Chamber of Commerce of the United States of America et al v. Federal Trade Commission et al

1
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
CHAMBER OF COMMERCE OF THE
UNITED STATES OF AMERICA,
et al.,
Plaintiffs,
v.
FEDERAL TRADE COMMISSION,
et al.,
Defendants.
§
§
§
§
§
§
§
§
§
§
§
§
Case No. 6:25-cv-9-JDK
MEMORANDUM OPINION AND ORDER
This 	case 	challenges 	a 	2024 	rule 	promulgated 	by 	the 	Federal 	Trade
Commission. 	The rule significantly expands the amount of documentary material
and information that merging companies must include in a premerger notification to
the agency. 	Premerger Notification; Reporting and Waiting Periods Requirements,
89 Fed. Reg. 89,216 (Nov. 12, 2024) (hereinafter, “the Final Rule” or “the Rule”).
Plaintiffs challenge the Final Rule as unlawful under the Administrative
Procedure Act (“the APA”). 	Plaintiffs first claim that the Rule exceeds the FTC’s
statutory authority because the information requested by the Rule is not “necessary
and appropriate,” as the statute requires. 	Additionally, Plaintiffs argue that the
Final Rule was the product of arbitrary and capricious rulemaking. 	Specifically,
Plaintiffs contend that the FTC failed to show that the Rule’s benefits outweigh its
costs and failed to explain why the agency rejected less burdensome alternatives.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 1 of 34 PageID #:
<pageID>

2
The parties cross-moved for summary judgment. The FTC for its part defends
the Rule on both grounds. 	It also challenges the parties’ standing. 	On the merits,
the agency claims that the information sought by the Final Rule is both necessary
and appropriate to determine whether a proposed transaction would violate the
antitrust laws. 	And the FTC defends its rulemaking, explaining that it considered
the costs and benefits and reasonably rejected the alternatives.
For the reasons set forth below, the Court grants Plaintiffs’ motion and denies
the FTC’s cross-motion. 	On standing, Plaintiffs have properly shown that they are
associations representing members who face imminent injury because of the Final
Rule. Plaintiffs also succeed on the merits. First, the Final Rule exceeds 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. 	Mexican
Gulf Fishing Co. v. U.S. Dep’t of Com., 60 F.4th 956, 965 (5th Cir. 2023). Though 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 “necessary
and appropriate,” and the statute “does not authorize [the FTC] to promulgate [the
Final Rule].” Id.
The Final Rule is also arbitrary and capricious for largely the same reason:
the FTC “failed to consider an important aspect of the problem,” namely that the
Rule’s benefits “bear a rational relationship” to its costs. 	Id. at 973. 	The FTC also
did not adequately explain its rejection of less costly and burdensome alternatives.
Accordingly, the Court vacates and sets aside the Final Rule.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 2 of 34 PageID #:
<pageID>

3
I.
In 1978, acting under congressional authority, the FTC promulgated a rule
requiring 	certain 	information 	from 	merging 	parties 	that 	was 	“necessary 	and
appropriate” to enforce the antitrust laws. Forty-six years later, the FTC determined
that the old form was outdated and issued the Final Rule that is the subject of this
case.
A. 	The 	Statute. 	In 	1976, 	Congress 	enacted 	the 	Hart-Scott-Rodino
Antitrust Improvements Act, 15 U.S.C. § 18a (“HSR Act”). 	The HSR Act requires
parties to certain mergers and acquisitions to file a “premerger notification” with the
FTC and the Department of Justice thirty days before finalizing the transaction. Id.
§ 18a(a)–(b). 	The purpose of the requirement is to detect “illegal mergers and
acquisitions 	prior 	to 	consummation 	without 	unduly 	burdening 	business 	with
unnecessary paperwork or delays.” S. Rep. No. 94-803, at 65 (1976).
The HSR Act authorizes the FTC to specify the “documentary material and
information” to be submitted with the premerger notification. 15 U.S.C. § 18a(d)(1).
Specifically, the FTC “shall require that the notification . . . be in such form and
contain 	such 	documentary 	material 	and 	information 	relevant 	to 	a 	proposed
acquisition as is necessary and appropriate to enable the [FTC and DOJ] to determine
whether such acquisition may, if consummated, violate the antitrust laws.” Id. If an
agency determines during the thirty-day period that a particular transaction needs
further 	scrutiny, 	then 	the 	agency 	may 	“require 	the 	submission 	of 	additional
information or documentary material.” Id. § 18a(e). This broader “Second Request”
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 3 of 34 PageID #:
<pageID>

4
generally applies only to a small subset of transactions that pose a potential antitrust
concern. 89 Fed. Reg. at 89,216.
B. 	The 1978 Rule. 	In 1978, the FTC published the first premerger
notification “Form.” 	See Premerger Notification; Reporting and Waiting Period
Requirements, 43 Fed. Reg. 33,450, 33,519 (July 31, 1978). 	The Form required
parties to submit:
The identities of the persons involved and the type of acquisition (item
1); A description of the voting securities or assets to be acquired and of
the means by which the acquisition is to be carried out (item 2); The
percentage and total dollar amount of the assets and voting securities of
the acquired person to be held by the acquiring person as a result of the
acquisition (item 3); Copies of various SEC filings [and] Annual reports
and financial statements of the reporting person, as well as studies or
analyses of the acquisition (item 4); A listing of dollar revenues derived
by the reporting person, broken down separately by industry, product
class and product (item 5); Information about the entities included
within 	the 	reporting 	person, 	as 	well 	as 	information 	about 	the
shareholders of the reporting Person and the shareholdings of the
reporting 	person 	in 	other 	persons 	(item 	6); 	Geographic 	market
information relating to industries in which the reporting person and
another party to the acquisition both derived dollar revenues (item 7);
Information 	about 	revenues 	resulting 	from 	certain 	vendor-vendee
relationships existing between the reporting person and another party
to the acquisition (item 8); [and] Any other recent acquisitions by the
acquiring person in an industry from which both it and the acquired
person derive dollar revenues (item 9).
Id. at 33,520.
This 	Form, 	with 	only 	minor 	adjustments, 	has 	governed 	mergers 	and
acquisitions for nearly fifty years. 43 Fed. Reg. at 89,257. Over the years, the FTC
and DOJ have repeatedly stated that the Form was “highly effective” in “giving the
government the opportunity to investigate and challenge mergers.” 	Docket No. 44,
Ex. 17 at 28 (Fed. Trade Comm’n & U.S. Dep’t of Justice, Annual Report Fiscal Year
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 4 of 34 PageID #:
<pageID>

