The state of Colorado’s lawsuit aiming to block the $24.6 billion Kroger, Albertsons merger will move forward, following a ruling by Denver District Court Judge Andrew Luxen, rejecting Kroger’s motion to dismiss the case.
The ruling follows a similar court decision in Washington state in April, where King County Superior Court Judge Marshall Ferguson ruled against the companies’ motion to dismiss the state attorney general’s antitrust lawsuit.
The two lawsuits are independent of another lawsuit filed in February by the Federal Trade Commission and the attorneys general of eight states and the District of Columbia.
The grocer has argued in the Washington and Colorado cases that the states do not have jurisdiction to sue because both grocers operate across multiple states.
Kroger’s and Albertsons’ legal team argued in both cases that state attorneys general have, historically, joined with the FTC to block such mergers.
“To defendants’ knowledge, this litigation is only the second time state attorneys general have ever sought to enjoin a nationwide merger before the FTC proceeding has even commenced …” the motion to dismiss claimed. “Whatever the scope of Colorado’s independent interests, they are narrower than and subordinate to the national interests being pursued by the FTC. The Colorado attorney general could have joined the FTC’s suit (as eight other state attorneys general did) but he chose to go at it alone. That may be his prerogative, but the federal proceeding should still take priority.”
Luxen, in his rejection of the argument, noted that dismissing the Colorado case “would be at odds with numerous rulings recognizing states as co-equal antitrust enforcers.”
“As the DOJ made clear and as the court ruled, states have the authority to challenge anti-competitive corporate mergers in state courts. The attorney general’s office looks forward to making our case in court to block the Kroger-Albertsons merger,” the Colorado Attorney General’s Office said in an email to Supermarket News in response to the court decision.
The Colorado case is somewhat different from the FTC and Washington lawsuits in its accusation that Kroger and Albertsons violated the Colorado State Antitrust Act in January 2022, when union workers at Kroger-owned King Soopers went on strike for 10 days.
The Colorado lawsuit contends that during the strike, Kroger and Albertsons entered into an agreement to not poach workers and to not solicit King Soopers’ pharmacy customers.
“Such no-poach and non-solicitation agreements are illegal under the Colorado State Antitrust Act because they are agreements to not compete,” Colorado Attorney General Phil Weiser said in February.