Ivy Sports Med., LLC v. Burwell, No. 13-5139

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtKAVANAUGH, Circuit Judge
Decision Date26 September 2014
Docket NumberNo. 13-5139


No. 13-5139


Argued April 8, 2014
September 26, 2014

Appeal from the United States District Court for the District of Columbia
(No. 1:11-cv-01006)

Matthew M. Hoffman argued the cause for appellant. With him on the briefs was Mark A. Heller.

Adam C. Jed, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Stuart F. Delery, Assistant Attorney General, Ronald C. Machen, Jr., U.S. Attorney, and Scott R. McIntosh, Attorney.

Before: GRIFFITH, KAVANAUGH, and PILLARD, Circuit Judges.

Opinion for the Court filed by Circuit Judge KAVANAUGH, with whom Circuit Judge GRIFFITH joins.

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Dissenting opinion filed by Circuit Judge PILLARD.

KAVANAUGH, Circuit Judge: This case concerns the Food and Drug Administration's regulation - and subsequent re-regulation - of a medical device called the Collagen Scaffold, an absorbable surgical mesh that is designed for use in knee-replacement surgeries. In December 2008, the manufacturer of the scaffold, ReGen Biologics, obtained FDA clearance to market the device. FDA's clearance of the scaffold soon came under fire in the press and from some Members of Congress amid allegations that the process had been tainted by improper political pressure from other Members of Congress. An internal FDA investigation concluded that some procedural irregularities had occurred during the agency's review of the device.

Following the internal investigation, FDA did not exercise its clear statutory authority to reclassify the device. Reclassification would force the device off the market and require the device to undergo the extensive pre-market approval process before it could again be marketed. That statutory reclassification process generally requires FDA to provide notice and an opportunity for comment before the agency reclassifies a device. FDA here did not give notice and opportunity for comment. Rather, FDA short-circuited the statutory reclassification process by relying on what it called its inherent reconsideration authority. Asserting that inherent authority, FDA reevaluated the scaffold and concluded that the agency had erred in allowing the device to be sold. FDA issued an order rescinding its clearance decision, forcing ReGen to immediately pull the scaffold from the market. ReGen subsequently filed for bankruptcy.

ReGen and its successor in interest, Ivy Sports Medicine, challenged FDA's decision to rescind the clearance

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determination as procedurally flawed. The District Court granted summary judgment to FDA, and Ivy now appeals. Because we conclude that FDA did not follow the proper statutory procedure for reclassifying a device, we reverse the judgment of the District Court. We direct the District Court to vacate FDA's decision and to remand to the agency for further proceedings.


In 1976, Congress amended the Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., to grant FDA authority to regulate medical devices intended for human use. Devices fall into one of three categories - Class I, Class II, or Class III. A device's classification is determined based on "the degree of regulation thought necessary to provide reasonable assurance of each device's 'safety and effectiveness.'" Contact Lens Manufacturers Association v. FDA, 766 F.2d 592, 594 (D.C. Cir. 1985).

The classification of a device matters because the three classes trigger different approval processes. In order to enter the market, manufacturers of Class III devices first must go through the "premarket approval" process. "That process generally requires extensive clinical research on a new device to ensure the device's safety, and it often takes significant time." Cytori Therapeutics, Inc. v. FDA, 715 F.3d 922, 923 (D.C. Cir. 2013). Class I and II devices are considered to pose fewer risks and are therefore able to enter the market more easily. Rather than requiring pre-market approval, Class I and II devices are subject either to "general controls" such as labeling restrictions (for Class I devices), or a combination of general controls and "special controls," such as

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performance standards (for Class II devices). See 21 U.S.C. § 360c(a)(1)(A)(i), (a)(1)(B).

