US FTC urges Fifth Circuit to reinstate HSR overhaul as appeal proceeds

By Flavia Fortes ( February 27, 2026, 15:09 GMT | Insight) -- The US Federal Trade Commission has asked the Fifth Circuit to pause a Texas federal court order vacating its sweeping overhaul of the Hart-Scott-Rodino premerger notification form, arguing the agency is likely to prevail on appeal and will suffer irreparable harm if the rule remains blocked.The US Federal Trade Commission has asked the Fifth Circuit to pause a Texas federal court order vacating its sweeping overhaul of the Hart-Scott-Rodino premerger notification form, arguing the agency is likely to prevail on appeal and will suffer irreparable harm if the rule remains blocked.“There is no denying that the Executive Branch will be unable to enforce a duly promulgated rule absent a stay, nor that the antitrust agencies will lack critical information during their initial premerger review, including information that even plaintiffs seem to concede is appropriate,” the FTC said.In a reply brief filed Feb. 26, the FTC said the district court erred in setting aside the rule at summary judgment in a challenge brought by the US Chamber of Commerce and other business groups. The commission contends the plaintiffs failed to establish standing with admissible evidence and that the updated form falls squarely within the agency’s statutory authority under the HSR Act.A central plank of the FTC’s stay request is its argument that the trade associations relied on hearsay declarations from unnamed members to establish standing at summary judgment.Because the associations themselves are not subject to the HSR reporting requirements, they were required to show that identified members would be harmed by the rule, the agency said.Instead, the plaintiffs submitted declarations from association officials relaying information about unidentified members’ anticipated transactions, which the FTC characterizes as inadmissible hearsay under Federal Rule of Civil Procedure 56 and the Federal Rules of Evidence.The commission argues that associations cannot rely on pseudonymous members at the summary judgment stage, pointing to the Supreme Court’s decision in Summers v. Earth Island Inst., 555 U.S. 488 (2009) requiring organizations to “name” affected members to establish standing.“Plaintiffs treat the holding of Summers as irrelevant, suggesting that ‘[w]hether the specific member is identified by real name or pseudonym was not relevant to the Court’s decision.’ But the Court’s actual holding cannot be ignored merely because the case could have been resolved differently,” the FTC said. The agency said Summers described another Supreme Court decision holding that an “affidavit provided … to establish standing would be insufficient because it did not name the individuals who were harmed” (FW/PBS, Inc. v. Dallas, 493 U.S. 215, 235 (1990)).The FTC maintains that Congress directed it to require premerger notification “in such form and contain such documentary material and information … as is necessary and appropriate” to assess potential antitrust violations, language it says confers broad discretion.The updated rule, issued in November 2024 after a unanimous bipartisan vote, is designed to modernize a form that had not seen a substantial overhaul in nearly five decades. The agency says changes in deal structures, private equity investment and corporate governance have made initial screening more difficult under the existing form.Responding to claims that it failed to justify the rule’s costs, the FTC points to a dedicated section of the final rule addressing “Benefits and Costs” and says it expressly concluded that the benefits outweigh the incremental burdens. It also disputes assertions that it ignored higher cost estimates from commenters, noting it reconciled those estimates and considered other costs in the administrative record.The commission further argues that it was not required to identify specific mergers that escaped detection under the prior form before updating it, warning that such a requirement would create a “practically insurmountable barrier” to necessary regulatory adjustments in a changing economy.Turning to the stay factors, the FTC says the executive branch suffers harm when a court prevents it from enforcing a duly promulgated rule against nonparties. Without a stay, the agency and the Justice Department will lack information they deem critical during the initial 30-day review period for reportable deals, it argues.The commission also contends that vacatur creates uncertainty for companies preparing imminent filings and for future transactions, whereas maintaining the status quo during the appeal would provide clarity.By contrast, the FTC characterizes the plaintiffs’ claimed injuries as minor relative to the size of reportable deals. It notes that HSR-reportable transactions are valued at more than $126.4 million and estimates average additional compliance costs at roughly $39,644 per party — about 0.03% of the transaction value.The agency also said the new form does not impose these costs on “all filers.” “The form is tailored so that transactions presenting little antitrust risk require less additional information, while the transactions that pose the most antitrust risk require more.”“Even crediting plaintiffs’ meager evidence of harm, it pales in comparison to the harm the public and other parties will face absent a stay,” said the FTC.The Fifth Circuit’s decision on the stay could determine whether the revised form remains in effect while the court considers the broader challenge — a case closely watched by dealmakers and antitrust practitioners navigating an evolving premerger review landscape....

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