Stem MSJ Oppo

Case 1:10-cv-01327-RMC Document 26
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, Plaintiff, v. REGENERATIVE SCIENCES LLC, CHRISTOPHER J. CENTENO, M.D. JOHN R. SCHULTZ, M.D. and MICHELLE R. CHEEVER, Individuals, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) Civil Action No. 1:10-cv-01327-RMC
DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT Defendants REGENERATIVE SCIENCES LLC (Regenerative), CHRISTOPHER J. CENTENO, M.D. (Dr. Centeno), JOHN R. SCHULTZ, M.D. (Dr. Schultz) and MICHELLE R. CHEEVER (Ms. Cheever), respectfully file this Opposition to Plaintiffs Motion for Summary Judgment. The grounds for this opposition are set forth in attached the memorandum of points and authorities, Defendants Statement of Material Facts, and its supporting exhibits and affidavits. DATED this 25th day of May, 2011.
Respectfully Submitted, /s/ William Coffield, Esq. Bar No.: 431126 Counsel for Plaintiff Coffield Law Group, LLP 1330 Connecticut Avenue, NW Suite 220 Washington, DC 20036 (202) 429-4799 (o) (202) 429-3902 (f) wcoffield@coffieldlawgroup.com Mitchell Fuerst, Esq. Florida Bar No. 264598 Andrew S. Ittleman, Esq. Florida Bar No. 802441 Fuerst Ittleman, PL 1001 Brickell Bay Drive, Suite 2002 Miami, FL 33131 305-350-5690 (o) 305-371-8989 (f)
MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT
TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................................. i TABLE OF AUTHORITIES ......................................................................................................... iii INTRODUCTION .......................................................................................................................... 1 STATUTORY AND REGULATORY FRAMEWORK ................................................................ 1 I. II. III. IV. V. FEDERALISM AND THE PRACTICE OF MEDICINE ............................................ 1 THE COMMERCE CLAUSE ...................................................................................... 4 THE FDA ...................................................................................................................... 6 THE HCT/P RULE: 21 C.F.R PART 1271 .................................................................. 6 THE BELMONT REPORT ........................................................................................ 11
STATEMENT OF FACTS ........................................................................................................... 14 I. II. III. THE DEFENDANTS.................................................................................................. 14 THE REGENEXX PROCEDURE .......................................................................... 15 PROCEDURAL HISTORY........................................................................................ 16
ARGUMENT ................................................................................................................................ 20 I. A. B. C. II. A. B. C. SUMMARY JUDGMENT STANDARD .................................................................. 20 Fed.R.Civ.P. 56 ............................................................................................................20 Summary Judgment is Disfavored When Discovery Has Yet to Commence ..............21 To the extent that the Governments Motion for Summary Judgment fails to address the Defendants Affirmative Defenses, the Motion should be denied. ...........21 ADULTERATION ..................................................................................................... 23 Defendants Affirmative Defenses XI and XII ............................................................23 The Defendants Do Not Manufacture a Cultured Cell Product ...................................24 To the extent that the Defendants medical procedure might be subject to FDA jurisdiction, a genuine issue of material fact exists regarding whether it meets the criteria for regulation solely under 21 C.F.R. Part 1271. .......................................26 Burden of proof. .......................................................................................................... 26 Minimal Manipulation ................................................................................................ 27
i
1. 2.
D. E. III. IV. V.
The Regenexx Procedure does not substantially affect interstate commerce. ..........32 The Defendants do not adulterate anything. ................................................................35 MISBRANDING ........................................................................................................ 37 PRACTICE OF MEDICINE....................................................................................... 38 A PERMANENT INJUNCTION SHOULD NOT BE ISSUED IN THIS CASE...... 43
CONCLUSION ............................................................................................................................. 46
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TABLE OF AUTHORITIES Federal Cases A.L.A. Schechter Poultry Corp. v. United States 295 U.S. 495 (1935) .................................................................................................................. 34 *ABA v. FTC 430 F.3d 457 (D.C. Cir. 2005) ........................................................................................ 3, 24, 39 Abdullahi v. Pfizer 562 F.3d 163, 182 n.13 (2d Cir. 2009) ...................................................................................... 12 *Anderson v. Liberty Lobby 477 U.S. 242 (1986) .................................................................................................................. 20 Asgrow Seed Co. v. Winterboer 513 U.S. 179 (1995) .................................................................................................................. 40 Baker v. United States 932 F.2d 813 (9th Cir. 1991) ................................................................................................ 32, 33 Barnes v. District of Columbia, 242 F.R.D. 113 (D.D.C. 2007) .................................................................................................. 21 Betancur v. Florida Dep't of Health 296 Fed. Appx. 761, 763 (11th Cir. 2008) ................................................................................... 2 Bowen v. Georgetown Univ. Hosp. 488 US 204 (1988) ...................................................................................................................... 6 Breen v. Peters 474 F.Supp. 2d 1 (D.D.C. 2007) ......................................................................................... 20, 21 Bynum v. District of Columbia 215 F.R.D. 1 (D.D.C. 2003) ...................................................................................................... 21 Camp v. Pitts 411 U.S. 138 (1973) .................................................................................................................. 31 Center for Auto Safety v. FHA 956 F.2d 309 (D.C. Cir. 1992) (Thomas, J.) ............................................................................. 31 Chaney v. Heckler 718 F.2d 1174 (D.C. Cir. 1984) ................................................................................................. 2 Consumer Federation of America and Public Citizen v. HHS 83 F.3d 1497 (D.C. Cir. 1996) ............................................................................................ 30, 31
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Corson & Gruman Co. v. NLRB 899 F.2d 47 (D.C. Cir. 1990) .................................................................................................... 23 FDIC v. Meyer 510 U.S. 471 (1994) .................................................................................................................. 40 Federal Election Commission v. Rose 806 F.2d 1081 (D.C. Cir. 1986) ................................................................................................ 41 *Gonzales v. Raich 545 U.S. 1 (2005) ........................................................................................................ 3, 5, 34, 35 *Gonzalez v. Oregon 546 U.S. 243, (2006) ................................................................................................. 2, 24, 39, 44 Heckler v. Chaney 470 U.S. 821 (1985) .................................................................................................................... 2 Herbert v. National Academy of Sciences 974 F.2d 192 (D.C. Cir. 1992) .................................................................................................. 23 Hillsborough County v. Automated Medical Laboratories, Inc. 471 U.S. 707 (1985) .................................................................................................................... 2 Holcomb v. Powell 433 F.3d 889 (D.C. Cir. 2006) ................................................................................................. 20 James Everards Breweries v. Day 265 U.S. 545 (1924) ................................................................................................................... 3 Jones v. Rath Packing Co. 430 U.S. 519 (1977). ................................................................................................................... 2 Jones v. United States, 529 U.S. 848 (2000) .......................................................................................................... 3, 5, 33 Lambert v. Yellowley 272 U.S. 581 (1926) .................................................................................................................... 3 Linder v. United States 268 U.S. 5 (1925) ................................................................................................................ 25, 44 Mar-Jac Poultry Inc. v. Katz, 2011 U.S. Dist. LEXIS 33582 (D.D.C. 2011) (Collyer, J.) ...................................................... 20 Medtronic Inc. v. Lohr 518 U.S. 470 (1996) ................................................................................................................ 1, 2 Metropolitan Life Ins. Co. v. Massachusetts 471 U.S. 724 (1985) .................................................................................................................... 2
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Motor Vehicles Manufs Assoc. v. State Farm, 463 U.S. 29 (1983) ............................................. 41 National League of Cities v. Usery 426 U.S. 833 (1976) .................................................................................................................... 3 *Natural Resources Defense Council v. EPA 25 F.3d 1063 (D.C. Cir. 1994) .................................................................................................. 22 New York v. United States 505 U.S. 144 (1992) .................................................................................................................... 4 Nixon v. Freeman 670 F.2d 346 (D.C. Cir. 1982) .................................................................................................. 21 Pennsylvania Elec. Co. v. FERC 11 F.3d 207 (D.C. Cir. 1993) .................................................................................................... 23 Railway Labor Exec. Assn v. Natl Mediation Bd. 29 F.3d 655 (D.C. Cir. 1994) (en banc) .................................................................................... 39 Ray v. Atlantic Richfield Co. 435 U.S. 151 (1978) .................................................................................................................... 2 RB&W Manufacturing v. Buford 2004 U.S. Dist. LEXIS 22512 (N.D. Ill. 2004) ......................................................................... 22 Rice v. Santa Fe Elevator Corp. 331 U.S. 218 (1947) .................................................................................................................... 2 Ruff v. Partners Liquidating Trust 2001 U.S. Dist. LEXIS 11683 (N.D. Ill. 2001) ......................................................................... 22 Rush Prudential HMO, Inc. v. Moran 536 U.S. 355 (2002) .................................................................................................................. 40 *Scarborough v. Harvey 493 F.Supp. 2d 1 (D.D.C. 2007) ............................................................................................... 21 United States v. Article of Food Consisting of 345-50 Pound Bags 622 F.2d 768 (5th Cir. 1980) ...................................................................................................... 27 United States v. Bass, 404 U.S. 336 (1971) .................................................................................................................... 3 United States v. Baxter Healthcare 712 F.Supp. 1352 (D.N.J. 1989) ............................................................................................... 44 United States v. Dianovin Pharmaceuticals 475 F.2d 100 (1st Cir. 1973) ................................................................................................ 32, 33
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United States v. Dotterweich 320 U.S. 277 (1943). ............................................................................................................. 6, 34 *United States v. Evers 643 F.2d 1043 (5th Cir. 1981) .............................................................................................. 37, 38 *United States v. Lopez 514 U.S. 549 (1995) ................................................................................................................ 4, 5 United States v. Morrison 529 U.S. 598 (2000) ................................................................................................................ 4, 5 United States v. Oakland Cannabis Buyers Cooperative 532 U.S. 483 (2001) .................................................................................................................... 3 United States v. Vidal-Cruz 67 F.Supp.2d 35, (D.P.R. 1999) ................................................................................................ 34 United States v. W.T. Grant Co. 345 U.S. 629, 633 (1953) .................................................................................................... 43, 44 United States v. Walsh 331 U.S. 432 (1947) .............................................................................................................. 6, 34 Watson v. State of Maryland, 218 U.S. 173 (1910) .................................................................................................................... 2 Whitman v. Am. Trucking Assns 531 U.S. 457 (2001) .................................................................................................................... 3 Constitutional Provisions U.S. Const., Art.1, 8 ..................................................................................................................... 4 Federal Statutes 18 U.S.C. 922(q)(1)(A) ................................................................................................................ 5 21 U.S.C. 321(g)(1)(B) .............................................................................................................. 25 21 U.S.C. 331(k) ........................................................................................................................ 32 21 U.S.C. 333(e) .......................................................................................................................... 4 *21 U.S.C. 353a ............................................................................................................. 24, 36, 37 21 U.S.C. 812(c) .......................................................................................................................... 3 42 U.S.C. 262(a) .......................................................................................................................... 6 State Statutes
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*C.R.S. 12-36-106(1)................................................................................................................. 25 Federal Regulations 21 C.F.R. 1271.10(a)........................................................................................................ 9, 26, 28 21 C.F.R. 601.41 ........................................................................................................................ 11 Federal Rules Fed. R. Civ. P. 56 .......................................................................................................................... 21 Fed.R.Civ.P. 56(a) ........................................................................................................................ 27 Miscellaneous *Belmont Report, at p.3 fn............................................................................................................ 14 44 Fed. Reg. 23192 (April 18, 1979) ............................................................................................ 12 60 Fed.Reg. 36,808 (July 18, 1995) ................................................................................................ 7 61 Fed.Reg. 26523 .......................................................................................................................... 9 61 Fed.Reg. 9,185 (Mar. 7, 1996) ................................................................................................... 8 63 Fed.Reg. 26,744 (May 14, 1998) ............................................................................................... 7 63 Fed.Reg. 26,745 (May 14, 1998) ............................................................................................. 27 66 Fed.Reg. 5,457 ......................................................................................................................... 28 9 Oxford English Dictionary 546 (2d ed. 1989) ........................................................................... 26 American Medical Association, What Constitutes the Practice of Medicine?, L(5) J. Am. Med. Assoc. 368, 368-369 (Feb. 1, 1908).................................................................................................................................... 25, 40 Application of Current Statutory Authorities to Human Somatic Cell Therapy Products and Gene Therapy Products, 58 Fed.Reg. 53,248 (December 13, 1993) .............................................................................. 7, 8 Bedi, A., B.T. Feeley, and R.J. Williams, 3rd, Management of articular cartilage defects of the knee. J Bone Joint Surg Am, 2010. 92(4) ............................................................................................. 7 *Brief for the Petitioners, Gonzales v. Oregon, 546 U.S. 243 (2006), available at 2005 U.S. S.Ct. Briefs LEXIS 354 ............................................................ 25, 26, 40 Cunha, B.A., C.M. Sibley, and A.M. Ristuccia, Doxycycline. Ther Drug Monit, 1982. 4(2): p. 115-35.............................................................. 32
