Opinion ID: 2608931
Heading Depth: 3
Heading Rank: 1

Heading: Breach of Fiduciary Duty and Lack of Informed Consent

Text: (2a) Moore repeatedly alleges that Golde failed to disclose the extent of his research and economic interests in Moore's cells [6] before obtaining consent to the medical procedures by which the cells were extracted. These allegations, in our view, state a cause of action against Golde for invading a legally protected interest of his patient. This cause of action can properly be characterized either as the breach of a fiduciary duty to disclose facts material to the patient's consent or, alternatively, as the performance of medical procedures without first having obtained the patient's informed consent. (3) Our analysis begins with three well-established principles. First, a person of adult years and in sound mind has the right, in the exercise of control over his own body, to determine whether or not to submit to lawful medical treatment. ( Cobbs v. Grant (1972) 8 Cal.3d 229, 242 [104 Cal. Rptr. 505, 502 P.2d 1]; cf. Schloendorff v. New York Hospital (1914) 211 N.Y. 125 [105 N.E. 92, 93].) Second, the patient's consent to treatment, to be effective, must be an informed consent. ( Cobbs v. Grant, supra, 8 Cal.3d at p. 242.) Third, in soliciting the patient's consent, a physician has a fiduciary duty to disclose all information material to the patient's decision. ( Id., at pp. 242, 246; see also Stafford v. Schultz (1954) 42 Cal.2d 767, 777 [270 P.2d 1]; Nelson v. Gaunt (1981) 125 Cal. App.3d 623, 635 [178 Cal. Rptr. 167]; Berkey v. Anderson (1969) 1 Cal. App.3d 790, 805 [82 Cal. Rptr. 67]; Bowman v. McPheeters (1947) 77 Cal. App.2d 795, 800 [176 P.2d 745].) These principles lead to the following conclusions: (1) a physician must disclose personal interests unrelated to the patient's health, whether research or economic, that may affect the physician's professional judgment; and (2) a physician's failure to disclose such interests may give rise to a cause of action for performing medical procedures without informed consent or breach of fiduciary duty. To be sure, questions about the validity of a patient's consent to a procedure typically arise when the patient alleges that the physician failed to disclose medical risks, as in malpractice cases, and not when the patient alleges that the physician had a personal interest, as in this case. The concept of informed consent, however, is broad enough to encompass the latter. The scope of the physician's communication to the patient ... must be measured by the patient's need, and that need is whatever information is material to the decision. ( Cobbs v. Grant, supra, 8 Cal.3d at p. 245.) Indeed, the law already recognizes that a reasonable patient would want to know whether a physician has an economic interest that might affect the physician's professional judgment. As the Court of Appeal has said, [c]ertainly a sick patient deserves to be free of any reasonable suspicion that his doctor's judgment is influenced by a profit motive. ( Magan Medical Clinic v. Cal. State Bd. of Medical Examiners (1967) 249 Cal. App.2d 124, 132 [57 Cal. Rptr. 256].) The desire to protect patients from possible conflicts of interest has also motivated legislative enactments. Among these is Business and Professions Code section 654.2. Under that section, a physician may not charge a patient on behalf of, or refer a patient to, any organization in which the physician has a significant beneficial interest, unless [the physician] first discloses in writing to the patient, that there is such an interest and advises the patient that the patient may choose any organization for the purposes of obtaining the services ordered or requested by [the physician]. (Bus. & Prof. Code, § 654.2, subd. (a). See also Bus. & Prof. Code, § 654.1 [referrals to clinical laboratories].) Similarly, under Health and Safety Code section 24173, a physician who plans to conduct a medical experiment on a patient must, among other things, inform the patient of [t]he name of the sponsor or funding source, if any, ... and the organization, if any, under whose general aegis the experiment is being conducted. [7] (Health & Saf. Code, § 24173, subd. (c)(9).) It is important to note that no law prohibits a physician from conducting research in the same area in which he practices. Progress in medicine often depends upon physicians, such as those practicing at the university hospital where Moore received treatment, who conduct research while caring for their patients. Yet a physician who treats a patient in whom he also has a research interest has potentially conflicting loyalties. This is because medical treatment decisions are made on the basis of proportionality  weighing