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Date: 09-13-2021
Case Style:
United States of America v. US STEM CELL CLINIC, LLC,
a Florida limited liability company,
US STEM CELL, INC.,
a Florida profit corporation,
KRISTIN C. COMELLA,
individually
Case Number: 19-13276
Judge: Douglas Howard Ginsburg
Court: IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
Plaintiff's Attorney: United States Attorney’s Office
Defendant's Attorney:
Description:
Atlanta, Georgia - Medical Malpractice lawyer represented defendant with a charge alleging the stem cell procedure violates the Federal Food, Drug, and Cosmetics Act (codified at 21 MaU.S.C. §§ 301 et seq.).
Since 2001 the FDA has regulated human cells, tissues, and cellular and
tissue-based products or “HCT/Ps,” which the FDA defines as “articles containing
or consisting of human cells or tissues that are intended for implantation,
transplantation, infusion, or transfer into a human recipient,” 21 C.F.R.
§ 1271.3(d), under both the FDCA and the Public Health Service Act (codified at
42 U.S.C. §§ 201 et seq.). See Human Cells, Tissues, and Cellular and TissueBased Products, Establishment Registration and Listing, 66 Fed. Reg. 5447, 5447-
69 (Jan. 19, 2001) (codified at 21 C.F.R. § 1271) [hereinafter Final Rule]. The
FDA has three goals in regulating HCT/Ps:
1) preventing unwitting use of contaminated tissues with the potential
for transmitting infectious diseases such as AIDS and hepatitis; 2)
preventing improper handling or processing that might contaminate or
damage tissues; [and] 3) ensuring that clinical safety and effectiveness
is demonstrated for tissues that are highly processed, are used for other
than their normal function, are combined with non-tissue components,
or are used for metabolic purposes.
Food & Drug Admin., Proposed Approach to Regulation of Cellular and Tissuebased Products 6 (Feb. 28, 1997), https://www.fda.gov/media/70704/download
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[hereinafter Proposed Approach]. Recognizing “different HCT/Ps may present
different concerns,” the FDA adopted a “tiered, risk-based approach” to regulating
them. Final Rule, 66 Fed. Reg. at 5450. The two provisions at issue here are
aspects of this tiered approach.
The first is the “same surgical procedure” exception, which applies where
an establishment “removes HCT/Ps from an individual and implants such HCT/Ps
into the same individual during the same surgical procedure.” 21 C.F.R.
§ 1271.15(b). HCT/Ps in this category are not regulated by the FDA at all – under
neither the FDCA nor the PHSA – because “[t]he communicable disease risks, as
well as safety and effectiveness risks, would generally be no different from those
typically associated with surgery.” Proposed Approach at 12.
The second provision is 21 C.F.R. § 1271.10, which subjects HCT/Ps
meeting each of several criteria to a lighter regulatory burden. HCT/Ps meeting
the specified criteria are called “361 HCT/Ps,” and they are regulated under § 361
of the PHSA (codified at 42 U.S.C. § 264) only to prevent the spread of infectious
disease. An HCT/P that fails to satisfy one or more criteria may be regulated as a
biological product under the PHSA or as a drug or device under the FDCA. 21
C.F.R. § 1271.20. The only criterion at issue here is that the HCT/P must be
“intended for homologous use only.” 21 C.F.R. § 1271.10(a)(2). “Homologous
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use” is “the repair, reconstruction, replacement, or supplementation of a recipient’s
cells or tissues with an HCT/P that performs the same basic function or functions
in the recipient as in the donor.” Id. § 1271.3(c). Grafting skin from an arm to
replace lost skin on a face would be a homologous use, for example, but “use of
amniotic membrane in the eye” would not be. Final Rule, 66 Fed. Reg. at 5458;
see also Proposed Rule on Establishment Registration and Listing for
Manufacturers of Human Cellular and Tissue-Based Products, 63 Fed. Reg. 26744,
26749 (May 14, 1998). In essence, the party offering the procedure must intend
that the HCT/P do the same basic job before and after it is transplanted. To divine
the company’s intent, the FDA looks to “the labeling, advertising, or other
indications of the manufacturer’s objective intent.” 21 C.F.R. § 1271.10(a)(2).
* * *
The Clinic marketed its body-fat-derived stem cell therapy for the treatment
of a plethora of autoimmune, neurological, and degenerative conditions, including
ALS, Parkinson’s disease, kidney disease, brain and spinal cord injuries, COPD,
diabetes, rheumatoid arthritis, osteoarthritis, stroke, liver disease, congestive heart
failure, and others.