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Dr. Alvan Feinstein & Dr. Jeffrey Lichtenstein, Medical Ethics and the Architecture of Clinical Research (1979) ........................................... 13 Dr. David Sabiston, The Boundaries Between Biomedical Research Involving Human Subjects and the Accepted or Routine Practice of Medicine with Particular Emphasis on Innovation in the Practice of Surgery (1979) ............................ 13 *Dr. Robert Levine, The Boundaries Between Biomedical or Behavioral Research and the Accepted and Routine Practice of Medicine (July 14, 1975) ........................................................................................ 13 Exec. Order No. 12612 (Oct. 26, 1987) ........................................................................................ 41 Exec. Order No. 12866 (Sept. 30, 1993)....................................................................................... 41 Exec. Order No. 12988 (Feb. 5, 1996) .......................................................................................... 41 Exec. Order No. 13083 (May 14, 1998) ....................................................................................... 41 Exec. Order No. 13132 (Aug. 4, 1999) ......................................................................................... 41 Exec. Order No. 13450 (Nov. 13, 2007) ....................................................................................... 41 Exec. Order No. 13563 (Jan. 21, 2011) ........................................................................................ 41 Guidance on Applications for Products Comprised of Living Autologous Cells Manipulated Ex Vivo and Intended for Structural Repair or Reconstruction. 61 Fed.Reg. 26,523 (May 31, 1996) .......... 7 John Robertson, Esq., Legal Implications of the Boundaries Between Biomedical Research Involving Human Subjects and the Accepted or Routine Practice of Medicine (Dec. 31, 1975) .......................................................................................................... 13 National Research Act, Pub.L.93-348, 88 Stat. 342. .................................................................... 11 Proposed Approach to Regulation of Cellular and Tissue Based Products, 62 Fed.Reg. 9,721 (Feb. 28, 1997) .............................................................................................. 9 *Summary for Basis of Approval, Carticel, BLA Ref. No. 96-0372, (August, 1997) ....................................................................... 7 *The Belmont Report: Ethical Principles and Guidelines for the Protection of Human Subjects of Research, (1979) 12 The Random House Dictionary of the English Language 1194 (2d ed. 1987) ............................. 26 Webster's Third New International Dictionary 1402 (1966) ........................................................ 26
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INTRODUCTION The Defendants in this case treat the musculoskeletal injuries of their patients at the Centeno Schultz Clinic in Broomfield, Colorado using, inter alia, a procedure called the Regenexx Procedure. In its Motion for Summary Judgment, which it filed before the start of discovery, the Government argues that the Regenexx Procedure constitutes the manufacturing, holding for sale, and distribution of an unapproved injectable biological drug product which it refers to as a cultured cell product. As will be detailed in this Opposition, numerous genuine issues of material fact exist which must lead to the denial of the Governments motion. STATUTORY AND REGULATORY FRAMEWORK The Defendants and the Government are of very different opinions as to what the Regenexx Procedure is. The Defendants assert that the Procedure constitutes the practice of medicine as defined by the law of the State of Colorado and that the FDA lacks jurisdiction to regulate it. The Government asserts that the Procedure constitutes a biologic drug lacking FDA approval in violation of federal law. These differences are embedded in virtually every aspect of this lawsuit and must be understood in their appropriate Constitutional context. I. FEDERALISM AND THE PRACTICE OF MEDICINE The United States Supreme Court has interpreted Federalism to require an assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. Medtronic Inc. v. Lohr, 518 U.S. 470, 485 (1996). As stated by the Court, [t]hroughout our history the several States have exercised their police powers to protect the health and safety of their citizens. Because these are primarily, and historicallymatter[s] of local concern, the States traditionally have had great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet
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of all persons. Id., at 474; quoting Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 719 (1985); Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 756 (1985). It is well settled that the practice of medicine is left for the States to regulate; see e.g. Betancur v. Florida Dep't of Health, 296 Fed. Appx. 761, 763 (11th Cir. 2008), [s]tates retain the police power to regulate professions, such as the practice of medicine. citing Watson v. State of Maryland, 218 U.S. 173, 176 (1910). As stated by the Court in Chaney v. Heckler, 718 F.2d 1174, 1180 (D.C. Cir. 1984), 1 Congress exempted the practice of medicine from the Act so as not to limit a physicians ability to treat his patients. 2 Of course, Congress may still regulate the practice of medicine (or certain aspects of it) if it chooses to and if such regulation is consistent with its powers under the Commerce Clause. As stated by the Court in Gonzalez v. Oregon, 546 U.S. 243, 271 (2006), [e]ven though regulation of health and safety is primarily, and historically, a matter of local concern, there is no question that the Federal Government can set uniform national standards in these areas. (internal citations omitted). However, in cases where a States exercise of its police power is challenged under the Supremacy Clause, we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress. Ray v. Atlantic Richfield Co., 435 U.S. 151, 157 (1978); quoting, Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947); Jones v. Rath Packing Co., 430 U.S. 519, 525 (1977). In other words, we have wisely decided that unless Congress conveys its purpose
1 2
Overruled on other grounds as stated in Heckler v. Chaney, 470 U.S. 821 (1985). The FDA has itself recognized this principle: Throughout the debate leading to enactment [of the Act], there were repeated statements that Congress did not intend the Food and Drug Administration to interfere with medical practice and references to the understanding that the bill did not purport to regulate the practice of medicine as between the physician and the patient. Id., at n.16; quoting 37 Fed.Reg. at 16503.
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clearly, it will not be deemed to have significantly changed the federal-state-balance. Jones v. United States, 529 U.S. 848, 859 (2000) (Stevens, J., concurring); quoting, United States v. Bass, 404 U.S. 336, 349 (1971). 3 When Congress chooses to regulate the practice of medicine, it does so explicitly. For instance, during Prohibition, Congress enacted Section 2 of the Prohibition Act, which prevented physicians from prescribing intoxicating malt liquors for medicinal purposes. The Supreme Court upheld the statute as a lawful exercise of Congresss power under the Eighteenth Amendment to the Constitution; James Everards Breweries v. Day, 265 U.S. 545 (1924); see also, Lambert v. Yellowley, 272 U.S. 581 (1926) Congress has also regulated the practice of medicine through the Controlled Substances Act (CSA). For instance, under the CSA, Congress classified marijuana as a Schedule I drug because of its high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medically supervised treatment. Gonzales v. Raich, 545 U.S. 1, 14 (2005); citing 21 U.S.C. 812(c). Thus, [b]y classifying marijuana as a Schedule I drug, as opposed to listing it on a lesser schedule, the manufacture, distribution, or possession of marijuana became a criminal offense... Id; see also, United States v. Oakland Cannabis Buyers Cooperative, 532 U.S. 483, 490 (2001). The Supreme Court has upheld this law as necessary for the regulation of interstate commerce, even though the law effectively preempted express state law determinations contrary to the result which has commended itself to the collective wisdom of Congress. Raich, 545 U.S. at 41; quoting National League of Cities v. Usery, 426 U.S. 833, 840 (1976).
Congress, as articulated by Justice Scalia, does not, one might say, hide elephants in mouseholes. Whitman v. Am. Trucking Assns, 531 U.S. 457, 468 (2001); see also, ABA v. FTC, 430 F.3d 457, 467 (D.C. Cir. 2005).
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Likewise, Congress has regulated physicians use of human growth hormone to treat patients by criminalizing whoever knowingly distributes, or possesses with intent to distribute, human growth hormone for any use in humans other than the treatment of a disease or other recognized medical condition 21 U.S.C. 333(e). Thus, even though human growth hormone is not a scheduled drug like marijuana, Congress has restricted physicians ability to use it on their patients and has thereby regulated the practice of medicine in the clearest possible way. II. THE COMMERCE CLAUSE Although Congresss authority is indisputably expansive, it is by no means total. As articulated by the Supreme Court, [t]he Constitution creates a Federal Government of enumerated powers. United States v. Lopez, 514 U.S. 549, 552-53 (1995); citing U.S. Const., Art.1, 8. Deeply ingrained in our Constitutional history is the principle that the Constitution created a Federal Government of limited powers while reserving a generalized police power to the States is deeply ingrained in our constitutional history. United States v. Morrison, 529 U.S. 598, 618, n.8 (2000); quoting New York v. United States, 505 U.S. 144, 156-157 (1992). The United States Supreme Court has outlined three broad categories of activity that Congress may regulate under its commerce power. Morrison, 529 U.S. at 608-609; quoting Lopez, 514 U.S. at 558. These three broad categories are (1) the use of the channels of interstate commerce, (2) the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities, and (3) those activities having a substantial relation to interstate commerce, i.e. those activities that substantially affect interstate commerce. Id. (internal citations and quotations omitted). Modern Supreme Court jurisprudence has set the outer limits of Congresss authority under the Commerce Clause, especially as it relates to the regulation of intrastate activities. In
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Lopez, the Court considered the constitutionality of the Gun-Free School Zones Act of 1990, which made it a federal offense for any individual knowingly to possess a firearm at a place that the individual knows, or has reasonable cause to believe, is a school zone. Lopez, 514 U.S. at 551; quoting 18 U.S.C. 922(q)(1)(A). Before the Supreme Court, the Government argued that the Act was a proper exercise of Congresss Commerce Clause authority; Id., at 564. Noting that the Constitution specifically withheld from Congress a plenary police power that would authorize enactment of every type of legislation, the Court rejected the Governments arguments; Id., at 566. 4 The Court thus ruled that the Act was beyond Congresss Commerce Clause power. 5 Conversely, in ruling that the Federal Government had jurisdiction to regulate marijuana lawfully obtained for medical purposes under a new California-state law, the Court in Raich reasoned that, in enacting the CSA, Congress was particularly concerned with the need to prevent the diversion of drugs from legitimate to illicit channels. Raich, 545 U.S. at 16. Thus, even though the marijuana at issue in Raich was lawfully possessed under California law, the Court ruled that Congress nevertheless had the power to regulate it due to the impact that it could have on the interstate marijuana market. 6
To uphold the Governments contentions here, we would have to pile inference upon inference in a manner that would bid fair to convert congressional authority under the Commerce Clause to a general police power of the sort retained by the statesTo do so would require us to conclude that the Constitutions enumeration of powers does not presuppose something not enumeratedand that there never will be a distinction between what is truly national and what is truly local. This we are unwilling to do. Id., at 567; (internal citations omitted). 5 See also, United States v. Morrison, 529 U.S. 598 (2000); Jones v. United States, 529 U.S. 848 (2000). 6 See, e.g. Id. at 34 (Scalia, J., concurring) (Not only is it impossible to distinguish controlled substances manufactured and distributed intrastate from controlled substances manufactured and distributed interstate, but it hardly makes sense to speak in such terms. Drugs like marijuana are fungible commodities. As the Court explains, marijuana that is grown at home and possessed for personal use is never more than an instant from the interstate market--and this is so whether or not the possession is for medicinal use or lawful use under the laws of a particular State.) 5
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III.
THE FDA Like all other Federal governmental agencies, the FDAs power to promulgate
legislative regulations is limited to the authority delegated by Congress. Bowen v. Georgetown Univ. Hosp., 488 US 204, 208 (1988). The Government points to two sources of authority for the FDAs regulation of the Defendants medical practice, the Federal Food, Drug and Cosmetic Act (FDCA) and Public Health Service Act (PHSA). The FDCA rests upon the constitutional power resident in Congress to regulate interstate commerce. To the end that the public health and safety might be advanced, it seeks to keep interstate channels free from deleterious, adulterated and misbranded articles of the specified types. It is in that interstate setting that the various sections of the Act must be viewed. United States v. Walsh, 331 U.S. 432, 434 (1947); citing United States v. Dotterweich, 320 U.S. 277, 280 (1943). The PHSA delegates to the FDA as follows: The Surgeon General, with the approval of the Secretary, is authorized to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession.42 U.S.C. 262(a). Pursuant to that authority, the FDA created the chapter of regulations at issue in this case, 21 C.F.R. 1271.1, et seq. IV. THE HCT/P RULE: 21 C.F.R PART 1271 In the Governments Motion for Summary Judgment, it describes that prior to 1997, FDA had regulated human cellular and tissue based products on a case-by-case basis, responding as the agency determined appropriate to the particular characteristics of and concerns raised by each type of product. Motion for Summary Judgment, at p.6; citing, 63 Fed.Reg.
6
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26744 (May 14, 1998) (Proposed Registration Rule); Proposed Approach, at 6. Indeed, prior to 1997, FDA had regulated human cellular and tissue based products only pursuant to informal guidance documents. 7 In 1995, Genzyme Tissue Repair (Genzyme) began marketing Carticel based upon indications from the agency that, being an autologous cell therapy, Carticel would not be regulated. Summary for Basis of Approval, Carticel, BLA Ref. No. 96-0372, p.1 (August, 1997). 8 However, later that same year, CBER 9 notified [Genzyme] that CBER considered Carticel to be a somatic cell therapy product as defined in the October 14, 1993 Federal Register notice concerning human somatic cell and gene therapy products and advised [Genzyme] that marketing approval would be required. Id. Consequently, Genzyme submitted a request for product designation to clarify agency jurisdiction [and] the agency notified [Genzyme] that it could continue to market Carticel while jurisdiction was under consideration and policy under development. Id. On July 18, 1995, FDA announced that it would hold a public hearing on November 1617, 1995, regarding Products Comprised of Living Autologous Cells Manipulated ex vivo and Intended for Implantation for Structural Repair or Reconstruction. 60 Fed.Reg. 36808. Thereafter, a hearing was held and attended by a variety of public and private officials, including a collection of Genzyme representatives. As described by the FDA, the Hearing had 8 panels
See, e.g. Points to Consider in Human Somatic Cell Therapy and Gene Therapy, 56 Fed.Reg. 61022 (November 29, 1991); Application of Current Statutory Authorities to Human Somatic Cell Therapy Products and Gene Therapy Products, 58 Fed.Reg. 53248 (December 13, 1993); Guidance on Applications for Products Comprised of Living Autologous Cells Manipulated Ex Vivo and Intended for Structural Repair or Reconstruction. 61 Fed.Reg. 26523 (May 31, 1996). 8 Carticel is an autologous cell culture product wherein a surgeon takes a cartilage biopsy from a patient and sends the biopsy to a central Genzyme laboratory where it is cultured for several months before being shipped back to the treating physician for surgical re-implantation. Bedi, A., B.T. Feeley, and R.J. Williams, 3rd, Management of articular cartilage defects of the knee. J Bone Joint Surg Am, 2010. 92(4): p. 994-1009. 9 CBER is FDAs Center for Biologics Evaluation and Research.
