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Tennessee Surrogacies: Supreme Court Provides Needed Guidance In Traditional Surrogacies

The Tennessee Supreme Court has recently addressed several important issues in traditional surrogacies in the case of In re Baby et al., No. 20116298PT150334, (September 18, 2014). Such issues include: (a) whether Intended Parents may be awarded custody of a child carried by a traditional surrogate before birth of the child; (b) whether a surrogacy contract is enforceable against a traditional surrogate under Tennessee’s surrogacy statute; (c) whether the Parties may contractually agree to the best interests of the expected child before birth; and, (d) whether the surrogate’s parental rights may be terminated before birth; and, (e) if not what parental rights the surrogate may have in the child where she changes her mind and will not relinquish the child to the Intended Parents despite previously contractually agreeing to do so.

As a traditional surrogate possesses a genetic link to the child she carries, as opposed to a gestational surrogate carrier who does not, and Tennessee’s surrogacy statute does not specifically distinguish between gestational surrogacies and traditional surrogacies, the Court was asked to determine whether a surrogate maintains the same right of revocation as other biological mothers who agree to have their parental rights terminated, but thereafter change their mind. The Supreme Court considered these issues and then remanded the case to the juvenile court to consider whether the surrogate might have visitation rights in the child and whether child support should be assessed.

The case demonstrates a scenario that is the culmination of the worst fears of Intended Parents in a traditional surrogacy. The outcome reached by the Court is important in that first, it reaffirms that the judiciary will recognize and give validity to surrogacy contracts both in traditional surrogacies as well as in gestational surrogacies. The opinion also recognizes the Intended Parents as the legal parents of a child born through surrogacy, subject to certain limitations. The same should be reassuring to Intended Parents and demonstrates the importance of having a thoroughly drafted and prepared surrogacy agreement by competent counsel who regularly represent intended parents in surrogacy.

However, the case is also troubling in that it recognizes continuing rights of the surrogate in the child and affirms that the surrogate’s parental rights cannot be surrendered before the birth of the child. The case also emphasizes that the surrogate’s parental rights continue and will need to be surrendered or terminated after the birth of the child, even in cases where the surrogate has contractually agreed to surrender or have her parental rights terminated, and the same has actually occurred pre-birth by court order.

The pertinent history and facts of the case are as follows: The surrogate, her husband, and the Intended Parents all freely contracted to engage in a traditional surrogacy by which the surrogate’s genetic egg was united through artificial insemination with semen from the Intended Father to produce a viable embryo and fetus that was gestated and carried by the surrogate through birth. Both the Intended Parents and the surrogate were represented by separate legal counsel who negotiated the terms of the contract. The final contract specifically noted that the surrogate and her husband would give the resulting child to the Intended Parents after the birth of the child. The pertinent provision of the contract clearly and unambiguously provided that:

Neither the Surrogate nor the Surrogate’s husband desires to have a parental relationship with any child or children born pursuant to this Agreement. Despite the fact that the Surrogate’s eggs will be used to help create any child or children born pursuant to the Agreement, both she and her husband believe that any child or children she delivers as a result of this Agreement is morally, biologically, ethically, and contractually the child or children of the Intended Parents. In addition, the Surrogate states that she does not believe any action she takes pursuant to this Agreement makes her a “mother” or “parent” to the child or children she delivers….

Furthermore, the surrogate was compensated for her pain and suffering associated with the pregnancy and birth, with the Intended Parents also paying medical expenses, legal fees, and other costs totaling approximately $70,000.00. Additionally, in conjunction with the surrogacy contract the surrogate joined with the Intended Parents in filing a joint petition just two months before the birth of the child by which the Parties all asked the juvenile court to declare the paternity of the child, grant custody to the Intended Parents, and that the surrogate’s parental rights in the child be terminated. The petition was granted by the juvenile court as requested by the Intended Parents and the surrogate.

Shortly thereafter, the surrogate gave birth to a baby girl. At the advice of her attending medical provider, the Parties agreed that the surrogate would initially breastfeed the child for a period of time. However, the surrogate became reluctant about the situation and ultimately unwilling to give the child to the Intended Parents. The surrogate then breached the surrogacy contract and petitioned the juvenile court to awarded her custody of the child as the child’s biological mother. The juvenile court denied her request and affirmed its prior award of custody to the Intended Parents. The surrogate then appealed to the Tennessee Court of Appeals where the appellate court affirmed the ruling of the juvenile court.

