Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-11-01268/USCOURTS-caDC-11-01268-0/pdf.json

Parties Involved:
Cytori Therapeutics, Inc.
Petitioner
Food & Drug Administration
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 21, 2012 Decided March 22, 2013

No. 11-1268

CYTORI THERAPEUTICS, INC.,

PETITIONER

v.

FOOD & DRUG ADMINISTRATION,

RESPONDENT

Consolidated with 11-1279

On Petitions for Review of Orders

of the Food & Drug Administration

Andrew S. Ittleman argued the cause for petitioner. With 

him on the briefs was Mitchell Fuerst.

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

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

Stuart F. Delery, Acting Assistant Attorney General, and 

Scott R. McIntosh, Attorney. Douglas N. Letter, Attorney, 

entered an appearance. 

Before: BROWN and KAVANAUGH, Circuit Judges, and 

SENTELLE, Senior Circuit Judge.

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Opinion for the Court filed by Circuit Judge KAVANAUGH.

KAVANAUGH, Circuit Judge: In Administrative Procedure 

Act cases alleging arbitrary and capricious agency action, 

courts must be careful not to unduly second-guess an agency’s 

scientific judgments. That basic principle of administrative 

law controls this case. 

The Food and Drug Administration must approve certain 

medical devices before they are marketed. Here, Cytori 

Therapeutics applied to FDA to market two new medical 

devices, the Celution 700 and the StemSource 900. Those 

two devices use adipose tissue – that is, fat – as a source of 

stem cells that could later be used in lab analysis or,

potentially, in regenerative medicine. The most similar 

devices on the market extract stem cells from blood or bone 

marrow.

Federal law establishes two basic paths for FDA approval 

of new medical devices. One is the “premarket approval” 

process. See 21 U.S.C. § 360e. That process generally 

requires extensive clinical research on a new device to ensure 

the device’s safety, and it often takes significant time. The

other is the streamlined “premarket notification” process, 

which simply requires that the new device be “substantially 

equivalent” to another device already on the market. See 21

U.S.C. §§ 360(k), 360c(i). 

Here, FDA concluded that the Celution and the 

StemSource were not substantially equivalent to any device 

already on the market. The FDA reasoned, in essence, that 

using fat rather than blood as a source of cells made those new 

devices different from existing devices. Therefore, FDA 

ruled that Cytori must go through the extensive premarket 

approval process. 

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Cytori argues that FDA’s decision was arbitrary and 

capricious under the Administrative Procedure Act. Cytori 

contends in particular that FDA acted unreasonably in 

rejecting Cytori’s substantial equivalence application and that, 

in any event, FDA did not reasonably explain its decision. In 

response, FDA first raises a jurisdictional argument: that 

Cytori must file its petition in the district court rather than in 

this Court. On the merits, FDA argues that it reasonably 

determined and explained that the Celution and the 

StemSource were not substantially equivalent to any device 

already on the market, meaning that Cytori must go through 

the more extensive premarket approval process. 

On the threshold jurisdictional issue, we conclude that 

this Court is the proper forum for direct review of FDA’s 

substantial equivalence determination. On the merits, we

conclude that FDA’s determination was reasonable and 

reasonably explained for purposes of the Administrative 

Procedure Act. We therefore deny the petitions for review. 

I

Cytori Therapeutics manufactures medical devices, 

including devices for use in cell therapy and other forms of 

regenerative medicine. In a typical cell therapy treatment, 

doctors introduce stem cells1 or other regenerative cells into 

the patient’s body to treat a disease. The cells may come 

from the patient or from a donor. For example, there are 

several devices on the market that draw and concentrate blood 

or bone marrow in order to treat leukemia and blood-borne 

diseases, among other things. The healthy donor cells are 

 1 Stem cells are a cellular “blank slate” that can change into a 

variety of other kinds of cells and generate additional stem cells. 

Those cells can be used to regenerate and repair damaged tissue. 