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with 24 speakers, and there was general consensus that the establishment, the production process and the products should be of the highest quality. The speakers and attendees also agreed that MAS cell products should benefit the patient, but there was little consensus on the appropriate mechanism that should be used to show this benefit. Docket No.95N-0200. 10 The record of the hearing was kept open until February 16, 1996. On March 7, 1996, the FDA announced that it would hold an FDA Commissioners roundtable public meeting on the regulatory approach to products comprised of living autologous cells manipulated ex vivo and intended for structural repair or reconstruction. 61 Fed.Reg. 9185. The roundtable, to be held on March 15, 1996, was to be a continuation of the public hearing held on November 16-17, 1995, and the participants were to discuss FDAs current thinking on the regulatory approach of these products with respect to clinical and manufacturing issues, and to get input on the agencys tentative approach. Id. At that roundtable, the FDA publicly announced for the first time that FDAs Product Jurisdiction Officer had chosen CBER to be the lead center for the regulation of MAS cell products; 1995-N-0200 000814. At that roundtable, the FDA also publicly announced for the first time as follows: Burdensome, long term clinical studies should be avoided whenever possible and the regulation of the manufacturing process should be based on sound scientific principles and not [be] excessive. In this spirit, I believe a new approach is warranted. We believe at the agency that we can accomplish this best not with the traditional PLA-ELA requirements, but rather with a new approach, with a biologics license application.
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The basic nomenclature of HCT/Ps changed on several occasions during the 1990s. At first, the FDA referred to these as somatic cell therapy, i.e. the prevention, treatment, cure, diagnosis, or mitigation of disease or injuries in humans by the administration of autologous, allogeneic, or xenogeneic cells that have been manipulated or altered ex vivo. Application of Current Statutory Authorities to Human Somatic Cell Therapy Products and Gene Therapy Products, 58 Fed.Reg. 53248. Later, the FDA referred to autologous HCT/Ps as MAS cells or MAS cell products, i.e. living autologous cells manipulated ex vivo and intended for structural repair or reconstruction. Guidance on Applications for Products Comprised of Living Autologous Cells Manipulated Ex Vivo and Intended for Structural Repair or Reconstruction, Docket No. 95N-0200. Today, these are all referred to simply as HCT/Ps.
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1995-N-0200 000817. Although the FDA stressed at the hearing that the regulation of this field ought not hinder its development, the FDAs announcement was nevertheless met with a subdued reactiondue in part to the fact that a number of people [being] in shock at the overall proposal that FDA has put forward 1995-N-0200 000853. 11 Next, FDA issued its Guidance on Applications for Products Comprised of Living Autologous Cells Manipulated Ex Vivo and Intended for Structural Repair or Reconstruction on May 31, 1996 (61 Fed.Reg. 26523) and its Proposed Approach to Regulation of Cellular and Tissue-Based Products (Proposed Approach) on February 28, 1997 (62 Fed.Reg. 9721). In the Proposed Approach, the FDA set forth a plan wherein, purportedly, tissues would be regulated with a tiered approach based on risk and the necessity for FDA review based on the following five overarching public health and regulatory concerns: A) How can the transmission of communicable diseases be prevented? B) What processing controls are necessary, e.g. to prevent contamination that could result in an unsafe or ineffective product, and to preserve integrity and function so that products will work as they are intended? C) How can clinical safety and effectiveness be assured? D) What labeling is necessary, and what kind of promotion is permissible for proper use of the product? E) How can the FDA best monitor and communicate with the cell and tissue industry? Proposed Approach, at p.9. The terms of the proposed approach would ultimately become codified at 21 C.F.R. 1271.10(a) which provides, inter alia, that HCT/Ps be minimally manipulated in order to be regulated solely under section 361 of the PHS ACT and the regulations in Part 1271.
The administrative record produced by the Government in this case exceeds 10,000 pages and each page has one of five possible prefixes: DNR, GTP, REG, FDA 91N-0248, and 1995-N-0200.
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On March 17, 1997, the FDA held a public hearing regarding its Proposed Approach; see PA 000139 PA 000406. During that hearing, the participants discussed the issue of minimal manipulation, and Mary Pendergast, Esq. on behalf of FDA, announced that it was the FDAs plan to keep downgrading things and pushing them into the M&M, not the upgraded M&M with peanuts category, the more than minimally manipulated. PA 000319. In other words, according to Ms. Pendergast, the FDA would downregulate tissue processing techniques over time as it learned more about them and could determine that such processing did not alter the relevant biological characteristics of the tissues being processed. However, the FDA has never downregulated a stem cell process, in spite of the fact that studies supporting the safety and efficacy of processes are widely available and have been made available to FDA on numerous occasions. The reason why no downregulation has ever occurred is uncertain at this time, but may be revealed by the following conversation between Ms. Lisa Raines, on behalf of Genzyme, and Mary Pendergast, Esq., on behalf of FDA on the record at FDA headquarters on March 17, 1997: [Ms. Raines]: Lisa Raines. I just wanted to comment on the issue of the possibility of the possible downregulation of more than minimally manipulated products for which premarket approval is required and just suggest that that is a potentially very difficult thing to do if you want to preserve the incentives for innovation. If you require a company to collect the clinical data, either before or after approval, at great expense, to allow competitors into that market without imposing on them a comparable responsibility and obligation, just as a policy matter, creates a great incentive to be the second guy instead of the first guy. If you dont have first guys, you wont have second guys. So there really is a risk. I mention it in particular in this area because products that FDA considers to be more than minimal manipulated, those manipulations may not be considered patentable. Certainly, in the area in which my company is working,
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we do not have any intellectual property other than some trade secrecy with respect to our processes. So, if there is no patent protection, if there is no FDA exclusivity as there is under the Food, Drug and Cosmetic Act for a period of five years for the first indication for a new drug, if you eliminate all of that in this area, you create a significant financial disincentive for companies to develop these therapies. [Ms. Pendergast]: A point well taken. That is why we need to hear back from you as to what you want. We are very curious as to which way do you want it. Do you want to preserve your confidential commercial information and use that as a tool, a marketing tool, and a market entry barrier or do you want the Agency to be downclassifying as soon as it can things that (sic), once we get a handle on their impact on the cell, the tissue and the body. PA 000324-000325. Carticel was approved on August 22, 1997 pursuant to 21 C.F.R. 601.40-46, which permit the use of certain surrogate endpoints or an effect on a clinical endpoint other than survival or irreversible morbidity as bases for approvals of products intended for serious or lifethreatening (sic) illnesses or conditions. 21 C.F.R. 601.41; Exhibit 1, at p.19. 12 As of the date of Carticels approval, Genzyme had scant clinical data supporting its approval; see e.g. Affidavit of Dr. Michael Freeman, at p.13, 8u. Since Carticels 1997 approval, no other stem cell therapy has been approved by the FDA. V. THE BELMONT REPORT In 1974, Congress enacted the National Research Act, which established the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research; see National Research Act, Pub.L.93-348, 88 Stat. 342.
See, Affidavit of Dr. Michael Freeman, attached hereto as Exhibit 2, at 8u (No medical training is necessary to realize that a common knee cartilage injury is unlikely to be fatal.)
12
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One of the charges to the Commission was to identify the basic ethical principles that should underlie the conduct of biomedical and behavioral research involving human subjects and to develop guidelines which should be followed to assure that such research is conducted in accordance with those principles. In carrying out the above, the Commission was directed to consider: (i) the boundaries between biomedical and behavioral research and the accepted and routine practice of medicine, (ii) the role of assessment of riskbenefit criteria in the determination of the appropriateness of research involving human subjects, (iii) appropriate guidelines for the selection of human subjects for participation in such research and (iv) the nature and definition of informed consent in various research settings. See, http://ohsr.od.nih.gov/guidelines/belmont.html In 1979, the Commission carried out this charge when it issued The Belmont Report: Ethical Principles and Guidelines for the Protection of Human Subjects of Research, (1979) (the Belmont Report). 13 As described by the National Institute of Health, the Belmont Report was the outgrowth of an intensive four-day period of discussions that were held in February 1976 at the Smithsonian Institution's Belmont Conference Center supplemented by the monthly deliberations of the Commission that were held over a period of nearly four years. 14 As described by Commission Chairman Kenneth J. Ryan, M.D. in his letters dated September 30, 1978 to, inter alia, President Carter, it was the recommendation of the Commission that the Belmont Report be adopted in its entirety as a statement of departmental policy on the conduct of research involving human subjects. Exhibit 3, pp. 5, 7, 9, and 11 of 40. The Belmont Report was published in the Federal Register at 44 Fed. Reg. 23192 (April 18, 1979), and was designed to provide federal employees, members of Institutional Review Boards and scientific
A copy of the complete Belmont Report is attached hereto as Exhibit 3. See, http://ohsr.od.nih.gov/guidelines/belmont.html; see also Abdullahi v. Pfizer, 562 F.3d 163, 182 n.13 (2d Cir. 2009).
14
13
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investigators with common points of reference for the analysis of ethical issues in human experimentation. Id. 15 The Belmont Report is relevant to the Governments Motion for Summary Judgment for two interrelated reasons. First, as detailed later in this brief, the Belmont Report may assist the Court in evaluating as an issue of material fact whether the Regenexx Procedure constitutes the practice of medicine. As described in Dr. Centenos attached affidavit (Exhibit 5), Dr. Centeno developed the Regenexx Procedure consistent with the terms of the Belmont Report; Centeno Affidavit, at pp. 67-71. The Belmont Report may thus assist the Court in evaluating whether the Regenexx Procedure is the practice of medicine or something else entirely; see e.g., Levine, 16 (If a physician proceeds in his interaction with a patient to bring what he considers to be the best available technique and technology to bear on the problems of that patient with the intent of doing the most possible good for that patient, this may be considered the pure practice of medicine.) Similarly, the Belmont Report is relevant to the Governments request for a permanent injunction which is based, inter alia, on the allegation that the Defendants are somehow experimenting on their patients; see Governments Motion for Summary Judgment, at pp.3839. Indeed, the Belmont Report provides the Court with a tutorial regarding what constitutes the practice of medicine, what constitutes medical research, what constitutes a combination of the
Published contemporaneously with the Belmont Report was a two-volume Appendix which exceeds 600 pages and contains the reports of experts and specialists who assisted the Commission in fulfillingits charge. Id. Although we do not attach the entire appendix to this Brief, we do attach as Exhibit 4 the Appendixs Table of Contents, as well as a copy of the following individual reports: Dr. Robert Levine, The Boundaries Between Biomedical or Behavioral Research and the Accepted and Routine Practice of Medicine (July 14, 1975); Dr. Alvan Feinstein & Dr. Jeffrey Lichtenstein, Medical Ethics and the Architecture of Clinical Research (1979); John Robertson, Esq., Legal Implications of the Boundaries Between Biomedical Research Involving Human Subjects and the Accepted or Routine Practice of Medicine (Dec. 31, 1975); Dr. David Sabiston, The Boundaries Between Biomedical Research Involving Human Subjectsand the Accepted or Routine Practice of Medicine with Particular Emphasis on Innovation in the Practice of Surgery (1979).
