Connect with us

Business

Supreme Court upholds law that could force TikTok to shut down in U.S.

Published

on

Supreme Court upholds law that could force TikTok to shut down in U.S.

The Supreme Court on Friday upheld a law that calls for the shutdown of the U.S. operations of social media app TikTok due to privacy and security concerns related to its Chinese owner.

The justices in a unanimous opinion said the 2024 law does not violate the 1st Amendment or its protection for freedom of speech. The ruling means 170 million Americans may lose access to the popular social media platform as soon as Sunday.

“There is no doubt that, for more than 170 million Americans, TikTok offers a distinctive and expansive outlet for expression, means of engagement, and source of community,” the court said in an unsigned opinion. “But Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok’s data collection practices and relationship with a foreign adversary. .. we conclude that the challenged provisions do not violate petitioners’ 1st Amendment rights.”

The decision appears to leave the U.S. fate of TikTok to either a last-minute sale by its Chinese owners, or a reprieve from President Biden or President-elect Donald Trump.

Trump takes office on Monday, the day after the shut-down law is due to take effect. Recently, Trump has said he will try to work out a deal that keeps TikTok in operation, presumably by separating it from Chinese government control.

Advertisement

Last year, the House and Senate by large bipartisan votes approved the shut-down law, citing national security fears that ByteDance, TikTok’s parent company, was gathering data on tens of millions of Americans.

Congress decided TikTok must separate itself from its ownership by a “foreign adversary.”

In defense of the law, U.S. Solicitor General Elizabeth Prelogar told the justices that TikTok and ByteDance “collect vast swaths of data about tens of millions of Americans,” which China “could use for espionage or blackmail.”

In its 20-page “per curiam” opinion Friday, the court said the case turned on the ownership and control of TikTok, not free speech.

While TikTok is “operated in the United States by TikTok Inc., an American company incorporated and headquartered in California,” its “ultimate parent company is ByteDance Ltd., a privately held company that has operations in China. ByteDance Ltd. owns TikTok’s proprietary algorithm…and is subject to Chinese laws that require it to ‘assist or cooperate’ with the Chinese government’s ‘intelligence work’ and to ensure that the Chinese Government has ‘the power to access and control private data’ the company holds.”

Advertisement

Second, the court said the shut-down law is not targeted at speech or expression. The 1st Amendment protects against the government’s efforts to control the “content” of the speech, but that is not at issue in this case, the court said.

The law “does not regulate the creators…and directly regulates ByteDance and TikTok only through the divestiture requirement.”

The free-speech advocates who sued to block the law “have not identified any case in which this court has treated a regulation of corporate control as a direct regulation of expressive activity or semi-expressive conduct. We hesitate to break that new ground in this unique case.”

Biden and his administration tried and failed to make progress on a separation agreement. Government lawyers told the court they did not find ByteDance to be trustworthy.

But Trump may see it differently. Though he originally supported efforts to ban TikTok in the U.S., he recently changed his position. “I have a warm spot in my heart for TikTok,” Trump said last month.

Advertisement

One provision of the law allows the president to give TikTok a 90-day extension if it is determined there has been “significant progress” toward arranging a “qualified divestiture” from its foreign owners.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

RFK Jr. Sought to Stop Covid Vaccinations 6 Months After Rollout

Published

on

RFK Jr. Sought to Stop Covid Vaccinations 6 Months After Rollout

Robert F. Kennedy Jr., President-elect Donald J. Trump’s choice to lead the nation’s health agencies, formally asked the Food and Drug Administration to revoke the authorization of all Covid vaccines during a deadly phase of the pandemic when thousands of Americans were still dying every week.

Mr. Kennedy filed a petition with the F.D.A. in May 2021 demanding that officials rescind authorization for the shots and refrain from approving any Covid vaccine in the future.

Just six months earlier, Mr. Trump had declared the Covid vaccines a miracle. At the time Mr. Kennedy filed the petition, half of American adults were receiving their shots. Schools were reopening and churches were filling.

Estimates had begun to show that the rapid rollout of Covid vaccines had already saved about 140,000 lives in the United States.

The petition was filed on behalf of the nonprofit that Mr. Kennedy founded and led, Children’s Health Defense. It claimed that the risks of the vaccines outweighed the benefits and that the vaccines weren’t necessary because good treatments were available, including ivermectin and hydroxychloroquine, which had already been deemed ineffective against the virus.

