Kroger Heads Back To Court Seeking Injunction Against The FTC
The Kroger Co. has filed a motion in U.S. District Court seeking a preliminary injunction against the Federal Trade Commission's (FTC) administrative proceeding challenging the company's merger with Albertson's Companies, Inc.
In the filing in U.S. District Court, Southern District of Ohio, the grocer 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:
- First, Kroger said 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 United States. This principle was recognized and applied by the Supreme Court in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010).
- Second, Kroger claims the FTC 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. This standard was reinforced this past term by the Supreme Court in SEC v. Jarkesy (2024).
Kroger also claims 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. The FTC has also filed a motion in the federal court proceedings seeking to block the merger for the duration of its administrative proceeding – which will likely take several years to resolve. Evidentiary hearings for the federal court proceeding are set to begin on August 26 in the District of Oregon.
"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,” said Rodney McMullen chairman and CEO of Kroger.
The latest court filing by Kroger on August 19 comes days after a report by Bloomberg that the grocer intends to double its proposed price cuts to $1 billion upon completion of the Albertsons’ merger.
Erin Rolfes, a spokesperson for Kroger, told Store Brands sister-publication Progressive Grocer, that the $1 billion figure is “correct and consistent” with what the grocer continues to share with regulators.
"As we’ve prepared for integration since announcing our planned merger nearly two years ago, we continued our ongoing work to confirm and increase opportunities to generate efficiencies to invest back in customer prices, associate wages, and store experience,” she said. “After the merger closes, Kroger will invest $1 billion to lower Albertsons’ prices, consistent with Kroger’s track record of fighting inflation and providing value to customers.”
Kroger had previously announced $500 million in price cuts along with a $1 billion investment in employee wages and benefits.