Undeterred, the surrogate petitioned the Tennessee Supreme Court to grant her the right to further appeal. Permission was granted by the Supreme Court as the case presented issues of first impression in Tennessee in regard public policy, jurisdiction, parental rights, custody, and visitation in a traditional surrogacy. On appeal, the Supreme Court first observed that the Tennessee legislature recognizes the concept of traditional surrogacy by state statute. See Tenn. Code Ann. § 36-1-102(48)(A)–(C) (2014). As such, the laws of Tennessee do not prohibit traditional surrogacy contracts. Specifically, Tennessee’s surrogacy statute provides as follows:

(48)(A) “Surrogate birth” means:

(i) The union of the wife’s egg and the husband’s sperm, which are then placed in another woman, who carries the fetus to term and who, pursuant to a contract, then relinquishes all parental rights to the child to the biological parents pursuant to the terms of the contract; or

(ii) The insemination of a woman by the sperm of a man under a contract by which the parties state their intent that the woman who carries the fetus shall relinquish the child to the biological father and the biological father’s wife to parent;

(B) No surrender pursuant to this part is necessary to terminate any parental rights of the woman who carried the child to term under the circumstances described in this subdivision (48) and no adoption of the child by the biological parent(s) is necessary;

(C) Nothing in this subdivision (48) shall be construed to expressly authorize the surrogate birth process in Tennessee unless otherwise approved by the courts or the [G]eneral [A]ssembly.

The Court next noted that while the public policy of Tennessee is statutorily expressed and does not oppose enforcement of surrogacy contracts, it nonetheless, imposes certain restrictions upon surrogacy agreements. Specifically, the Court found that other Tennessee statutory authority prohibits the termination of parental rights of a mother prior to the birth of a child. Based upon the same, the Court concluded that the underlying juvenile court had no legal basis to terminate the surrogate mother’s parental rights in the child before the birth of the child, even though the surrogate willingly requested that the juvenile court do so. Importantly, in light of the Parties’ contractual agreement, the Supreme Court still upheld the a
ward of custody to the Intended Father, but it did remand the case back to the juvenile court for determinations of visitation with the child and child support to be paid. In doing so, the Court clarified several issues that must be decided on a case by case basis in regard to custody in surrogacy cases.

To this extent, the case is important as it affirms, subject to certain limitations, that the judiciary will recognize surrogacy contracts not only in gestational surrogacies but also in traditional surrogacies. Further, the case makes clear that a surrogate may be compensated within certain parameters which must comply with other Tennessee statutes, including T.C.A. § 36-1-108 and § 36-1-109. These adoption statutes do not preclude the enforcement of traditional surrogacy contracts, but do impose limitations as to the types of compensation that is permissible in surrogacy contracts.

Initially, T.C.A. § 36-1-108(a)(2)–(3) proscribes payments in exchange for the surrender of a child or the termination of parental rights. As such, in order to comply with public policy reflected by these provisions, compensation to a traditional surrogate must not be contingent in any way upon the surrogate’s agreement to surrender her child, or termination of her parental rights.

Moreover, in furtherance of the goal of avoiding improper financial considerations, the statutes disallow payments where payments are unrelated to the following:

(1) the reasonable legal services related to the adoption process; (2) the medical and counseling services related to the birth, relinquishment, or adoption of the child; or, (3) other matters related to the pregnancy and the birth of the child, including expenses such as “housing, food, maternity clothing, child’s clothing, utilities or transportation.

See Tenn. Code Ann. §§ 36-1-108(b)(2)(B), and 36-1-109(a)(1)(B)(i).

Such statutory limitations diminish potential harm that some courts have hypothesized might occur where financial interests exert an improper influence on a potential surrogate.

In addition to clarifying that traditional surrogacy contracts will be recognized and addressing permissible forms of compensation, the opinion is also important in that it clarifies that the lower courts in awarding custody in surrogacies, must strictly comply with the requirements applied in determining custody in other non-surrogacy cases. Specifically, the courts must comply with T.C.A. §36-6-106(a) (2014), and make specific findings of fact that the custodial placement is in the best interest of the minor child. To this extent, T.C.A. §36-6-106(a) provides fifteen (15) factors that the courts must consider, where applicable, in deciding the minor child’s best interests. The courts also are directed to consider “the location of the residences of the parents, the child’s need for stability, and all other relevant factors.” Id. § 36-6-106(a).

