) defamation, (3) breach of contract, (4) breach of the covenant of good faith and fair dealing, (5) interference with prospective economic advantage, (6) violation of privacy, (7) declaratory judgment, and (8) unfair business practices.

            Plaintiff alleges that she donated blood to Defendants in exchange for money. However, in February 2024, Defendants allegedly performed a test on Plaintiff’s blood that returned a false positive for HIV. As a result, Defendants identified Plaintiff to the National Donor Deferral Registry (NDDR), which caused Plaintiff to be banned from donating blood nationwide. Plaintiff underwent a more accurate confirmatory test which confirmed that she did not have HIV. Plaintiff alleges that Defendants falsely identified her as HIV-positive using a test known to have a high false-positive rate and failed to employ confirmatory testing. Plaintiff alleges that Defendants have refused to correct their own records or to remove Plaintiff’s name from the NDDR despite proof of the error. As a result of Defendants’ actions, Plaintiff has allegedly suffered mental distress and stigma, and allegedly lost income from being unable to donate blood. 

            On March 14, 2025, Defendants filed the instant demurrer and motion to strike. The motion to strike was originally scheduled to be heard on May 2, 2025. However, because the demurrer and motion to strike are companion filings concerning the same subject matter, the motion to strike is advanced and heard on this date.

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ. Proc., § 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court finds that Defendants have satisfied the meet and confer requirement. (See Bolcom Decl.)

DISCUSSION

I. Demurrer

            a. Conflict of Laws

Defendants argue that Michigan law[1] should apply under the governmental interest test. (See Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 919-20.) However, Defendants do not identify a material distinction between Michigan and California law as applied to the claims in question, which is the first step in the governmental interest test. (Ibid.)

Moreover, even if Michigan law applied, that alone would not be a basis for sustaining the demurrer. Defendants argue that Michigan law should apply but do not substantively analyze each claim under Michigan law. In other words, Defendants do not explain how the claims fail under Michigan law. Instead, Defendants rely solely on California law when discussing the factual sufficiency of each claim. Therefore, the Court proceeds under California law for purposes of this demurrer.     

b. Negligence

            The elements of negligence are: (1) a duty to exercise ordinary care; (2) breach of that duty; (3) causation; and (4) damages. (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917.)

Here, Plaintiff alleges that “Defendants owed a duty to Plaintiff to use reasonable care when obtaining, handling, processing, and testing her blood donation.” (Compl. ¶ 25.) Defendants allegedly breached this duty by “caus[ing] Plaintiff’s sample to be tainted or compromised in some way which led to the false HIV positive screening test.” (Ibid.) Defendants allegedly used a screening test they knew to be inaccurate, failed to perform confirmatory testing, disclosed a false-positive test result to the NDDR, and refused to make corrections after being confronted with proof. (Id., ¶¶ 27-28.) Plaintiff alleges that as a result, she has suffered stigma, mental distress, and lost out on income she could have gained from donating blood. (Id., ¶ 30.)

These are ultimate facts which sufficiently state a negligence claim for pleading purposes. Evidentiary facts pertaining to the exact nature of Defendants’ actions, or to the precise extent of Plaintiff’s harm, should be left for discovery.

The demurrer is OVERRULED as to the first cause of action.  

c. Defamation

“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or cause special damage.” (Wong v. Jing (2011) 189 Cal.App.4th 1354, 1369.)

Here, Plaintiff alleges that Defendants published false test results to the NDDR and other third parties stating that Plaintiff was HIV-positive. (Compl. ¶ 31.) Defendants published the test results despite allegedly knowing that the results were false because Plaintiff presented Defendants with confirmatory test results showing Plaintiff to be HIV-negative. (Ibid.) This allegedly resulted in stigma and barred Plaintiff from donating blood anywhere. (Id., ¶ 32.) These facts satisfy the elements of defamation.

Defendants argue that truth is a complete defense to a defamation claim. (See Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 889.) Defendants argue that Plaintiff has not shown the second test result invalidated the first so as to render the first result false. However, this is a factual issue not resolvable on the pleadings. Plaintiff has alleged that Defendants’ test result was false and that Defendants knew it to be false. Plaintiff has alleged that the second, confirmatory test was accurate and proved she did not have HIV. These facts must be accepted as true on a demurrer. Therefore, Plaintiff has adequately pled the falsity of the publication. 

Defendants next argue that the test result was an opinion, not a provable assertion of fact. (Grenier v. Taylor (2015) 234 Cal.App.4th 471, 486.) However, a test result showing that an individual has HIV is a provably false assertion of fact, not a mere opinion. In the context of this case, the test results are intended to inform donation centers of which individuals have HIV so that the centers know not to allow those individuals to donate blood. In other words, a reasonable person would view the test results as statements of fact. Therefore, Plaintiff has pled an actionable statement of fact.

