U.S. Court rules for FTC in fight with Whole Foods

WASHINGTON Sat Jan 24, 2009 12:37am GMT

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WASHINGTON Jan 23 (Reuters) - An appeals court has ruled against high-end grocer Whole Foods' WFMI.O request for a delay in an administrative trial to decide whether its 2007 merger with rival Wild Oats needs to be undone.

Whole Foods had asked the court to delay the Federal Trade Commission trial, which is due to begin on April 6.

Whole Foods argued that the agency, one of two which enforces antitrust law, had publicly prejudged the merger and that it was unfair that the FTC and Justice Department had different procedures for assessing whether mergers are legal.

The U.S. Court of Appeals for the District of Columbia said in a brief order that "petitioner (Whole Foods) has not shown that it has a 'clear and indisputable' right to the extraordinary remedy."

Whole Foods, which said it had filed its petition in the appeals court to avoid a fight over jurisdiction, said it was considering its options.

"We filed our case based on the FTC's violation of Whole Foods' constitutional rights directly to the Court of Appeals, as the FTC requested, to save time. We now are considering re-filing the case in the District Court or re-framing our request for relief to the Court of Appeals so that they will hear our case," said Whole Foods attorney Lanny Davis in an e-mailed statement.

The FTC had no comment.

The merger itself, which the FTC has said it might order undone, is complete, except for changing a half-dozen signs, according to Whole Foods.

The FTC has previously said that a significant number of the Wild Oats stores, and perhaps some legacy Whole Foods stores, could end up being sold as part of a remedy, perhaps requiring divestiture of 40 to 50 stores as well as their distribution channels. Wild Oats had 109 stores at the time of the merger.

The FTC's battle against Whole Foods was revived last July, when the U.S. Court of Appeals for the District of Columbia said the lower court underestimated the FTC's likelihood of success in denying the request for a preliminary injunction. (Reporting by Diane Bartz; editing by Carol Bishopric)

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