Whole Foods v. FTC - Motion For Preliminary Injunction

Case 1:08-cv-02121-PLF Document 12 Filed 12/19/2008 Page 1 of 42
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA
)
WHOLE FOODS MARKET, INC., )
)
)
Plaintiff, )
)
v. ) Case No. 1:08-cv-02121 PLF
)
FEDERAL TRADE COMMISSION, )
)
)
Defendant. )
)
PLAINTIFF WHOLE FOODS MARKET, INC.’S

MOTION FOR A PRELIMINARY INJUNCTION
Plaintiff Whole Foods Market, Inc. (“Whole Foods”), by and through its
undersigned counsel, respectfully moves this Court, pursuant to Federal Rule of Civil Procedure
65(a) and Local Civil Rule 65.1(c), for a preliminary injunction against the Defendant Federal
Trade Commission (“FTC”) enjoining the FTC from any further prosecution of its administrative
action against Whole Foods, pending the resolution of Whole Foods’ Amended Complaint for
Declaratory and Injunctive Relief filed in the above-captioned matter on December 17, 2008. In
support of this Motion, Whole Foods refers this Court to the accompanying Memorandum of
Points and Authorities in Support of Its Motion For a Preliminary Injunction, and the
Declarations of Paul T. Denis and Lanny J. Davis, attached hereto.
Pursuant to Local Civil Rule 65.1(d), for the reasons set forth in the
accompanying Memorandum of Points and Authorities, Whole Foods respectfully requests a
hearing on this motion at the earliest possible date.
-1-
Pursuant to Local Civil Rule 7(m), counsel for Whole Foods conferred with the
FTC’s counsel by telephone in a good-faith effort to determine whether the FTC opposes the
relief sought herein. The FTC’s counsel indicated that such relief is opposed.
Dated: December 19, 2008 Respectfully submitted,
/s/ Lanny J. Davis

Lanny J. Davis (D.C. Bar No. 158535)
Garret G. Rasmussen (D.C. Bar No. 239616)
Antony P. Kim (D.C. Bar No. 489553) (app. pending)
ORRICK, HERRINGTON & SUTCLIFFE LLP
1152 15th Street, N.W.
Washington, D.C. 20005
Telephone: (202) 339-8400
W. Stephen Cannon (D.C. Bar No. 303727)

Todd Anderson (D.C. Bar No. 462136)
CONSTANTINE CANNON, LLP
1627 I Street, N.W.
Telephone: (202) 204-3500
Attorneys for Plaintiff Whole Foods

Market, Inc.
-2-
IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA
)
WHOLE FOODS MARKET, INC., )
)
Plaintiff, )
)
v. ) Case No. 1:08-cv-02121 PLF
)
FEDERAL TRADE COMMISSION, )
)
Defendant. )
)
PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF ITS MOTION FOR A PRELIMINARY INJUNCTION
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ..................................................................................................... ii

INTRODUCTION..................................................................................................................... 1
STATEMENT OF FACTS ........................................................................................................ 3
ARGUMENT ............................................................................................................................ 9
I. THE DISTRICT COURT HAS JURISDICTION TO HEAR THIS CASE ..................... 9
II. A PRELIMINARY INJUNCTION SHOULD BE GRANTED..................................... 11
A. Whole Foods is likely to prevail on its equal-protection claims......................... 11
1. Fifth Amendment requirements of equal protection prohibit the
federal government from treating similarly situated persons
differently without a rational basis.. ...................................................... 12
2. The FTC Act imposes outcome-determinative differences on
merging parties... .................................................................................. 13
3. There is no rational basis for these outcome-determinative
differences in treatment of similar merging parties.. .............................. 16
B. Whole Foods is likely to prevail on its due-process claims................................ 17
1. The Commission has violated due process by publicly prejudging
the merits of Whole Foods' merger and credibility of its witnesses
and evidence, and thus has in appearance, if not if fact, gutted any
potential for an impartial and disinterested tribunal.. ............................. 18
2. The Commission has violated due process by imposing a
prejudicial Scheduling Order that denies Whole Foods appropriate
discovery to reasonably and adequately prepare for trial........................ 20
C. Whole Foods Has Suffered And Will Continue To Suffer Irreparable
Harm ................................................................................................................ 28
1. Deprivation of constitutional guaranteed rights constitutes
irreparable injury................................................................................... 28
2. Whole Foods has suffered and will continue to suffer irreparable
harm per se because there is no legal avenue by which Whole
Foods could recover any monetary damages against the
Commission.......................................................................................... 29
D. The Commission Will Not Be Harmed By A Preliminary Injunction ................ 30
E. A Preliminary Injunction Will Further the Public Interest in Ensuring That
FTC Proceedings Are Fundamentally Fair to Respondents ............................... 30
RELIEF REQUESTED ........................................................................................................... 32
-i-
TABLE OF AUTHORITIES
Page
Cases
Allegheny Pittsburgh Coal Co. v. Cty. Comm’r of Webster Cty.,

488 U.S. 336 (1989)............................................................................................................ 12
Amos Treat & Co. v. SEC,

