In landmark step, judge does not defer to FDA in stem cell clinic chain case, orders full trial

Judge Jesus Bernal presiding in fat stem cells case.
California Federal District Court Judge Jesus Bernal ruled on Monday that fat stem cells might be exempt from being regulated as drugs by the FDA, but a full trial is needed to make that final determination in the case of the FDA vs. Cell Surgical Network, et al.

In what could be a serious legal warning sign for the stem cell field, California federal district court Judge Jesus Bernal denied the government’s motion for summary judgement against Cell Surgical Network, et al. related to their marketing of an unproven fat stem cell product via their chain of clinics. The FDA is seeking a permanent injunction. You can read the new ruling here.

The reasons why Bernal said he rejected the summary judgment request are concerning and don’t fit with my view of the medical science here as a stem cell biologist.

Unfortunately, this all leaves the door potentially still open for hundreds of clinics to sell the unproven fat stem cell product at the heart of this case called “stromal vascular fraction” or (SVF).

Full trial

We’ll have to wait for a full trial to see how it all turns out, but it’s now clear that Bernal is charting a very different path than the federal district court Judge Ursula Ungaro in Florida, who last year granted summary judgment against SVF firm U.S. Stem Cell, Inc. That Florida ruling resulted in a permanent injunction against U.S. Stem marketing or using SVF, a decision which is now being appealed. The Florida judge largely deferred to the FDA in that trial.

In contrast, Bernal not only denied the FDA/DOJ motion for summary judgment, but also in doing so he surprisingly rejected a key FDA point that SVF could not be exempt from classification as a drug. The government had successfully argued that issue in the Florida case.

Bernal is clearly not going to just defer to the agency, which is good news for the defendants.

Update: Bernal ended up ruling against the FDA and for Cell Surgical Network. The case is now on appeal at The Ninth Circuit.

Judge Bernal initial ruling

Here’s a key part of Bernal’s ruling (emphasis mine and note that SSP means Same Surgical Procedure, a potential basis for a product being exempt from regulation as a drug):

“Finally, this reading of the SSP Exception is entirely consistent with the Government’s assertion that the implanted HCT/P’s be “in the form removed from the patient.” (See Summary Judgment Reply at 4.) It is also consistent with the Guidance Document’s statement that “[a]n HCT/P remains ‘such HCT/P’ when it is in its original form.” Guidance Document at 7. If SVF cells are removed from a patient and those same cells are implanted back into the same patient without alteration of the cells themselves, they are “in the form removed” and “in [their] original form”—even when they were removed along with other biological material that was not ultimately implanted back.

While the SSP Exception could apply to a procedure that removes SVF cells by removing adipose tissue from a patient and implants only extracted SVF cells back into the same patient, it only applies if those SVF cells remain unaltered. The parties dispute whether the SVF Procedure alters the SVF cells. (Summary Judgment Opposition at 15–17.) Because both parties have submitted competing evidence on this point, there is a triable issue of fact and summary judgment is not appropriate.”

Much of this case boils down to whether the SVF cells even exist in the same form in the body as they are in the SVF made in vitro. I don’t believe that they do, but the judge seems at least open to that idea. Actually, enzymatic treatment, removal, and concentration of the heterogeneous population of cells in fat tissue substantially changes those cells. In addition, all the various cells in SVF don’t exist together in fat tissue in the body. They are spread apart. As a scientist, I’m not sure why the judge didn’t see it this way, but then again I’m not an attorney or legal expert. Did the FDA not make a convincing enough case including via its experts?

Patti Zettler’s take on Judge Bernal ruling

I asked FDA legal policy expert Professor Patti Zettler for her initial take on this ruling. She noted a key Supreme Court decision sometimes called “Kisor” happened between the Florida verdict and this California order, which may have impacted how this unfolded:

“Wow, I’m pretty surprised by this (and from a public health perspective a bit worried), particularly because I think FDA’s arguments have both legal and public health merits. But as readers of The Niche will know, the regulatory scheme in this space is very complex. The difference in outcomes for the Florida and California cases seems at this point to turn quite a bit on whether the judges gave any deference to FDA’s position on when the same surgical procedure exception in its regulations applies—with Judge Ungaro in Florida deferring to the agency’s position, and Judge Bernal in California not. (One interesting wrinkle for those *really* interested in the law of administrative agencies is that the Florida opinion came before, and the California opinion came after, a June 2019 Supreme Court decision in case called Kisor v. Wilkie. Kisor has been viewed as narrowing the circumstances in which courts will defer to an agency’s interpretations of its own regulations. A colleague at Ohio State wrote a blog post about Kisor here.) All of that said, the case is not over yet—this was an opinion on the government’s pre-trial motion for summary judgment—and so this is one to keep watching.”

