Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-13-05139/USCOURTS-caDC-13-05139-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 8, 2014 Decided September 26, 2014 

No. 13-5139 

IVY SPORTS MEDICINE, LLC, 

APPELLANT

v. 

SYLVIA MATHEWS BURWELL, SECRETARY OF HEALTH AND 

HUMAN SERVICES (IN HER OFFICIAL CAPACITY), ET AL., 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:11-cv-01006) 

Matthew M. Hoffman argued the cause for appellant. 

With him on the briefs was Mark A. Heller. 

Adam C. Jed, Attorney, U.S. Department of Justice, 

argued the cause for appellees. With him on the brief were 

Stuart F. Delery, Assistant Attorney General, Ronald C. 

Machen, Jr., U.S. Attorney, and Scott R. McIntosh, Attorney. 

Before: GRIFFITH, KAVANAUGH, and PILLARD, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge

KAVANAUGH, with whom Circuit Judge GRIFFITH joins. 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 1 of 42
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Dissenting opinion filed by Circuit Judge PILLARD. 

KAVANAUGH, Circuit Judge: This case concerns the 

Food and Drug Administration’s regulation – and subsequent 

re-regulation – of a medical device called the Collagen 

Scaffold, an absorbable surgical mesh that is designed for use 

in knee-replacement surgeries. In December 2008, the 

manufacturer of the scaffold, ReGen Biologics, obtained FDA 

clearance to market the device. FDA’s clearance of the 

scaffold soon came under fire in the press and from some 

Members of Congress amid allegations that the process had 

been tainted by improper political pressure from other

Members of Congress. An internal FDA investigation 

concluded that some procedural irregularities had occurred 

during the agency’s review of the device. 

Following the internal investigation, FDA did not 

exercise its clear statutory authority to reclassify the device. 

Reclassification would force the device off the market and 

require the device to undergo the extensive pre-market 

approval process before it could again be marketed. That 

statutory reclassification process generally requires FDA to 

provide notice and an opportunity for comment before the 

agency reclassifies a device. FDA here did not give notice 

and opportunity for comment. Rather, FDA short-circuited 

the statutory reclassification process by relying on what it 

called its inherent reconsideration authority. Asserting that 

inherent authority, FDA reevaluated the scaffold and 

concluded that the agency had erred in allowing the device to 

be sold. FDA issued an order rescinding its clearance 

decision, forcing ReGen to immediately pull the scaffold from 

the market. ReGen subsequently filed for bankruptcy. 

 ReGen and its successor in interest, Ivy Sports Medicine, 

challenged FDA’s decision to rescind the clearance 

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determination as procedurally flawed. The District Court 

granted summary judgment to FDA, and Ivy now appeals. 

Because we conclude that FDA did not follow the proper 

statutory procedure for reclassifying a device, we reverse the 

judgment of the District Court. We direct the District Court 

to vacate FDA’s decision and to remand to the agency for 

further proceedings. 

I 

A 

In 1976, Congress amended the Food, Drug, and 

Cosmetic Act, 21 U.S.C. § 301 et seq., to grant FDA authority 

to regulate medical devices intended for human use. Devices 

fall into one of three categories – Class I, Class II, or Class 

III. A device’s classification is determined based on “the 

degree of regulation thought necessary to provide reasonable 

assurance of each device’s ‘safety and effectiveness.’” 

Contact Lens Manufacturers Association v. FDA, 766 F.2d 

592, 594 (D.C. Cir. 1985). 

The classification of a device matters because the three 

classes trigger different approval processes. In order to enter 

the market, manufacturers of Class III devices first must go 

through the “premarket approval” process. “That process 

generally requires extensive clinical research on a new device 

to ensure the device’s safety, and it often takes significant 

time.” Cytori Therapeutics, Inc. v. FDA, 715 F.3d 922, 923 

(D.C. Cir. 2013). Class I and II devices are considered to 

pose fewer risks and are therefore able to enter the market 

more easily. Rather than requiring pre-market approval, Class 

I and II devices are subject either to “general controls” such 

as labeling restrictions (for Class I devices), or a combination 

of general controls and “special controls,” such as 

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performance standards (for Class II devices). See 21 U.S.C. 

§ 360c(a)(1)(A)(i), (a)(1)(B). 

How does a device initially get classified into Class I, II, 

or III? The Act makes Class III the default category for new 

(that is, post-1976) medical devices, unless and until FDA 

finds that one of two conditions has been met. See id.

§ 360c(f)(1). First, FDA may determine that a device is 

“substantially equivalent” to a pre-existing Class I or II 

device. Id. § 360c(f)(1)(A)(ii). To be substantially equivalent 

to a pre-existing Class I or II device, the new device must 

have “the same intended use as the predicate device,” and 

either (i) have “the same technological characteristics as the 

predicate device” or (ii) be shown to be as safe and effective 

as the predicate device. Id. § 360c(i)(1)(A). Second, 

regardless of whether a device is substantially equivalent to 

an existing device, FDA may make a de novo determination 

that a device meets the statutory definitions of Class I or II. 

See id. § 360c(f)(1)(B), (f)(2)-(3). That determination may be 

made on FDA’s own initiative or in response to the device 

manufacturer’s petition for de novo classification. 

Here is how it works in practice: Classification of a new 

medical device into Class I or II is usually obtained by 

submitting to FDA a “premarket notification,” which in turn 

triggers the FDA’s substantial equivalence review. See id.

§ 360(k). In the pre-market notification, the manufacturer 

states the new device’s intended use, identifies the predicate 

devices to which the new device is substantially equivalent, 

and offers a proposed classification. See id.; 21 C.F.R. 

§ 807.87. If FDA agrees that the new device is substantially 

equivalent to an existing Class I or Class II device, it issues a 

classification order allowing the device to be marketed subject 

to appropriate restrictions. See 21 C.F.R. § 807.100. But if 

FDA disagrees with the proposed classification, the device 

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remains in Class III and must go through the pre-market 

approval process, unless FDA subsequently approves a 

petition for de novo classification. See 21 U.S.C. 

§ 360c(f)(3)(A). 

 After a device has been initially classified, there is also a 

process for FDA reclassification. The Act includes a 

provision, Section 360c(e), allowing FDA to change the 

classification given to a device. See 21 U.S.C. § 360c(e). 

During the time period relevant to this litigation, that 

provision stated: “Based on new information respecting a 

device, the Secretary may, upon his own initiative or upon 

petition of an interested person, by regulation (A) change such 

device’s classification, and (B) revoke, because of the change 

in classification, any regulation or requirement in 

effect . . . with respect to such device.” Id. § 360c(e)(1) 

(2011). Because reclassification must be done “by 

regulation,” it must be done in accord with certain procedural 

requirements, including notice and comment. See FDA Br. 

36; 21 U.S.C. § 360c(e); 21 C.F.R. § 860.130(c). 

B 

 ReGen Biologics, Inc. was a New Jersey-based medical 

device manufacturer. In 1993, ReGen began research on a 

new device for use in certain knee-repair surgeries. The fruit 

of that labor, called the Collagen Scaffold, is a crescentshaped surgical mesh made of bovine collagen. According to 

ReGen, the Collagen Scaffold was intended to reinforce and 

repair the knee cartilage remaining after knee surgery and to 

provide a scaffold on which new tissue could grow. 

In 2004, ReGen submitted a Class III premarket approval 

application but subsequently withdrew it and sought to 

proceed through the quicker premarket notification process 

for Class I or Class II devices. In 2005, ReGen submitted to 

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FDA its first pre-market notification for the Collagen 

Scaffold. Shortly thereafter, FDA issued a letter finding that 

the scaffold was not substantially equivalent to its claimed 

predicates. FDA eventually agreed to convert that finding 

into a request for additional information. After receiving the 

requested information, FDA again determined that the 

scaffold was not substantially equivalent. 

In late 2006, ReGen submitted a second pre-market 

notification with revised labeling. Following more back-andforth between ReGen and FDA, the agency issued another 

finding that the Collagen Scaffold was not substantially 

equivalent to existing devices. A few months after this 

second decision, four members of New Jersey’s congressional 

delegation wrote to the FDA Commissioner expressing 

concern about FDA’s process for reviewing the scaffold. 

Representatives from ReGen later met with the Commissioner 

and with Dr. Daniel Schultz, the director of FDA’s Center for 

Devices and Radiological Health, the office that oversees 

device approval decisions. Although the FDA officials 

declined to take further action on the denied application, Dr. 

Schultz advised ReGen that it could submit a new pre-market 

notification with additional revisions. 

