Wednesday, December 25, 2024

AI Predicts ACLA Win, FDA Loss, in FDA LDT Case

The ACLA and AMP filed their closing arguments in the FDA-LDT litigation on November 25, 2024.  The government has filed its final argument on December 23, 2024.  Find them in one cloud zip file here.

Working primarily from these documents, I asked Chat GPT 4o to review and summarize.  It predicts a win for ACLA/AMP, or otherwise, a substantial narrowing of the FDA's authority.   I show the prompt and the AI response below.

At bottom, a separate and similar conclusion was reached by AI at Google Notebook LM.


I would note, both Chat GPT and Google Notebook LM were impressed on the "major questions doctrine."   DOJ said this was entirely irrelevant in its closing brief.  However, DOJ spent much of its time saying so (pages 10-19 (10pp) of its argument overall (10-35, 26pp).  

Sidebar 1: Fictional Mockup Ruling
 Chat GPT also provided a fictional mockup of the Judge's ruling (which will not occur until Spring 2025).  Here.

Sidebar 2: AI Personas
Several characters, including includig Columbo, re-write the judge's ruling.  Here.  More Here.

### Prompt, Chat GPT 4o

For this project, focus on the three legal documents attached.   They pertain to an FDA recent regulation claiming authority to regulate all US Lab developed tests.   The Association for Molecular Pathology (AMP) and the American Clinical Lab Association (ACLA) filed their closing briefs, in Texas federal court, on 11/25/2024.   The government (DOJ representing FDA and HHS) filed their closing brief on 12/23/2024.   

Please review all three  PDFs.   Briefly summarize key arguments in each.   Then, taking the role of a law school professor who is expert in FDA law and healthcare law, predict and explain the most likely outcome(s).   

You may consider that the Texas federal courts, and the Fifth Circuit more generally, are often skeptical of government agency overreach and over interpretation.   However, that posture should be only one of the inputs you consider.

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Summary of Key Arguments from the Closing Briefs

1. Department of Justice (DOJ) and FDA Closing Brief (December 23, 2024)​:

  • FDA's Authority: The FDA argues that laboratory-developed tests (LDTs) fall within its jurisdiction under the Federal Food, Drug, and Cosmetic Act (FDCA) because they meet the statutory definition of "devices" as "apparatus" or "contrivances" intended for diagnostic purposes.
  • Major Questions Doctrine: The FDA asserts that this case does not trigger the major questions doctrine because Congress clearly authorized its regulation of LDTs, making the FDA’s actions consistent with statutory authority.
  • Alignment with CLIA: The FDA contends that its regulation of LDTs complements, rather than conflicts with, the Clinical Laboratory Improvement Amendments (CLIA), emphasizing that CLIA focuses on laboratory proficiency, while the FDA ensures clinical validity and reliability of diagnostic devices.
  • Rule of Lenity: The FDA dismisses the plaintiffs’ invocation of the rule of lenity, arguing that the FDCA's provisions are unambiguous and do not warrant such interpretation.
  • Defense Against Arbitrary Action Claims: The FDA defends the Final Rule as reasoned and responsive to public health needs, balancing regulatory burdens with public safety.

2. American Clinical Laboratory Association (ACLA) Closing Brief (November 25, 2024)​:

  • Overreach of Authority: ACLA argues that the FDA exceeds its statutory authority by treating LDTs as "manufactured devices," asserting that the FDCA was intended to regulate tangible medical products, not laboratory services.
  • Conflict with CLIA: ACLA emphasizes that Congress specifically tasked CLIA with regulating laboratory services, creating a distinct regulatory framework that does not overlap with FDA jurisdiction.
  • Major Questions Doctrine: The brief frames the Final Rule as a "major question" requiring clear Congressional authorization, arguing that the FDA’s actions impose significant economic and operational burdens on the clinical laboratory sector.
  • Arbitrariness: ACLA criticizes the FDA's ad hoc enforcement policies, highlighting that the lack of clarity undermines compliance and imposes unjustified risks to laboratories.
  • Request for Vacatur: ACLA advocates for complete vacatur of the Final Rule, citing its foundational legal deficiencies.

