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The Federal Trade Commission is trying a new tack in its attempt to
blow up Whole Foods Market Inc.'s year-old $700 million acquisition of
Wild Oats Markets Inc.
The FTC, which has been experimenting with ways to speed its slow in-house "Part 3" merger challenges, is using its revived case against Whole Foods to light a fire under its administrative law judges, or ALJs. Commissioner Tom Rosch is currently slated to preside over a Sept. 8 hearing to set a schedule for the case but, according to lawyers closely watching the case, he'll step aside and allow one of the commission's designated ALJs, to actually conduct the trial.
To some degree that would probably please Whole Foods' legal team, lead by Paul Denis at Dechert LLP. Denis's team on Aug. 22 filed a request for Rosch to recuse himself as ALJ. The unorthodox notion of appointing a sitting commissioner to act as ALJ was set up for the FTC's recent case against a northern Virginia hospital merger but the parties canceled the deal before that proceeding got underway. The purpose of Rosch setting the trial schedule would be to make sure the Whole Foods case proceeds at a rapid clip. But it's not clear how much leeway the ALJ would have to adjust Rosch's schedule or whether the judge would feel bound to abide by it anyway. Additionally, a final decision could bog down even if the ALJ sticks to Rosch's timetable. Even though FTC rules ostensibly require the ALJ to file an opinion within a set time period, the judge can claim extension for extra time to complete writing, without seeking approval from the commission. Meanwhile, a parallel proceeding regarding the Whole Foods case continues in federal appeals court. The FTC is waiting to hear whether it will be asked to file a reply to Whole Foods' request for a rehearing by the entire circuit court. Whole Foods lawyers Tuesday asked the U.S. Court of Appeals for the District of Columbia Circuit to review the July 29 decision by a three-judge panel of the circuit court. Their ruling encouraged the FTC to jumpstart its in-house case. The FTC doesn't automatically get to reply; the agency has to wait for an invitation from the appeals court. A request for a reply, however, would likely be evidence that the appeals court is seriously considering a rehearing, which the FTC would surely oppose. -- Cecile Kohrs Lindell See Aug. 27 story on TheDeal.com See Aug. 25 story on TheDeal.com Categories Deal Video
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