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FDA v. California Stem Cell case update

FDA v. California Stem Cell case update

Honestly, I lost interest in this case after the federal judge in the Florida US Stem Cell case granted summary judgement to the FDA and issued a permanent injunction barring the use of the stem cell/SVF product, which is basically the same stuff used by the California group. I assumed that the California federal judge would agree with the Florida judge. I am still making that assumption, but I did learn a few interesting things from my cursory review of the summary judgment papers which have been filed. Also, I heard some misinterpretations of what has recently happened in the case, so I thought it might be helpful to set people straight.

The Schedule

In federal court, the parties propose an initial schedule which is accepted, rejected or modified by the court. It is everyone’s rough guess of how long it will take to get to a trial. But things change. It is extremely common for scheduling orders to be revised, meaning deadlines and trial settings are pushed back, by months, or many months, and there are sometimes several successive revisions to scheduling orders.

In this case, the Government complied with the then current scheduling order and filed its motion for summary judgment in early July. The judge took a quick look at the papers, and he probably reviewed the docket in the Florida stem cell case. On his own, he pushed back the hearing on summary judgement to December. That meant the original trial date had to be put off as well.

The judge ordered to parties to meet and confer and come up with a new trial date and other deadlines. The parties couldn’t agree on much. Interestingly, the Defendants asked for a quicker hearing than the judge ordered December hearing, because of the uncertainty and resulting financial problems the case was creating for the defendants’ business. The judge declined, and set the trial date in February 2020.

That was fine for the Government because it is not expecting there to be a trial, based on its view of the law, and its recent summary judgement win in the US Stem Cell case on similar facts.

The fact that the trial date has been pushed back until February 2020 has no legal significance because 1. As stated, trials get put back all the time in federal cases, and 2. The Government (and most likely the judge) doesn’t think there will be a trial.

What I learned from the Government’s Summary Judgment Papers

Caveat: because of the press of other business, I only took a quick look at the papers. My impression was the Government’s papers were very similar to the papers it filed in the US Stem Cell cases. However, the papers did relate two facts which I was not aware of.

First, in 2018 the Government obtained a court order seizing the company’s toxin laced stem cell/SVF vacinia product, based on a finding that the product was misbranded. It is unlikely that this judge will reach a different result, on that product at least. The people who make misbranded products get injunctions issued against them for producing misbranded drugs.

Second, the company is (or had been) expanding some of its patients stem cells. I don’t get it. We know from appellate authority in the Regenerative Sciences case that is illegal. These two facts make a much stronger case for the Government than the facts in the Florida case. Here is the Government’s Motion for Summary Judgment (without the declarations and exhibits)

What I learned from the Defendants’ Summary Judgment Papers

While I thought the Government’s papers in this case were basically the same as what it filed in the Florida case, I think the defense papers in this case are much stronger than in the Florida case. Same firm in both cases, but different lawyers.

Don’t get me wrong, the Florida defense papers were perfectly fine, well written and extremely competent. However, I think the California summary judgment papers presented a more compelling defense, notwithstanding the fact that they had some bad facts to deal with. (Lander’s declaration states that they are not doing these two bad things anymore, or hadn’t as of the date of the FDA’s complaint). The California defense also had the advantage of their clients being actual board-certified surgeons, rather than the morons in Florida who thought it was a good idea to have a nurse practitioner inject people’s eyeballs with stem cells. Still, I thought the California papers were excellent and told a very compelling story. Hats off to the defense team.

Here is the Defendants’ Summary Judgment Response, and the principal declarations:


I really liked the expert report attached to the attorney’s affidavit. I do not recall if it was submitted in the Florida case. If it was, it made alot more sense here since the defendants are surgeons and make a better case for a surgery exception, than in Florida case where (I presume) NP’s are not licensed to practice surgery.

Will the Defense’s excellent papers make a difference?

The defense has some very bad facts to overcome (expansion of cells, and using a toxin in a product which has been determined by a judge in the same district to a misbranded drug), and the recent US Stem Cell decision dealing with a product which is closer to being FDA compliant under applicable law.

So, despite, the excellent job on the papers by defense counsel, as an old Louisiana friend of mine used to say: “You can’t make chicken salad out of chicken [explicative deleted].” And that’s about how I see it. We’ll have the answer probably mid-to late January, 2020.

Rick Jaffe, Esq.

