US Backs Colorado Lawsuit to Block Kroger, Albertsons Deal

An Albertsons grocery store in Grand Prairie, Texas.

(Bloomberg) — The US Justice Department backed Colorado’s bid to block the merger between supermarket giants Kroger Co. and Albertsons Cos., saying federal laws don’t preclude parallel state antitrust lawsuits.

Colorado sued to block the $24.6 billion proposed deal in state court separately from the Federal Trade Commission and a group of eight other states plus Washington, DC, that are challenging the merger in Oregon federal court. Kroger and Albertsons have sought to dismiss Colorado’s case, arguing that the state doesn’t have authority to seek what they say would be a nationwide injunction.

In a filing with the Denver district court overseeing the Colorado suit, made Friday and posted publicly Tuesday, the Justice Department said that while states often work with federal enforcers, they have the authority to pursue their own cases. It noted as an example recent lawsuits against Alphabet Inc.’s Google and Facebook parent company Meta Platforms Inc.

“The federal antitrust laws do not preempt or otherwise preclude parallel state lawsuits to protect the public,” the Justice Department wrote. “That remains true even when states seek remedies different from those sought in an existing federal lawsuit.”

At a court hearing in Denver on Tuesday, Kroger lawyer Matthew Wolf slammed the Justice Department’s filing, saying the agency had “done a 180” from the position it took in a previous deal involving T-Mobile USA Inc. and Sprint. In that case, the Justice Department reached a settlement with the companies but a group of states still sued to block the deal.

Colorado’s lawyer Conor May said the Justice Department’s filing in the T-Mobile case related to a situation where the states were suing under federal antitrust law, which differs from the current case, which relies on the state’s own antitrust law.

Judge Andrew J. Luxen didn’t indicate when he might rule on the company’s motion to dismiss Colorado’s suit. The judge has scheduled a hearing in August on the state’s request for a preliminary injunction against the deal over alleged harm to residents.

The case is Colorado v. Kroger Co., 2024-cv-30459, Denver District Court, Denver, Colorado.

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