Bernal mentioned Kisor in his ruling.

On another point, I also don’t agree with the judge’s analogy of the process of making SVF from fat being just like a surgeon isolating an artery for grafting and in so doing trimming some of the artery off and removing some blood from inside of it. After the surgeon prepares it, the artery is still the artery, while SVF doesn’t even exist inside human beings. The judge also seemed to equate surgical cutting with “enzymatic cutting” conducted to make SVF, a flawed comparison in my view.

Overall, Bernal’s order is at least a temporary setback for both the FDA’s case and in my view for those of us concerned about unproven stem cell clinics. We’ll have to see how the trial goes and the FDA could still win, but the odds of the defendants winning this case instead just went up substantially, relatively speaking at least.  If that happens, then the Florida firm U.S. Stem Cell has a much better chance on its appeal as well I think.

Then the FDA’s broader ability to regulate biologics may be substantially weaker.

28 thoughts on “In landmark step, judge does not defer to FDA in stem cell clinic chain case, orders full trial”

  1. Do any of you know what the Paracrine Effect is? The FDA was given $6.5 billion for regenerative medicine under the 21st Century Cures Act/ They have allocated only $30 million over 4 years with most of the money allocated to other programs. This alone shows that the NIH/FDA are stifling the use of any form of regenerative medicine that actually cures disease. All of my research of Clinical Trials as published in PubMed state that stem cell treatment in all cases is safe and efficacious but further trials are needed. It is time for large scale phase three Clinical Trials to establish most effective source and dosage. Dr Steven Bauer of FDA has an excellent article about how the Paracrine Effect cures degenerated organs.

    1. I run a podcast and I would like to back your work. I believe FDA is shuffling their money to there programs. The stem cells are the wave of future in order to cure/help patients with arthritis, etc. I run NE cold case podcast and Im getting ready to start a new podcast. ” Wave of the Future” its about cutting edge science research that does not seem to be allowed in the US but is allowed elsewhere in the world. I can be reached at or 860-719-0538. Thanks podcast email is

      Jen Roy

  2. How much do you get paid to spout this nonsense? There is an error in your first line. “In what could be a serious legal warning sign for the stem cell field”? The ruling was against the FDA. You’re biased, your article has errors, and your writing sucks.

    1. Readers, let’s stop the accusations; stem cell researchers like Paul and I are not paid by pharmaceutical companies or the FDA. Our funding comes from state or government grants and philanthropy, and most recently for me, from investments in my biotechnology company so that my research can be translated to a clinical trial.
      That said, here is the scientific fact: mesenchymal [“stem”, ‘stromal”, or whatever] cells are considered to be safe for transplantation for one reason: when injected into the bloodstream, they are cleared by the body, because they are not normally part of the bloodstream. Since they are transient, they would not be expected to be better than a saline injection, and nearly as safe as saline.
      Paul and I are working on pluripotent stem cells, which when used properly do not form cancers; this is not because they disappear like MSCs- they actually can engraft under most circumstances. No, it’s because pluripotent stem cells are potentially cancerous only when they are undifferentiated. No one would be foolish enough to use undifferentiated pluripotent stem cells for therapy. But once differentiated into, for example, pancreatic islet cells or specific types of neurons, they can actually reverse diseases like diabetes and neurological disease. There have been many FDA-overseen trials of pluripotent stem cell-derived cell types, and no cancers have ever been reported.
      Therefore, both MSCs and pluripotent stem cell derivatives are safe…just not for the same reason.

      1. Be Honest You're Biased

        You state, “state or government grants and philanthropy” and “investments in my biotechnology company so that my research can be translated to a clinical trial”. That constitutes conflicts of interest! You are directly competing with the stem cell clinics mentioned in the article. And you’re clearly trying to protect the author, who hasn’t declared his own conflicts of interest. There may be other undisclosed payments related to speaking out against stem cell clinics. Furthermore, your biotechnology company’s clinical trial required FDA approval, and more FDA approvals may be required, so you are publicly siding with the FDA against the stem cell clinics.

