U.S. District Court vacates FTC changes to Hart-Scott-Rodino premerger notification rules

The U.S. District Court for the Eastern District of Texas on Feb. 12 vacated a final rule by the Federal Trade Commission that changed premerger notification rules, form and instructions under the Hart-Scott-Rodino Antitrust Improvements Act. The rule had increased reporting requirements on the HSR form. The final rule was challenged by the U.S. Chamber of Commerce in 2024. Judge Jeremy D. Kernodle wrote in his opinion that the Final Rule exceeds the FTC's statutory authority because the agency has not shown that the Rule's claimed benefits will reasonably outweigh its significant and widespread costs. Though the FTC asserts that the Rule will detect illegal mergers and save agency resources, the FTC fails to substantiate these assertions. The Final Rule is therefore not necessary and appropriate, and the statute does not authorize the FTC to promulgate the Final Rule. The AHA filed an amicus brief in the case last year, explaining that the changes made by the FTC under the HSR Act were unnecessary and unlawful. Key aspects of the decision, including the court's rejection of the FTC's reliance on a study regarding hospital mergers, were based on arguments made in the AHA's amicus brief.