5
2001 (corrected April 2008)). 	Indeed, from 2001 to 2020, only about 3% of
transactions 	submitting 	Forms 	triggered 	a 	Second 	Request 	for 	additional
information. Logan Billman & Steven C. Salop, Merger Enforcement Statistics: 2001-
2020, 85 ANTITRUST L.J. 1 (2023).
Although 	the 	agencies 	now 	claim 	the 	Form 	fails 	to 	provide 	sufficient
information, a significant criticism of the Form was that it was too burdensome and
costly and applied to too many transactions. 146 Cong. Rec. 24,253 (2000) (statement
of Sen. Hatch). As a result, Congress amended the HSR Act in 2000 to raise the dollar
thresholds for filing a premerger notification and indexed them to economic growth.
Pub. L. No. 106-553, § 630, 114 Stat. 2762 (2000).
C. 	The 2024 Rule. In 2023, the FTC proposed dramatically expanding the
Form by requiring thirty-four new categories of information. Premerger Notification;
Reporting and Waiting Period Requirements, 88 Fed. Reg. 42,178, 42,185-42,186
(June 29, 2023). According to the FTC, the Form no longer served its purposes in “the
economy of 2024.” 89 Fed. Reg. at 89,216. The FTC argued that “profound changes”
in corporate structures, business competition, mergers, and investment strategies
had “rendered the Form’s focus on traditional corporate structures outdated” and left
agencies 	“unable 	to 	determine 	which 	entities 	or 	individuals 	will 	be 	making
competitive decisions post-merger.” Id. at 89,217.
Hundreds of commenters responded, urging the FTC to withdraw or rewrite
the proposed rule. One commenter noted that the new rule would “treat all reportable
transactions as deserving of an extensive degree of disclosure and scrutiny far in
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 5 of 34 PageID #:
<pageID>

6
excess of any actual competitive risks they pose” and “establish a presumption that
M&A activity is inherently dubious.” 	Nat’l Ass’n of Mfrs., Comment Letter on
Proposed Rule (September 28, 2023), https://www.regulations.gov/comment/FTC-
2023-0040-0700. 	Another commenter noted that the new requirements in the
proposed rule exceeded even what the agencies typically request in an informal
investigation. 	Nat’l Council of Farmer Coops., Comment Letter on Proposed Rule
(August 8, 2023), https://www.regulations.gov/comment/FTC-2023-0040-0496. 	Still
another questioned what benefits the proposed rule would provide when “[t]he
Agencies have not identified any transactions as raising competition issues that
would have only made clear if the Proposed Rules were implemented.” Mo. Chamber
of Com. and Indus., Comment Letter on Proposed Rule (September 26, 2023),
https://www.regulations.gov/comment/FTC-2023-0040-0660. Others argued that the
proposed rule violated the HSR Act and its mandate for a “balance between providing
the government with information to enforce the antitrust laws properly and avoiding
undue burdens on legitimate merger and acquisition activity.” 	Nat’l Retail Fed’n,
Comment 	Letter 	on 	Proposed 	Rule 	(September 	27, 	2023),
https://www.regulations.gov/comment/FTC-2023-0040-0679.
On October 10, 2024, the FTC adopted the Final Rule at issue here. 	89 Fed.
Reg. at 89,394. Although the Final Rule pared back the categories of new information
required by filers, it substantially modified the Form, requiring approximately
twenty (rather than thirty-four) new categories of information and documents:
Translations, Changes to Identification of Additional Minority Interest
Holders, Organization of Controlled Entities, Description of Ownership
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 6 of 34 PageID #:
<pageID>

7
Structure, Organizational Chart (if it exists), Identification of Certain
officers and Directors, Description of Business of the Acquiring Person,
Transactions 	Subject 	to 	International 	Antitrust 	Notification,
Transaction Rationale, Transaction Diagram (if one exists), Competition
Documents from Supervisory Deal Team Lead, Plans and Reports,
Transaction 	Agreements, 	Other 	Agreements 	Between 	the 	Parties,
Overlap 	Description, 	Supply 	Relationship 	Description, 	Geographic
market 	Information 	(new 	organization, 	street-level 	reporting, 	and
reporting 	of 	francisees 	[sic]), 	Limiting 	Minority-Held 	Entity
Identification to Overlaps, Prior Acquisitions, Subsidies from Foreign
Entities or Governments of Concern, Defense or Intelligence Contracts.
Id. at 89,264 (Figure 3: Applicability of Significant Updated and New Information
Requirements); see also id. at 89,277. 	The FTC also revised the estimated time to
comply with the new Rule. 	According to the agency, the Final Rule would take an
average of 105 hours for financial institutions to complete, 89 Fed. Reg. at 89,333,
lower than the proposed rule’s estimate of 144 hours, 88 Fed. Reg. at 42,208, but still
nearly triple that of the prior Form’s average time of 37 hours, id.
D. 	This Lawsuit. 	On January 10, 2025, Plaintiffs Longview Chamber of
Commerce, Chamber of Commerce of the United States of America, American
Investment Council, and Business Roundtable challenged the Final Rule under the
APA, 5 U.S.C. §§ 701, et seq. 	Docket No. 27. 	The FTC thereafter moved to dismiss
the Longview Chamber for lack of subject matter jurisdiction and to transfer the case
to the U.S. District Court for the District of Columbia. 	Docket No. 30. 	Before the
Court had an opportunity to rule on the FTC’s motion, Plaintiffs filed a motion for
summary judgment. 	Docket No. 44. 	The FTC then cross-moved for summary
judgment, again challenging the Longview Chamber’s standing, among other issues.
Docket No. 57.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 7 of 34 PageID #:
<pageID>

8
This 	Memorandum 	Opinion 	addresses 	the 	summary 	judgment 	motions.
Summary 	judgment 	is 	proper 	when 	the 	pleadings, 	depositions, 	answers 	to
interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue of material fact and that the moving party is entitled to
judgment as a matter of law. FED . R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S.
317, 323–25 (1986); Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir.
1998).
As explained further below and as the parties agreed, this Opinion moots the
FTC’s other pending motions (Docket Nos. 23, 30, and 53). 	Those motions are
therefore denied as moot.
II.
The FTC argues that Plaintiffs lack standing to challenge the Final Rule.
First, the FTC claims that Plaintiffs’ only evidence of standing is inadmissible.
Alternatively, the FTC argues, Plaintiffs’ evidence is insufficient to establish the
Longview Chamber’s standing. Both arguments fail.
A.
Plaintiffs bear the burden to establish standing. 	DaimlerChrysler Corp. v.
Cuno, 547 U.S. 332, 242 & n.3 (2006). 	Here, Plaintiffs have submitted declarations
of individuals who are officers in each of the Plaintiff associations. 	Docket No. 44,
Ex. A–D. 	Each declarant attests that he or she is an officer of the association and
has personal knowledge that many of the association’s members “regularly enter into
merger[s], acquisition[s], or other transactions that meet or exceed the size thresholds
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 8 of 34 PageID #:
<pageID>

9
for filing a premerger notification form under the HSR Act and will be subject to the
requirements of the Rule.” Docket No. 44, Ex. D ¶¶ 1, 2, 5; see also id. Ex. A ¶¶ 1, 2,
7; id. Ex. B ¶¶ 1, 2, 4; id. Ex. C ¶¶ 1, 2, 9. The declarants further state that these
members “are harmed by the Rule” in part by making it “far more costly for [the
association’s] members to consummate such deals.” 	Docket No. 44, Ex. D ¶ 13; see
also id. Ex. A ¶ 12; id. Ex. B ¶ 9; id. Ex. C ¶ 13. The declarations easily satisfy Federal
Rule of Civil Procedure 56(c)(4), which requires that a declaration in support of
summary judgment “be made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to testify
on the matters stated.” 	FED . R. CIV. P. 56(c)(4). 	See, e.g., 	Chamber of Com. of the
U.S. v. CFPB, 691 F. Supp. 3d 730, 738 (E.D. Tex. 2023); (relying on similar
declarations to find that an associational plaintiff has standing to challenge agency
action).
The 	FTC 	nevertheless 	argues 	that 	the 	declarations 	are 	not 	competent
summary judgment evidence because they “rely on inadmissible hearsay” by the
associations’ members. Docket No. 57 at 9. The factual statements in a declaration
at summary judgment, however, “need only be capable of being ‘presented in a form
that would be admissible in evidence’” at trial. 	See Maurer v. Independence Town,
870 F.3d 380, 384 (5th Cir. 2017) (citing FED . R. CIV. P. 56(c)). “This flexibility allows
the court to consider the evidence that would likely be admitted at trial—as summary
judgment is trying to determine if the evidence admitted at trial would allow a jury
to find in favor of the nonmovant—without imposing on parties the time and expense
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 9 of 34 PageID #:
<pageID>

