Dive Brief:
- Eight states and Washington, D.C. are seeking to compel Kroger and Albertsons to reimburse them for more than $10 million in legal fees and litigation costs they incurred in mounting their successful effort to prevent the grocery chains from merging.
- In a petition filed on Tuesday in U.S. District Court for the District of Oregon, the nine jurisdictions said they made a “good-faith effort” to work with attorneys for the supermarket companies but could not agree on an amount for the states to receive.
- The states pointed out in the petition that the amount they want to collect from Kroger and Albertsons represents only a small fraction of the nearly $1.5 billion in costs the companies together racked up during their failed bid to combine.
Dive Insight:
In laying out why they believe Kroger and Albertsons should bear the costs they incurred to oppose the merger, the states that filed the petition said the sum they are asking for is “reasonable in light of the significant amount of work required to investigate and ultimately block the $24 billion merger.”
The plaintiffs, which include Arizona, California, Illinois, Maryland, New Mexico, Oregon and Wyoming in addition to the District of Columbia, added that the time and money they allocated to their efforts to investigate the merger was in line with “the complexity of the issues, the significant impact they had, and the resources required to succeed.”
In February 2024, the states partnered with the Federal Trade Commission to request a preliminary injunction in federal court to halt the merger, which Judge Adrienne Nelson granted that December. Judge Nelson also cleared the way for the states to seek reimbursement from the grocers with an order issued on Feb. 27 in which she directed them to file a court petition by March 31.
California is asking for the largest slice of the approximately $10.3 million the states collectively want the grocery chains to pay them. Most of the $5.1 million California is seeking would cover attorneys’ fees, which it said amounted to about $4.9 million. Wyoming and New Mexico, both of which are looking only to be reimbursed for litigation expenses, are seeking about $34,000 and $3,000, respectively.
The Oregon Department of Justice, which is leading the states in their effort to recoup the funds and says it is due about $2.3 million, said in a press release that the reimbursement it wants to obtain would help states cover costs associated with other proposed deals they deem anticompetitive.
“This case illustrates what it looks like when states hold the line. As federal antitrust enforcement has retreated, state attorneys general have moved to fill that vacuum — defending consumers, protecting workers, and challenging corporate consolidation that Washington is no longer willing to confront,” the department said. “When states win those fights, the law allows them to shift the cost of litigation back to the corporations that forced it.”
Neither Kroger nor Albertsons responded by publication time to requests for comment.
