The US Stem Cell Judge Denies the Motions to Intervene by the SVF Owners Subject to….?

The US Stem Cell Judge Denies the Motions to Intervene by the SVF Owners Subject to….?

On July 31st, the US Stem Cell judge issued an “Omnibus Order” denying “without prejudice” all of the SVF’s Motions to Intervene in the case.
Here is her order:

What is happening is confusing, even to an FDA litigator like me. But, for what it’s worth, here is my explanation of what’s going on and why we’re here, (whereever “here” is).

First, I think that neither party specifically informed the judge that the company was banking SVF product for its patients and possibly people who were not patients, but just used US Stem Cell as an SVF bank). I do not know why that happened/didn’t happen.

After it obtained summary judgement, the government prepared an order requiring all SVF product in the Defendants’ possession to be destroyed. So far as I can tell, neither party informed the judge about the banked product for customers.

The defendants did not inform its SVF banking customers of the problem, until after the judge signed the injunction order, whereupon the defendants told its customers that their body material was about to be destroyed per the court’s order, and encouraged them to write to the judge via the clerk’s office.

The clerk received over two hundred letters and at least two motions to intervene, one of which was filed by a South Florida law firm purporting to represent many of the SVF banking customers.

After the judge started seeing these letters from the SVF banking customers, she did what she probably thought was the only thing she could do, given the procedural posture of the case, (namely, that there was a final judgement); she issued a stay of the part of the injunction order relating to the banking customers’ SVF, pending the filing of an appeal by the defendants of her permanent injunction order and judgment.

If the defendants appeal, then the judge’s stay continues until the court of appeals (the Eleventh Circuit) makes some applicable ruling on the case. If the defendants do not appeal, her stay of the destruction order automatically dissolves, and the destruction will take place under the FDA’s supervision, per the final permanent injunction.

Here is what my gut tells me is going to happen (meaning this is not a researched deep analysis).

If the defendants file a timely appeal (and I hope and suspect they will), that should essentially end the district court’s involvement in the case, as technically, I don’t think she will have jurisdiction on the case once a timely appeal is filed. She may issue another clarifying opinion telling the intervenors to try to intervene in the appeal, but that is about all I expect to happen in the district court, unless and until the court of appeal reverses and remands all or a part of the case back to the district court.

And I will go out on a limb and make a prediction about will happen in the court of appeals.

The part of the injunction order enjoining the defendants from performing SVF transplant procedures will be affirmed.

However, if correctly litigated, the part of the judge’s order mandating the destruction of the banked SVF product will or should be reversed on the grounds that the district court never acquired jurisdiction over the material/failure to join an indispensable party/the relief granted exceeded the claims in the lawsuit, or some combination thereof, as will be argued by the intervenors. That part of the case will be remanded for further proceedings. At that point, I would hope to see a settlement between the FDA and the SVF banking customers.

Well, maybe there is some wishful thinking going on here, but I think that is the way it could play out, if it goes that far.

Rick Jaffe, Esq.

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