Navigating Liability Protections for Life Science Companies Under Blood and Tissue Shield Laws

Beginning in the 1960s, medical facilities, blood banks, and other public providers of blood products began seeing limited statutory protections arise in most states through what has become known as “blood shield laws.” These laws codify public policy aimed at encouraging the ongoing donation and transfusion of life-saving blood supplies. Since then, the field of life-saving treatments has greatly expanded to include a wide range of human cell and tissue materials, sometimes referred to as “Human Cells, Cellular or Tissue-Based Products” (HCT/Ps). But do HCT/Ps enjoy any similar liability protections as blood and blood materials do under existing state laws? And if so, when and to what extent can those laws be relied upon by private companies leading life science innovations?

What are Blood Shield Laws?

Blood shield laws in the United States trace their origins to the landmark 1954 case of Perlmutter v. Beth David Hospital, 308 N.Y. 100 (1954). In Perlmutter, the plaintiff received a blood transfusion from the defendant hospital that allegedly caused her to contract hepatitis. She did not allege that the hospital acted negligently, but instead sued the hospital under the New York Sales Act, which required a finding that the hospital had breached implied warranties of fitness and merchantable quality. In other words, the blood was allegedly a defective “product” that the hospital “sold” to the plaintiff. The court disagreed, however, concluding instead that hospitals provide services, not products, and that the transfusion of blood was no different. In doing so, the court noted: 

The art of healing frequently calls for a balancing of risks and dangers to a patient. Consequently, if injury results from the course adopted, where no negligence or fault is present, liability should not be imposed upon the institution or agency actually seeking to save or otherwise assist the patient.

Following Perlmutter, states became increasingly concerned that strict products liability claims over tainted blood could have a chilling effect on the nation’s blood supply. California was the first to respond with the passage of Health and Safety Code Sec. 1606 in 1963, which stated “[t]he procurement, processing, distribution, or use of whole blood, plasma, blood products, and blood derivatives for the purpose of injecting or transfusing … shall be construed to be … for all purposes whatsoever, the rendition of a service by each and every person, firm, or corporation participating therein, and shall not be construed to be … a sale.” Shortly thereafter, in May of 1966, Mississippi similarly passed Miss. Code. Sec. 41-41-1, with nearly identical language. Other states were quick to follow, setting off a domino effect of blood shield laws across the U.S. To date, blood shield laws can be found in 49 out of 50 U.S. states. The only exceptions are New Jersey and the District of Columbia. But even those jurisdictions can often be expected to apply common law (i.e., non-statutory, judicially created) protections and preclude strict liability or implied warranty claims against blood transfusion providers. See, e.g., Fisher v. Sibley Mem’l Hosp., 403 A.2d 1130 (D.C. 1979); Snyder v. Mekhjian, 244 N.J. Super. 281 (App. Div. 1990).

To be clear, the original purpose behind blood shield protections was not to preclude all claims by persons injured from blood transfusions. Instead, by characterizing blood transfusion as a service and not a sale, states sought only to prevent claims based upon strict (i.e. no-fault) liability and implied warranty. Blood suppliers and transfusion providers typically remain accountable for substandard practices, such as negligent screening and processing noncompliance, and for particularly egregious, willful or intentional misconduct. However, the exact scope and extent of liability protection can vary by jurisdiction.

Do Blood Shield Laws Extend to Private Entities?

Most blood shield laws were also originally directed at hospitals and blood banks. The extent to which private, for-profit entities also benefit from the protections afforded by state shields can hinge on jurisdiction-specific interpretations and policies, as well as evolving product classifications. Blood shield laws are widely considered to have been born in part out of the observation in Perlmutter that blood transfusions provided by the defendant hospital qualified as a medical service more so than a commercial transaction, thereby exempting them from consumer expectations and associated warranty protections. However, the rise of for-profit plasma collection and biotech industry has strained this framework. For example, plasma fractionation companies, which process donated plasma into therapeutic products like immunoglobulins, operate under profit-driven models distinct from traditional blood blanks.

Some states do specifically limit their protections to banks, storage facilities, and hospitals. See Ind. Code Sec. 16-41-12-11. Nevertheless, others are open to interpretation as they speak generally to the act of procuring, processing, storing, distributing, etc. See, e.g., California and Mississippi. As will be exhibited in more detail below, some states tend to focus more on the product and the public policy supporting its availability than on the specific entity receiving the protection. 

Do Blood Shield Laws Extend to Organs, Tissues and Other Materials?