ReGen took Dr. Schultz up on his suggestion and 

submitted a third pre-market notification in July 2008. As 

they had before, FDA’s staff reviewers recommended that the 

scaffold be found not substantially equivalent to the claimed 

predicates. Rather than issue a final decision, however, Dr. 

Schultz decided to convene and seek input from an expert 

advisory panel. That panel ultimately concluded that the 

scaffold “was as safe and effective as the predicate devices.” 

FOOD & DRUG ADMINISTRATION, ORTHOPAEDIC AND 

REHABILITATION DEVICES PANEL MEETING – NOVEMBER 14,

2008 (SUMMARY). Based on the panel’s conclusions and 

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other information in the administrative record, Dr. Schultz 

issued a letter finding that ReGen had demonstrated 

substantial equivalence and classifying the Collagen Scaffold 

into Class II. 

ReGen’s victory would prove short-lived. A few months 

after ReGen received clearance to market the Collagen 

Scaffold, the Wall Street Journal published an article alleging 

that political pressure had skewed FDA’s review process. See

Alicia Mundy, Political Lobbying Drove FDA Process, WALL 

ST. J., Mar. 6, 2009, at A1. The same day that the Wall Street 

Journal article appeared, a United States Senator contacted 

FDA to raise concerns that ReGen had been allowed to play 

an outsized and inappropriate role in the process. Other 

Members of Congress later raised similar concerns. And in 

April 2009, at the same time ReGen was preparing for its first 

commercial distributions of the scaffold in the United States, 

a group of FDA employees wrote a letter to President Obama 

accusing Dr. Schultz and the FDA Commissioner of 

improperly influencing the results of the agency’s review. 

Faced with those and other allegations of impropriety, 

FDA’s newly appointed Acting Commissioner ordered an 

internal investigation of the Collagen Scaffold’s review 

process. The investigation culminated in a report issued in 

September 2009. See FOOD & DRUG ADMINISTRATION,

REVIEW OF THE REGEN MENAFLEX: DEPARTURES FROM 

PROCESSES, PROCEDURES, AND PRACTICES LEAVE THE BASIS 

FOR A REVIEW DECISION IN QUESTION, PRELIMINARY REPORT

(2009). The report identified “multiple departures from 

processes, procedures, and practices” that raised “serious 

questions about whether the integrity (as well as the quality) 

of the review process was compromised.” Id. at 1, 22. 

Among other things, the report criticized ReGen’s access to 

high-level FDA officials, and those officials’ involvement in 

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the decisionmaking process; communications between 

Members of Congress and the FDA Commissioner; and 

ReGen’s level of involvement in the expert panel 

proceedings. Although the report stopped short of concluding 

that the review process had been compromised, it 

recommended reevaluation of Dr. Schultz’s decision to clear 

the Collagen Scaffold. Id. at 23. 

Following the report’s publication, FDA appointed a new 

team to review the Collagen Scaffold. That team concluded 

that the device was not substantially equivalent to its claimed 

predicates. Dr. Jeffrey Shuren, who had succeeded Dr. 

Schultz as head of FDA’s Center for Devices and 

Radiological Health, then convened a second expert panel. 

The second panel’s findings were mixed; although the 

scaffold was “generally considered safe,” the panel members 

raised “some concerns about efficacy.” J.A. 1020. In 

October 2010, Dr. Shuren notified ReGen that the clearance 

of the scaffold “was in error,” and that to “rectify this error” 

FDA would rescind its substantial equivalence determination. 

Letter from Dr. Jeffrey Shuren, Director, Center for Devices 

and Radiological Health, to Dr. Gerald E. Bisbee, Jr., 

Chairman and Chief Executive Officer, ReGen Biologics, Inc. 

(Oct. 14, 2010). That decision, in turn, meant that the 

Collagen Scaffold would be in Class III and have to go 

through the extensive pre-market approval process to be 

marketed again. An official rescission order followed in 

March 2011, forcing ReGen to withdraw the Collagen 

Scaffold from the market. 

ReGen then filed this suit in the District Court seeking 

review of FDA’s decision pursuant to the Administrative 

Procedure Act. See 5 U.S.C. § 702. During the pendency of 

the case, ReGen went bankrupt and Ivy Sports Medicine, LLC 

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became the successor in interest to ReGen and was substituted 

as plaintiff. 

Before the District Court, Ivy argued that FDA’s 

rescission order was unlawful. Of relevance here, Ivy 

asserted that FDA did not have inherent authority to rescind 

its substantial equivalence determination; rather, according to 

Ivy, FDA should have exercised its statutory reclassification 

authority if it wanted to change the original classification 

decision. The District Court disagreed and granted summary 

judgment to FDA. Our review of the District Court’s decision 

is de novo. See Virginia Department of Medical Assistance 

Services v. HHS, 678 F.3d 918, 921 (D.C. Cir. 2012). 

II 

FDA asserts that it had “inherent authority” to rescind its 

determination that the Collagen Scaffold was substantially 

equivalent to devices already in the market. Rescinding that 

determination had the effect of putting the device into Class 

III, and thus required completion of the extensive pre-market 

approval process before the scaffold could be marketed again. 

FDA used its inherent authority to rescind rather than its 

statutory reclassification authority. As a result, FDA did not 

go through the procedures – including notice and comment –

that are required for reclassification. 

The Act does not contain an express provision granting 

FDA authority to reconsider its substantial equivalence 

determinations. But as FDA notes, administrative agencies 

are assumed to possess at least some inherent authority to 

revisit their prior decisions, at least if done in a timely 

fashion. See, e.g., American Methyl Corp. v. EPA, 749 F.2d 

826, 835 (D.C. Cir. 1984) (“We have held that agencies have 

an inherent power to correct their mistakes by reconsidering 

their decisions within the period available for taking an 

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appeal.”); Mazaleski v. Treusdell, 562 F.2d 701, 720 (D.C. 

Cir. 1977) (“We have many times held that an agency has the 

inherent power to reconsider and change a decision if it does 

so within a reasonable period of time.”) (quoting Gratehouse 

v. United States, 512 F.2d 1104, 1109 (Ct. Cl. 1975)); 

Albertson v. FCC, 182 F.2d 397, 399 (D.C. Cir. 1950) (“in the 

absence of any specific limitation,” reconsideration available 

“within the period for taking an appeal”); see generally

Daniel Bress, Note, Administrative Reconsideration, 91 VA.

L. REV. 1737 (2005). As this Court explained in an oftrepeated framing of the principle, inherent authority for 

timely administrative reconsideration is premised on the 

notion that the “power to reconsider is inherent in the power 

to decide.” Albertson, 182 F.2d at 399. 

But we have also recognized that any inherent 

reconsideration authority does not apply in cases where 

Congress has spoken. In American Methyl Corp. v. EPA, 749 

F.2d 826 (D.C. Cir. 1984), we held that an agency may not 

rely on inherent reconsideration authority “when Congress 

has provided a mechanism capable of rectifying mistaken 

actions.” 749 F.2d at 835. In such circumstances, we 

concluded, “it is not reasonable to infer authority to 

reconsider agency action.” Id.; see also New Jersey v. EPA, 

517 F.3d 574, 583 (D.C. Cir. 2008) (“Congress . . . 

undoubtedly can limit an agency’s discretion to reverse 

itself”). Put more simply, our cases assume that Congress 

intends to displace an administrative agency’s inherent 

reconsideration authority when it provides statutory authority 

to rectify the agency’s mistakes. 

Ivy argues that this case falls squarely within the ambit of 

cases like American Methyl. In particular, Ivy contends that 

Congress precluded FDA from exercising inherent authority 

to rescind substantial equivalence determinations by creating 

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in 21 U.S.C. § 360c(e) a specific statutory mechanism to 

correct alleged device classification errors. As relevant here, 

that provision states: “Based on new information respecting a 

device, the Secretary may, upon his own initiative or upon 

petition of an interested person, by regulation (A) change such 

device’s classification, and (B) revoke, because of the change 

in classification, any regulation or requirement in effect under 

section 360d or 360e of this title with respect to such device.” 

21 U.S.C. § 360c(e)(1) (2011). To do so, the agency must 

first give notice and opportunity for comment. See FDA Br. 

36; 21 U.S.C. § 360c(e); 21 C.F.R. § 860.130(c). 

For its part, FDA acknowledges that it could have used 

the statutory reclassification procedure in Section 360c(e) to 

reclassify the Collagen Scaffold into Class III and thereby 

remove it from the market. See FDA Br. 39. But FDA argues 

that nothing in the Act or the American Methyl line of cases 

bars the agency from relying on its inherent reconsideration 

authority for the underlying substantial equivalence 

determination. In FDA’s view, Ivy is conflating the 

underlying substantial equivalence determination with the 

potential consequence of that decision – classification into 

Class I, II, or III. 

