Whole Foods Files Suit Against FTC

Washington, D.C. Whole Foods Market filed a federal lawsuit Monday against the Federal Trade Commission (FTC), claiming the regulator violated its due process rights in a dispute over its acquisition of rival Wild Oats.

Whole Foods bought rival Wild Oats Markets Inc. in 2007 for $565 million. But the FTC's antitrust challenge has left the acquisition in legal limbo ever since.

The FTC worried the deal would create a natural-food monopoly, but federal judges ruled the acquisition could move forward. An appeals-court decision threw it back into question.

The commission is to conduct an administrative trial in the case in February that is supposed to be impartial. However, Whole Foods said in a lawsuit filed in U.S. District Court for the District of Columbia on Monday that the FTC's proceeding is hopelessly biased and the agency has prejudged the case.

Whole Foods argues that the commission also violated the company's due process rights by setting a rapid schedule for the administrative proceedings that does not allow Whole Foods adequate time to prepare its defense.

“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 Market, who signed the complaint. “Even more so does the FTC's insistence on hearing this case rather than allowing an objective federal court to hear it.”

Whole Foods wants the court to require the FTC to terminate the proceedings. The company wants the case to be resolved in federal court instead.