In a late move Monday, Whole Foods Market filed suit in the U.S. District Court for the District of Columbia against the Federal Trade Commission, alleging that the commission has violated the grocery chain’s due process rights and prejudged its merger case.
The suit stems from an ongoing legal battle over whether last year’s merger between Whole Foods Market and Wild Oats Market violated antitrust laws.
In its complaint, Whole Foods asks for injunctive relief that would order the FTC to halt a specialized administrative trial involving the merger, set for February 2009, and move all future proceedings into federal court.
Lanny Davis, a partner at Orrick, Herrington & Sutcliffe representing Whole Foods, says that given the truncated five-month discovery period that the FTC set for the administrative trial--which raises arguments about the effects of the merger in 29 geographical markets--it is impossible for the company to receive a fair trial.
The complaint also says that the FTC appointed a commissioner to serve as the presiding official for scheduling purposes instead of leaving such matters to the administrative law judge. As a final kicker, Whole Foods contends, if the company eventually tries to appeal the administrative law judge’s ultimate decision, it will have to do so in front of the full commission, including the commissioner overseeing the initial proceedings.
In a press conference this morning, Whole Foods CEO John Mackey called the FTC’s legal actions against the merger a vendetta filed in a “kangaroo court” and said he doesn’t understand what is motivating the commission.