10
it takes to authenticate everything in the record.” Id. Here, the most obvious way to
make this testimony admissible would be for the unnamed members themselves to
testify at trial, as Plaintiffs propose. 	Docket No. 62 at 2–3; see, e.g., Hargiss v.
Princeton Excess & Surplus Lines Ins. Co., 2023 WL 11886895, at *4 (W.D. La. Dec. 8,
2023) (finding that a declaration with hearsay is permissible summary judgment
evidence because the hearsay could be admissible at trial through testimony).
Because there is “nothing to compel a conclusion” that these unnamed members
would be incapable of testifying, the declarations are admissible for the purpose of
summary judgment. Maurer, 870 F.3d at 384.
The FTC also argues that the declarations are not “based on the declarants’
personal knowledge.” 	Docket No. 57 at 8. 	But each declarant expressly states that
the declaration “is based upon my personal knowledge and belief and/or upon [the
declarant’s] review of [the association’s] business records.” Docket No. 44, Ex. A ¶ 2;
id. Ex. B ¶ 2; id. Ex. C ¶ 2; id. Ex. D ¶ 2. This is all that is needed to satisfy Rule
56(c)(4). 	Diamond Offshore Co. v. A&B Builders, Inc., 302 F.3d 531, 544 n.13 (5th
Cir. 2002), overruled on other grounds by Grand Isle Shipyard, Inc. v. Seacor Marine,
LLC, 589 F.3d 778 (5th Cir. 2009). Further, and in any event, each declaration sets
forth information that is reasonably within the declarant’s position or “sphere of
responsibility,” which is sufficient for a finding of personal knowledge. 	DIRECTV,
Inc. v. Budden, 420 F.3d 521, 530 (5th Cir. 2005). For example, Kelly Hall states that
she is the President of the Longview Chamber of Commerce, “oversee[s] all of the
Longview Chamber’s operations,” and represents and advocates for the Longview
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 10 of 34 PageID #:
<pageID>

11
Chamber’s members on a variety of issues, including antitrust enforcement. Docket
No. 44, Ex. D ¶¶ 1, 3. 	Hall’s testimony about transactions by members of the
Longview Chamber is thus within her personal knowledge for purposes of summary
judgment. 	See, e.g., Council of Ins. Agents & Brokers v. Juarbe-Jimenez, 443 F.3d
103, 111 n.10 (1st Cir. 2006) (finding that declarations from the president of a trade
association came from personal knowledge because of the president’s position).
B.
The FTC alternatively argues that the Longview Chamber’s evidence, even if
admissible, “does not establish that [the] Longview Chamber has associational
standing.” Docket No. 57 at 10. The Court disagrees.
An association has standing to sue on behalf of its members when “(a) its
members would otherwise have standing to sue in their own right; (b) the interests it
seeks to protect are germane to the organization’s purpose; and (c) neither the claim
asserted nor the relief requested requires the participation of individual members in
the lawsuit.” Hunt v. Wash. State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977).
Here, the FTC primarily challenges the first requirement, arguing that “the alleged
injury to [the] Longview Chamber’s members is speculative.” 	Docket No. 57 at 11.
In particular, the FTC argues, the evidence showing that some members of the
Longview Chamber “‘plan’ or ‘expect[] to enter into’ HSR-reportable transactions in
the ‘foreseeable future’ or ‘by the end of 2025’” is “insufficient to demonstrate
standing.” Id.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 11 of 34 PageID #:
<pageID>

12
The FTC misunderstands both the law and the evidence. 	The injury-in-fact
standard requires an injury to have three elements. 	First, the injury must be
“concrete, meaning that it must be real and not abstract.” TransUnion LLC v.
Ramirez, 594 U.S. 413, 424 (2021). Second, the injury must be “particularized” and
not a “generalized grievance.” 	Lujan v. Defenders of Wildlife, 504 U.S. 555, 560
(1992). 	Third, the injury must be actual or imminent, not speculative. 	Clapper v.
Amnesty Int’l USA, 568 U.S. 398, 409 (2013). 	To satisfy this last requirement for
imminent injury, a plaintiff needs more than “allegations of possible future injury” or
“a highly attenuated chain of possibilities”; rather, an imminent injury means one
that is “certainly impending.” Clapper, 568 U.S. at 410; see also Susan B. Anthony
List v. Driehaus, 573 U.S. 149, 158 (2014) (“An allegation of future injury may suffice
if the threatened injury is ‘certainly impending,’ or there is a ‘substantial risk’ that
the harm will occur.’” (quoting Clapper, 568 U.S. at 414 n.5)); Stringer v. Whitley, 942
F.3d 	715, 	721 	(5th 	Cir. 	2019) 	(adopting 	the 	“substantial 	risk” 	standard 	for
imminence). Further, where a party is an “object of the action . . . at issue,” there is
“little question” that the party has standing to challenge it. 	E.g., Diamond Alt.
Energy, LLC v. EPA, 606 U.S. 100, 112 (2025).
The Longview Chamber’s evidence satisfies the imminent-injury requirement.
The key declaration states that members of the Longview Chamber “regularly enter
into merger[s], acquisition[s], or other transactions that meet or exceed the size
thresholds for filing a merger notification form under the HSR Act, including
members for which M&A activity is a regular and consistent feature of their business
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 12 of 34 PageID #:
<pageID>

13
model.” Docket No. 44, Ex. D ¶ 5. In fact, “Longview Chamber members have already
engaged in HSR-reportable transactions this year.” Id. As objects of the Final Rule,
there is “little question” that these members have standing. 	Diamond Alt. Energy,
606 U.S. at 114. Further, “consistent with their past levels of deal activity, members
of the Longview Chamber also plan to engage in HSR-reportable transactions in the
forthcoming months.” Docket No. 44, Ex. D ¶ 5. The declaration then provides details
about 	five 	specific 	members 	who 	have 	already 	engaged 	in 	HSR-reportable
transactions this year and plan to continue engaging “in a similar level of HSR-
reportable activity going forward,” including “at least one more HSR-reportable
transaction this year.” Id. ¶¶ 5–11. All of this is sufficient to show a substantial risk
of future harm. 	See, e.g., Driehaus, 573 U.S. at 161–62 (concluding that a pro-life
organization sufficiently established impending harm because it had made pro-life
statements in past elections and planned to make them in the upcoming election
year); Barilla v. City of Houston, 13 F.4th 427, 432–33 (5th Cir. 2021) (concluding
that a street performer sufficiently established impending harm because he had
previously performed on a street and stated that he planned to perform again on the
same street). 	Cf. Lujan, 504 U.S. at 558 	(concluding that an association lacked
standing where the evidence showed only that members “intend[ed]” to visit Sri
Lanka “in the future” to see endangered species imperiled by the regulation).
The FTC also argues that this case “is not germane to the Longview Chamber’s
interests.” 	Docket No. 57 at 13. 	Germaneness, however, is not a high bar for
associational standing. Rather, “the germaneness requirement is ‘undemanding’ and
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 13 of 34 PageID #:
<pageID>

