FDA appeals Cell Surgical Network lawsuit verdict

The FDA has finally filed an appeal of the Cell Surgical Network lawsuit verdict.  It took them a very long time for some reason.

The stem cell clinic chain Cell Surgical Network and other defendants had prevailed in a federal district court here in California in front of Judge Jesus Bernal.

Their adipose cell product, stromal vascular fraction or SVF, might for the moment to be legal to sell in some of California at least. Bernal ruled it is not a drug.

Cell Surgical Network stem cell clinic chain
Dr. Mark Berman, a leader of Cell Surgical Network, demonstrating an adipose procedure at a meeting. Image from a YouTube video.

Appeal of Judge Bernal’s ruling on Cell Surgical Network lawsuit

I’ve written before how I believe that Judge Bernal made some big scientific mistakes in his final judgment and findings of fact. I won’t rehash all of those, but Bernal bought every major argument from the defense.

I disagree with the defendants’ characterizations of the processes and products at issue here. In my view SVF is a drug and especially when you expand SVF in a lab, it should be a drug. Risks are increased by growing cells in a lab.

It’s not clear why Bernal was so one-sided.

Good odds on the appeal

The extreme nature of his ruling could be a weakness. I believe that the FDA has an excellent chance of getting the ruling overturned.

One main reason is that the Eleventh Circuit Court of Appeals earlier ruled in favor of the FDA in a very similar Florida case. There the FDA had initially prevailed to get a permanent injunction of sale of SVF and the defendants (US Stem Cell) had appealed. Then in the appellate ruling, the court went out of its way to be critical of Judge Bernal’s initial ruling against summary judgment requested by the FDA in the California case.

Of course, the Ninth Circuit will decide whatever it wants, but the Eleventh Circuit judgment could be a powerful precedent. The Eleventh Circuit is kind of viewed as a top appellate court as well. Note that I testified for the FDA in the case before Bernal.

Part of Bernal’s judgment also conflicts with the earlier ruling that lab-grown stem cells are a drug in the key Regenerative Sciences case.

He seems to be way out on a limb overall.

Looking ahead on the Cell Surgical Network lawsuit

So far the FDA/DOJ hasn’t said exactly why it is appealing the ruling.

What are the key flaws in Bernal’s verdict in their view? It could be months before court documents answer such questions.

As far as I can tell, the FDA hasn’t issued a press release either, which seems odd.

One big practical question is whether the feds will request a stay of Bernal’s ruling pending appeal.

The appeal case will get moving early in 2023 and maybe we’ll see a ruling by the end of 2023. What happens in the interim with SVF clinics, especially here in California?

Meanwhile, as much as the Bernal ruling muddied things in the SVF space, it shouldn’t impact FDA oversight of many hundreds of unproven stem cell clinics selling distinct products that are often clearly noncompliant.

Why are we still seeing no major new action by the agency on stem cell clinics? There continues to be just one letter here, another there. Drops in the bucket.

7 thoughts on “FDA appeals Cell Surgical Network lawsuit verdict”

  1. You guys know that Mark Berman died, right? Please be wary of disrespecting the Dead whether you agree with them or not.

    1. Dr. Mark Berman was a great clinician and opened my eyes to the immense potential of autologous stem cell therapy for my painful osteoarthritic knee. As a physician I tried hyaluronic acid, PRP, steroids, NSAIDS – all to no avail. An autologous deployment gave me 14 months of relief. I repeated it with similar results. Thanks to Big Pharma and the academia that they fund there is a concerted effort to vilify autologous therapies because it is a bedside procedure and there is nothing to patent. Even the LA Times write a very critical article after Dr. Berman died about his legacy – I think it was done by a Pulitzer Prize winning journalist. Why the criticism over a Beverly Hills facial plastic surgeon forsaking a lucrative cosmetic practice to pursue autologous stem cell therapy? It makes no sense. And when things make no sense, I say “follow the money!” This Riverside judge who ruled in favor of autologous cell therapy is the first judge to actually grasp the facts rather than simply side with bureaucratic nonsense. Meanwhile the USA and Canada fall farther and farther behind in regenerative therapies.

