Court SLAMS Bureaucrats — $139M Scam Exposed

A federal court just delivered a crushing blow to bureaucratic overreach, striking down the FTC’s massive expansion of merger filing requirements that nearly doubled costs for American businesses without justification.

Story Snapshot

Texas federal court vacated the FTC’s 2025 Hart-Scott-Rodino rule expansion, finding it arbitrary and exceeding statutory authority
The rule tripled filing burdens to $155,000 per transaction, up from $80,000, costing businesses an additional $139 million annually
FTC failed to identify a single merger missed under the previous 46-year-old system, undermining claims the expansion was necessary
Victory for U.S. Chamber of Commerce marks another judicial check on Biden-era regulatory excess under the Trump administration

Court Rejects Unjustified Regulatory Expansion

Judge Jeremy Kernodle of the U.S. District Court for the Eastern District of Texas granted summary judgment on February 12, 2026, vacating the FTC’s expanded Hart-Scott-Rodino premerger notification requirements. The court found the agency’s rule arbitrary, capricious, and beyond its statutory authority under both the Administrative Procedure Act and the HSR Act itself. This represents a significant rebuke of regulatory overreach that imposed massive compliance costs without demonstrable benefits. The ruling came after the U.S. Chamber of Commerce and allied business groups challenged requirements that fundamentally transformed merger reporting obligations.

Tripling Costs Without Evidence of Need

The FTC’s October 2024 rule revision, which took effect in February 2025, dramatically expanded disclosure requirements for companies planning mergers or acquisitions. Chamber of Commerce surveys documented that the new form increased filing time to 20 business days and nearly doubled costs from approximately $80,000 to $155,000 per transaction. Aggregated across thousands of annual filings, businesses faced an additional $139 million in compliance burdens annually. Remarkably, the FTC could not cite a single instance in the previous 46 years where the old form failed to detect an illegal merger, undermining the entire justification for this regulatory expansion.

Rejecting Alternative Approaches to Enforcement

The court found particularly troubling the FTC’s refusal to consider less burdensome alternatives. Business groups proposed targeted information requests or voluntary data submissions for transactions warranting deeper scrutiny, approaches that would preserve enforcement capabilities without blanket requirements affecting all filers. The agency dismissed these options without adequate justification, contributing to the court’s determination that the rulemaking process violated administrative law standards. Legal experts from multiple firms noted the FTC’s failure to conduct proper cost-benefit analysis, a fundamental requirement for major regulatory actions affecting thousands of businesses across all sectors of the American economy.

Immediate Relief for American Businesses

The ruling included a seven-day stay through February 19, 2026, allowing the FTC time to seek appellate intervention from the Fifth Circuit Court of Appeals. Absent a successful emergency motion, businesses immediately returned to the previous HSR filing requirements, eliminating the additional $39,000-plus per-transaction burden. This delivers tangible relief to dealmakers across industries, from small acquisitions to major corporate consolidations. The decision signals heightened judicial scrutiny of administrative agency actions in the post-Biden era, particularly regulations lacking clear statutory authorization or empirical support for their necessity and proportionality.

The @FTC is projecting its own progressive ideology onto the @USChamber.https://t.co/BarCDvlbi6 https://t.co/xUfJTI0spD

— Jack Nicastro (@jack_g_nicastro) February 19, 2026

Broader Implications for Regulatory Reform

This victory represents more than merger filing relief—it establishes important precedent limiting federal agencies’ ability to impose costly mandates without justification. The ruling contrasts with the FTC’s noncompete ban, also struck down in 2025, demonstrating consistent judicial rejection of regulatory overreach regardless of whether rules pass on party-line or unanimous votes. The HSR expansion’s unanimous 5-0 FTC approval could not save requirements the court found arbitrary and unsupported by evidence. Business groups and constitutional conservatives see this as validation that even bipartisan agency consensus cannot override statutory limits or substitute for rigorous analysis demonstrating genuine necessity for burdensome new requirements.