15
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two, and how the physician should govern himself in each of those circumstances; see e.g. see e.g. Belmont Report, at p.3 fn. (The fact that some forms of practice have elements other than immediate benefit to the individual receiving an intervention, however, should not confuse the general distinction between research and practice. Even when a procedure applied in practice may benefit some other person, it remains an intervention designed to enhance the wellbeing of a particular individual or groups of individuals; thus, it is practice and need not be reviewed as research.) STATEMENT OF FACTS I. THE DEFENDANTS The Defendants in this case are Regenerative Sciences LLC (Regenerative), Dr. Christopher Centeno, Dr. John Schultz, and Ms. Michelle Cheever. Together, the Defendants treat the musculoskeletal injuries of their patients at the Centeno Schultz Clinic in Broomfield, Colorado using, inter alia, a procedure called the Regenexx Procedure. Counterclaims, 3. This history and corporate structure of Regenerative and the Centeno Schultz Clinic is detailed in the attached affidavits of Gus Michaels, Esq. and Dr. Centeno. As Mr. Michaels describes, Dr. Centeno first formed Christopher J. Centeno, M.D., P.C. d/b/a The Centeno Clinic in 1999. The practice was incorporated as Centeno-Schultz, Inc. in 2005 after Dr. John Schultz joined the practice. The professional corporations name was changed to Centeno Schultz, P.C. in 2007. Michaels Affidavit, at 3. Today, Drs. Centeno and Schultz jointly own the Centeno Schultz Clinic and are majority shareholders of Regenerative. Counterclaims 4. The laboratory and clinic are related companies and operate as one business. The laboratory exclusively services the Centeno Schultz Clinic and the Clinics patients and does so exclusively at the direction of Drs. Centeno and Schultz. Regenerative and the Clinic have
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overlapping management structures. Michaels Affidavit, at 8. As Mr. Michaels describes, Dr. Schultz is a board member of both entities, and Dr. Centeno is the medical director for both entities. Id. Further, Regenerative and the Clinic have been separate, but very closely related Colorado entities since [Regeneratives] formation in 2005. Id. As Mr. Michaels further describes, the relationship between Regenerative and the Clinic is commonplace for medical practices in the State of Colorado. Id., at 7. The relationship between the companies is analogous to the common practice among physicians of forming separate entities for purposes such as holding valuable medical equipment, operating ambulatory surgery centers, or such other activities necessary or closely related to the principal medical practice Id. As Dr. Centeno describes, [t]hrough the years the lab has been located in various places relative to the practice so that the patients sample has been handed through a door to the doctor, driven down the street, is currently transported a short drive, and will soon be handed to the doctor in the same medical space. Centeno Affidavit, at 55. II. THE REGENEXX PROCEDURE As Dr. Centeno describes in his affidavit, the Regenexx Procedure is one of several procedures that Drs. Centeno and Schultz use to treat their patients. Centeno Affidavit, at 3. At the time that this case began in August of 2010, the Regenexx Procedure constituted about one-third of the procedures performed by the clinic. Dr. Schultz and I treat our patients using the Regenexx Procedure only after deciding on a patient-by-patient basis that the Regenexx Procedure will most effectively treat the patient whom we are treating. Id. The steps taken to perform the Regenexx Procedure are summarized in the introductory paragraphs of the Defendants Counterclaims ( 5-19) and more completely outlined in Dr. Centenos affidavit, at 12-33, and need not be fully repeated here. Suffice it to say for
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purposes of this document that the Procedure involves the extraction of stem cells and natural growth factors from the patient, the expansion of the stem cells ex vivo in culture using the patients own natural growth factors and FDA approved products, the reimplantation of the patients stem cells back into the patient, and a robust set of safety protocols designed to protect the patient and ensure the medical integrity of the procedure. Id. Additionally, the Procedure has been examined by the Colorado Board of Medicine and has been determined to be fully compliant with Colorado-state law; see, Michaels Affidavit at 12; Centeno Affidavit, at 6. III. PROCEDURAL HISTORY On or about August 5, 2008, Regenerative received a letter dated July 25, 2008 from FDAs Office of Compliance and Biologics Quality concerning Regeneratives Regenexx Procedure. Counterclaims, at 20. In that letter, the FDA alleged that Regenerative was promoting the use of MSCs under conditions that caused the cells used in the Regenexx procedure to be drugs under section 201(g) of the Federal Food, Drug and Cosmetic Act (FDCA) and biological products as defined in section 351(i) of the Public Health Service Act (PHSA). Id. The FDA further alleged that the MSCs utilized in the Regenexx Procedure were drugs which were not the subject of an approved biologics license application (BLA) or investigational new drug application (IND) and may therefore have been unlawful. Further, on July 25, 2008, the very date on which the FDA purportedly sent its letter to Regenerative, but eleven days before Regenerative actually received it, the FDA posted its letter on its website (www.fda.gov) and thereby made the letter available to the public. Regenerative was given no opportunity to respond to the FDAs letter prior to the letter being published by the FDA on the World Wide Web. Id., at 21.
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On August 12, 2008, counsel for Regenerative sent the FDA a Petition for Stay of Action pursuant to 21 C.F.R. 10.35 requesting that all information in the petition for stay of action be withheld from public disclosure. Id., at 22. On August 19, 2008, the FDA responded to undersigned counsel stating that FDA was in receipt of the petition for stay of action filed on behalf of Regenerative. FDA assigned the petition a docket number and accepted the petition for filing but did not indicate whether it would agree to the action requested. Id. On August 25, 2008, counsel for Regenerative sent FDA a separate legal opinion, citing cases, statutes, regulations and FDA policy which demonstrated that the agencys allegations in its July 25, 2008 letter were both legally and factually flawed. Id., at 23. On October 3, 2008, the FDA formally denied Regeneratives Petition for Stay of Action, refused to remove the July 25, 2008 letter from the FDAs public website, and denied Regeneratives request that the Petition for Stay of Action be withheld from public disclosure. Id. Almost seven months later, on February 23, 2009, the FDA initiated an inspection of Regeneratives medical facilities. That inspection concluded on April 15, 2009, when the FDA issued a Form 483 to Regenerative indicating that, according to the FDA, Regenerative was manufacturing biological drugs in a facility that did not meet the standards of federally regulated biological drug manufacturers. Id., at 24. Also on April 15, 2009, the FDA warned Regenerative that its (Regeneratives) failure to comply with the terms of the Form 483 could lead to the issuance of a warning letter, seizure, injunction, criminal prosecution, and the disqualification of Regeneratives licensed physicians as clinical investigators. Id. While the inspection was ongoing, Regenerative sued the Government in the United States District Court for the District of Colorado. Id., at 25. 16 Regeneratives suit alleged, inter
16
Case No. 1:09-cv-00411-WYD-BNB in the United States District Court for the District of Colorado.
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alia, that FDAs regulatory scheme defining and regulating the autologous use of stem cells was ultra vires. On April 29, 2009, the Government filed its motion to dismiss on ripeness grounds, and the District Court entered its order dismissing Regeneratives lawsuit on March 26, 2010. Id. On March 29, 2010, Regenerative filed its notice of appeal with the United States Court of Appeals for the Tenth Circuit. 17 The FDAs efforts to regulate Regeneratives medical practice continued shortly after the District Court dismissed Regeneratives lawsuit. Counterclaims, at 26. On June 2, 2010, the FDA visited the Plaintiff for purposes of conducting an exhaustive inspection of the Plaintiffs medical facilities. Id. This inspection began when the Defendants issued a Notice of Inspection to the Plaintiff which, like the April 15, 2009 Form 483 issued by the Defendants to the Plaintiff identified the Plaintiff as a drug manufacturer. FDAs inspection of Regeneratives medical clinic lasted for roughly two weeks and cost Regenerative nearly $20,000 in personnel time. Id. The inspection concluded with an exit interview between FDA and Regenerative on or about June 16, 2010. Counterclaims, at 27. During the exit interview, FDA issued a Form 483 to Regenerative which, like the April 15, 2009 Form 483 and June 2, 2010 Notice of Inspection, identified Regenerative as a drug manufacturer. This Form 483 also listed a number of alleged compliance deficiencies at Regeneratives medical facilities only applicable to drug manufacturers. Id. Likewise, during the June 16, 2010 exit interview, FDA advised Regenerative that the decision was made by FDA before the inspection even began that Regenerative was a drug manufacturer and that that decision could not be challenged. Counterclaims, at 28. Moreover,
17
Case No. 10-1125 in the United States Court of Appeals for the Tenth Circuit.
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FDA advised Regenerative that the failure to remedy the observations contained in the Form 483 could lead to the issuance of a warning letter, Cease and Desist Letter, civil penalties, and/or a judicial injunction to compel compliance under threat of closure and criminal prosecution. Id. On June 22, 2010, Regenerative filed suit before this court in Case No. 10-cv-01055 challenging FDAs finding that Regenerative was a drug manufacturer. 18 Additionally, in an effort to enjoin the FDA during the pendency of the ongoing appeal in the Tenth Circuit, on June 30, 2010 Regenerative filed a motion for an injunction pursuant to Rule 62(c) of the Federal Rules of Civil Procedure in the District of Colorado. [Case No. 09-411; DE 53]. Finally, on July 6, 2010, Regenerative filed a Motion for Temporary Restraining Order before this Court in Case No. 10-cv-01055 [DE 9], and the Government filed its Motion to Transfer Venue or in the Alternative to Dismiss on July 13, 2010 [DE 11] challenging, inter alia, that Regeneratives claims were not ripe. On July 15, 2010, the parties appeared before this Court on Regeneratives Motion for Temporary Restraining Order, and on July 28, 2010, Regenerative filed its Initial Brief before the Tenth Circuit challenging the decision of the District Court Judge dismissing Regeneratives lawsuit against the Government on ripeness grounds. While both matters were pending, the Government approached counsel for Regenerative and proposed the agreement which is outlined in the Stipulated Order which has been entered in this case; [DE 10]. In short, in exchange for voluntarily dismissing the ongoing actions before the District Court for the District of Colorado
18
It should not be inferred that the Defendants responses to these FDA inspections were limited to the filing of lawsuits in Denver and Washington, D.C. As stated by Dr. Centeno in his affidavit, [w]e are proactive and responsive to improve quality. Prior to the FDA first showing up to inspect the lab in 2008, we hired a national recognized lab audit company, Reglera, to inspect the lab and make recommendations to improve patient safety. Over the ensuing several years we hired Reglera twice more. See appendix C for final Reglera audits. After every FDA inspection, while we disagreed that we should treat our tissue lab as a drug production facility, we met to address any concerns brought up by the investigators that could improve our patients safety. See appendix D for records of our actions after the 2009 and 2010 inspections. Centeno Affidavit, at 32n.
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and the Court of Appeals for the Tenth Circuit and withdrawing its Motion for a Temporary Restraining Order before this Court in Case No. 10-cv-01055, the Government agreed to sue the Defendants in this Court and thereby allow the entire dispute between the parties to be litigated in a single forum. [DE 10]. Additionally, the Defendants have agreed to discontinue their use of the Regenexx Procedure during the pendency of this litigation; Id.; see also, Motion for Summary Judgment, at p.17. ARGUMENT I. SUMMARY JUDGMENT STANDARD A. Fed.R.Civ.P. 56
Rule 56(a) of the Federal Rules of Civil Procedure provides that [t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Facts are material if disputes over them might affect the outcome of a suit under governing law Holcomb v. Powell, 433 F.3d 889, 895 (D.C. Cir. 2006); quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). Issues are genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Breen v. Peters, 474 F.Supp. 2d 1, 7 (D.D.C. 2007); citing Liberty Lobby, 477 U.S. at 248; Holcomb, 433 F.3d at 895. More specifically, at the summary judgment state the judges function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial. Liberty Lobby, 477 U.S. at 249. Further, in ruling on a motion for summary judgment, the court must draw all justifiable inferences in the nonmoving party's favor and accept the nonmoving party's evidence as true. Mar-Jac Poultry Inc. v. Katz, 2011 U.S. Dist. LEXIS 33582, 17 (D.D.C. 2011) (Collyer, J.); citing Liberty Lobby, 477 U.S. at 255.
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B. Summary Judgment is Disfavored When Discovery Has Yet to Commence Rule 56(c)(1)(A) provides that when moving for summary judgment, the party asserting that a fact cannot be genuinely disputed must support the assertion by citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations order, stipulationsadmissions, interrogatory answers, or other materials In other words, as stated by the Court in Scarborough v. Harvey, 493 F.Supp. 2d 1, 17 (D.D.C. 2007), [s]ummary judgment is premised on the notion that parties will have had adequate time for discovery to establish whether a genuine issue of material fact exists. Id., quoting Breen v. Peters, 474 F.Supp. 2d, 1, 7 (D.D.C. 2007). Accordingly, it is the general rule that decision by summary judgment is disfavored when additional development of facts might illuminate the issues of law requiring decision. Barnes v. District of Columbia, 242 F.R.D. 113, 116 (D.D.C. 2007); quoting Nixon v. Freeman, 670 F.2d 346, 362 (D.C. Cir. 1982); see also Bynum v. District of Columbia, 215 F.R.D. 1, 4 (D.D.C. 2003). In this case, the Government has failed to establish, much less argue, why the Court should depart from the general rule that summary judgment should be denied prior to the completion of discovery and the opportunity of the parties to develop the material facts discussed below which are relevant to this case. C. To the extent that the Governments Motion for Summary Judgment fails to address the Defendants Affirmative Defenses, the Motion should be denied. As a threshold matter, it must be noted that the Governments Motion for Summary Judgment only addresses the Defendants affirmative defenses dealing with the practice of medicine. Indeed, at p.34, n.27, the Government writes that [a]lthough we respond briefly to Defendants practice of medicine argument here because it appears to be their principal defense to this suit, we will not respond to Defendants affirmative defenses unless and until they are
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briefed by Defendants. This position, however, is fundamentally flawed and calls for the denial of the Governments Motion. While the burden of proof of an affirmative defense must be carried by the party asserting it, [t]he burden or proof has nothing to do with a movants obligation to address contested issues in a motion for summary judgment. RB&W Manufacturing v. Buford, 2004 U.S. Dist. LEXIS 22512, 9-10 (N.D. Ill. 2004). In other words, regardless of who bears the ultimate burden on proving the defenses, if a party contends that it is entitled to judgment as a matter of law, it must show the court why that is so in its motion for summary judgment. Id.; citing Ruff v. Partners Liquidating Trust, 2001 U.S. Dist. LEXIS 11683 (N.D. Ill. 2001). In this case, the Government has addressed only the Defendants practice of medicine affirmative defenses, and chosen to place the burden of briefing the Defendants other affirmative defenses on the Defendants. Certain of the Defendants affirmative defenses including Affirmative Defenses XI and XII are based on questions of fact which will be developed in discovery and prosecuted by the Defendants at trial or in their own motion for summary judgment. In failing to even mention these affirmative defenses in its own motion for summary judgment, the Government has left to be determined genuine issues of material fact discussed below, thus preventing the Court from ruling on the Governments Motion as a matter of law. Similarly, by failing to address these affirmative defenses in its own Motion and choosing instead to address them in its reply brief, the Government has violated this Circuits well settled rule that petitioners lay all their arguments on the table in their opening briefs so that their opponents are not taken by surprise. Natural Resources Defense Council v. EPA, 25 F.3d 1063, 1072, n.4 (D.C. Cir. 1994); citing Pennsylvania Elec. Co. v. FERC 11 F.3d 207, 209 (D.C. Cir.
