In 1988, the New Jersey Supreme Court ruled that a surrogacy contract was invalid based upon the circumstances of that case.  The Court found that such agreements are in direct conflict with existing statutes and in conflict with New Jersey public policy.  In the Baby M case, would-be parents entered into a contract with a women who agreed to supply the egg for in vitro fertilization, to implantation of the embryo and to carry the fetus to birth at which point the would-be parents would adopt the baby.  However, the surrogate mother changed her mind after the birth of the child and would not agree to the adoption.   The Baby M decision made it clear that New Jersey courts disfavor surrogacy agreements especially those involving monetary exchange. 

The Baby M case involved a surrogacy agreement by a surrogate who was also the biological donor of the egg.  Since the 1988 Baby M decision, the question of whether or not surrogacy agreements are invalid regardless of whether or not the surrogate mother has biological relations to the child has never been answered.  However, recently, on December 23, 2009, a trial Court in Hudson County entered a decision in the A.G.R. v. D.R.H. and S.H. case finding that surrogacy agreements in New Jersey are invalid regardless of the biological relationship of the surrogate mother.

The A.G.R. decision arose out of a 2005 agreement between the surrogate mother and her brother, D.R.H. D.R.H. and defendant S.H. obtained a same sex marriage in the State of California and thereafter registered as domestic partners in the State of New Jersey. In or about 2005, D.R.H. and A.G.R. entered into a contract whereby S.H. would provide the sperm which would be used to fertilize the eggs donated by an unknown woman. The parties furtehr agreed that once fertilization occurred the fertilize embryos would then be implanted into A.G.R. who would carry the fetus to birth. As a result of the in vitro procedure, A.G.R. delivered twin girls.

Although the Court’s decision does not provide specifics, after the twins were born, there was a dispute as to A.G.R.’s ongoing involvement with the twins resulting in litigation among the parties.

D.R.H. argued that since A.G.R. did not provide the biological material for the embryos, the surrogacy agreement should be held valid. The Court however pointed out that the Baby M decision only comments on the infants genetic make-up once and the vast majority of the decision supported invalidity of surrogacy agreements in New Jersey.

Notably, there is a split among jurisdictions. Some states honor gestational surrogacy while others, like New Jersey, do not.