UPDATES & ANALYSIS

Oral argument on the right to a jury will be heard by Iowa Supreme Court in session in Perry April 4

by Rox Laird | April 3, 2023

In July 2020 the Iowa Attorney General filed a civil suit alleging a now-defunct Omaha company violated Iowa’s Consumer Fraud Act in marketing stem-cell and exosome therapy treatments using false, misleading, and deceptive tactics.

When the case went to trial in Polk County District Court, the defendant, Travis Autor, an unlicensed chiropractor who owned a stem cell clinic operating under the name of Regenerative Medicine and Anti-Aging Institutes of Omaha, asked that the case to be heard by a jury. The judge denied the request.

Autor appealed that ruling to the Iowa Supreme Court, which will hear arguments in the case in Perry at 7 p.m. Tuesday at the Perry Performing Arts Center, 1200 18th St. [Go to On Brief’s “Cases in the Pipeline” page to read the briefs filed in this case.]

According to the Attorney General’s brief, “Autor claimed that stem cell therapy and exosome therapy provided at the Omaha clinic could heal a range of common health problems and reverse the aging process. The clinic advertised that stem cell and exosome therapies could treat, cure, prevent, or reverse a variety of medical conditions, such as chronic obstructive pulmonary disease, neuropathy, joint pain, knee pain, and Alzheimer’s disease.”

The treatments were pitched at events held at Iowa hotels and restaurants, according to the Attorney General, attended by hundreds of Iowans. “Many ultimately paid thousands of dollars for stem cell therapy or exosome therapy (none of which is covered by health insurance) with prices ranging from $1,400 to over $27,000.”

In its suit, the Attorney General seeks to enjoin the defendants from further fraudulent practices and to restore to Iowans money acquired by the defendants by acts or practices that violate the Consumer Fraud Act.

The State also asked the trial court to issue civil penalties.

That is at the heart of this appeal because the defendants argue that seeking a civil penalty transforms the Consumer Fraud Act into a punitive action, in which case the defendants are entitled to a trial by jury as provided for by the Iowa Constitution.

The Attorney General argued, and the District Court agreed, that the Legislature in the Consumer Fraud Act explicitly declared in Iowa Code section 714.16(7) that consumer fraud actions brought by the Attorney General “shall be by equitable proceedings.”

By “equitable proceeding” the Legislature referred to the jurisdiction of Iowa courts to hear cases where the court has the power to grant remedies, such as an injunction, as opposed to a civil liability suit seeking monetary damages.

Although Article 1, Section 9, of the Iowa Constitution states in part that “The right of trial by jury shall remain inviolate,” the right to trial by jury is not absolute in all civil cases. A civil action under the Consumer Fraud Act is one such exception.

Autor argues, however, that the Legislature’s expansion of the Consumer Fraud Act to allow civil penalties is “antithetical to proper equitable relief,” which is a remedy that compensates defrauded individuals for their losses.

“The [Consumer Fraud Act’s] declaration that cases should tried by ‘equitable proceedings’ does not end the inquiry,” Autor argues in a brief filed with the Court, because a defendant’s constitutional right to a trial by jury may not be denied by inserting financial penalties into a statute that otherwise directs that consumer fraud cases be decided by a judge.

The oral argument in Perry is one in a series of arguments heard outside of Des Moines in the Court’s effort to make the appellate process more accessible to the public. Arguments were also heard this term in Denison and Iowa City. There will be a public reception with the justices in the auditorium lobby sponsored by the Dallas County Bar Association following the oral arguments.

Tags: Iowa Supreme Court 2022-23