A federal judge in San Francisco has thwarted another attempt to employ consumer lawsuits in blocking the $24 billion merger between U.S. supermarket giants Kroger and Albertsons. U.S. District Judge Vince Chhabria granted a second dismissal of a lawsuit brought on behalf of supermarket customers, citing the lack of legal standing for the plaintiffs due to unanswered questions about their connection with the stores.
The lawsuit, filed by attorneys from various San Francisco firms in February, alleged that the Kroger-Albertsons merger would create a supermarket monopoly in violation of federal antitrust laws. The complaint claimed potential economic harm, including higher prices for consumers and job losses, while benefitting investors and directors. Despite dismissing the consumer lawsuit earlier, Judge Chhabria, out of caution, is allowing the plaintiffs another opportunity to amend their complaint.
Kroger and Albertsons, the largest and second-largest U.S. supermarket chains, plan to merge, creating a company with around 5,000 stores nationwide. The merger faces opposition from labor unions, Congress, and state governments, asserting harm to grocery shoppers and workers. While Judge Chhabria expresses concerns about competition among grocery stores, he emphasizes the need for the plaintiffs to demonstrate personal harm from the deal.
The Federal Trade Commission (FTC) is deliberating whether to challenge the merger in federal court, with a decision expected by January 17. Labor unions, including the Teamsters, oppose the merger, anticipating significant job cuts. The complex legal battle continues as stakeholders await regulatory decisions and potential further amendments to the consumer lawsuit.