$10-Million Accord With UC Reported in Fertility Scandal

The University of California has agreed to a $10-million settlement with 50 couples who had been enrolled in UC Irvine’s now-closed fertility clinic and sued after learning that doctors had allegedly stolen eggs from unsuspecting women patients, plaintiffs’ attorneys announced Friday.

The accord, which the attorneys said must be approved by an Orange County judge, would end in one stroke about half of the more than 100 civil lawsuits filed after the fertility scandal broke in the spring of 1995.

The mammoth new settlement would raise to roughly $14 million the total that university officials have agreed should be paid to 72 couples in connection with the scandal, said plaintiffs’ attorneys Lawrence S. Eisenberg of Irvine and Melanie R. Blum of Orange.

The scandal centers on three UC Irvine doctors who allegedly stole eggs harvested from women undergoing fertility treatments in four Southern California medical facilities from 1986 through the early 1990s, implanting some of the eggs in other women and funneling others into research.

In some instances, children were conceived and born without the knowledge of the women whose eggs were taken.

Ricardo H. Asch and Jose P. Balmaceda, the two principal doctors accused in the case, have left the country and would face criminal charges if they return.

Asch is in Mexico and Balmaceda in Chile. Their colleague, Dr. Sergio C. Stone, is under house arrest in Villa Park. All have been indicted on federal charges of mail fraud and income tax evasion in connection with the scandal. They have denied wrongdoing.

Details of the settlement, including the identity of the couples and how much money they will receive, were not disclosed Friday, as UC officials and plaintiffs’ attorneys stood behind a state Supreme Court order issued late Thursday that allowed them to withhold the information from the public. Senior officials for the UC system, however, confirmed that settlements had been reached.

The court said that the issue involved--the public’s interest in how taxpayer money is spent versus the privacy rights of the couples--eventually will be decided by the high court’s justices.

Late Friday, UC General Counsel Jim Holst, who managed the settlement proceedings for the university, said the state court order prevents him from disclosing the amount of the settlement.

But Holst confirmed that the university has been involved in settlement negotiations for “a number” of the 102 lawsuits he said were filed in the wake of the scandal.

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Holst, UC’s top lawyer, said the university would continue seeking “fair and appropriate resolution” of remaining suits. He added that settlements would be disbursed from self-insurance funds the university keeps.

Byron Beam, a private attorney in Santa Ana representing UC Irvine, said university officials consider the settlement a “good deal” for the UC system, and are eager to settle the remaining cases by the end of the year.

Eisenberg and Blum said the complex settlement package had been approved by the UC Board of Regents in its June and July meetings.

The two plaintiffs’ attorneys, who together negotiated the deal with UC lawyers, claimed a victory for their clients in a news conference at a hotel across the street from the UC Irvine Medical Center in Orange. They said the facts of each case had been considered individually, though they were presented as a package.

“These women are being justly compensated, although their pain will never go away,” Eisenberg said.

“The damage is unbelievable,” said Blum, noting that at least 15 births had resulted from the misappropriation of eggs alleged in the 50 malpractice suits. “These children were robbed of their heritage. The parents were robbed of their children.”

Lt. Gov. Gray Davis, an ex officio member of the Board of Regents, called the settlement “yet another example of California taxpayers footing the bill to clean up a UC management fiasco.

“I do not begrudge restitution to the innocent victims of this scandal,” Davis continued. “But this money could have paid for a lot of outreach and a lot of scholarships for deserving UC students. We simply must bring UC’s managerial and fiscal controls up to the high level of its academic standards.”

It was unclear how much UC would ultimately pay from the $10-million settlement described Friday.

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Blum and Eisenberg said that about half of the 50 cases involved couples who were treated by the UC Irvine doctors while they were working out of a hospital in Garden Grove, and the rest were treated at the UC Irvine Medical Center facility known as Pavilion II. They said they understand that the owner of the Garden Grove hospital recently agreed to share some of the liability with UC. But that could not be confirmed Friday.

About two dozen civil suits are still pending against the university and the three doctors.

Walter Koontz, a Newport Beach attorney representing five couples with active lawsuits, said Friday the 50-suit settlement could speed the resolution of the others.

“It’s always good news when people can get together and resolve their differences and stop the bleeding, as far as the animosity that’s created by litigation like this,” Koontz said. “It will be saving a substantial amount of money that the people of California [would be] stuck with picking up the tab for.”

But some California officials saw the settlements as a black eye for the state and defeat for the public.

State Sen. Tom Hayden (D-Los Angeles), who led a hearing into the fertility scandal in 1995 and sponsored legislation last year that made the theft of human eggs, sperm and embryos a crime, lamented Friday that the full facts may never be known.

Such settlements, Hayden said, are “a way in which a whole system is spared adverse publicity, but the public suffers from never knowing exactly what happened and who is responsible. . . . There is no trial, no deposition, no face-to-face encounter, no airing of the issue for the benefit of the public.”

One former regent interviewed Friday said the scandal shocked university officials from the beginning.

In some of the first discussions of the scandal and the physicians’ actions, “it was clear that these guys really [screwed] up,” the ex-regent said. “My gosh, this was a can of worms. There was big concern about where this was all going. It was taking your breath away.”

Plaintiffs involved in the 50-suit settlement were difficult to reach for comment on Friday, in part because some of them had not yet heard the news.

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Elizabeth Shaw Smith and Gary Smith of Tustin were among the plaintiffs in the settlement. “I just wish [the money] had come out of Asch’s pocket instead of UCI’s,” Shaw Smith said.

The deal described by attorneys Friday mentioned nothing of payments from the three accused doctors. Instead, money would apparently be drawn from the university system’s self-insured medical malpractice fund.

Rick Malaspina, a UC spokesman, said that a settlement would increase the premiums UC Irvine Medical Center pays into that fund.

The fund, known as the Professional Medical and Hospital Liability Program, is funded by premiums paid each year by each of the five UC medical centers around the state, Malaspina said. It is administered by the university.

An attorney for one doctor, Balmaceda, said he is pleased with the settlement package.

“It removes Dr. Balmaceda from potential liability,” said attorney Dan Callahan of Irvine, who speaks periodically by telephone to his client in Santiago, Chile, “but I’d still like to see him have his day in court.”

Times staff writers Nancy Cleeland, Thao Hua, Julie Marquis, Michael G. Wagner and Janet Wilson contributed to this report.