Q&A with Roxland on stem cell clinic suits by Iowa & Nebraska

I wrote last week about the Nebraska and Iowa state Attorney Generals filing lawsuits against stem cell clinic firms and three individuals also named as defendants. Although I went into detail about the individuals including leader Travis Autor and the firms, I didn’t yet go into much depth on the state lawsuits themselves in that post.

beth roxland, stem cell legal expert
Attorney and stem cell legal expert, Beth Roxland.

For more on this critical part of the story I needed some expert input so I turned to attorney Beth Roxland for a Q&A. She has unique expertise in stem cell and biologics including legal, policy, and bioethics matters. I hope you find it as informative and useful as I did.

PK: What’s your big picture take on the Iowa and Nebraska lawsuits?

BR: The very public filing by two states’ Attorneys General against stem cell clinic entities are a major legal development for the entire stem cell field, and are emblematic of state-level agencies’ and actors’ efforts to take a greater role in attempting to oversee and control stem cell and “regenerative medicine” clinic and provider conduct. These new actions are in line with the ground-breaking April 2019 New York State civil suit against a stem cell clinic and its chief executive that relied on state laws, like deceptive business practices and false advertising, to try to reign in certain conduct that the AG considered unethical or unfair to “consumers” of healthcare or wellness products, services, and interventions.

PK: Are there any key similarities between the suits brought by the two states?

BR:  As both suits arose from a coordinated investigation by Nebraska and Iowa into a chain of stem cell clinics, there are a number of commonalties between the actions, including virtually all of the named Defendants (including Regenerative Medicine and Anti-Aging Institutes of Omaha (RMAIO), Omaha Stem Cells, Stem Cell Centers, and two individuals, Travis and Emily Artur), the general legal bases for asserting civil liability, and the relief sought.

More specifically, the Complaints claim that the Defendants were engaged in unlawfully advertising or marketing stem cell therapies to treat or cure a range of health conditions. Nebraska and Iowa both seek injunctions to halt the allegedly illegal conduct, as well as various forms of restitution for the consumers, such as monetary refunds for stem cell products and interventions, civil penalties, and other equitable relief that per the state statutes at issue.

Despite the many commonalities, however, the briefs highlight each state’s unique approach and perspectives on the Defendants’ allegedly illegal conduct that are worthy of close review.

PK: Who are the individual defendants?

BR: Both states’ complaints specifically name Travis Autor and his wife Emily Autor as Defendants, and allege in varying detail the controlling interests or other interrelations between individual and the entity Defendants (see for example Neb. Comp. ¶ 10), or how the offending actions of the clinic entities, such as the alleged misleading or deceptive advertising or sales of stem cell and exosome interventions, were directly or indirectly controlled by Defs. Travis and Emily Autor. Interestingly, both suits assert that the Defendants should be jointly and severally liable for the conduct at issue.

The complaints also assert that an individual named Michael Pavey provided personal testimonials about his own success with the cell therapies at issue, allegedly without disclosing that he had a financial stake in or a position with one of the Defendant Companies (RMAIO) – a failure that both states incorporate in their claims of misleading or deceptive practices. Iowa actually includes Michael Pavey as a named Defendant, although the Nebraska Complaint contains detailed allegations involving Mr. Pavey even without naming him as a Defendant.

PK:  What kinds of actions are the AGs targeting in these suits?

BR: More specifically, the Complaints asserts and detail –

  • Alleged deceptive marketing and sales of stem cell and exosome interventions;
  • Alleged deceptive advertising conduct occurring in both states via in-person seminars (over 80 asserted to have occurred in each state), television and radio advertisements, social media posts and websites;
  • Allegations that Defendants’ made misleading claims that their stem cell and exosome therapies could cure a variety of named conditions, such as COPD and neuropathy, that the therapies were “safe,” and a variety of other claims that the States allege lacked sufficient evidentiary basis; and
  • High out-of-pocket, costly interventions allegedly being deceptively marketed.

In addition, in laying out the factual predicate for claimed violations of consumer rights and welfare, both Complaints refer to US Federal FDA rules and actions regarding (1) the safety of exosomes and reported Serious Adverse Events (“SAEs”), specifically in Nebraska, and (2) cautionary public guidance for those seeking or considering stem cell interventions.

