CHICAGO (LN) — A federal judge on Thursday ruled that Landmark American Insurance Company has no duty to defend Reproductive Genetics Institute Inc. in a class action lawsuit alleging the fertility lab engaged in deceptive advertising regarding its genetic testing services.
U.S. District Judge Manish S. Shah granted Landmark’s motion for judgment on the pleadings, finding that the underlying claims by plaintiff Noelia Donamaria did not trigger coverage under either the insurer’s medical professional liability or commercial general liability policies.
The underlying suit, filed in October 2024, alleges RGI falsely marketed preimplantation genetic testing for aneuploidy, or PGT-A, to screen embryos for abnormalities during the in vitro fertilization process. Donamaria and other class members claim they purchased the testing based on RGI’s misleading representations.
Shah rejected RGI’s argument that the allegations involved professional services. The court found that the complaint primarily alleged false and misleading marketing, which does not arise from the rendering of embryo storage services.
“The risk of conducting one’s business in a deceptive and fraudulent manner is not one inherent of embryo storage,” Shah wrote.
The judge noted that while RGI pointed to specific paragraphs alleging failures to disclose facts, those allegations must be read of the entire 325-paragraph complaint. The court agreed with Landmark that advertising regarding PGT-A testing was incidental to RGI’s professional services.
Shah also dismissed RGI’s argument that the general liability policy was triggered by allegations of bodily injury. RGI had cited claims that the testing resulted in the “unnecessary loss of embryos” and that viable embryos were discarded.
Shah found that the underlying lawsuit did not allege that class members actually lost embryos as a result of the testing, but rather that they suffered financial harm by purchasing a service they would not have bought absent the alleged misrepresentations.
“Donamaria’s alleged injuries are entirely financial in nature,” Shah wrote.
The court declined to rule on a third claim regarding a consumer protection law exclusion, finding the issue unnecessary to resolve the dispute since neither primary coverage provision applied. That specific count was dismissed without prejudice.
RGI’s remaining counterclaims seeking a declaration that Landmark breached the policy were dismissed with prejudice.