At the first step of the therapy, the Clinic uses a syringe to remove two
ounces of the patient’s adipose tissue (that is, body fat). The adipose tissue is
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made up primarily of fat cells and a network of collagen fibers, but it also contains
various stromal and vascular cells. These stromal and vascular cells are known
collectively as the “stromal-vascular fraction” of the adipose tissue; among them
are the titular stem cells.
After removing adipose tissue from the patient, the Clinic uses a five-step
process to isolate the stromal-vascular fraction (i.e., to turn the syringe of body fat
in picture (b) into the tube of stromal and vascular cells in picture (c)). First, the
adipose tissue is rinsed with a cell wash solution to remove blood cells. Second,
the Clinic uses an enzyme to digest the collagen fibers. Third, the solution is
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centrifuged to separate the stromal-vascular fraction from the fat cells. Fourth, the
Clinic uses a cell extractor and cell strainer to strip away everything except the
stromal-vascular fraction. Finally, the stromal-vascular fraction is centrifuged a
second time. The isolated stromal-vascular fraction is then suspended in saline
solution or in platelet-rich plasma and injected back into the patient.
The FDA inspected the Clinic in 2015 and 2017. The inspectors found fault
with several of the Clinic’s practices, including its failure to keep a sterile
environment and to prevent contamination; test stromal-vascular fraction samples
for contamination; and label the stromal-vascular fraction solution as a drug. The
Clinic responded to the FDA’s adverse findings by asserting it was exempt from
regulation.
* * *
In 2018 the FDA sued the Clinic, alleging the stromal-vascular fraction
solution is an adulterated and misbranded drug. While the lay person may not
think of stem cells as a “drug,” the FDCA’s definition of that word is expansive;
any “article[] intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease” is a drug for purposes of the statute. 21 U.S.C.
§ 321(g)(1)(B). In keeping with its “core objective[]” of ensuring drugs sold in the
United States are safe and effective, FDA v. Brown & Williamson Tobacco Corp.,
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529 U.S. 120, 133 (2000) (citing 21 U.S.C. § 393(b)(2)), the FDCA forbids the
adulteration or misbranding of drugs, see 21 U.S.C. § 331(k). The FDA alleged
the Clinic’s solution was “adulterated” because it was not manufactured,
processed, or stored in conformity with its regulation establishing “good
manufacturing practice.” 21 U.S.C. § 351(a)(2)(B); see 21 C.F.R. §§ 210-11. It
further alleged the solution was “misbranded” because it did not bear a label
providing “adequate directions for use.” 21 U.S.C. § 352(f)(1); see 21 C.F.R.
§ 201.5. In fact, the FDA argued, the Clinic could not label the stromal-vascular
fraction solution in compliance with the FDCA because “there is no scientifically
valid evidence to show that it is safe or effective for any indication.”
The Clinic did not claim to have complied with the FDA’s good
manufacturing practice or labeling requirements. Instead, opposing the FDA’s
motion for summary judgment, the Clinic argued either the same surgical
procedure or the 361 HCT/P exception applied. The district court rejected those
arguments and granted the FDA’s motion. United States v. US Stem Cell Clinic,
LLC, 403 F. Supp. 3d 1279, 1287-98 (S.D. Fla. 2019).
Regarding the same surgical procedure exception, the district court first held
the HCT/Ps implanted into the patient must be the same HCT/Ps, in their original
form, as the ones removed from the patient. Id. at 1288-89. The court based this
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holding on the text of the regulation, which exempts only an establishment that
removes HCT/Ps from a patient and reimplants “such HCT/Ps” into the same
patient. Id. The Clinic had argued the stromal-vascular fraction was an HCT/P
removed from the patient and reimplanted in its original form, so the procedure
was exempt. According to the FDA, however, the HCT/P removed was adipose
tissue and the stromal-vascular fraction solution was obtained only after substantial
processing; therefore, the Clinic was not exempt. See Food & Drug Admin., Same
Surgical Procedure Exception Under 21 CFR 1271.15(b): Questions & Answers
Regarding the Scope of the Exception: Guidance for Industry (Nov. 2017),
https://www.fda.gov/media/89920/download [hereinafter Guidance Document]
(announcing the FDA’s view of how this exception applies in regard to adipose
stem cell therapies). The district court deferred to the FDA’s interpretation of its
regulation and held the same surgical procedure exception did not apply. 403
F. Supp. 3d at 1289-94.
Next, the court held the 361 HCT/P exception inapplicable because the
stromal-vascular fraction solution was not intended solely for homologous use. Id.
at 1297-98. The Clinic had protested that it “intend[ed] the [stromal-vascular
fraction] to perform the same basic regenerative function before and after the
procedure.” Id. at 1298. Looking to the Clinic’s marketing materials, however,
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the district court found the Clinic intended that the stromal-vascular fraction treat a
“litany of illnesses in the recipient,” which is not the “same basic function” the
stromal-vascular fraction performed before the procedure. Id.
