The U.S. District Court for the Northern District of Texas universally vacated the Federal Trade Commission’s Non-Compete Rule (16 C.F.R. §§ 910.1-910.6) based on a belief that “the [Administrative Procedure Act] does not contemplate party-specific relief.” Quoting this Court’s dicta in Braidwood Management, Inc. v. Becerra, 104 F.4th 930 (5th Cir. 2024), the district court opined that “setting aside agency action under § 706 [of the APA] has ‘nationwide effect,’ is ‘not party-restricted,’ and ‘affects persons in all judicial districts equally.’” The district court thus treated universal relief as mandatory.

We agree with the FTC’s position (Br. at 47-54) that the district court “erred in ordering universal vacatur of the Rule without considering equitable principles.” As the FTC explains (Br. at 49), the district  court’s  position  is  fatally  inconsistent  with  this  Court’s recognition that, in an APA action, “party-specific vacatur is definitely appropriate in [some] situations.”7

We elaborate here on why recent Supreme Court precedents require this Court to repudiate its language in Braidwood and like decisions that treat universal vacatur as a default. In Braidwood, the scope of an APA remedy was not at issue, because the Court held that there was no APA claim in the first place. And as administrative law scholar Alisa Klein explains, this dicta cannot be reconciled with recent Supreme Court decisions that this Court has never addressed.

First, treating universal vacatur as a required or default remedy is inconsistent with the Supreme Court’s decision in Starbucks Corp. v. McKinney, which held that a statute’s grant of authority for federal courts to issue equitable relief must be interpreted to carry forward traditional principles of equity. That Court has long held that a judicial “proceeding to set aside” agency action “is a plenary suit in equity.” It is a traditional principle of equity that relief may be no broader than “necessary to provide complete relief to the plaintiffs.” That principle applies even when the plaintiff in an APA case challenges a rule on a legal theory that implicates the rule’s application to nonparties. Indeed, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the Court concluded that the APA’s “cause of action” is “plaintiff specific” regardless of whether the plaintiff challenges a rule on its face. Even assuming the APA authorizes district courts to vacate agency rules, there is no canon of statutory interpretation that suggests universal vacatur is a required or default remedy.

Furthermore, the Supreme Court’s recent decisions in Food & Drug Administration v. Alliance for Hippocratic Medicine and Murthy v. Missouri show that treating universal vacatur as a required or default remedy cannot be reconciled with Article III’s “case or controversy” requirement. Writing for the Court in Alliance for Hippocratic Medicine, Justice Kavanaugh emphasized that Article III did not establish standing to sue for a plaintiff concerned with the impact of the rule on others. Writing for the Court in Murthy, Justice Barrett explained that “‘plaintiffs must demonstrate standing for each claim that they press’ against each defendant, ‘and for each form of relief that they seek.’” Together, these decisions show that a plaintiff’s standing to seek plaintiff-specific relief cannot alone justify a universal remedy.

Although the Supreme Court has not yet addressed the availability of a universal vacatur remedy under the APA, a plurality of its members has treated the universal vacatur remedy with deep skepticism. The nature of the remedy is to extinguish the rights of nonparties, including nonparties who do not wish for the “benefit” of vacatur—as in the instant case. Universal vacatur disrupts the principle of comity between courts, including where—as here—sister district courts have upheld the rule or resisted universal vacatur by issuing party-specific relief. Furthermore, universal  vacatur  supplants  joinder  and  class  action  procedures, themselves the result of statutory authorization. Finally, universal vacatur improperly casts the judiciary in the role of policymaker, straining the Nation’s separation of powers.

Not allowing for a remedy of universal vacatur does not leave plaintiffs without relief and is instead consistent with the supremacy of the Supreme Court and the separation of powers under the Constitution. At a minimum, “courts of appeals must do their part, too, asking whether party-specific relief can adequately protect the plaintiff ’s interests,” as it can in the instant case. “If so, an appellate court should not hesitate to hold that broader relief is an abuse of discretion.”