Kroger Seeks to Block FTC Case Against Albertsons Acquisition

Kroger Co. is seeking to block the Federal Trade Commission’s in-house case against its proposed purchase of rival grocer Albertsons Cos., claiming the proceeding is unconstitutional.

The FTC, eight states and Washington, DC, challenged the Kroger-Albertsons tie-up in February, suing to block the largest supermarket merger in US history. The agency claimed the merger would drive up grocery prices for American customers.

Kroger, in the Monday filing in federal court in Ohio, claimed the FTC’s case moving through the agency’s in-house administrative law court violates constitutional separation of powers. The company is requesting a preliminary injunction against the FTC proceeding.

Kroger said “private rights — like life, liberty, or property” should be adjudicated only in federal court, citing a recent Supreme Court case.

In that case, Securities and Exchange Commission v. Jarkesy, the Supreme Court curbed the SEC’s ability to press complaints before in-house judges. Legal observers have predicted that precedent will extend to other administrative agencies, though it’s so far unclear how lower court judges will interpret that decision.

The Kroger-Albertsons deal is facing several legal challenges, including a federal court challenge in Oregon, two state lawsuits in Colorado and Washington and the FTC’s administrative trial. A group of consumers unsuccessfully sued over the deal last year.

The merger is on hold until the antitrust lawsuit in Colorado is resolved.

Kroger and Albertsons have argued the $24.6 billion acquisition would help the grocers compete against large retailers like Amazon.com Inc.

The FTC said the deal would harm consumers by reducing competition and increase the company’s leverage over workers, slowing wage growth.

To contact the reporter on this story:
Emily Birnbaum in Washington at ebirnbaum3@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Elizabeth Wasserman, Peter Jeffrey

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