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used to replace the diseased or damaged cells and regenerate 

new tissue. 

Cytori is anticipating a major breakthrough in 

regenerative medicine: the expanded use of adipose tissue –

that is, fat – as a source of stem cells for therapy and other

medical uses. Cytori recently developed technology to 

harvest and concentrate stem and regenerative cells from fat 

via its Celution system. The Celution and the StemSource 

are two versions of this broader Celution system.

But before a new medical device such as the Celution or 

StemSource may be marketed in the United States, the 

manufacturer must obtain approval from FDA. In many

cases, premarket clearance is obtained by submitting a 

“premarket notification.” The premarket notification process 

requires that FDA find the new device “substantially 

equivalent” to a device that is currently on the market. See 

21 U.S.C. § 360c(i). Once FDA makes that finding, the 

device may be marketed. 

Some devices – in recent years, a low percentage of all 

devices marketed in the United States – are not “substantially 

equivalent” to existing devices and must go through FDA’s

more extensive “premarket approval” process. Premarket 

approval entails scientific review of a device and often 

requires clinical studies. 

Cytori recently submitted premarket notifications for two

of its cell-harvesting devices. Although the notifications 

both referred to virtually identical physical devices, each 

notification corresponded to a different marketing version of 

the device that would be sold for different medical purposes. 

One version of the device, labeled as the Celution 700, is 

intended to harvest and prepare stem cells for clinical 

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laboratory analysis. The other, labeled as the StemSource 

900, is also intended to harvest stem cells but for storage, so 

they can be used or analyzed in the future, potentially for 

therapeutic purposes. Neither version of the device is 

expressly intended for a specific cell therapy treatment, at 

least not yet. 

In general, federal law requires a new device to meet two 

criteria to be considered “substantially equivalent” to a 

previously marketed device. First, the new device must have 

the same intended use as the predicate device. Second, the 

new device must use the same basic technology as the 

predicate device – or, if not, the materials submitted must 

establish that the devices are equally safe and effective, and 

the technological differences must not raise any different 

questions of safety and effectiveness. 

In its premarket notifications, Cytori claimed that the 

Celution and StemSource were substantially equivalent to 

currently marketed devices, including devices that harvest 

cells from blood and bone marrow. FDA’s basic response 

was simple: Fat is not blood. And a device meant to derive

cells from fat does not have the same intended use as a device 

meant to derive cells from blood. FDA also determined (as 

an alternative basis for the “not substantially equivalent”

finding) that the devices had different technological 

characteristics or posed different safety concerns. In 

particular, FDA highlighted risks posed by an enzyme that the 

Celution and the StemSource use to separate the useful cells 

from other tissue. FDA stated that this enzyme posed new 

safety questions based on its effect on the harvested cells.2

 

 2 Cytori correctly notes that its devices are not yet labeled for 

use in cell therapy. However, because the StemSource 900 is 

designed for cell banking and cryopreservation – that is, for storing 

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Moreover, FDA said that the testing data for the Celution 

were based on a study of only 12 donors and thus not 

sufficient to demonstrate substantial equivalence. Therefore, 

FDA concluded that Cytori’s devices would need to complete 

the more extensive premarket approval process. 

Cytori contests FDA’s “not substantially equivalent” 

determination. Cytori claims that the Celution and the 

StemSource share an intended use with other predicate 

devices already on the market: They all process tissue 

samples and isolate cells. In addition, according to Cytori, 

the devices share basic technological characteristics. Cytori 

therefore claims that FDA acted unreasonably in rejecting its 

premarket notification. 

FDA contends that this Court does not have jurisdiction 

to hear Cytori’s petitions and, alternatively, defends its 

determination on the merits. 

II

As a preliminary matter, FDA asserts that this Court lacks

jurisdiction to hear Cytori’s petitions. In particular, FDA 

argues that the relevant statutes establish the district court as 

the proper forum for initial review of Cytori’s petitions. 

