Korean stem cell clinic sued by patients in U.S. for fraud: RNL Bio

A Korean stem cell clinic has been sued.

For the first time to my knowledge, patients have sued a dubious stem cell clinic (RNL Bio) for fraud. As one stem cell expert has put it (see below), now there is “blood in the water”.

RNL Bio of Korea has reportedly (hat tip to Leigh Turner) just been sued for fraud by patients related to stem cell treatments it allegedly gave them. RNL Bio has both international operations, but notably also runs the Celltex stem cell clinic in Texas.

The court documents on the case run 52 pages. To be clear this case does NOT include Celltex as a defendant and is not an indication that Celltex itself has done anything untoward. In addition, I don’t believe in guilt by association, but it would be hard to spin this as anything except yet another huge migraine headache for Celltex.

According to court documents, the plaintiffs in the RNL case, 6 patients who reside in Los Angeles County, seek “restitution of alleged payments to Defendants of $75,000, in addition to damages for physical ailments” as well as punitive damages. (Update in 2020: Note that RNL Bio leader Jeong Chan Ra now runs a firm called Nature Cell, where there has also been controversy.)

The most important thing about this lawsuit is not its indirect link to Celltex, but rather its potential to change the playing field for stem cell clinics more generally.

Read on….

According to an article in “Healthintheglobalvillage”, the plaintiffs all underwent stem cell treatments by Human Biostar, Inc (operating as RNL Life Science at the time, which allegedly is the same thing as RNL Bio…I know it gets confusing) and are seeking damages for:

intentional misrepresentation of fact; negligent misrepresentation of fact; false advertising in violation of California Business and Professions Code; unfair competition in violation of California Business and Professions Code; financial elder abuse; negligence; and breach of implied covenant of good faith and fair dealing.

What do the plaintiffs allege was fraudulent behavior by RNL Bio? Healthintheglobalvillage reports:

“This action arises from a scheme by which defendants defrauded elderly Plaintiffs through false representations that experimental stem cell therapy, which is not approved in the United States and South Korea as an acceptable method of medical treatment, would cure not only all known ailments, but also would reverse aging, thereby improve overall health and quality of life and prevent future illness.”

The plaintiffs allege a long litany of issues with RNL that together raises serious concerns if confirmed.

The case also embodies the international complexities of how some stem cell clinics operate these days.

As best as I can determine, the plaintiffs claim that their stem cells were harvested in Korea, transported from Korea to China, then from China to Los Angeles, and then from Los Angeles to Mexico where the cells were finally transplanted back into them. If only stem cells qualified for frequent flyer miles, right? The plaintiffs allege that the condition of the stem cells might have been compromised on this global tour.

This case has broad, important, and global implications for stem cell clinics.

What the stem cell research field, including me, and its organizations have been unable to do (that is positively and effectively deal with the for-profit stem cell clinics out there that are looking for a quick profit), trial lawyers may very well achieve rather rapidly.

Look at this link where a firm is already gearing up in Texas to pursue cases. The RNL case also illustrates how (1) being an international company and/or (2) performing procedures outside the U.S. are not necessarily going to be effective elements of a legal defense for dubious clinics.

I believe this is a watershed moment for the stem cell field.

From now on, operators of some stem cell clinics start deeply worrying about litigation and personal liability. As a consequence I predict that almost all of them either change their ways of doing business or consider shutting down entirely. Those that don’t will be at extremely high risk of being sued by patients and patient families.

Bernard Siegel, Director of the Genetics Policy Institute and a leader in the stem cell field, told me this to say about the RNL case:

“This lawsuit serves as notice to the purveyors of unproven stem cell treatments that they may be subject to  civil litigation if they market their services in the United States.  Any licensed clinician dabbling in stem cell therapies might face expensive lawyer’s fees and economic ruin, defending a  civil claim for punitive damages that is not likely covered by standard medical malpractice insurance.  The blood is in the water. The plaintiffs’ trial bar is well aware of the potential of this new lucrative specialty “cell therapy malpractice.” As I see it, the well-intentioned medical and scientific societies have been unable to impede marketers of unproven stem cell therapies and their deceptive advertising.  These stem cell therapy clinics hawking unproven treatments and their associates will learn that there is a fate far worse than public disapprobation. How does it feel to be a defendant in a federal lawsuit brought on behalf sympathetic victim of malpractice and fraud and prosecuted by a skilled trial lawyer? We should not underestimate the US tort system to serve as a deterrent to egregious conduct.”

Time will tell, but this may well be one of those few notable events in the history of the stem cell field that goes on those timelines in review articles in journals.