United States v. U.S. Stem Cell Clinic, LLC

• Decision Date: 02 June 2021
• Docket Number: No. 19-13276,19-13276
• Citation: 998 F.3d 1302
• Parties: UNITED STATES of America, Plaintiff - Appellee, v. US STEM CELL CLINIC, LLC, a Florida limited liability company, US Stem Cell, INC., a Florida profit corporation, Kristin C. Comella, individually, Defendants - Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

998 F.3d 1302

UNITED STATES of America, Plaintiff - Appellee,

v.US STEM CELL CLINIC, LLC, a Florida limited liability company, US Stem Cell, INC., a Florida profit corporation, Kristin C. Comella, individually, Defendants - Appellants.

No. 19-13276

United States Court of Appeals, Eleventh Circuit.

June 2, 2021

Adam C. Jed, U.S. Department of Justice, Civil Division, Appellate Staff, Washington, DC, Emily M. Smachetti, U.S. Attorney's Office, U.S. Attorney Service-Southern District of Florida, U.S. Attorney Service-SFL, Miami, FL, for Plaintiff-Appellee.

Michael S. Blume, Venable, LLP, New York, NY, Pamela A. Chamberlin, Loren H. Cohen, Isaac Jaime Mitrani, Mitrani Rynor Adamsky & Toland, PA, Miami Beach, FL, Stephen Ray Freeland, Mary M. Gardner, Todd H. Halpern, Todd A. Harrison, Venable, LLP, Washington, DC, for Defendants-Appellants US Stem Cell Clinic, LLC, US Stem Cell, Inc.

Michael S. Blume, Venable, LLP, New York, NY, Loren H. Cohen, Isaac Jaime Mitrani, Mitrani Rynor Adamsky & Toland, PA, Miami Beach, FL, Stephen Ray Freeland, Mary M. Gardner, Todd H. Halpern, Todd A. Harrison, Venable, LLP, Washington, DC, for Defendant-Appellant Kristin C. Comella.

Before JORDAN, MARCUS, and GINSBURG,^* Circuit Judges.

GINSBURG, Circuit Judge:

US Stem Cell Clinic, LLC, its parent company, and its chief scientific officer (collectively, the Clinic) offer a procedure in which they remove fat tissue from a patient, isolate the portion containing stem cells, and inject that portion back into the patient. This procedure purportedly treats all manner of chronic conditions, from pain to Parkinson's disease

.

The United States Food and Drug Administration is skeptical of the Clinic's claims. It sued the Clinic, alleging the stem cell procedure violates the Federal Food, Drug, and Cosmetics Act (codified at 21 U.S.C. §§ 301 et seq. ). The district court granted summary judgment for the FDA and enjoined the Clinic from offering its procedure until it can demonstrate to the FDA that its stem cell therapy

is safe and effective. The Clinic appeals, arguing it is exempt from regulation because the procedure falls into either the "same surgical procedure" exception or the "361 HCT/P" exception to regulation under the FDCA. See 21 C.F.R. § 1271.15(b) ; id. § 1271.10. We disagree: The procedure does not fall within the first exception because the biological material implanted into the patient is not the same as that removed and the procedure does not fall within the second exception because the Clinic intends the stem cells to perform functions after the procedure beyond the basic functions the stem cells performed prior to the procedure. We therefore affirm the judgment of the district court.

I. Background

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 Tissue-Based 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 Tissue-based Products 6 (Feb. 28, 1997), https://www.fda.gov/media/70704/download [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 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 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 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. , 529 U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d 121 (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....