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.


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