306 F.2d 260 (D.C. Cir. 1962) ............................................................... 10, 17, 18, 19, 28, 31
Bowen v. Massachusetts,
487 U.S. 879 (1988)............................................................................................................ 29
Cinderella Career & Finishing School v. FTC,

425 F.2d 584 (D.C. Cir. 1970) ............................................................................................ 19
Citicorp Services, Inc. v. Gillespie,

712 F. Supp. 749 (N.D. Cal. 1989)...................................................................................... 28
City of Cleburne v. Cleburne Living Center,

473 U.S. 432 (1985).......................................................................................................11, 12
Ellipso, Inc. v. Mann,

480 F.3d 1153 (D.C. Cir. 2007) ............................................................................................ 9
Falls v. Town of Dyer,

875 F.2d 146 (7th Cir. 1989)...........................................................................................13, 16
FTC v. Exxon Corp.,

636 F.2d 1336 (D.C. Cir. 1980) .......................................................................................... 14
FTC v. H.J. Heinz, et al.,

246 F.3d 708 (D.C. Cir. 2001) ............................................................................................ 14
FTC v. Whole Foods Market, Inc.,

502 F. Supp. 2d 1 (D.D.C. 2007)........................................................................................... 3

533 F.3d 869 (D.C. Cir. July 29, 2008) ........................................................................... 6, 22

No. 07-5276, 2007 U.S. App. LEXIS 20539 (D.C. Cir. Aug. 23, 2007)................................. 4
Feinerman v. Bernardi,
558 F. Supp. 2d 36 (D.D.C. 2008)................................................................................... 2, 29
-ii-
(continued)
Page
Gibson v. Berryhill,
411 U.S. 564 (1973)............................................................................................................ 18
Goldie’s Bookstore, Inc. v. Superior Court,

739 F.2d 466 (9th Cir. 1984)........................................................................................... 2, 28
Grolier Inc. v. FTC,

615 F.2d 1215 (9th Cir. 1980)......................................................................................... 2, 19
Gulf Oil Corp. v. Department of Energy,

663 F.2d 296 (D.C. Cir. 1981) .......................................................................................11, 28
Hosp. Corp. of America v. FTC,

807 F.2d 1381 (7th Cir. 1986)............................................................................................. 15
Jacksonville Port Authority v. Adams,

556 F.2d 52 (D.C. Cir. 1977) .............................................................................................. 31
McClelland v. Andrus,
606 F.2d 1278 (D.C. Cir. 1979) .....................................................................................21, 25
Mercy Hosp. of Laredo v. Heckler,

777 F.2d 1028 (5th Cir. 1985) ............................................................................................ 25
Pepsico, Inc. v. FTC,

472 F.2d 179 (2d Cir. 1972)................................................................................................ 11
Shapiro v. Thompson,
394 U.S. 618 (1969)............................................................................................................ 13
In the Matter of Rambus, Inc.,

2006-2 Trade Cas. P 75, 2006 WL 2330117 (F.T.C. Aug. 2, 2006) ..................................... 16
Sioux City Bridge Co. v. Dakota Cty.,

260 U.S. 441 (1923)............................................................................................................ 12
Standard Oil Co. v. FTC,

475 F. Supp. 1261 (N.D. Ind. 1979) ..................................................10, 17, 21, 22, 25, 28, 31
Telecommunication’s Research and Action Center v. FCC,

750 F.2d 70 (D.C. Cir. 1984) ............................................................................................ 9, 10, 11
Ticor Title Insurance Co. v. FTC,
-iii-
(continued)
Page
814 F.2d 731 (D.C. Cir. 1987) ................................................................................................ 10
Time Warner Entm’t Co. v. FCC,

530 F.3d 936 (D.C. Cir. 1996) ................................................................................................ 10
United States v. Baker Hughes, Inc.,

908 F.2d 981 (D.C. Cir. 1990) .......................................................................................... 14, 15
United States v. Gillette Co.,

828 F. Supp. 78 (D.D.C. 1993) ............................................................................................... 14
United States v. S.A. Empresa De Viacao Aerea Rio Grandense,

467 U.S. 797 (1984)................................................................................................................ 30
United States v. State of New York,

708 F.2d 92 (2d Cir. 1983)...................................................................................................... 29
Utica Packing Co. v. Block,

781 F.2d 71 (6th Cir. 1986)..................................................................................................... 19
Village of Willowbrook v. Olech,

