Kroger files to block FTC challenge to proposed $25 billion Albertsons merger
Legal activity surrounding the proposed $25 billion merger of The Kroger Co. and Albertsons Cos. continues to grow.
Kroger has filed a motion for preliminary injunction in the U.S. District Court, Southern District of Ohio, against the Federal Trade Commission's (FTC) administrative proceeding challenging the company's merger with Albertsons.
In addition to the administrative proceeding, the FTC and a group of states have sued to challenge the deal in Oregon federal court. A hearing in that case is set to start on Aug. 26.
In its new motion, Kroger argues that by proceeding in its administrative tribunal, in addition to the separate action in federal court, the FTC is violating Constitutional protections in two areas.
According to Kroger, the FTC violates Article II of the Constitution because the administrative law judge presiding over the administrative proceeding is not removable by the president of the U.S.
In addition, Kroger’s motion claims that FTC also violates Article III of the Constitution by seeking to adjudicate Kroger's private rights to contract with another private party administratively through the executive branch rather than in the independent judicial branch.
Furthermore, Kroger says the FTC has sought to split its challenge to the merger into two separate tribunals in an inappropriate attempt to receive multiple opportunities to litigate the same issues, including the scheduled Aug. 26 court proceeding.
"The merger between Kroger and Albertson's is squarely focused on ensuring we bring customers lower prices starting day one while securing the future of good-paying union jobs," said Rodney McMullen, Kroger Chairman and CEO. "We stand prepared to defend this merger in the upcoming trial in federal court – the appropriate venue for this matter to be heard – and we are asking the Court to halt what amounts to an unlawful proceeding before the FTC's own in-house tribunal."
During a separate hearing in Denver District Court on July 25, Judge Andrew J. Luxen granted a preliminary injunction delaying the merger and also cancelled an Aug. 12 hearing on the matter. The two companies agreed to the delay as they await a court ruling on a lawsuit filed by the attorney general of Colorado to block the deal. The trial is set to start on Sept. 30.
[READ MORE: Judge puts temporary hold on Kroger, Albertsons $25 billion deal]
As of June 15, 2024, Albertsons operated 2,269 retail food and drug stores with 1,725 pharmacies, 403 associated fuel centers, 22 dedicated distribution centers and 19 manufacturing facilities. Based in Cincinnati, Kroger operates 2,800 stores under a variety of banners across the U.S.