Although counsel for FDA has advanced a forceful case 

for the agency’s position, we ultimately think that Ivy has the 

better of the argument. It may well be correct, as FDA 

contends, that the statutory procedures outlined in Sections 

360c(f) (for determining substantial equivalence) and 360c(e) 

(for reclassification) are not mirror images of one another. 

But the fundamental question both provisions address – what 

is the appropriate classification of a new device? – is the 

same. And as a practical matter, the decision to revoke a 

substantial equivalence determination in circumstances like 

those present here is a de facto reclassification of the device 

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into Class III, at least absent other FDA action. If FDA finds 

that a device is no longer substantially equivalent to any 

existing Class I or Class II devices, that device is 

automatically reclassified as a Class III device. In other 

words, to revoke a substantial equivalence determination is to 

“change the classification,” 21 U.S.C. § 360c(e)(2), of that 

device. 

FDA’s statutory reclassification authority covers the 

same concerns, and achieves the same result, as revocation of 

a substantial equivalence determination. Therefore, as in 

American Methyl, “Congress has provided a mechanism 

capable of rectifying mistaken actions,” and it would be 

unreasonable under this statutory scheme to infer that FDA 

retains inherent authority to short-circuit or end-run the 

carefully prescribed statutory reclassification process in order 

to correct the same mistake. Indeed, accepting FDA’s 

assertion of inherent authority would render Section 360c(e) a 

dead letter in many cases because FDA could often reclassify 

a device without complying with the procedural requirements 

of that provision, in particular notice and comment. 

In short, because FDA concededly could have used 

Section 360c(e) to reclassify the Collagen Scaffold into Class 

III, it could not rely on a claimed inherent reconsideration 

authority to short-circuit that statutory process and revoke its 

prior substantial equivalence determination to achieve that 

same result. 

The practical significance of our holding on this point is 

limited but important. To reclassify under the statute, FDA 

must go through certain procedural hoops, including notice 

and comment. See FDA Br. 36. FDA obviously thinks notice 

and comment is unnecessary here, a not-uncommon sentiment 

among agencies that want to take action more promptly. But 

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notice and comment helps to prevent mistakes, because 

agencies receive more input and information before they 

make a final decision. And notice and comment also helps 

ensure that regulated parties receive fair treatment, a value 

basic to American administrative law. So notice and 

comment, while somewhat burdensome, serves important 

purposes both generally and in this statute.1

III 

FDA responds that even if Section 360c(e) is the kind of 

statutory provision that can displace inherent reconsideration 

authority, the American Methyl principle still would not apply 

on the particular facts of this case. American Methyl held that 

EPA had erred by failing to use the statutory procedure for 

revoking fuel-marketing waivers. But in a footnote, the Court 

also stated that it was not expressing any view “as to EPA’s 

power to revoke a waiver obtained through fraud, ex parte 

contacts, or other misconduct tainting the original record and 

thereby affecting the integrity of an agency’s proceedings.” 

749 F.2d at 834 n.51. The Court went on to note that in the 

case before it there was no evidence of such fraud or 

misconduct in the administrative record. Id. 

 1

 As both a legal and a practical matter, the difference between 

our approach and the dissent’s approach is exceedingly narrow. As 

a legal matter, we simply read this particular statutory notice and 

comment scheme as one that, under our American Methyl 

precedent, negates FDA’s resort to its inherent authority in these 

circumstances. As a practical matter, FDA can still quickly and 

readily reclassify a device even with notice and comment. 

Moreover, in certain situations where it becomes necessary, an 

agency may rely on exceptions to the notice and comment 

requirement. See, e.g., 5 U.S.C. § 553(b)(3)(B). 

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Here, FDA argues that the findings of its internal 

investigation – political pressure, agency acquiescence to that 

pressure, and departures from standard agency procedures –

are the kinds of concerns that American Methyl contemplated 

could warrant reconsideration on the basis of inherent 

authority even if a statutory reconsideration provision exists. 

FDA overreads American Methyl. To begin with, it is not 

clear that American Methyl’s statements regarding the 

implications of misconduct are anything more than dicta. As 

FDA itself points out, the record in American Methyl

contained no evidence of misconduct. The Court therefore 

had no occasion to consider whether a finding of misconduct 

would allow an agency to use inherent authority – rather than 

statutory authority – to reconsider a decision. Indeed, the 

Court explicitly stated that it “of course intimate[d] no view”

on the subject. Id.; see also id. at 835 n.55 (fraud allegations 

“an issue not before us today and on which we venture no 

opinion”). Given its ambiguous precedential value, we are 

hesitant to bind ourselves to American Methyl’s supposed 

misconduct exception. Cf. Empresa Cubana Exportadora de 

Alimentos y Productos Varios v. Department of Treasury, 638 

F.3d 794, 802 (D.C. Cir. 2011) (where footnote was arguably 

dicta, Court would “decline to elevate it now to a holding”). 

In any event, it is unnecessary to decide today whether to 

recognize that American Methyl exception. Even accepting 

that American Methyl’s footnote 51 created an exception for 

misconduct, that exception poses a high bar and would not 

apply in this case. To state the obvious, not every wrong 

decision or ill-considered decision is tainted by misconduct. 

The term “misconduct” as used in American Methyl connotes 

some clear legal or ethical violation. Here, the record 

indicates that the review process for the Collagen Scaffold 

was perhaps imperfect, but the supposed mistakes do not rise 

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to the level of misconduct contemplated by American Methyl. 

For example, FDA’s report on the scaffold’s review process 

acknowledged that communications between members of the 

New Jersey congressional delegation and FDA officials were 

“not inappropriate.” J.A. 850. And in fact, representing the 

interests of constituents is a key and proper part of the job of 

Representatives and Senators. Indeed, FDA received pressure 

from other Members of Congress to change the original 

reclassification decision. Not surprisingly, therefore, 

Members of Congress were on both sides of the question. 

The Members’ expression of their views – on both sides –

was not misconduct for purposes of the American Methyl

exception. 

Similarly, while the report identified mistakes in the 

expert panel proceedings, the report found no evidence that 

those supposed defects affected FDA’s decision. See FDA

PRELIMINARY REPORT 20-21 (consequences of excluding 

review team members were “speculative” and panel transcript 

“does not provide adequate support for a conclusion that the 

integrity of the process was compromised”).2

 2

 The District Court expressed concern about purported ex 

parte contacts between FDA officials and ReGen’s executives 

following the denial of ReGen’s second premarket notification. See 

Ivy Sports Medicine, LLC v. Sebelius, 938 F. Supp. 2d 47, 57 

(D.D.C. 2013). As Ivy points out, however, the statutes and FDA 

regulation barring companies from meeting with FDA officials 

apply only to formal, on-the-record hearings in a rulemaking or 

adjudication, not to informal agency proceedings, such as 

proceedings to determine substantial equivalence. See 5 U.S.C. 

§ 557(a), (d); 21 C.F.R. § 10.55(a). And generally speaking, it is a 

good thing for agency officials to meet with regulated entities and 

other affected parties. 

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It is also notable that no senior leaders of FDA, 

executives of ReGen, or Members of Congress were 

disciplined for their involvement in the scaffold’s review 

process. Yet if FDA actually rendered a decision tainted by 

misconduct – as opposed to simply reaching a mistaken 

decision or a decision it no longer agrees with – that 

misconduct must have been due to the legally or ethically 

wrongful actions of some person or persons. FDA’s inability 

or unwillingness to identify those wrongdoers is an indication 

that, in fact, no American Methyl-level misconduct occurred, 

at least on the record before us. 

* * * 

Because Congress created a procedure for FDA to 

reclassify medical devices, FDA may not short-circuit that 

process through what it calls its inherent authority to reverse 

its substantial equivalence determinations for those devices. 

FDA’s order rescinding the Collagen Scaffold’s substantial 

equivalence determination on the basis of inherent authority 

was therefore invalid. We reverse the judgment of the 

District Court. We direct the District Court to vacate FDA’s 

decision and to remand to the agency for further proceedings. 

So ordered. 