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1993); Herbert v. National Academy of Sciences, 974 F.2d 192, 195 (D.C. Cir. 1992); Corson & Gruman Co. v. NLRB, 899 F.2d 47, 50 n.4 (D.C. Cir. 1990) (We require petitionersto raise all of their arguments in the opening brief to prevent sandbagging ofrespondents and to provide opposing counsel the chance to respond.) Accordingly, the Governments Motion should be denied. II. ADULTERATION In its Motion for Summary Judgment, the Government argues that the Defendants cultured cell product is adulterated, and that the facts relevant to the adulteration issue have either been admitted by the Defendants or are beyond dispute. However, in reality, the Defendants have consistently denied that they manufacture a cultured cell product, and numerous other genuine issues of material fact also exist necessitating the denial of the Governments Motion. A. Defendants Affirmative Defenses XI and XII
First, as a threshold matter, the Government has ignored the Defendants affirmative defenses in its Motion choosing to instead address them in its reply. As stated above, the Governments choice has violated this Circuits well settled jurisprudence on this issue. More importantly, the Governments choice has left a critical factual issue on the table necessitating the denial of the Governments Motion. Defendants Affirmative Defense XII states that [b]ecause the FDA has previously approved or licensed the manufacturing of autologous, culture expanded HCT/Ps, the adulterating and misbranding provisions of the FDCA are not applicable to the Defendants use of autologous, culture expanded HCT/Ps in treating the injuries of their patients on a patient-bypatient basis. Because of this prior approval, Defendants Affirmative Defense XI provides that
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this treatment of patients on a patient-by-patient basis is within the practice of medicine, does not constitute the manufacturing or distribution of a product and is not subject to the adulterating and misbranding provisions of the FDCA; see, 21 U.S.C. 353a. As previously discussed, the FDA approved Genzymes Carticel in 1997. Carticel involves the extraction of HCT/Ps from a patient by the patients physician, expanding the HCT/Ps at a Genzyme laboratory, returning the expanded HCT/Ps to the physician, and the use of the expanded HCT/Ps in the treatment of the patients injured knee. As articulated in their affirmative defenses, the Defendants are therefore entitled to compound Genzymes Carticel pursuant to 21 U.S.C. 353a, and are statutorily exempted from the FDCAs adulteration and misbranding provisions; see 21 U.S.C. 353a(a). Thus, even at a threshold level, the Governments failure to address these affirmative defenses in its motion creates a per se genuine issue of material fact necessitating the denial of the Governments Motion. B. The Defendants Do Not Manufacture a Cultured Cell Product
As previously described, the Defendants and the Government are of very different opinions as to what, exactly, the Regenexx Procedure is. The Defendants assert that the Procedure constitutes the practice of medicine as defined by the law of the State of Colorado and that the FDA lacks jurisdiction to regulate it. In contrast, based on its argument that the procedure does not constitute the practice of medicine because it does not involve the use of an FDA approved drug on a patient, the Government asserts that the Procedure constitutes the manufacturing of a biologic drug lacking FDA approval in violation of the law. As described in our opposition to the Governments Motion to Dismiss, because the FDA lacks the jurisdiction to regulate the practice of medicine, it also lacks the jurisdiction to define it; see, Gonzales v. Oregon, 546 U.S. 243 (2006); ABA v. FTC, 430 F.3d 457 (D.C. Cir. 2005).
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Instead, because it is well settled that the practice of medicine has been left to the individual States to regulate, the definition of the practice of medicine has also been left to the individual States to create; see e.g. Linder v. United States, 268 U.S. 5, 18 (1925); see also, Gonzales v. Oregon (defining physician-assisted suicide as within the practice of medicine). In this case, Defendants Centeno and Schultz are licensed to practice medicine by the State of Colorado and to treat their patients in a one-on-one bases from their medical facilities located in Broomfield, Colorado. The State of Colorados definition of the practice of medicine is unquestionably broad enough to include the Regenexx Procedure, and the Defendants practice under the direct supervision of the Colorado Board of Medicine; see, Michaels Affidavit at 12; Centeno Affidavit, at 6. Therefore, the Regenexx Procedure constitutes the practice of medicine as regulated and defined by law in the State of Colorado; see C.R.S. 12-36-106(1). The Government also argues that the Regenexx Procedure constitutes the manufacturing of a drug because they promote it to treat a variety of conditions. Motion for Summary Judgment, at p.19. However, this argument must also fail. Whereas the FDCA defines drug as articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man, 21 U.S.C. 321(g)(1)(B), Colorados definition of the practice of medicine contains similar language: Suggesting, recommending, prescribing, or administering any form of treatment, operation, or healing for the intended palliation, relief, or cure of any physical or mental disease, ailment, injury, condition, or defect of any person C.R.S. 12-36-106(1)(b); see also, American Medical Association, What Constitutes the Practice of Medicine?, L(5) J. Am. Med. Assoc. 368, 368-369 (Feb. 1, 1908); Brief for the Petitioners, Gonzales v. Oregon, 546 U.S. 243 (2006), available at 2005 U.S. S.Ct. Briefs LEXIS 354, 40-42 (using ordinary
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meaning 19 to define the practice of medicine). Thus, simply because a procedure is designed to cure a person and is advertised as such by the treating physician, it does not mean that that procedure becomes a federally regulated drug. The Governments Motion for Summary Judgment should be denied. C. To the extent that the Defendants medical procedure might be subject to FDA jurisdiction, a genuine issue of material fact exists regarding whether it meets the criteria for regulation solely under 21 C.F.R. Part 1271. 1. Burden of proof.
Even though we are before the Court on the Governments Motion for Summary Judgment of its own claims prior to the commencement of discovery, the Government argues that the burden is on the Defendants to prove that their cultured cell product meets all of the criteria in 21 C.F.R. 1271.10(a). Motion for Summary Judgment, at p.20. Regardless of whether the Governments position is legally correct, it highlights a fundamental inconsistency within the Governments position in this case. In the FDAs Proposed Approach, regulation solely under 21 C.F.R. Part 1271 was never presented as an exception to a rule. Rather, the public was presented with a regulatory regime wherein tissues would be regulated with a tiered approach based on risk and the necessity for FDA review which would provide a rational, comprehensive and comprehensible framework under which tissue processors could develop and market their products. Proposed Approach, at
19
The ordinary meaning of the term medical is pertaining or related to the healing art orto 'medicine,' 9 Oxford English Dictionary 546 (2d ed. 1989), and the term medicine refers to that department of knowledge and practice which is concerned with the cure, alleviation, and prevention of disease in human beings, and with the restoration and preservation of health, id. at 549; see Webster's Third New International Dictionary 1402 (1966) (the science and art dealing with the maintenance of health and the prevention, alleviation, or cure of disease); The Random House Dictionary of the English Language 1194 (2d ed. 1987) (the art or science of restoring or preserving health or due physical condition). Brief for the Petitioners, Gonzales v. Oregon, 546 U.S. 243 (2006), available at 2005 U.S. S.Ct. Briefs LEXIS 354, 40-42.
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p.7; see also 63 Fed.Reg. 26745 (a risk-based tiered approach intended to regulate human cellular and tissue-based products only to the extent necessary to protect public health.) Instead of 351 of the PHSA being set forth as the default regulatory scheme for HCT/Ps, the FDA simply told the public that HCT/Ps would be regulated based on the risk they presented. Nevertheless, the FDA has enforced these regulations with 351 of the PHSA as a default rule, and as such, no autologous stem cell therapies have been approved since 1997, in spite of the fact that the relevant technology has significantly progressed since that time. The parties are before the Court on the Governments Motion for Summary Judgment. The burden is on the Government to prove that there is no genuine dispute as to any material fact and the Government is entitled to judgment as a matter of law; Fed.R.Civ.P. 56(a). None of the cases cited by the Government in support of its burden-shifting proposition dealt with summary judgment proceedings or otherwise change the plain language of Rule 56. Accordingly, while the burden might ultimately be on the Defendants at trial to prove that the Regenexx Procedure qualifies for exemption solely under 21 C.F.R. Part 1271, such burden is not on the Defendants at this time. In opposing the Governments motion, the Defendants need only show that there exists a genuine issue of material fact for trial, and the Defendants readily do so below; see e.g. United States v. Article of Food Consisting of 345-50 Pound Bags, 622 F.2d 768 (5th Cir. 1980). 2. Minimal Manipulation
In its Motion, at pp. 20-22, the Government argues that it is beyond dispute that Defendants cultured cell product is more than minimally manipulated, and that therefore it remains subject to the FDCAs adulteration and misbranding provisions. Motion for Summary Judgment, at p.22. However, this statement is not accurate; the Defendants vehemently deny that they manufacture or more-than-minimally manipulate anything, support their denial with
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affidavits attached to this motion, and dispute the credibility of the Governments factual presentation. As such, a genuine issue of material fact regarding this issue plainly exists and the Governments Motion for Summary Judgment must be denied. 21 C.F.R. 1271.10(a) sets forth the FDAs standard for evaluating how stem cells and other HCT/Ps will be regulated. The first prong of that standard asks whether the HCT/Ps are minimally manipulated, and 1271.3(f)(2) states that cells and nonstructural tissue are minimally manipulated when their processing does not alter their relevant biological characteristics. The term minimal manipulation is vague, and its definition does nothing to clarify its meaning; see e.g. Affidavit of Dr. Centeno, at 53. In an effort to qualify that definition, the FDA has stated that culture expansion constitutes the more-than-minimalmanipulation of stem cells, but has never shared the science upon which it relied to make that determination; see 66 Fed.Reg. 5457. The FDA has articulated in this case that this determination was merely an example of what it believes to be more-than-minimalmanipulation, and as such, does not constitute a legislative rule; Motion to Dismiss, at p.27. Likewise, prior to the start of this case, the FDA never took the position that many steps constitutes more-than-minimal-manipulation. Actually, in the administrative record, the FDA took the opposite position; see PA 000267 (explaining that the intent of the regulations is to look at cells based on function, not so much as how much processing is done to them.) The Governments argument that the Regenexx Procedure constitutes the more-thanminimal manipulation of stem cells is laden with questions of fact. The Government relies entirely upon the declaration of Steven R. Bauer, Ph.D. for the proposition that the stem cells used in the Regenexx Procedure are more-than-minimally-manipulated, but as Dr. Bauer himself acknowledges, he never once examined or otherwise laid eyes on the cells in making his
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determination; see Motion for Summary Judgment, Exhibit B, 2. Indeed, during the FDAs two inspections of the Defendants medical facilities, no FDA representative ever tested a single patients stem cells despite having ample opportunity to do so; see, e.g. Bauer Declaration, at 2; Centeno Affidavit, at 52. Dr. Bauer relies entirely upon documents generated by FDA representatives and the Defendants to come to the determination that the relevant biological characteristics of the cells change during the course of the procedure. Such a conclusion is highly curious, especially given the hypothetical nature of Dr. Bauers affidavit; see e.g. Bauer Affidavit, 37 (During this time, most of the cells from the original bone marrow aspirate would likely die and the remaining cells would change so they are different from the original cells in the bone marrow.) (emphasis added). Whether the problems associated with Dr. Bauers affidavit are aggravated by the minimal manipulation regulation itself, or whether the regulation leads to the problems associated with Dr. Bauers affidavit is irrelevant. The regulation which the Defendants have challenged as being arbitrary and capricious (Counterclaim IV and V) is vague and indefinite, and a legislative rule not issued through notice and comment rulemaking procedures (Counterclaim VI). Thus, given the absence of any clarification in the administrative record as to the regulation, and given the fact that the FDA never once tested the Regenexx Procedure, it was simply impossible for Dr. Bauer to do anything more than speculate and backfill, thereby further violating the APA. Such is the regulatory history behind Dr. Bauers affidavit. Because the FDA never offered a meaningful explanation as to what minimal manipulation or relevant biological characteristics actually means, Dr. Bauer was left to attempt an explanation on behalf of the
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FDA for purposes of this litigation. Not surprisingly, Dr. Bauers affidavit calls the concept of minimal manipulation even further into question. Whereas the FDA has defined more than minimal manipulation to mean changes to the relevant biological characteristics of the stem cells, Dr. Bauer writes that more than minimal manipulation means any change at all: During this time, most of the cells from the original bone marrow aspirate would likely die and the remaining cells would change so they are different from the original cells in the bone marrow. Bauer Affidavit, 37; (emphasis added). Consistent with the failure of the administrative record, Dr. Bauer does not explain which biological characteristics are relevant, or how they change in the course of the Regenexx Procedure. Instead, his affidavit is an unadulterated attempt to backfill the administrative records gaping holes. In Consumer Federation of America and Public Citizen v. HHS, 83 F.3d 1497 (D.C. Cir. 1996) (Consumer Federation), the Court confronted a similar issue. There, HHS had drafted regulations consistent with its statutory delegation, for purposes of setting forth personnel qualifications for cytologists working in clinical laboratories. Id., at 1499-1500. However, rather than explaining in the administrative record why its new qualifications significantly varied from the preexisting industry standard, HHS instead offered a terse statement which failed to explain how HHSs regulations reflected a reasonable interpretation of the relevant statutory delegation. Id., at 1506. In an effort to cure that defect before the District Court, HHS submitted a declaration drafted by an HHS official which offered an entirely new theory for the regulations found nowhere in the administrative record. Rejecting the declaration as an impermissible post hoc rationalization, the Court remanded the matter to HHS to articulate a convincing rationale for its protocol or to continue the rulemaking process it has already
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commenced for issuing a new one. Id., at 1506-1507; citing, Camp v. Pitts, 411 U.S. 138, 142 (1973); Center for Auto Safety v. FHA, 956 F.2d 309, 314 (D.C. Cir. 1992) (Thomas, J.). Like the declaration in Consumer Federation, Dr. Bauers affidavit is a post hac rationalization of the definition of minimal manipulation not included in the administrative record. Again, the administrative record contains no explanation as to why culture expansion constitutes more-than-minimal-manipulation or how culture expansion alters the relevant biological characteristics of the cells. Such an explanation had not appeared until the Government made it appear in this case, but as Consumer Federation makes clear, the Courts review must be made on the administrative record rather than some new record created for purposes of litigation. Consumer Federation, 83 F.3d at 1506; quoting Camp v. Pitts, 411 U.S. at 142. Dr. Bauers affidavit should therefore be rejected. Notwithstanding its procedural inadequacies, Dr. Bauers affidavit also contains a number of factual problems which lead to genuine issues of material of fact in this case. First, as previously articulated, neither Dr. Bauer nor any other FDA representative ever tested a single patients stem cells despite being repeatedly offered the opportunity to do so by the Defendants; see, Bauer Declaration, at 2; Centeno Affidavit, at 52. Thus, even ignoring the fact that there is no clear definition of minimal manipulation in the first place, how the FDA determined that the stem cells used in the Regenexx Procedure are more than minimally manipulated is a question of fact in and of itself. Next, a question of fact is created by the studies Dr. Bauer relies upon in determining that the Regenexx Procedure constitutes more-than-minimalmanipulation. Indeed, Dr. Bauer relies entirely upon studies focused on MSCs grown with protocols designed to create tumors, MSCs grown for ridiculous periods of time, and other irrelevant references. Centeno Affidavit, 55-57; 102-107.
