SIDEBAR
NOTE: THIS IS A FICTIONAL RULING BASED ON CHAT GPT 4o's READING OF THE FINAL BRIEFS IN DECEMBER 2024.
Main Blog:
https://www.discoveriesinhealthpolicy.com/2024/12/chat-gpt-4o-reviews-final-fda-ldt-court.html
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FICTIONAL
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Prompt:
Going back to the three PDF final briefs, one from ACLA, one from AMP, and one for the government (DOJ for FDA). Take the role of the federal district court judge in Texas and write an opinion finding for the moving parties (ACLA, AMP).
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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
AMERICAN CLINICAL LABORATORY ASSOCIATION, et al.,
ASSOCIATION FOR MOLECULAR PATHOLOGY, et al., Plaintiffs,
v.
UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Defendants.
Case Nos. 4:24-cv-479-SDJ and 4:24-cv-824-SDJ
MEMORANDUM OPINION AND ORDER
This Court considers the motions for summary judgment filed by Plaintiffs, the American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP), challenging the Final Rule promulgated by the United States Food and Drug Administration (FDA) asserting jurisdiction over laboratory-developed tests (LDTs). Plaintiffs argue that the FDA’s Final Rule exceeds statutory authority, violates the Administrative Procedure Act (APA), and conflicts with the statutory frameworks established by Congress under the Federal Food, Drug, and Cosmetic Act (FDCA) and the Clinical Laboratory Improvement Amendments (CLIA).
Having carefully considered the briefs, statutory framework, regulatory history, and relevant precedent, this Court finds for the Plaintiffs. The Final Rule exceeds the FDA’s statutory authority, conflicts with the major questions doctrine, and is arbitrary and capricious in violation of the APA. For the reasons stated below, the Court GRANTS Plaintiffs’ motions for summary judgment and VACATES the FDA’s Final Rule.
I. Background
The Final Rule, issued by the FDA, seeks to regulate LDTs as medical devices under the FDCA. Historically, the FDA has exercised enforcement discretion over LDTs, deferring to the regulatory framework established by CLIA, which governs laboratory operations to ensure the safety, accuracy, and reliability of laboratory services. Plaintiffs contend that the FDA’s assertion of jurisdiction over LDTs represents an unprecedented expansion of regulatory authority, violating Congressional intent and undermining reliance interests.
II. Legal Standard
Under the APA, this Court must set aside agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). The Court also considers whether the agency has acted beyond its statutory authority.
III. Discussion
A. The FDA Exceeded Its Statutory Authority
The statutory text of the FDCA defines a “device” as a “instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article.” 21 U.S.C. § 321(h)(1). Plaintiffs argue—and this Court agrees—that this definition applies to tangible, manufactured products rather than the intangible professional services provided by laboratories through the use of LDTs.
The FDA’s Final Rule improperly stretches the statutory language to encompass LDTs, which are developed and performed within laboratories as part of medical practice. Congress’s intent to regulate laboratory operations separately under CLIA is evident from the distinct regulatory frameworks established by the FDCA and CLIA. The FDA’s interpretation effectively renders CLIA’s provisions superfluous, violating principles of statutory construction.
B. Major Questions Doctrine
The Final Rule implicates the major questions doctrine, as it asserts regulatory authority over a significant portion of the healthcare economy without clear Congressional authorization. The Supreme Court has emphasized that “extraordinary” assertions of agency authority must be grounded in explicit statutory language. See West Virginia v. EPA, 597 U.S. 697 (2022).
Here, the FDA’s attempt to regulate LDTs as devices constitutes an extraordinary expansion of its regulatory jurisdiction. Congress has repeatedly declined to grant the FDA such authority, as evidenced by failed legislative efforts to address LDT regulation directly. Without clear authorization, the FDA’s Final Rule cannot stand.
C. Arbitrary and Capricious Rulemaking
The Court further finds that the Final Rule is arbitrary and capricious. The FDA failed to adequately address reliance interests and the substantial economic burdens imposed on laboratories. The agency’s reliance on ad hoc enforcement discretion policies does not provide sufficient clarity or predictability for regulated entities.
Moreover, the FDA’s cost-benefit analysis underestimates the rule’s economic impact and overstates its purported public health benefits. This lack of reasoned decision-making violates the APA’s procedural requirements.
IV. Remedy
The Fifth Circuit’s “ordinary practice” is to vacate unlawful agency actions. See Data Mktg. P'ship, LP v. U.S. Dep’t of Lab., 45 F.4th 846 (5th Cir. 2022). In this case, vacatur is appropriate to prevent irreparable harm to laboratories and to preserve the regulatory framework established by Congress under CLIA.
