On Monday (18 June 2012), a US federal judge in San Diego denied a claim brought by Sharp Healthcare for reimbursement of approximately $600,000 in medical costs for the medical care of seven surrogate babies delivered as a result of an international baby-selling ring.
This case follows on from the conviction of a former prominent Poway surrogacy lawyer, Theresa Erickson, earlier this year for fraud and her sentence to a 14 month term (with five months to be spent in prison) for her part in the surrogacy scam. Two others, Carla Chambers of Las Vegas and Hilary Neiman of Maryland received similar sentences for their parts in the scam as well.
The seven surrogate born babies were delivered at Sharp hospitals. Several of the babies were premature and medical costs for their care exceeded $600,000. The intended parents respectively paid between $100,000 and $150,000 for their surrogacy arrangements and believed everything was legal and that there was medical insurance in place to cover medical costs. The intended parents were then shocked and horrified when they were presented with huge medical bills and discovered these were not covered by health insurance and the illegality of their surrogacy arrangements came to light.
Sharp Healthcare entered into agreements with the majority of the intended parents and accepted more than $235,000 in payments. However, this left a shortfall of approximately $600,000 which it sought to recover from Theresa Erickson. Their claims were denied in five of the seven cases by US District Judge Anthony Battaglia. The judge ordered only a few thousand dollars of reimbursement to the remaining two sets of intended parents who had been listed in the government’s criminal case as victims (the other five sets of intended parents had not been listed as victims in the government’s case).
The outcome of this case graphically illustrates once again what can happen when surrogacy arrangements go wrong. The legal issues surrounding surrogacy are complex and even more so in cases involving international surrogacy arrangements. It is therefore critical that anyone contemplating a surrogacy arrangement fully gets to grips with the legal issues and implications from the outset and ensures they have confidence in the people with whom they work.