When Surrogacy Goes Wrong: The Law’s Struggle to Keep Up with Modern Parenthood

Prisha Kakliya

Edited by Samantha Tonini, Samuel Huron, Mac Kang, and Sahith Mocharla

“I want the surrogate to be known for what she did, to be set as an example,” Bi tells me. “I hope she goes to jail. Ideally, for murder” — Emi Nietfeld, WIRED [1].

In June 2024, Cindy Bi, a Silicon Valley venture capitalist, filed suit against the woman who served as the gestational surrogate for her child, alleging negligence related to the baby’s stillbirth. In 2023, Bi arranged for a gestational carrier (GC), “Rebecca Smith” (a pseudonym). A gestational carrier is a woman who carries a pregnancy but is not genetically related to the child. In this case, an embryo created in vitro using Bi’s egg and her husband’s sperm was implanted and carried by Smith. The arrangement was commercial, with the GC set to receive compensation, rather than an altruistic motive. The parties accordingly signed confidentiality provisions and contracts. During the pregnancy, unfortunately, Smith experienced several complications, including early benign bleeding at 26 weeks, a premature rupture of membranes at 29 weeks, and ultimately a placental abruption at 32 weeks that deprived “Baby Leon” of oxygen, leading to his still birth, or medically, a subsequent death in utero[2].

Although the doctors concluded that the stillbirth was due to an unpredictable medical complication, Bi contended that Smith was personally responsible for a preventable death and began to pursue what she viewed as justice for her child. She alleged serious wrongdoing by her surrogate, including alleged negligence during pregnancy and alleged surrogacy contract breach. Bi claimed that Smith failed to follow medical instructions and exercise due care during the late stages of pregnancy—specifically, that she ignored warning signs such as abdominal discomfort and fluid leakage, delayed seeking treatment, and failed to immediately notify Bi or her physicians of potential complications. Bi further alleged that Smith violated the terms of their surrogacy agreement by engaging in what Bi described as unsafe or reckless behavior, which she believed directly contributed to the death of the baby. Accordingly, Bi withheld the final contractual payments, hired a private investigator to examine Smith’s actions, and launched a public campaign on social media targeting her alleged gross misconduct. She sought to hold both Smith and the involved agencies financially and legally accountable, suggesting that their actions—or inactions—were so negligent, it amounted to homicide [2].

While no evidence substantiated Bi’s claims, and medical professionals stressed that the stillbirth was not caused by any deliberate act of negligence, it left the erstwhile surrogate mother particularly vulnerable. She was ‘doxxed’ (having one’s location/person leaked online) leading to threats and harassment from strangers; faced serious financial strain as she was left with unpaid medical expenses, lost wages, and legal bills; and severe emotional distress, including depression and suicidal ideation [3].

The case of Baby Leon points to a growing problem in the United States surrogacy landscape: the lack of adequate and sufficient regulatory legislation, an issue that has become a double-edged sword, leaving both surrogate mothers and the intended parents (IPs) vulnerable. 

The lack of adequate surrogacy law regulation can be attributed to the fact that it is regulated largely at the state level, pursuant to the Tenth Amendment, which reserves powers not expressly granted to the federal government to the individual states [4]. The lack of federal uniformity has led to significant variations in how surrogacy is treated across states:

California, for example, permits both compensated and uncompensated gestational surrogacy and allows IPs to secure pre-birth orders establishing legal parentage under California Family Code § 7960, with protections extending to LGBTQ+ and unmarried couples. New York similarly allows compensated gestational surrogacy under the Child-Parent Security Act, providing for pre-birth parentage orders with defined medical and legal requirements. In contrast, Arizona prohibits all surrogacy contracts under A.R.S. § 25-218, recognizing the surrogate as the legal mother and limiting parentage options for intended parents. States like Louisiana and Nebraska impose severe restrictions on compensated surrogacy, effectively prohibiting it, while Washington supports both gestational and traditional surrogacy with enforceable contracts and pre-birth parentage orders under RCW 26.26A [6].

These differences mean that IPs and GCs must carefully navigate state-specific laws––as their rights, obligations, and the enforceability of contracts can vary dramatically depending on where the arrangement takes place. The lack of a uniform federal oversight exacerbates vulnerabilities of all parties, as surrogacy agencies operate in a largely self-regulated environment that often prioritizes profit over accountability. These agencies serve as intermediaries, matching IPs with GCs, drafting contracts, and managing funds for compensation and medical expenses. Yet, without mandatory licensing or standardized practices, these entities can––even inadvertently––expose both parties to significant risks. For instance, agencies may conduct insufficient or entirely fail to conduct background checks on carriers or parents, leading to mismatched expectations or (otherwise preventable) health complications that go unaddressed. Recent data indicate that the U.S. surrogacy market has expanded to approximately $5.1 billion in 2025, with gestational arrangements comprising over 90% of cases. This growth has coincided with a rise in agency-related disputes, where mismanagement of funds or inadequate vetting results in financial abandonments [7].