14
requires ‘mere pertinence’ between the litigation at issue and the organization’s
purpose.” 	Ass’n of Am. Physicians & Surgeons, Inc. v. Tex. Med. Bd., 627 F.3d 547,
550 n.2 (5th Cir. 2010) (quoting Bldg. & Constr. Trades Council of Buffalo v.
Downtown Dev., Inc., 448 F.3d 138, 148 (2nd Cir. 2006)). 	And here, the Longview
Chamber has established that its purpose is to “advocate for policies that promote
economic development and job creation,” including by “challenging harmful and
misguided federal regulations.” 	Docket No. 44, Ex. D ¶ 3. 	The Longview Chamber
has also demonstrated that the Final Rule would harm its members and the local
economy. Id. ¶¶ 13–15. This satisfies the “pertinence” between the lawsuit and the
Longview Chamber’s purpose. E.g., Tex. Med. Bd., 627 F.3d at 550 n.2.
Finally, the FTC contends that the Longview Chamber fails to establish
standing 	because 	the 	key 	declaration 	identifies 	the 	affected 	members
pseudonymously. Docket No. 57 at 12 (citing Summers v. Earth Island Inst., 55 U.S.
488, 498–499 (2009)). 	The FTC misreads Summers. 	As the Fifth Circuit has
explained, “Summers only requires that the plaintiff allege that there is a specific
injured member. . . . Alleging that a specific member exists does not require naming
that member.” Nat’l Infusion Ctr. v. Becerra, 116 F.4th 488, 497 n.5 (5th Cir. 2024)
(citations omitted); see also CFPB, 691 F. Supp. 3d at 738.
* * *
The FTC’s standing argument thus fails as a matter of law.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 14 of 34 PageID #:
<pageID>

15
III.
Plaintiffs argue that the Final Rule exceeds the FTC’s statutory authority
under the HSR Act. Docket No. 44 at 11. According to Plaintiffs, “the HSR Act forbids
the FTC from demanding materials that would impose substantially more costs on
filing parties to compile and produce than are justified by any benefit to the antitrust
agencies’ initial evaluation of the transaction.” 	Id. 	Because the FTC “never
performed the required cost-benefit analysis,” Plaintiffs contend, the Final Rule is
unlawful and should be set aside under the APA. Id. at 11–12. As explained below,
the Court agrees.
The APA requires courts to “hold unlawful and set aside agency action . . .
found to be . . . in excess of statutory jurisdiction, authority, or limitations.” 5 U.S.C.
§ 706(2)(C). 	“It is axiomatic that an administrative agency’s power to promulgate
legislative regulations is limited to the authority delegated by Congress.” 	Bowen v.
Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). 	“Agencies, as mere creatures of
statute, must point to explicit Congressional authority justifying their decisions.”
Inhance Techs., LLC v. EPA, 96 F.4th 888, 893 (5th Cir. 2024); see also Earl v. Boeing
Co., 515 F. Supp. 3d 590, 615 (E.D. Tex. 2021) (“[B]efore promulgating rules or
regulations pursuant to a statute, agencies must demonstrate a clear ‘textual
commitment of authority’ in the language Congress enacted.” (quoting Whitman v.
Am. Trucking Ass’ns, 531 U.S. 457, 468 (2001))).
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 15 of 34 PageID #:
<pageID>

16
After reviewing the governing statute, the Court concludes that the HSR Act
requires that the benefits of the Final Rule reasonably outweigh its costs. The Court
then determines that the Rule fails to satisfy this statutory requirement.
A.
The FTC claims authority for the Final Rule from Section 18(a) of the HSR Act.
That 	provision 	states 	that 	the 	FTC 	“shall 	require 	that 	the 	[premerger]
notification . . . be 	in 	such 	form 	and 	contain 	such 	documentary 	material 	and
information relevant to a proposed acquisition as is necessary and appropriate to
enable 	the 	[FTC 	and 	DOJ] 	to 	determine 	whether 	such 	acquisition 	may, 	if
consummated, violate the antitrust laws.” 	15 U.S.C. § 18a(d)(1) (emphasis added).
Additionally, the statute permits the FTC and DOJ to “define the terms used in this
section,” “exempt from the requirements of this section [those mergers] which are not
likely to violate the antitrust laws,” and “prescribe such other rules as may be
necessary and appropriate to carry out the purposes of this section.” 	15 U.S.C.
§ 18a(d)(2)(A)–(C).
The key phrase at issue is “necessary and appropriate.” Plaintiffs argue that
this phrase “constrains the FTC’s authority, prohibiting it from demanding certain
documents or information from all HSR filers if doing so would impose significant
costs while doing comparatively little to enable the agency to determine whether to
issue a Second Request.” Docket No. 44 at 12. The FTC, on the other hand, argues
that “necessary and appropriate” is a “capacious standard” giving the agency “broad
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 16 of 34 PageID #:
<pageID>

17
discretion” to determine what information to require in a premerger notice—without
conducting a cost-benefit analysis. Docket No. 57 at 16.
Precedent supports Plaintiffs on this point. In Michigan v. EPA, the Supreme
Court interpreted the term “appropriate and necessary” in a statute permitting the
EPA to promulgate emissions regulations for power plants. 576 U.S. 743, 752 (2015).
Although the term “appropriate” is “capacious” and “leaves agencies with flexibility,”
“[r]ead naturally in the present context,” “the phrase ‘appropriate and necessary’
requires at least some attention to cost.” 	Id. 	“One would not say that it is even
rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in
return for a few dollars in health or environmental benefits.” Id. “In addition, ‘cost’
includes more than the expense of complying with regulations; any disadvantage
could be termed a cost.” 	Id. 	Indeed, “[n]o regulation is ‘appropriate’ if it does
significantly more harm than good.” 	Id. 	Accordingly, the Court held, the EPA’s
regulation was unlawful because the agency had “deemed cost irrelevant to the
decision to regulate power plants.” Id. at 760.
A few years later, the Fifth Circuit interpreted the phrase “necessary and
appropriate” in the Magnuson-Stevens Act, Pub. L. No. 94-265, § 1852, 90 Stat. 331
(1976). The provision there authorized the Department of Commerce to promulgate
regulations “necessary and appropriate for the conservation and management of the
fishery.” 	Mexican Gulf Fishing, 60 F.4th at 965. 	“As an initial matter,” the Fifth
Circuit began, “the adjectives necessary and appropriate limit the authorization
contained in this provision.” 	Id. 	“For this reason, the rule is authorized by the
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 17 of 34 PageID #:
<pageID>

