U.S. Chamber of Commerce v. FTC stayed, injunction will be global

As you may recall, on April 30, the Federal Trade Commission moved to stay the litigation brought by the U.S. Chamber of Commerce seeking an order vacating the FTC’s rule banning noncompetes and an injunction precluding enforcement.

Specifically, the FTC argued that the Court should stay the U.S. Chamber’s case because Ryan, LLC filed parallel litigation a day earlier, and that case should have priority as the first-filed action.

The U.S. Chamber filed an opposition on May 2.

Today (May 3), the Court granted the FTC’s request for a stay of the U.S. Chamber litigation.

As a consequence of its ruling, the Court simultaneously rendered the FTC’s request that the U.S. Chamber identify its members moot.

The request is moot not just because the case is stayed. Rather, the request is moot because of the nature of the ultimate relief — vacatur of the FTC’s rule. Quoting Justice Gorsuch’s concurring opinion in United States v. Texas, 599 U.S. 670, 693, 699 (2023), the Court in the U.S. Chamber litigation explained that, regardless of who the plaintiff is, a “vacatur remedy means that ‘a single plaintiff can secure a remedy that rules the world’ . . . .” (Emphasis added.)

Accordingly, if Ryan prevails in its case, the FTC’s noncompete ban would be vacated and the FTC could not enforce it against anyone. In contrast, if Ryan fails, other parties should be able continue to challenge the rule until someone secures an injunction globally vacating the rule.

Time to turn your attention to Ryan, LLC v. The Federal Trade Commission.

As you may recall, yesterday (May 2), the Court in that case granted Ryan’s motion and gave the FTC until 5:00 CT on May 7 to file its opposition.

Unless the schedule changes, expect to see the FTC’s opposition on Tuesday.

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*A huge thank you to Erika Hahn for all of her extraordinary help in monitoring all of the filings in the various lawsuits challenging the FTCs rule banning noncompetes.