In general, initial review “occurs at the appellate level 

only when a direct-review statute specifically gives the court 

of appeals subject-matter jurisdiction to directly review 

agency action.” Watts v. SEC, 482 F.3d 501, 505 (D.C. Cir. 

2007). The medical device section of the Food, Drug, and 

Cosmetic Act contains such a direct-review provision. See 

 

cells – those cells could foreseeably be used for treatment at a later 

date.

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21 U.S.C. § 360g. That provision allows “any person 

adversely affected by” a specified regulation or order to file a 

petition in the U.S. Court of Appeals for the D.C. Circuit. 21 

U.S.C. § 360g(a). The specified orders in Section 360g 

include “an order pursuant to section 360c(i) of this title” –

that is, an order determining whether a new device is 

substantially equivalent to an existing device. 21 U.S.C. 

§ 360g(a)(8). 

This Court may therefore review an “order” that is made 

“pursuant to section 360c(i)” of Title 21. We thus must 

decide (i) whether a “not substantially equivalent” 

determination is an “order” for purposes of the Act’s 

direct-review provision; and, if so, (ii) whether such an order 

is “pursuant to” Section 360c(i).

First, a “not substantially equivalent” determination is 

plainly an “order” for purposes of the direct-review provision.

Because the Food, Drug, and Cosmetic Act does not define an 

“order,” we look to the Administrative Procedure Act’s 

definition. See Watts, 482 F.3d at 505. The APA provides 

that an ‘‘order’’ is “the whole or a part of a final disposition, 

whether affirmative, negative, injunctive, or declaratory in 

form.” 5 U.S.C. § 551(6) (emphasis added). 

In this case, FDA’s decision was the “final disposition” 

of the issue. FDA’s letter to Cytori stated that, after 

consideration, FDA had determined that the devices were not 

substantially equivalent to any device currently on the market 

and would need to go through the premarket approval process. 

The letter did not state that FDA was still considering the 

applications or that the decision was preliminary. FDA said 

that the devices were not substantially equivalent. End of 

story. And as the APA’s definition makes clear, a final 

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disposition may be either affirmative or negative. The 

disposition here was negative. 

Second, a “not substantially equivalent” order is made 

pursuant to Section 360c(i). Section 360c(i) sets forth the 

criteria for determining whether a new medical device is 

substantially equivalent to a predicate device already on the 

market. 

FDA contends that findings of equivalence – but not 

findings of non-equivalence – are made “pursuant to” Section

360c(i). According to FDA, Section 360c(i) explicitly refers 

to only one kind of order, in which “the Secretary by order has 

found that the device” is substantially equivalent. 21 U.S.C. 

§ 360c(i). Based on that passing reference to an affirmative 

order, FDA concludes that negative, non-equivalence orders 

are not made pursuant to Section 360c(i) because negative, 

non-equivalence orders are not specifically mentioned.

We do not read the statute that way. Section 360c(i) sets 

criteria for determining whether a device is substantially 

equivalent to another device already on the market. As a 

natural consequence of Section 360c(i)’s criteria, some orders 

will confirm substantial equivalence, and some will not. As 

the APA puts it, some orders may be “affirmative,” and others 

may be “negative.” Either way, the order is “pursuant to” 

Section 360c(i) because the criteria of that section – and that 

section alone – guide the determination. 

A non-equivalence determination, then, is an “order” 

made “pursuant to” Section 360c(i). Under the text of the 

Food, Drug, and Cosmetic Act, this Court therefore has 

jurisdiction to directly review Cytori’s petitions. 

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III

Applying the arbitrary and capricious standard of the 

Administrative Procedure Act, we next must determine 

whether FDA’s non-equivalence decision was reasonable and 

reasonably explained. See Motor Vehicle Manufacturers 

Assn. v. State Farm Mutual Auto. Insurance Co., 463 U.S. 29

(1983). 