the benefits to the patient against the risks to the patient. As another court has said, the determination as to whether the burdens of treatment are worth enduring for any individual patient depends upon the facts unique in each case, and the patient's interests and desires are the key ingredients of the decision-making process. ( Barber v. Superior Court (1983) 147 Cal. App.3d 1006, 1018-1019 [195 Cal. Rptr. 484, 47 A.L.R.4th 1].) A physician who adds his own research interests to this balance may be tempted to order a scientifically useful procedure or test that offers marginal, or no, benefits to the patient. [8] The possibility that an interest extraneous to the patient's health has affected the physician's judgment is something that a reasonable patient would want to know in deciding whether to consent to a proposed course of treatment. It is material to the patient's decision and, thus, a prerequisite to informed consent. (See Cobbs v. Grant, supra, 8 Cal.3d at p. 245.) Golde argues that the scientific use of cells that have already been removed cannot possibly affect the patient's medical interests. The argument is correct in one instance but not in another. If a physician has no plans to conduct research on a patient's cells at the time he recommends the medical procedure by which they are taken, then the patient's medical interests have not been impaired. In that instance the argument is correct. On the other hand, a physician who does have a preexisting research interest might, consciously or unconsciously, take that into consideration in recommending the procedure. In that instance the argument is incorrect: the physician's extraneous motivation may affect his judgment and is, thus, material to the patient's consent. We acknowledge that there is a competing consideration. To require disclosure of research and economic interests may corrupt the patient's own judgment by distracting him from the requirements of his health. [9] But California law does not grant physicians unlimited discretion to decide what to disclose. Instead, it is the prerogative of the patient, not the physician, to determine for himself the direction in which he believes his interests lie. ( Cobbs v. Grant, supra, 8 Cal.3d at p. 242.) Unlimited discretion in the physician is irreconcilable with the basic right of the patient to make the ultimate informed decision.... ( Id., at p. 243.) Accordingly, we hold that a physician who is seeking a patient's consent for a medical procedure must, in order to satisfy his fiduciary duty [10] and to obtain the patient's informed consent, disclose personal interests unrelated to the patient's health, whether research or economic, that may affect his medical judgment.
(2b) We turn now to the allegations of Moore's third amended complaint to determine whether he has stated such a cause of action. We first discuss the adequacy of Moore's allegations against Golde, based upon the physician's disclosures prior to the splenectomy. Moore alleges that, prior to the surgical removal of his spleen, Golde formed the intent and made arrangements to obtain portions of his spleen following its removal from [Moore] in connection with [his] desire to have regular and continuous access to, and possession of, [Moore's] unique and rare Blood and Bodily Substances. Moore was never informed prior to the splenectomy of Golde's prior formed intent to obtain a portion of his spleen. In our view, these allegations adequately show that Golde had an undisclosed research interest in Moore's cells at the time he sought Moore's consent to the splenectomy. Accordingly, Moore has stated a cause of action for breach of fiduciary duty, or lack of informed consent, based upon the disclosures accompanying that medical procedure. We next discuss the adequacy of Golde's alleged disclosures regarding the postoperative takings of blood and other samples. In this context, Moore alleges that Golde expressly, affirmatively and impliedly represented ... that these withdrawals of his Blood and Bodily Substances were necessary and required for his health and well-being. However, Moore also alleges that Golde actively concealed his economic interest in Moore's cells during this time period. [D]uring each of these visits ..., and even when [Moore] inquired as to whether there was any possible or potential commercial or financial value or significance of his Blood and Bodily Substances, or whether the defendants had discovered anything ... which was or might be ... related to any scientific activity resulting in commercial or financial benefits ..., the defendants repeatedly and affirmatively represented to [Moore] that there was no commercial or financial value to his Blood and Bodily Substances ... and