Colorado urges judge to keep Kroger-Albertsons antitrust suit in play

DENVER (CN) — Colorado attorneys urged a Denver judge Friday not to delay issuing its findings in the state’s antitrust case against Kroger and Albertsons, following a federal ruling and an announcement from the companies that the merger is off.

“This is the first action under the Colorado Antitrust Act which further heightens the merits and importance of making a ruling under the claim,” said Senior Assistant Attorney General Arthur Biller during a hearing.

“In terms of exigency, I think Colorado consumers are anxious to know whether their local grocers are going to stay open and what’s going to happen in our state,” he added.

Kroger, which owns 2,719 grocery stores nationwide, announced a plan in October 2022 to purchase 2,271 Albertsons stores. In Colorado, Kroger’s King Soopers and City Market stores dominate the landscape alongside Albertsons subsidiary Safeway and Walmart.

Colorado Attorney General Phil Weiser sued Kroger and Albertsons on Feb. 14, claiming the $24.6 billion merger would stifle competition and raise prices. In July, Second Judicial District Judge Andrew Luxen temporarily halted the deal pending the outcome of a 16-day bench trial that ran in October.

On Tuesday, a federal court in Oregon and a state court in Washington state both ruled against the grocers in similar cases. On Wednesday, the companies called off the deal and Albertsons sued Kroger in the Delaware Court of Chancery.

In light of these events, attorneys representing Kroger and Albertsons told Luxen Colorado’s antitrust claims are moot.

“As a practical matter, both Kroger and Albertsons have announced publicly that they’ve terminated the merger agreement, so it’s our position that count one is moot, there is no longer any practical relief that can be granted,” Kroger attorney Sonia Pfaffenroth told Luxen.

In addition to suing to block the merger however, Colorado also claimed Kroger and Albertsons had entered an illegal noncompete, nonpoach agreement during a January 2022 workers strike, in which Albertsons agreed not to hire striking Kroger workers or try to take their pharmacy customers.

Biller expressed pessimism at the idea of the state reaching an expeditious settlement on the matter, recalling a conversation with Kroger’s trial attorney Matthew Wolf.

“We heard very early on in this case from Mr. Wolf that if count one was dismissed, they’d be able to settle count two in 15 minutes, and more than 15 minutes have passed,” Biller said. “Respectfully we would urge the court to continue its work on a ruling and issue a ruling when ready, notwithstanding these extracurricular events going on between Kroger and Albertsons.”

Nevertheless, Luxen said he has a duty to review the jurisdictional questions and issue of mootness raised before issuing a ruling on the state’s original claims.

“I need briefing on jurisdictional issues that have been identified based on events over the last couple of days,” Luxen, an appointee of Democratic Governor Jared Polis, said.

The hearing was held remotely on WebEx and broadcast to the public over the state’s livestream site.

The parties are expected to submit briefs after the holidays, with Luxen’s order to follow.

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