On Feb. 19, 2026, the U.S. Court of Appeals for the Fifth Circuit granted the Federal Trade Commission (FTC)'s motion to stay a district court judgment that had vacated the FTC's 2024 rule expanding the Hart-Scott-Rodino Act (HSR) premerger notification form. While the FTC requested a stay only through March 2, 2026, the Fifth Circuit instead granted a stay "until further order of [the] court."
Eastern District of Texas Ruling on FTC's HSR Form Authority
The district court's opinion, issued on Feb. 12, 2026, addressed the FTC's 2024 rule, which significantly expanded the information required in the HSR premerger notification form. Judge Jeremy D. Kernodle in the Eastern District of Texas found that the FTC exceeded its statutory authority under 15 U.S.C. § 18a(d)(1), concluding that the agency failed to demonstrate that the rule's claimed benefits "reasonably outweigh its significant and widespread costs." The court further held that the rule was not "necessary and appropriate" to enable the FTC and DOJ to determine whether a proposed acquisition may violate the antitrust laws, as required by statute. The court also found the rule arbitrary and capricious, noting that the FTC did not show the rule's benefits "bear a rational relationship" to its costs. It vacated the rule but allowed seven days for the FTC to appeal and seek emergency relief.
Central to the decision was the FTC's own concession that its estimate of the cost to comply with the new form is roughly triple the cost it estimated to comply with the previous version. Aggregated across the 3,514 HSR filings in Fiscal Year 2023, the new form cost filers approximately $139.3 million using the FTC's figures. Further, the district court was unpersuaded by the FTC's argument there were not reasonable alternatives. While the FTC noted that Second Requests impose significant costs (in its estimate, averaging $4.3 million and 7.9 additional months to conclude the premerger process), the court found the FTC failed to explain why imposing the costs of an in-depth investigation on a small subset of filers is more burdensome than tripling costs for all HSR-reportable transactions.
The court characterized the rule's benefits as "illusory or, at least, unsubstantiated." The FTC argued that the new form helps prevent illegal mergers and save agency time and resources, but the court found it failed to support these claims. The court further found that the FTC could not link alleged failures of the old form to failures to detect illegal mergers, and did not provide sufficient evidence or reasoning behind changes to the new form. Notably, the court observed that the FTC opens investigations into only 8% of HSR-reported mergers, meaning that 92% of filers would bear increased costs with no corresponding benefit.
Upcoming Fifth Circuit Briefing Schedule
Plaintiffs filed their Opposition to Motion for Stay Pending Appeal in the Fifth Circuit, and the FTC's reply is due Feb. 26.
As a result of the Fifth Circuit's initial stay, however, the new HSR premerger notification form remains in effect.
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