  3. Salad pulverized into soup with a hefty portion of cookies aside, check out all of the Liveyon LLC trademarks listed on Justin Trademarks Liveyon:
    Liveyon still says it manufactures “stem cells” even though it is still a 361 FDA Registered company and the FDA states that only 351 FDA Approved Drugs can contain living stem cells.
    Looks as if Liveyon’s “stem cells” are going into everything from pharmaceuticals to baby food, fungicides and vermin killers to dietetic substances and dental wax and more.
    A quote by a Cornell Law Professor, right beside the Liveyon LLC Trademarks, stated on that day, “ The law will not save us… The Rule of Law exists in the United States primarily to conceal politics; that is, one cannot rely on having ‘the law’ on one’s side if politics are opposed.”
    Even though adipose and possibly bone marrow may not meet the SSP Exception under 21 CFR 1271.15(b) because of syntax soup, culture media or Porcine enzymes, at least these procedures use a person’s own material going back into them. While the application and risks should be known, like tumor causing, etc., as long as the other added ingredients are known to be safe, like enzymes, then it seems that could warrant a different designation or classification that distinguishes those procedures from cord blood banks or amniotic and umbilical cord blood products that are known to be seriously harmful in the current modus operandi.
    Amniotic and Umbilical Cord Blood has no known method of sterilization, per the CDD MMWR 2018 about Liveyon LLC, in addition, according to James Hardy, the former Compliance Director of the Genetech/ Liveyon amniotic and umbilical cord blood products are not donor matched and cause GVHD and are not intended to be used for therapeutic use in humans ( see and, according to the Florida Department of Health, those injected with the Liveyon product should be tested for at least 8 communicable diseases to include West Nile and Zika. The FDA has repeatedly sent warning letters because Liveyon and it’s trained physicians sell the product by telling people that their
    Product contains living stem cells – selling it as if it is an FDA Approved Drug, when it is not as well as violating numerous cGMP standards and more.
    According to the Justia Trademarks on Liveyon LLC, this company is far from not selling it’s products.
    Where does their material come from? Is it imported? How is this legal? Does this include child and human rights violations or crimes against humanity? What potential diseases are caused by unsterile material? Why is this material in baby food? What is going into food and vaccines? Who really “over sees” any of this business practice called “ medical?” As a former broker, FDA would constitute “ insider trading” by it’s mere existence.
    What are the “politics du jour” that are subverting this purported billions of dollars and illegal distribution of unsterile amniotic and umbilical cord products into so many things that humans use?
    Why all the distractions with lesser used bone marrow and adipose while they are at least coming from and returning to the same subject?
    Meanwhile, lots of disease, including known GVHD, is being spread while these being that are causing harm to so many are given 3 years to leap ahead of the FDA and the legal system? That is some disheartening and potentially lethal global politics that is not concerned with the well being of anyone.

  4. Louise B Andrew MD JD

    Fairly clear to me that Ursula Ungaro is the one who took the easy way out in FL, not even considering that her order to destroy the banked stem cells of USSC’s patients was depriving them of property (dearly acquired, both in terms of $$$ and inconvenience, and possibly also discomfort) without even the right to be heard or impleaded into the case.

    I’m glad judge Bernal had both the work ethic and good sense to notice that there were unresolved issues that precluded a hasty (and easy) summary judgment in favor of the agency whose mission creep is only surpassed by its allegiance to Big Pharma.

  5. I imagine that the judge needs much more extensive scientific education, or needs to get a special master. Without that, a judge can feel quite unsure about whether to accept one party’s assertion that certain cells have not been changed in a particular way. Patti is right that if greater deference is given to the agency, then the judge can rely on the agency. Thus Kisor does matter. And Kavanaugh (on the SCT) seems to be someone who might be sympathetic with less deference as a rule. But even with great deference, a judge might be somewhat nervous if his or her educational background does not provide an adequate basis for assessing the reasonableness of the alternative view being proposed by the defendant.

    1. The judge is there to rule on issues of law. The rest is why we have expert witnesses. @admin “Did the FDA not make a convincing enough case including via its experts?” Obviously not. My guess is that they went into the this thinking it was a slam dunk based on the Florida case and found out otherwise.

    2. @Alta,
      It does seem that in “science-heavy” cases like this that judges in general might have to put in some extraordinary effort or enlist a special master to make sure things are clear to them scientifically. As I wrote in the post, I do worry about some of the language the judge used in this ruling such as errantly equating enzymatic digestion of a tissue with cutting an artery. It’s also a challenge to deconstruct a tissue in an abstract sense like imagining the fat cells separate from the fat overall, and then asserting the cells can be considered as their own entity in a sense if I got that right from the ruling when in fact the cells are enmeshed in the tissue and are extremely heterogeneous in fat. It’s not that simple.

