LDTs Are Not Devices Under the FDCA: Eastern District of Texas Vacates FDA Final Rule on LDTs

On March 31, 2025, the Eastern District of Texas granted the laboratory plaintiffs’ motions for summary judgment and vacated the U.S. Food and Drug Administration’s (FDA) LDT Final Rule, ruling in favor of the American Clinical Laboratory Association (ACLA) and the Association for Molecular Pathology (AMP). Laboratories are thus breathing a sigh of relief given that the original enforcement date of May 2025 was quickly approaching. It remains to be seen whether FDA will appeal the decision; given the change in administration since the final rule was published, the agency may well stand down.

The ruling was widely anticipated and is among the first challenges to FDA rulemaking decided post-Loper Bright.¹ As a quick re-cap, the case concerned FDA’s May 6, 2024 LDT Final Rule which declared laboratory-developed tests (LDTs) as devices under the Federal Food, Drug and Cosmetic Act (FDCA). These consolidated cases raised several questions including whether LDTs are devices and whether FDA acted consistent with the Administrative Procedures Act. Had the final rule gone into effect this spring, as it was scheduled to do, nearly 80,000 existing LDTs and over 1,100 laboratories would have been captured by FDA’s new regulatory framework.²

In rejecting the final rule, the court agreed with ACLA and AMP that LDTs are services, not devices. The court explained that while a device is a “tangible, physical object[],” an LDT “is a proprietary methodology performed by only the developing laboratory.”³ The FDCA unambiguously does not regulate professional medical services, the court went on; FDA is limited to regulating tangible goods such as test kits that fall within the plain language meaning of “things” enumerated in section 201(h) of the FDCA.⁴ In so holding, the court agreed that FDA has authority to regulate the devices used in laboratories, such as microscopes and centrifuges, but not LDTs, which as “methodologies” are outside of FDA’s authority.⁵ Given this “common sense” finding, the court determined that FDA’s “creative attempt” to regulate LDTs went beyond the agency’s statutory authority⁶ and warned that an alternative finding would open the door to FDA regulation of “nearly every other medical procedure or examination” which clearly was not Congress’ intent.⁷

The court also rejected, in a series of lengthy footnotes, FDA’s attempts to rest its assertion of jurisdiction on prior statements asserting that the agency retained authority to regulate LDTs, citing the FDCA statutory scheme for the proposition that LDTs are not devices. Further, the court relied on several device provisions that apply only to physical products, explaining that because such requirements cannot apply to LDTs, LDTs cannot be considered devices under the FDCA.⁸

Perhaps more surprising to those of us following the long history of legislative efforts concerning LDTs, was the court’s conclusion that the Centers for Medicare and Medicaid Services’ (CMS) regulation of LDTs under the Clinical Laboratory Improvements Act of 1988 (CLIA) is a distinct regulatory paradigm from the FDA’s regulation of devices under the FDCA. The court held that Congress gave CMS — not FDA — the authority to regulate clinical laboratories “and the tests they develop and perform”⁹ and that the FDCA did not and could not give FDA simultaneous or overlapping authority.¹⁰ If FDA does appeal, we expect this to be a place where it pushes back. FDA and CMS have long had an understanding — which is memorialized by statute and regulation — that FDA regulates devices used in laboratories, including categorizing in vitro diagnostic devices (IVDs), whereas CMS regulates the laboratories themselves and whether laboratories adhere to certain requirements for high complexity tests, for example. Even absent an appeal, FDA is likely to read this opinion narrowly in order to retain its long-held jurisdiction over IVDs and the CLIA categorization of such devices.

In conclusion, the court vacates the final rule and remands to FDA for further consideration in light of the opinion, without opining on certain of the plaintiffs’ arguments — including whether the rule itself was arbitrary and capricious.¹¹

We will continue to monitor the effects this order has on industry and whether the rubric employed to vacate this final rule is picked up by other plaintiffs to challenge rules passed during the previous administration. If you have any questions or would like more information, please reach out to one of the authors of this Advisory or your existing Arnold & Porter contacts.

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Related Arnold & Porter Content

• Advisory: LDT Final Rule Litigation — Status of Pending Court Challenges and What May Happen Next (December 4, 2024)
  
  
• Advisory: FDA Intends To Regulate Many Clinical Labs as Medical Device Manufacturers: What You Need To Know About the Laboratory Developed Test Final Rule (May 7, 2024)
  
  
• Webinar: FDA’s New LDT Rule: What You Need to Know (April 30, 2024).

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.