Ohio Attorney General Dave Yost and 11 other Republican attorneys general filed a brief in federal court in Cincinnati on Monday arguing that the Federal Trade Commission’s attempt to block the merger of grocery giants Kroger and Albertsons is unconstitutional.
If their argument succeeds, it would limit the FTC’s ability to crack down on anticompetitive practices in a range of other areas, from prescription drugs to concert tickets. It would also threaten the independent powers of countless other executive agencies that also handle administrative law.
The argument by Yost and his colleagues is closely related to a proposal in Project 2025, a controversial roadmap for a potential second Trump administration. Trump has tried distance yourself from this.
Food giant
Yost’s office did not respond to questions for this article — including whether he believes one of the attorney general’s primary functions is to facilitate mega-mergers in the food sector.
However, in a statement announcing his presidency of the friend of the court hearing, which he led, the attorney general said: “FTC judges are part of the executive branch, and that means they should be subject to removal by the president. Their multi-layered protections against removal undermine the president’s authority and violate the Constitution.”
The FTC, an agency that regulates anti-competitive practices, released a report in March that found that immense retail chains such as Kroger and Walmart had engaged in several frauds, artificially high prices of food products during the pandemic and that they appeared to continue.
Before that, Cincinnati-based Kroger and Boise-based Albertsons had proposed merging. If approved, it would create a chain that would have 5,000 stores and about 4,000 retail pharmacies and employ nearly 700,000 people in 48 states. Fearing that this would further weaken competition and cause further increases in grocery prices, the FTC in February sued to stop merger.
Last month, Yost and three other attorneys general submitted a friend of the court letter in an effort to end the FTC’s intervention. They argued that creating a mega-grocery store would actually escalate competition.
“The acquisition is likely to increase, rather than reduce, competition in the grocery retail marketplace, which will benefit consumers,” the statement said. “It promises to strengthen Kroger’s ability to compete effectively for consumer dollars in an already crowded field of retailers, and (the FTC) has no factual or legal basis to conclude otherwise.”
They cited Costco, Sam’s Club, Aldi, Whole Foods, Family Dollar and Dollar General as part of this “crowded field of retailers.”
Sweeping Challenge
On Monday, Yost and 11 associates filed a brief challenging the constitutionality of the mechanism the FTC used to try to stop the merger, arguing that the agency’s apply of administrative judges is unconstitutional because it does not give the president the authority to fire them.
“This case arises out of an administrative proceeding that violates the separation of powers. Kroger, a well-known grocery chain, is the subject of a proceeding before an administrative judge of an executive branch agency, the Federal Trade Commission,” Yost and the other attorneys general argue in their letter. “Although the presiding ALJ is part of an executive branch agency that must be in the chain of command from the People to the President, Congress enacted a statute to insulate this official from that chain of command.”
In addition to Ohio, the attorneys general of Alabama, Georgia, Iowa, Louisiana, Montana, Nebraska, Oklahoma, South Carolina, Tennessee, Texas and West Virginia joined the amicus curiae brief.
What they are trying to do could undo decades of rulings in administrative proceedings by dozens of agencies. They include the Environmental Protection Agency, the Securities and Exchange Commission and the Federal Trade Commission.
Yost and his colleagues’ brief argues that prior guidance set forth in a Supreme Court decision following the 1914 Federal Trade Commission ruling does not cover the FTC’s action against the Kroger-Albertsons merger.
In 1933, President Franklin Roosevelt tried to remove Federal Trade Commissioner William Humphrey, who had been appointed by Roosevelt’s predecessor, Herbert Hoover. Roosevelt believed that Humphrey was blocking some of his New Deal initiatives, and as head of the executive branch, the president believed he had the authority to remove him.
Not so quick, the Supreme Court ruled unanimously Humphrey’s Executor v. United StatesThe court said the Constitution never granted the president unlimited authority to remove executive branch employees — especially those at agencies like the FTC that had quasi-judicial and quasi-legislative functions.
For over a decade, some in the conservative movement have tried to reverse that decision. It is a movement that has also tried to significantly escalate presidential power beyond what is already there extensive borders.
Controversial ideas
A version of Yost’s argument and that of Republican attorneys general appears in Project 2025, a 900-page policy document for a second Trump term crafted by right-wing thinkers. In addition to expanding presidential power by rolling back civil service protections, its proposals include banning the federal government from calling abortion health care, undermining efforts to combat global warming, and phasing out Title I funding for low-income schools.
In an age of growing corporate power, Project 2025 undermines the need for the Federal Trade Commission.
“Should the FTC enforce antitrust laws or continue its business at all?” he asks. “Some conservatives believe that antitrust enforcement should be entrusted solely to the Department of Justice (DOJ). FTC commissioners are not removed from office by the President, which many reasonably believe violates the Acquisitions Clause of Article II of the Constitution; for this reason, conservatives have long believed in ending the enforcement of independent agencies or their independent status. The Supreme Court’s decision in Humphrey’s Executor seems ripe for reconsideration—and perhaps sooner rather than later.”
Riddle
Yost has been a foe of what he sees as anticompetitive practices on other fronts, overseeing several lawsuits against giant health conglomerates that own pharmaceutical middlemen, which he accuses of using their dominance to raise drug prices.
The suits consist of one under Ohio antitrust law v. Cigna-Express Scripts. But if the argument he made in the Kroger case proves successful, it would destroy what some observers say is one of the most sedate attempts to rein in pharmaceutical middlemen.
On Friday, the FTC filed a lawsuit accusing three major healthcare conglomerates of working together to escalate the cost of insulin — a drug many diabetics need to survive. Like the action to stop the Kroger-Albertsons merger, it was filed as an administrative proceeding with the FTC.
It appears Yost and his colleagues want to put an end to this process.