Advertisement

The petition received little notice when it was filed. Mr. Kennedy was then on the fringes of the public health establishment, and the agency denied it within months. Public health experts told about the filing said it was shocking.

John Moore, a professor of immunology at Weill Cornell Medical College, called Mr. Kennedy’s request to the F.D.A. “an appalling error of judgment.” Gregg Gonsalves, an epidemiologist at the Yale School of Public Health, likened having Mr. Kennedy lead the federal health agencies to “putting a flat earther in charge of NASA.”

Dr. Robert Califf, commissioner of the Food and Drug Administration, described Mr. Kennedy’s effort to halt the use of Covid vaccines as a “massive error.”

Mr. Kennedy’s transition spokeswoman did not respond to requests for comment, but has said recently that he does not want to take vaccines away.

Asked in November by an NBC reporter about his general opposition to Covid vaccines — and whether he would have stopped authorization — Mr. Kennedy said he was concerned that the vaccines did not prevent transmission of the virus.

Advertisement

“I wouldn’t have directly blocked it,” he said. “I would have made sure that we had the best science, and there was no effort to do that at that time.”

Mr. Kennedy’s early opposition to Covid vaccines has alarmed public health experts, many of whom contend that it should disqualify him from overseeing health agencies with the power to authorize, monitor and allocate funding for millions of vaccines each year.

They are also concerned about how he might handle a possible bird flu pandemic, which could necessitate a rapid deployment of vaccines.

As Mr. Kennedy prepares for his confirmation hearings before two Senate committees, he and his allies have insisted that he is not anti-vaccine.

In fact, in mid-2023, he told a House panel that he had taken all recommended vaccines — except for the Covid immunization.

Advertisement

At his confirmation hearings, he’ll most likely face scrutiny of his broader statements on vaccines, including that the polio vaccine cost more lives than it saved.

Mr. Trump has stepped forward in recent weeks to defend Mr. Kennedy after The New York Times reported that one of Mr. Kennedy’s lawyers had previously petitioned the F.D.A. to revoke approval or pause distribution of several polio vaccines over safety concerns.

“I think he’s going to be much less radical than you would think,” Mr. Trump said last month.

After the Times report, Mr. Trump and Mr. Kennedy expressed their support for the polio vaccine.

If confirmed by the Senate as secretary of the Health and Human Services Department, Mr. Kennedy would assume oversight of $8 billion in funding for the Vaccines for Children program and would have the authority to appoint new members to a panel that makes influential vaccine recommendations to states.

Advertisement

At the time Mr. Kennedy challenged the Covid vaccines, some of his objections touched on wider concerns about their rapid development. Emergency-use authorization — a preliminary form of approval — for immunizations was unusual. Others argued that a public health emergency dictated a speedier rollout.

Dr. Jennifer Nuzzo, director of the Pandemic Center at Brown University School of Public Health, said it would be reasonable to debate whether Covid vaccines should have been subject to additional study.

But she profoundly disagreed with Mr. Kennedy’s views, saying that “the idea that in early 2021 that you could be saying that people over the age of 65 don’t need Covid vaccines — that’s just nuts.”

Vaccines have rare side effects, and there have been cases of injury from the Covid shots. Government officials weigh the harms against the potential to save lives. An estimate released in early 2024 found that the Covid vaccines and mitigation measures saved about 800,000 lives in the United States.

Another study found that in late 2021 and 2022, Covid death rates among unvaccinated people were 14 times the rates of those who had received a Covid booster shot. Researchers also estimated that from May 2021 through September 2022, more than 230,000 deaths could have been prevented among people who declined initial Covid inoculations.

Advertisement

From the start of the Covid vaccine campaign, Mr. Kennedy’s view that the Covid vaccines were dangerous put him at odds with Mr. Trump, whose Operation Warp Speed to develop the vaccines was one of his policy triumphs. And Mr. Kennedy went on a concerted campaign against the vaccine.

Mr. Kennedy told Louisiana lawmakers in late 2021 that the Covid vaccine was the “deadliest vaccine ever made.”

He has remained a plaintiff in a lawsuit against President Biden and others, contesting efforts by government officials to limit his ability to suggest on social media that Covid vaccines were not safe.

