A coalition of attorneys general are supporting a challenge of the constitutionality of the Federal Trade Commission’s administrative proceedings for the Kroger-Albertsons merger.
The AGs, led by Ohio’s Dave Yost, filed a motion for leave to file an amicus brief September 23 in the case, which is styled The Kroger Co. v. The Federal Trade Commission et al. The case was filed in U.S. District Court for the Southern District of Ohio. Kroger is headquartered in Cincinnati.
In the accompanying amicus brief, Yost and the 11 other state AGs support Kroger’s legal argument that a tribunal of administrative law judges at the FTC violates the Constitution’s separation of powers.
“The FTC’s judges are part of the executive branch, and that means they’re supposed to be subject to removal by the president,” Yost said. “Their multilayered protections from removal undermine the president’s authority and violate the constitution.”
West Virginia Attorney General Patrick Morrisey is one of the dozen Republican AGs who signed the amicus brief.
In August, Kroger sued in response to an in-house FTC administrative complaint filed to block a merger between Kroger and Albertsons. Kroger’s proposed acquisition of Albertsons is tagged at $24.6 billion. The FTC claims the deal will drive up grocery prices and harm employee wages. The companies say the merger would help consumers by allowing the company to better compete against companies such as Walmart, Costco and Amazon.
In the amicus brief, the AGs support Kroger, saying the removal protections for the FTC’s administrative law judges overseeing the proceedings violate Article II of the U.S. Constitution. They say the Constitution generally gives the president unrestricted power to remove executive branch officers. And although the FTC’s administrative law judges fall under the executive branch, the AGs say they are shielded from presidential removal and “sit outside the three-branch structure like part of a ‘headless fourth branch of government.’”
The AGs say this arrangement is unconstitutional, which would mean the FTC’s in-house adjudication of its claim against Kroger subjects the company to an unconstitutional proceeding.
The AGs note recent U.S. Supreme Court decisions, including June’s SEC v. Jarkesy ruling that restricted the SEC’s ability to take complaints before in-house judges.
The coalition also says the U.S. Court of Appeals for the Fifth Circuit found the SEC’s administrative law judge removal scheme to be “invalid on precisely this ground.”
Administrative law judges are generally protected from removal unless there is “good cause.”
In a September 16 filing, the FTC said having administrative law judges mostly protected from removal without good cause allows those judges to have a “qualified right of decisional independence.” It says Kroger’s arguments misinterpret the law.
The FTC seeks a preliminary injunction to allow the in-house case to proceed. Kroger has said the merger will be off if that injunction is granted.
The FTC also wants the case moved to a federal court in Oregon where a bench trial on the FTC request regarding antitrust laws ended last week. No ruling has been announced yet.
In addition to Morrisey, other joining Yost in the amicus brief are the AGs from Alabama, Georgia, Iowa, Louisiana, Montana, Nebraska, Oklahoma, South Carolina, Tennessee and Texas.
U.S. District Court for the Southern District of Ohio case number 1:24-cv-00438