  2. I made an error in my prior post above – it was SCOTUS judge Thurgood Marshal for whom judge Douglas H. Ginsburg clerked, not Souter. I wanted to verify that – so I checked the 11th circuit bio on judge Ginsburg, again, who penned the final written decision on the U.S. Stem Cell SVF parallel case in FL.
    Below is his mini-bio straight from the 11th circuit site – you can see why he’s highly respected ! His credentials at all things “D.C. govt regulatory law” are at the platinum level and he’s been at it for a heck of a long time –
    Quote from 11th circuit bio of Sr justice Douglas H. Ginsburg who wrote the opinion (with the other 2 judges on the panel signing-on in full agreement) regarding the parallel DOJ-FDA SVF stem cell clinic case in FL :

    From 11th circuit court site:
    “Judge Ginsburg was appointed to the United States Court of Appeals in November 1986, served as Chief Judge from July 16, 2001 until February 10, 2008, and took senior status on October 14, 2011. He was graduated from Cornell University (B.S. 1970) and from the University of Chicago Law School (J.D. 1973). Following law school, he clerked for Judge Carl McGowan of the U.S. Court of Appeals for the D.C. Circuit and for U.S. Supreme Court Justice Thurgood Marshall. From 1975 to 1983, he was a professor at Harvard Law School. He then served as Deputy Assistant Attorney General for Regulatory Affairs, Antitrust Division, U.S. Department of Justice, from 1983 to 1984; Administrator, Information and Regulatory Affairs, OMB, from 1984 to 1985; and Assistant Attorney General, Antitrust Division, U.S. Department of Justice, from 1985 to 1986.

    Again – I believe the Feds in this appeal will rely heavily on the final appeal decision resulting from the FL U.S. Stem Cell case, as written by the Honorable Douglas Ginsburg of the 11th circuit to “make their case” to the 9th circuit on the west coast.

    My guess is – the 9th circuit appellate judges will give heavy consideration and deference to an appellate final decision of a near identical case in all form and matter, when it was penned by one Douglas H. Ginsgurg and comes from the D.C. situated heavy hitter 11th circuit !

  3. Great update IMO on this on-going saga, Dr Paul :
    Appeal cases are largely argued (and thus decided) almost entirely on the written “Legal brief” submitted. Written in this case by the Feds aka DOJ-FDA as plaintiff. The other side (defendants) Cell Surgical Network and Dr Mark Berman, Dr Landers et al then get to file their “responding brief” usually 30 days after the initial brief is due.
    It looks like PACER (the govt court docket tracking site) has officially updated and the case is now 100% “officially at the 9th circuit” – moved from judge Bernal and the Riverside CA federal district court to the docket now of the 9th circuit which is situated in San Francisco CA.
    The clerk of the court at the 9th has already set a “initial case schedule(ing) and docket entries” and that includes “written brief filing due dates” and I’m seeing Feb 6, 2023 as the deadline for the DOJ-FDA to submit their appeal brief. The reply brief by the defendants then at approx 30 customary days to respond is shown as being due by March 8th, 2023 at the latest.
    Those briefs are essentially the entire appeal in a nut shell – so when they post and can be read, all will be revealed as to what the legal arguments are going to as to why the Feds believe judge Bernal was wrong and why this should be overturned on appeal. A case of this magnitude – will likely also be allowed oral arguments, in which each side gets a very limited time to stand before the panel of judges and argue their case “live” as written in their brief and often answer any questions the judges may raise etc – it’s usually very limited, like 15 minutes per side or something if I’m not mistaken. Also, the briefs as written are strictly controlled by the court as to limit of number of pages/word-count that can be filed, etc.
    I believe the Feds will draw heavily upon the 11th circuit ruling and the final written decision there as penned by very Sr judge Douglas H. Ginsburg. Ginsburg is a sort of “Honorary Sr appellate judge in D.C.” and he can be “called in when needed” by the 11th circuit to sit and hear high profile cases – and that is exactly what happened in the prior FL parallel stem cell clinic SVF case to this one.
    All that is needed IMO for the Feds to prevail was already written by the highly respected Ginsburg who’s well, well recognized as a “Regulatory affairs expert judge” being he sits/sat on the 11th circuit in D.C. since I believe 1986 or so and then served as “Chief judge” for 7 or 8 yrs of the 11th, home of pretty much all things “Govt regulatory affairs and law”. His opinion and that of the 3-judge 11th circuit panel (of which he was one of the three) will be given great deference I believe. Judge Ginsburg has been on the bench a very long time, he clerked for Supreme Court justice Souter back in his younger days and he was well “rumored” to be a Supreme Court justice pick in his own right.
    And, as you noted – the Regenerative Sciences (Centeno) case was also long ago decided and sits as sort of “long standing legal precedent/case law” also, giving the Feds a strong set of positions to stand on here IMO.
    So – the real show should kick-off and many things be revealed by no later than Feb 2023 which is actually pretty quick for the Federal Appellate 9th, known for being backlogged and overwhelmed with cases and given a lot of near term court shut downs are upon us, for the various end of yr season holidays.
    I also will be curious to see if/when the DOJ-FDA issue a formal PR of their own and will they seek a “stay” blocking SVF being used in CA or elsewhere per the Bernal ruling, while they let this appeal play-out through the 9th circuit which can take as long as 1.5 to 2 yrs to final ruling, not being unusual given their historic track record per all I’ve read and know.