In January 2021, Mr. Kennedy suggested on Facebook that the death of the baseball legend Hank Aaron, 86, was related to a Covid vaccine he had received 17 days earlier. It was “part of a wave of suspicious deaths” following Covid vaccines, he claimed. A doctor who was vaccinated alongside Mr. Aaron and the county medical examiner dismissed the claim.

In May, when Mr. Kennedy petitioned the F.D.A. to “immediately remove Covid vaccines from the market,” he was joined by Dr. Meryl Nass, a member of the Children’s Health Defense scientific advisory board and a physician in Maine.

Advertisement

Her medical license was initially suspended on an emergency basis in early 2022 for prescribing ivermectin and hydroxychloroquine to patients with severe cases of Covid, including one who was intubated, Maine medical board records show.

She later sued the board, claiming that it retaliated against her for exercising her right to free speech. The case is pending.

In 2022, Mr. Kennedy and others filed a lawsuit against the F.D.A. on behalf of Children’s Health Defense and parents who said they were concerned that their children would be given Covid vaccines without their knowledge or consent. The amended lawsuit, filed in July 2022, sought a court order requesting that the agency reconsider granting authorization for Pfizer and Moderna Covid vaccines for children.

A Texas appeals court dismissed the case in early 2024, concurring with a lower court that the plaintiffs did not face a “concrete or imminent” risk of harm. In June, the Supreme Court declined to hear an appeal.

Mr. Kennedy also sent letters to the F.D.A. threatening legal action if vaccine authorizations for children were granted.

Advertisement

Covid vaccines by Pfizer and Moderna for infants and children 6 months to 11 years old remain in use under emergency authorization, according to the F.D.A. Spokesmen for Pfizer and for Moderna said the companies are pursuing full approval for all ages.

Mr. Kennedy claimed in the censorship case that top Biden administration officials had coerced social media platforms to silence him, mostly during the summer of 2021. At the time, vaccine rates were stalling. People who were not vaccinated began to die at higher rates. Some who died were young; their loved ones said they were confused by conflicting messages on social media — or regretted that they had not gotten the vaccine.

Records in the lawsuit outline a briefing that summer with Jen Psaki, the White House press secretary at the time, and Dr. Vivek Murthy, the U.S. surgeon general, both of whom criticized social media companies for allowing the spread of misinformation that was influencing people against vaccination.

“And we can’t wait longer for them to take aggressive action because it’s costing people their lives,” Dr. Murthy said on July 15, 2021.

Mr. Biden expressed outrage the following day, telling reporters that social media companies that hosted vaccine misinformation were “killing people.”

Advertisement

In legal filings, Mr. Kennedy said that he had been named one of the “Disinformation Dozen” by a prominent advocacy group — and that he was one of the people the White House was targeting. Exhibits in the lawsuit show that White House officials leaned on social media companies to take down misinformation.

Within a month, a senior Facebook executive reported to Dr. Murthy that it had removed a number of pages or groups, including Mr. Kennedy’s, court records show.

The Supreme Court dismissed an associated case last summer, and an appeals court dismissed Mr. Kennedy’s case late last year. Lawyers representing Mr. Kennedy and others are still working on obtaining depositions of about 30 people, mostly Biden administration officials.

Sheryl Gay Stolberg and Dylan Freedman contributed reporting.

Advertisement
Continue Reading

Business

Musk and Zuckerberg Reflect New Blows Against D.E.I. Policies

Published

on

Musk and Zuckerberg Reflect New Blows Against D.E.I. Policies

Even before Donald Trump won in November, the conservative backlash against diversity, equity and inclusion policies was going strong.

But new revelations about the next Trump administration’s efforts to constrain what’s commonly known as D.E.I. — and corporate titans’ willingness to put such programs aside — suggest just how strident the pushback will be.

Elon Musk’s cost-cutting initiative is eyeing big cuts to federal diversity programs, according to The Washington Post. The nongovernmental panel, the Department of Government Efficiency, is said to be considering a report by a right-wing civil rights group that claims to have identified more than $120 billion in potential cuts in D.E.I.-related programs.

Among them, according to The Post, are ending programs to benefit Black farmers and businesses, as well as a Biden-era executive order reserving 15 percent of federal contracts for minority-owned businesses. (Separately, the F.B.I. confirmed that it had closed its Office of Diversity and Inclusion, prompting Trump to express anger that it had existed at all.)

