United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 21, 2013 Decided February 4, 2014
No. 12-5254
UNITED STATES OF AMERICA,
APPELLEE
v.
REGENERATIVE SCIENCES, LLC, A CORPORATION, ET AL.,
APPELLANTS
Appeal from the United States District Court
for the District of Columbia
(No. 1:10-cv-01327)
Andrew S. Ittleman argued the cause for appellants. With
him on the briefs was Mitchell S. Fuerst.
Jonathan W. Emord was on the brief for amicus curiae
American Association of Orthopaedic Medicine in support of
appellants.
Lawrence J. Joseph was on the brief for amicus curiae
Association of American Physicians and Surgeons, Inc., in
support of appellants.
James S. Turner was on the brief for amicus curiae Tim
Moore in support of appellants.
2
Abby C. Wright, Attorney, U.S. Department of Justice,
argued the cause for appellee. With her on the brief were
Stuart F. Delery, Principal Deputy Assistant Attorney
General, Ronald C. Machen, Jr., U.S. Attorney, Mark B.
Stern, Attorney, William B. Shultz, Acting General Counsel,
Food and Drug Administration, and Eric M. Blumberg,
Deputy Chief Counsel. Alisa B. Klein, Attorney, U.S.
Department of Justice, entered an appearance.
Before: GRIFFITH and SRINIVASAN, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge GRIFFITH.
GRIFFITH, Circuit Judge: In this civil enforcement action,
we must decide whether the appellants—three individuals and
a related corporate entity—violated federal laws regulating
the manufacture and labeling of drugs and biological products
by producing, as part of their medical practice, a substance
consisting of a mixture of a patient’s stem cells and the
antibiotic doxycycline. Because we conclude that they did, we
affirm the district court’s judgment and the permanent
injunction it entered against appellants.
I
A
This case involves two statutes under which the Food and
Drug Administration (FDA) regulates the healthcare industry:
the Federal Food, Drug & Cosmetic Act (FDCA), 21 U.S.C.
§ 301 et seq., and the Public Health Service Act (PHSA), 42
U.S.C. § 201 et seq. Those statutes promote the safety of
drugs and biological products, respectively, by setting forth
detailed requirements for how such substances are to be
3
manufactured and labeled. See 21 U.S.C. §§ 351 (FDCA
manufacturing requirements), 352 (FDCA labeling
requirements); 42 U.S.C. § 262(j) (incorporating by reference
most of the FDCA’s provisions, including its manufacturing
and labeling requirements, into the PHSA). Drugs and
biological products not satisfying those requirements are
deemed “adulterated” or “misbranded,” see 21 U.S.C. §§ 351,
352, 353(b)(4); 42 U.S.C. § 262(j), and doing any act that
causes a drug or biological product to be adulterated or
misbranded is a violation of federal law, 21 U.S.C. § 331(k);
42 U.S.C. § 262(j). The FDA may seek an injunction to
prohibit such violations. 21 U.S.C. § 332(a); 42 U.S.C.
§ 262(j).
B
The substance at issue in this case is produced by
appellants Dr. Christopher Centeno, Dr. John Schultz,
Michelle Cheever, and Regenerative Sciences, LLC, as part of
a medical therapy that they market as the “Cultured Regenexx
Procedure” (the Procedure). Drs. Centeno and Schultz, who
practice medicine together at the Centeno-Schultz Clinic in
Colorado, jointly developed the Procedure to treat patients’
orthopedic conditions. They are the majority shareholders of
Regenerative Sciences, which they founded and which, in
turn, owns the Procedure and licenses it exclusively to the
Centeno-Schultz Clinic. Michelle Cheever is the laboratory
director for Regenerative Sciences.
The Procedure begins with the extraction of a sample of a
patient’s bone marrow or synovial fluid. From that sample,
Regenerative Sciences isolates mesenchymal stem cells
(MSCs), which are capable of differentiating into bone and
cartilage cells. The MSCs are then placed in a solution to
culture them—that is, to cause them to divide and proliferate.
4
Other substances are sometimes added to the solution that
affect the MSCs’ differentiation. The culturing process
determines the growth and biological characteristics of the
resulting cell population. When the MSCs are sufficiently
numerous for re-injection, they are combined with
doxycycline, an antibiotic obtained in interstate commerce
and used to prevent bacterial contamination of the MSCs. The
resulting mixture (the Mixture) is injected into the patient
from whom the stem cell sample was initially taken, at the site
of the damaged tissue.
Appellants promote the Procedure as an alternative to
surgery for various orthopedic conditions and diseases. In
court filings, they have described the Procedure as a
“treatment [for] orthopedic injuries and arthritis” and for
“musculoskeletal and spinal injury.” Their promotional
materials recommend the Procedure for treatment of
osteoarthritis, non-healing bone fractures, chronic bulging
lumbar discs, and soft tissue injuries.
In August 2010, the government filed this action for a
permanent injunction against appellants, alleging that the
Mixture is both a drug and a biological product that is
adulterated and misbranded in violation of § 331(k) of the
FDCA and § 262(j) of the PHSA, which incorporates § 331(k)
by reference. Appellants counterclaimed, asserting that the
Mixture is not subject to federal regulation and that, even if it
is, the FDA’s effort to regulate the Mixture is defective under
both the PHSA and the Administrative Procedure Act (APA),
5 U.S.C. § 706(2).
The district court granted the government’s motion for
summary judgment and dismissed appellants’ counterclaims,
holding that they had violated the FDCA and the PHSA.
