US Stem Cell Co-Defendant Gradel Throws in the Towel; Mediation fails (big surprise)

US Stem Cell Co-Defendant Gradel Throws in the Towel; Mediation fails (big surprise)

The consent order of defendant Theodore Gradel has been filed. He is no longer involved with the company and has agreed to a permanent injunction enjoining him basically being in what the FDA considers to be the illegal private stem cell clinic business.

here it is: gradelconsentdecree

On top of that, the mediation between the FDA and US Stem Cells and its remaining individual defendant, Kristin Comella has failed. No surprise here.

What does that mean?

Well it’s obviously not good news for Comella or the future of her company. I had thought that the Judge was sending her a message in her denial of the joint motion to cancel mediation, that now would be a good time to fold. If so, the message wasn’t received.

My guess is that the judge will use the consent order as a basis of the summary judgment order she issues against the defendants, meaning the language of the permanent injunction order.

Look to the judge to accept the FDA’s position in toto, now more than ever since one of the two individual defendants has already accepted the FDA’s position. Interestingly, the consent agreement was also signed by the primary or local counsel for all defendants. Technically, it means nothing that the attorneys fighting a case for the two remaining defendants have agreed to the relief requested in the lawsuit for a third defendant. But still . . . . I incorrectly predicted a separate firm would be signing the consent agreement.

The only thing different between this case and the Regenerative Sciences case on which there is binding or almost binding federal circuit court authority is that the Colorado clinic expanded its HCT/P’s, so it didn’t have the same-day surgical procedure exception going for it (21 CFR 1271.15).

But the FDA guidance documents say, imply, or are being interpreted by the FDA to reject the 1271.15 exception to US Stem Cell Clinic because it is not the same HCT/P. In other words, the HCT/P which is extracted via liposuction (belly fat containing MSC’s) are not the same HCT/P which are reimplanted (some MSC processed SVF). That view is consistent with the FDA’s new “more than minimal manipulation” position in its guidance documents.

So unless this district court has a crystal ball and knows how the Supreme Court is going to rule on a pending case dealing with continued judicial deference to administrative agencies’ interpretations of their own statutes, I am going with the judge giving deference to the FDA’s interpretation of the same-day surgical exception, which knocks US Stem Cell Clinic out of 1271.15 safe harbor land.

The cross motions for summary judgement should be submitted to the court by April 5th. Expect a decision a week or three before the mid May pre trial conference.

Bottom line and practically speaking, Gradel’s consent agreement agreeing to the relief sought, which was signed-off by counsel of record for all defendants is just one more step to the inevitable, in my view at least.

Rick Jaffe, Esq.

rickjaffeesquire@gmail.com

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