On February 12, 2026, in Chamber of Commerce of the United States of America, et al., v. Federal Trade Commission, the U.S. District Court for the Eastern District of Texas (the Court) vacated the Federal Trade Commission’s (FTC) 2024 Final Rule (the 2024 Rule) that substantially expanded the Hart-Scott-Rodino (HSR) Act premerger notification requirements. The Court held that the FTC exceeded its authority under the HSR Act because it failed to demonstrate that the expanded filing requirements were “necessary and appropriate” within the meaning of the statute. The Court further determined that the 2024 Rule was arbitrary and capricious under the Administrative Procedure Act (the APA) and vacated the 2024 Rule in full, subject to a seven-day stay.

The decision represents one of the most significant judicial rebukes of the FTC’s recent merger enforcement initiatives. It not only disrupts the FTC’s planned transformation of the HSR process, but also underscores the increasingly exacting judicial review that agency rulemaking now faces in the post-Loper Bright environment.

Background: The 2024 HSR Form Overhaul

The HSR Act established a premerger notification system intended to give the FTC and the Department of Justice (the “DOJ”) an opportunity to review the potential anti-competitive effects of certain transactions before closing, while avoiding unnecessary burdens on legitimate business activity. The Act permits the FTC to gather such information that is “necessary and appropriate” to determine whether a transaction may violate the antitrust laws. For nearly five decades, the FTC used the same HSR form to screen transactions for potential anti-competitive effects. Filing thresholds were periodically increased to reduce burden, and only a small percentage of transactions historically triggered additional investigation through Second Requests, underscoring that most deals were cleared during the initial waiting period.

In recent years, however, federal antitrust policy shifted toward a more expansive and aggressive enforcement posture. In October 2024, the FTC adopted new, expansive rules (the “2024 Rule”) that added approximately twenty new categories of required disclosures and overhauled the original notification form. The revised form required expanded information regarding ownership structures and minority investors, identification of certain officers and directors, internal deal documents and transaction rationale, supply relationships and geographic market data, prior acquisitions, and certain foreign subsidies and defense-related contracts. The changes substantially broadened the scope of information required at the initial filing stage and moved the form closer to the type of information historically developed during investigative review.

The FTC estimated that average completion time would nearly triple, and the Office of Management and Budget calculated that the additional compliance burden would total approximately $139.3 million annually across filers. As a practical matter, the revised form shifted investigative burdens to the front end of the process by requiring all reportable transactions to produce information that previously would have been sought only in a limited subset of transactions subject to deeper review. It was this reallocation of burden, from targeted investigation to universal front-end disclosure, that served as the basis for the Chamber’s lawsuit and ultimately framed the Court’s analysis.

The Court’s Holding

After the Court determined that the plaintiff associations had standing to challenge the 2024 Rule, it concluded that the 2024 Rule both exceeded the FTC’s rulemaking authority under the HSR Act and violated the APA. It further determined that vacatur on a nationwide basis, rather than party-limited relief, was the appropriate remedy.

A. The 2024 Rule Exceeded Statutory Authority

Drawing on Supreme Court and Fifth Circuit precedent, the Court held that the HSR Act’s “necessary and appropriate” language requires, at minimum, that the benefits of a rule reasonably outweigh its costs and that it was not within the FTC’s discretion to determine what is necessary or appropriate.

Applying that standard, the Court found that the FTC failed to identify a single transaction that was cleared under the old regime but that the new rules would have prevented. The Court also found that the FTC’s claimed benefits, resource savings and screening efficiencies, were largely conclusory and insufficiently substantiated in the administrative record. In the Court’s view, the agency had not shown that imposing substantial additional compliance burdens on every reportable transaction was justified by concrete enforcement benefits. On that basis, the Court concluded that the 2024 Rule was not “necessary and appropriate” within the meaning of the statute and therefore exceeded the FTC’s authority.

B. The 2024 Rule Was Arbitrary and Capricious

For largely the same reasons, the Court held that the 2024 Rule was arbitrary and capricious. The Court determined that the FTC failed to demonstrate a rational relationship between the 2024 Rule’s significant compliance costs and its asserted benefits. At base, the FTC did not adequately substantiate how the expanded and admittedly burdensome front-end disclosures would yield corresponding enforcement gains.

The Court also concluded that the FTC failed to meaningfully address less burdensome alternatives raised in public comments, including reliance on voluntary information requests and the existing Second Request process. In the Court’s view, the agency’s responses relied too heavily on generalized assertions of expertise and did not sufficiently engage with the evidence and counterarguments presented during the 2024 Rulemaking process. The 2024 Rule was therefore set aside.

C. Remedy: Universal Vacatur

The Court vacated the 2024 Rule nationwide and rejected the FTC’s request to limit relief to the plaintiff associations or their members. It emphasized that vacatur is the default remedy under the APA and found no basis to depart from that approach. The Court further determined that reverting to the prior form would not be unduly disruptive, noting that the longstanding framework had governed merger review for decades and provided a sufficient structure for agency screening.

The Court stayed its order for seven days to allow the FTC to seek emergency appellate relief, creating a short window during which the status of filing requirements may depend on developments at the Fifth Circuit.

Immediate Impact and Next Steps

The immediate implications of the decision depend on appellate developments. The FTC is expected to seek emergency relief from the Fifth Circuit and to pursue an appeal on the merits. During the seven-day stay period ordered by the Court, the 2024 form remains operative. If the Fifth Circuit does not grant a stay pending appeal, however, filing parties should expect a reversion to the pre-2024 Rule HSR form following expiration of the stay.

In the near term, this creates a period of procedural uncertainty for transactions approaching signing or filing. Parties should work closely with HSR counsel to monitor developments at the Fifth Circuit and confirm current agency guidance before submitting filings. Depending on the timing of appellate action, deal teams may need to adjust filing strategies or sequencing considerations, particularly where regulatory timing is critical to transaction structure or financing commitments.

Looking beyond the immediate stay period, the decision raises broader questions about the FTC’s path forward should the vacatur be upheld. The agency may attempt to pursue revised rulemaking supported by a more developed evidentiary record, or it may seek narrower amendments designed to address the deficiencies identified by the Court. In the interim, the FTC and DOJ may place greater emphasis on voluntary information requests and the Second Request process to obtain information that the 2024 Rule would have required at the outset. As a practical matter, this could result in more front-end engagement during the initial waiting period, even under the prior Form.

Parties contemplating reportable transactions should also consider how potential shifts in agency practice may affect information gathering, transaction documentation, and risk allocation provisions. Although the prior form may govern in the short term, the broader enforcement environment remains active and closely scrutinized.

Conclusion

The Eastern District of Texas’ decision vacating the 2024 Rule represents a significant development in merger enforcement. Whether the appellate courts will alter the immediate outcome remains to be seen. Regardless, the ruling reinforces the increasingly exacting judicial review that agency initiatives now face, particularly where statutory text constrains regulatory authority.

Godfrey & Kahn is closely monitoring further developments. For more information on the HSR Act, HSR filing requirements, or to learn how Godfrey & Kahn can help, contact a member of our Antitrust Practice.