18
Magnuson-Stevens Act only if it is necessary and appropriate, which at a minimum
requires that its benefits reasonably outweigh its costs.” 	Id. (citing Nat’l Grain &
Feed Ass’n v. OSHA, 866 F.2d. 717, 733 (5th Cir. 1988)). Additionally, “a necessary-
and-appropriate condition requires more than just consideration of financial costs.”
Id. at 966. It also requires an analysis of “any disadvantage” that could be deemed a
cost. Id. (quoting Michigan v. EPA, 576 at 752).
Applying that standard to the relevant regulation, the Fifth Circuit found that
the rule exceeded Commerce’s statutory authority. The rule required fishing vessels
to keep expensive GPS-tracking equipment to verify whether a vessel was at the dock
or “whether a fishing trip was taken, and the length of that trip.” Id. at 965. Although
a “strict cost-benefit analysis is not required,” the court held, the rule was unlawful
because the agency “failed to show that the GPS-tracking requirement is necessary
and appropriate for the conservation and management of the fishery.” 	Id. at 966.
Installing the equipment would cost $3,000 with additional monthly service fees—
significant costs for small businesses operating on thin margins. See id. at 965. And,
yet, there was “[n]ext to nothing” in benefits. Id. Information about vessel location
was the only cited benefit, and “the Government already has this information” from
less-costly reporting requirements. Id. at 966. Accordingly, the court concluded, “the
Act does not authorize [the agency] to promulgate the GPS-tracking requirement.”
Id.
The FTC contends that Michigan v. EPA and Mexican Gulf Fishing are
distinguishable because the statutes in those cases authorized the agencies to issue
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 18 of 34 PageID #:
<pageID>

19
a rule only if it was necessary and appropriate. Docket No. 57 at 19. Whereas here,
the FTC argues, the HSR Act “requires” the FTC to issue a rule and permits the
agency the flexibility to determine whether the rule is “necessary and appropriate,”
“even if the costs outweigh the benefits.” Id. (citing 15 U.S.C. § 18a(d)(1)). According
to the FTC, the HSR Act falls under the handful of “settings in which the phrase
‘appropriate and necessary’ does not encompass cost.” 	Id. (quoting Michigan, 576
U.S. at 752). 	The Court is unpersuaded. 	Nothing in Michigan v. EPA nor Mexican
Gulf Fishing draws the distinction urged by the FTC here. Rather, in both cases the
courts interpreted the phrase to be a limit on agency authority, “which at a minimum
requires that [the rule’s] benefits reasonably outweigh its costs,” Mexican Gulf
Fishing, 60 F.4th at 965. See also Michigan v. EPA, 576 U.S. at 752. Further, in any
event, in Mexican Gulf Fishing, one of the catch-all provisions authorizing the rule
explicitly required the agency to regulate, yet the Fifth Circuit made no note of this
distinction in analyzing the meaning of “necessary and appropriate.” 	See 16 U.S.C.
§ 1853 (a)(1)(A); id. § 1853 (b)(14); Mexican Gulf Fishing, 60 F.4th at 965–66.
In sum, the HSR Act requires that any benefits to the FTC in mandating
additional information in the premerger notice “reasonably outweigh” the costs.
Mexican Gulf Fishing, 60 F.4th at 965.
B.
Plaintiffs argue that the FTC failed to conduct any cost-benefit analysis and
that the Final Rule therefore exceeds the FTC’s statutory authority. 	“[T]he FTC
never determined . . . that obtaining the newly mandated materials would be helpful
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 19 of 34 PageID #:
<pageID>

20
enough to the decision to issue a Second Request that they were worth the additional
burden on thousands of annual HSR filers.” Docket No. 44 at 15. The FTC counters
that, even though it believed a cost-benefit analysis was unnecessary, the agency
nevertheless weighed the costs and benefits and determined that the Final Rule was
worth the additional burden on filers. 	Docket No. 57 at 17. 	Again, Plaintiffs have
the better argument. Even assuming that the FTC’s discussion of costs and benefits
constituted a cost-benefit analysis, the Court finds that the agency failed to show that
the benefits of the Final Rule reasonably outweighed its costs.
Start with costs. See Mexican Gulf Fishing, 60 F.4th at 965. The FTC concedes
that the costs to comply with the Final Rule are roughly triple the costs to comply
with the previous Form. 	89 Fed. Reg. at 89,333. 	While the prior Form took an
average of 37 hours to complete, 88 Fed. Reg. at 42,208, the FTC expects that the
Final Rule’s new form will require 105 hours, 89 Fed. Reg. at 89,333. Estimating an
hourly 	rate 	of 	$583 	for 	“executive 	and 	attorney 	compensation,” 	the 	Office 	of
Management and Budget determined that each filing under the Final Rule would cost
$39,644 (68 hours X $583) more than the cost to complete the prior Form. Id. With
3,515 HSR filings in Fiscal Year 2023, OMB determined that the overall additional
burden to comply with the Final Rule would be 239,020 hours (3,515 filings X 68
additional hours per filing) and would cost approximately $139.3 million (239,020
hours X $583 per hour). Id. 1
1 Plaintiffs dispute OMB’s estimate. Docket No. 44 at 20–21. Plaintiff U.S. Chamber of Commerce
estimated the cost of complying with the FTC’s proposed rule (which included more requirements
than the Final Rule). 	The U.S. Chamber concluded that the FTC’s proposed rule would add
approximately 242 hours to the average transaction, Docket No. 44, Ex. 6 ¶¶ 45–48, far more than
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 20 of 34 PageID #:
<pageID>

21
And yet, the benefits of the Final Rule identified by the FTC are illusory or, at
least, unsubstantiated. 	These claimed benefits can be divided into two main
categories: (1) detecting additional harmful mergers and (2) saving the FTC the time
and cost of obtaining more information during the premerger screening process.2
OMB’s estimate of 107 additional hours for the proposed rule, id. ¶ 35. Although the U.S. Chamber
acknowledges that the Final Rule has fewer requirements than the proposed rule, the Chamber
contends that the removed requirements alone cannot explain the significant disparity between the
Chamber’s estimate (an increase of 241 hours) and OMB’s estimate (an increase of only 68 hours).
Docket No. 44. at 21. The Court need not decide this dispute, however, because even using OMB’s
lower cost estimate, the Court concludes that the costs outweigh the FTC’s claimed benefits.
2 The FTC lists the benefits of the Final Rule as the following:
(1) the non-consummation of harmful mergers that otherwise would not have been
caught during premerger screening, whose harm continues unless and until the
merger is unwound and competition in the affected market is restored, if it can be
restored at all;
(2) the reallocation of staff hours from attempting to collect additional necessary
information from the parties on a voluntary basis and reduced uncertainty that
delay and insufficiency create for resource allocation decisions;
(3) the reallocation of staff hours from collecting additional necessary information
from third parties regarding the parties' business operations;
(4) the reduction in burden required for third parties to respond to the Agencies'
outreach to provide information known to the filing parties, but not currently
required by the Form;
(5) improvements in premerger screening through
(i) 	more accurate identification of transactions requiring in-depth review;
(ii) the reduction in the number of HSR Filings withdrawn and refiled for the
purpose of allowing Agency staff to collect and review more information
from the parties;
(iii) reduction in delays associated with HSR Filings, including those that are
withdrawn and refiled but do not receive Second Requests;
(iv) the narrowing of issues required to properly focus any in-depth review,
including through the issuance of more targeted and less burdensome
Second Requests;
(v) the reduction in the number of Second Request investigations that do not
ultimately result in enforcement or voluntary restructuring; and
(6) a more efficient allocation of resources devoted to merger enforcement, including
by avoiding expensive and time-consuming litigation to unwind consummated
mergers that cause harm but were not identified under the current rules.
89 Fed. Reg. at 89,252.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 21 of 34 PageID #:
<pageID>

