Health Law Daily Wrap Up, GENERAL HEALTH CARE NEWS—N.D. Cal.: Claims of misrepresented genetic testing needed to satisfy Rule 9(b) fraud pleading standard, (Aug 8, 2025)

By Jeffrey H. Brochin, J.D.

References to brochure content published two years after purchase of lab testing services did not establish that Purchasers relied on those representations at the time of purchase as required for fraud pleading.

A federal District Court in California has granted the motion to dismiss filed by Natera, Inc. (Natera or Manufacturer) in a lawsuit brought by Purchasers who alleged false, deceptive, and misleading advertising, in the marketing and promotion of Natera’s preimplantation genetic testing for aneuploidy (PGT-A testing). The testing service, which Natera marketed under the name Spectrum, was promoted (among other places) in Natera’s patient brochure which stated a typical accuracy of greater than 99 percent, and that pregnancy rates were higher when Spectrum was performed with IVF. However, based on various scientific studies and articles, the Purchasers alleged that Natera’s statements were false. Under the doctrines of judicial notice and incorporation by reference, the court considered the propounded consent forms, studies, and articles referred to in the Complaint in weighing the motion to dismiss, but only as to authenticity and not as to evidentiary statements of truth. Nevertheless, the claims were dismissed---with leave to amend---based on the Purchasers’ failure to plead fraud with the requisite particularity (Petersen v. Natera, Inc., No. 4:24-cv-07062-JST (N.D. Cal. Aug. 4, 2025)).

Dispute over reliability and effectiveness. PGT-A testing is marketed and sold by Natera as an add-on to the IVF process and purports to screen embryos for chromosomal abnormalities. A number of small cells from an embryo are sent to Natera for the PGT-A testing with results provided to the patient and their clinic. The results are intended to determine which embryos are “euploid” (or best suited for implantation) and which embryos are “aneuploid” (or abnormal and not suited for implantation).

Natera’s patient brochure stated, “Spectrum informs embryo selection by combining PGT-M and PGT-A testing with a typical accuracy of greater than 99%,”; and, it previously stated, “Pregnancy rates are higher when Spectrum is performed with IVF.” However, the Purchasers cited studies showing a potential false positive rate of almost 55 percent and an intra-embryo discrepancy of almost 50 percent. Another study found that “33% of embryos originally reported to be ‘aneuploid’ were found to be ‘euploid’ upon repeat assessment,” and a 2020 study “found that PGT-A resulted in a lower chance of live birth in all age groups compared to transfer of embryos without PGT-A.” Based on those studies and other articles, the Purchasers filed suit claiming violations of various California consumer and deceptive practices statutes as well as their Michigan counterparts. Presently before the court was Natera’s motion to dismiss, whivch for the reasons cited below, the court granted.

Judicial notice and incorporation by reference. In support of their motion to dismiss, Natera sought the court’s consideration of three categories of documents outside the Complaint: consent forms signed by the Purchasers to receive PGT-A testing; scientific studies or articles cited in the Complaint; and clinical laboratory licenses issued to Natera by the California Department of Public Health. The court noted that the mere mention of the existence of a document is insufficient to incorporate the contents of a document, and incorporation by reference is appropriate only where the document’s authenticity is not in question and there are no disputed issues as to the document’s relevance. Here, because the Purchasers did not challenge the consent forms’ authenticity, the court considered them in the motion to dismiss; however, the court declined to consider the contents of the forms as evidence of the truth of the statements contained therein.

As to the studies and articles referenced in the Complaint, the court ruled that they would consider the articles as having been incorporated by reference into the Complaint but, would not interpret those “extrinsic documents” to resolve competing theories against the Complaint. Because the court found Natera’s licenses to be relevant to determining whether the punitive damages claims could move forward, the court took judicial notice of the licenses.

Pleading with specificity. The Purchasers acknowledged that their claims for fraud and fraud by concealment, (as well as portions of their California UCL claims) alleged fraudulent conduct and were therefore subject to the specific pleading requirements of Rule 9(b), i.e. the “who, what, when, where, and how” of the misconduct charged. Such specificity would include identifying the allegedly misleading representations that each Purchaser saw and relied upon in deciding to purchase Spectrum. However, the court found that the Purchasers did not satisfy those requirements: although the Complaint alleged that both Purchasers “purchased the PGT-A testing in or around November 2022” and identifies categories of allegedly false and misleading statements on which they allegedly based their purchases, Natera correctly observed, that the Complaint alleged only the approximate dates of purchase and not when the Purchasers viewed the alleged statements or where they viewed them (e.g., on the website, in a marketing brochure, or elsewhere).

Additionally, the Purchasers cited to different versions of Natera’s brochure, and the Complaint was unclear as to whether all of the alleged statements were in the version available prior to their purchases. For example, they cited to an online brochure last visited on July 7, 2023, to support an allegation that Natera “previously promoted its Spectrum PGT-A testing as increasing pregnancy rates.” And, they cited to a version last visited on October 8, 2024, to support their contention that Natera “misleadingly states that its PGT-A testing [is] greater than 99% accurate.” However, neither of those statements appeared in the current version of the brochure available at the cited link, and it was not clear whether they were included in the brochure prior to the Purchasers’ 2022 purchases.

Based on the foregoing, the court concluded that the Purchasers had failed to satisfy the Rule 9(b) requirements for pleading fraud, and they accordingly granted Natera’s motion to dismiss---albeit with leave to amend.

The case is No. 4:24-cv-07062-JST.

Judges: Tigar, J.

Attorneys: Colleen Fewer (Berger Montague PC) for Shannon Petersen and Erin Vedrode. Carol Dan Browning (Stites & Harbison, PLLC) for Natera, Inc.

Companies: Natera, Inc.

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