FDA’s Legally-Suspect Shift of Clinical Lab Test Regulation Through Guidance Documents

_MG_8707Guest Commentary

by Gail Javitt, Sidley Austin LLP*

The penchant of the Food and Drug Administration (FDA) to use “guidance” documents as a means to effectuate substantive regulatory change may have reached its zenith on July 31, 2014, when FDA’s Center for Devices and Radiological Health announced its intent to issue two new draft guidances. Those draft guidances would fundamentally alter the oversight of clinical laboratory testing in the United States, by regulating clinical laboratories as medical device manufacturers and the laboratory developed tests (LDTs) they perform as medical devices.

As mandated by Congress under the 2012 Food and Drug Administration Safety and Innovation Act (FDASIA), FDA notified the House and Senate committees of jurisdiction that the agency intended to issue draft guidance, and also unveiled advance copies of the guidance documents. These documents announce the agency’s “risk-based” framework for LDTs, which comprise essentially all laboratory testing that is not performed using an in vitro diagnostic test kit in accordance with a manufacturer’s instructions for use.

Under the proposed framework, all clinical laboratories that perform laboratory developed tests will, at a minimum, be required to register with FDA, list the LDTs they perform, and report “adverse events” to FDA. LDTs that FDA classifies as “high” or “moderate” risk will also need to obtain FDA premarket review and authorization. They will additionally be subject to quality system regulatory requirements for medical devices, although the agency has not yet explained how it plans to adapt these to the clinical laboratory context. Continue reading

Supreme Court’s “Executive Benefits” Bankruptcy Ruling Provides a Practical Solution to a “Stern” Problem

supreme courtGuest Commentary

by Dee Wallander, a 2014 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech University School of Law.

In an overlooked but practically significant decision from its October 2013 term, Executive Benefits Insurance Agency v. Arkison, the U.S. Supreme Court clarified the procedural impact of its 2011 bankruptcy decision, Stern v. Marshall. In Stern (a case that received more fanfare for its underlying facts—which featured the late model Anna Nicole Smith—than for its legal issues), the Court narrowly held that a bankruptcy court can preside over actions arising from bankruptcy, but cannot hear state-law claims independent of the bankruptcy action. More specifically, Stern held that Article III of the U.S. Constitution bars bankruptcy courts from adjudicating counterclaims to proofs of claims, even though such actions are permissible under 28 U.S.C. § 157 as “core” traditional bankruptcy claims. Despite the Court’s attempt to rule narrowly in Stern, lower courts’ varying interpretations of the decision have created confusion in the bankruptcy system.

Justice Thomas, who wrote the unanimous Executive Benefits opinion, carefully avoided a detailed analysis of Stern by discussing only the narrow statutory question of how federal district and bankruptcy courts should procedurally handle so-called Stern claims. Continue reading

Washington Post Parrots Activists’ Skewed Spin of FDA’s “GRAS” Process

The ScreamJust below the fold in the print and digital versions of this morning’s Washington Post blares the headline “Food additives on the rise as FDA scrutiny wanes.” The story dutifully advances the perspective of professional activists that the Food and Drug Administration’s (FDA) “generally recognized as safe” (GRAS) process for food additives is perilously broken. Food nanny organizations such as Center for Science in the Public Interest and the Natural Resources Defense Council have ramped up their attacks on GRAS over the past several years, assisted by a 2010 Government Accountability Office (GAO) report calling for changes to the process.

As explained in a Washington Legal Foundation Legal Backgrounder by Hyman, Phelps & McNamara attorneys Roberto Carvajal and Nisha Shah, the GRAS process dates back to 1958, when Congress determined that certain uses of substances in foods that were generally recognized as safe need not go through formal FDA approval. For nearly four decades, FDA applied that exception very narrowly, but the Clinton-era agency leadership altered that interpretation in 1997. They concluded that narrow application of the GRAS exception deeply strained agency resources and chilled food industry innovation. The agency’s new approach permitted food processors to self-report new uses of certain substances and provide FDA with the science supporting the GRAS conclusion. In response to the critical 2010 GAO report, the agency acknowledged that while the GRAS process could be improved, “FDA believes that the GRAS concept has continuing utility as a practical tool for distinguishing between substances and new uses of substances that merit a full pre-market safety evaluation by FDA and those that do not.”