      1. It helps to give the judges metaphors rather than let them make them up. The Supreme Court case that invalidated patenting of human genes is a good example. The metaphor that convinced them that cDNAs should be excluded involved chocolate chip cookies. The ingredients exist in nature but not the combination, which is made by humans. It’s worth looking up.

    3. “I imagine that the judge needs much more extensive scientific education” (Alta Charo)

      “It does seem that in “science-heavy” cases like this that judges in general might have to put in some extraordinary effort or enlist a special master to make sure things are clear to them scientifically.” (Paul Knoepfler)

      It’s elitist/condescending language like this which makes me double down on exactly why science and medicine are too important of enterprises to leave just to the “experts”. We cannot in a free society afford to just rely on the experts….particularly when they are conflicted. Experts like the FDA have at their disposal mission statements about protecting the people all the while receiving funding from the industries they are supposed to regulate. And which scientific/legal experts are these judges supposed to rely on? You Dr. Knoepfler? You, Alta Charo? Nothing doing! I nominate James Sherley MD PhD. One person’s education or point of view could very well qualify as another person’s propaganda or even brain washing.

      1. @Douglas, your comment does raise the interesting point of how biomedical experts are chosen for court cases. Of course, opposing sides in court are likely to end up with scientists/physicians saying very different things. I was trying to imagine if I were a judge instead of a scientist, how would I navigate a case like this, especially in the context of expert witnesses on each side saying very different things. Could be a tough spot for a judge, but it must happen frequently. Especially now moving forward in courts do not defer to the FDA on questions of biomedical science as much anymore, then judges may find themselves having to get much more into the science themselves.

  6. the issue about drugs doing harm by doctors is exactly what happened to me oN synthroid, the doctor didn’t treat mY
    ADRENSAL GLANDS Yand I am sicker than sick and I will have to go OUT OF THE COUNTRY TO HEAL MY KIDNEYS AND DIABETES BECAUSE I WAS COMPLETELY HEALTHY BEFORE I WENT TO THIS DOCTOR. ad, DOCTORS can and do harm to patients .I was completely healthy before gong to this endochronologist who treats people to tHEIR pocket book it has never even been approved by the FDA in 46 years of use . way to go FDA ,IWILL.NEED TO GO OUT OF THE COUNTRY . THE AMERICAN SYSTEM OF CAPITOLISM IS JUST WAITING FOR BIG PHARMA TO COME IN AND TAKE OVER AND CHARGE US FOR OUR OWN STEM CELLS.

  7. If I have a big bowl of Salad and I remove everything except the cucumber and eat that, am I having a salad, or a plate of cucumber? Likewise, if I extract a large volume of adipose tissue, mince it up, digest it with enzymes, remove all the extracellular matrix and adipocytes, use a force 400 times that of gravity to mechanically concentrate some of the cells from the adipose into a pellet and inject those cells……did I inject something substantially different than adipose tissue? Of course I did.

    1. LOL – nice analogy. But writing a definition to separate cell therapies into drugs or transplants is not so easy. There are numerous tissues that are transplanted after enzyme treatment or mechanical disruption but these are not drugs (e.g. skin, intestine, corneal endothelium).

      In Europe the definition from EMA involves, “non-homologous use” and/or “cell proliferation”, either or which moves the therapy into the drug classification. So I guess your cucumber is still a transplant.

    2. “use a force 400 times that of gravity to mechanically concentrate some of the cells from the adipose into a pellet” Good grief! 400 times the force of gravity!!??? That sounds like an alien technology the way you put it. In fact what you are probably referring to is centrifugation which has been around since about the 1860’s. Centrifuges have been used in laboratories and doctors office for well over a century. As far as this sort of SVF therapy being “unproven”…..nonsense! The literature is full of articles describing the use of SVF not only in veterinary medicine but people medicine also. Just off the top of my head in PubMed.

    3. Louise B Andrew MD JD

      Brenton, yes, you are still having a salad. A cucumber salad. Perhaps you have an intolerance to everything else in the previous salad, or your physician has determined that the other extraneous ingredients (blood vessels, oily residue, cellular debris) would not be healthy for you if taken by the usual route. Why would your cucumbers now be anything other than a highly refined salad? Even if it had been washed in an enzymatic vege-wash to remove cucumber fungus or parasites or pieces of undesireable salad ingredients or sprinkled with tenderizer to break down the skin or pieces, or even further chopped or spun around in a powerful salad spinner to remove excess water or seeds released by the process? What’s left is still cucumber! And it’s still a salad, as there is nothing that dictates that “salad” has to have more than one ingredient, just because most do. One definition of a “salad” is “a vegetable suitable for eating raw.”