The district court went on to hold the Clinic violated the FDCA based upon
the FDA’s undisputed contentions that the stromal-vascular fraction solution was a
drug, that it was adulterated, and that it was misbranded. Id. at 1298-1300. In a
separate order, the district court permanently enjoined the Clinic from offering its
adipose stem cell therapy unless and until several conditions were met, including
FDA approval of a new drug application or biologics license application for the
stromal-vascular fraction solution.
II. Analysis
On appeal, the Clinic again argues it is exempt from regulation under the
FDCA because either the same surgical procedure exception or 361 HCT/Ps
exception applies.
A. Same surgical procedure exception
Recall the applicable regulation provides: “You are not required to comply
[with the FDA’s rules regarding HCT/Ps] if you are an establishment that removes
HCT/Ps from an individual and implants such HCT/Ps into the same individual
during the same surgical procedure.” 21 C.F.R. § 1271.15(b). The Clinic’s view is
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straightforward: The stromal-vascular fraction is removed from the patient and
then reinjected; therefore, the Clinic removes HCT/Ps from the patient and then
implants “such HCT/Ps” into the same patient; therefore, the Clinic is exempt from
regulation under the same surgical procedure exception. The FDA counters that,
due to the substantial processing necessary to isolate the stromal-vascular fraction,
the solution injected into the patient does not contain the same HCT/P as was
removed, and therefore is not “such HCT/P[]” as that term is used in the
regulation. That is, the HCT/P removed was adipose tissue, whereas the HCT/P
implanted is the stromal-vascular fraction, so the exception does not apply.
At first glance, both readings seem plausible. There was a time when a court
faced with a regulation that seemed “impenetrable on first read” might simply
“wave the ambiguity flag” and defer to the agency’s interpretation. Kisor v.
Wilkie, 139 S. Ct. 2400, 2415 (2019). No longer. The Supreme Court recently
clarified that judicial deference is appropriate only if a regulation is “genuinely
ambiguous.” Id. Before declaring a regulation genuinely ambiguous, we must
“exhaust all the traditional tools of construction,” which entails “carefully
consider[ing] the text, structure, history, and purpose of [the] regulation.” Id.
(internal quotation marks omitted). We will consider the parties’ textual
arguments, giving the agency’s view no special weight “except to the extent it has
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the ‘power to persuade.’” Id. at 2414 (quoting Skidmore v. Swift & Co., 323 U.S.
134, 140 (1944) (“The weight of [an agency’s interpretation] will depend upon the
thoroughness evident in its consideration, the validity of its reasoning, [and] its
consistency with earlier and later pronouncements”)). In this case, our tools of
construction resolve the apparent ambiguity in the FDA’s favor, so we need not
decide whether to defer to the interpretation expressed in the Guidance Document.
Each side argues its interpretation is textually required. The Clinic first
argues the relevant HCT/P must be the stromal-vascular fraction because adipose
tissue does not fall within the definition of an HCT/P. Specifically, the Clinic says
cells or tissues can be HCT/Ps only if they are “intended for implantation” into a
patient. Appellants’ Br. 13 (quoting 21 C.F.R. § 1271.3(d)). This is not correct.
HCT/Ps are “articles containing or consisting of human cells or tissues that are
intended for implantation” into a patient. 21 C.F.R. § 1271.3(d) (emphasis added).
The adipose tissue contains the stromal-vascular fraction, which consists of cells
intended for implantation into a patient. Therefore, both adipose tissue and
stromal-vascular fraction are HCT/Ps.
The Clinic next draws our attention to the opinion of a district court in
California that, in a similar suit against a clinic offering a similar procedure,
rejected the FDA’s interpretation under the canon against surplusage – the idea that
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a reading of a statute or regulation which gives each word independent meaning is
generally to be preferred over a reading that makes some words superfluous.
United States v. Cal. Stem Cell Treatment Ctr., Inc., No. 5:18-cv-01005, 2020 WL
1289543 (C.D. Cal. Jan 27, 2020); see also Rimini Street, Inc. v. Oracle USA, Inc.,
139 S. Ct. 873, 881 (2019) (explaining the canon against surplusage and its
limitations). That court reasoned that through its use of the word “HCT/Ps,”
§ 1271.15(b) refers to the removal and reimplantation of both cells and tissues:
“Because cells make up tissues and organs, cells can only be removed from a
patient along with those larger systems.” Cal. Stem Cell, 2020 WL 1289543 at *8;
but see id. at *8 n.12 (“[T]he Government attorney asserted that technology to
remove only cells did exist. However, no evidence was submitted on this point.”).