FDA’s resolve on the GRAS process seems to be weakening, however. The Post article features a troubling front-page quote from FDA’s Deputy Commissioner Michael Taylor: “We simply do not have the information to vouch for the safety of many of these chemicals.” He goes on to proclaim later in the article, “We aren’t saying we have a public health crisis.” But of course Deputy Commissioner Taylor understands that when FDA uses the term “public health crisis,” even when denying the existence of one, it sounds alarm bells. FDA’s latest statements could be setting the stage for regulatory action against such common, widely-used ingredients as caffeine and sodium, which the agency has long considered GRAS.

For those who might be interested in learning more about the GRAS process from a far different perspective than the Washington Post provided today, watch WLF’s free July 10 Web Seminar, The Future of FDA’s “GRAS” Designation in an Era of Increased Scrutiny. The Powerpoint presentation utilized by our speakers, Keller and Heckman LLP’s Melvin Drozen and Evangelia Pelonis, is available here.

Fifth Circuit Decides Texas Water Agencies Can Leave Crystal Ball at Home: Aransas Project v. Shaw

Guest Commentary

by John Eisler, a 2014 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech University School of Law.

Photo by NaturesFan1226

Photo by NaturesFan1226

“[B]ecause of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point.”[1] That “certain point” is proximate cause and many times the line drawn can seem arbitrary. Consider last year’s opinion from a U.S. District Court in South Texas that held the Texas Commission on Environmental Quality (TCEQ) liable for “taking” whooping cranes under Section 9 of the Endangered Species Act (ESA). The taking occurred—in the court’s view—from the TCEQ’s failure to “properly manage” the inflows of freshwater into the San Antonio and Guadalupe bays over the winter of 2008-2009.[2] The court acknowledged that “[o]rdinary requirements of causation apply to ESA cases.” The very next sentence concluded that “[p]roximate causation exists where a defendant government agency authorized the activity that caused the take.”[3] Out of a 124-page opinion, that phrase marked the extent of the court’s proximate cause analysis. The court also enjoined the TCEQ from issuing any new water permits in the area until the State could provide “reasonable assurances” the permits would no longer take whooping cranes and ordered the TCEQ to “seek an Incidental Take Permit that will lead to development of a Habitat Conservation Plan.”[4]

The United States Court of Appeals for the Fifth Circuit, in a per curiam opinion, emphatically reversed, concluding, “the district court’s opinion misapplies proximate cause analysis and further, even if proximate cause had been proven, the injunction is an abuse of discretion.” Aransas Project v. Shaw, — F.3d —-, 13-40317, 2014 WL 2932514 (5th Cir. June 30, 2014). The Fifth Circuit’s welcome reversal restores proximate cause to its rightful place.

Continue reading

Yates Prosecution Throws Logic of Sarbanes-Oxley Act Overboard

Guest Commentary

by Nicholl B. Garza, a 2014 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech University School of Law.

Imagine if a commercial truck driver received a citation from the Federal Motor Carrier Safety Administration for failing to keep a record of his driving hours. Further suppose the truck driver lost some of his records, but decided to pay a civil penalty to dispose of the matter. Normal, right? Now imagine three years later the Department of Justice (DOJ) decided to prosecute that person, alleging that he intentionally discarded documents during a federal investigation (a crime under the Sarbanes-Oxley Act (SOX)). While this circumstance may seem absurd, a very similar situation is happening to commercial fisherman John Yates because he allegedly disposed of three fish after being stopped by an official from the Florida Fish and Wildlife Conservation Commission during a commercial fishing trip.

