A federal district court judge in Texas has invalidated the Federal Trade Commission’s (FTC’s) revised premerger notification requirements under the Hart-Scott-Rodino Act (HSR), representing a potentially significant shift in the premerger landscape.

Background

On February 12, 2026, U.S. District Judge Jeremy D. Kernodle of the Eastern District of Texas granted summary judgment to the U.S. Chamber of Commerce and allied business groups, throwing out the FTC’s overhaul of the HSR premerger reporting requirements. The ruling marks the first successful challenge to the FTC’s nearly 50-year history of administering HSR filings. Judge Kernodle stayed his order for seven days to give the FTC an opportunity to appeal the ruling.

The challenged rule, approved by the FTC on a bipartisan 5-0 vote in 2024, went into effect last February and dramatically increased the information merging parties must provide upfront when notifying antitrust enforcers of a transaction.

What the Rule Required

The rule imposed substantial new disclosure requirements on merging parties, including:

• Expanded transaction document production, including documents from deal team supervisors and any documents (even nonfinal drafts) sent to at least one company board member
• Descriptions of overlapping business lines
• Provision of details regarding previous acquisitions
• Identification of other parties, especially private equity firms, holding minority stakes that could influence the deal
• Details on vertical and other nonhorizontal relationships, including supply relationships and products and services still in development

The Court’s Reasoning

Judge Kernodle concluded the FTC failed to demonstrate the rule’s claimed benefits would “reasonably outweigh” its significant costs, as required under 5th U.S. Circuit Court of Appeals precedent. The court found the rule exceeded the FTC’s statutory authority because while the agency asserted the rule would help detect illegal mergers and save agency resources, it failed to substantiate these claims.

The court also held that the rule was “arbitrary and capricious” under the Administrative Procedure Act, finding that the FTC did not adequately explain its rejection of less costly and burdensome alternatives.

Implications for M&A Activity

The seven-day stay of the court’s order provides the FTC an opportunity to appeal and seek to revive the rule. Companies with pending or imminent filings should monitor developments closely, as the rule could be reinstated if the 5th Circuit reverses this decision.

For now, the ruling potentially eliminates the expanded disclosure requirements imposed by the 2025 HSR overhaul. It does not, however, preclude the FTC from pursuing future modifications to HSR filing requirements, provided the agency can demonstrate that any new rule’s benefits reasonably outweigh its costs and adequately consider less burdensome alternatives.

Miles & Stockbridge will continue to monitor this matter as it goes through the courts, and our corporate lawyers are available to answers questions about how the ruling affects pending or planned transactions.

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