Therefore, the court concluded, the FDA’s characterization would “eliminate[] the
possibility of a cell removal and implantation,” and thus fail to give “full effect to
all words” in the regulation. Id. at *8.
For its part, the FDA focuses upon the word “such.” The regulation exempts
only establishments that remove HCT/Ps from a patient and implant “such
HCT/Ps” back into the same patient. As the district court in this case correctly
explained, the word “such” in legal documents is typically used to refer back to an
antecedent. See 403 F. Supp. 3d at 1288-89. Here, this means the HCT/Ps
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implanted must be the same as the antecedent HCT/Ps – that is, the HCT/Ps that
were removed. If significant processing steps expose the HCT/Ps to foreign
substances and alter their form prior to reimplantation, then the HCT/Ps cease to be
the same as they were at the time of removal. This interpretation seems, at the
outset, to be the more natural of the two readings.
The FDA’s view is all the more persuasive because it is consistent with its
early (as well as its recent) pronouncements, see Skidmore, 323 U.S. at 140, and
consonant with the history and purpose of the regulation, Kisor, 139 S. Ct. at 2415.
In 2001, when the FDA first proposed the rule that would become § 1271, it
received just one comment on the same surgical procedure exception. Final Rule,
66 Fed. Reg. at 5460. Responding to that comment, the FDA noted that certain
ways of processing an HCT/P could render the exception inapplicable, giving the
example of cell or tissue expansion. Id. Specifically, the FDA was asked whether
the exception covered “hospitals retaining [a patient’s own] tissue ... to be used in a
subsequent application on the same patient.” Id. The FDA indicated the exception
would apply in that scenario “so long as the hospital does not engage in any other
activity encompassed within the definition of ‘manufacture’.... For example, if the
hospital expanded the cells or tissues, it would not meet the terms of the
exception.” Id. “Manufacture” encompasses “the recovery, processing, storage,
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labeling, packaging, or distribution of any human cell or tissue.” 21 C.F.R. §
1271.3(e). The FDA’s response therefore implied that more than ordinary
processing would make the exception inapplicable. Thus, from the start, the FDA
treated “such HCT/Ps” as meaning HCT/Ps in their original form, not subjected to
significant processing, and informed the public of this understanding. Cf. Bostock
v. Clayton Cty., 140 S. Ct. 1731, 1738 (2020) (instructing courts to interpret a law
“in accord with the ordinary public meaning of its terms at the time of its
enactment”).
After establishments such as the Clinic began offering adipose-derived stem
cell therapies, the FDA issued a Guidance Document expounding on the
application of the same surgical procedure exception to these therapies. The
agency was of the view that when a procedure involves “intervening processing
steps beyond rinsing, cleansing, sizing, or shaping,” the same surgical procedure
exception usually will not apply. Guidance Document at 3. This is because while
“limited handling, such as rinsing and cleansing ... solely to remove debris (e.g.,
lipids, blood, bone particles)” presents no special risks, “processing steps ... for cell
isolation, cell expansion, cell activation, or enzymatic digestion” raise “safety
concerns, such as contamination and cross-contamination, beyond those typically
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associated with surgery.”1
Id. at 7. Therefore, an establishment that merely
removes and reinjects adipose tissue into a patient would generally qualify for the
exception, but an establishment that uses enzymatic digestion to isolate the stem
cells from the tissue before reinjection would not. Id. at 7-8. The Guidance
Document is well-reasoned, explaining how its conclusion follows from the FDA’s
original understanding of the same surgical procedure exception.
Because the plain text of the regulation suggests that “such HCT/Ps” must
be in their original form (rather than subjected to extensive processing), and
because this understanding is confirmed by the agency’s contemporaneous
statements and its later, thoroughly-considered interpretation, we hold the same
surgical procedure exception unambiguously does not apply to the Clinic’s
procedure. The stromal-vascular fraction solution is the product of an intensive
cell isolation process involving enzymatic digestion that goes much farther than
simple rinsing or sizing. By the time the stromal-vascular fraction is reinjected, it
is no longer “such HCT/P” as the adipose tissue removed from the patient.
1 Recall that the rationale for the same surgical procedure exception was to carve out HCT/Ps
that present “communicable disease risks, as well as safety and effectiveness risks,” that are “no
different from those typically associated with surgery.” Proposed Approach at 12.