Agencies have a fiduciary duty to act with care and loyalty toward clients, as outlined in the Restatement (Third) of Agency § 8.01 [8]. This duty requires thorough vetting of surrogates’ health histories, transparent handling of escrow funds, and enforcement of contract terms, such as medical compliance. Breaches of this duty can lead to negligence or contract claims [9]. For example, the Texas-based company Surrogacy Escrow Account Management (SEAM) allegedly misappropriated over $16 million from intended parents’ escrow accounts, which were meant to cover surrogates’ medical expenses, legal fees, and compensation. Instead, funds were reportedly diverted to personal ventures, including to SEAM’s owner Dominic Side’s music career and real estate purchases. In July 2025, a Harris County judge ordered Side to pay over $1 million in restitution to 37 affected families, though many are still awaiting full recovery. The FBI has also launched a federal investigation into the matter [10]. Other common clauses in surrogacy agreements that lead to disputes include the following:

I. Parental Rights and Intent Clauses: These clauses define who becomes the legal parent(s) and often require the surrogate to relinquish any claim to the child. Conflicts arise when surrogates assert emotional or legal rights, especially in states with unclear laws. For instance, in restrictive jurisdictions like Louisiana, same-sex couples face barriers to securing pre-birth parentage orders, as only married heterosexual couples using their own gametes qualify [11]. A notable case involved a surrogate seeking custody due to emotional attachment, but courts upheld the intended parents’ rights based on the contract’s intent clause [12]. Ambiguities in these clauses can lead to costly litigation if not explicitly drafted to reflect all parties’ intentions.

II. Lifestyle and Medical Compliance Clauses: Surrogacy contracts often impose strict rules on the surrogate’s behavior, such as bans on smoking, alcohol, or certain activities, and mandates to follow medical advice. Disputes occur when intended parents allege non-compliance, claiming it harmed the pregnancy. In the Bi case, the IPs accused the surrogate of ignoring warning signs like fluid leakage, alleging this caused a stillbirth, though medical evidence pointed to an unpredictable complication [13]. Such clauses can be hard to enforce, especially if compliance is subjective or medical outcomes are uncertain, leading to breach-of-contract claims.

III. Termination Clauses: These address whether a pregnancy can be terminated, typically for fetal anomalies or health risks. Post-Dobbs (2022), state abortion laws create conflicts. In states like Louisiana, where abortion is banned at all stages, such clauses are unenforceable, leaving parties without recourse if expectations differ [14].

IV. Compensation and Expense Clauses: These outline payments to the surrogate (typically $30,000–$50,000 for GCs) and coverage for medical or incidental costs. Disputes arise over unclear terms, such as what qualifies as a covered expense, or when payments are withheld, as in the Bi case, where the intended parents withheld funds, alleging negligence [15]. In states like Arizona, where all surrogacy contracts are void, these clauses lack legal backing, increasing financial risks for surrogates [16]. Clear definitions of expenses and escrow management are critical to avoid litigation.

V. Jurisdiction and Choice-of-Law Clauses: These designate which state’s laws govern the contract. Forum shopping (seeking favorable jurisdictions like California) creates issues when parties return to restrictive states like Louisiana, where contracts may be voided [17]. The Sofia Vergara embryo case illustrates this, where the plaintiff filed in Louisiana to leverage its unique embryo laws, only for the case to be dismissed for improper venue [18]. These clauses often fail when courts prioritize local public policy over contractual intent.

While most surrogacy disputes center on breach-of-contract claims, the death of a fetus or newborn introduces questions of tort liability—a civil legal demand in which one party alleges that another has caused them harm, specifically through negligence and wrongful death . These claims often fall outside traditional contractual remedies, as they implicate medical professionals, clinics, and, in rare instances, the surrogate herself. As seen in Bi v. Smith, when tragedy occurs, IPs may seek justice not only as contracting parties but as grieving parents, pursuing recognition and justice of a potentially wrongful loss. Medical professionals have since concluded that baby Leon’s death resulted from adverse medical events, not negligence. However, should such a scenario arise of the latter, medical malpractice law may offer IPs pathways for recovery.

Wrongful death claims are civil actions brought by surviving relatives or legally recognized representatives when a person’s death is caused by another’s negligence, recklessness, or intentional act. Similar to surrogacy claims, wrongful death claims are codified by state statutes, not federal law––leaving these claims similarly vulnerable jurisdictional differences. Generally, wrongful death suits allow recovery for monetary losses (such as medical expenses, funeral costs, and loss of financial support) and non-economic harms (including loss of companionship and emotional suffering). The key elements mirror those in negligence: a duty of care owed to the deceased, a breach of that duty, causation linking the breach to the death, and measurable damages [19]. The unique challenge in surrogacy-related wrongful death arises because the deceased is a fetus—whose legal personhood varies across jurisdictions—and the parents are the IPs, who may not yet be recognized as legal parents under state law. For example, while most states allow wrongful death suits for children born alive who later die from injuries sustained in utero, only a subset extends this right to fetuses that die before birth. Some states, like California, limit recovery to cases where the fetus was viable outside the womb, whereas others, such as Alabama and South Dakota, recognize fetal personhood from conception for wrongful death purposes [20].

