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Key Takeaways
- On February 12, 2026, the United States District Court for the Southern District of Texas vacated and set aside the 2024 final rule that created the New HSR Forms.
- The New HSR Forms have been in effect for just over one year.
- The court stayed its opinion for seven days to allow the FTC to seek emergency relief from the Fifth Circuit.
What Does This Mean for HSR Filers?
- No changes to statutory thresholds, reportability requirements, exemption rules, or filing fees.
- Filers may continue to submit HSR notifications as needed.
- The change: which form to file on. Filers must continue to use the New HSR Forms until February 19. From February 20 onward, filers must revert to the old HSR form, unless the Fifth Circuit first reverses or stays the Southern District.
A federal court in Texas has invalidated the 2024 FTC final rule that created the New HSR Forms. In October 2024, the Federal Trade Commission (FTC) promulgated a final rule that created the New HSR Forms and materially expanded the information and documents that HSR filers must submit.1 These changes included production of additional documents that address competition, including certain categories of ordinary course documents – a substantial expansion from the old HSR form. Additionally, on the New HSR Forms, filers are required to provide a narrative of the rationale for the transaction and several narrative descriptions of the competition that exists between the filing parties (if any). These changes, among many others, have increased the average time and cost of HSR preparation.
The New HSR Forms have been in effect since early February 2025. Shortly before the New HSR Forms came into effect, the Chamber of Commerce and several aligned business groups sued the FTC in the Southern District of Texas, seeking to invalidate the final rule. Following summary judgment briefing and a hearing, on February 12, the court granted the plaintiffs' request.
The court held that the final rule exceeded the bounds of the FTC's authority under the HSR Act. Key to the court's analysis is language in the HSR Act, which limits the information and documentary material the FTC may require to that which is "necessary and appropriate" to allow the agencies to determine whether a proposed transaction poses harm to competition. Because the FTC failed to undertake an adequate cost-benefit analysis, it cannot establish that the final rule is less burdensome than needed for the FTC to carry out its statutory mandate. While the FTC adequately assessed the anticipated costs of the final rule, the court held that none of the purported benefits were concrete enough to overcome the costs.
The court also held the final rule arbitrary and capricious under the Administrative Procedure Act. The FTC's failure to conduct an adequate cost-benefit analysis, alone, renders the final rule arbitrary and capricious. But the court also held that the FTC failed to consider less burdensome alternatives to the final rule – an independent basis for holding the final rule arbitrary and capricious.
Accordingly, the court vacated the final rule. However, it stayed the vacatur for seven days to allow the FTC to seek emergency relief from the Fifth Circuit. Stay tuned for updates in this space.
Footnote
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
