July 30, 2008
The Deal quoted partner Richard E. Donovan on a federal appeals court's July 29, 2008 decision to reverse a lower court's ruling that allowed Whole Foods' $700 million acquisition of Wild Oats Markets.
"'It's a clear victory for the FTC, to get two appeals court judges to say, 'You weren't crazy to bring this case,' said antitrust lawyer Richard Donovan, of Kelley Drye & Warren LLP. The FTC had claimed that the two stores competed against each other in a unique fashion, with both chains providing some hard-to-find premium products, and similarly shunning many common consumer products that are not considered contributors to natural and organic lifestyles, such as Diet Coke, Tide laundry detergent and tobacco.
Tuesday's ruling is 'at least a tentative vindication of the FTC's theory,' Donovan said."
The article also quotes Mr. Donovan regarding possible future activity in the case. "'The next step for the case is likely a request for a rehearing by all the judges who sit on the federal appeals court in Washington. That's generally a long shot, Donovan said, but in this case, because the concurring opinion varies from many of the points in the majority opinion, Whole Foods' lawyers might find a way to get enough judges interested in reviewing the opinion.
Whole Foods will have to 'contrast the dissent with the majority opinion, and will really want to try to persuade the rest of the circuit court judges that this is the wrong result,' said Donovan. And they'll be able to point to the fact that while the two judges are in general agreement, there appears to be subtle differences in how they perceive the FTC's standard of proof, which could be problematic for the lower court in future merger cases."