 

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PILLARD, Circuit Judge, dissenting: This case requires us 

to consider the source and scope of the FDA’s authority to 

rescind its clearance of an ineffective medical device when 

the agency concludes that its decision was flawed and that it 

should not have cleared the device in the first place. Ivy 

Sports Medicine’s predecessor, ReGen Biologics,1

 developed 

a surgical mesh, referred to as the Collagen Scaffold, which it 

described as a resorbable, crescent-shaped mesh designed to 

be implanted inside the knee joint in treatment of injuries of 

the meniscus. The FDA cleared the device for marketing as a 

Class II device under the Federal Food, Drug, and Cosmetic 

Act, as amended by the Medical Device Amendments of 1976 

(MDA) (collectively, FDCA or the Act). It did so without 

making any substantive determination that the device met the 

statutory Class II criteria, but by an alternative route that the 

statute authorizes: deeming the device substantially 

equivalent to other Class II surgical meshes already in use. In 

effect, the FDA’s clearance of the Collagen Scaffold 

piggybacked on its prior approval of other, ostensibly 

equivalent “predicate” devices. But the FDA soon recognized 

that the apparent equivalence was specious and rescinded the 

Class II clearance because none of the predicate surgical 

meshes was used in a weight-bearing joint like the knee, nor 

was any used in place of diseased tissue. There was, 

moreover, no evidence that the Collagen Scaffold had any 

beneficial effect for its intended use.

Neither the erroneous clearance nor its reversal was 

accompanied by notice and comment rulemaking. Ivy 

acknowledges that the statute provides for substantial 

equivalence determinations to be made without notice and 

comment, but challenges the reversal because, in its view, the 

FDA lacks authority to revisit any erroneous equivalence 

decision except through the Act’s notice-and-comment 

1

 For the sake of simplicity, this opinion refers interchangeably to 

both ReGen Biologics and Ivy Sports Medicine simply as “Ivy.” 

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process for making “Classification Changes.” Where a statute 

specifies an exclusive process for revoking erroneous 

decisions, agencies cannot circumvent that process by 

adverting to their inherent or implied power of error 

correction. Ivy contends that 21 U.S.C. § 360c(e) 

(“subsection (e)”) is the exclusive process for revoking an 

erroneous substantial equivalence determination, and so ousts 

the FDA’s implicit reconsideration authority. 

The FDA argues to the contrary. The regulatory 

“Classification Changes” procedure, codified in subsection 

(e), is a means to adjust a device’s statutory classification 

“based on new information respecting [the] device.” It is 

narrower than Ivy supposes, and clearly does not set forth the 

exclusive process—and perhaps not even a permissible 

route—for revocation of the FDA’s substantial equivalence 

determination. 

The statute’s text, structure, history, and purpose, in 

addition to past administrative practice, all show that the FDA 

permissibly read the statute not to displace its otherwiseundisputed implicit authority to correct erroneous substantial 

equivalence decisions. Subsection (e) speaks neither to 

correction of decisions that were wrong when made, nor to 

substantial equivalence determinations. It is keyed instead to 

changes in light of new information of classifications that 

were themselves made through a notice-and-comment process 

under subsections (b)-(d). See 21 U.S.C. § 360c(b)-(d). It 

does not relate to the type of de facto reclassification to Class 

III that occurs upon revocation of an erroneous clearance into 

a lower class under the substantial equivalence determination, 

and, indeed, does not speak to any decision, such as an 

equivalence revocation, that would move a device from Class 

II or I into Class III. It does, however, specifically 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 18 of 42
3

contemplate shifts in the opposite direction, e.g., out of Class 

III into Class II or I. 

Congress did not intend subsection (e) to be the exclusive 

method to reconsider assessments of substantial equivalence, 

so it does not displace the FDA’s implicit authority to correct 

its own errors. I believe the majority errs in reading the Act 

to require that the agency’s erroneous approval of a medical 

device via the abbreviated substantial equivalence process 

remain frozen in place unless the agency takes the long way 

around, through notice and comment rulemaking required for 

“Classification Changes,” to undo it, and so I respectfully 

dissent.

I. Background 

As the majority explains, a medical device defaults to the 

restrictive “Class III” under the Act unless the FDA 

determines that it belongs in the less restrictive Class II or 

Class I (or affirmatively classifies it as required to remain in 

Class III). Ivy initially faced a choice of two routes by which 

it might have its device moved into a less restrictive class. 

One route was to petition the Secretary for classification of 

the device directly under the statutory criteria. The other way 

was to employ a shortcut “substantial equivalence” process. 

After an initial stab at developing the clinical evidence for a 

premarket approval application, Ivy chose to bypass the more 

onerous regulatory route and seek FDA clearance into Class II 

via the piggyback substantial equivalence process. Ivy thus 

filed a premarket notification contending that its device was 

substantially equivalent to a set of already-classified predicate 

devices. If that abbreviated process did not succeed, Ivy 

retained the option to seek clearance by petitioning the 

Secretary for application of the statutory criteria under the de 

novo classification process.

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 19 of 42
4

As it happened, the piggyback worked for Ivy, at least 

temporarily. The FDA approved the Collagen Scaffold as 

substantially equivalent to Class II surgical meshes that were 

already being marketed to reinforce injured soft tissue, such 

as a sutured rotator cuff or fistula. But the substantial 

equivalence determination was fraught and close. The FDA 

found equivalence reluctantly, and soon suspected that it had 

erred. The agency did not immediately reverse itself, 

however, but ordered an independent review of its process to 

determine whether it had improperly bowed to outside 

pressures. In addition, the agency organized a new FDA team 

to review the device’s substantial equivalence, subject to 

further review by a panel of outside experts. The preliminary 

report of the internal investigation, titled “Review of the 

ReGen Menaflex®: Departures from Processes, Procedures 

and Practices Leave the Basis for A Review Decision in 

Question,” identified significant process irregularities and 

concerns about outside pressures. The scientific review found 

no substantial equivalence due to the different technological 

characteristics and intended use from the predicate meshes 

and concluded that the Collagen Scaffold was not as safe and 

effective as the predicates. With the results of those 

investigations in hand, the FDA decided that the substantial 

equivalence determination was indeed wrong and reversed it, 

inviting Ivy to submit the device for a risk-based 

classification of the device through the de novo process. 

Instead of submitting the Collagen Scaffold for classification 

under the statutory criteria, however, Ivy filed suit under the 

Administrative Procedure Act challenging the FDA’s 

authority to reconsider and revoke its own erroneous 

substantial equivalence determination. 

Ivy argues that the FDA’s reversal is invalid because, in 

its view, Congress required any correction of error in a 

substantial equivalence determination go through notice and 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 20 of 42
5

comment rulemaking, and the FDA’s reversal here, however 

informed and procedurally careful, did not proceed by 

regulation. Ivy points to subsection (e), the Act’s provision 

entitled “Classification Changes” that authorizes such changes 

by notice and comment rulemaking, and contends that the 

statute makes that provision the exclusive authority for 

reversal of erroneous substantial equivalence determinations 

because the effect of such a reversal is to return the device by 

default to Class III, and thus, effectively, to change its 

classification. 

Subsection (e)(1) begins: 

Based on new information respecting a device, the 

Secretary may, upon his own initiative or upon 

petition of an interested person, by regulation (A) 

change such device’s classification, and (B) revoke, 

because of the change in classification, any regulation 

or requirement in effect under section 360d or 360e of 

this title with respect to such device. 

21 U.S.C. § 360c(e)(1).2

 The subsection goes on to provide 

that, in promulgating such a classification-change regulation, 

“the Secretary may secure from the panel to which the device 

was last referred pursuant to subsection (c) of this section 

[authorizing initial classification by regulation] a 

recommendation respecting the proposed change in the 

device’s classification.” Id. It then spells out conditions 

required for changing device classifications, referring only to 

changes from Class III to Class II or I, which the parties refer 

to as “down classification.” It nowhere mentions substantial 

2

 As discussed further below, subsection (e) was amended in July 

2012. Unless otherwise noted, all citations to the Act refer to the 

provisions in effect when the FDA rescinded its substantial 

equivalence determination. 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 21 of 42
6

equivalence or the statutory provision authorizing equivalence 

determinations, nor does it mention changes in classification 

in the other direction (as occurred here), from Class I or II to 

Class III, referred to as “up classification.”

II. Analysis 

The sole issue here is whether the FDCA requires the 

agency to go through the rulemaking process authorized by 

subsection (e) for “Classification Changes” in order to undo 

an erroneous substantial equivalence determination, which it 

was not in the first instance required to make by rule, and 

which did not involve application of the Act’s classification 

criteria. The nub of the dispute is a contest between dueling 

statutory implications. The FDA relies on the established 

principle that agencies’ power to make decisions implies their 

power to reconsider and revoke erroneous decisions. Ivy 

acknowledges such implicit power of error correction, but 

contends that the FDCA eliminates it here by operation of the 

settled canon, expressio unius est exclusio alterius, i.e., the 

express mention of one thing excludes all others. Ivy says the 

statutory provision authorizing “Classification Changes” by 

regulation, 28 U.S.C. § 360c(e)(1), is the explicit and 

exclusive avenue for changing any agency decision that yields 

even a default, provisional reclassification of a medical 

device. Thus, according to Ivy, the FDA must conduct 

rulemaking under the “Classification Changes” provision, not 

only to change a classification initially determined by 

rulemaking under subsections (b)-(d), see 21 U.S.C. 