22
1. 	As to the first category, preventing illegal mergers is certainly a benefit.
But the FTC has not shown that the Final Rule’s new form would prevent any illegal
mergers not already prevented by the previous Form. 	In fact, although repeatedly
asked, counsel for the FTC could not identify a single illegal merger in the forty-six-
year history of the prior Form that the Final Rule’s new form would have prevented.
The FTC offers evidence that premerger enforcement is needed, 89 Fed Reg. at
89,2220, and that the prior Form did not request all the information available to the
parties in acquisitions, 89 Fed. Reg. at 89,233. 	But none of this demonstrates that
the Final Rule’s new form will detect illegal mergers more effectively than the prior
Form, as the FTC claims. 	The FTC also argues that firms “structure their deals to
avoid premerger review,” Docket No. 57 at 29, but the agency fails to explain how the
Final Rule would eliminate that problem, especially since the reporting thresholds
are unchanged. See 89 Fed. Reg. at 89,264 (“[N]othing in the final rule changes which
acquisitions are subject to premerger review.”).
The FTC relies heavily on a study of hospital mergers that were submitted for
premerger review, co-authored by two economists at the FTC’s Bureau of Economics.
89 Fed Reg. at 89,221 (citing Keith Brand et al., In the Shadow of Antitrust
Enforcement: Price Effects of Hospital Mergers from 2009–2016, 66 J. L. Econ. 639
(2023)). Per the FTC, the study identified certain hospital mergers that were subject
to the premerger notification process that later had anticompetitive effects (i.e., price
increases). The FTC suggests that the prior Form failed to provide the agency with
“sufficient information to trigger additional investigations that could have blocked
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 22 of 34 PageID #:
<pageID>

23
these harmful mergers before they were consummated.” Docket No. 57 at 29 (quoting
89 Fed. Reg. at 89,221). But the study itself also stated that the FTC issued Second
Requests in reviewing these problematic mergers, which means that the prior Form
worked as it should have—triggering additional review by the agency. Brand, supra,
at 662. The failure of the agency to prevent the mergers therefore had nothing to do
with the Form’s alleged deficiencies but rather with “[in]sufficient resources to
challenge th[os]e mergers,” “evidence [being] too weak,” or plain error. Id. at 662–63.
The FTC also repeatedly cites its own “experience and expertise” in concluding
that the Final Rule’s new form will detect unlawful mergers. 89 Fed. Reg. at 89,217.
The FTC claims that it “compared documentary material and information [the FTC
and DOJ have] received over the years” and identified information that, if the
agencies had at the beginning of previous investigations, “would have changed the
Agencies’ decision whether and how to investigate reportable transactions.” Id. But
the FTC fails to substantiate this claim. 	Nor does the agency provide any specifics.
It does not identify the mergers, does not state what information it lacked, and does
not say whether the agency would have approved the mergers or not.
The FTC asserts that requiring evidence of a past illegal merger is “an insanely
lofty standard.” Docket No. 57 at 30. But it’s the FTC’s own standard. The agency
claimed that the Final Rule was necessary to detect “harmful mergers that otherwise
would not have been caught during premerger screening.” 	89 Fed. Reg. at 89,252.
Meanwhile, for years, until August 2024, the FTC’s own online guide to the HSR
program declared that the “Program [using the prior Form] has been a success” and
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 23 of 34 PageID #:
<pageID>

24
“has minimized the number of post-merger challenges the enforcement agencies have
had to pursue.” 	See Docket No. 44, Ex. 19 at 2 (Fed. Trade Comm’n, What is the
Premerger Notification Program? An Overview (Mar. 2009)); Docket No. 27 ¶ 5. With
this record, it’s not “insanely lofty” to ask the agency to identify at least one “harmful
merger” that the prior Form failed to detect. As the Supreme Court recently held, an
agency should at least have “evidence to support [its] findings.” 	Loper Bright Ents.
v. Raimondo, 603 U.S. 369, 387 (2024). After all, “courts, not agencies, will decide ‘all
relevant questions of law’ arising on review of agency action.” Loper Bright, 603 U.S.
at 387 (quoting 5 U.S.C. § 706).
Although a “strict cost-benefit analysis is not required,” Mexican Gulf Fishing,
60 F.4th at 965, the FTC’s vague and conclusory assertions about preventing illegal
mergers does not justify the significant costs of the Final Rule’s new form—costs to
be borne by thousands of annual HSR filers. See Mexican Gulf Fishing, 60 F.4th at
965–66 (holding that the agency’s claim that GPS-trackers would provide necessary
information was insufficient to justify the cost of the trackers because the claim was
conclusory and unsubstantiated); see also Mexican Gulf Fishing Co. v. U.S. Dep’t of
Com., 587 F. Supp. 3d 428, 460 (E.D. La. 2022), rev’d, 60 F.4d 956 (5th Cir. 2023)
(quoting the agency’s claims that the requested information was required to improve
management of fisheries and facilitate enforcement of the Magnuson-Stevens Act).
2. 	The FTC’s second category of claimed benefits is saving the agency time
and resources in obtaining more information during the premerger screening process.
89 Fed. Reg. at 89,252. 	Saving resources is also, undoubtedly, a benefit. 	But the
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 24 of 34 PageID #:
<pageID>

25
FTC’s resource-savings argument is limited to a small subset of HSR filers, and the
agency again fails to show how that limited benefit reasonably outweighs the
significant costs on the thousands of other annual filers.
As an initial matter, the FTC’s resource-savings justification suffers from
many of the same flaws as its detecting-illegal-mergers argument: 	it is conclusory,
lacks specifics, and is unsubstantiated. 	See, e.g., id. at 89,252–54; id. at 89,269–70.
It is also underwhelming. 	By the FTC’s own estimate, approximately 92% of HSR-
reported mergers do not require any investigation or additional requests by the
agency. 	Docket No. 44, Ex. 23 at T1(Fed. Trade Comm’n & U.S. Dep’t of Justice,
Hart-Scott-Rodino Annual Report Fiscal Year 2021). 	Indeed, the FTC opens an
investigation in only 8% of HSR-reported mergers, and even fewer—3%—receive
Second Requests from the agency. 	Id.; see Billman & Salop, Merger Enforcement
Statistics: 2001-2020, 85 ANTITRUST L.J. 1, 10 (2023) (finding that from 2001 to 2020,
only about 3% of HSR-reportable transactions received a Second Request). And yet,
the agency justifies the Final Rule on the time and resources saved in only the few
mergers that receive a closer look. The FTC claims that the new form will allow it to
more quickly conclude investigations, 89 Fed. Reg. at 89,252, and will permit more
targeted Second Requests, which will save the agency both time and resources, id. In
conclusion, the FTC asserts, the new form will lead to “an overall reduction in the
number of staff hours spent collecting additional information from all sources,
including the parties, as well as a reduction in associated burdens of reviewing and
processing that information.” Id.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 25 of 34 PageID #:
<pageID>