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In other words, whereas Dr. Bauer relies on studies designed to more than minimally manipulate stem cells for ridiculous periods of time, none of these studies have any bearing on the likelihood of the Regenexx Procedure to more than minimally manipulate stem cells. Moreover, none of these studies refute the studies cited by Dr. Centeno in his affidavit which show that procedures like the Regenexx Procedure do not manipulate the biological characteristics of the stem cells being cultured; see e.g. Centeno Affidavit, at 52. Genuine issues of material fact clearly exist in this case, and the Governments efforts to argue otherwise must fail. D. The Regenexx Procedure does not substantially affect interstate commerce. In its Motion for Summary Judgment, at pp.23-25, the Government argues that because the Defendants purchase doxycycline from outside of the State of Colorado and use the doxycycline 20 as part of the Regenexx Procedure, the Regenexx Procedure thereby affects interstate commerce and violates 21 U.S.C. 331(k). In support of its argument, the Government relies upon United States v. Dianovin Pharmaceuticals, 475 F.2d 100 (1st Cir. 1973) and Baker v. United States, 932 F.2d 813 (9th Cir. 1991) for the proposition that the use of a component shipped in interstate commerce makes a federal case out of the Regenexx Procedure. However, Baker and Dianovin should not govern this case. First, in Dianovin, the Court ruled that because the ingredients in Dianovins vitamin K for injection product including the vitamin K itself were shipped in interstate commerce to Dianovin before being placed into ampules for sale, such activities fell within 331(k) and
As attested to in the affidavit of Dr. Centeno, Doxyclycline is an antibiotic which is approved and commonly used for multiple purposes. Preventative antibiotic use is common in surgical procedures that are higher risk for introducing infection (such as dental procedures). The Defendants use Doxycycline to prevent the contamination of their patients tissue in culture. Cunha, B.A., C.M. Sibley, and A.M. Ristuccia, Doxycycline. Ther Drug Monit, 1982. 4(2): p. 115-35.
20
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conferred jurisdiction to restrain violations thereof upon the district court. Dianovin, 475 F.2d at 103. Similarly, in Baker, Baker entered a plea of nolo contendere to manufacturing and distributing synthetic heroin in California. Baker, 932 F.2d at 814. On appeal, Baker attempted to unravel the factual basis of his conviction by arguing that notwithstanding that the component parts of the synthetic heroin traveled in interstate commerce, the manufacture and distribution of the end product all occurred in California, so that the interstate commerce link is missing. Id., at 814. However, the Court held that Baker was estopped from doing so and ruled that regardless of Bakers argument, 331(k) had been violated. Id. Unlike the manufacture and distribution of synthetic heroin or vitamin K, the Regenexx Procedure is an autologous stem cell therapy involving the use of a patients own stem cells to heal the patients musculoskeletal injuries. The entire procedure from the withdrawal of the stem cells and growth factors to the expansion to the reimplantation takes place at the Defendants medical facilities in Broomfield, Colorado. Moreover, unlike the manufacture and distribution of synthetic heroin or vitamin K, the Regenexx Procedure constitutes the practice of medicine as defined by Colorado-state law and is performed on a patient-by-patient basis by physicians licensed to practice medicine in the State of Colorado. Thus, the question of whether the Regenexx Procedure affects interstate commerce in such a way as to trigger the FDCA is fundamentally different than the question regarding the manufacture and distribution of synthetic heroin or vitamin K. First of all, when a doctor purchases an item from another state for use in his practice, he does not automatically become a federally regulated entity or somehow substantially affect interstate commerce; see e.g. Jones v. United States, 529 U.S. 848 (2000) (Were we to adopt the Governments expansive interpretation, hardly a building in the land would fall outside the
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federal statutes domain. Practically every building in our cities, towns and rural areas is constructed with supplies that have moved in interstate commerce, served by utilities that have an interstate connection, financed or insured by enterprises that do business across state lines, or bears some other trace of interstate commerce.); A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 546 (1935) (If the commerce clause were construed to reach all enterprises and transactions which could be said to have an indirect effect upon interstate commerce, the federal authority would embrace practically all the activities of the people and the authority of the State over its domestic concerns would exist only by sufferance of the federal government.); United States v. Vidal-Cruz, 67 F.Supp.2d 35, 39, n.5 (D.P.R. 1999) (The government also claims that the use of containers which traveled in interstate commerce should ensure federal jurisdiction over the matter. However, merely requiring the use of an out-of-state container would open the floodgates for FDCA litigation.) Rather, the FDCA rests upon the constitutional power resident in Congress to regulate interstate commerce. To the end that the public health and safety might be advanced, it seeks to keep interstate channels free from deleterious, adulterated and misbranded articles of the specified types. It is in that interstate setting that the various sections of the act must be viewed. United States v. Walsh, 331 U.S. 432, 434 (1997); citing United States v. Dotterweich, 320 U.S. 277, 280 (1943). Thus, the question at issue in this case is whether Congresss power to regulate interstate markets encompasses the Regenexx Procedure; see e.g. Raich, 545 U.S. at 9. In other words, the Court must ask whether the Regenexx Procedure substantially affects interstate commerce, a question that must undeniably be resolved in the negative. 21
In its Motion, at p.23, the Government frames the issue as whether the Defendants Cultured Cell Product is held for sale after shipment of one or more of its components in interstate commerce. However, two things must be noted here. First, 331(k) is actually triggered by [t]he alterationor the doing of any other act with respect to, a
21
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First, unlike Genzymes Carticel in which doctors from around the country extract their patients stem cells and send them to a central Genzyme laboratory for expansion the Regenexx Procedure occurs entirely within the Defendants medical facility in Broomfield, Colorado. Unlike in Raich, the Government does not even argue that the Regenexx Procedure, despite its intrastate nature, substantially affects interstate commerce. In Raich, the Court held that personally consumed medical marijuana which was lawful under California law could be federally regulated due to the need to prevent the diversion of drugs from legitimate to illicit channels, Raich, 545 U.S. at 11. However, no such risk exists in this case. Indeed, the Regenexx Procedure is entirely autologous and performed on a one-on-one basis between doctor and patient. It simply has no impact on interstate commerce. These factual and legal issues plainly belie the Governments conclusory argument that [t]here is no dispute that the interstate commerce requirement of section 331(k) is satisfied here. Motion for Summary Judgment, at p.24. Accordingly, genuine issues of material fact exist in this case, and the Governments Motion for Summary Judgment should be denied. E. The Defendants do not adulterate anything. First of all, again, as a threshold matter, the Government failed in its motion to address the Defendants affirmative defenses, specifically Affirmative Defenses XI and XII. These defenses assert that pursuant to 21 U.S.C. 353a, the Defendants were statutorily exempted from
food, drug, device, or cosmetic, if such act is done while such article is held for sale (whether or not the first sale) after shipment in interstate commerce and results in such article being adulterated or misbranded. Second, the Governments framing of the issue is derived from Baker, which in dicta provided that Bakers criminal conviction for selling synthetic heroin intrastate could be upheld because he purchased ingredients from vendors in other states. What is crucial to recognize here is that Baker was decided in 1991, well before the Lopez, Jones, Morrison, and Raich line of cases. Pursuant to Raich, the Ninth Circuit in Baker unquestionably reached the right result, as Bakers synthetic heroin affected interstate commerce at least as substantially as Raichs personal stash of homegrown medicinal marijuana. However, had Baker been decided today in a post-Raich landscape, the question would not be whether Baker purchased an ingredient for his drug product from another state, but instead whether his synthetic heroin would have affected interstate commerce.
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the FDCAs adulteration and misbranding provisions; see 21 U.S.C. 353a(a). Thus, even at a threshold level, the Governments failure to address those affirmative defenses in its motion created a per se genuine issue of material fact necessitating the denial of the Governments Motion. Regarding the merits of the Governments position, the Government argues that the Defendants have adulterated their cultured cell product because they do not comply with cGMP when they manufacture it; see Motion for Summary Judgment, at pp. 25-28. The Government also argues that the Defendants have admitted cGMP violations and that therefore there is no genuine dispute that Defendants cultured cell productis adulterated within the meaning of the FDCA. Motion for Summary Judgment, at p.28. This, however, is not the case. As described by the FDA, cGMP refers to the Current Good Manufacturing Practice regulations enforced by the US Food and Drug Administration (FDA). cGMPs provide for systems that assure proper design, monitoring, and control of manufacturing processes and facilities. 22 Whereas cGMPs are applicable to the manufacturing of FDA-regulated drugs and devices, cGMPs are not applicable to medical practices such as hospitals, doctors offices, ambulatory centers and IVF facilities. As previously articulated, and as supported by the affidavits submitted with this Opposition, the Defendants are engaged in the practice of medicine and treat their patients in a one-on-one basis at the Defendants medical facilities in Broomfield, Colorado. As such, the FDA lacks the jurisdiction to regulate the Defendants medical practice and the FDAs regulations governing CGMP requirements applicable to the manufacturing of drugs and biological products are inapplicable. These concepts alone create a genuine issue of
22
Available at http://www.fda.gov/Drugs/DevelopmentApprovalProcess/Manufacturing/ucm169105.htm
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material fact regarding the Governments adulteration claim, and the Governments Motion for Summary Judgment should therefore be denied. III. MISBRANDING Defendants Affirmative Defenses XI and XII assert that pursuant to 21 U.S.C. 353a, the Defendants were statutorily exempted from the FDCAs adulteration and misbranding provisions; see 21 U.S.C. 353a(a). The Governments failure to address those affirmative defenses in its Motion creates a per se genuine issue of material fact necessitating the denial of the Governments motion. Regarding the merits of the Governments argument, the Government posits that the Defendants have misbranded their cultured cell product by failing to include adequate directions for use on its labeling; Motion for Summary Judgment, at pp.28-34. More specifically, the Government argues that the cultured cell product is a prescription drug, and because its labeling lacked an RX Only symbol, it was misbranded; Id., at 29. This exact argument, however, was summarily disposed of in United States v. Evers, 643 F.2d 1043 (5th Cir. 1981). In that case, as in this one, a licensed physician was charged with misbranding prescription chelating drugs which he administered intravenously into his patients for the off-label treatment of circulatory disorders; Id., at 1044-1045. In response to the Governments charge that Dr. Evers had misbranded the chelating drugs in violation of 331(k), the Court held as follows: The requirement which the FDA seeks to impose is nonsensical. Since Calcium EDTA is a prescription drug, the misbranding provision under which Dr. Evers was charged requires him to provide adequate information for use by prescribing physicians. However, Dr. Evers was the only physician who used the Calcium EDTA in question. The government's application of the statute may therefore be reduced to the following proposition: Dr. Evers did not provide adequate information to himself. It is doubtful at
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best that this interpretation was intended by the drafters of the statute. If the doctor is not holding the drug for sale to the party to whom he owes a statutory obligation of full disclosure (in this case other prescribing physicians), then it makes no sense to impose the requirements of the statute. No legitimate purpose is served when a statutory provision requiring disclosure to one particular group of purchasers is invoked on the basis of sales made to a different group. Since Dr. Evers was holding Calcium EDTA, a prescription drug, for sale only to his patients, and since section 502(f)(1) of the Act does not require any disclosure to patients regarding prescription drugs, we conclude that Dr. Evers did not violate section 301(k) of the Act. Id., at 1053. In this case as in Evers, the Governments misbranding charge against the Defendants boils down to the proposition that the Defendants did not provide adequate information to themselves. Accordingly, there is a genuine dispute regarding the Defendants alleged violation of 331(k), and the Governments Motion for Summary Judgment should be denied. 23 IV. PRACTICE OF MEDICINE In its Motion, at pp.34-36, the Government argues that the Defendants alleged violations of the FDCA are not excused by their claim that they are engaged in the practice of medicine. As it did in support of its Motion to Dismiss the Defendants Counterclaims, the Government argues that the Regenexx Procedure does not constitute the practice of medicine because the
The Government also argues in its motion for summary judgment, at pp. 33-34, that the Defendants cultured cell product could only have been misbranded because even if Defendants tried to draft adequate directions for use, it would be impossible to do so based on currently available data. Id., at p.33. However, this argument was also disposed of by the Fifth Circuit in Evers, and should be likewise disposed of here. In Evers, the Court noted that even though Dr. Evers claims for his therapy are not generally accepted by the medical profession, andthe FDA has not approved any chelating drug for use in the treatment of circulatory disorders Dr. Evers could not be held liable for failing to provide adequate information to himself; Evers, 643 F.2d at 1045.