§ 360c(b)-(d), but also to reverse a piggyback decision to 

clear a device under subsection (f) as substantially equivalent 

to a predicate device the FDA has already cleared, see id. § 

360c(f)(1). As Ivy understands it, subsection (e) ousts by 

negative implication the authority the agency would otherwise 

have to reconsider and revoke, without conducting notice and 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 22 of 42
7

comment rulemaking, a non-regulatory substantial 

equivalence decision that it made in error. 

 The FDA counters that it need not conduct notice and 

comment rulemaking under subsection (e) to rethink and 

retract a substantial equivalence decision that it decides, on 

the original record, was wrong from the start. The FDA’s 

inherent authority is preserved, it argues, because “neither the 

text nor the legislative history of [subsection (e)] speak to 

reconsideration or even to substantial equivalence at all.” Br. 

for Appellees 30. And even if it can be read to bar 

reconsiderations triggered by “new information,” such 

information being the threshold requirement of subsection (e), 

the FDA contends that it need not be used for revocation of 

decisions “that were flawed at their inception.” Id.

The parties start from the shared premise that the FDA has 

implicit statutory authority to correct its own errors, including 

erroneous substantial equivalence decisions, unless subsection 

(e) displaces it. See Slip Op. 9-10. It is well settled that, even 

where Congress has provided no explicit mechanism for 

agency reconsideration, statutes that authorize agencies to act 

are also presumed to empower those agencies to reconsider 

their actions to correct their mistakes. See, e.g., Boesche v. 

Udall, 373 U.S. 472, 476 (1963); Civil Aeronautics Bd. v. 

Delta Air Lines, Inc., 367 U.S. 316, 325 (1961); Am. Trucking 

Ass’ns v. Frisco Transp. Co., 358 U.S. 133, 145 (1958); Nat’l 

Ass’n of Trailer Owners, Inc. v. Day, 299 F.2d 137, 139 (D.C. 

Cir. 1962). “[I]n the absence of any specific [statutory] 

limitation,” an agency retains authority to reconsider and 

correct an earlier decision. Albertson v. FCC, 182 F.2d 397, 

399 (D.C. Cir. 1950). The description of such authority as 

“inherent,” though widely used in our precedents, is 

somewhat of a misnomer, because the FDA, like other 

executive agencies, is “entirely a creature of Congress.” Civil

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 23 of 42
8

Aeronautics Bd., 367 U.S. at 322. Assuming no “inherent” 

power in the constitutional sense, cf. Owens v. Republic of 

Sudan, 531 F.3d 884, 893 (D.C. Cir. 2008), agencies are 

typically understood to have statutorily implicit corrective 

powers in the absence of statutory provisions explicitly 

removing them. See Civil Aeronautics Bd., 367 U.S. at 321-

22. The touchstone, then, is congressional intent. 

American Methyl Corp. v. EPA, 749 F.2d 826 (D.C. Cir. 

1984), is a straightforward statutory interpretation decision, 

and Ivy’s application of it here rests on a misreading of the 

FDCA. In American Methyl, the EPA asserted that it retained 

inherent authority to revoke a waiver granted under 

Section 211(f)(4) of the Clean Air Act that allowed the 

introduction of a fuel additive onto the market. See id. at 828-

29. The court rejected the agency’s assertion of inherent 

authority to revoke the waiver, concluding that Section 211(c) 

of the statute expressly “empowered [the agency] to take 

action against an offending fuel or fuel additive” that was 

“already in commerce,” and that, because the statute explicitly 

set forth that process for taking a fuel additive off the market, 

the agency could not avoid it by resorting to its “inherent 

authority” to revoke the waiver. Id. at 835-366. Specifically, 

the court looked at the “interrelationship” of subsections (c) 

and (f) and concluded that Section 211(c) “provid[ed] a 

mechanism for correcting” the error in that case. Id. at 834-

35; see also id. at 836-37 (analyzing “statutory design”). The 

court also examined the legislative history, emphasizing that 

it supported the view that Congress intended Section 211(c) 

“as the exclusive means by which [the agency] was to correct 

waivers mistakenly granted by default.” Id. at 836 (emphasis 

added). Because “Congress contemplated regulation of fuels 

and fuel additives . . . waived into commerce only through 

proceedings under section 211(c),” the court reasoned that 

“the legislative understanding thus rejects the implied 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 24 of 42
9

revocation authority claimed by the EPA.” Id. at 834 

(emphasis added)). Explicit authority must be used where it 

represents an exclusive and specific limitation on whatever 

inherent authority the agency might otherwise have had. 

Albertson, 182 F.2d at 399-400; Am. Methyl, 749 F.2d at 835.

As American Methyl recognizes, the touchstone in 

determining whether an explicit provision must be read to 

limit an agency’s implied authority to reconsider a prior 

decision is whether “Congress had an intention on the precise 

question at issue.” Am. Methyl, 749 F.2d at 833 (quoting 

Chevron, U.S.A., Inc. v. Nat’l Resources Defense Council, 

Inc., 467 U.S. 837, 843 n.9 (1984)). The “precise question” in 

this case is whether Congress intended subsection (e), which 

allows the FDA to make a “classification change” by 

regulation, to be the exclusive means for the agency to 

reconsider a substantial equivalence determination. 

Answering that question requires examination of the statutory 

scheme, see id. at 834-37, guided by “the customary statutory 

interpretation tools,” Cal. Metro Mobile Commc’ns, Inc. v. 

FCC, 365 F.3d 38, 44 (D.C. Cir. 2004) (“traditional tools” 

include text, structure, purpose, and legislative history); see

also Am. Methyl, 749 F.2d at 834-837 (reviewing legislative 

history, text, structure, and agency practice). Read with the 

help of those customary tools of statutory interpretation, the 

FDCA makes clear that Congress never intended to require 

the FDA to use subsection (e) to rescind an erroneous 

substantial equivalence determination. 

A. Statutory Overview

Some statutory context is helpful to explicate the textual, 

structural, and functional relationship between the full 

regulatory classification process detailed in subsections (b)-

(d) and the shortcut subsection (f) substantial equivalence 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 25 of 42
10

determination. Compare 21 U.S.C. § 360c(b)-(d), with id.

§ 360c(f). Congress enacted the MDA in 1976 to bring 

medical devices, not previously subject to federal regulation, 

under the ambit of the FDCA. The new regulatory scheme 

was designed to give consumers prompt access to medical 

devices beneficial to human health while keeping off the 

market devices that are not safe and effective. See Contact 

Lens Mfrs. Ass’n v. FDA, 766 F.2d 592, 593-94 (D.C. Cir. 

1985). The Act grants authority to the agency to classify 

medical devices into three classes “based on the risk that they 

pose to the public.” Medtronic Inc. v. Lohr, 518 U.S. 470, 

476 (1996); see Contact Lens Mfrs. Ass’n, 766 F.2d at 594. 

As the majority explains, a device’s classification determines 

both the relative ease with which the device can enter the 

market and the types of marketing restrictions to which it will 

be subject, with devices in Class III requiring the FDA’s 

affirmative premarket approval, subject to the most extensive 

conditions, and those in Classes II and I subject only to 

specific or general controls. See 21 U.S.C. § 360c(a)(1); Slip 

Op. at 3. No medical device introduced after the enactment 

date of the MDA may be marketed until the FDA has at least 

acted to clear it. The FDA treats such a device as Class III by 

default unless and until it moves it into a lower category, such 

as by application of the statutory criteria, see id. § 360c(f)(2)-

(3), or a substantial equivalence determination under 

subsection (f)(1).3

3

 Class III devices may not be marketed without premarket 

approval, whereas devices in Class II and Class I need no such 

additional scrutiny. A premarket approval application initiates a 

detailed process of scientific review requiring the manufacturer to 

submit research findings showing the device is safe and effective 

for its intended use, together with proposed labeling that is not false 

or misleading. See 21 U.S.C. § 360e. The FDA’s premarket 

approval process involves referral of the device to expert panels, 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 26 of 42
11

The majority is correct that, in practice, placement of a 

new device in Class I or II usually is obtained through a 

determination that the device is “substantially equivalent” to a 

predicate device, i.e., one already in Class I or II. But the 

majority misunderstands subsection (e) in part because it 

leaves out of its description a number of related provisions of 

Section 360c (“Classification Of Devices Intended For 

Human Use”) that describe the Act’s foundational method of 

device classification by regulation, informed by 

recommendations from panels of scientific experts and 

subject to public notice and comment. See 21 U.S.C. 