United States v. Regenerative Scis., LLC,
878 F. Supp. 2d
5
248, 263 (D.D.C. 2012). Then, finding a “cognizable danger
of a recurrent violation,” the district court entered a
permanent injunction prohibiting appellants from committing
further violations of the FDCA’s adulteration and
misbranding restrictions. Id. at 262-63 (internal quotation
marks omitted). Appellants timely appealed both orders.
We have jurisdiction to review the district court’s orders
under 28 U.S.C. § 1291. We review the grant of summary
judgment and dismissal of appellants’ counterclaims de novo,
“drawing all reasonable inferences from the evidence in the
light most favorable to the nonmoving party,” Geleta v. Gray,
645 F.3d 408
, 410 (D.C. Cir. 2011), and affirming only if
“there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law,” FED. R.
CIV. P. 56(a). We review the district court’s entry of a
permanent injunction for abuse of discretion and its factual
findings for clear error. United States v. Philip Morris USA
Inc.,
566 F.3d 1095
, 1110 (D.C. Cir. 2009) (per curiam).
II
Appellants’ principal argument is that the Mixture is not
subject to regulation under the FDCA or PHSA because it is
neither a drug nor a biological product but is, rather, a
medical procedure. The text of those statutes forecloses this
argument.
The FDCA defines a “drug” as any “article[] intended for
use in the diagnosis, cure, mitigation, treatment, or prevention
of disease” or “intended to affect the structure or any function
of the body.” 21 U.S.C. § 321(g)(1); see also 21 C.F.R.
§ 201.128 (providing that a drug’s intended use is shown by
“the objective intent of the persons legally responsible for the
labeling of [the] drug[],” which “may . . . be shown by
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labeling claims, advertising matter, or oral or written
statements by such persons or their representatives”). The
PHSA defines “biological product” in similarly broad terms
as any “virus, therapeutic serum, toxin, antitoxin, vaccine,
blood, blood component or derivative . . . or analogous
product . . . applicable to the prevention, treatment, or cure of
a disease or condition of human beings.” 42 U.S.C.
§ 262(i)(1). Both of these wide-ranging definitions clearly
apply to the Mixture, an article derived mainly from human
tissue and intended to treat orthopedic diseases and to affect
musculoskeletal function. Indeed, appellants do not actually
dispute that the plain language of the statutes compels this
conclusion.
Rather, appellants urge us to construe the FDCA in light
of purported federalism concerns. 1 But appellants’ concerns
lack merit. They boil down to the following syllogism: the
FDCA was not intended to infringe on states’ traditional role
in regulating the practice of medicine; the Procedure fits
Colorado’s statutory definition of the “practice of medicine”;
therefore, the FDA’s regulation of the Procedure exceeds the
FDA’s authority under the FDCA. This syllogism is flawed
twice over.
First, it misapprehends what this case is about.
Notwithstanding appellants’ attempt to characterize this case
1
Because the PHSA simply incorporates the FDCA’s
substantive provisions by reference, the scope of the FDCA’s
provisions is determinative of the reach of the PHSA’s provisions
as well. Thus, the parties’ arguments and our discussion focus on
the scope and application of the FDCA—keeping in mind that to
adulterate and misbrand a substance that is both a drug and a
biological product violates the PHSA as well as the FDCA.
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as an effort by the FDA to “restrict[] the use of an autologous
stem cell procedure,” 2 Appellants’ Br. 8 (emphasis added),
the focus of the FDA’s regulation is the Mixture. That is, the
FDA does not claim that the procedures used to administer the
Mixture are unsafe; it claims that the Mixture itself is unsafe.
Appellants’ arguments about the practice-of-medicine
exemption are therefore wide of the mark.
Second, appellants are wrong to suggest that the scope of
the FDCA depends on state-by-state definitions of the
“practice of medicine.” The FDCA enacts a comprehensive,
uniform regulatory scheme for the distribution of drugs. The
scheme’s breadth—and, more specifically, its applicability to
doctors—is evident in the fact that the FDCA carves out
certain exceptions from its requirements for doctors who
manufacture and administer drugs in the course of their
professional practice. See, e.g., 21 U.S.C. § 360(g)(2)
(exempting licensed healthcare practitioners engaged in
certain activities from the FDCA’s registration requirements);
id. § 374(a)(2)(B) (narrowing the FDA’s ability to review the
records of licensed healthcare practitioners “who
manufacture, prepare, propagate, compound, or process drugs
. . . solely for use in the course of their professional practice”).
Those exceptions would be unnecessary if the FDCA did not
otherwise regulate the distribution of drugs by licensed
physicians. See United States v. Evers,
643 F.2d 1043
, 1048
(5th Cir. 1981) (“[W]hile the [FDCA] was not intended to
regulate the practice of medicine, it was obviously intended to
control the availability of drugs for prescribing by
physicians.”). Appellants’ construction of the FDCA, by
contrast, would allow states to gut the FDCA’s regulation of
2
An “autologous” stem cell procedure is one in which cells
are implanted back into the individual from whom they were
initially taken. See 21 C.F.R. § 1271.3(a).
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doctors, and thereby create an enormous gap in the FDCA’s
coverage, by classifying the distribution of drugs by doctors
as the practice of medicine. Given Congress’s intent that the
FDCA’s “coverage be as broad as its literal language
indicates,” United States v. An Article of Drug . . . Bacto-
Unidisk,
394 U.S. 784
, 798 (1969), such a construction is not
tenable.
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