On February 12, the FTC issued a final rule in the Federal Register to conform three of its recent rules to federal court decisions, revising the Negative Option Rule and withdrawing both the Combating Auto Retail Scams Trade Regulation Rule (CARS Rule) and the Non-Compete Rule. The agency restored the Negative Option Rule to its pre-November 2024 form after the Eighth Circuit vacated the 2024 amendments for procedural insufficiency, specifically the failure to issue a preliminary regulatory analysis (covered by InfoBytes here). The FTC also withdrew the CARS Rule following the Fifth Circuit’s finding that the agency violated its own regulations by not issuing an advance notice of proposed rulemaking (covered here), and removed the Non-Compete Rule (covered here) after district courts concluded the rule exceeded statutory authority and was arbitrary and capricious. The FTC determined that notice and public comment were unnecessary because these actions conformed the rules to court-ordered results and stated it will discontinue related information collections with the Office of Management and Budget.
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