      1. You´re right about the salad but very wrong about cellular physiology. Cells in vivo are contact inhibited, meaning that their contact with other cells induces differentiation and stops cell division, If you remove this inhibition by separating the cells, you don´t get a “refined” population, you get a different population with potentially activated cells that can now proliferate. If this proliferation becomes uncontrolled you may induce a cancerous population.

        Stem cells in the body rely heavily on their environment and contact with cells of different ontogenies to keep them in check. Your one ingredient salad may no longer be a salad but a tumor.

        1. @Stella Six. Boy. This sounds like a lot of speculation on your part and perhaps for the purpose of fear mongering. Let’s see…..

          “If this proliferation becomes uncontrolled you may induce a cancerous population.”

          “Your one ingredient salad may no longer be a salad but a tumor.”

          Nothing quite like generating fear among the masses regarding our own bodies…I guess.

          So in those clinics (people or veterinary) that have utilized SVF can you cite cases where a person or animal then developed tumors as a result? On the other hand, I believe it is quite well known that Induced pluri-potent as well as embryonic stem cells are well known not only for tumor generation in their hosts but for giving rise to a whole variety of immune responses.

          1. Well Brian, are you sure I’m not in the pocket of big pharma too? No speculation in my explanation of why isolation of stem cells from an integrated tissue, such as adipose, does not result in concentration of those cells as they were, but a change in the nature of those cells. This is widely published in reputable journals by independent authors.

            If you drop your SVF into a tissue culture dish the stem cells will proliferate, whereas in the fat tissue, they are quiescent and need to be induced by tissue damage to initiate repair. Extraction of SVF is similar to tissue damage, inducing a proliferative phenotype. The key regulatory environment that has been destroyed by isolation is called the stem cell “niche” (hence Paul´s blog title). Also widely published.

            Replicating cells accumulate mutations and if these confer autonomy over growth regulation, you have a step on the way to cancer. This is why repeated injury to a tissue in some chronic diseases can result in cancer. All of the above is relatively well known and published in credibly journals.

            Unlike a paper that you cited above to show that SFV is “safe”, which was authored by someone with a commercial interest in pushing this message. If I were you I would avoid citing publications driven by the industry as it seems as if you are supporting a speculative pharma agenda.

            1. I’ll repeat my question to you one more time Stella Six. So in those clinics (people or veterinary) that have utilized SVF can you cite cases where a person or animal then developed tumors as a result? It truly sounds as though you are politically dancing around the issue with your lengthy technical explanation of ” integrated tissue” OR ” Extraction of SVF is similar to tissue damage, inducing a proliferative phenotype” OH PLEASE!! Just answer the question or cite papers of your own if you wish to about how the use of SVF has actually induced tumor or cancer formation. Enough of your fear mongering responses like “a step on the way to cancer”. Show me a paper (commercial driven or otherwise) where a person or animal developed cancer the result of SVF.

  8. Yes, they shouldn’t shut down these Stem Cell Clinics willy nilly. Buyer beware just like anything else. Some people have had their knee surgery postponed due to stem cell injections.

  9. The promise of regenerative medicine is something to protect. Yes, there is much yet to be learned, however it is important to prevent the FDA handing this technology over to big pharma. Yes, there are some who plunge ahead with inadequate testing, and yes there are dangers to our health. But, is that any worse than the record of big pharma, that with the blessing of the FDA, sells their drugs to a public that expect them to be safe. Every day we hear of a new drug that has be rushed to the market only to be recalled because it has proven to be dangerous. Let’s us have a full trial, but under no circumstances should the courts place regenerative medicine totally in the hands of money grubbing big pharma. This is my perspective, Paul, and I would appreciate hearing your views.

    1. So your rationale for accepting an untested potentially dangerous therapy (stem cell or otherwise) is that there are others already out there that have killed people. That drops the bar for patient safety to the lowest denominator, any approved drug that killed some people in the past is now the precedent for all new drugs. Do you think that´s good?

      1. It is our right as individuals to access our own stem cells regardless of the opinions of health authoritarians and their preference to see us suffer and die rather than act without their approval.

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