§ 360c(b)-(d). Reading Section 360c as a whole makes clear 

that the subsection (e) process is required not for revocations 

of piggyback substantial equivalence determinations, but for 

changes in classifications initially made by the foundational 

regulatory classification route.

When Congress enacted the MDA to bring medical 

devices under the ambit of the FDCA, it faced the project of 

classifying an enormous number of then-existing medical 

devices (now commonly referred to as “pre-amendments 

devices”). Subsections (b)-(d) require that to be done through 

a process of notice and comment rulemaking, supported by 

input from expert advisory panels, to determine with respect 

to each type of device its effectiveness and the risks it poses, 

and what kinds of controls might be needed for it be used as 

and inspection of the manufacturing site and assurances about the 

manufacturing process. Throughout the premarket approval 

process, the burden of proof is on the manufacturer. Approval, 

when given, is typically accompanied by marketing conditions to 

provide reasonable assurance of safety and effectiveness. See id. § 

360e(c)-(d). The time and cost associated with the premarket 

approval process tends to motivate manufacturers to seek 

classification of their devices into Class I or II where it is feasible 

to do so. See Medtronic, 518 U.S. at 479. 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 27 of 42
12

intended in a safe and beneficial manner. See 21 U.S.C. 

§ 360c(b)-(d). The Act provides—in subsection (e), on which 

Ivy relies—that, where new information respecting a device 

comes to the FDA’s attention, the agency must again deploy 

notice and comment rulemaking if it wants to change the 

device’s classification. Id. § 360c(e). Pre-amendments 

devices are grandfathered and thus left unclassified unless and 

until the FDA classifies them pursuant to subsection (a)-(d). 

See Medtronic, 518 U.S. at 477-78. 

Congress further created, in subsection (f), a dual-track 

process to be followed to clear new, or “post-amendments” 

devices. Whereas the default for pre-amendments devices is 

that they are left unclassified until classified, subsection (f) 

starts all post-amendments devices in Class III by default, and 

then sets forth two tracks for their clearance for marketing. 

One track involves FDA application of the statutory criteria to 

post-amendments devices through a rulemaking process 

analogous to that used for pre-amendments devices. Thus, if 

a new device has no apparent equivalent among cleared 

predicate devices, for example, it can be cleared like a preamendments device, through a process that may include 

expert panels and is subject to notice and comment. See 21 

U.S.C. § 360c(f)(3).

The other track piggybacks on the foundation of devices 

classified by regulation, by simply matching new devices to 

those already-reviewed predicates as a way to assign them to 

their appropriate classes. See id. § 360c(f)(1). That second, 

expedited clearance process applies to post-amendments 

devices that are “substantially equivalent” to already cleared 

devices to avoid shielding devices already in use from 

competition from new and potentially improved versions. See

id.; Medtronic, 518 U.S. at 478. The substantial equivalence 

inquiry does not require the FDA to apply the statute’s 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 28 of 42
13

classificatory criteria to the new device, but asks whether the 

new device is substantially equivalent to a predicate device 

and thus can be assigned the same classification. See id.

§ 360c(i) (defining substantial equivalence). The substantial 

equivalence decisional process is a procedural as well as 

substantive shortcut, as it does not require notice and 

comment rulemaking. See id. § 360c(f)(1).

Finally, subsection (f) provides that proponents of postamendments devices can have it both ways: When a 

manufacturer or importer tries the substantial equivalence 

shortcut and fails, the device defaults back to Class III, see id.

§ 360c(f)(1), but that need not be the end of the road. If, for 

example, the FDA rules adversely on a petition for substantial 

equivalence because the device has a different intended use 

from the predicate, the unsuccessful petitioner can within 30 

days request that the Secretary classify the device as safe and 

effective in its own right under a de novo process applying the 

statutory criteria. See id. § 360c(f)(2).

B. Statutory Text 

In discerning Congress’s meaning, the text is primary. 

Subsection (e) authorizes the FDA, on its “own initiative or 

upon petition of an interested person, by regulation,” to 

change a device’s classification. 21 U.S.C. § 360c(e)(1). The 

parties agree that “by regulation” means notice and comment 

rulemaking. The question is whether Congress intended 

subsection (e) to be the exclusive process for reconsidering 

erroneous substantial equivalence determinations. The 

statute’s text shows that it did not and, indeed, raises doubts 

about whether it would have even been permissible for the 

agency to use it for that purpose.

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1. Subsection (e) explicitly addresses subsection (c) 

classification, not subsection (f) substantial 

equivalence.

The first hint that subsection (e) does not restrict the 

agency’s reconsideration of erroneous substantial equivalence 

determinations is that subsection (e) makes no reference to the 

piggyback substantial equivalence process or the provisions 

codifying it, whereas it explicitly cross-references the full 

regulatory process for classifying devices by application of 

the statute’s classification criteria, with input from expert 

advisory panels and notice and comment. As Ivy’s counsel 

acknowledged during oral argument, Congress developed 

subsection (e) as a procedural mechanism for reclassifying 

pre-amendments devices. See Oral Arg. Rec. at 4:45-4:55 

(counsel for Ivy) (describing rulemaking procedures for preamendments devices and explaining that “Congress initially 

provided for reclassification of pre-amendments devices by 

notice and comment rulemaking [i.e. via subsection (e)] to 

parallel that original classification decision”). Subsection (e) 

specifically cross-references the classification procedures for 

ab initio regulatory device classification: It empowers the 

FDA to “secure from the panel to which the device was last 

referred pursuant to [the rulemaking procedures for preamendments devices] a recommendation respecting the 

proposed change in the device’s classification.” Id.

§ 360c(e)(1) (citing § 360c(c)). Mirroring the requirements of 

the regulatory classification procedures (set forth in 

subsections (b)-(d)), subsection (e) requires that any panel 

recommendation for a classification change must likewise be 

published in the Federal Register. Compare id. § 360c(d)(1), 

with id. § 360c(e)(1). The explicit statutory cross-reference 

and the parallel procedures reflect Congress’s assumption that 

the device classifications subject to change under subsection 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 30 of 42
15

(e) are those that were made in the first instance, with expert 

panel input, pursuant to subsections (b)-(d). 

The text of subsection (e) makes no mention whatsoever 

of subsection (f) or substantial equivalence determinations. 

Because classifications that result from substantial 

equivalence determinations, unlike those made under 

subsections (b)-(d), do not proceed by panel recommendation 

and notice and comment rulemaking, subsection (e)’s textual 

reference to subsection (c) and “the panel to which the device 

was last referred” make no sense in the context of revocation 

of a substantial equivalence determination, such as is at issue 

in this case. Subsection (e)’s explicit references to the panel 

process, and its lack of any mention of either error correction 

or substantial equivalence, belies Ivy’s efforts to cast it as the 

only way the FDA can correct an equivalence decision it 

recognizes was wrong.

2. Subsection (e) speaks to classification changes based 

on new evidence, not correction of errors in an initial 

substantial equivalence determination. 

Two additional textual features reinforce the conclusion 

that subsection (e) is not the FDA’s exclusive means to 

revoke an invalid substantial equivalence determination: 

Subsection (e) is titled “Classification Changes,” and provides 

for changes in response to “new information respecting a 

device.” Neither of those terms is apposite to revocation of 

equivalence decisions that were invalid at their inception.

The FDA asserts here the authority to reconsider a 

decision on its initial record, not to change it based on new 

information. The agency’s reversal of its determination that 

the Collagen Scaffold was equivalent to predicate devices—

like any determination that the agency made the wrong 

equivalence decision from the start—was not triggered by any 

USCA Case #13-5139 Document #1514181 Filed: 09/26/2014 Page 31 of 42
16

“new information,” and yet such information is the threshold 

condition for application of subsection (e).4

It is also not at all clear that, even if it were triggered by 

new information, reversal of a substantial equivalence 

determination is a “classification change” within the meaning 

of subsection (e). Revoking the decision that the Collagen 

Scaffold was substantially equivalent to devices in Class II 

caused a de facto “change” in its “classification” back to 

Class III, but that change resulted from the statutory default 

that places all post-amendments devices in Class III until the 

FDA takes appropriate action on them. 21 U.S.C. 