26
The problem for the FTC is that the Final Rule’s new form imposes costs on all
filers—including the 92% for which the new form will provide the agency with little
or no benefit. 	And even the benefit in 8% of the transactions is unclear. 	The FTC
does 	not 	argue 	that 	the 	new 	form 	would 	eliminate 	or 	substantially 	curtail
investigations or Second Requests. 	Nor does the agency attempt to specify or
substantiate how exactly the new form will save time and resources. 	A typical
explanation is that the Final Rule will allow the agencies to “narrow[] the scope of
their investigations in some cases, and in others, reduce[] the need to conduct a more
burdensome in-depth investigation by issuing Second Requests.” 	See, e.g., 89 Fed.
Reg. at 89,217. This does not satisfy Mexican Gulf Fishing’s standard, which requires
the agency to show “at a minimum” that the new rule will provide a “meaningful
benefit,” one that “reasonably outweigh[s] its costs.” F.4th at 965–66.
The FTC argues that “it is appropriate to shift some of this information-
gathering burden to the merging parties and away from other market participants—
including customers who may suffer harm if the merger is consummated—who
currently absorb this burden due to deficiencies in the existing HSR Form.” 89 Fed.
Reg. at 89,253. 	But as noted above, the agency has provided no evidence that any
deficiencies in the prior Form resulted in illegal mergers that the new form would
prevent. 	Such cost-shifting, moreover, would hardly keep the form “as minimally
burdensome as possible without compromise the agencies’ ability to investigate and
interdict proposed transactions.” Docket No. 44, Ex. 17 at 29.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 26 of 34 PageID #:
<pageID>

27
* * *
To be sure, the FTC made more of an effort to consider costs and benefits than
the agencies in Michigan v. EPA and Mexican Gulf Fishing. But the lack of specifics
and evidence here prevents the Court from concluding that the claimed benefits of
the Final Rule reasonably outweigh its significant costs, as required by the HSR Act.
See, e.g., Mexican Gulf Fishing, 60 F.4th at 965–66; Tex. Indep. Ginners Ass’n v.
Marshall, 630 F.2d 398, 411 (5th Cir. 1980) (citing Am. Petroleum Inst. v. OSHA, 581
F.2d 493, 503 (5th Cir. 1978)) (holding that the agency’s “estimate of the anticipated
cost and expected benefit of the proposed regulations are factual findings that must
be supported by substantial evidence in the record.”); Getty v. Fed. Sav. & Loan Ins.
Corp., 805 F.2d 1050, 1055 (D.C. Cir. 1986) (“Stating that a statutorily mandated
factor was considered is not a substitute for considering it.”).
The Court thus concludes that the Final Rule is unlawful because it exceeds
the FTC’s statutory authority. 5 U.S.C. § 706(2)(C).
IV.
Plaintiffs also argue that the Final Rule should be vacated because it is the
product of arbitrary and capricious rulemaking in violation of the APA. 	Docket No.
44 at 19–20. 	Specifically, Plaintiffs contend that the FTC “failed to show that the
Rule’s benefits are worth the immense new costs on every HSR filer,” id. at 20, and
“gave no reasoned explanation for rejecting less burdensome alternatives,” id. at 27.
The APA instructs courts to “hold unlawful and set aside” rules that are
“arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.”
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 27 of 34 PageID #:
<pageID>

28
5 U.S.C. § 706(2)(A). 	“The APA’s arbitrary-and-capricious standard requires that
agency action be reasonable and reasonably explained.” 	FCC v. Prometheus Radio
Project, 592 U.S. 414, 423 (2021); see also ExxonMobil Pipeline Co. v. U.S. Dept. of
Transp., 867 F.3d 564, 571 (5th Cir. 2017) (“Arbitrary and capricious review focuses
on whether an agency articulated a rational connection between the facts found and
the decision made.” (citation modified)). “In reviewing that explanation, we must
consider whether the decision was based on a consideration of the relevant factors
and whether there has been a clear error of judgment.” Texas v. EPA, 983 F.3d 826,
835 (5th Cir. 2020) (quoting Motor Vehicle Mfrs. Assn. of U.S. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
The Court addresses each of Plaintiffs’ arguments in turn.
A.
First, the cost-benefit analysis. Docket No. 44 at 20–24. Plaintiffs argue that
the FTC “unreasonably understated the costs of the Rule” while “unreasonably
overstat[ing] the benefits.” Id. at 20, 23. The Court agrees.
“[A] regulation is arbitrary and capricious if the agency ‘failed to consider an
important aspect of the problem’” which “includes, of course, considering the costs
and benefits associated with the regulation.” Mexican Gulf Fishing, 60 F.4th at 973
(quoting State Farm, 463 U.S. at 43)). 	“[A]s part of the cost-benefit analysis, the
agency must identify benefits that ‘bear a rational relationship to the . . . costs
imposed.’” Chamber of Com. of U.S. v. SEC, 85 F.4th 760, 777 (5th Cir. 2023) (quoting
Mexican Gulf Fishing, 60 F.4th at 973). The Court must consider whether an agency
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 28 of 34 PageID #:
<pageID>

29
“examine[d] the relevant data and articulate[d] a satisfactory explanation for its
action.’” 	FCC v. Fox Television Studios, Inc., 556 U.S. 502, 513 (2009) (quotation
omitted). 	The Court also must ensure that the agency “has acted within a zone of
reasonableness,” but “may not substitute its own policy judgment for that of the
agency.” Prometheus, 592 U.S. at 423.
Plaintiffs’ argument succeeds for the same reason that the necessary-and-
appropriate provision does not authorize the Final Rule: 	the FTC “failed to
demonstrate that it would obtain meaningful benefits” from the new form. Mexican
Gulf, 60 F.4th at 973 (holding that the GPS-tracking requirement was arbitrary and
capricious “for the same reason that the necessary-and-appropriate provisions do not
authorize [the tracking requirement]”). 	The FTC lacks any evidence that the Final
Rule would detect illegal mergers more effectively than the prior Form. And it failed
to show that the claimed benefit of saving time and resources reasonably outweighs
the Final Rule’s significant costs. Thus, the Rule is arbitrary and capricious because
its benefits do not “bear a rational relationship” to its costs. Id.
B.
Plaintiffs also argue that the FTC failed to properly consider less burdensome
alternatives offered in comments to the Final Rule. 	Specifically, Plaintiffs contend
that the FTC dismissed “more targeted tools” like voluntary requests for reasons that
were “irrational, contrary to the evidence, or both.” Docket No. 44 at 27–28. The FTC
claims that it fully considered the alternatives and rejected them because they would
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 29 of 34 PageID #:
<pageID>

30
create further delays or shift more costs to the investigated parties. Docket No. 57 at
33–37.
“[A]n agency must consider and explain its rejection” of “‘significant and viable’
and ‘obvious’ alternatives.” 	10 Ring Precision, Inc. v. Jones, 722 F.3d 711, 724 (5th
Cir. 2013) (quoting Nat’l Shooting Sports Found., Inc. v. Jones, 716 F.3d 200, 215
(D.C. Cir. 1984)); see also Farmers Union Cent. Exch., Inc. v. FERC, 734 F.2d 1486,
1511 (D.C. Cir. 1984) (“It is well established that an agency has a duty to consider
responsible alternatives to its chosen policy and to give a reasoned explanation for its
rejection of such alternatives.” (citing 	State Farm, 463 U.S. at 47–53; Int’l Ladies'
Garment Workers' Union v. Donovan, 722 F.2d 795, 815 (D.C. Cir. 1983))). 	“An
agency’s failure to respond meaningfully to [alternatives] raised by a party renders
its decision arbitrary and capricious.” 	PPL Wallingford Energy LLC v. FERC, 419
F.3d 1194, 1198 (D.C. Cir. 2005) (quoting Canadian Ass’n of Petroleum Producers v.
FERC, 254 F.3d 289, 299 (D.C. Cir. 2001)). 	So too is an “artificial narrowing of
options” by the agency by responding to alternatives with “a recital of conclusions,
not facts” and a “conclusion with little supporting rationale visible.” 	Pillai v. CAB,
485 F.2d 1018, 1027 (D.C. Cir. 1973).
The FTC’s main complaint with the suggested alternatives is that they did not
“address the information deficiencies . . . with the current information requirements.”
89 Fed. Reg. 89,248-89,249. 	The FTC claims that alternatives like voluntary
submissions and more targeted Second Requests are not comparable because the
agencies first need the information provided by the new form before they can
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 30 of 34 PageID #:
<pageID>

