Legal News

Lanny and Ted?s Excellent Antitrust Adventure

By Dan Slater

Who knew antitrust could be such a rollicking good ride?

Since February, 2007, when Whole Foods announced its plan to buy smaller rival, Wild Oats, for $565 million, the merger has become a lightning rod for competition wonks. Five months after the companies announced the deal, the FTC sued to block it, saying it would stifle competition in the market for natural and organic groceries. But District Judge Paul Friedman denied the FTC’s request, concluding that that it had failed to prove the merger would hurt competition. Then, over the summer, the U.S. Court of Appeals for the District of Columbia reversed Friedman — despite the fact that the companies were reportedly well on their way to integration — ruling that Friedman “underestimated the FTC’s likelihood of success on the merits.”

That 2-1 appellate court ruling, authored by Janice Rogers Brown, is apparently so controversial that it’s made some strange bedfellows. Former solicitor general and current Gibson Dunn partner Ted Olson — who argued the “light” cigarette case before the High Court on Monday and is currently under consideration for another gig this term — believes antitrust law has been so turned on its head by Judge Brown’s opinion that he felt compelled to file a motion for leave to support Whole Foods’ petition for an en banc hearing. As this Legal Times article points out, the case pairs Olson with his political foil, Orrick Herrington’s Lanny Davis, who’s serving as co-counsel and whose Hillary Clinton-cheering emails hit our inboxes day after day this past summer.

“I called Ted as he was preparing for oral argument for the Supreme Court and told him I wasn’t taking no for an answer. This case is hugely significant,” Davis told the Legal Times. “I’m an ACLU card-carrying Democrat, and Ted is certainly not that, but for this, left and right came together.” The Legal Times couldn’t reach Olson for comment.

In his brief, Olson writes:

As if in a time warp, the Panel eclipsed decades of leading cases — including this court’s decision in Heinz and Baker Hughes, which require an analysis of the competitive effects of a merger under modern economic principles — and dusted off a series of cases dating back to the 1960s that have long been discarded by modern antitrust decisions.

For some background on the central legal issue in the case — whether “market definition” should depend on “marginal” or “core” customers — click here for an earlier Law Blog post.

Full post as published by Law Blog - WSJ.com on October 10, 2008 (boomark / email).