Whole Foods files action to bar FTC trial

WASHINGTON D.C. Whole Foods announced on Monday that it has filed an action in the D.C. U.S. District Court to bar the Federal Trade Commission from conducting a trial that would violate the company's due process rights, because the FTC has already publicly prejudged the case against Whole Foods and has refused to give the company enough time to prepare for trial.

Citing "Alice In Wonderland's" Queen of Hearts, Whole Foods' complaint begins: "Now for the evidence," said the King. "And then the sentence." "No!" said the Queen. "First the sentence, and then the evidence."

The complaint continues: "The Defendant FTC has acted no less blatantly than the Queen of Hearts in violating both the Constitutional due process rights of Plaintiff Whole Foods Market, Inc. The violations of Whole Foods Market’s due process rights here are stark and, therefore, hurt the FTC's credibility," said Lanny J. Davis, attorney for Whole Foods, who signed the complaint filed on Monday. "Even more so does the FTC's insistence on hearing this case, rather than allowing an objective federal court to hear it."

The first count of the complaint quotes specific biased prejudgments of the FTC made publicly in legal findings in 2008, such as the FTC declaring categorically, without qualification, that the Whole Foods Market-Wild Oats Markets merger reduced competition and was anti-competitive. In 2009, the FTC will be asked to review the same evidence and make a decision.

"How can the same FTC sit as judge and jury sometime in the future of the very same case in which it has already declared that the Whole Foods-Wild Oats merger is illegal and its key expert testimony 'garbage'?" asked John Mackey, co-founder and ceo of Whole Foods. "The answer is--it shouldn't be allowed to. It has obviously already closed its mind. That's not our understanding of what due process and principles of fundamental fairness are all about."

The second count addresses a 'rush to trial.' "The FTC is forcing Whole Foods Market to go to trial in just five months and defend itself in 29 separate geographic jurisdictions in a merger that was not anti-competitive," stated Davis. "That is unreasonable and impossible, and thus, a violation of Whole Foods' due process rights to a fair trial."

"We are not asking Congress to interfere with the merits of the litigation, but rather, simply to help change the venue from a biased one at the FTC to a U.S. federal judge, who has exhibited no previous categorical prejudgments of the facts and the law," said Walter Robb, co-president and coo for Whole Foods.

Whole Foods is asking the Court to issue an injunction, barring the FTC from holding the administrative trial and from reviewing the case itself. Such relief is required, the complaint states, because the Commission "cannot, consistent with fundamental principles of due process, preside over an administrative proceeding where it cannot present itself, in fact or in perception, as an objective and open-minded adjudicator."

With such an injunction in place, the FTC would still have the ability under current law to re-file the case in U.S. District Court, which, as Whole Foods has alleged, would allow a non-biased federal judge to decide the case.