Monday, January 12, 2009

FTC's Likelihood of Success in Whole Foods Case Will Not Be Considered on Remand

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Following a federal appellate court's remand of the FTC's action challenging the acquisition of Wild Oats Markets by Whole Foods Market, Inc., the federal district court in Washington, D.C. agreed with the FTC that the only task on remand was an evaluation of the equities to determine whether enjoining the transaction was in the public interest.

The exact issue to be decided on remand was in dispute after the appellate court reversed the lower court's denial of the agency's request for a preliminary injunction blocking the transaction (2008-2 Trade Cases ¶76,233).

Success on Merits and Balance of Equitites?

Whole Foods argued that the district court was required on remand to take additional evidence addressing both the FTC’s likelihood of success on the merits and the balance of the equities. However, it was decided that the appellate court concluded that the agency had demonstrated a likelihood of success on the merits of its claim that the acquisition restrained competition.

“The question remaining is how best to proceed to weigh the equities and, if they favor the FTC, to determine the appropriate remedies in view of the fact that the merger already has gone forward,” the court said, noting that it had the power to grant relief despite the consummation of the acquisition.

Scheduling, Interim Relief

The court ordered the parties to meet and confer and file a joint report detailing their proposed method of proceeding and proposed schedule. The parties were to discuss whether they could agree on some interim relief during the pendency of the proceedings in order to ensure that any relief obtained by the FTC would be effective.

The January 8, 2009, decision in FTC v. Whole Foods Market, Inc., Civil Action No. 07-1021, will appear in CCH Trade Regulation Reporter.

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