The Times shed more light on Mark Zuckerberg’s move to unwind D.E.I. at Meta. In a meeting with Stephen Miller, the influential Trump aide, Zuckerberg signaled that he would do nothing to obstruct the president-elect’s agenda of cracking down on corporate D.E.I. culture. The tech mogul said new guidelines were coming — and soon after announced a rollback of content moderation rules and an end to Meta’s D.E.I. efforts.

Advertisement

Moreover, Zuckerberg blamed Sheryl Sandberg, his former longtime lieutenant who was known for cultural advocacy programs like Lean In, for encouraging employee self-expression in the workplace, The Times adds. (The revelation stoked outrage online.)

The news underscores how defenses of D.E.I. are faltering. Many companies had already been rethinking their commitment to diversity programs before Trump’s victory, especially after the Supreme Court struck down affirmative action at universities. But several corporate giants, including Amazon and McDonald’s, have ended or scaled back such programs post-election.

For some corporations, work on diversity will still take place, using language that isn’t as politically charged. But as corporate leaders respond to pressure from ascendant right-wing activists and seek to get on Trump’s good side, the pressure on D.E.I. isn’t going away.

  • In related news: Meta’s chief technology officer said the company had mishandled how it rolled out changes to diversity policies and content moderation. And for some workers whose careers haven’t advanced how they like, diversity programs may have simply been an excuse to sugarcoat the real reason they were passed over, according to a Wall Street Journal column.

Israel’s security cabinet meets to approve the cease-fire deal. The vote is taking place after Israeli and Hamas negotiators resolved remaining disputes, with ministers expected to clear the agreement this weekend. If approved, Israel would withdraw eastward and both sides would release hostages or prisoners, potentially paving a path to ending the 15-month war.

China’s economy grows, but its population shrinks again. New data showed that the Chinese economy grew 5 percent last year, with increased exports and investment in manufacturing offsetting a slump in construction. But Beijing also disclosed that China’s population fell for a third straight year, despite an unexpected rise in births, portending a longer-term challenge to economic growth.

Advertisement

The Biden administration files a final flurry of regulatory actions. Regulators including the Consumer Financial Protection Bureau, the Environmental Protection Agency, the Federal Trade Commission and the Justice Department struck settlements with companies including American Express, Block, General Motors and Toyota, and recommended charges against the parent of Snapchat. They’re a last burst of oversight actions before the Trump administration, which is expected to take a lighter hand in regulating business, takes office next week.

Bitcoin, stock futures and government bonds — all are rallying modestly on Friday, the final trading day of the Biden era.

Their fortunes appear to be buoyed by renewed bullishness for the next Trump administration, with investors feeling relieved about what they’ve heard from the president-elect’s Cabinet picks on how they intend to operate.

Markets were especially heartened by Donald Trump’s Treasury secretary pick, Scott Bessent. In his confirmation hearing on Thursday, Bessent played down the inflationary risks of Trump’s agenda.

Here are the highlights:

Advertisement
  • Bessent called for renewing and extending Trump’s 2017 tax cuts to avert “economic calamity.” But while he said cutting fiscal spending was also important, he was noncommittal about repealing the country’s debt ceiling and said entitlement programs like Medicare would be safe.

  • He said tariffs should be imposed on select countries to fix trade imbalances or used as leverage to negotiate favorable trade deals. A new round directed at China seems inevitable. In response, China is zeroing in on American chipmakers.

  • Bessent said that Fed independence is key to American fiscal stability. But he warned that Trump, who has long grumbled about high interest rates, was still “going to make his views known.”

  • He demurred on the idea of the Fed creating a digital currency. Still, Bloomberg reports that Trump is expected to designate crypto as a national priority. Speculation is also growing that Trump will greenlight a federal Bitcoin reserve.

Other confirmation hearings raised questions about how the second Trump administration was shaping up. Gov. Doug Burgum of North Dakota, the choice for interior secretary, criticized renewables as part of a wider national “electricity crisis.” The country needed to refocus on fossil fuels to maintain its global lead in energy-intensive sectors like artificial intelligence, he added.

But Lee Zeldin, Trump’s choice to lead the Environmental Protection Agency, dodged questions about Trump’s repeated vows to roll back or scrap the Inflation Reduction Act, Biden’s signature climate legislation.