The Final SB 276 Push: What Might Help with the Legislators and What Won’t

The Final SB 276 Push: What Might Help with the Legislators and What Won’t

By all accounts, SB 276 will come out of the suspense docket next week. That means it goes for a vote in the Assembly and presumably back to the Senate to consider the amendments made during its travels through the Assembly, then to a Senate vote, and if it passes, on to the Governor’s desk.

Caveat: I am not an expert on the California legislative process. Nonetheless, I do have opinions on what I think might impress the legislators and what won’t.

First, here are the loser arguments in order of loser-ness:

The Biggest Loser argument: “I have a constitutional right and absolute freedom not to vaccinate my child and send him/her to public school.”

No, you don’t! That argument was made in at least four different SB 277 lawsuits, and it lost every time. You may have that right someplace, but not in California.

The Second Biggest Loser argument: “It will cost a lot of money to put SB 276 in place.”

The job of government is to protect the public. In the public health context, whatever it takes to protect the public from risks identified by the authorities designated to make such decisions is cheap at 10 times the cost. Money is irrelevant to avoid a perceived/misperceived/manufactured public health crises.

The Third Biggest Loser argument: “If the law passes, thousands of vaccine aware families will leave the state.”

As my grandfather used to say, “Don’t let the door bump you in the ass as you leave.” Respectfully, and as you most likely know, at this point in time, the vaccine aware are considered the modern-day lepers. There are recent examples of official and social actions against unvaccinated children. In this environment, you’d be more apt to get an offer of bus fare out of the state than support from most legislators if you argue that the vaccine concerned will leave if the bill passes. Actually, making life more difficult for you, if and after SB 276 passes is probably in the cards, all with an eye to accomplish exactly what you are threatening them with, namely the exodus of the vaccine aware from California. So, don’t make their day.

The Fourth Worst argument: “Doctors should be making these decisions, not state officials.” The recent amendment puts an appeals process in place where the review of physician exemptions is in the hands of physician specialists, not public health officials. That was the criticism of early versions of the bill, and it was addressed and changed.

What about the variation of the argument that a physician who has seen the patient has to have the final say on a medical exemption?

The problem is that SB 276 was supposedly introduced to eliminate the handful of physicians writing fake exemptions. Of course, to date, there are no board orders making such conclusions, but there are several doctors under investigation for doing so, as has been recently reported in several NorCal papers. So, while I would not say it’s a complete loser argument, I don’t see it swaying many legislators in light of all the drumbeat pounding out the fake exemption narrative. But for sure, it might be worth a shot.

Ok, so what is the best arguments to make to legislators?

I wish I knew, but I don’t.

But what I can tell you is what impresses and moves me, and what keeps me up nights: The stories of the families of the vaccine injured. Most of these(you) folks never gave much thought to vaccination and followed your pediatricians’ advice and the “proven” vaccine schedule, and then something bad happened after one of these visits. Most of you haven’t or couldn’t prove causation in vaccine court, and many have other children. Few or none of you will qualify for a medical exemption under CDC guidelines for either your vaccine injured child or your other children, and you are being asked to sacrifice your other child/children for the greater good on the alter of “evidenced-based guidelines.” For most of you, that’s an unacceptable option, and understandably so.

Even back when Congress passed the national vaccine immunity act in the mid 80’s Congress knew that there would be a small number of children who would permanently disabled from the 22 doses of the 7 or so vaccines given back then, despite the CDC guidelines or vaccine package inserts. The problem then and now is that despite CDC guidelines, children are still being injured by vaccines and there’s no accurate way to predict injury, witness your child. One child sacrificed ought to be enough. That won’t be possible under SB 276.

So, the most effective argument you can make with your legislator is to tell your story.
I know you already know that. Call this reaffirmance of what you are doing and will continue to do.

Good Luck

Rick Jaffe, Esq.

NY Adopts California like SB 276 Limitations on Vaccine Medical Exemptions via “Emergency” Regulation”???

NY Adopts California like SB 276 Limitations on Vaccine Medical Exemptions via “Emergency” Regulation”???

On Friday August, 16, 2019, New York State Department of Health issued “emergency regulations” concerning the issuance of vaccine medical exemptions. The short of it is that NY has basically done what California SB 276 will do (and what the original version of SB 277 tried to do) via regulation, thereby circumventing the legislative process.

