Federal District Court vacates expanded HSR Premerger Notification Rule—key takeaways

Background

The Final Rule represented the first substantial modification to the HSR filing since the publication of the original filing in 1978, expanding existing categories of required information and adding new ones. Under the Final Rule, parties were required to submit a broader scope of responsive documents and information related to notified transactions and competition.

In practice, the expanded filing necessitated additional time and effort by parties and their antitrust counsel to complete HSR filings that, at a minimum, raised parties’ out-of-pocket filing costs. By the FTC’s own estimate, the new HSR filing was expected to triple compliance time.

Plaintiffs, including the U.S. Chamber of Commerce, the American Investment Council, and the Business Roundtable, challenged the Final Rule under the Administrative Procedure Act, arguing that the Final Rule exceeded the FTC’s statutory authority and was arbitrary and capricious. In granting summary judgment for the plaintiffs, Judge Jeremy D. Kernodle held that the Final Rule exceeded 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.”²

Judge Kernodle further ruled that the Final Rule was arbitrary and capricious because the FTC failed to consider whether the rule’s benefits “bear a rational relationship” to its costs and the FTC “did not adequately explain its rejection of less costly and burdensome alternatives,” such as targeted voluntary submissions or more focused Second Requests.³

Takeaways for parties considering reportable transactions

The court stayed its ruling for seven days through February 19, 2026, affording the FTC an opportunity to assess and file an appeal. The FTC has not yet indicated whether it will appeal the District court’s decision. Without an appeal, the Premerger Notification requirements will revert to the prior HSR reporting rules on February 20, 2026,⁴ subject to any further guidance provided by the FTC’s Premerger Notification Office. Under this scenario, at a minimum, we would expect the FTC to propose new rulemaking to reintroduce the foreign subsidies and countervailing duties requirements, pursuant to the Merger Filing Fee Modernization Act of 2022.⁵

The Final Rule may remain in place pending appeal

Should the FTC appeal the District Court’s decision, we expect that the FTC will seek a continued stay of the vacatur order pending appeal. Accordingly, parties pursuing reportable transactions should anticipate the possibility of continuing to prepare HSR filings pursuant to the existing requirements adopted in the Final Rule.

Should the FTC appeal, the median time for the Fifth Circuit to issue a decision is about eight months

The median time from filing a notice of appeal to issuance of an opinion in the United States Court of Appeals for the Fifth Circuit is approximately 7.8 months based on available data published by the Fifth Circuit.⁶ Should the FTC appeal and secure a further stay, the Final Rule shall remain in effect throughout the appeal process.

FTC and DOJ staff may seek additional information on a voluntary basis

Should the vacatur order come into effect, staff at the FTC and the Antitrust Division of the Department of Justice (DOJ) will retain broad discretion to request additional information on a voluntary basis in waiting periods. To the extent that FTC and DOJ staff found the Final Rule’s broadened requirements helpful in assessing transactions, there may be a higher likelihood of requests for some of the disclosures required under the Final Rule, such as ordinary course business documents for transactions raising competitive overlaps.

The vacatur has no impact on the HSR Act thresholds, reportability analyses, or waiting periods

Regardless of whether the FTC seeks to appeal the order, the Final Rule does not impact the HSR Act and Premerger Notification Rules regarding the various transaction reportability thresholds,⁷ the available exemptions, or the statutory waiting periods. Further, the District Court decision has no retroactive impact on any HSR filings that have already been submitted nor, at a minimum, any HSR filings that will be submitted by or before February 19, 2026.

We are tracking developments closely and will provide further updates.

If you have any questions concerning this client alert, please contact a member of A&O Shearman’s Antitrust practice.

Footnotes

1. Chamber of Commerce of the United States v. FTC, No. 6:25-cv-9-JDK (E.D. Tex. February 12, 2026).

2. Id at 2.

3. Id.

4. When a court vacates a final rule, the vacatur “restores the status quo before the invalid rule took effect.” See Orr v. Trump, 778 F.Supp.3d 394 (D.Mass. April 18, 2025) (citing Am. Great Lakes Ports Ass’n v. Zukunft, 301 F.Supp.3d 99, 103-04 (D.D.C. 2018)).

5. Merger Filing Fee Modernization Act of 2022, H.R. 3843, 117th Cong. (2022).

6. See U.S. Court of Appeals for the Fifth Circuit, Practitioners’ Guide to the United States Court of Appeals for the Fifth Circuit (May 2025) (the lookback period is 12 months ending on June 30, 2024).

7. 2026 Increases to HSR Notification Thresholds, Filing Fees, and Interlocking Directorate Thresholds, A&O Shearman (January 16, 2026), https://www.aoshearman.com/en/insights/2026-increases-to-hsr-notification-thresholds-filing-fees-and-interlocking-directorate-thresholds.