The U.S. Department of Justice has weighed in on a lawsuit out of Colorado that aims to block Kroger’s $24.6 billion acquisition of Albertsons, arguing against Kroger’s attempt to get the case thrown out of court.
Attorneys general in Colorado and Washington state filed antitrust lawsuits earlier this year independent of the Federal Trade Commission lawsuit that includes AGs in eight other states and the District of Columbia.
Kroger and Albertsons moved to dismiss the Colorado case, arguing that since the two grocers operate nationwide, the lawsuit “would undermine principles of interstate comity and federalism, impose a disproportionate remedy to the harms alleged, and implicate potential issues under the U.S. Constitution.”
The grocers’ case essentially argues that the state should be prevented from pursuing cases under federal law because it would be improper to block the merger of companies that operate nationwide based on the potential harm it would have in a regional market like Colorado.
Kroger and Albertsons similarly attempted to block the Washington state lawsuit, but that effort was denied by King County Superior Court Judge Marshall Ferguson, according to court documents.
The DOJ disagreed with the motion to dismiss in Colorado, arguing: “Federal enforcement stands alongside a ‘long history’ of states ‘providing common-law and [state] statutory remedies against monopolies and unfair business practices.’”
The Justice Department noted other high-profile cases brought by states against Microsoft and Facebook by the state of New York that ran parallel with federal lawsuits brought by the FTC.
“The federal antitrust laws do not preempt or otherwise preclude parallel state lawsuits to protect the public from a potentially anti competitive merger. That remains true even when states seek remedies different from those sought in an existing federal lawsuit,” the DOJ argued, adding, “Their argument that comity principles preclude the state from pursuing its own independent state law claim flies in the face of the long history of independent state and federal antitrust enforcement.”
Further, the DOJ said the attempted injunction is proper under federal antitrust legislation laid out in the Clayton Act “if there is a reasonable probability of substantially lessening competition in any relevant market.”