31
determine which transactions require additional information. 	Id. at 89,247-89,249.
But once again, the FTC does not substantiate this claim. The agency does not specify
what information was lacking in the prior Form that the Final Rule would now
provide—or what transactions the prior Form allowed to proceed that the Final Rule
would flag as problematic. 	As discussed above, the FTC cannot show that a single
illegal merger occurred due to “information deficiencies” in the old Form. See supra
Section III.B.1.
The FTC also argues that the proposed alternatives are “extremely costly”
compared to the Final Rule. 	The FTC points to a 2014 report by the American Bar
Association estimating that Second Requests cost recipients an average of $4.3
million and 7.9 additional months to conclude the premerger approval process. Id. at
89,247. But the agency fails to explain why imposing these costs on a small subset of
filers is a more “costly” alternative than tripling the costs of every HSR-reportable
transaction for all filers. 	Nor does it explain why voluntary disclosures before a
Second Request would also be unacceptable.
The Court thus concludes that the FTC’s rejection of the alternatives was
based on improper reasoning and that the agency failed to consider an “important
aspect of the problem.” 	State Farm, 463 U.S. at 43; see also Canadian Ass’n of
Petroleum Producers, 254 F.3d at 222 (finding that agency acted in an arbitrary and
capricious manner when its reasoning for rejecting an alternative was “not wholly
accurate” 	math); 	Pillai, 	485 	F.2d 	at 	1027 	(finding 	that 	agency’s 	rejection 	of
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 31 of 34 PageID #:
<pageID>

32
alternatives was arbitrary and capricious when the agency’s reasoning relied on
“unsupported conclusions” and “sheer faith in the [agency’s] ‘expertise.’”).
* * *
The FTC’s failure to apply reasoned decision-making provides a second and
independent basis to hold unlawful and set aside the Final Rule under the APA.
5 U.S.C. § 706(2)(A).
V.
Having determined that the Rule violates the APA, the Court considers the
proper remedy. 	Plaintiffs ask for “universal vacatur” of the Rule. 	Docket No. 44 at
30; Docket No. 62 at 25. 	The FTC states that the Rule is “ill-suited for universal
relief” because “hundreds of parties have already sought premerger review . . . using
the new form.” Docket No. 57 at 39. Additionally, the FTC asks that any vacatur be
limited to “members of the plaintiff associations who have demonstrated that they
have standing.” Id. at 38.
“Vacatur is the only statutorily prescribed remedy for a successful APA
challenge to a regulation.” Franciscan All., Inc. v. Becerra, 47 F.4th 368, 374-75 (5th
Cir. 2022). 	And vacatur under the APA is “not party-restricted.” 	Career Colls. and
Schs. of Tex. v. U.S. Dep’t of Educ., 98 F.4th 220, 255 (5th Cir. 2024). 	“‘When a
reviewing court determines that agency regulations are unlawful, the ordinary result
is that the rules are vacated—not that their application to the individual petitioners
is proscribed.” Id. (quoting Harmon v. Thornburgh, 978 F.2d 484, 495 n.21 (D.C. Cir.
1989). As such, the Fifth Circuit has repeatedly rejected government efforts to limit
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 32 of 34 PageID #:
<pageID>

33
relief to the parties and has upheld universal vacatur as the appropriate remedy in
APA cases. 	See, e.g., id.; Career Colls. and Schs. of Tex, 98 F.4th at 255; Tex. Med.
Ass’n v. U.S. Dep’t of Health and Hum. Servs., 110 F.4th 762, 779–80 (5th Cir. 2024).
Though vacatur is the “default rule,” Cargill v. Garland, 57 F.4th 447, 472 (5th
Cir. 2023) (en banc), courts may deviate based on two equitable interest factors:
“(1) the seriousness of the deficiencies of the action, that is, how likely it is the agency
will be able to justify its decision on remand; and (2) the disruptive consequences of
vacatur.” Texas v. Biden, 20 F.4th 928, 1000 (5th Cir. 2021), rev’d on other grounds,
597 U.S. 785 (2022) (quoting United Steel v. Mine Safety & Health Admin., 925 F.3d
1279, 1287 (D.C. Cir. 2019)). Considering these factors here, the Court concludes that
the appropriate remedy is vacatur.
First, the seriousness of the Final Rule’s deficiencies makes it unlikely that the
FTC can justify its decision on remand. In fact, the FTC has said nothing to suggest
otherwise, noting instead that it would be an “insanely lofty and impossible standard”
to require the agency to identify problematic transactions that the prior Form failed
to detect. 	Docket No. 57 at 30. 	Without an “explanation as to how [the FTC] could
correct the Final Rule’s conflicts with the statute on remand,” this factor thus weighs
against the FTC. Tex. Med. Ass’n, 110 F.4th at 779 (citation modified).
Second, the Court finds that vacatur would not be unduly disruptive. The FTC
argues that the Final Rule is already in effect and that merging parties would be
forced to “scrap the time and money spent on preparing the new form and pivot[] to
the old form, which included requirements that are not part of the new form.” Docket
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 33 of 34 PageID #:
<pageID>

34
No. 57 at 39. But the existence of some costs to some parties is not unduly disruptive.
See Texas, 20 F.4th at 1000. Vacatur here would not be unduly disruptive, moreover,
because the old Form—used for forty-six years—certainly “provide[s] a sufficient
framework” for mergers to be processed. Tex. Med. Ass’n v. U.S. Dep’t of Health and
Hum. Servs., 587 F.Supp.3d 528, 549 (E.D. Tex. 2022).
With no reason to depart from the default rule, the Court finds that vacatur of
the Rule and remand is the proper remedy.
VI.
In sum, the Court holds that (1) Plaintiffs have standing to challenge the FTC’s
Final Rule, (2) the Rule conflicts with the unambiguous terms of the Act, (3) the Rule
is the product of arbitrary and capricious decision-making, and (4) vacatur and
remand is the proper remedy.
Accordingly, the Court GRANTS Plaintiffs’ motion for summary judgment
(Docket No. 44), DENIES the FTC’s cross-motion for summary judgment (Docket
No. 57), and ORDERS that the Rule be vacated. 	The Court further DENIES AS
MOOT the FTC’s motions to dismiss (Docket Nos. 23, 30) and motion to stay (Docket
No. 53).
Finally, the Court STAYS the applicability of this order for seven days to allow
the FTC time to seek emergency relief from the United States Court of Appeals for
the Fifth Circuit.
So ORDERED and SIGNED this day of
___________________________________
JEREMY D. KERNODLE
UNITED STATES DISTRICT JUDGE
12th	February, 2026.
Case 6:25-cv-00009-JDK Document 75 Filed 02/12/26 Page 34 of 34 PageID #:
<pageID>