It’s Tough to Prevail in Private Consumer Class Challenges to Mergers

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In Kottaras v. Whole Foods Market, Inc. (D.D.C. Jan. 30, 2012), the court refused to certify a purported class of people Whole Foods Market (Photo credit: Wikipedia)who had bought premium, natural or organic products from Whole Foods in the Los Angeles area after Whole Foods purchased the Wild Oats food chain. On April 20, the D.C. Circuit refused to hear an appeal from the court’s order, and last week the plaintiff agreed to entry of judgment against her.

Several years ago, the FTC had sought to enjoin the merger, but ultimately reached a divestiture deal with Whole Foods. (No Los Angeles County stores were divested.) As to the private consumer challenge, which was brought after the FTC settlement, the district court concluded that injury to individual class members could not be proven through class-wide evidence. Although some shoppers may have paid more because of the merger, others may have paid less, depending upon the mix of products they purchased. (The prices of many products apparently did decline post-merger.) Figuring out which shoppers suffered “net” harm because of price movements resulting from the merger would require analyzing each consumer’s purchases and individual product price fluctuations. These very granular inquiries prevented class-wide proof or even a conclusion that all class members had been injured.

The moral of the story is that establishing injury through class-wide proof remains an important hurdle in antitrust class actions, one that can be especially difficult to surmount in a merger case.

* Whole Foods Market (Photo credit: Wikipedia)

 

Published In: Antitrust & Trade Regulation Updates, Civil Procedure Updates, Civil Remedies Updates, Mergers & Acquisitions Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Howard Ullman, Orrick, Herrington & Sutcliffe | Attorney Advertising

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