How does a device initially get classified into Class I, II, or III? The Act makes Class III the default category for new (that is, post-1976) medical devices, unless and until FDA finds that one of two conditions has been met. See id. § 360c(f)(1). First, FDA may determine that a device is "substantially equivalent" to a pre-existing Class I or II device. Id. § 360c(f)(1)(A)(ii). To be substantially equivalent to a pre-existing Class I or II device, the new device must have "the same intended use as the predicate device," and either (i) have "the same technological characteristics as the predicate device" or (ii) be shown to be as safe and effective as the predicate device. Id. § 360c(i)(1)(A). Second, regardless of whether a device is substantially equivalent to an existing device, FDA may make a de novo determination that a device meets the statutory definitions of Class I or II. See id. § 360c(f)(1)(B), (f)(2)-(3). That determination may be made on FDA's own initiative or in response to the device manufacturer's petition for de novo classification.

Here is how it works in practice: Classification of a new medical device into Class I or II is usually obtained by submitting to FDA a "premarket notification," which in turn triggers the FDA's substantial equivalence review. See id. § 360(k). In the pre-market notification, the manufacturer states the new device's intended use, identifies the predicate devices to which the new device is substantially equivalent, and offers a proposed classification. See id.; 21 C.F.R. § 807.87. If FDA agrees that the new device is substantially equivalent to an existing Class I or Class II device, it issues a classification order allowing the device to be marketed subject to appropriate restrictions. See 21 C.F.R. § 807.100. But if FDA disagrees with the proposed classification, the device

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remains in Class III and must go through the pre-market approval process, unless FDA subsequently approves a petition for de novo classification. See 21 U.S.C. § 360c(f)(3)(A).

After a device has been initially classified, there is also a process for FDA reclassification. The Act includes a provision, Section 360c(e), allowing FDA to change the classification given to a device. See 21 U.S.C. § 360c(e). During the time period relevant to this litigation, that provision stated: "Based on new information respecting a device, the Secretary may, upon his own initiative or upon petition of an interested person, by regulation (A) change such device's classification, and (B) revoke, because of the change in classification, any regulation or requirement in effect . . . with respect to such device." Id. § 360c(e)(1) (2011). Because reclassification must be done "by regulation," it must be done in accord with certain procedural requirements, including notice and comment. See FDA Br. 36; 21 U.S.C. § 360c(e); 21 C.F.R. § 860.130(c).


ReGen Biologics, Inc. was a New Jersey-based medical device manufacturer. In 1993, ReGen began research on a new device for use in certain knee-repair surgeries. The fruit of that labor, called the Collagen Scaffold, is a crescent-shaped surgical mesh made of bovine collagen. According to ReGen, the Collagen Scaffold was intended to reinforce and repair the knee cartilage remaining after knee surgery and to provide a scaffold on which new tissue could grow.

In 2004, ReGen submitted a Class III premarket approval application but subsequently withdrew it and sought to proceed through the quicker premarket notification process for Class I or Class II devices. In 2005, ReGen submitted to

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FDA its first pre-market notification for the Collagen Scaffold. Shortly thereafter, FDA issued a letter finding that the scaffold was not substantially equivalent to its claimed predicates. FDA eventually agreed to convert that finding into a request for additional information. After receiving the requested information, FDA again determined that the scaffold was not substantially equivalent.

In late 2006, ReGen submitted a second pre-market notification with revised labeling. Following more back-and-forth between ReGen and FDA, the agency issued another finding that the Collagen Scaffold was not substantially equivalent to existing devices. A few months after this second decision, four members of New Jersey's congressional delegation wrote to the FDA Commissioner expressing concern about FDA's process for reviewing the scaffold. Representatives from ReGen later met with the Commissioner and with Dr. Daniel Schultz, the director of FDA's Center for Devices and Radiological Health, the office that oversees device approval decisions. Although the FDA officials declined to take further action on the denied application, Dr. Schultz advised ReGen that it could submit a new pre-market notification with additional revisions.

ReGen took Dr. Schultz up on his suggestion and submitted a third pre-market notification in July 2008. As they had before, FDA's staff reviewers recommended that the scaffold be found not substantially...

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