23
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Regenexx Procedure which the Government calls a cultured cell product has not been approved by the FDA. 24 As extensively detailed in the Defendants Opposition to the Governments Motion to Dismiss, the Defendants dispute the Governments legal position regarding the practice of medicine on several fronts. We will not belabor these disputes anew in this Opposition, but for purposes of this Opposition, we summarize them as follows: First, because Congress has undisputedly left the regulation of the practice of medicine to the individual States, we dispute that the Government somehow has the authority to define the practice of medicine. The Defendants practice medicine in the State of Colorado, and thus Colorado-state law should control in this case; see C.R.S. 12-36-106(1); see, Gonzalez v. Oregon, 546 U.S. 243 (2005); ABA v. FTC, 430 F.3d 457 (D.C. Cir. 2005). Second, the absence of an explicit prohibition in the FDCA does not imply an implicit authority allowing FDA to define or regulate the practice of medicine. Indeed, Supreme Court and D.C. Circuit jurisprudence make clear that because that the practice of medicine has been left to the individual States to regulate, and because Congress has never explicitly delegated the regulation of the practice of medicine to the FDA, such an exercise of power is ultra vires and should be rejected; see ABA, 430 F.3d at 468; see also Railway Labor Exec. Assn v. Natl Mediation Bd., 29 F.3d 655 (D.C. Cir. 1994) (en banc).
The Government asks as an initial matter...how RS LLC, a corporation, and its Laboratory Director, Ms. Cheever (a non-physician), could possibly engage in the practice of medicine. Motion for Summary Judgment, at p.34. This question implies that no doctor may hire a medical technician or establish a separate company to own expensive prescription medical equipment (such as an MRI or arthroscopic surgical device) and have the medical technician or equipment assist the doctor in his practice of medicine. This suggestion by the Government is wholly untethered from the reality of the practice of medicine where it is common for physicians to hire medical technicians to assist the doctor in his medical practice and to own expensive medical devices separately from their medical practices for a variety of legitimate reasons; see e.g. Michaels Affidavit, at 7; see also, Centeno Affidavit, at 4 (describing that regardless of whether a corporation or a non-physician professional is involved in the Regenexx Procedure, Dr. Centeno has direct control of the processing of [his] patients cells used by [him] in the treatment of [his] patients.)
24
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Third, we dispute that the limited definition of practice of medicine endorsed by the Government in this case is the only such definition that it has ever endorsed. Indeed, in Gonzales v. Oregon the Government argued for a definition that was at least as broad as the Colorado-state definition that it has cast aside as superfluous in this case; see Brief for the Petitioners, Gonzales v. Oregon, 546 U.S. 243 (2006), available at 2005 U.S. S.Ct. Briefs LEXIS 354, 40-42. Fourth, we dispute that the limited definition of practice of medicine endorsed by the Government in this case should receive deference. Congress never delegated to the FDA the power to regulate the practice of medicine; its definition of that term should therefore receive no deference from this Court; Gonzales v. Oregon, 546 U.S. at 255; quoting, Mead Corp., 533 U.S. at 226-227 (2001). Likewise, because the definition of practice of medicine sponsored by the Government in this case attempts to preempt state law governing the practice of medicine, it should receive no deference as it runs afoul of the well-settled presumption against preemption. Gonzales v. Oregon, 546 U.S. at 274; citing Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 387 (2002). Fifth, because neither the FDCA nor the PHSA define the practice of medicine, the term should be given its ordinary meaning, much like that endorsed by the Government in Gonzales v. Oregon; U.S. S.Ct. Briefs LEXIS at 41; citing, Asgrow Seed Co. v. Winterboer, 513 U.S. 179, 187 (1995); FDIC v. Meyer, 510 U.S. 471, 476 (1994); see also American Medical Association, What Constitutes the Practice of Medicine?, L(5) J. Am. Med. Assoc. 368, 368-369 (Feb. 1, 1908). Finally, sixth, we dispute that the limited definition of practice of medicine endorsed by the Government in this case should receive deference because it is arbitrary and capricious and was never asserted in the administrative record of the regulations; see e.g. Federal Election
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Commission v. Rose, 806 F.2d 1081, 1088 (D.C. Cir. 1986), [a] determination that an agency made a decision without considering a relevant factor leads to condemning the decision as arbitrary and capricious. Id., citing Motor Vehicles Manufs Assoc. v. State Farm, 463 U.S. 29, 46-57 (1983). Likewise, the definition flies in the face of well settled principles of federalism, and explicitly contradicts the executive orders 25 of every president since (and including) Ronald Reagan governing how federal agencies must address that issue. While we contend that the Governments limited definition of the practice of medicine may be rejected by the Court based on legal principles alone, we recognize that we are presently before the Court on the Governments Motion for Summary Judgment, and that the Court may wish to evaluate the issue of the practice of medicine as a mixed question of law and fact. To the extent that the Court chooses to do so, there exists a genuine issue of material fact regarding whether the Defendants are actually engaged in the practice of medicine. Although the Government contends that the Defendants are not engaged in the practice of medicine, the Defendants contend that they are, and have provided the Court with an ample legal and evidentiary foundation in support of their position. Factually, the Defendants contention is endorsed by the testimony of Drs. Freeman, Henderson, Angle and Centeno, each of whom has submitted an affidavit in support of this Opposition. Dr. Freeman makes plain that the Regenexx Procedure constitutes the practice of medicine, and rejects the claims of the Governments witnesses who have testified to the contrary; see, e.g. Freeman Affidavit, at 8a (Based on Dr. Muschlers monolithic interpretation of the definition of a drug, compounding pharmacies, gynecologists practicing in vitro
25
See, e.g. Exec. Order No. 12612 (Oct. 26, 1987); Exec. Order No. 12866 (Sept. 30, 1993); Exec. Order No. 12988 (Feb. 5, 1996); Exec. Order No. 13083 (May 14, 1998); Exec. Order No. 13132 (Aug. 4, 1999); Exec. Order No. 13450 (Nov. 13, 2007) (Bush); Exec. Order No. 13563 (Jan. 21, 2011).
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fertilization, surgeons performing skin graft transplants for burn victims, and any number of other practices that are currently defined as the practice of medicine and thus are governed by state regulatory bodies, are all manufacturing a drug and thus violating the [FDCA].) Dr. Hendersons affidavit, which is attached hereto as Exhibit 7, describes the Regenexx Procedure as comparable to in vitro fertilization (IVF) procedures, which are commonly viewed as the practice of medicine. As Dr. Henderson describes, the Regenexx procedure is very similar to Embryo culture and in no way similar to the drug mass manufacturing process (CGMP). Henderson Affidavit, at 4; see also Henderson Affidavit, at 2 (I consider the Regenexx Procedure to be much more like the 3 to 5 or 6 day embryo transfer in IVF and therefore a specialized medical procedure.); see also Angle Affidavit, at 17 (Nor is RS a manufacturing plant. They are not creating a product for sale, cells are not being synthesized, nor are they being stimulated to synthesize any product that will be isolated from the cells or the culture media, and cells are not being packaged for mass distributions. Cells are simply being removed from a patient, cultured and then transferred back into the same patient from whom they came in an attempt to alleviate pain and encourage reformation of the patients own tissues. I cannot conceive of how this can be anything other than the practice of medicine.) Dr. Centeno also testifies in his attached affidavit that the Regenexx Procedure constitutes the practice of medicine, and that it is only one of several medical procedures that Dr. Centeno uses to treat his patients; Centeno Affidavit, at 3; see also, Centeno Affidavit, at 833 (describing medical practice); Centeno Affidavit, at 4 (rather than a drug manufacturer who makes a biologic drug to sells it other physicians or clinics, I am a partner in a medical
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practice treating its own patients.) 26 Additionally, as stated by Gus Michaels, Esq., the Colorado Board of Medicine has thoroughly examined the Regenexx Procedure and determined that it, as well as Dr. Centenos medical practice, is fully compliant with Colorado law; Michaels Affidavit, at 8; see also, Colorado Department of Regulatory Agencies letter to Dr. Christopher Centeno, October 22, 2010, attached hereto as Exhibit 9. For all of these reasons, there exists a genuine issue of material fact regarding whether the Regenexx Procedure constitutes the practice of medicine, and as such, the Governments Motion for Summary Judgment should be denied. V. A PERMANENT INJUNCTION SHOULD NOT BE ISSUED IN THIS CASE In its Motion for Summary Judgment, at pp. 37-40, the Government argues that the Court should enter a permanent injunction against the Defendants pursuant to 21 U.S.C. 332(a), first because the Government argues that the Defendants have violated the FDCA, and second because the Government argues that the Defendants will continue to do so unless enjoined. Once again, the Defendants dispute the Governments assertions, as they are flatly belied by the nature and procedural history of the dispute between the parties. First, as the Government notes in its brief, when seeking a statutory injunction, the government need only show that the defendants have violated the statute and that there is some cognizable danger of recurrent violation. Motion for Summary Judgment, at p.37; quoting United States v. W.T. Grant Co., 345 U.S. 629, 633 (1953). Thus, as an initial matter, because the Government has failed to show in its Motion that the Defendants have violated the law, the Governments Motion should be denied.
Dr. Centenos description of the development of the Regenexx Procedure is also instructive on this issue, as it not only refutes the Governments allegations that Dr. Centeno somehow experimented on his patients, but it allows the Court to essentially reverse engineer the procedure and more fully understand its nature as the practice of medicine; see supra, at pp. 11-14.
26
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Additionally, the relief that the Government seeks from the Court in this case is a permanent injunction of licensed physicians treating their patients on a patient-by-patient basis at the physicians medical clinic in Broomfield, Colorado under the direct supervision of the Colorado Board of Medicine. The Government seeks this relief in spite of the fact that it lacks the jurisdiction to regulate or define the practice of medicine; see e.g. Linder v. United States, 268 U.S. at 18; see also, Gonzales v. Oregon. Thus, given the lengths that the Defendants have gone to comply with applicable State law and treat their patients in accordance with the Belmont Report and the law of the State of Colorado, the Governments request should be denied. Finally, even assuming arguendo that the Government has showed in its Motion that there exists no genuine issue of material fact in this case and that it is entitled to judgment as a matter of law, the Governments request for a permanent injunction should nevertheless be denied. First, as stated by the Court in United States v. Baxter Healthcare, 712 F.Supp. 1352, 1355 (D.N.J. 1989), [t]he grant of authority to issue an injunction is not the same as a mandate that an injunction issue whenever the government proves a violation and cognizable danger of recurrence. The court must employ its sound discretion in imposing all equitable remedies, including those which Congress has authorized. Id., citing W.T. Grant, 345 U.S. at 633. In this case, principles of equity dictate that a permanent injunction not issue in this case. Indeed, in the years leading up to this case, the Defendants have shown the utmost respect for the judicial system, and have sought out the jurisdiction of the Courts to resolve the dispute between the parties on multiple occasions. On the first two occasions, when the Defendants sought a determination as to whether they were in violation of the law, the Government prevented those suits from going forward on the grounds that they were unripe. Throughout the time that those matters were being litigated, the Defendants operated openly and
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under the direct supervision of the Colorado Board of Medicine 27 and the FDA, even though the Defendants had asserted that the FDA lacked the jurisdiction to regulate them. At the beginning of this case, rather than proceeding into a preliminary injunction hearing, the Government and the Defendants agreed to a stipulation wherein the Defendants agreed to not treat their patients using the Regenexx Procedure for the duration of this litigation. The Defendants have abided by that agreement without the need for the Courts intervention. Thus, the Governments assertion that the Defendants will continue to violate the law unless enjoined ignores the procedural history of the dispute between the parties and fails to recognize the nature of the Defendants. A finding by the Court in this case against the Defendants would mean that the Regenexx Procedure constitutes something other than the practice of medicine. The Courts finding would be published, and it would be a decision of first impression in the United States. Such a decision would unquestionably reach the Colorado Board of Medicine, which will continue to have jurisdiction over the Defendants regardless of the outcome of this case. Thus, should the Court rule that the Regenexx Procedure constitutes something other than the practice of medicine, and should the Defendants continue to treat their patients using it, the Defendants would risk sanction by the Colorado Board of Medicine, which would ultimately have far greater repercussions than any injunction order the Government asks the Court to enter. Given the Defendants untarnished medical records, 28 there is no reasonable likelihood that a violation will occur. As such, a permanent injunction in this case would be an unnecessary exercise of the Courts equitable powers, and the Governments Motion for Summary Judgment should therefore be denied.
