Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 30, 1990 TAG: 9004300392
SECTION: NATIONAL/INTERNATIONAL PAGE: A/1 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
By a 9-0 vote, the justices said the California attorney general's office is empowered by a key 1914 trust-busting law to challenge a $2.5 billion merger of the Lucky and Alpha Beta supermarket chains.
State officials said the merger could cost consumers $440 million more a year in grocery bills.
The court said any opponent of a merger, not just the federal government, can sue to force divestiture in a completed merger.
But Justice John Paul Stevens, writing for the court, said the power of states and individuals is not as broad as that of the federal government.
To break up a merger, the federal government must prove only that a violation of law occurred, Stevens said.
"A private litigant, however, must have standing . . . he must prove threatened loss or damage to his own interests in order to obtain relief," he said.
Before today, it was widely assumed that states and private citizens could prevent anticompetitive business combinations but could not interfere once such deals were completed.
In other actions today, the Supreme Court:
Rejected an appeal by a labor union and let the government force thousands of Transportation Department employees in sensitive jobs to take random drug tests. The union, the American Federation of Government Employees, had contended that the tests violate the workers' privacy rights, but only Justice Thurgood Marshall voted to hear arguments in the case. Four votes are needed to grant such review.
Refused to revive a lawsuit that sought to strip the Roman Catholic Church of its tax-exempt status because of its anti-abortion activities. The court left intact a ruling that abortion rights advocates lack the legal standing to sue the federal government for revocation of the church's tax exemption. The 2nd U.S. Circuit Court of Appeals had thrown out the suit last September.
Allowed a lawsuit against General Motors to go to trial. The fraud and misrepresentation suit was brought by 32 people who had been employeed at a GM subsidiary in Clinton, Miss., before GM in 1983 began laying off hundreds of workers there. The workers alleged that a GM representative said they could could be rehired after agreeing to a voluntary termination of employment plan if new jobs were created. But they said they were told in 1985 when new positions opened that they were ineligible for rehiring because of the severance plan they took.
Let stand a ruling that says the public has no constitutional right to know the names of jurors while they are serving in a criminal trial. The court rejected a challenge to a Delaware judge's order that kept jurors' names secret during the much-publicized murder trial of Steven Pennell, who eventually was convicted of the torture slayings of two women and sentenced to life in prison. Gannett Co. Inc., publisher of the News Journal in Wilmington, had challenged the presiding judge's decision not to identify jurors by name in court during the trial.
Ordered more study in a dispute stemming from the prosecution of nine Puerto Rican men accused of robbing $7.2 million from a Wells Fargo depot in Connecticut seven years ago. The justices said a federal appeals court must reconsider whether all the tape recordings made during electronic surveillance of members of Los Macheteros (the machete wielders) may be used as trial evidence. The lower court had ruled that some of the tapes may not be used as evidence because they were not sealed for safekeeping quickly enough.
At issue in the supermarkets case was the scope of the Clayton Act, passed in 1914 when Congress was preoccupied with trust busting on a national scale.
Lucky, California's largest supermarket chain, and Alpha Beta, the fourth largest, operate a total of 550 stores.
Alpha Beta's parent company, American Stores, acquired Lucky in June 1988 to merge the two chains under the Lucky name.
American Stores said California customers would save more than $40 million a year because of increased efficiency. But the California attorney general's office said the merger would drive other competitors out of business and would lead to $440 million in higher grocery prices each year.
U.S. District Judge David Kenyon in Los Angeles temporarily blocked the merger in 1988 and ordered separate operation of the two chains pending further action on the suit.
But the 9th U.S. Circuit Court of Appeals overturned the judge's ruling and lifted the break-up order.
The appeals court said the state could have prevented the merger had it sued quickly enough, but could not dissolve the completed business deal.
The Federal Trade Commission temporarily blocked the acquisition in 1988 but later reached an agreement with the corporations allowing the deal as long as certain conditions were met.
The Supreme Court today sent the case back to the lower courts where the state will try to prove the merger is illegal.
The case is California vs. American Stores, 89-258.
by CNB