TL;DR:   While most of y'all were likely sleeping soundly at 4:17 AM this morning, your friends at Cobalt were hard at work reviewing an email from the Office of the Federal Register regarding three recent FTC rulemakings.  Relevant for this audience is the FTC recodifying (yup, it's a word!) its pre-2024 Prenotification Negative Option Rule in light of the 8^th Circuit's smackdown last summer of the agency's 2024 amended “Click to Cancel” Rule.  To spare you the agony of having to read and interpret the meaning behind this action, we note that all this does is recodify the Prenotification Negative Option Rule to its pre-2024 original form just in case the FTC finds the need to go after those pesky book, 8-track and cassette clubs that offer 10 selections for a penny and obligation (in really small type) to purchase 15 more selections at regular club prices.  Lord knows what a scourge these programs are in today's world!

The Bigger Story

Negative Option Rule.  While we jest about the need for the FTC to have the Prenotification Negative Option Rule in its toolbox to go after companies still making these types of offers (“Hello... 1978…are you there?”), we believe there may be a different motivation at play here; the FTC may need that Rule to be in effect for it to resurrect the vacated 2024 Click to Cancel Rule, announced 2 weeks ago, when it issued an Advance Notice of Proposed Rulemaking (ANPRM) to cure procedural deficiencies identified by the 8^th Circuit when it vacated the C2C Rule.  As we are not hardcore administrative law wonks here, we can't say for sure this is the reason, but it makes sense, especially if amending an existing Rule is procedurally easier than initiating a new one.  And for those following said resurrection, all the FTC did two weeks ago was announce its submission of the ANPRM to the Office of Information and Regulatory Affairs (part of the OMB) for its review and approval to publicly publish the ANPRM in the Federal Register; it did not publish the actual proposal, so we don't know exactly what the FTC is up to.  But as always, we will let you know as soon as we know something ... or if you ask us in the meantime.  Sorta like if you asked us who to bet on in the Super Bowl, we would have told you to take Seattle and give the 4.5 points, in which case you'd be sitting on a pile of cash today, perhaps almost enough to buy a single share of Bitcoin, currently trading at a 12 month low of $66,062.  Bruh…now's the time to get into crypto…what can possibly go wrong?!?

Recission of the CARS and Non-Compete Rules. In other news, in contrast to the FTC recodifying the Negative Option Rule, this morning's FTC's Federal Register notice rescinds two 2024 Lina Khan era rulemakings.

It rescinds the Combating Auto Retail Scams Trade Regulation Rule (cutely named the “CARS Rule”), which placed certain restrictions and obligations on car dealers when selling, leasing, or arranging financing for motor vehicles, such as selling worthless add-on products or services (ala this TruCoat scene from Fargo).  This Rule was challenged in court by various industry groups, eventually vacated by the 5^th Circuit in January 2025, and is now officially rescinded by the FTC.  So now car buyers are back to caveat emptor.

The notice also rescinds the Non-Compete Clause Rule (prohibits non-compete clauses in certain employee agreements) which, like the above two rules, were challenged in court by various industry groups, but here resulting in three different opinions that went to appeal.  In September 2025, the FTC voted to dismiss its appeals, and today rescinded the Rule from the CFR entirely.