These noted statutory factors are as follows:

(1) The strength, nature, and stability of the child’s relationship with each parent . . . ; (2) Each parent’s or caregiver’s past and potential for future performance of parenting responsibilities . . . ; (3) Refusal to attend a court ordered parent education seminar may be considered by the court as a lack of good faith effort in these proceedings; (4) The disposition of each parent to provide the child with food, clothing, medical care, education and other necessary care; (5) The degree to which a parent has been the primary caregiver, defined as the parent who has taken the greater responsibility for performing parental responsibilities; (6) The love, affection, and emotional ties existing between each parent and the child; (7) The emotional needs and developmental level of the child; (8) The moral, physical, mental and emotional fitness of each parent as it relates to their ability to parent the child. . . . ; (9) The child’s interaction and interrelationships with siblings, other relatives and step-relatives, and mentors, as well as the child’s involvement with the child’s physical surroundings, school, or other significant activities; (10) The importance of continuity in the child’s life and the length of time the child has lived in a stable, satisfactory environment; (11) Evidence of physical or emotional abuse to the child, to the other parent or to any other person. . . . ; (12) The character and behavior of any other person who resides in or frequents the home of a parent and such person’s interactions with the child; (13) The reasonable preference of the child if twelve (12) years of age or older. . ; (14) Each parent’s employment schedule, and the court may make accommodations consistent with those schedules; and (15) Any other factors deemed relevant by the court.

Tennessee case precedent similarly holds (as was noted by the Supreme Court), that where courts by statute must determine the best interests of a minor child, the interested parties cannot avail themselves of a private agreement to usurp the court’s duty to conduct an independent “best interests” inquiry. See Tuetken v. Tuetken, 320 S.W.3d 262, 272 (Tenn. 2010) (holding parents cannot enter into an agreement that relieves the court of its responsibility to ensure that custody disputes are resolved in the best interests of the children); Berryhill v. Rhodes, 21 S.W.3d 188, 194 (Tenn. 2000) (holding that parents may not permissibly enter into private agreements circumventing statutory child support obligations). As such, by analogy, private agreements that purport to settle the question of a child’s best interests for custody purposes in surrogacy agreements are not binding on the court as “parents cannot bind the court with an agreement affecting the best interest of their children.” Tuetken, 320 S.W.3d at 272.

In light of these principles, the Supreme Court’s opinion in In re Baby et al., No. 20116298PT150334 makes clear that Tennessee courts are not bound by the Parties’ agreement in their surrogacy contract as to determinations of the best interests of the expected child.

The same presented the question as to whether any weight will be afforded by the courts to an agreement of the Parties in a surrogacy contract that the best interest of any resulting child are served by the child being placed and remaining in the custody of the Intended Parents, and/or the Intended Father. The Supreme Court did answer this question, noting that Tennessee law recognizes that in determining whether any contract is unenforceable, the court first should interpret the contract so as to uphold its validity whenever possible, and only invalidate the specific portions of the contract that are found to be unenforceable as against public policy. As such, when faced with a surrogacy contract containing terms regarding the best interests of a child, The Supreme Court requires that the lower courts determine the “best interests” of the child as required by § 36-6-106(a) and, when possible, then enforce the remainder of the surrogacy contract.

Accordingly agreements in the surrogacy contract as to the best interest of the child are not per se binding. However, the courts should consider the terms in the surrogacy contract as an important factor in the best interest analysis, particularly when the same reflects the Parties’ freely expressed intention as to the best interests of the expected child at the time they entered into the surrogacy contract before the creation of the child. See Tenn. Code Ann. § 36-6-106(a) (directing courts to consider “all . . . relevant factors” in assessing the best interest of a child); cf. Tuetken, 320 S.W.3d. at 272 (concluding that courts may consider factors resulting from parties’ agreements, such as a determination resulting from non-binding arbitration, in ruling on parentage issues).

In most cases, enforcing the parenting scheme as provided by the Parties’ surrogacy contract was recognized by the Supreme Court as likely promoting the best interests of the child. Along that line, the Court cited with approva
l to opinions of other jurisdictions, which noted that “surrogacy agreements ‘allow the intended parents to plan for the arrival of their child, to reinforce the expectations of all parties to the agreement, and to reduce contentious litigation that could drag on for the first several years of the child’s life.” See In re F.T.R., 833 N.W.2d at 649-50. Such grounds were recognized by the Supreme Court as promoting “stability and permanence in family relationships” and, therefore, to advance the “best interests” of the child.

Therefore, in a surrogacy, a contract may allow intended parents to plan for a child, limit litigation, and enhance familial stability; all of which are properly considered as “relevant factors” in the best interest analysis required by § 36-6-106(a). When there is no conflict between the contractual terms of the surrogacy contract and the best interests of the child, contract provisions will be enforceable. When the best interests as determined by the trial court pursuant to § 36-6-106(a) conflict with the Parties’ surrogacy agreement, the court’s determination will control over the contractual agreement of the Parties. See Holloway v. Bradley, 230 S.W.2d 1003, 1006 (Tenn. 1950) (holding that “the supreme rule to which all others should yield is the welfare and best interest of the child.”).

