Federal Court Strikes Down New HSR Rules

On Feb. 12, the U.S. District Court for the Eastern District of Texas vacated the Federal Trade Commission’s October 2024 overhaul of the Hart-Scott-Rodino (HSR) premerger notification process. Unless the FTC seeks and obtains a further stay of the ruling pending appeal, the court’s decision will go into effect on Feb. 20 and parties filing HSR premerger notifications will need to revert to the prior version of the HSR form.

Background

In October 2024, the FTC issued a final rule overhauling the HSR form. The rule, which went into effect in February 2025, significantly expanded the volume of information and documents that parties to HSR-reportable transactions are required to provide to the FTC and Department of Justice. The U.S. Chamber of Commerce and other business groups brought a lawsuit challenging the rule, alleging that it was unlawful under the Administrative Procedure Act.

Ruling in Chamber of Commerce of the United States v. FTC

The plaintiffs in Chamber of Commerce of the United States v. FTC successfully argued that the expanded HSR form violates the Administrative Procedure Act on two grounds. First, they claimed that the new rules exceeded the FTC’s statutory authority by calling for information that was not “necessary and appropriate” to enable the antitrust agencies to detect anticompetitive mergers. The court agreed, finding that the alleged benefits of the expanded reporting requirements were conclusory and unsubstantiated and therefore insufficient to justify the significant costs imposed on filing parties.

Second, the plaintiffs asserted that the new HSR rules were the product of arbitrary and capricious rulemaking, on the basis that the FTC failed to give a reasoned explanation for rejecting less burdensome alternatives to the new rules. Again, the court agreed, reasoning that the FTC had unreasonably understated the costs of the expanded requirements while overstating their benefits. The court noted that the FTC failed to substantiate its rejection of more targeted, less burdensome alternatives to the new rules.

Key Takeaways

• Parties that plan to file HSR notification forms between now and Feb. 19 should continue to use the new version of the form.

• Parties that plan to file on or after Feb. 20 currently face uncertainty as to which version of the HSR rules will be in effect at the time they file. Parties facing imminent filing deadlines or other urgent timing considerations may need to be prepared to file either version of the form.
  

• Unless the FTC appeals the decision in Chamber of Commerce v. FTC and obtains a further stay, the prior version of the HSR form will come back into effect on Feb. 20.

• The FTC is likely to issue further updates in the coming days regarding the implications of the court’s decision for the premerger notification process and how the agency plans to proceed.

Hughes Hubbard & Reed is closely monitoring these developments and will provide further updates as more information becomes available. Please do not hesitate to contact the attorneys listed below if you have any questions or require further guidance.