RATIONALE: Drugs used in chemotherapy, such as pentostatin, cyclophosphamide, and CAMPATH-1H work in different ways to stop cancer cells from dividing so they stop growing or die. Monoclonal antibodies, such as rituximab can locate cancer cells and either kill them or deliver cancer-killing substances to them without harming normal cells. Combining chemotherapy with monoclonal antibody therapy may kill more tumor cells.

PURPOSE: This phase II trial is studying how well pentostatin, cyclophosphamide, rituximab, and CAMPATH-1H work in treating patients with relapsed or refractory B-cell chronic lymphocytic leukemia.

OBJECTIVES:

Primary

• Determine the objective response rate (complete remission, partial remission [PR], or nodular PR) in patients with relapsed or refractory B-cell chronic lymphocytic leukemia (CLL) treated with pentostatin, cyclophosphamide, and rituximab (PCR) followed by CAMPATH-1H .
• Determine the presence of minimal residual disease in patients treated with this regimen who achieve a CR or nPR

Secondary

• Determine the toxicity of this regimen in these patients.
• Determine the overall and progression-free survival of patients treated with this regimen.
• Evaluate the number of patients who after PCR (or during PCR for PD), only achieve a PR, SD, or PD and who subsequently convert to a higher response category after CAMPATH-1H .

Exploratory

• Assess the angiogenic profile (i.e., secretion levels of pro- versus anti-angiogenic molecules) of CLL B cell clones as well as bone marrow angiogenesis (i.e., vascular density by immunohistochemistry) at baseline, after PCR, after CAMPATH-1H, every six months (serum only), and at time of response assessment (marrow).
• Determine the V_H gene mutation status and CD38 expression of the B-CLL clones at study entry and at the end of the therapy and assess the association between the VH gene mutation status and CD38 expression and clinical outcome.
• Determine surface phenotype (by flow cytometry) and genetic defects (by CLL FISH panel) information on CLL-B cell clones and associate with clinical outcome.
• Monitor the T-cell status by repertoire and flow cytometry analysis to determine the nature and extent of T-cell deficiency induced by the PCR and CAMPATH-1H treatment and assess any association with clinical outcome and toxicities.

Inclusion criteria:

• Diagnosis of B-cell chronic lymphocytic leukemia (CLL) meeting the following criteria:

  • Peripheral blood absolute lymphocyte count greater than 5,000/mm^3

  • Lymphocytosis must comprise small to moderate size lymphocytes with no greater than 55% prolymphocytes, atypical lymphocytes, or lymphoblasts morphologically

  • Phenotypically characterized CLL defined by the following:

    • Predominant population of cells share B-cell antigens with CD5 in the absence of other pan-T-cell markers (CD3 or CD2)
    • B cell expresses either kappa or lambda light chains
    • Surface immunoglobulin with low cell surface density expression

• Requires chemotherapy, as indicated by any of the following:

  • Disease-related symptoms

    • Weight loss of 10% or more within the past 6 months
    • Extreme fatigue
    • Fevers greater than 100.5°F for 2 weeks without evidence of infection
    • Night sweats without evidence of infection

  • Evidence of progressive marrow failure manifested by the development of or worsening anemia (hemoglobin no greater than 10 g/dL) and/or thrombocytopenia (platelet count no greater than 100,000/mm^3)

  • Massive (i.e., greater than 6 cm below left costal margin) or progressive splenomegaly

  • Massive nodes or clusters (i.e., greater than 10 cm in longest diameter) or progressive adenopathy

  • Progressive lymphocytosis with an increase of greater than 50% over a 2-month period OR an anticipated doubling time of less than 6 months

• Demonstrated progression after at least 1 course of either an alkylating agent-based or purine nucleoside-based (e.g., fludarabine) regimen OR failed to achieve a meaningful response OR relapsed after prior therapy

  • Patients who have relapsed after a pentostatin-based regimen are eligible provided the response was greater than 12 months prior to study entry

• 18 and over

• ECOG Performance Status 0-2

• Bilirubin no greater than 2 mg/dL (unless secondary to tumor, hemolysis, or Gilbert syndrome)

• Creatinine no greater than 2.0 mg/dL

• Creatinine clearance ≥ 30 mL/min

• Negative pregnancy test

• Fertile patients must use 2 methods of effective contraception (including 1 barrier method) for at least 28 days before starting lenalidomide, while participating in the study, and for at least 28 days after discontinuation/stopping lenalidomide

• At least 8 weeks since prior rituximab

• At least 6 weeks since prior chemotherapy

• At least 1 year since prior pentostatin, cyclophosphamide, and rituximab (PCR) therapy

  • PCR therapy at least 1 year prior to study entry allowed

Exclusion criteria:

• Bone marrow dysplasia related to prior therapy
• New York Heart Association class III or IV heart failure
• Prior lenalidomide
• Other malignancy within the past 2 years except squamous cell or basal cell skin cancer or carcinoma in situ of the cervix
• Pregnant or nursing
• Concurrent oral or IV antibiotics for active infection