The regulation limits medical exemptions to ACIP other nationally recognized guidance documents establishing the standard of care.”

Here is the Health Department’s summary of the regulations:

Here is the part directly effecting the criteria for medical exemptions:

“A new subdivision (l) of section 66-1.1 defines “may be detrimental to the child’s health” to mean that a physician has determined that a child has a medical contraindication or precaution to a specific immunization consistent with ACIP guidance. Amendments to subparagraph (ii) of paragraph (4) of subdivision (c) of section 66-1.2 require that the reason why an immunization is detrimental to a child’s health be documented in the New York State Immunization Information System. Additionally, amendments to subdivision (c) of section 66-1.3 require the use of medical exemption forms approved by the New York State Department of Health or New York City Department of Education; a written statement from a physician is no longer allowed.”

Clarifying the detrimental to “child’s health” the regulation states that:

“May be detrimental to the child’s health means that a physician has determined that a child has a medical contraindication or precaution to a specific immunization consistent with ACIP guidance or other nationally recognized evidence-based standard of care.”

Here is what the exemption has to contain:

“For individuals exempt from administration of vaccines, providers must submit patient information, including the reason [for the exemption] that such immunization may be detrimental to the child’s health, as defined in subdivision (l) of this section, to the statewide immunization information system within 14 days following the in-person clinical interaction that occurs at or after what would normally have been the due date for administration of an age-appropriate immnization to that child, according to current national immunization recommendations. Subdivision (c) of section 66-1.3 is hereby amended to read as follows: (c) A signed, completed [sample] medical exemption form [issued] approved by the NYSDOH or [NYCDOHMH or a signed statement] NYC Department of Education from a physician licensed to practice medicine in the New York State certifying that immunization may be detrimental to the child’s health, containing sufficient information to identify a medical contraindication to a specific immunization and specifying the length of time the immunization is medically contraindicated. The medical exemption must be reissued annually. The principal or person in charge of the school may require additional information supporting the exemption.”

BTW: Medical exemption decisions are still technically being made by the child’s physician, not by the Health Department. But of course, physician discretion to write medical exemptions beyond national guidelines has been explicitly eliminated. So in reality, New York State is making vaccine medical exemption decisions. The doc is just filing out the paperwork.

Is that a legal exercise of regulatory power?

Good (and obvious) question. I have not looked hard at the issue, yet, but I am sure some of New York’s best and brightest will do so.

If it is legal, then Senator Pan and his allies have gone to a great deal of unnecessary trouble trying to pass legislation to achieve what a couple regulators in the NY State Department of Health achieved without any legislation, so you do have to wonder….

My case for Ken Stoller against the San Francisco City Attorney raises the issue of an alternative standard of care for vaccine medical exemptions. A successful result could have an impact on the New York situation, or maybe the New York Courts ought to be asked to do the same thing.

Teaser: expect a major announcement in the Stoller case soon, and it will be a double good!

Rick Jaffe, Esq.

To All California Physicians: Watch out for Scammers Claiming to Be DEA Agents and Demanding $25k

To All California Physicians: Watch out for Scammers Claiming to Be DEA Agents and Demanding $25k

As if physicians didn’t have enough to worry about, apparently there is a scam being being run on California physicians. They are getting a call from someone claiming to be a DEA agent stating that the physician is under investigation. The caller requests a $25,000 bond, maybe to make the investigation go away.

Here is what the Medical Board of California says about it:

“Fake DEA Agents Extortion Scam
The Medical Board of California (Board) has learned that scam artists posing as U.S. Drug Enforcement Administration (DEA) agents or Board staff are calling California physicians as part of an extortion scheme. The scammers identify themselves as DEA agents or Board staff calling about ongoing investigations regarding their license issued by the Medical Board of California (Board). The scammers tell victims their license may be suspended for illegal drug trafficking and the suspension means they will not be able to practice. The scammers may provide an “Agreement for the Bond and Protocols” that includes statements that licensees are not to share or disclose the investigation to any third party and agree to a bond fee payment of $25,000.00. The scammers’ phone number may show up as the Board’s toll-free number (800) 633-2322.