And Scott Turner, the former N.F.L. player tapped to head the Department of Housing and Urban Development, offered little detail about how he would address a housing crunch. His lack of clarity came as new Freddie Mac data showed mortgage rates hitting an eight-month high.

The surge is pricing some prospective buyers out of the market — despite the Fed having lowered borrowing costs — in a trend that has alarmed some market watchers.


As TikTok nears a potential ban in the United States, elected officials are racing to find ways to delay a crisis that many of them helped stoke by backing the law behind the punishment.

Advertisement

Here’s where things stand.

President Biden is trying to make it Donald Trump’s problem. An administration official told NBC News that the White House was “exploring options” to forestall the app from going dark. Biden also does not plan to fine the companies that host the TikTok app, like Google and Apple, according to NBC News.

That would leave it up to Trump to enforce any punishments against TikTok and its partners. The president-elect has been weighing an executive order to let the app keep running until a U.S. buyer is found, though it is unclear how effective that would be.

Senate Democrats scrambled to arrange a delay. Lawmakers led by Ed Markey of Massachusetts, Chris Van Hollen of Maryland and Cory Booker of New Jersey have sought to pass a bill giving TikTok more time to find a buyer. But Senator Tom Cotton, Republican of Arkansas, objected, citing concerns about dangers posed by the app.

A spokesperson for Senator Chuck Schumer, Democrat of New York, told The Wall Street Journal that the minority leader spoke with Biden on Thursday about creating a delay.

Advertisement

TikTok’s C.E.O. is continuing to court Trump as well. In addition to sitting on the dais for the inauguration with top Cabinet picks and other tech moguls, Shou Chew is hosting a party for pro-Trump creators Sunday night, which will cost TikTok about $50,000 to throw.

Chew is also expected to attend a Trump victory rally on Sunday at the Capital One Arena, sitting in the suite of Raul Fernandez, a Trump donor and a partner at Monumental Sports and Entertainment, the sports team owner.


Elon Musk has famously and unapologetically clashed with regulators and heads of state. But he is coming up against opponents who appear to have touched a nerve: gamers who have questioned his claims to video game mastery.

A recap: Musk has boasted lately on X lately about his gaming prowess, including soaring to the top of the global leader boards in Diablo IV and Path of Exile 2. Such feats require skills, sure, but also a lot of screen time, leading skeptics to question how the C.E.O. of six companies and a key adviser to Donald Trump finds the time.

Online sleuths increasingly believe they have found the answer: They’ve accused Musk of paying others to use his accounts and put in the hours to boost his rankings.

Advertisement

A popular YouTube gaming personality named Asmongold in particular accused Musk of being disingenuous about his rapid rise to the top.

Musk has taken those charges personally. The billionaire has shared videos of himself in action as a way to prove he’s the real deal. Musk also fired back at Asmongold, saying of the YouTuber, “he is NOT good at video games.”

Others came to Asmongold’s defense, using X’s Community Notes feature to annotate Musk’s posts.

Given the level of discussion online, this spat feels like it’s far from over.

Deals

Advertisement
  • Rio Tinto and Glencore reportedly held talks last year about a deal, which would have combined two of the world’s biggest miners, though discussions aren’t currently active. (Bloomberg).

  • Junior investment bankers beware: Artificial intelligence tools can write 95 percent of an I.P.O. prospectus in minutes, according to David Solomon, Goldman Sachs’s C.E.O. (FT)

Politics, policy and regulation

  • Meet Ken Howery, the tech investor and friend of Elon Musk who will spearhead any deal talks with Denmark over Greenland. (NYT)

  • A group representing Capitol Hill staffers who work for progressive lawmakers is pushing for a 32-hour workweek. (Politico)

Best of the rest

  • A SpaceX rocket broke up on Thursday during a test flight, forcing the F.A.A. to divert several commercial flights to avoid the debris. (CNBC)

  • David Lynch, the director behind classic movies and TV shows including “Blue Velvet,” “Mulholland Drive” and “Twin Peaks,” has died. He was 78. (NYT)

We’d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com.

Continue Reading

Business

Column: A stem cell clinic tees up a Supreme Court challenge to rules protecting patients' health and safety

Published

on

Column: A stem cell clinic tees up a Supreme Court challenge to rules protecting patients' health and safety

For years, the Food and Drug Administration has taken up arms against clinics hawking unproven and ineffective stem cell treatments to desperate patients looking for cures of intractable diseases and conditions such as Alzheimer’s, Parkinson’s, multiple sclerosis and even erectile dysfunction.