Defendants argue that reporting the test result was a matter of public concern, citing Campanelli v. Regents of the Univ. of Cal. (1996) 44 Cal.App.4th 572 for support. That case discussed the making of a statement “in a public debate, a heated labor dispute, or in another setting in which the audience may anticipate efforts by the parties to persuade others to their positions by use of epithets, fiery rhetoric or hyperbole.” (Id. at p. 580.) The court also noted that the First Amendment protects publications that “raise questions and prompt investigation or debate,” even if the publication itself is not entirely accurate. (Id. at p. 581.) The court found that the statement at issue “was of the kind typically generated in a spirited dispute between two divergent viewpoints--in short, nonactionable opinion.” (Id. at p. 581.) But in the instant case, Defendants simply published a test result showing Plaintiff to be HIV positive. This was a direct assertion of fact, not an issue being debated publicly, nor was it meant to trigger public discussion.[2]

Lastly, Defendants argue that the complaint fails to set forth the actual statement being challenged as defamatory. (See Gilbert v. Sykes (2007) 147 Cal.App.4th 13, 31 [“the words constituting an alleged libel must be specifically identified, if not pleaded verbatim, in the complaint”].) However, Plaintiff has alleged that Defendants published a false test result showing Plaintiff to be HIV positive. This sets forth the nature of the publication with the requisite specificity.

The demurrer is OVERRULED as to the second cause of action.

d. Breach of Contract

To establish breach of contract, a plaintiff must show: (1) the contract existed, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)  

The breach of contract claim is premised on the allegation that Plaintiff was ordinarily permitted to donate blood, and was paid accordingly, as long as she signed a form before each donation attesting that she had refrained from certain activities. (Compl. ¶¶ 35-37.) The complaint alleges that “Plaintiff upheld the parties’ contract by refraining from the proscribed activities and donating her plasma. Defendants breached the contract with Plaintiff by refusing to continue collecting Plaintiff’s blood plasma and no longer paying her for her blood plasma donations.” (Id., ¶ 39.)

Reading the claim in context, it appears to be based on Defendants’ refusal to collect Plaintiff’s blood once Plaintiff tested positive for HIV. However, Plaintiff does not allege a contract wherein Defendants agreed to allow Plaintiff to continue donating blood in perpetuity. The fact that Plaintiff signed a form each time she donated blood, confirming she had refrained from certain activities, does not mean Defendants are contractually bound to take Plaintiff’s blood any time she refrains from the proscribed activities. There is no indication from the facts alleged that Defendants entered into a contract requiring them to take someone’s blood.

To the extent there was a contract which required Defendants to pay Plaintiff in exchange for a blood donation, Plaintiff does not allege any instance where Defendants took her blood but refused to pay. Therefore, Plaintiff has not adequately alleged a breach of contract.

The demurrer is SUSTAINED as to the third cause of action.

e. Covenant of Good Faith and Fair Dealing

“[I]n every contract there is an implied covenant of good faith and fair dealing that neither party will do anything which injures the right of the other to receive the benefits of the agreement.” (Murphy v. Allstate Ins. Co. (1976) 17 Cal.3d 937, 940.) “[T]he duty of good faith and fair dealing arises from and exists solely because of the contractual relationship between the parties.” (Jones v. Aetna Casualty & Surety Co. (1994) 26 Cal.App.4th 1717, 1722.) As discussed above, Plaintiff has not sufficiently pled a contract. Therefore, the derivative implied covenant claim fails as well.    

The demurrer is SUSTAINED as to the fourth cause of action.

f. Interference with Prospective Economic Advantage

The elements of a claim for intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) To maintain a claim for intentional interference with prospective economic advantage, a plaintiff must demonstrate that the defendant engaged in an independently wrongful act. (Id. at p. 1158.) “[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Id. at p. 1159.)

Here, Plaintiff alleges that Defendants’ publication of the false HIV test result prevented her from earning money at other donation centers, thus interfering with her economic relations with those other centers. (Compl. ¶¶ 52-58.) This constitutes an interference with prospective economic relations.

Defendants argue that Plaintiff has not pled the existence of an actual economic relationship with a prospect of future benefit, or Defendants’ knowledge of such relationship. However, Plaintiff alleges that she “donated blood plasma to Defendants and other plasma donation centers on numerous occasions in the past.” (Compl. ¶ 53.) Plaintiff alleges that Defendants were aware donors earned money at competing donation centers. (Ibid.) Plaintiff alleges that Defendants published the false test results with a “conscious desire” to disrupt Plaintiff’s relationship with other donation centers. (Id., ¶ 56.) These facts sufficiently establish that Plaintiff had existing relationships with other donation centers and that Defendants were aware of those relationships. The precise identity of the other donation centers, and Defendants’ knowledge of them, are factual matters for discovery.