No DEA agent or Board staff will ever contact physicians by telephone to demand money or any other form of payment. If you receive a call such as the one described, refuse the demand for payment. Please also conisder the following:

If the caller is stating they are from the DEA, immediately report the threat using the DEA’s Extortion Scam Online Reporting form.
If the individual identifies themselves as a Board employee, please contact the Board at 1-800-633-2322 or send an email to
If the phone number of the caller appears to be the Board’s toll-free number, it is recommended that you submit an online complaint with the Federal Communications Commission (FCC) using the FCC’s Consumer Complaint form or contact the Board so it can provide this information to the FCC.”

Don’t be fooled!

Rick Jaffe, Esq.

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.

No, you were not just subpoenaed by the California Medical Board

No, you were not just subpoenaed by the California Medical Board

I have previously written about the Medical Board’s attempt to trick, cajole, and intimidate families whose children have a vaccine medical exemption into agreeing to execute a consent/authorization to allow your child’s doctor to release medical records to the Board.
Here is that post:

The bottom line is that you are not legally required to sign the release, and there is nothing the Board can do to you to force you to do so. Specifically, the Board cannot issue a subpoena to you, for the simple reason that you do not have the medical records.

I have seen one of the Board’s recent letters. It had a twist: attached to the letter was a subpoena, BUT, the subpoenaed party was not the family, but the family’s vaccine medical exemption writing physician. For nonlawyers, this creates the (probably intentionally) false impression that the family is the subject of the subpoena.

DO NOT BE DECEIVED: A subpoena that does not have your name on it has no legal effect whatsoever. It is just a tactic by the Board to intimidate or confuse you into thinking that you have been subpoenaed and must comply, presumably by executing the also attached medical release form.

If you receive this letter with the attached subpoena, my suggestion is you simply fax or email it to your physician, and he or she will take care of it. Also state in your letter whether you authorize your physician to release your child’s records. As I have explained in a prior post, it is likely that the Board will eventually obtain your child’s records. However, for a variety of reasons, you should at least tell your physician what you think about it. Here is the post which lays out the legal issues surrounding the Board’s power to obtain medical records over the patient’s objections.

As many of you know, the Medical Board is now a defendant in Dr. Stoller’s lawsuit against the San Francisco City Attorney. Don’t be surprised if at some point in the not-too-distant future, this new intimidation tactic by the Board becomes part of our lawsuit.

Rick Jaffe, Esq.

Major Update on the Stoller Case: New Defendants Added and New Claims Made

Major Update on the Stoller Case: New Defendants Added and New Claims Made

Here is the update on the gogetfunding website:

Here is a pdf of the amended complaint. (The beginning is mostly the same as the original)

Amended Complaintfiled

Rick Jaffe, Esq.

Should you be worried if you banked your SVF/Stem Cells?

Should you be worried if you banked your SVF/Stem Cells?

The injunction entered by the Florida federal district court judge in the US Stem Cell case ordered the company to destroy all of the SVF product which it was storing for their patients and SVF banking customers. I did not think that was right, in large part because the owners of the stored product were not parties to that lawsuit. See my previous post:

here is the final injunction order:

The basis of the judge’s destruction order was that the material is an unapproved new drug basically because the separation of the SVF from the fat from which it was derived constitutes more than minimal manipulation and is not even a stem cell. The FDA also claimed that US Stem Cell was using the product in their patients for non-homologous use, but that may or may not carry over into SVF banking because there is no use homologous or otherwise in banking, and won’t be until the client wants the cell back for reimplantation, arguably anyway. The other problem the court had with the product, (also adopting the FDA’s position), is that the material was not produced in accordance with Current Good Manufacturing Practices, which made the drug product adulterated under FDA law.

As I reported recently, the judge stayed the part of the injunction ordering the destruction of the banked SVF product pending appeal, even though she thought the product was FDA illegal and the owners did not have any rights to their body parts.

In case you have any doubt about how unimpressed the judge was with the rights of patients/consumers to control their own body parts (or something derived therefrom), here are the judge’s words and you can decide for yourself.

