In late March, Judge Sean D. Jordan of the U.S. District Court for the Eastern District of Texas issued an opinion in American Clinical Laboratory Association v. FDA, striking down the FDA’s May 2024 final rule (the “Final Rule”) that classified laboratory-developed tests (LDTs) as medical devices1. In doing so, the court cited Loper Bright v. Raimondo to review the FDA’s authority, ultimately siding with the plaintiffs’ argument that the FDA lacked the authority to regulate LDTs as medical devices.
Specifically, the court granted summary judgment for the plaintiffs, vacating the Final Rule and remanding the matter to HHS for further consideration. However, the court’s opinion seemed to forestall future FDA regulatory action over LDTs absent congressional action granting the agency explicit statutory authorization.
Background
LDTs are diagnostic tests performed by clinical laboratories that help physicians diagnose, care for, and treat patients. They include routine tests, such as pap smears, as well as more advanced molecular and genetic sequencing tests for diseases like cancer. The FDA has authority to regulate medical devices under the Federal Food, Drug and Cosmetic Act (FDCA). CMS, on the other hand, is the primary administrator of the Clinical Laboratory Improvement Amendments of 1988 (CLIA), which is the federal law that regulates laboratory testing.
The FDA’s view of its authority to regulate LDTs as medical devices has been a “moving target” since the 1990s. In August 2020, HHS rescinded its previous guidance documents and informal statements of policy concerning LDTs. On May 6, 2024, however, the FDA reasserted its authority over LDTs, issuing a rulemaking that classified LDTs as medical devices under the FDCA. A group of plaintiffs, including the American Clinical Laboratory Association, the Association for Molecular Pathology, and HealthTrackRx, filed a lawsuit arguing that the Final Rule exceeded the FDA’s statutory authority under the FDCA and, therefore, should be vacated under the Administrative Procedure Act.
American Clinical Laboratory Association v. FDA
Applying the requirement in Loper Bright to “independently identify and respect [constitutional] delegations of authority,” Judge Jordan determined that the FDA’s assertion of jurisdiction to cover LDTs as medical devices under the FDCA2 was beyond the agency’s statutory authority.
The court began by reviewing the legislative text in both the FDCA and CLIA. According to Judge Jordan, the FDCA’s regulatory framework for medical devices—as amended in 1976—regulates “only tangible, physical products.” In contrast, CLIA speaks to the regulation of facilities that perform health care services.
Judge Jordan determined that an LDT is a “methodology or process” by which a laboratory generates biochemical, genetic, molecular, or other forms of clinical information about a patient specimen using the laboratory’s “own unique knowledge of the protocols, performance characteristics, and means of analysis” to develop such methodologies or processes. Thus, the court reasoned, LDTs are offered as services, as opposed to a device, which is a manufactured and packaged “article of commerce” that, for example, comes with user instructions.
Expanding upon the distinction between a device and a testing service, the court reasoned that LDTs are not “sold as a kit,” and the proprietary methodology used to generate information is not transferred in any manner to other laboratories, hospitals, or other facilities outside the developing laboratory entity. No article of personal property is transferred such that title passes from one party to another. Therefore, LDT services are “professional medical services” that are qualitatively and categorically different from the tangible goods that the FDA has authority to regulate as devices.
The court also looked to the legislative history of the FDCA and CLIA to assess the FDA’s authority, finding that the legislative history demonstrates that Congress understood medical-device safety and the accuracy of LDTs as “distinct areas for regulatory oversight.” According to the court, this understanding was “largely mirrored in the approach taken by FDA and CMS” for many years following passage of the FDCA and amendments thereto, as well as CLIA. The fact that Congress considered several regulatory frameworks that would have given the FDA authority over LDTs further cemented the court’s conclusion that Congress did not intend to give the FDA authority over LDTs.
Based on this, the court determined that the FDA’s rule exceeded the agency’s statutory authority because the FDCA’s text makes clear that the “devices” within its purview do not include professional medical services. Therefore, the FDA does not have the authority under current federal law to regulate LDTs as medical devices. Instead, the regulation of laboratory testing services falls under CLIA and, accordingly, CMS. The 60-day window to file an appeal expired over the last weekend in May, meaning that HHS has effectively declined to appeal the district court’s ruling.
Takeaways
The court’s application of Loper Bright served as a key factor in its decision to vacate the FDA’s Final Rule, underscoring that post-Loper Bright, agencies’ regulations can be more easily overturned by courts absent an explicit statutory authorization by Congress. This may be particularly true in the pharmaceutical and device industry, where scientific progress has outpaced Congressional action to redefine the FDA’s authority. Additionally, the foreclosure of FDA approval for LDTs may make it easier to contract for LDTs as “services” under payer agreements and spur continuing innovation in LDTs by generating a more robust market for such services.
- Am. Clinical Lab’y Ass’n v. FDA, 2025 WL 964238, No. 4:24-cv-00479 (E.D. Tex. Mar. 31, 2025). ↩︎
- Medical Devices; Laboratory Developed Tests, 89 Fed. Reg. 37286 (May 6, 2024). ↩︎