Under Section 360c(i), a device must meet two core 

criteria to be substantially equivalent to a currently marketed 

device. First, the device must have “the same intended use as 

the predicate device.” 21 U.S.C. § 360c(i)(1)(A). Second, 

the new device must also have “the same technological 

characteristics as the predicate device” or, if not, the 

submitted data must establish that the new device is both

equally “safe and effective as a legally marketed device” and

“does not raise different questions of safety and effectiveness 

than the predicate device.” Id. 

Here, FDA reasonably determined – and reasonably 

explained its determination – that the Celution and the 

StemSource met neither the “intended use” criterion nor the 

“technological characteristics” criterion.

First, FDA concluded that the intended uses of the 

Celution and the StemSource are not the same as the intended 

uses of the most similar predicate devices. The Celution and 

the StemSource are designed to derive stem cells from fat 

tissue. But the most similar devices currently on the market 

are designed to derive cells from blood and bone marrow. 

Extracting cells from fat, FDA reasoned, is different from 

extracting cells from blood. Cytori, however, argues that 

deriving cells and preparing cell concentrate – whether from 

fat or blood – is the same intended use. 

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One of the factors FDA routinely considers regarding 

intended use concerns the “types of tissue involved.” FDA, 

Guidance on the Center for Devices and Radiological 

Health’s Premarket Notification Review Program (1986). To 

illustrate how different kinds of tissue can lead to different 

intended uses, FDA’s guidance document offered the example 

of (i) a device meant to process fat and (ii) a device meant to

process blood and other tissue. Id. A device designed 

specifically to process fat, FDA explained, is not intended for 

the same use as a device designed to process some other form 

of tissue. 

Here, using that same logic, FDA concluded and 

explained that fat is not blood and that the difference matters.

A court is ill-equipped to second-guess that kind of agency 

scientific judgment under the guise of the APA’s arbitrary and 

capricious standard. After careful review, we find FDA’s 

assessment both reasonable and reasonably explained.

Second, FDA concluded that, in any event, the Celution

and the StemSource did not meet the substantial equivalence 

criteria for another, independent reason: They did not pass 

the separate “technological characteristics” test for a 

substantial equivalence determination.

To pass this prong of the substantial equivalence test, a 

device ordinarily must have the same technological 

characteristics as a predicate device. But as FDA explained, 

the Celution and the StemSource use different technology 

than blood processing devices use. The Celution and the 

StemSource required new technology both to break down the 

fat tissue and to harvest the useful cells. For example, the 

Celution and the StemSource take advantage of the particular 

buoyancy of fat cells to separate heavier stem cells from fat 

tissue. In this way, the technology of the Celution and 

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StemSource differs from the technology of blood processing 

devices.

Alternatively, even if it does not have the same 

technological characteristics, a device may still satisfy the 

technological characteristics component of the substantial 

equivalence test if it is equally “safe and effective as a legally 

marketed device” and does not raise different “questions of 

safety.” However, FDA concluded that the Celution and 

StemSource did not meet this prong of the test. As to the 

StemSource, the FDA focused on one component, the enzyme 

used to aid the separation of stem cells from fat tissue. The 

enzyme, which is called Celase, was previously approved by 

FDA for one particular use: After liposuction, it is used to 

liquefy fat waste to simplify disposal. Because the enzyme 

has been approved only for that use, the scientists at FDA

identified “different questions of safety” – and reasonably 

raised concerns about the impact the Celase enzyme might 

have on cells that may be reintroduced into the human body.

Regarding the Celution, FDA also reasonably determined 

that the only safety study Cytori submitted – which had 

merely a dozen participants – was insufficient to show that the 

device was equally “safe and effective” as a “legally marketed 

device.” 

In short, FDA reasonably concluded and reasonably 

explained that the Celution and StemSource did not meet 

either the “intended use” requirement or the “technological 

characteristics” requirement for a substantial equivalence 

determination. 

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* * *

We have considered all of Cytori’s arguments. We deny 

the petitions for review.

So ordered. 

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