January 20, 2021

The Niche

Trusted stem cell blog & resources

In dark augur for clinic industry, court allows class action suit by 100s against Stemgenex

StemGenex court order class action lawsuit
StemGenex case court order awarding class action status to the lawsuit.

In the latest blow to the unproven stem cell clinic industry, a California federal district court judge just granted class status to a lawsuit against the fat stem cell clinic Stemgenex. (update: Stemgenex has since filed for bankruptcy).

What this means in practical terms is that the lawsuit alleging fraud in marketing by the clinic firm amongst other allegations will proceed and may have 100s of patients involved.

Many of these people paid nearly $15K per treatment to the company. Presumably some customers got numerous treatments from the company. As a result, millions could be at stake here if the plaintiffs prevail and if StemGenex, et al. must return payments to customers.

This is a huge deal and a somber warning of a sort to many other clinics selling unproven and non-FDA approved stem cells.

You can see a screenshot of the top portion of page 1 of the court order here in this blog post, which begins, “This is a complex and troubling case.

The firm representing the plaintiffs in this case Mulligan, Banham, & Findley, put up an announcement about the class certification on their website here.

From the news item, they wrote:

“On June 24, 2019, a class action was certified against a San Diego stem cell clinic, StemGenex, Inc., its owners and related entities.  The lawsuit claims fraud, false advertising and violations of consumer law relating to stem cell treatments aggressively marketed to people with a variety of diseases and medical conditions. Moorer v. StemGenex Medical Group Inc., et al., United States District Court for the Southern District of California, Case No.: 16-cv-2816-AJB-NLS, Hon. Anthony J. Battaglia.”

and further:

“The class is comprised of hundreds of customers throughout the United States, all of whom had the same type of treatment, a stem cell process which used each person’s own belly fat, and all of whom paid Defendants the same amount – $14,900 per treatment.   The Court ultimately agreed with the patients that their claims were suited for a class action, stating, “The questions asserted are common questions of fact and, as Plaintiffs acknowledge, the answers can apply to all class members in one swoop.”

You can see an example of the type of customer satisfaction infographic that was up at one time some years back on the StemGenex website at right indicating in my view a claim of 100% customer approval, but the plaintiffs argue that some customers including the plaintiffs themselves, told the company they weren’t happy.

Past screenshot from Stemgenex website of claimed 100% customer satisfaction.

In my opinion this class action lawsuit certification is terrible news for Stemgenex, but good news for patients and the stem cell field. The year isn’t even half over and already 2019 is in some ways the worst ever for unproven stem cell clinics more generally.

For instance, another fat stem cell clinic firm U.S. Stem Cell, Inc. just recently lost a federal lawsuit and had a permanent injunction placed on it. A strikingly similar case by the FDA is pending in California against a number of co-defendants including a network of scores of clinics called Cell Surgical Network. The suits are both focused at least in part on whether stromal vascular fraction (SVF) is a drug, its alleged misbranding and adulteration, and the scope of FDA authority. In my opinion (as a non-attorney I could be wrong), the clinic network is likely to lose its case to the FDA as well.

A variety of other patient lawsuits are in the works against many clinics and the suppliers of the clinics too.

So even as the number of clinics likely has never been higher, a tide of governmental and patient lawsuits and many resulting court victories or expensive settlements makes the future outlook darker for the clinic firms.

Note that StemGenex may be trying to put the past behind itself as it recently appeared to have reincarnated as a clinic firm by another name, Advanced Cell Medicine.

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