On September 27, the United States Court of Appeals for the 9th Circuit, in U.S. v. California Stem Cell Treatment Center, Inc., overturned a lower court decision and awarded FDA a win in the Agency's regulatory fight against clinics that produce and administer stem cell mixtures without FDA approval. The case was born out of a 2017 inspection of the clinic and its practices of obtaining tissue from a patient, processing it, and then administering a portion of it back to the same patient. Under FDA's interpretation of its regulations, the steps that the clinic took created a “drug” that required FDA approval. However, the clinic claimed that its process did not create a drug or, if it did, that it falls under the “same surgical procedure” (SSP) exception within FDA's regulations.

The 9th Circuit determined that “[b]ased on the plain text of the statute,” the clinic had created a drug.  However, the Court also found that “neither party's textual arguments fully resolve the interpretive dispute” of the scope of the SSP exception, and it therefore “turn[ed] to the regulations' purpose and history.” In doing so, the Court found that the clinic's activities did not meet the appropriate standard for the SSP exception. Significantly, although Circuit Judge Michelle Friedland concurred with the Court's conclusion about the SSP exception, she concluded “that the SSP exception provision is ambiguous, and that we owe deference to the FDA's interpretation of it.”

The 9th Circuit's decision helped resolve what had been a California-Florida split in the case law involving FDA's regulatory oversight of cells and tissues. As a result, FDA may feel emboldened to take more regulatory actions against clinics that advertise procedures using a patient's cells or tissues to treat any of a variety of medical conditions.

However, the 9th Circuit did not reference the recent Loper Bright decision that overturned Agency deference under Chevron. The Court relied upon the history of FDA's cell and tissue regulations, while Circuit Judge Friedland acknowledged that courts are not in the position to assess protocols, procedures, or uses of cells and tissues that warrant regulation. It remains to be seen whether the logic applied by the 9th Circuit will stand the test of time.