Defendants also argue that Plaintiff fails to plead an independently wrongful act. However, as discussed above, Plaintiff has adequately pled defamation. The defamatory publication of a false test result constitutes an independently wrongful act. Therefore, Plaintiff has sufficiently alleged a claim for interference with prospective economic relations. 

The demurrer is OVERRULED as to the fifth cause of action.

g. Violation of Privacy Rights

Plaintiff alleges that “Defendants violated Plaintiff’s federal and state privacy rights by disclosing false, but private and confidential, medical information to third parties without her consent in violation of state and federal law.” (Compl. ¶ 60.)

Defendants argue that only Michigan law could apply to this claim because as a Michigan resident, Plaintiff cannot claim any protection under California’s constitution. Again, Defendants do not explain why this is a basis for demurrer, i.e., why the claim fails under Michigan law.

In reply, Defendants shift to arguing that “Plaintiff, by her own words, has not shown otherwise that Michigan law applies to this one cause of action. There is a presumption that California law applies unless the proponent of foreign law can show otherwise.” (Reply 5:7-9.) However, it was Defendants in the first place who argued “only Michigan law would be applicable” because Plaintiff is a Michigan resident. (Dem. 19:11-16.) By arguing that only Michigan law could apply but failing to explain how the claim would fail under Michigan law, Defendants have presented no basis for demurrer.    

The demurrer is OVERRULED as to the sixth cause of action.

h. Declaratory Relief

“Any person . . . who desires a declaration of his or her rights or duties with respect to another . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties . . . .” (Code Civ. Proc., § 1060.) “Declaratory relief operates prospectively to declare future rights, rather than to redress past wrongs.” (Canova v. Trustees of Imperial Irrigation Dist. Employee Pension Plan (2007) 150 Cal.App.4th 1487, 1497.) “The fundamental basis of declaratory relief is an actual, present controversy.” (Tashakori v. Lakis (2011) 196 Cal.App.4th 1003, 1012.)

Plaintiff seeks a declaratory judgment that she is not HIV-positive and that Defendants must correct their records and remove Plaintiff from the NDDR list. (Compl. ¶ 63.) This is an actual, ongoing controversy because Plaintiff remains classified as HIV-positive and is currently unable to donate blood anywhere due to her status. (Id., ¶ 65.) Plaintiff has also had other rights restricted based on her status, including the right to donate and receive organ transplants, to obtain employment in health fields, and to obtain insurance information. (Id., ¶ 66.) This represents a dispute over future rights, not past wrongs. Thus, Plaintiff has adequately pled a declaratory relief claim.

In reply, Defendants argue that “this dispute is not ripe for declaratory relief as the same potential problem could come up again and again with a dispute over future test results.” (Reply 5:23-24.) The possibility that another dispute could arise over a future test result does not negate the existence of the present dispute over the test result at issue in this lawsuit. Plaintiff is still entitled to seek resolution of the present dispute over the current test result and her current status on the NDDR list. Plaintiff seeks a declaration that the current result is false and that she should not currently be on the NDDR list. Plaintiff does not seek a declaration that she can never test positive for HIV or that she must be excluded from the NDDR list in perpetuity.         

The demurrer is OVERRULED as to the seventh cause of action.

i. Unfair Business Practices

Business and Professions Code section 17200 prohibits unlawful, unfair, or fraudulent business acts or practices. Each of the three prongs is an independent basis for relief. (Smith v. State Farm Mutual Automobile Insurance Co. (2001) 93 Cal.App.4th 700, 718.) Unlawful conduct is defined as any practice forbidden by law. (Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.) UCL actions alleging unlawful conduct “borrow” from other statutes or common law causes of action outside Section 17200. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1383.)  

As discussed above, Plaintiff has sufficiently pled claims for defamation and interference with prospective economic relations. These torts constitute wrongful conduct as defined by common law, which may then be considered “unlawful” under the UCL. (See Klein, supra, 202 Cal.App.4th at p. 1383.) Thus, Plaintiff has pled a violation of the UCL.

Defendants correctly note that Plaintiff must allege she “has suffered injury in fact and has lost money or property as a result of the unfair competition.” (See Bus. & Prof. Code, § 17204.) However, Plaintiff has done so. As discussed above, Plaintiff alleges that Defendants’ actions caused her to be prohibited from donating blood anywhere, thus losing a source of income. Therefore, Plaintiff has sufficiently pled her standing under the UCL.

The demurrer is OVERRULED as to the eighth cause of action.

II. Motion to Strike

            a. Punitive Damages

            “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id., subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id., subd. (c)(2).) Fraud is “intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id., subd. (c)(3).)