27 28
See, Michaels Affidavit at 12; see also, Centeno Affidavit, at 6. See, Centeno Affidavit, at 2.
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CONCLUSION For the foregoing reasons, the Governments Motion for Summary Judgment should be denied. Respectfully submitted,
/s/ William Coffield, Esq. Bar No.: 431126 Counsel for Plaintiff Coffield Law Group, LLP 1330 Connecticut Avenue, NW Suite 220 Washington, DC 20036 (202) 429-4799 (o) (202) 429-3902 (f) wcoffield@coffieldlawgroup.com Mitchell Fuerst, Esq. Florida Bar No. 264598 Andrew S. Ittleman, Esq. Florida Bar No. 802441 Fuerst Ittleman, PL 1001 Brickell Bay Drive, Suite 2002 Miami, FL 33131 305-350-5690 (o) 305-371-8989 (f)
46
Filed 05/25/11 Page 58 of 66
DEFENDANTS RESPONSE TO PLAINTIFFS STATEMENT OF MATERIAL FACTS AS TO WHICH THERE IS NO GENUINE ISSUE AND DEFENDANTS STATEMENT OF MATERIAL FACTS GENUINELY IN DISPUTE Defendants REGENERATIVE SCIENCES LLC (Regenerative), CHRISTOPHER J. CENTENO, M.D. (Dr. Centeno), JOHN R. SCHULTZ, M.D. (Dr. Schultz) and MICHELLE R. CHEEVER (Ms. Cheever), pursuant to Local Rule 7(h), respectfully file this Response to Plaintiffs Statement of Material Facts as to Which there is no Genuine Issue and Statement of Material Facts Genuinely in Dispute. Part I responds, paragraph-by-paragraph, to the Governments statements and either admits or explains why the Governments recitation of the facts is subject to dispute and why genuine issues of material fact persist. Part II identifies the genuine issues of material fact which are present in this case. PART I 1. 2. 3. The Defendants admit this allegation. The Defendants admit this allegation. The Defendants admit this allegation.
1
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4. 5.
The Defendants admit this allegation. The Defendants admit the first sentence. The Defendants deny the second
sentence to the extent that it infers that Ms. Cheever is the person most responsible for the day to day operations of the Regenerative Sciences Laboratory. Answer 7. Dr. Centeno is the person most responsible for the day to day operations of the laboratory. Id. Admit the third sentence, as Ms. Cheever participated in the drafting of the laboratory procedures, but deny that she drafted the procedures alone, deny that she alone is responsible for the procedures being followed by Regeneratives employees, and affirmatively allege that the laboratory director reports to Dr. Centeno, the medical director. Id. 6. The Defendants admit this allegation, but affirmatively allege that such equity
ownership comes by way of stock options granted but not yet exercised. Answer 7. 7. The Defendants admit this allegation, but affirmatively allege that this ownership
comes by way of assignment from Dr. Christopher Centeno, the patent holder of the Procedure. Answer, at 7. 8. The Defendants admit this allegation, but affirmatively allege that other relevant
tissue is removed from the patients body contemporaneously with the removal of the patients stem cells. Centeno Affidavit, at 16. 9. The Defendants deny the first sentence as it mischaracterizes the nature of the
Regenexx Procedure and the relationship between Regenerative and the Centeno Schultz Clinic (the Clinic). First, to perform the Regenexx Procedure, a physician at the Clinic removes transplantable tissue from the patient and provides it to the laboratory to be made ready for reimplantation by the treating physician. Centeno Affidavit, at 13. Likewise, Regenerative does not receive anything, as the Clinic and laboratory operate as one business with shared
2
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employees. Michaels Affidavit, at 10. The Defendants admit the second sentence, and affirmatively allege that each of the reagents and drug products involved in the procedure are routinely used in medical offices and hospitals and either FDA approved or exempt from approval. Centeno Affidavit, at 114. The Defendants admit the remainder of this paragraph. 10. The Defendants admit this allegation, but deny the existence of a cultured cell
product, and affirmatively allege that each of the reagents and drug products involved in the procedure are routinely used in medical offices and hospitals and either FDA approved or exempt from approval. Centeno Affidavit, at 114. 11. The Defendants admit the first sentence, but affirmatively allege that
Regeneratives pamphlet is only made available to patients at the Centeno Schultz Clinic. The Defendants admit the second sentence. 12. 13. product. 14. The Defendants admit the first sentence. The Defendants admit the second The Defendants admit this allegation. The Defendants admit this allegation, but deny the existence of a cultured cell
sentence, but deny the existence of a cultured cell product and deny that cGMP standards are applicable to the Defendants medical practice. The Defendants admit the third sentence. The Defendants deny the fourth sentence and each of its five subparagraphs, and deny that any of the CGMP violations observed during the 2009 inspection are somehow applicable to the Defendants medical practice. 15. The Defendants admit the first sentence. The Defendants admit the second
sentence, but deny the existence of a cultured cell product and deny that cGMP standards are applicable to the Defendants medical practice. The Defendants admit the third sentence. The
3
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Defendants deny the fourth sentence and each of its five subparagraphs, and deny that any of the CGMP violations observed during the 2009 inspection are somehow applicable to the Defendants medical practice. 16. The Defendants deny the first sentence, and specifically deny the existence of a
cultured cell product and the allegation that the Regenexx Procedure constitutes the manufacturing of a product. The Defendants admit the second sentence. The Defendants deny the third sentence as it mischaracterizes the nature of the Regenexx Procedure and the relationship between Regenerative and the Clinic. First, nothing is brought to the Clinic unless and until requested by the treating physician. Second, consistent with Colorado-state law, no patient-related decision is made at the laboratory without the treating physicians direct supervision. Finally, nothing is sent between the laboratory and the clinic, as the Clinic and laboratory operate as one business with shared employees. Michaels Affidavit, at 10. 17. The Defendants admit the content of the label but deny the reminder of the
allegation as it mischaracterizes the nature of the Regenexx Procedure and the relationship between Regenerative and the Clinic. Specifically, the Regenexx Procedure does not constitute a distribution or shipping activity, as the Clinic and laboratory operate as one business with shared employees. Michaels Affidavit, at 10. Rather than the Regenexx Procedure constituting a distribution or shipping activity, once the patients expanded, autologous tissues are ready for reimplantation, a common employee of the laboratory and clinic brings them to the treating physician for administration to the patient from whom they were removed. At one time this meant walking them down a hallway. Later, when the clinic outgrew its original space, this required the employee to bring them from a separate building. Centeno Affidavit, at 58.
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18.
The Defendants admit the content of the label but deny the reminder of the
allegation as it mischaracterizes the nature of the Regenexx Procedure and the relationship between Regenerative and the Clinic. Specifically, the Regenexx Procedure does not constitute a distribution or shipping activity, as the Clinic and laboratory operate as one business with shared employees. Michaels Affidavit, at 10. Rather than the Regenexx Procedure constituting a distribution or shipping activity, once the patients expanded, autologous tissues are ready for reimplantation, a common employee of the laboratory and clinic brings them to the treating physician for administration to the patient from whom they were removed. At one time this meant walking them down a hallway. Later, when the clinic outgrew its original space, this required the employee to bring them from a separate building. Centeno Affidavit, at 58. 19. The Defendants admit this allegation, but deny that the existence of a cultured
cell product and deny that an NDA is required for the Defendants medical procedure. Answer, 20. 20. The Defendants admit this allegation, but deny that the existence of a cultured
cell product and deny that an IND is required for the Defendants medical procedure. Answer, 21. 21. The Defendants admit this allegation, but deny that the existence of a cultured
cell product and deny that a BLA is required for the Defendants medical procedure. Answer, 25. 22. The Defendants admit that doxycycline is used in the Regenexx Procedure, but
deny that they manufacture anything and deny the existence of a cultured cell product.
Filed 05/25/11 Page 63 of 66
23.
The Defendants admit that doxycycline purchased from vendors located outside
of the State of Colorado is used in the Regenexx Procedure, but deny that they manufacture anything and deny the existence of a cultured cell product. 24. The Defendants admit this allegation, but affirmatively allege that the
Government itself has explained that the untitled letter was tentative and without a direct legal effect on Regenerative. Answer, 41. PART II 1. The Regenexx Procedure constitutes the practice of medicine. Freeman
Affidavit, at 8; Henderson Affidavit, at 4; Angle Affidavit, at 17; Centeno Affidavit, at 4. 2. The Centeno Schultz Clinic (Clinic), when performing the Regenexx
Procedure, is engaged in the practice of medicine. Id. 3. Drs. Centeno and Schultz, when performing the Regenexx Procedure, are
engaged in the practice of medicine. Id. 4. Regenerative Sciences LLC provides laboratory and ancillary medical services to
the Clinic and Drs. Centeno and Schultz when it cultures autologous HCT/Ps for patients; Id. 5. The Regenexx Procedure was developed in conformance with all applicable
laws and regulations governing the development of medical therapies. Centeno Affidavit, at Centeno Affidavit, at 116-126. 6. The Regenexx Procedure does not constitute the shipment or distribution of a
product. Counterclaims, at 19; Freeman Affidavit, at 9; Angle Affidavit, at 17. 7. The Defendants do not manufacture a product. Counterclaims, at 18; Freeman
Affidavit, at 9; Angle Affidavit, at 17.
Filed 05/25/11 Page 64 of 66
8.
The stem cells used in the Regenexx Procedure are not drugs, but human tissue,
no different than any other body part, and used exclusively for the patients from whom they were withdrawn. Counterclaims, at 17. 9. The Regenexx Procedure does not constitute the more-than-minimal-
manipulation of HCT/Ps. Centeno Affidavit, at 57. 10. The Regenexx Procedure does not change the relevant biological characteristics
of the patients stem cells. Centeno Affidavit, at 57. 11. The Regenexx Procedure constitutes the lawful compounding of Genzymes
Carticel pursuant to 21 U.S.C. 353a. Counterclaims, at 11, passim. 12. The Regenexx Procedure does not constitute the adulteration of a drug or
biological product. Centeno Affidavit, at 57. 13. The Regenexx Procedure does not constitute the misbranding of a drug or
biological product. Centeno Affidavit, at 58-60. 14. The Regenexx Procedure does not substantially affect interstate commerce.
Affirmative Defense III. 15. Regenerative Sciences LLC and the Centeno Schultz Clinic operate as one
business when performing laboratory and ancillary medical services for the Clinic and Drs. Centeno and Schultz. Michaels Affidavit, at 10. Respectfully submitted,
/s/ William Coffield, Esq. Bar No.: 431126 Counsel for Plaintiff Coffield Law Group, LLP 1330 Connecticut Avenue, NW
7
Filed 05/25/11 Page 65 of 66
Suite 220 Washington, DC 20036 (202) 429-4799 (o) (202) 429-3902 (f) wcoffield@coffieldlawgroup.com Mitchell Fuerst, Esq. Florida Bar No. 264598 Andrew S. Ittleman, Esq. Florida Bar No. 802441 Fuerst Ittleman, PL 1001 Brickell Bay Drive, Suite 2002 Miami, FL 33131 305-350-5690 (o) 305-371-8989 (f)
Filed 05/25/11 Page 66 of 66
CERTIFICATE OF SERVICE I certify that on the 25th day of May, 2011, the undersigned caused a true and correct copy of the above-entitled Defendants Opposition to Plaintiffs Motion for Summary Judgment, and attached Memorandum of Points and Authorities, to be served via the District Courts Electronic Filing System upon all counsel of record. /s/ William Coffield, Esq. Bar No.: 431126 Counsel for Plaintiff Coffield Law Group, LLP 1330 Connecticut Avenue, NW Suite 220 Washington, DC 20036 (202) 429-4799 (o) (202) 429-3902 (f) wcoffield@coffieldlawgroup.com

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MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFFS MOTION FOR SUMMARY JUDGMENT

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