“As an initial matter, the Court is not persuaded that any party has a property interest in the SVF Product warranting a stay of the Order of Permanent Injunction. First, the law is unsettled as to a party’s rights in its biological tissue. See, e.g., Greenberg v. Miami Children’s Hosp. Research Inst., Inc., 264 F. Supp. 2d 1064, 1075 (S.D. Fla. 2003) (explaining that “[t]he property right in blood and tissue samples also evaporates once the sample is voluntarily given to a third party.”). And, in this case, any such rights would be governed by the contractual relationship between Defendants and each individual patient, which rights are not addressed properly in this lawsuit. Second, as explained in the Court’s Order on the Parties’ Motions for Summary Judgment, the SVF Product is not the same as the patients’ stem cells; rather, the SVF Product is a separate product created by Defendants through a proprietary and complex multi-step processing procedure. See D.E. 73. Lastly, in-line with well-settled and recently affirmed Supreme Court precedent, in the Court’s Order on the Parties’ Motions for Summary Judgment, the Court deferred to the FDA’s scientific expertise and its interpretation of the FDCA that the SVF Product is an adulterated and misbranded drug. See D.E. 73; Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (affirming Auer v. Robbins, 519 U.S. 452 (1997)). Accordingly, the Court is not persuaded that any party has a property interest in the SVF Product because it is an adulterated and misbranded drug. See United States v. Ellis Research Labs., Inc., 300 F.2d 550, 554 (7th Cir. 1962) (“We find no merit in defendants’ argument that the injunction sought and granted is an unconstitutional and unwarranted exercise of the regulatory powers exercised by the United States under the Act in question . . . they can have no vested interest in a business activity found to be illegal.”) (emphasis added).”

Here is the judge’s complete stay order:

I think there are sound and compelling arguments to be made in response to the judge’s opinion, and sooner or later, in this or another case, I am confident they will be made.

So, the question arises what, if any effect the judge’s decision will have on patients who have banked their SVF (or some other stem cell derived product) with other stem cell banks. There are technical, theoretical and practical answers to this.

The technical legal answer is that a district court decision is not binding in other districts. The reasoning of the decision might be persuasive, but the decision itself is not binding. In fact, I think even a judge in the same district court can disagree. That is especially the case here since the owners of the material were not parties to the lawsuit, and I think that makes the judge’s decision on this particular point much less persuasive.

My prediction is that eventually the patients/SVF owners of material held by US Stem Cells will become parties to the appeal. If so, once the Eleventh Circuit decision comes out (in about a year) that decision will be precedential and binding unless another court of appeals takes a different position. So much for the technical/legal.

As to the theoretical, I suppose the FDA could take that decision and start looking at all the stem cell banking operations to determine which of them are manufacturing adulterated drugs (and that would probably be most or all of them I would guess) even though these materials are not imminently going to be injected into patients. However, I do not see that happening.

The reality is the FDA has a lot on its plate in the stem cell field. There are many hundreds of these private stem cell clinics out there operating in violation of FDA law. The 2017 FDA guidance document stated reason for not taking action against all these clinics is that it wanted to give the industry a three-year window to come into compliance, (and that was damn nice of them if you ask me). But in actuality, the FDA does not have the manpower to investigate and prosecute them all. So as Siddhartha says, “If you have nothing to eat, you should fast.”

Apart from the autologous MSC dervied stem cell clinics, there are dozens and probably hundreds of clinics providing allogeneic based products. All of these places are treating patients with what the FDA would consider illegal drugs. The MSC based autologous stem cell banks are just “manufacturing” and storing the material for possible future use. (And honestly, I just do not get why older people store their stem cells. I’ll address that in another post). But back to the point, I have to believe that the low risk profile of these stem cell banks puts them way down on the potential enforcement list.

I think the FDA’s next target is much more likely to be clinics that provide birth related derived products (i.e. umbilical cord stem cells, cord and placental tissue, and more exotic products) used in alleogeneic therapy. But more about that later.

Rick Jaffe, Esq.

Breaking New on the US Stem Cell Case: SVF Destruction Order Stayed and SVF Owners Intervene in the Suit

Breaking New on the US Stem Cell Case: SVF Destruction Order Stayed and SVF Owners Intervene in the Suit

Last week was busy in the US Stem Cell case and some much needed help arrived.

First, to their credit, the defendants in the case moved to stay the SVF destruction order for the product it was banking for patients/customers. Although the judge was skeptical that these people had a prioprietary interest in their banked SVF product, she did grant the stay, on technical grounds, basically saying that she’ll continue the stay until the later of the expiration of the defendant’s time to appeal her final decision, or if they do appeal, until the Eleventh Circuit Court of Appeals dissolves her stay pending appeal. The bottom line is that so long as the defendants appeal the final decision, the SVF product will not be destroyed well into the appeal process. That is certainly good news for the people who have banked their SVF with the company. Here is the judge’s order:

I haven’t done a deep dive into the cases she cited, but I think the judge is oversimplying things, and their are serious arguments to be made. More simply put: I think she is wrong on the law or or at least wrong on the equities involved.

