Breaking News in the US Stem Cell Injunction Case!

Breaking News in the US Stem Cell Injunction Case!

But first a ho hum update

Last week, both parties filed motions for summary judgment. What that means is that both sides are arguing that there is no need for a trial and that the judge can decide the case on the summary judgment papers.

The government argues of course that the defendants are violating FDA law by using their more than minimally manipulated products for non homologous use, and that it doesn’t fit within the same day surgical procedure exception (21 CFR 1271.15) because what’s being reinjected is not the same HCT/P as what was taken out.

US Stem Cell Clinic argues that it’s just a medical procedure over which the FDA has no jurisdiction, it is the same HCT/P, both out and in, and the court shouldn’t consider the FDA’s guidance documents because it did them without complying with proper administrative procedures, and also because the Supreme Court may soon reject the Chevron deference standard granted to administrative agencies.

The parties have another week to submit responses to their opponent’s motions, and then a week to reply to those responses. So look to the case being submitted to the judge for consideration around April 5th.

The pre-trial conference is mid May, and I’d look for a decision on the cross motions for summary judgement a week or two before the conference. Unfortunately, the parties have alot of paperwork due end of March, which in US Stem Cell Clinic’s case translates into a to six figure legal bill just for this month, I’d bet.

The judge has three options: Grant the government’s motion and the case is over. Grant the Defendants’ motion and the case is over. Deny both motions and the case goes to trial. Or actually there are a fourth and fifth option, which is partially grant one or the other motions and have a trial on the remaining parts of the case.

Now for the breaking news!

You’ll recall from my last update that the parties filed a joint motion to eliminate the required mediation. I thought the motion should be granted because both sides seemed intractable. Well, I was wrong about that, because something big has happened, but not formally yet.

In denying the joint motion to cancel mediation, the judge noted that one of the Defendants, Theodore Gradel, who is a co-owner of the company has entered into a consent order!

In her decision, the judge refers to the Defendants’ motion, which was filed by US Stem Cell Clinic and Kristin Comella, because as set forth in the papers:

Defendant Theodore Gradel does not join this motion for summary judgment as he has signed a consent decree, which the parties anticipate will be filed shortly for entry by the Court.”

In the judge’s order denying the cancellation of mediation, the judge asked the FDA to try again to convince the remaining defendants (read Comella) to give up, or maybe I’m reading too much into it. Here is the operative language. You decide for yourselves.

“There is no reason that the parties cannot negotiate as to the injunction requested by Plaintiff in its complaint at mediation. Indeed, it appears Defendant Theodore Gradel has entered into a consent decree. See D.E. 41. Moreover, discussion at mediation may lead to agreement or settlement of other related matters, streamlining any remaining issues for trial and/or summary judgment . ***”

We will know more once Thomas Gradel’s consent agreement is filed, but at this point, I don’t think the government is going to accept anything less than a permanent injunction, since by my calculation and judgment, a permanent injunction order is only 4-5 weeks away.

This development is not good news for Comella, and that’s an understatment. Gradel should have new counsel and he probably will now appear on the Government’s trial witness list. It makes the dismissal of the case as sought by the remaining defendants much less likely. The screws are turning.

Rick Jaffe, Esq.

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