Kim Krawiec, the Sullivan & Cromwell Professor of Law at the University of Virginia, sheds some light on recent legal exchanges between the kidney exchange nonprofit National Kidney Registry and some of the Transplant Centers that are (or were) members of its network. Both suits (which seem to have been settled out of court) involved the TC's desire to withdraw (or partially withdraw) from NKR's system, and NKR's attempt to charge them $1000/kidney/month in perpetuity (or until they supply the kidneys) for kidneys they received in excess of kidneys they supplied. (In particular, NKR wanted $8000 per month from Colorado forever, or until they supplied 8 kidneys.) Her post is long and learned, and well worth reading in its entirety, but here are some snippets.
She leads off with this graphic of a judge's gavel hammering a stethoscope
Recent Contract Disputes In The Transplant World November 3, 2021 / By Kimberly Krawiec
"Readers may be interested in two relatively recent lawsuits involving the National Kidney Registry (NKR) and the University of Colorado Hospital Authority (“UCH,” filed 3/26/21) and the University of Maryland Medical Center (“UMMC”, filed 4/2/2018), respectively. (Citations and links to both lawsuits are at the end of this post)
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This option to specifically perform is interesting in its own right, and I may say more about it later, but what if a Member Center couldn’t deliver kidneys to the network, say because the UCH kidney transplant program had been closed? Or because they determined that kidney exchange was bad for their patients? In the event that delivering kidneys to NKR is impossible, is a court likely to award NKR these fees into perpetuity – a present value of nearly $5 million? (using an interest rate of 2%, which may understate the amount, given the current low interest rate environment)
"Under the penalty doctrine, NKR would have to describe its loss, and why $1000/kidney/month is a reasonable estimate of it, even if it can’t provide a precise amount. Here, the “in perpetuity” aspect may be troubling to courts, even if the present value is not high relative to whatever the alleged loss is, as it seems unlikely that NKR is harmed in perpetuity if a member center backs out.
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"when federal law prohibits the exchange of valuable consideration for a kidney, by definition there is no market price for either the court or the contracting parties to reference. Here, the parties attempted to overcome that problem by specifying a recurring charge, but it’s continuation into perpetuity may raise eyebrows, even if the present value of the charges is otherwise reasonable.
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The various legal documents can be found at these links
https://kimberlydkrawiec.org/wp-content/uploads/2021/11/Member-Terms-and-Conditions.pdf
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Given NKR's non-profit status, paragraph 30 of the Colorado complaint caught my eye:
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