A complaint must “must include specific factual allegations showing that defendant's conduct was oppressive, fraudulent, or malicious to support a claim for punitive damages.” (Today's IV v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1193.) “Punitive damages may not be pleaded generally.” (Ibid.)

Here, the complaint does not contain specific aggravating facts demonstrating malice, oppression, or fraud. Additionally, Plaintiff does not address Defendants’ contention that punitive damages are barred under Code of Civil Procedure section 425.13. Under that statute, a complaint pertaining to the professional negligence[3] of a health care provider cannot include a claim for punitive damages unless the plaintiff files a motion demonstrating a “substantial probability” of success under Civil Code section 3294. (Code Civ. Proc., § 425.13(a).) Plaintiff has not satisfied this requirement. Thus, the complaint improperly pleads punitive damages.

The motion to strike is GRANTED as to punitive damages.

b. Attorney’s Fees

“Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . .” (Code Civ. Proc., § 1021.) Thus, “[a]ttorney fees are not recoverable unless a fee award is expressly authorized by either statute or the parties’ contract.” (Ilshin Investment Co., Ltd. v. Buena Vista Home Entertainment, Inc. (2011) 195 Cal.App.4th 612, 627.)

Here, the complaint alleges no contractual or statutory basis for attorney’s fees. Therefore, the claim for attorney’s fees should be stricken.

The motion to strike is GRANTED as to attorney’s fees.

c. Restitution and Disgorgement

            “Under the UCL, an individual may recover profits unfairly obtained to the extent that these profits represent monies given to the defendant or benefits in which the plaintiff has an ownership interest.” (Lee v. Luxottica Retail North America, Inc. (2021) 65 Cal.App.5th 793, 801.) “[N]onrestitutionary disgorgement of profits—that is, profits that are neither money a defendant took from the plaintiff nor funds in which the plaintiff has an ownership interest—is not an authorized remedy under the UCL in an individual action.” (Id. at pp. 800-01.)

            Here, the complaint does not allege that Plaintiff lost any money to which she had an ownership interest. At most, the complaint alleges that Plaintiff lost out on prospective income from donations. But Plaintiff has no ownership interest in income from donations that she never made. Nor would this be money that Defendants took from Plaintiff.

In her opposition, Plaintiff argues that Defendants saved money at Plaintiff’s expense by using a cheaper, less accurate screening test and refusing to correct their mistake. But again, Plaintiff has no ownership interest in the money that Defendants saved. Because Plaintiff has not alleged that any money was taken from her, there is no basis for restitution or disgorgement.   

            The motion to strike is GRANTED as to restitution and disgorgement.  

            d. Emotional Distress

            Defendants argue that the allegations pertaining to emotional distress damages should be struck for lack of factual support. The complaint contains sufficient facts for pleading purposes. The existence and extent of Plaintiff’s emotional injuries should be left for discovery.

            The motion to strike is DENIED as to emotional distress damages.

            e. Damages

            Defendants argue that Plaintiff is not entitled to damages because the allegations are too speculative. However, the complaint is sufficiently certain for pleading purposes. The complaint alleges that Plaintiff lost income as a result of a false test result prohibiting her from donating blood. The complaint also alleges that being falsely identified as having HIV caused Plaintiff to endure stigma and emotional distress. For pleading purposes, it is sufficiently clear what Plaintiff’s damages are and what caused them.

            The motion to strike is DENIED as to damages.

            f. Economic Loss Rule

            Economic loss consists of “damages for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits—without any claim of personal injury or damages to other property.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless the purchaser “can demonstrate harm above and beyond a broken contractual promise,” such as some form of personal injury or damage to property other than the defective product itself. (Ibid.) The economic loss rule exists to prevent “the law of contract and the law of tort from dissolving one into the other.” (Ibid.) “An omission to perform a contract obligation is never a tort, unless that omission is also an omission of a legal duty.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551.)

            Here, the facts alleged demonstrate personal injury beyond a broken contractual promise. Plaintiff does not only allege lost income from blood donations, but also personal stigma and emotional distress from being labeled as HIV-positive. These injuries allegedly resulted from Defendants’ intentional publication of a false test result. This constitutes a tort independent of any purported contractual obligations. Therefore, the economic loss rule does not apply.

            g. Public Harm

            Plaintiff alleges that Defendants’ actions have caused harm to “Plaintiff and the public.” (Compl. ¶¶ 68-70.) Defendants argue that the references to “the public” should be stricken because this is a private dispute. The passing references to the public constitute proper contextual information. The allegations need not be stricken.          

            The motion is DENIED as to references to “the public.”

CONCLUSION

            Defendants’ demurrer is SUSTAINED in part as set forth above with leave to amend. The motion to strike is GRANTED in part as set forth above with leave to amend.