District court vacates FTC changes to premerger notification rules
The U.S. District Court for the Eastern District of Texas Feb. 12 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.
鈥淔irst, the Final Rule exceeds the FTC鈥檚 statutory authority because the agency has not shown that the Rule鈥檚 claimed benefits will 鈥榬easonably outweigh鈥 its significant and widespread costs,鈥 Judge Jeremy D. Kernodle wrote in his opinion. 鈥淭hough 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 鈥榥ecessary and appropriate,鈥 and the statute 鈥榙oes not authorize [the FTC] to promulgate [the Final Rule].鈥"
The AHA filed an in the case last year, explaining that the changes made by the FTC under the HSR Act were 鈥渦nnecessary and unlawful.鈥 Key aspects of yesterday鈥檚 decision, including the court鈥檚 rejection of the FTC鈥檚 reliance on a study regarding hospital mergers, were based on arguments made in the AHA鈥檚 amicus brief.