V. Conclusion
For the foregoing reasons, the Court GRANTS Plaintiffs’ motions for summary judgment, DENIES Defendants’ cross-motion for summary judgment, and VACATES the FDA’s Final Rule. The Court REMANDS the matter to the FDA for further proceedings consistent with this opinion.
It is SO ORDERED.
DATED: January 15, 2025
SIGNED:
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ALTERNATE
Opinion and Order of the Court
United States District Court for the Eastern District of Texas
Case No. 4:24-CV-479-SDJ and 4:24-CV-824-SDJ
American Clinical Laboratory Association et al. v. United States Food and Drug Administration et al.
Association for Molecular Pathology et al. v. United States Food and Drug Administration et al.
Opinion by Judge XXX
Introduction
Before the Court are motions for summary judgment filed by the plaintiffs, the American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP), challenging the Final Rule issued by the Food and Drug Administration (FDA), which seeks to assert regulatory authority over laboratory-developed tests (LDTs). The plaintiffs contend that the FDA’s actions exceed its statutory authority, conflict with existing regulatory frameworks under the Clinical Laboratory Improvement Amendments (CLIA), and violate principles of administrative law.
Having reviewed the parties’ briefs, the administrative record, and applicable law, the Court finds that the Final Rule is unlawful and must be vacated.
Legal Standard
In an Administrative Procedure Act (APA) challenge, this Court reviews whether agency action is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2). The Court also evaluates whether the agency acted in excess of its statutory jurisdiction.
Findings
1. Exceeding Statutory Authority
The FDA’s interpretation of the Federal Food, Drug, and Cosmetic Act (FDCA) to encompass LDTs as “devices” is unpersuasive and unsupported by the statute. The FDCA defines a “device” as an “instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article” that is intended for diagnostic use. 21 U.S.C. § 321(h). The statutory language clearly applies to tangible, manufactured items, not professional laboratory services or testing protocols developed and performed in-house.
As ACLA and AMP compellingly argue, Congress enacted a separate regulatory framework, CLIA, to oversee the safety and reliability of laboratory procedures. The legislative history and structure of these statutes demonstrate Congress’s intent to delineate the regulatory authority of the FDA and CLIA. The Court agrees with plaintiffs that interpreting LDTs as “devices” effectively collapses this statutory distinction and improperly expands the FDA’s jurisdiction.
2. Application of the Major Questions Doctrine
This case raises a quintessential “major question” requiring clear Congressional authorization. The FDA’s Final Rule attempts to regulate an area—LDTs—that has been historically governed by CLIA and state authorities. Plaintiffs presented unrefuted evidence that this regulatory shift would impose significant economic burdens and disrupt decades of established practices in the clinical laboratory industry.
The Supreme Court’s precedents in West Virginia v. EPA and FDA v. Brown & Williamson Tobacco Corp. instruct that such sweeping regulatory assertions require explicit Congressional authorization, which is absent here. The FDA’s reliance on broad definitions of terms like “apparatus” and “contrivance” does not suffice to justify its assertion of authority.
3. Arbitrary and Capricious Rulemaking
The Final Rule fails to adequately consider the reliance interests of laboratories that have operated under a CLIA-based regulatory framework for decades. The FDA’s reliance on discretionary enforcement carveouts underscores the arbitrary nature of its approach. While the FDA contends that its regulation will enhance public safety, it provides scant evidence to justify the immense compliance costs and disruption it would impose. The agency’s failure to address these concerns renders its rulemaking arbitrary and capricious.
4. Remedy
The Court finds that the Final Rule must be vacated. As the Fifth Circuit has repeatedly emphasized, vacatur is the “ordinary practice” for unlawful agency action under the APA. See Tex. Med. Ass’n v. HHS, 110 F.4th 762, 779-80 (5th Cir. 2024). A remand without vacatur would allow the FDA to continue enforcing an unlawful rule, causing irreparable harm to the plaintiffs and the broader clinical laboratory industry.
Conclusion
For the foregoing reasons, the Court grants the plaintiffs’ motions for summary judgment and denies the defendants’ motion.
Order
The Court hereby ORDERS that:
- The FDA’s Final Rule regarding laboratory-developed tests is VACATED.
- The FDA is ENJOINED from enforcing the Final Rule against the plaintiffs and their members.
SO ORDERED.
Date:
SIGNED
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FICTIONAL
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