Wednesday, January 28, 2009

Whole Foods Denied Emergency Relief Against FTC

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

The U.S. Court of Appeals in Washington, D.C. on January 23 denied an emergency petition filed by Whole Foods Market, Inc., seeking a writ of mandamus and injunctive relief against the FTC.

The specialty grocer had sought an order barring the agency from conducting a trial in an administrative challenge to the combination of Whole Foods and rival Wild Oats Markets, Inc. that would violate the company's due process rights. According to Whole Foods, the FTC had already publicly prejudged the case and refused to give the company enough time to prepare for the administrative trial.

Despite Whole Foods' claims, the federal appellate court ruled that the FTC did not show that it had a "clear and indisputable" right to the extraordinary remedy of mandamus.

Whole Foods sought relief from the appellate court after initially filing its challenge last December in the federal district court in Washington, D.C. The FTC challenged the jurisdiction of the federal district court to entertain the specialty grocer's request for relief. The agency contended that the U.S. Court of Appeals in Washington, D.C. had exclusive jurisdiction over the issues.

Whole Foods re-filed its case in the appellate court to sooner reach a decision on the merits. Because the FTC's administrative trial is set to begin on April 6, 2009, Whole Foods Market said that it decided not to spend time arguing the case on jurisdictional grounds and voluntarily withdrew the matter from the district court.

According to Whole Foods, the petition alleged "that companies under the jurisdiction of the FTC, like Whole Foods Market, are subjected to a different standard of justice than those under the U.S. Department of Justice, which does not engage in further litigation if it loses a preliminary injunction."

Whole Foods noted that after the FTC lost a preliminary injunction, it started an administrative trial 18 months later. The administrative proceedings recommenced after the federal appellate court issued a decision (2008-2 Trade Cases ¶76,233), reversing the district court's denial of the FTC's request for injunctive relief (see Trade Regulation Talk, July 30, 2008)

The one-page, per curiam decision, In re: Whole Foods Market, Inc., appears at CCH Trade Regulation Reporter ¶76,470.

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