William v. American Ass'n of Blood Banks
676 A.2d 1036, 144 N.J. 269, 1996 N.J. LEXIS 620 (1996)
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Rule of Law:
A national professional association that assumes a dominant role in setting safety standards for an industry and invites public and member reliance on those standards owes a duty of care to individuals foreseeably harmed by the association's negligent failure to establish adequate standards.
Facts:
- The American Association of Blood Banks (AABB) is a professional association that sets standards, inspects, and accredits nearly every blood bank in the United States.
- Bergen Community Blood Center (BCBC), a member of the AABB, relied on the AABB's standards as the primary guide for its operating procedures.
- In the early 1980s, significant evidence emerged from the Centers for Disease Control (CDC) and other health authorities indicating that a fatal disease, later known as AIDS, could be transmitted through blood products.
- In a January 1983 meeting, the CDC recommended that blood banks implement surrogate laboratory testing (such as the hepatitis B core antibody test) and direct questioning of donors to screen out high-risk individuals.
- The AABB and other blood industry organizations actively resisted these recommendations, arguing the evidence was inconclusive and citing concerns about cost, blood supply shortages, and donor privacy.
- Despite internal communications acknowledging the probable risk of blood-borne transmission, the AABB publicly maintained that surrogate testing was unnecessary and did not recommend it to its members.
- On August 23, 1984, William Snyder received a transfusion of blood platelets at St. Joseph’s Hospital during open-heart surgery, with the blood unit having been supplied by BCBC.
- Snyder was later diagnosed with AIDS after it was discovered through a 'look-back' program that the donor of one of the units he received was HIV-positive.
Procedural Posture:
- William and Roslyn Snyder filed a complaint in the Law Division (New Jersey's trial court of general jurisdiction) against multiple defendants, including the AABB.
- The Law Division allowed the negligence claim against the AABB to proceed.
- On an interlocutory appeal, the Appellate Division (New Jersey's intermediate appellate court) affirmed the trial court's decision, holding that the Snyders could maintain their negligence action against the AABB.
- The New Jersey Supreme Court affirmed the Appellate Division's interlocutory decision.
- After all other defendants settled or were dismissed, the case proceeded to a jury trial against only the AABB.
- The jury found the AABB was negligent for not recommending surrogate testing and was thirty-percent liable for the Snyders' damages.
- The AABB appealed the final judgment to the Appellate Division, which affirmed the trial court's verdict.
- The AABB then filed a petition for certification to the Supreme Court of New Jersey, which the court granted.
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Issue:
Does a national professional association that sets safety standards for the blood banking industry owe a duty of ordinary care to a patient who contracts AIDS from a blood transfusion supplied by one of its member institutions?
Opinions:
Majority - Pollock, J.
Yes, a national professional association that sets safety standards for the blood banking industry owes a duty of ordinary care to a patient who contracts AIDS from a blood transfusion supplied by one of its member institutions. The existence of a duty is a question of fairness and policy, determined by the relationship of the parties, the nature of the risk, and public policy considerations. The court reasoned that the risk of transfusion-related AIDS was both severe and foreseeable to the AABB by 1984. The AABB cultivated a special relationship with the public and its members by setting itself up as the dominant standard-setter for blood safety, thereby inviting reliance from blood banks, hospitals, and patients. Public policy supports imposing a duty because the AABB, despite its quasi-regulatory role, is a private entity not entitled to governmental or charitable immunity. The jury found the AABB was negligent not for its political lobbying, but for its failure as a standard-setting body to recommend surrogate testing to its members.
Dissenting - Garibaldi, J.
No, while the AABB owes a duty, it should not be a duty of ordinary care; instead, it should be protected by qualified immunity and liable only for actions taken in bad faith. The AABB performed a quasi-governmental function by setting standards that federal and state regulatory agencies relied upon. Government entities making the same discretionary policy decision—weighing the costs and benefits of surrogate testing under scientific uncertainty—would be protected by absolute immunity. Public policy dictates that private organizations performing these essential public functions should be granted at least qualified immunity to prevent the chilling of their participation in complex regulatory and scientific debates. Therefore, the AABB should only be liable if it acted with malice or in bad faith, not for a decision that, with the benefit of hindsight, proved to be merely negligent.
Analysis:
This decision is significant for establishing that a private, national standard-setting association can be held directly liable to a third-party end-user for negligently performing its functions. It extends tort liability beyond the direct provider of a service or product, creating a duty of care for organizations that exert substantial influence and control over an industry's safety practices. The ruling clarifies that assuming a powerful, quasi-regulatory role does not confer governmental immunity on a private entity. The case serves as a major precedent for holding trade and professional associations accountable for the standards they promulgate, potentially impacting numerous industries where such associations play a key role in self-regulation and public safety.
