Saturday, January 31, 2009

Whole Foods Proposes Settlement with FTC

Whole Foods has made a settlement proposal to the FTC in connection with the FTC's challenge to Whole Foods' merger with Wild Oats.

The FTC granted a five-day suspension of adjudicative proceedings in order to consider Whole Food's proposal, which has not been publicly disclosed. The FTC order states that the case will return to adjudicative status on February 5. Whole Foods has previously argued that it is impossible to undo the merger with Wild Oats, stating that it would be like trying to put toothpaste back in the tube.

Last Friday, the D.C. Circuit denied Whole Foods' request for an emergency petition for writ of mandamus to halt the FTC proceedings, finding no "clear and indisputable" right to mandamus relief. Whole Foods had challenged the constitutionality of the proceedings, arguing that its due process rights were being violated because the FTC had prejudged the merits of the case and because of the expedited timeline for a trial.

Whole Foods has also spent time lobbying on Capitol Hill against the procedures used by the FTC, gaining support from eight Senators on the Judiciary Committee who wrote a letter expressing concern that the FTC had shortened the comment period for proposed rule changes. The shortened comment period affected a recent rule change shortening the time frame for Part 3 adjudications, which includes the Whole Foods case.

As noted in an earlier post on this blog, Whole Foods' due process challenge and lobbying efforts appear to be an effort to put pressure on the FTC to settle, and not a challenge with substantial merit.

Related posts: Whole Foods Files Suit Against FTC; Whole Foods Faces Consumer Class Action; D.C. Circuit Reverses Ruling That Allowed Whole Foods Merger.

Tuesday, January 27, 2009

Update on News America Marketing Litigation

Some readers have asked me for updates on the pending News America Marketing litigation. The last couple months appear to be the calm before the storm, as there have been no major developments recently, but News America is facing trials in federal court beginning in March, April, and May, and related state court trials in March and August, as follows:

  • March 2. Floorgraphics, Inc. v. News America Marketing (D.N.J.)
  • March 10. Valassis v. News America Marketing (Wayne County Cir. Ct., Mich.)
  • April. Valassis v. News America Marketing (E.D. Mich.). A hearing on a Motion for Summary Judgment in the same case is scheduled for February 19.
  • May 1. Insignia Systems, Inc. v. News America Marketing (D. Minn.). Summary Judgment briefingin the case is scheduled to be completed by March 11.
  • August. Valassis v. News America Marketing (Cal. Super. Ct. L.A. County)

If readers have updates or other information about these cases, especially as the trials unfold, please e-mail me.

Monday, January 26, 2009

Media Coverage of Retailer Lawsuit Against Wholesalers C&S and SuperValu

Kotchen & Low LLP’s recently-filed lawsuit against grocery wholesalers C&S Wholesale and SuperValu has garnered media attention from several sources, including stories by the Minneapolis Star-Tribune (here), Supermarket News (here), Competition Law 360 (here, subscription only), and others.

The lawsuit is described in more detail in this previous post.

Related post: Gary's Foods Files Class Action Lawsuit Against Wholesalers C&S and Supervalu

Saturday, January 24, 2009

FTC Agenda Set for Resale Price Maintenance Workshops

The FTC announced the agendas for upcoming workshops on resale price maintenance ("RPM") on February 17 and 19, 2009.

According to the FTC press release:

The February 17 workshop will focus on Theories of Economic Benefits. It will begin at 10 am, with welcoming remarks by FTC Commissioner Pamela Jones Harbour, followed by a panelist presentation on various economic theories supporting claims that the use of RPM enhances competition and benefits consumers. The panel will be moderated by Daniel P. O'Brien, an economist in the Commission's Bureau of Economics, and will be followed by a moderated discussion between the panelists and discussants, members of academia, industry representatives, and the public.

The February 19 workshop will focus on Theories of Economic Harms. It also will begin at 10 am, and will explore the various economic theories supporting claims that the use of RPM harms competition and consumers. Daniel P. O'Brien also will moderate this panel, which again will be followed by a discussion of the issue by members of academia and industry with the panelists. Both workshop sessions provide time for members of the public to ask questions.

Efforts to legislatively overturn the Supreme Court's Leegin decision, which applies a rule of reason standard to RPM, have been gaining traction. The American Antitrust Institute recently held a conference criticizing the Leegin decision, and Congressional hearings on the issue are expected later this year.

Related posts: Conference Participants Criticize RPM; WSJ Examines Manufacturers' RPM Practices; FTC's Nine West Order Explores RPM Under Leegin; State RPM Laws and Leegin; Herman Miller Contends That Consent Decree Allows it to Continue Minimum RPM Policy; Developing Legally-Compliant Trade Promotion Management Programs.

Wednesday, January 21, 2009

Gary’s Foods Files Class Action Lawsuit Against Wholesalers C&S and SuperValu

On December 31, 2008, Gary’s Foods filed a class action lawsuit against grocery wholesalers C&S and SuperValu, alleging that the two companies violated the antitrust laws by conspiring to allocate territories and to limit competition.

Before the alleged conspiracy began, C&S and Supervalu competed aggressively in New England, where C&S is headquartered and where much of its grocery wholesale business was concentrated. In mid-2003, C&S sought to extend its competition with Supervalu by entering the Midwest. According to the Complaint, prices for wholesale sales and services were higher in the Midwest than in New England, and C&S’s planned entry into the Midwest would have substantially lowered prices to retailers. Rather than competing in the Midwest or continuing to compete in New England, Supervalu and C&S allegedly conspired to allocate the territories: Supervalu exited New England and allocated the territory to C&S in return for C&S’s commitment not to enter the Midwest. The Defendants closed six distribution facilities that had supported the wholesale industry in the Midwest and New England, and thousands of employees lost their jobs.

Gary’s Foods alleges that the collusion has caused substantial harm to retailers: prices for wholesale sales and services have been inflated, fewer manufacturer discounts have been passed on to retailers, and the supply of wholesale sales and services has been artificially reduced.

The law firm representing Gary’s Foods, Kotchen & Low LLP, seeks to recover on behalf of a class of all retail grocers harmed by the Defendants’ scheme. Kotchen & Low partner, Daniel Kotchen, stated, “we conducted a thorough investigation of the business practices of C&S and SuperValu, and believe that a substantial number of retailers have been harmed by the decreased competition between the two wholesalers.”


The Law Firm of Kotchen & Low LLP - Civil Litigation, Counseling, and Representation Before Government Agencies

This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 United States License.