As the FDA has repeatedly cautioned, there is no scientifically validated evidence that these treatments work. They’re typically not covered by insurance. For the clinics, however, they’re money-makers, with fees of $9,000 or more per treatment; the clinics often recommend multiple treatments.

But now the FDA’s campaign against these bogus therapies is facing serious headwinds on two fronts.

[The FDA is] likely to be subjected to enormous political pressure during Trump 2.0 to weaken oversight of cell and regenerative products.

— Paul S. Knoepfler, UC Davis

Advertisement

One is the Supreme Court. A California stem cell network that recently lost a lawsuit brought by the FDA has signaled that it intends to appeal to the Supreme Court. It’s far from certain that the court will take up the appeal, at this stage — but a majority of the justices have looked favorably on efforts to rein in administrative agencies such as the FDA.

“I think it’s highly unlikely … but not impossible” that the court will take up the stem cell case, says Henry T. Greely, an expert in the legal issues involving bioscientific technologies.

The case doesn’t have the customary hallmarks of cases that warrant Supreme Court action, Greely told me, such as disagreements among appellate circuits requiring resolution. But it may suit the ideological bent of four justices — the minimum number required to place a case on the Supreme Court docket.

“Some of these justices really hate administrative agency power,” Greely says.

Advertisement

In a landmark ruling last year, the Supreme Court struck down a 40-year-old precedent—the Chevron doctrine — that required courts to accept federal agencies’ interpretations of the laws they administer as long as their interpretations weren’t openly unreasonable. That sharply narrowed agency authority. The FDA has ranked high on the list of agencies that conservatives see as exercising excessive authority.

It may not take a Supreme Court decision to hamper the FDA’s campaign against bogus stem cell treatments.

“Just the possibility that [the Supreme Court] could take this case may have a chilling effect on FDA activity in the stem cell clinic space,” Paul S. Knoepfler, a UC Davis biologist who has assiduously tracked the industry, told me. Even without the case, he says, the FDA is “likely to be subjected to enormous political pressure during Trump 2.0 to weaken oversight of cell and regenerative products.”

That brings us to the second threat, coming from Donald Trump’s nominee as secretary of Health and Human Services, Robert F. Kennedy Jr. Even before his nomination, Kennedy made clear that he was girding to go to war against the FDA, which would come under his jurisdiction at HHS.

In an Oct. 25 tweet, he declared “FDA’s war on public health is about to end.” He specifically accused the agency of “aggressive suppression” of stem cells as well as “psychedelics, peptides, … raw milk, hyperbaric therapies, chelating compounds, ivermectin, hydroxychloroquine … and anything else that advances human health and can’t be patented by Pharma.”

Advertisement

Kennedy wasn’t clear what he meant by his reference to stem cells or whether he was referring to the unproven stem cell treatments marketed by the clinics facing FDA regulation.

Many of the other items in his litany have been shown to be ineffective for their marketed purposes — ivermectin and hydroxychloroquine, for example, have been touted as treatments for COVID-19 even though scientific studies have shown them to be useless against the disease. I asked Kennedy to clarify his reference to stem cells but haven’t received a reply.

Here’s a brief primer on what these clinics are selling. Typically, their method involves removing fat cells from a customer via liposuction, treating the fat ostensibly to extract stem cells, and injecting those cells into the customer’s body.

For instance, Cell Surgical Network, a defendant in the FDA’s California case, boasts of offering “innovative solutions” for spine disease, knee problems and other orthopedic conditions; lupus, Crohn’s and other autoimmune diseases; ALS, Parkinson’s and multiple sclerosis; cardiac conditions; and glaucoma, among other issues. None of these claims has been supported by scientific research.

The only stem cell products the FDA has approved for use are stem cells extracted from umbilical cord blood, and then only for rare blood disorders.

Advertisement

Like other clinics, Cell Surgical has asserted that its products are exempt from oversight because, as reimplantations of a customer’s own tissue, they don’t meet the law’s definition of “drugs.”

They also claim the “same surgical procedure” exemption from FDA regulation, which the agency typically applies to procedures in which a patient’s tissue is given only minimal processing before being used, such as in skin grafting or coronary artery bypass surgery. The FDA holds that the stem cell clinics subject the tissues to significant processing and that the procedures are separate surgical events.

