Blood Bank Liability in AIDS Case Upset : Court: Appellate ruling says the facility could not be held negligent in 1983 transfusion. More than 100 similar suits in California could be affected.

In a ruling that could affect scores of cases, a state Court of Appeal on Thursday overturned the nation’s first damage award against a blood bank for providing AIDS-infected blood to a transfusion recipient.

The court held the blood bank could not be held negligent because in 1983, when the transfusion took place, it was doing as much if not more than any other bank in the country to test blood and screen donors.

In recent years, blood banks and hospitals have used new mandatory testing procedures to ensure that donated blood is safe from the AIDS virus. As a result, scientists say the chance of contracting AIDS from transfusions now is very remote.

The court’s decision came a day after tennis star Arthur Ashe revealed he had contracted AIDS from a blood transfusion, most likely in 1983. Ashe said he had no plans to bring suit.

The 3-0 ruling invalidated a $416,307 verdict against the Irwin Memorial Blood Bank of San Francisco for a blood transfusion provided during heart surgery for Michael Osborn, then 3 weeks old.

The transfusion took place two years before a definitive test to determine the presence of the virus in donated blood became available. The boy was found to have AIDS in 1987 and recently died.

Thursday’s decision, unless overturned by the state Supreme Court, will become binding on trial courts throughout California and is likely to affect more than 100 similar cases currently pending, lawyers said.

Michael J. Moriarty, a San Francisco lawyer representing the parents of Michael Osborn, assailed the ruling as “devastating” and promised an appeal to the high court. There was considerable evidence that blood banks were lax and slow in responding to the AIDS epidemic in the early 1980s, he said.

“Now all the blood banks have to do is establish that they were doing the same as everybody else and they won’t be held negligent,” Moriarty said. “This decision condones industry negligence.”

On the other side, David E. Willett of San Francisco, an attorney for the California Blood Bank System and the American Assn. of Blood Banks, welcomed the ruling, saying that a decision to the contrary would have opened the way for ruinous verdicts against nonprofit blood banks like Irwin Memorial.

“They have only the money they receive for providing the service and their insurance is limited,” said Willett. “I don’t know how they could continue to provide blood.”

The Osborns had learned shortly after the boy’s birth that he required surgery for a rare heart condition. The surgery was successfully performed at the University of California at San Francisco Medical Center, with Michael receiving 12 units of blood supplied by Irwin Memorial.

The family received a letter in 1987 recommending an AIDS test because he had received the transfusion before April, 1985, when AIDS blood tests became available. He tested positive and later was found to have an AIDS-related brain tumor.

The Osborns brought suit and in December, 1988, a San Francisco Superior Court jury awarded $750,000 to the boy and his parents. Later, Superior Court Judge John A. Ertola held that the blood bank could not be held liable for failing to adequately test but could be sued for improperly preventing relatives from donating their own blood specifically for Michael’s transfusion. The judge reduced the verdict to $416,307 and the case then was appealed.