The scope of blood shield laws has expanded in many states to incorporate tissue, organs and other related bodily materials. For example, the Mississippi blood shield law referenced above was amended in 1987 to include “human tissue, organs or bones.” A majority of jurisdictions similarly extend their laws with “integrated” provisions, thereby providing an additional layer of consistency and reliability. A smaller number of jurisdictions maintain laws that address organs, tissues, and related materials separately from blood. And then there are some states that do not specifically address these categories at all. Entities and individuals seeking protection in states like New Jersey and New York, for example, may need to look beyond legislation, such as to case precedent, public policy, and contractual consent and disclaimer language. 

Section 361 of the Public Health Service (PHS) Act grants the Food and Drug Administration (FDA) authority to regulate certain human cells, tissues, and cellular or tissue-based products (HCT/Ps) under a flexible framework. Such products are sometimes referred to as “361 HCT/Ps” because they are regulated under Section 361 and 21 CFR Part 1271, rather than subject to premarket approval like other drugs and biologics. To qualify as a 361 HCT/P, a product must meet all four of the following criteria outlined in 21 CFR 1271.10(a):

1. Minimally Manipulated: The product must undergo only minor processing that does not alter its biological properties.
2. Homologous Use: The product must be intended for the same use/purpose in the recipient as it served in the donor.
3. No Combination With Other Products: The product must not be mixed with drugs, biologics, or other materials.
4. No Systemic Effect or Dependencies on Metabolic Activity: The product generally must not have a systemic effect on, or depend upon, the metabolic activity of living cells for its primary function or, if it has such an effect, it is intended for autologous use (same person) or allogeneic use in close relatives, or for reproductive use.

Typical examples of 361 HCT/Ps include bone grafts, skin grafts, tendons and ligaments, corneal transplants, amniotic membranes, and certain autologous (same donor and recipient) transfers. Any HCT/P product that fails to meet any one of the four criteria above, however, must undergo full FDA screening and approval, including clinical trials, leading to much stricter oversight and regulation. It also likely means a much lower potential for treatment as a “service” under state shield laws as the public policy and rationales that legislatures and courts point to in support for such treatment may begin to fall away. 

What are Recent Legal Developments Supporting HCT/P Recognition under Shield Laws?

In 2024, Ohio’s integrated blood shield law was at the center of tissue product claims in Pierson v. Elutia, Inc., S.D.Ohio No. 1:24-CV-368, 2024 WL 4494243. The plaintiff alleged she was implanted with bone grafting material during spinal surgery that was contaminated with tuberculosis bacteria and asserted claims of negligence, breach of implied and express warranties, gross negligence, strict products liability, failure to warn, and loss of consortium. The defendant moved for partial dismissal of the plaintiff’s strict liability, warranty, and failure to warn claims on the basis of Ohio Rev. Code Sec. 2108.30, which states:

[T]he procuring, furnishing, donating, processing, distributing, or using of human whole blood, plasma, blood products, blood derivatives, and products, corneas, bones, organs or other human tissue except hair, for the purpose of injecting, transfusing, or transplanting the fluid or body part into another human body, is considered for all purposes as the rendition of a service by every person participating in the act and not a sale of any such fluid or body part. No warranties of any kind or description are applicable to the act.

The court first noted that the bone graft product at issue met the qualifications of a 361 HCT/P which, it reasoned, supported its placement within the scope of the state’s blood shield law due to its necessary satisfaction of the minimal manipulation requirement. The plaintiff sought leave to take discovery into the exact composition of the tissue to support her argument that the law shouldn’t apply, but given the CFR’s guidance, the court found that any such discovery would be “gratuitous.” It also rejected the plaintiff’s public policy argument that the defendant should be precluded from protection under the law as a for-profit commercial entity, noting that the law speaks broadly of “every person participating” in the transplant process. The court concluded, finding in favor of the defendant’s motion, by quoting the statement that “no court has ever applied strict liability to the distribution of human tissue.” See Pierson. 

As of this article, the case remains pending on the counts of negligence, gross negligence, and loss of consortium, which are generally beyond the scope of state blood and tissue shield laws. Nevertheless, the court’s decision with respect to issues of strict liability and warranty in Pierson appears consistent with prior case precedent in other states, such as a 2014 case in Mississippi, and the intent of the FDA’s regulatory scheme for HCT/Ps. 

What is the Path Forward for HCT/Ps and Shield Laws?

As newer lifesaving or life-enhancing treatments are developed using both HCT/Ps and other related materials, courts will continue to consider the applicability of state-specific blood and tissue laws. Companies and providers associated with products and treatments that qualify as 361 HCT/Ps have case precedent to point to for extending existing protections and public policy in their favor. Other products may find the road more difficult, but not necessarily impossible. Life science companies and their insurance representatives should be aware of the nuances among the issues and categories referenced in this article and the protections afforded by shield laws in the jurisdictions where their products are sold and distributed. 

Authored by: Phillip Skaggs, JD, CPCU, ARC, Berkley Life Sciences, VP, Chief Legal & Regulatory Affairs Officer