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Last week, in litigation brought by the U.S. Chamber of Commerce, Judge Kernodle of the U.S. District Court for the Eastern District of Texas held that the FTC exceeded its authority in enacting changes to the Hart-Scott-Rodino (HSR) rules that came into effect in February 2025. Accordingly, he vacated the rules. The 2025 changes substantially increased the burden on transacting parties to produce internal documents and information, and the time to make an HSR filing after deal signing often increased from five to twenty or more business days. Judge Kernodle's ruling did not impact HSR filing thresholds, reportability exemptions, or filing fees.
Judge Kernodle stayed his order for seven days to permit the FTC to appeal, allowing the 2025 HSR rules to remain in effect through February 19. The FTC has instructed filers to continue using the 2025 process pending further announcements.
The FTC has announced that it intends to appeal Judge Kernodle's ruling. It is seeking emergency relief, requesting that Judge Kernodle agree to stay his ruling pending the agency's appeal. In arguing for a stay, the FTC described the uncertainty that transacting parties currently face: "Already, parties to impending transactions will have to decide whether to begin filling out the old form instead of the new form, even if they have already incurred the time and expense of completing some or all of the new form...parties to HSR-reportable transactions will have to weigh the risk that if they begin completing the old HSR form but the rule is reinstated, they will need to complete the new form, potentially delaying any deal."
The FTC added that if it does not secure a stay pending appeal in the district court, it will seek relief from the Fifth Circuit Court of Appeals – including an initial, administrative stay to allow the appeals court time to consider its request for longer relief.
Once these emergency proceedings play out, transacting parties should know which rules are in effect during the pendency of the FTC's appeal.
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