Supermarkets Hire Firm to Block Wal-Mart: Report

Mark Hamstra

A CONSULTING FIRM THAT helped drum up community opposition to dozens of proposed Wal-Mart developments around the country was covertly funded in part by supermarket companies, according to a report in last week's Wall Street Journal.

According to the article, companies including Ahold, Safeway and Supervalu have paid the firm, Hingham, Mass.-based Saint Consulting Group, to organize opposition to proposed Wal-Mart developments in dozens of markets, including ones in Pennsylvania, Chicago and California.

The firm reportedly built upon existing grass-roots opposition or created its own opposition by launching petition drives and repeatedly phoning local politicians to block Wal-Mart expansion or new construction projects. It also hired legal and traffic experts to argue against some developments.

The firm's employees used assumed names, funneled their funding through outside lawyers and took other steps to conceal the sources of its funding and make it appear as though local community groups were leading the opposition effort instead of the supermarket companies.

Minneapolis-based Supervalu declined to comment on the report last week, and neither Netherlands-based Ahold nor Pleasanton, Calif.-based Safeway could be reached for comment by SN. None of the companies commented for the Wall Street Journal article.

In addition, Saint Consulting's activities were sometimes funded in part by the United Food and Commercial Workers Union, according to the WSJ. A spokeswoman for the UFCW was quoted as saying the campaigns were protected by free speech.

Legal experts contacted by SN last week agreed that corporate campaigns disguised as citizen petitions are often protected by a legal principle called the Noerr-Pennington doctrine. This is based on Supreme Court decisions determining that restricting such campaigns — even if they are disguised as citizen-led efforts — often are protected under the First Amendment of the Constitution.

“Under Noerr-Pennington, companies are able to petition the government and take other actions,” explained Kurt R. Karst, a director at Washington law firm Hyman, Phelps & McNamara who has experience with cases involving drug companies that have conducted similar campaigns. “If they have the effect of delaying competition, that is protected, unless it's a sham. But as a general principal, Noerr-Pennington offers a decent amount of protection.”

For a company's actions to be considered a “sham” under Noerr-Pennington, he said, it would have to be demonstrated that their arguments “had no merit.”

“What's going on here is really not that unusual,” said Bert Foer, president of the American Antitrust Institute in Washington, in an interview with SN. “It's not unusual for companies to get a non-profit cover for the purpose of lobbying.”