The other big news is that last week, a Florida law firm appeared in the case on behalf of some of the people whose SVF is the subject of the destruction order, via a motion to intervene. Here is the intervention motion:

I’m not sure how this is going to play out since the judge has already issued a final judgement in the case. I suspect these consumers will end up being part of the appeal, which is probably what the lawyers are thinking, but we will just have to wait and see.

It’s all good news for everyone who has their SVF banked at the US Stem Cell facility. Now at least there will be someone directly protecting their interests.

I still think that the proper resolution is to allow these people to remove their property from the defendants’ possession and shipping it to some other location, probably out of the country. Initially, the FDA probably won’t like that idea, so the intervenors are going to have to find some additional means of persuasion. We will see what happens.

Rick Jaffe, Esq.

Chaos, Unfairness and Illegality in the US Stem Cell Case

Chaos, Unfairness and Illegality in the US Stem Cell Case

I have been following and writing about the US Stem case (and the FDA’s parallel California case) since the company received its warning letter and throughout the litigation. Last month, the judge issued the final injunction order. Here it is:

The order, among other things, mandates the destruction of all SVF product in the defendants’ possession, which destruction is to be supervised by the FDA. (page 9, paragraph 10)

That caught me by surprise. I might have missed something in the pleadings and motions in the case, but I did not know or appreciate that the company was storing or banking SVF for patients, or possibly even non patients who just wanted to bank their stem cells. I wonder whether the Judge knew that.

Caveat: I haven’t seen the US Stem Cells SVF banking agreement, but I have worked on some cord banking agreements. There is one thing I am fairly confident about, and that it that the product is owned by the patient/consumer and not by the banking facility, in this case, US Stem Cell or some affiliate.

Legally, the relationship between the US Stem Cell and the SVF donor is a bailment, not unlike, (but much more complicated obviously) when you check your coat with the coat check or when you park your car in a commercial garage. The difference of course is that the entity holding the property helped create it. But that does not change the ownership issue.

Federal civil procedure defines parties as either necessary or indispensable. My impression, (rather than my considered legal analysis) is that the owner of the property would be an indispensable party, unless the bailment agreement specifically conferred on the bailee (the party holding the property in trust for the owner/bailor) granted it the exclusive right to dispose of or defend the property or something like that, and I would doubt there is such a provision in the banking agreement.

Normally, failure to join an indispensable party would be brought up by the defendant in a federal case, but I don’t think it was. I would argue that the government lawyers had an obligation to bring it up, since it the government is not just an ordinary litigant. I think the issue could also be raised by the court itself, if the court becomes aware of the issue. (Just my impression based on past work on related issues, not a considered legal opinion). I seem to recall that failure to join an indispensable party is a fatal defect to a case, whenever it is raised, even on appeal.

After the injunction order was issued, US Stem Cells notified all of its banking customers of the injunction order requiring the destruction of their property and advised them to either write to the court or hire an attorney (alittle late in my book). I’ve heard that there is a Florida attorney who is trying to find enough customers/clients to collect an adequate retainer.

The case docket lists 200 or so letters from customers who have banked their stem cells/SVF.

Here they are



I think the stem cell institutional mafia should read some of these letters, and maybe it will restore some needed humility and compassion which is often lost when institutionalists concern themselves with the Public rather than actual people.

These letters from the SVF owners show the outrageous result of the Court’s order. I have to wonder whether the judge knew that the order would cause the destruction of property of people who were not parties to the lawsuit. These people’s property is being taken away from them without due process or just compensation. Last time I checked, that is illegal under the Fifth Amendment,and actionable under 42 U.S.C 1983, and could result in money damages as well as injunctive relief against the government. Who would you sue? The government and its lawyers for sure. Maybe the defendants also. But the Government is the party whose attention you need to get.

What would be the goal of the lawsuit? That’s pretty simple: Ask the judge to modify the order to allow the SVF owners to remove their property from US Stem Cell, and if necessary, have it shipped someplace else. There might be a procedural wrinkle or two to deal with first, but that’s where the case should end up.

Here’s hoping . . . .

Rick Jaffe,