Before the FDA acted, both the Florida and California clinic networks had been operating for years. The Florida company had been operating since at least 2014, and Lander and Berman had founded their California Stem Cell Treatment Center in Rancho Mirage in 2010. By 2018, the FDA said in its lawsuit, Lander had claimed that affiliated clinics had administered the technique he and Berman developed to more than 6,000 patients.

Yet the FDA sometimes seems to be fighting a losing battle, or at least a whack-a-mole battle, against clinics offering dubious stem cell treatments. There are just too many — more than 1,000, by Knoepfler’s reckoning — making pitches to desperate customers seeking cures against intractable conditions.

That has left things up to state and local regulators, but the record there is spotty. A notable recent success can be chalked up to Georgia Atty. Gen. Chris Carr, who announced on Jan. 8 that in conjunction with the Federal Trade Commission he had obtained judgments totaling more than $5.1 million from the operators of bogus stem cell clinics. The sum includes refunds of more than $3.3 million for 479 customers, most of whom were “older or disabled adults” who had been “sold expensive, unproven stem cell products.”

Advertisement

In June 2019, federal Judge Ursula Ungaro of Miami ordered U.S. Stem Cell of Florida effectively shut down, siding with the FDA in a lawsuit the agency had filed in May 2018.

The FDA’s case against California-based Cell Surgical Network and its affiliates took a somewhat different course. The agency filed suit in California federal court against the network and its physician-proprietors, Elliott B. Lander and the late Mark Berman, the same day it sued the Florida firm. But it lost at the trial stage in August 2022, when federal Judge Jesus Bernal of Riverside accepted the defendants’ claim that they were entitled to the “same surgical procedure” exemption from FDA oversight.

Bernal’s decision, however, was overturned last September by the San Francisco-based 9th Circuit Court of Appeals, which found in a 3-0 ruling that the FDA’s interpretation of the law “is the only interpretation that makes sense.” The appeals court sent the case back to Bernal with instructions to reconsider the case in light of its finding.

That’s where things stood until Jan. 6, when Cell Surgical Network and its affiliated defendants asked the appellate court to suspend its order to remand the case to Bernal, pending an appeal to the Supreme Court. The FDA opposed the motion, arguing that the Supreme Court is unlikely to take up the case. The appellate court rejected the network’s motion Tuesday, but the network hasn’t indicated that it intends to drop the Supreme Court appeal. I asked its lawyers if their plans have changed but haven’t received a reply.

As I’ve written before, undermining the FDA’s authority has been a right-wing project for years. That’s because the agency’s duty is to stand in the way of businesses desiring to push unsafe and ineffective nostrums at unwary consumers, and also in the way of a perverse idea that personal freedom includes the freedom to be gulled by charlatans.

Advertisement

In 2018, then-President Trump signed a right-to-try law that purportedly gave victims of terminal diseases access to experimental treatments that might save them.

But despite claims that it was designed as a “compassionate measure” for terminal patient, the law was a scam perpetrated by the Koch network and its allies, aimed at undermining the FDA’s authority to make sure our drugs are safe and effective. Sen. Ron Johnson (R-Wis.) ultimately gave the game away, informing then-FDA Commissioner Scott Gottlieb, a critic of the law, that its purpose was to “diminish the FDA’s power over people’s lives, not increase it.”

In 2023, GOP-appointed judges on the right wing-dominated 5th Circuit Court of Appeals ruled that the FDA had exceeded its authority in advising against the use of ivermectin against COVID. “The FDA can inform,” the court said, “but it has identified no authority allowing it to recommend consumers ‘stop’ taking medicine.” (Emphasis in the original.)

There may not be much distance between that finding by the 5th Circuit and a decision by the current Supreme Court majority that the FDA overstepped its bounds in not only informing consumers of the dangers of taking unproven and even dangerous stem cell treatments, but blocking the treatments by seeking to put clinics that sell them.

“MAGA loves stem cell clinics,” Greely says. “Why? It gives people a chance to make a lot of money, and because it’s a change for people to say ‘no bureaucrat is going to tell me what to do.’”

Advertisement

If the trend continues along these lines, you can expect more providers collecting more dollars by pushing worthless therapies to desperate customers. The threat to Americans’ health will be very real indeed.

Continue Reading
Advertisement

Trending