Whole Foods Sues FTC

Whole Foods filed a lawsuit on Monday against the Federal Trade Commission (FTC) for violating its due process rights in a dispute over the acquisition of the natural grocery chain, Wild Oats.


Whole Foods filed a lawsuit on Monday against the Federal Trade Commission (FTC) for violating its due process rights in a dispute over the acquisition of the natural grocery chain, Wild Oats. The FTC had initially disputed the acquisition on grounds that it would create a natural and specialty food retail monopoly. Federal judges then approved the acquisition, only to have the case thrown into limbo once again when an appeals court took on the case. Whole Foods now claims that the FTC mismanaged the dispute.

Whole Foods says it has already spent $16.5 million on the FTC dispute, and could stand to lose millions more if the case continues to drag on. Attorneys claim that there is an inherent flaw in the way antitrust cases are handled in the U.S. They cite the FTC’s ability to seek a preliminary injunction as well as an administrative proceeding, and then a right appeal the case to a circuit court. If the case would have fallen under the jurisdiction of the Justice Department, there would have been only one permanent injunction request. Whole Foods cites the discrepancy between the two entities as being inherently flawed.
Another claim Whole Foods has made is that the FTC set too rapid of a schedule for the administrative proceedings surrounding the case. Whole Foods has argued that the schedule did not give its attorneys enough time to adequately prepare a defense. Additionally, Whole Foods claims that the agency is hopelessly biased and prejudged the outcome of the case.

Whole Foods has also claimed that the merger has already gone through and it has not monopolized the market. Co-President and CEO Walter Robb commented, “It's frustrating as a business person out there competing ... in a very challenging marketplace to spend our time defending ourselves against something that is fundamentally, not common sense.” Whole Foods representatives are reportedly meeting with members of Congress today in an attempt to end some of the disparities between the FTC and the Justice Department and alleviate some of the perceived flaws in the handling of antitrust cases.

If you are an NBJ subscriber and would like to read more of NBJ’s coverage of Whole Foods, click the following:

Whole Foods Strives to Shrug Off Whole Paycheck Image in Current Economic Climate
Whole Foods stock price falls to 52-week low
Whole Foods-Wild Oats Merger Dodges FTC Antitrust Measures

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