Kroger sues FTC, says administrative proceeding is unconstitutional

The Kroger Co. filed a lawsuit against the Federal Trade Commission on Monday calling for a preliminary injunction in the U.S. District Court, Southern District of Ohio, to block an administrative proceeding challenging its proposed acquisition of Albertsons.

Cincinnati-based Kroger is set to appear in court on Aug. 26 in Portland, Ore., to defend its proposed $24.6 billion purchase of Boise, Idaho-based Albertsons, which has been challenged by the FTC and nine attorneys general. 

Kroger argued that the administrative proceeding violates Articles II and III of the U.S. Constitution “because the administrative law judge presiding over the administrative proceeding is not removable by the President of the United States” and because it aims to “adjudicate Kroger's private rights to contract with another private party administratively through the executive branch rather than in the independent judicial branch.”

The grocer released a press release arguing that the FTC has split its challenge into two separate tribunals by “filing a motion in federal court proceedings seeking to block the merger for the duration of its administrative proceeding—which will likely take several years to resolve.”

Kroger said the motion seeking to block the merger for the remainder of what it calls an “unconstitutional administrative proceeding” constitutes “an inappropriate attempt to receive multiple opportunities to litigate the same issues.”

Related:Grocery union reverses support for Kroger, Albertsons merger

"The merger between Kroger and Albertsons is squarely focused on ensuring we bring customers lower prices starting day one while securing the future of good-paying union jobs," Kroger Chairman and CEO Rodney McMullen said in a press release. "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."

The lawsuit is the latest move in the grocer’s effort to shut down lawsuits aiming to block the merger. On Aug. 14, Ohio Attorney General Dave Yost filed an amicus brief with the U.S. District Court in Oregon urging the court to reject the lawsuit. 

“The FTC’s tunnel vision in this case risks chilling the very competition that it seeks to protect,” Yost said in a press release. “A full view of the competitive landscape shows no reason to delay this deal further.”

The FTC lawsuit is joined by attorneys general in Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming. 

Related:Ohio AG calls on court to toss FTC lawsuit on Kroger, Albertsons merger

Meanwhile, Kroger and Albertsons still face two separate lawsuits aiming to block the acquisition by attorneys general in Colorado and Washington.