    1. Thanks, Rick. Very useful. Let’s say that Bernal’s verdict is overturned, I wonder if there are any consequences for federal district court judges who make weak rulings that are often overturned? For all I know Bernal’s rulings in general are great, but I feel like he failed to do a good job in this case.

      1. @Dr Paul,

        I believe that IF the 9th circuit also sides with the 11th and thus makes it two appellate courts deciding the same, on near identical cases – it pretty much becomes “settled case law” at that point IMO.
        Unless some entity is willing to “try” to get it before thee Supreme Court which is highly selective at even hearing cases, and thus is a long, long shot IF two appellate courts already came to agreement on the matter – then
        I’d guess that would put a real damper on any other lower district court judges “going against” what the appellate courts, and two biggy appellate courts at that being the 11th in D.C. and the 9th of the large state of CA have decided as law – so I’d be surprised after that if some lower court would want to tackle going against that level of precedent, if indeed the 9th ends up overturning this, siding with the 11th.
        Given that – as one attorney I read has opined (paraphrasing) and I agree with him, “These clinics, they’ll just mix it all up, rename it something knew, move on to some new thing as many already have like exosomes and other stem cell magic goo stuff” etc.
        In other words – when there’s enough money to be made, the bad actors, they just set-up shop across town, change the name and the formula a tad and keep right on rocking !
        Same happens if it’s stock scam boiler rooms, or internet scams or magic vitamin scam cures, or who knows what.
        Whack-a-mole: It’s a daunting problem and as you state, is the FDA really that serious about it all ?
        The counter balance I see – is when (not IF) but when folks get seriously harmed then the civil law attorneys step-in and often put said bad actors out of business via making them un-insurable and breaking their bank (although scam cosmetic surgery clinics for instance- they’re well known in hot spots like FL to set-up with no insurance, run cattle calls and butcher lined up young girls and when “the law” gets close, just shut it all down and re-open across town under a new name !!) – but the civil law attorneys can handle some of it.
        The worst part – is the desperately ill folks who will be bilked out of their life savings by the pitch of charlatans and the infamous “we can cure whatever ails you using magic stem cells, CASH only of course”.
        There, it’s just straight-up fraud and false advertising and good ole fashion scamming, and that makes it tough for a civil trial lawyer to pursue – as they have to front so many costs and expenses, that without a medical malpractice insurance case, there’s not enough money to recover to make it worth it to them.
        Thus, the “money fraud we ripped you off and conned you with false hype ads and promotion” – that stuff has to fall to state’s attorney generals and similar in most cases. We’ve seen a FEW AG’s take a swing at some stem clinics- and they were successful and took a few clinics for $millions in penalties and fines (Example: NY AG Letitia James recovered over $5 mil in fines and damages against stem cell bad actors in her state) and likely sent them to BK court.

        I see it as – this is a problem of such magnitude it will require heavy local law protections + state law aka attorneys general + federal trade commission type law for false hype and misleading ads + local and state medical boards and regulators + medical “societies” and medical ethics folks who help to self-regulate their own + the Feds aka FDA and DOJ when needed + a heck of a lot of awareness which is folks like you and academia and just “educating the public” to realize what is good, bad and really bad.
        I never thought I’d live to see the day where cigarettes practically vanished (at least in the U.S.) – but it took a multi decades long effort of mega lawsuits + govt regulators and warning labels etc + grass roots education programs + medical boards + academia and medical ethics folks + public awareness campaigns, etc.
        It’s daunting – it’s like this is the 1st or 2nd inning of a long game that’s going to go into overtime IMO.
        Keep up the good fight – as frustrating as it may be !!

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