Under current laws, in the context of gestational surrogacy, IPs rarely have the standing to bring a wrongful death claim when a fetus dies in utero, even if the loss resulted from clear negligence by the surrogate, agency, or medical providers. Because legal parentage in gestational surrogacy typically vests upon the finalization of a pre-birth or post-birth order, intended parents may not yet be recognized as the ‘surviving family members’ under state wrongful death statutes when fetal death occurs prior to that legal determination [21]. This gap leaves them without meaningful recourse when harm occurs. Expanding wrongful death protections to include IPs could thus create a new legal mechanism for contesting fetal loss in court. Recognizing IPs’ standing would allow claims to be brought against negligent actors—such as fertility clinics that fail to monitor high-risk pregnancies, agencies that ignore medical warnings, or even surrogates who breach contractual medical obligations. Such recognition would not only align with the IPs’ emotional and financial investment in the pregnancy but also reinforce accountability across a largely self-regulated industry. While this expansion must be carefully balanced to avoid criminalizing pregnancy outcomes or undermining GCs’ autonomy, it could represent a significant step toward legal justice in assisted reproduction, providing IPs with the same wrongful death protections that biological parents already possess.

Critics may argue that extending wrongful death protections to IPs could raise significant ethical issues, most notably, criminalizing adverse pregnancy outcomes, particularly when medical complications are unavoidable rather than negligent. Furthermore, many GCs face economic pressures, and expanding these protections could increase monitoring of surrogates in ways that might deter them from participating in surrogacy altogether. Thus, while expanding wrongful death statutes may enforce greater accountability, they should be carefully designed to avoid weaponizing the law against the very women it seeks to regulate.

The ongoing and controversial case of Baby Leon reveals a broader tension in current legislation surrounding surrogacy claims—where we need to ensure intended parents have an adequate pathway to pursue justice for their child while simultaneously safeguarding the rights and autonomy of gestational carriers. The absence of uniform federal oversight, coupled with inconsistent state laws, creates a precarious environment where neither party is fully shielded from financial, legal, or emotional damage. Expanding wrongful death protections to recognize intended parents’ standing could offer a pathway to address fetal loss, affirming their emotional and financial stake while holding negligent actors accountable. However, these reforms must be carefully crafted to avoid overburdening surrogates, who already navigate significant risks. Developing a uniform model law could bridge the current patchwork system and ensure equitable protection for all parties involved in surrogacy.

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[1] Emi Nietfeld, The Baby Died. Whose Fault Is It?, Wired (Sept. 3, 2025), https://www.wired.com/story/the-baby-died-whose-fault-is-it-surrogate-pregnancy/.

[2] see [1]

[3] see [1]

[4] see [1]

[5] U.S. Const. amend. X.

[6] Legal Professional Group, Surrogacy Laws By State, American Society for Reproductive Medicine, https://connect.asrm.org/lpg/resources/surrogacy-by-state?ssopc=1 (last visited Nov. 12, 2025).

[7] Parham Zar, Surrogacy Trends 2025: Costs, Laws, and Future Insights, Egg Donor & Surrogacy Institute Blog (June 26, 2025), https://eggdonorandsurrogacy.com/surrogacy-trends-2025/.

[8] Restatement (Third) of Agency § 8.01 (Am. Law Inst. 2006).

[9] Rosa Flores, Emma Tucker & Sara Weisfeldt, Nearly 2 Dozen Families Claim Owner of Houston Surrogacy Escrow Company Stole Millions to Fund Lavish Lifestyle, CNN (July 19, 2024), https://www.cnn.com/2024/07/19/us/houston-surrogacy-escrow-company-fraud-scheme-lawsuit.

[10] see [9]

[11] Taylor Paige Mutavdzic, Legal Challenges Across State Lines: A Look Into Surrogacy Law in the United States, 16 J. Civ. L. Stud. (2024), https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=1315&context=jcls.

[12] Eran Amir, Surrogacy Legal Disputes: Common Conflicts and Resolutions, GoStork (Mar. 24, 2025), https://www.gostork.com/surrogacy-legal-disputes-common-conflicts-and-resolutions/.

[13] see [1]

[14] see [7]

[15] see [1]

[16] see [7]

[17] see [7]

[18] see [7]

[19] Alexandra W. Payne, Navigating Wrongful Death Claims and Survival Action Claims in Texas, Accessible Law (2023), https://www.accessiblelaw.untdallas.edu/post/navigating-wrongful-death-claims-and-survival-action-claims-in-texas.

[20] Hamilton v. Scott, 278 So. 3d 1180 (Ala. 2018).

[21] Wrongful Death Of A Fetus: Complete 50 State Legal Guide, Thompson Law (Jan. 25, 2024), https://1800lionlaw.com/wrongful-death-of-a-fetus-or-unborn-child/.