In a recent development, the Federal Trade Commission (FTC)’s bid to compel supermarket companies, Kroger Co. and Albertsons Cos., to produce documents regarding their plans to divest stores as part of their $25 billion deal was struck down. Chief Administrative Law Judge Michael Chappell deemed the FTC’s request for negotiation materials as “premature”, thus denying the FTC’s motion without prejudice.
The decision follows the amended divestiture plan announced by Kroger and Albertsons a month prior. The retailers declared an intention to offload 579 stores to C&S Wholesale Grocers Inc., a move designed to maintain a healthy level of competition following the conclusion of their proposed deal and to ease the concerns of antitrust enforcers.
On May 17, the grocery firms guaranteed to provide all non-privileged documents and to put together a list of any withheld materials, according to Judge Chappell. He stated that both Kroger and Albertsons will be held to these representations.
Following the pronouncement, the companies requested the court to modify its order regarding the mandatory production of privilege logs, as they needed extra time to compile them—until May 24. Their counsel stressed the importance of carefully creating a privilege log, particularly in this case, as they anticipate that all the plaintiffs will challenge their privilege assertions.
Earlier this year, the FTC, along with eight states and Washington, D.C., filed a separate lawsuit in federal court in an attempt to block Kroger’s $24.6 billion acquisition of Albertsons. The bodies claimed that such a deal would suppress worker wages and increase the prices of groceries. Colorado and Washington state lodged their own lawsuits in state courts to prevent the merger from progressing.
Kroger is being represented by Weil, Gotshal & Manges LLP and Arnold & Porter Kaye Scholer LLP, while Albertsons is being represented by Dechert LLP and Debevoise & Plimpton LLP.
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