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B. 361 HCT/Ps exception
The district court held that the stromal-vascular fraction solution was not a
361 HCT/P because, as a matter of law, the Clinic did not intend the stromalvascular fraction solely for homologous use. That is, the Clinic intended the
stromal-vascular fraction to perform at least some functions in its patients after the
procedure that are distinct from the basic functions it performs inside the adipose
tissue prior to the procedure. The Clinic claims this was error. It argues there was
at least some evidence to the contrary, from which a reasonable fact-finder could
arrive at the opposite conclusion, so the district court should not have granted the
FDA summary judgment on this issue.
Rather than attempt to refute the Clinic’s argument, the FDA urges us not to
consider it. According to the FDA, to satisfy the homologous use criterion, the
Clinic would need to intend for the stromal-vascular fraction to serve the basic
functions of adipose tissue after the procedure (viz., “cushioning and support”). It
says the Clinic forfeited any argument to the contrary first by failing to raise it
before the district court, and again by failing to raise it on appeal. We see no
forfeiture in either court.
In the district court, the FDA raised the homologous use criterion in its
motion for summary judgment. It assumed, without analysis, that the relevant
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“basic function or functions” were those of adipose tissue. In its response, the
Clinic disputed the FDA’s assumption: “the regulation ... is silent as to which
HCT/P is the appropriate comparative unit ... thus allowing for the [stromalvascular fraction] cells to serve as the appropriate unit of comparison.” The Clinic
asserted that it intends the stromal-vascular fraction to “provide a regenerative
function” after the procedure, just as it does before the procedure, so the
homologous use criterion is satisfied. In its reply, the FDA disagreed and argued
in the alternative that the Clinic intended the stromal-vascular fraction to do more
than serve a vague regenerative function. This back-and-forth was sufficient for
each side to preserve its position in the district court.
On appeal, the Clinic adequately restates its position that the proper
benchmark is the basic function of the stromal-vascular fraction in adipose tissue
(viz., “regeneration and repair”). We agree. Unlike the same surgical procedure
exception, the 361 HCT/P exception and definition of homologous use do not
require that an establishment remove an HCT/P from a patient and reimplant “such
HCT/P” into the same patient.2
There is no reason, therefore, the court should not
compare stem cells to stem cells.
2 Throughout its briefs, the FDA attempts to graft the requirements of the 361 HCT/P exception
onto the same surgical procedure exception and vice versa. This is a mistake. As the FDA has
itself said, “[t]he assessment of whether the [same surgical procedure exception] applies is
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Nevertheless, we agree with the district court that the Clinic did not intend
the stromal-vascular fraction solely for homologous use.
3
The Clinic has
consistently maintained that the stromal-vascular fraction serves a “regenerative
function” inside adipose tissue. To determine the Clinic’s “objective intent” for
the stromal-vascular fraction’s function after the procedure, we must look to the
Clinic’s marketing materials. 21 C.F.R. § 1271.10(a)(2).
The Clinic marketed the stromal-vascular fraction procedure for the
treatment of the plethora of conditions we described earlier. The district court was
plainly correct that “providing a regenerative function in the donor is [not] the
same basic function as restoring cell function, contributing to anti-inflammatory
processes, and otherwise treating [a] litany of illnesses in the recipient.” 403
F. Supp. 3d at 1298 (citing Final Rule, 66 Fed. Reg. at 5458 (explaining
“promotion of an HCT/P for an unproven therapeutic use, such as curing cancer,”
would be a nonhomologous use)). No reasonable fact-finder could disagree.
independent from the determination of whether the HCT/P meets the criteria [of the 361 HCT/P
exception].” Guidance Document at 4.
3 The Government did not make this argument in its brief on appeal, perhaps out of unwarranted
confidence in its forfeiture argument. Still, “[w]hen an issue or claim is properly before the
court, the court is not limited to the particular legal theories advanced by the parties.” Kamen v.
Kemper Fin. Servs., 500 U.S. 90, 99 (1991); accord Walker v. Prudential Prop. & Cas. Ins. Co.,
286 F.3d 1270, 1275 n.4 (11th Cir. 2002) (“When addressing the issues in a case, we are not
precluded by counsel from applying the law to the record before us”).
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Outcome: For these reasons, neither the same surgical procedure exception nor the 361
HCT/Ps exception applies to the Clinic’s surgical practice. The Clinic did not
challenge the district court’s judgment upon any other ground.
Accordingly, we AFFIRM the judgment of the district court.
Plaintiff's Experts:
Defendant's Experts:
Comments: