FDA's Laboratory-Developed Test Rule Struck Down in Major Test of Loper Bright

In American Clinical Laboratory Association v. U.S. Food and Drug Administration, No. 4:24-CV-479 (E.D. Tex.), part of a closely watched saga we reported on earlier,¹ a federal court has struck down a final Food and Drug Administration (FDA) rule, extending the regulatory definition of “in vitro diagnostic products” to include laboratory developed tests (LDTs), thereby explicitly subjecting them to regulation as medical “devices.”² The ruling raises many questions about how LDTs will be regulated, including whether the new administration will seek to stay or appeal the ruling and whether Congress will extend explicit statutory authority to FDA to regulate LDTs.

In promulgating the final rule, FDA contended that LDTs have always been subject to the regulatory requirements for medical devices, but the agency had generally declined to apply these requirements as a matter of enforcement discretion.³ Plaintiffs in the litigation argued that the final rule should be vacated under the Administrative Procedure Act (APA) because it exceeds FDA’s statutory authority, is contrary to law, and is arbitrary, capricious, and an abuse of discretion. The parties cross-moved for summary judgment, and, on March 31, 2025, the court held that “FDA’s final rule exceeds its authority and is unlawful,” vacating the final rule and remanding the matter to the agency for further consideration in light of the opinion.⁴

The court’s decision leaned heavily on the U.S. Supreme Court’s decision in Loper Bright, which overruled Chevron deference, notwithstanding its conclusion that the pertinent statutory language is unambiguous. The decision emphasized Loper’s caution that courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority” and “independently identify and respect [constitutional] delegations of authority, police the outer statutory boundaries of those delegations, and ensure that agencies exercise their discretion consistent with the APA.”⁵

Several practical questions now face FDA and clinical laboratories. As the district court’s opinion noted, FDA’s final rule was scheduled to go into effect in May 2025 and would have affected nearly 80,000 existing tests offered by almost 1,200 laboratories. As things stand now, any effort by these laboratories to come into compliance with FDA requirements appears to be unnecessary.

In the near term, the Department of Justice, Department of Health and Human Services (HHS), and FDA could, however, pursue a variety of potential next steps that could call for at least some laboratories to continue their compliance efforts, including by challenging the ruling with an appeal and seeking a stay of the district court’s order pending resolution of the appeal. 

Even if the government declines to appeal, FDA could continue to take the position that some tests offered by laboratories do not fall within the scope of the district court decision and therefore remain subject to medical device regulation, either because they involve direct-to-consumer sample collection kits or because they were not designed within a single laboratory.⁶ 

Questions also remain as to the status of LDTs offered by laboratories that already have acquiesced to FDA’s authority, such as by obtaining approval of site-specific premarket approval applications. If the district court’s decision stands, FDA’s regulation of those LDTs could be viewed as a legal nullity, as FDA can no longer regulate LDTs as medical devices under the ruling. This may mean that these tests would continue to be marketed solely under the Clinical Laboratories Improvement Act of 1967 (CLIA). Similarly, pending applications may be closed for lack of jurisdiction unless there were some way for FDA to distinguish the applicable test as a medical device not subject to the ruling. It also remains to be seen whether FDA may announce a program of ongoing voluntary compliance. In the current regulatory environment, it is unclear whether the agency would be inclined to continue to offer any guidance or expend any resources in this area if the district court’s decision stands.

It is not clear whether HHS/FDA will issue a statement addressing the implications of the district court’s ruling, particularly to these previously approved applications. In the past, FDA has issued statements interpreting court rulings that are unfavorable to the agency in a narrow manner. It is unclear whether the agency would seek to take the same approach here.

Congress could also take action, including by reviving efforts to pass legislation that would create an entirely new regulatory scheme for many LDTs, which could be administered at least in part by FDA. These past efforts include the Verifying Accurate, Leading-Edge IVCT Development Act of 2023 (VALID Act), which would have given FDA explicit statutory authority to regulate LDTs.⁷ That legislation ultimately did not pass and, at this time, has not been reintroduced in the 119th Congress. It is unclear whether this will be a high priority of the current Congress. 

¹ See The Potential Implications of Loper Bright for FDA and FDA-Regulated Industries (June 28, 2024); Four Strategic Questions About the Future of Diagnostics in the Wake of FDA’s Final Rule on Laboratory Developed Tests (Apr. 29, 2024); FDA Proposes Regulation of Laboratory Developed Tests and Sets Up Collision Course with Major Questions Doctrine (Sept. 29, 2023).
² 21 C.F.R. § 809.3(a).
³ See generally Medical Devices; Laboratory Developed Tests, 89 Fed. Reg. 37,286 (May 6, 2024).
⁴ See Memorandum Opinion and Order at 3, 51, American Clinical Laboratory Association v. U.S. Food and Drug Administration, No. 4:24-CV-479 (E.D. Tex. Mar. 31, 2025).
⁵ Id. at 27-28. 
⁶ See, e.g., FDA, Guidance for Laboratory Manufacturers and Food and Drug Administration Staff: Laboratory Developed Tests: Small Entity Compliance Guide, at 4-5 (June 25, 2024).
⁷ See VALID Act of 2023, H.R. 2369, 118th Cong. (2023).