Kroger Files Motion to Enjoin the FTC's Administrative Merger Challenge; Rodney McMullen Comments

We’ve been keeping an ear to the ground at Deli Market News for updates regarding Kroger’s proposed merger with Albertsons Companies, and some new developments have recently come to light.

On August 19, Kroger filed a motion for preliminary injunction in the U.S. District Court, Southern District of Ohio, against the Federal Trade Commission's (FTC) administrative proceeding challenging the retailer’s deal with Albertsons. Kroger argues that the FTC is violating Constitutional protections by proceeding in its administrative tribunal in addition to the separate action in federal court.

"The merger between Kroger and Albertsons is squarely focused on ensuring we bring customers lower prices starting day one while securing the future of good-paying union jobs," said Rodney McMullen, Kroger Chairman and Chief Executive Officer. "We stand prepared to defend this merger in the upcoming trial in federal court—the appropriate venue for this matter to be heard—and we are asking the Court to halt what amounts to an unlawful proceeding before the FTC's own in-house tribunal."

A press release noted the motion addresses the FTC’s administrative proceeding against the merger, stating the following:

• The FTC violates Article II of the Constitution because the Administrative Law Judge presiding over the administrative proceeding is not removable by the President of the United States. This principle was recognized and applied by the Supreme Court in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010)
• The FTC violates Article III of the Constitution by seeking to adjudicate Kroger's private rights to contract with another private party administratively through the Executive Branch rather than in the independent Judicial Branch. This standard was reinforced this past term by the Supreme Court in SEC v. Jarkesy (2024)

"The FTC has sought to split its challenge to the merger into two separate tribunals in an inappropriate attempt to receive multiple opportunities to litigate the same issues," the release noted. "Despite forcing Kroger to participate in this unconstitutional administrative proceeding, the FTC has also filed a motion in the federal court proceedings seeking to block the merger for the duration of its administrative proceeding—which will likely take several years to resolve."

Evidentiary hearings for the federal court proceeding are scheduled to begin on August 26 in the District of Oregon.

Click back to DMN as we continue to report updates on this merger deal.