Apart from “best interests” considerations for determinations of custody, the Court’s opinion is equally important for its guidance as to the requirements to terminate the traditional surrogate’s parental rights. In addressing the same, the Court conveyed that: “Our statutes defining legal parents and establishing how a parent’s rights may be terminated also have relevant policy implications. Our adoption code provides that a woman may qualify as the ‘[l]egal parent’ of a child in two ways: (1) by being ‘[t]he biological mother of a child,’” Tenn. Code Ann. § 36-1-102(28)(A); or, (2) by being “[a]n adoptive parent of a child,” Id. § 36-1-102(28)(E).

The Court then explained, “once a woman attains the status of a legal parent, her parental rights may only be terminated in three ways.” The first way is where a statutory ground exists for termination and the proposed termination remains in the best interests of the minor child. In such cases, involuntary termination may be warranted. See Tenn. Code Ann. § 36-1-113(c). Second, upon a mother consenting to the adoption, her parental rights in the child may be terminated in a resulting adoption proceeding. See Id. §§ 36-1-102(15)(C), 36-1-117(g). Third, a biological mother may voluntarily relinquish her rights by executing a “surrender,” which is defined as “a document executed under the provisions of § 36-1-111, or under the laws of another state or territory or country, by the parent or guardian of a child, by which the parent . . . relinquishes all parental rights of that parent . . . to a child, to another person or public child care agency or licensed child-placing agency for the purposes of making that child available for adoption.” Id. § 36-1-102(47); See also In re Angela E., 303 S.W.3d 240, 247-48 (Tenn. 2010).

However, none of Tennessee’s adoption statutes demonstrate a public policy prohibiting the enforcement of traditional surrogacy contracts. Moreover, taken together, these statutes clarify who qualifies as a legal parent and the manner in which parental rights may be terminated in a traditional surrogacy. Importantly, holdings in prior cases, such as In re C.K.G. were acknowledged again, not to control cases involving traditional surrogacies. Id. at 730. Statutory grounds for the involuntary termination of parental rights include circumstances such as abandonment by the parent, substantial noncompliance with the terms of a permanency plan, and child abuse. See Id. § 36-1-113(g)). However, the Court noted that none of these grounds are in issue in the general traditional surrogacy case.

Nonetheless, a termination or surrender of parental rights in a traditional surrogacy still requires approval by the courts. See T.C.A. § 36-1-111(b). A surrender may not occur prior to the birth of the child. See id. § 36-1-111(d)(2). Further, as conveyed by the Court, unless the courts grants a waiver for good cause shown, “[n]o surrender or parental consent shall be valid[,] [where the same] is made within three (3) calendar days subsequent to the date of the child’s birth, [with] such period to begin on the day following the child’s birth.” Id. T.C.A. § 36-1-111(d)(3).

In light of the same, the Tennessee Supreme Court has now declared that even when the surrogate does not contest the termination of her parental rights, the courts must still find all the factors required for termination to be present. Therefore, enforcement of a traditional surrogacy contract must occur within the confines of the body of applicable Tennessee statutory authority governing who qualifies as a legal parent and how parental rights may be terminated. Just as parties cannot use private agreements to deprive the court of its designated role in determining a minor child’s best interest in a custody proceeding, Intended Parents in a surrogacy may not avoid judicial oversight of the termination of a traditional surrogate’s parental rights by contractually agreeing that parental rights will be terminated before the birth of the child. Accordingly, a traditional surrogate as the biological mother of the child, remains a legal parent until her parental rights are terminated through one of Tennessee’s statutory prescribed procedures. See Tenn. Code Ann. § 36-1-102(28)(A).

In turn, in traditional surrogacies, the Intended Mother, who, “by definition, is not genetically related to the child” born of the surrogacy “may only attain the status of a legal parent through adoption.” See In re Baby et al., No. 20116298PT150334, (September 18, 2014) (referring to T.C.A. § 36-1-102(28)(E)).

In conclusion, the Tennessee Supreme Court now has provided needed guidance on these issues in traditional surrogacies. In so doing, the Court has clarified that the public policy of Tennessee does not preclude enforcement of traditional surrogacy contracts. However, such enforcement is not without bounds and limits. Further, compensation to be paid to a surrogate may not be contingent upon her surrender of the child or her agreement to terminate her parental rights in the child. Instead, compensation must be limited to the reasonable costs of her services, expenses, and injuries likely to be realized by the surrogate in relation to the expected pregnancy, birth, and other matters inherent in the surrogacy itself. Moreover, the terms of the Parties’ surrogacy contract may not replace judicial oversight and determination of the expected child’s best interests. Similarly, the surrogacy contract itself may not by its terms circumvent Tennessee’s statutes governing a person’s status as a legal parent, nor the statutory procedures required to terminate parental rights. Finally, termination of parental rights in an involuntary proceeding require a judicial finding that the parent whose rights are to be terminated, is unfit or that substantial harm will result to the child if parental rights are not terminated.

By J. Matthew Miller