§ 360c(f)(1). The Collagen Scaffold moved back to Class III 

only provisionally and by default, and not as the result of any 

affirmative classification decision based on new information, 

such as subsection (e) contemplates. 

3. Subsection (e) refers only to changes from more to less 

restrictive classifications, but invalidating an 

erroneous equivalence determination has the opposite 

effect.

Subsection (e) provides further textual indication that it 

does not apply to the kind of de facto classification change 

here, resulting from operation of the statute’s default 

4

 The FDA has read “new information” to also encompass the 

reevaluation of existing information. J.A. 1675; see, e.g., Medical 

Devices; Reclassification of the Cutaneous Carbon Dioxide and the 

Cutaneous Oxygen Monitor, 67 Fed. Reg. 76,678, 76,679 (2002) 

(citing, inter alia, Holland Rantos v. U.S. Dep’t of Health, Educ., & 

Welfare, 587 F.2d 1173, 1174 n.1 (D.C. Cir. 1978)). That is not 

contrary to the point that Congress tied subsection (e) to evidencebased classifications based on the statutory criteria, not to 

rescissions of substantial equivalence determinations that were void 

on the record information from the start. 

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17

placement of post-amendments devices in Class III: It refers 

only to what the parties call “down classifications” (e.g., from 

Class III to Class II or I) and not to “up classifications” (e.g., 

from a lower class back up to Class III). Subsection (e) thus 

is not the requisite process for all reclassifications, as Ivy 

implies, but specifically governs moving Class III devices to 

lower classifications under certain circumstances. See id. 

§ 360c(e)(2)(A) (referring to classification change from Class 

III to Class II); id. § 360c(e)(2)(B) (referring to classification 

change from Class III to Class I). Under subsection (e), the 

FDA may change a device’s classification from Class III to 

Class I or Class II if the agency determines that the controls 

provided by the lower classification “would provide 

reasonable assurance of the safety and effectiveness of the 

device.” 21 U.S.C. § 360c(e)(2)(A) & (B). By contrast, in 

this case as in any case of substantial equivalence, the FDA 

did not have to consider the ability of classification controls to 

assure safety and effectiveness; rather, the agency simply 

determined—based on an evaluation of the device’s intended 

use and technological characteristics—that the Collagen 

Scaffold was not substantially equivalent to the predicate 

devices that the manufacturer had identified. See Oral Arg. 

Rec. at 28:53-31:21. 

Based on its explicit reference to down classifications 

only, it is far from obvious why the plain text of subsection 

(e) even permits, much less mandates, that the agency use it to 

upclassify the Collagen Scaffold. See Oral Arg. Rec. at 

25:55-26:15 (counsel for FDA) (asserting the agency’s upclassification authority but acknowledging that the question 

has not been adjudicated by any court).5

 Neither of the types 

5

 After the events at issue here, Congress prospectively amended 

subsection (e) to provide that it may be used to “up classify” 

devices from Class II to III. Food and Drug Administration Safety 

& Innovation Act, Pub. L. No. 112-144, § 608, 126 Stat. 993, 1055-

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18

of reclassifications specifically enumerated in subsection (e) 

(from Class III to II, or from Class III to I) describes the effect 

of the FDA’s rescission of the substantial equivalence 

determination, which restored the Collagen Scaffold from 

Class II to the default, more closely restricted, Class III. 

C. Statutory Structure and Purpose

The structure of the statute reinforces the textual evidence 

that Congress intended subsection (e) to play a different and 

more limited role than Ivy contends. A key structural feature 

of the Act is subsection (e)’s placement in the statute, which 

reinforces the distinction between the foundational 

classification of devices via a regulatory process of 

determining their safety and effectiveness, and the dependent 

process of classification based on matching new devices with 

predicates already on the market. The second, procedurally 

abbreviated, process piggybacks on the first process, which 

relies on expert panels and notice-and-comment rulemaking. 

Subsection (e) appears immediately after those subsections 

that set forth the regulatory classification process, but before 

subsection (f), which sets forth the piggyback classification 

method. Thus, the procedure that Ivy says must control 

rescission of an erroneous substantial equivalence 

determination appears in the statute before the FDCA defines 

or even mentions “substantial equivalence.” See 28 U.S.C. 

§ 360c(f)(A)(ii). It seems unlikely that Congress codified a 

56 (2012) (amending 21 U.S.C. § 360c(e)(1) to permit 

reclassification from Class II to III when Class I and II controls 

“together are not sufficient to provide a reasonable assurance of 

safety and effectiveness for such device”). As the majority 

emphasizes, the FDA has taken the position that, even prior to its 

amendment, the agency could have used subsection (e) to reclassify 

the Collagen Scaffold into Class III. That contention is addressed 

below. 

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mechanism for correcting a type of determination before it 

codified the authority for making such determination in the 

first place. Subsection (e) more logically relates not to 

substantial equivalence determinations, but to the full-dress 

device-classification provisions set forth in subsections (b)-

(d)—to which it expressly refers and which immediately 

precede it in the statute. Structurally, it makes sense that 

subsection (e) explains how to change the type of ab initio

classification described in the immediately preceding 

subsections of the statute; it is much less logical to conclude 

that it governs undoing a different kind of decision that the 

statute does not even set forth until later.

That conclusion is further reinforced by the equal rigor of 

the processes required to classify a device under subsections 

(b)-(d) and to change its classification under subsection (e), 

both of which require notice and comment rulemaking. For 

example, just as pre-amendments classifications must be 

announced “by regulation,” so too a classification change 

under full-dress reclassification must be effectuated “by 

regulation.” Compare 21 U.S.C. § 360c(d)(1) (initial 

classification), with id. § 360c(e)(1) (classification changes). 

That symmetry contrasts with the very different, shortcut 

process contemplated for substantial equivalence decisions 

under subsection (f)(1). Id. § 360c(f)(1). The latter type of 

decisions bypass the statutory classification criteria and 

instead focus on matching a new device with a cleared 

predicate, and do not require notice and comment rulemaking. 

 It makes practical sense that decisions made through the 

time consuming and expensive rulemaking process cannot be 

lightly changed—hence the notice and comment requirement 

in subsection (e) for classifications changes, which mirrors 

the process in subsection (d) for the classifications thereby 

being changed. In contrast, classifications made by deciding 

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into which of several boxes to place a new device (where the 

boxes are the prior device classifications) typically are—and 

are intended to be—quicker and more informal. Cf.

Medtronic, 518 U.S. at 478-79 (contrasting the roughly 20 

hours needed to complete the “limited form of review” 

required for substantial equivalence with the 1,200 hours 

needed to complete a premarket approval). 

Reading the statute so as not to require the subsection (e) 

process be used to correct erroneous substantial equivalence 

determinations best serves the statute’s purpose. Congress 

enacted the FDA classification system to make sure that 

consumers benefit from safe and effective medical devices 

and are protected from those that are useless or unsafe. See 

id. at 475-77. The substantial equivalence process helps to 

preserve market competition in medical devices by removing 

unnecessary barriers that the classification process could pose 

to devices that are substantially equivalent to, and may be 

cheaper or better than, those that are already on the market. 

See id. at 478.

The court has it backwards in citing the accuracy benefits 

of notice and comment in support of Ivy’s view, see Slip Op. 

at 12-13: Substantial equivalence decisions are prone to error 

in part because they are made without notice and comment, so 

Ivy’s contention that notice and comment, admittedly not 

required for the initial equivalence decision, is necessary to 

fix such a decision if it was wrong creates an obstacle against 

correction of mistakes in a body of presumptively error-prone 

decisions. I read the Act to allow equivalence decisions to be 

reversed as readily as they are made (leaving open to a device 

manufacturer or importer to seek a more fully informed and 

thus accurate consideration of the device through the de novo 

process), which I believe better serves the Act’s purpose of 

assuring the safety and effectiveness of medical devices than 

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does the one-way ratchet that Ivy advocates. The harms 

likely to flow from reading the Act so that mistaken 

equivalence determinations are easier to make than to fix are 

likely to be multiplied, because devices cleared as 

substantially equivalent thereby qualify as predicate devices 

for future equivalence decisions. An uncorrected error in 

deeming a device substantially equivalent invites a daisy 

chain of further errors. The court’s holding that FDA must 

undertake the relatively formal, slow, and costly process 

contemplated by subsection (e) in order to correct errors in 

relatively quick and informal substantial equivalence 

determinations creates an unwarranted asymmetry, making 

erroneous approvals easy to make and cumbersome and slow 

to correct—a result that is at odds with the core aims of the 

Act.