SOX was enacted in 2002. The intended purpose of SOX was to provide (1) criminal prosecution for persons who defrauded investors in publicly traded securities and (2) criminal prosecution for persons who destroyed or altered evidence in certain federal investigations. With regard to “certain Federal investigations,” the SOX Senate Report listed examples such as people committing securities fraud and auditors who intentionally fail to retain audit records. However, the statutory language in SOX does not integrate these specific examples and instead simply references “Federal investigations.” Nevertheless, the Senate Report and previous prosecutions under SOX illustrate that the purpose of the act is to provide a tool to prosecute those who commit financial crimes. Strangely then, in 2010, DOJ decided to prosecute Mr. Yates under SOX. DOJ asserts that in 2007 Yates violated SOX by discarding fish because a federal investigation was taking place.

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Seventh Circuit Ruling Exposes Federal Regulators to Public Nuisance Claims

sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP with Katharine Falahee Newman, Sidley Austin LLP

In recent years, plaintiffs have increasingly asserted public and private nuisance theories in cases seeking damages and remedies to address alleged environmental harms, despite the fact that the defendant was in compliance with relevant federal law—and in particular, the Clean Air Act (CAA). Defendants have opposed these suits on multiple grounds, including arguing the CAA preempts these common law claims. Most prominently, in American Elec. Power Co., Inc. v. Connecticut, 131 S. Ct. 2527 (2011), the Supreme Court held the CAA displaced public nuisance claims under federal common law, but left open the question whether the Act would similarly limit state common law tort claims. Last year, in Bell v. Cheswick Generating Station, 734 F. 3d 188 (3rd Cir. 2013), the U.S. Court of Appeals for the Third Circuit addressed the issue, holding the CAA did not preempt state common law claims of the source state. It now appears that the Sixth Circuit will get into the act, as the district court certified an interlocutory appeal in Merrick v. Diageo Americas Supply, (W.D. Ky. June 12, 2014), where, like Cheswick, the court had held the CAA does not preempt source state common law tort claims.

Recently, a unanimous panel of the Seventh Circuit weighed in on a similar but somewhat different variation on the theme of claims for public and private nuisance in Michigan, et al. v. United States Army Corps of Engineers, et al. (No. 12-3800). There, the court determined that governmental agencies may be subject to public nuisance suits despite maintaining a waterway as authorized by federal statute, but ultimately dismissed the suit after finding that Asian Carp are not an imminent threat to the Great Lakes. Continue reading

Federal Jurists ♥ Utilitarian Philosopher Jeremy Bentham

BenthamThe U.S. Court of Appeals for the D.C. Circuit, sitting as an en banc panel of 11 judges, sent shock waves through the world of First Amendment enthusiasts on July 29 with its opinion in American Meat Institute v. U.S. Dept. of Agriculture. We’re still digesting this compelled speech ruling, and will be producing a number commentaries over the next several weeks with our thoughts and insights from other experts.

But in the meantime, we couldn’t resist highlighting a wonderful quip in Judge Janice Rogers Brown’s dissent and how it relates to a dissent by Justice Antonin Scalia in a 2013 opinion (which borrowed a concept from 18th Century philosopher, jurist, and utilitarianism proponent Jeremy Bentham).

Upon reading American Meat Institute, an attorney who’s written publications for WLF on commercial speech called to our attention Judge Brown’s creative phrasing, which he thought rivals a quip he recalled Justice Scalia making last year in Maryland v. King.

At the outset of her American Meat Institute dissent, Judge Brown stated, “If, as Jeremy Bentham once quipped, a fanciful argument may be dismissed as ‘nonsense upon stilts,’ the court’s analysis in this case can best be described as delirium on a pogo stick.” Such an intelligently cutting statement is not at all unusual for Judge Brown, whose well-written and cogently reasoned opinions are often peppered with witty historical references. An NPR report about Judge Brown’s U.S. Senate confirmation hearings noted that her opinion writing “reminds [one] very much of Justice Scalia’s writing style.” Continue reading