in fact actively discouraged such inquiries. Moore admits in his complaint that defendants disclosed they were engaged in strictly academic and purely scientific medical research.... However, Golde's representation that he had no financial interest in this research became false, based upon the allegations, at least by May 1979, when he began to investigate and initiate the procedures ... for [obtaining] a patent on the cell line developed from Moore's cells. In these allegations, Moore plainly asserts that Golde concealed an economic interest in the postoperative procedures. Therefore, applying the principles already discussed, the allegations state a cause of action for breach of fiduciary duty or lack of informed consent. We thus disagree with the superior court's ruling that Moore had not stated a cause of action because essential allegations were lacking. We discuss each such allegation. First, in the superior court's view, Moore needed but failed to allege that defendants knew his cells had potential commercial value on October 5, 1976 (the time blood tests were first performed at UCLA Medical Center) and had at that time already formed the intent to exploit the cells. We agree with the superior court that the absence of such allegations precludes Moore from stating a cause of action based upon the procedures undertaken on October 5, 1976. But, as already discussed, Moore clearly alleges that Golde had developed a research interest in his cells by October 20, 1976, when the splenectomy was performed. Thus, Moore can state a cause of action based upon Golde's alleged failure to disclose that interest before the splenectomy. The superior court also held that the lack of essential allegations prevented Moore from stating a cause of action based on the splenectomy. According to the superior court, Moore failed to allege that the operation lacked a therapeutic purpose or that the procedure was totally unrelated to therapeutic purposes. In our view, however, neither allegation is essential. Even if the splenectomy had a therapeutic purpose, [11] it does not follow that Golde had no duty to disclose his additional research and economic interests. As we have already discussed, the existence of a motivation for a medical procedure unrelated to the patient's health is a potential conflict of interest and a fact material to the patient's decision.
The Regents, Quan, Genetics Institute, and Sandoz are not physicians. In contrast to Golde, none of these defendants stood in a fiduciary relationship with Moore or had the duty to obtain Moore's informed consent to medical procedures. If any of these defendants is to be liable for breach of fiduciary duty or performing medical procedures without informed consent, it can only be on account of Golde's acts and on the basis of a recognized theory of secondary liability, such as respondeat superior. The procedural posture of this case, however, makes it unnecessary for us to address the sufficiency of Moore's secondary-liability allegations. As already mentioned, the superior court addressed only the purported cause of action for conversion. Because the superior court found that Moore had not stated such a cause of action, it had no occasion to address the sufficiency of Moore's allegation that the Regents and Quan were acting as Golde's agent[s] and joint venturer[s]. [12] In a later proceeding, however, the superior court did find that the same allegations were too conclusory to state a cause of action against Genetics Institute and Sandoz. The Court of Appeal did not hold, explicitly or implicitly, that Moore's secondary-liability allegations were sufficient as against any defendant. The court did hold that Moore had stated a cause of action against the Regents and Quan. However, the court did not reach that conclusion on the basis of secondary liability. Instead, drawing no distinctions between the defendants, the court held simply that each defendant was primarily liable for conversion. [13] Because no court has yet addressed the Regents' and Quan's secondary liability and because the superior court will need to consider other issues on remand, there is no need to address these issues at this time. [14] With respect to Genetics Institute and Sandoz, the situation is slightly different. The Court of Appeal mentioned Moore's secondary-liability allegations against these defendants but expressed no opinion as to their sufficiency. Instead, as to these defendants the court merely reversed the superior court's order for failure to grant leave to amend. Our affirmance of this part of the Court of Appeal's decision will leave Moore free to attempt, once again, to allege that Genetics Institute and Sandoz are secondarily liable for Golde's torts.