D. Agency Practice 

The text and structure of the Act are sufficient, standing 

alone, to demonstrate that Congress did not intend full-dress 

reclassification to be the exclusive statutory mechanism for 

the agency’s reconsideration of an erroneous substantial 

equivalence determination. Nevertheless, because this court 

in American Methyl considered prior administrative practice 

relevant to the strength of the agency’s statutory reading, see 

749 F.2d at 838-39, it is worth briefly mentioning the FDA’s 

prior practice. In American Methyl, the agency’s own prior 

practice belied its proffered statutory analysis, see id. at 838, 

but here the FDA’s practice is consistent with its position that 

a classification change by regulation is not the exclusive 

method for reconsidering a substantial equivalence 

determination. Indeed, as discussed below, it may not be an 

appropriate method at all. 

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Two aspects of the FDA’s practice are especially 

pertinent. First, with respect to the rescission of prior 

substantial equivalence determinations, the FDA represented 

that there have been approximately 50 agency rescissions of 

substantial equivalence determinations in the history of the 

program, and that none of those has been accomplished using 

the regulatory classification change process of subsection (e). 

See Oral Arg. Rec. at 31:25-33:38. That further distinguishes 

this case from American Methyl, where “the agency’s 

prelitigation administrative practice belie[d] its professed 

belief in an implied revocation authority.” 749 F.2d at 838. 

We noted there that, “[i]n seven years of administering 

section 211(f), American Methyl [was] the first manufacturer 

subjected to a revocation proceeding” based on the EPA’s 

asserted inherent authority; in every prior case the EPA had 

used the statute’s express “control or prohibition” authority, 

id., and we concluded that course of conduct “exemplified the 

understanding” of the statute we adopted there to oust any 

residual reconsideration power and restrict the agency to the 

“control or prohibition” provision, id. at 838-39.

Second, the FDA emphasizes—and Ivy does not 

dispute—that the agency rarely uses the regulatory 

reclassification authority to reclassify a single device, but 

rather uses it to change the classification of groups of devices. 

See Oral Arg. Rec. at 5:40-6:44, 31:25-33:38. The pending 

reclassification proceeding relating to transvaginal meshes (on 

which Ivy relied in its opening brief and again brought to the 

court’s attention after oral argument) underscores that point. 

As the government explains, the FDA is currently using the 

subsection (e) reclassification procedure, including soliciting 

recommendations from an expert panel, to change the 

classification of two types of surgical meshes that encompass 

more than 100 different devices cleared over the course of 20 

years. See 79 Fed. Reg. 24,634, 24,636 (May 1, 2014). The 

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consistent practices of not using subsection (e) to correct 

errors in substantial equivalence determinations, and using it 

to accurately build the foundational classification architecture 

of types of devices on which substantial equivalence decisions 

piggyback, lend support to the agency’s position that it was 

not required to use the subsection (e) regulatory process to 

correct the mistaken equivalence decision about a single 

device in this case. 

E. FDA’s Assertion That It Could Have Used 

Subsection (e) 

 Ivy places substantial weight on the FDA’s 

acknowledgement that, although the agency chose not to do 

so, it could have used the subsection (e) regulatory route to 

move the Collagen Scaffold from Class II to Class III. In 

Ivy’s view, that concession all but clinches the case, on the 

logic that, if subsection (e) is available to move the device 

from Class II to Class III, under American Methyl, subsection 

(e) ousts implicit authority to correct an error by any other 

route. The court accepts that argument as decisive. It 

concludes that, because the FDA “concededly could have 

used [full-dress reclassification] to reclassify the Collagen 

Scaffold into Class III, it could not rely on a claimed inherent 

reconsideration authority to short-circuit that statutory process 

and revoke its prior substantial equivalence determination.” 

Slip Op. at 12 (citing American Methyl). 

That conclusion is in error for two related reasons. First, 

for the reasons discussed above, subsection (e) does not 

appear to apply at all to the kind of error-correction at issue in 

this case. And, second, even if the agency could have acted 

under subsection (e) to change the classification of the 

Collagen Scaffold, as the FDA contends, American Methyl’s

negative implication would only apply here to displace the 

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FDA’s implicit authority if the only permissible reading of the 

Act is that subsection (e) is the exclusive means for rescinding 

an erroneous substantial equivalence determination. The 

agency vigorously contests that point, and it has the better of 

the argument. 

 There is some question whether the FDA is correct that it 

could have used the subsection (e) process had it so chosen. 

As noted above, the revocation of the substantial equivalence 

determination was not “[b]ased on new information 

respecting [the] device,” as subsection (e) expressly requires; 

it effected a “classification change” only by default, and it 

was an up classification whereas subsection (e) only addresses 

down classifications; and it addressed a decision not 

previously made with input from a panel convened under 

subsection (c), and thus was not the kind of decision 

subsection (e) describes.

Assuming it were available to the FDA to change the 

device’s classification under subsection (e), that route would 

have effected an affirmative, regulatory “classification” 

decision. The route the FDA took, in contrast, merely 

reversed the agency’s erroneous substantial equivalence 

determination, leaving to Ivy, if it so chose, to petition to 

classify the Collagen Scaffold under the statutory criteria for 

Class II. See 21 U.S.C. §§ 360c(f)(1)(B) & (C), (f)(2), (f)(3); 

J.A. 1317-18 (notifying Ivy of FDA’s reversal of its 

substantial equivalence determination and inviting it to 

petition for Class II). In effect, what the FDA did left to Ivy 

whether to use the statutory-criteria regulatory classification 

process; all the agency did was to undo its error in having 

equated the device to an existing, already classified predicate 

device. It is consonant with the statute’s structure and 

purposes for the FDA to conclude that it would have been 

authorized, had it so chosen, to take an alternative course of 

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not only undoing its error, but going on to apply the statute’s 

criteria affirmatively to make a classification decision.

In any event, the FDA chose not to invoke the subsection 

(e) process here. My view of the statute does not rely on 

whether the agency was correct that it could have done so. It 

is at least clear that, even if the subsection (e) process were 

available to the FDA to initiate a full regulatory 

reclassification process to assess the propriety of the Collagen 

Scaffold remaining in Class II, that process is not required 

where the agency chooses simply to rescind a substantial 

equivalence decision it made in error without initiating any 

affirmative regulatory classification process such as 

subsection (e) provides.

III. Conclusion 

The text and structure of the Act, along with the agency’s 

administrative practice, amply support the FDA’s 

interpretation as not confining the agency to the notice and 

comment process set forth in subsection (e) when it acts to 

rescind a substantial equivalence decision it made in error. 

The preceding analysis of subsection (e) shows that the 

expressio unius canon that the American Methyl court invoked 

in rejecting the agency’s claim of implicit authority in that 

case does not apply to correction of a substantial equivalence 

determination that was erroneous from the start. See 749 F.2d 

at 835-36; cf. Adirondack Med. Ctr. v. Sebelius, 740 F.3d 692, 

697 (D.C. Cir. 2014) (emphasizing that “the canon’s 

relevance and applicability must be assessed within the 

context of the entire statutory framework”). That is especially 

true where, as here, a more plausible understanding is that 

Congress intentionally created two classification tracks—ab

initio regulatory classifications, and the substantial 

equivalence shortcut—with separate procedural and 

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substantive requirements, and that subsection (e) addresses 

only the first track. See Nat’l Shooting Sports Found., Inc. v. 

Jones, 716 F.3d 200, 211 (D.C. Cir. 2013) (no application of 

expressio unius where its invocation “disregards other 

plausible explanations for an omission” (brackets and internal 

quotation marks omitted)). 

A conclusion that the full-dress reclassification procedure 

did not preclude the FDA from exercising its implicit 

statutory authority to rescind the Collagen Scaffold’s 

substantial equivalence determination would not mean that 

the FDA’s exercise of that authority was reasonable in this 

case. See Mazaleski v. Treusdell, 562 F.2d 701, 720 (D.C. 

Cir. 1977). The parties disagreed on that point in the district 

court, but because Ivy did not renew those arguments until its 

reply brief, I would affirm the district court’s conclusion on 

that point. See New York Rehab. Care Mgmt., LLC v. NLRB,

506 F.3d 1070, 1076 (D.C. Cir. 2007) (“[W]e have generally 

held that issues not raised until the reply brief are waived.” 

(internal quotation marks omitted)). 

Because all these reasons lead me to conclude that the 

FDA permissibly read section (e) not to displace its authority 

to revoke its mistaken clearance of the Collagen Scaffold 

without undertaking full notice and comment rulemaking, I 

respectfully dissent.

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