PK: What specific laws are involved?

BR: Nebraska’s AG alleges violations of its Consumer Protection Act (Neb. Rev. Stat. § 59-1601 et seq. (“CPA”), and Uniform Deceptive Trade Practices Act (Neb. Rev. Stat § 87-301 et seq. (“UDTPA”), amongst others. Iowa claims violations of its Consumer Fraud Act, Iowa Code § 714.16, and a relatively unique law entitled the “Older Iowans Law” (Iowa Code § 714.16A), discussed in greater detail below.

PK: Are there any notable differences in terms of the specific allegations?

BR:   While both Complaints devote specific efforts to “exosome” products, separate and apart from other “stem cell” products, Nebraska focuses on EuCyt Laboratories LLC, which allegedly supplied products to the Defendants. EuCyt received a warning letter from the FDA on June 4, 2020, citing issues with sterility, and linking out to a public warning from December 2019 about reported SAEs from patients who received some form of “exosome” intervention.

Iowa’s Complaint opens with a framing of the issues surrounding stem cells and exosomes, including a scientific explanation of both, and the alleged environment that has evolved. Using Iowa’s unique law, the Older Iowans Law, Iowa sets forth a variety of allegations throughout the complaint to support the claim that Defendants’ also intentionally targeted older Iowans with unsubstantiated health claims about costly stem cell interventions. (See Iowa Compl. ¶¶ 108-111). The State alleges that Defendants knew or should have known these consumers were likely to suffer from medical problems and were more vulnerable, but that they “willful[ly] disregarded…the rights of older people.” (Id. ¶¶ 110-111). Iowa sought an increase of $5,000 for each civil penalty assessed under the CFA for this alleged conduct. (Id. ¶¶ 111).

Iowa engaged in several state-level “Civil Investigative Demand” (“CID”) processes to gather information from and allow Defendants to substantiate specific stem cell claims made and show that they had a reasonable basis for making such claims. Specifically, Iowa issued a CID, and then Defendants responded with documents and statements. The AG found no reasonable basis to support the myriad of alleged claims that stem cell or exosome interventions would positively impact: COPD (Iowa Compl. ¶¶ 32-41); Neuropathy (Id. ¶¶ 42-48); the process of Aging (Id. ¶¶ 49-55; 56-61); and although per the Complaint, rarely but sometimes asserted by Defendants, Alzheimer’s Disease (Id. ¶¶ 70-81). Iowa reached similar conclusions following the same investigative mechanism with Defendants regarding their claims that “bigger and more expensive packages” of stem cell and exosome treatments would be more effective. (Id. ¶¶ 82-88).

Also, Iowa asserted that Defendants’ own disclaimers were “insufficient to overcome the net impression Defendants created that stem cell or exosome therapy were effective….” (Id. ¶¶ 98-100), and that Defendants allegedly minimized or misconstrued FDA statements, warnings, and positions on stem cells to the extent that it constituted false, misleading or unfair practices. (Id. ¶¶ 101-107)

PK: What happens next and how might this unfold?

BR: The next step the public could usually expect is court-filed responses to the allegations from the Defendants, like an Answer or even perhaps a Motion to Dismiss. In addition to the substantive counters of the Defendants, it will be interesting here to see whether and to what extent the Defendants strategically approach the two-front attack on their operations.

Lawsuits of this nature can take many months before they are resolved by the court or the parties with any real finality, but those involved in stem cell operations, or even those seeking stem cell interventions, may be keen to to keep an eye on the cases as they unfold, for a number of reasons. From a legal perspective, the parties to these cases may raise issues relating to the role of the states versus the federal government over stem cell interventions, a ruling on which could have wider impact beyond the Defendants in these suits. From a practical / real-world perspective, it will be interesting to observe, for example, whether or to what extent these clinics and their operators engage in any similar advertising or sales that the 2 AGs claim to violate their state laws outside of the boundaries of the Iowa and Nebraska State Lines during or even after the pendency of these litigations, and whether they or related entities take any other steps to either fortify their businesses and operations, or on the on spectrum, disband them.

More about Beth Roxland. She is a Senior Advisor on Law, Policy & Bioethics,  Roxland Consultants Ltd., in New York, NY.

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