3. Association for Molecular Pathology (AMP) Closing Brief (November 25, 2024)​:

  • Major Questions Doctrine: AMP argues that the Final Rule represents an unprecedented assertion of authority over LDTs, requiring explicit Congressional approval under the major questions doctrine. They highlight that Congress has repeatedly declined to give the FDA authority over LDTs.
  • FDCA Interpretation: AMP disputes the FDA’s interpretation of the FDCA, asserting that LDTs do not qualify as "devices" due to the lack of commercial distribution and their exemption under the "practice of medicine" provisions.
  • Conflict with CLIA: Like ACLA, AMP underscores that CLIA already regulates the safety and reliability of laboratory tests, arguing that the FDA’s actions create regulatory duplication.
  • Arbitrary and Capricious Rulemaking: AMP alleges that the FDA failed to adequately consider the economic and practical impacts of the Final Rule, making its enforcement irrational and harmful to patient access.

Expert Prediction and Likely Outcomes

As a law school professor specializing in FDA and healthcare law, I predict that the court is likely to vacate or significantly narrow the FDA's Final Rule for the following reasons:

  1. Judicial Skepticism of Agency Overreach:

    • The Fifth Circuit has consistently been skeptical of perceived government overreach. The FDA's expansive interpretation of "device" to include LDTs may be viewed as an overextension of its authority, especially given the established regulatory role of CLIA.

  2. Major Questions Doctrine:

    • Both ACLA and AMP make compelling arguments under the major questions doctrine. The court is likely to agree that such a sweeping regulatory change demands explicit Congressional approval, which is absent here.

  3. Conflict with Congressional Intent:

    • The existence of CLIA as a separate regulatory framework undermines the FDA’s assertion of authority. The court may find that Congress’s deliberate establishment of CLIA implies that the FDA’s jurisdiction over LDTs is limited.
      • [BQ: IVDs can be modified to LDTs with variations, under CLIA regulations.  
      • This regulatory area is absurd if the activity is always a priori illegal under prior FDA law.]

  4. Arbitrary and Capricious Standard:

    • The FDA’s reliance on enforcement discretion and the alleged lack of comprehensive consideration of economic impacts may persuade the court that the rulemaking process was flawed.
      • [DOJ argues that the benefits are not easily quantified, and so, FDA didn't.  However, it leaves open the threshhold question of whether benefits exceed risks and costs.]

  5. Remedies:

    • The court may opt for a full vacatur of the Final Rule, as requested by ACLA and AMP, aligning with Fifth Circuit precedent that vacatur is the standard remedy for unlawful agency actions.

In sum, the court is likely to rule in favor of ACLA and AMP, emphasizing statutory limits on FDA authority and the need for clear Congressional directives when expanding regulatory jurisdiction.


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BONUS - GOOGLE NOTEBOOK LM

Given the same input, Google Notebook LM came to a similar conclusion.   It was unaware of the Chat GPT work.

Analysis and Prediction of Outcome
Based on the arguments presented and the general skepticism of Texas federal courts towards agency overreach, it is likely that the court will, at minimum, significantly narrow the scope of the FDA's final rule. Here's why:
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The court is likely to find that the FDA’s interpretation of "device" is overly broad. The FDCA's text focuses on tangible objects designed for diagnosis, and while an LDT involves such objects, it is ultimately a service performed by healthcare professionals using their skill and judgment. 
The court is likely to be swayed by the absurdity of potentially criminalizing common medical procedures, as pointed out by the AMP, if the FDA's broad interpretation is accepted.
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The court is also likely to be persuaded by the existence of CLIA and its comprehensive regulatory framework for LDTs. This suggests Congressional intent to place these tests under a different regulatory scheme, one focused on laboratory practices rather than device manufacturing.
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The "major questions" doctrine is a significant hurdle for the FDA. Given the enormous economic impact and the criminal penalties involved, the court is likely to demand a clearer statement from Congress authorizing such a sweeping expansion of FDA's regulatory authority.
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While the Texas federal court may not entirely invalidate the rule, it is likely to find that it requires substantial revisions to align with the FDCA and to respect the existing regulatory framework under CLIA. This could involve narrowing the definition of LDTs subject to regulation or carving out exemptions for certain types of tests.
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It is possible that the court, instead of attempting to rewrite the rule, could simply vacate it in its entirety and remand it back to the FDA for further consideration. This would allow the agency to craft a new rule that more clearly articulates its authority and addresses the concerns raised by the ACLA and AMP.

Overall, the case highlights the tension between an agency's desire to regulate in the interest of public health and the limits imposed by statutory language and Congressional intent. The outcome of this case will have significant implications for the future of LDT regulation and the balance of power between agencies and the courts.