528 U.S. 562 (2000)................................................................................................................ 12
Vlandis v. Kline,
412 U.S. 441 (1973)................................................................................................................ 13
Withrow v. Larkin,
421 U.S. 35 (1975) ............................................................................................................18, 19
Zobel v. Williams,
457 U.S. 55 (1982) ........................................................................................................... 12, 13
Statutes
16 C.F.R. § 3.1 ....................................................................................................................... 15, 31
16 C.F.R. § 3.42 ..................................................................................................................... 15, 27
16 C.F.R. 3.54 ........................................................................................................................ 15, 16
16 C.F.R. § 4.7……………………………………………………………………….....17, 25, 26, 27
5 U.S.C. § 702.............................................................................................................................. 29
-iv-
(continued)
Page
15 U.S.C. § 18........................................................................................................................ 13, 14, 15
15 U.S.C. § 45........................................................................................................................ 9, 14, 16
15 U.S.C. § 53.............................................................................................................................. 14
15 U.S.C. § 57.............................................................................................................................. 9
28 U.S.C. § 1291 .......................................................................................................................... 15
28 U.S.C. § 2680 .......................................................................................................................... 30
Rules
Fed. R. App. P. 3……………………………………………………………………………………15
Miscellaneous
Declaration of Paul T. Denis dated December 15, 2008.
Declaration of Lanny J. Davis dated December 18, 2008:
Exhibit 1 - FTC Order Staying Administrative Proceedings, FTC Docket No.

9324 (Aug. 7, 2007)
Exhibit 2 - Brief for Appellant FTC (D.C. Cir. Jan. 14, 2008)
Exhibit 3 - Emergency Motion of the FTC for an Injunction Pending Appeal

(D.C. Cir. Aug. 17, 2007)
Exhibit 4 - Reply Brief for Appellant FTC (D.C. Cir. Feb. 27, 2008)
Exhibit 5- FTC Order Rescinding Stay of Administrative Proceeding, Setting

Scheduling Conference, and Designating Presiding Official, FTC
Docket No. 9324 (Aug. 8, 2008)
Exhibit 6 - Motion To Disqualify The Commission As Administrative Law

Judge
And To Appoint A Presiding Official Other Than A Commissioner,
FTC Docket No. 9324 (Aug. 22, 2008)
-v-
(continued)
Page
Exhibit 7- FTC Order Denying Respondent’s Motion To Disqualify The

Commission, FTC Docket No. 9324 (Sept. 5, 2008)
Exhibit 8 - Transcript of FTC Scheduling Conference, FTC Docket No. 9324

(Sept. 8, 2008)
Exhibit 9 - FTC Scheduling Order, FTC Docket No. 9324 (Sept. 10, 2008)
Exhibit 10 - FTC Order Designating Administrative Law Judge (Oct. 20, 2008)
Exhibit 11 - Respondent’s First Status Report, FTC Docket No. 9324 (Nov. 21,
2008)
Exhibit 12 - Notice of Proposed Rulemaking in the Federal Register, 73 Fed.

Reg. 58832 (Oct. 7, 2008)
Exhibit 13 - Comments of ABA Section of Antitrust Law (Nov. 6, 2008)
Exhibit 14 - Comments of Chamber of Commerce of the United States of

America (Nov. 6, 2008)
Exhibit 15 - Comments of Robert Pitofsky and Michael N. Sohn (Nov. 6, 2008)
Exhibit 16 - Joint Case Management Statement, FTC Docket No. 9324 (Aug.
28, 2008)
Exhibit 17 - Report of the Antitrust Modernization Commission, Section II

(April 2007).
Exhibit 18 - Complaint Counsel’s Response to Respondents’ Motion For

Recusal of Commissioner Rosch, In the matter of Inova Health
System Foundation, et al., FTC Docket No. 9326, at 5 (May 27,
2008)
Exhibit 19 - Response of FTC to Petition for Rehearing En Banc, No. 07-5276

(D.C. Cir. 2008).
-vi-
INTRODUCTION
Plaintiff Whole Foods Market, Inc. (“Whole Foods”) requests a preliminary injunction
staying the Federal Trade Commission’s (“FTC” or “Commission”) administrative proceeding
against Whole Foods pending this Court’s consideration of the constitutional claims alleged in
Whole Foods’ Amended Complaint for Declaratory and Injunctive Relief (“Amended
Complaint”). As discussed below, Whole Foods has raised two constitutional issues.
First, Whole Foods has challenged on equal-protection grounds provisions of the Federal
Trade Commission Act (“FTC Act”) regarding merger challenges to which Whole Foods is now
subject. The FTC’s merger challenges subject parties like Whole Foods to materially different
standards and processes than do merger challenges by the U.S. Department of Justice (“DOJ”).
More specifically, if the FTC challenges a particular merger rather than the DOJ, the challenge
will be adjudicated under a different substantive legal test, using a different preliminary
injunction standard, in a different forum with a greater potential for prejudice to due process
rights (as explained below), using different procedural rules. Even after the initial proceeding
concludes, whereas a challenge by DOJ in U.S. district court will be reviewed by a circuit court,
the FTC can conduct an internal follow-on administrative proceeding – and even then can
completely change an adverse merits decision before appeal to the circuit court. There is no
rational basis for subjecting merging parties to different outcome-determinative standards and
legal processes.
Second, even if there were no equal-protection violations at issue, the Commission has
irreversibly deprived Whole Foods of its fundamental due process rights by:
· Prejudging, in appearance if not in reality, the outcome of Whole Foods’ case as

evidenced by its categorical, unqualified conclusions on the ultimate merits of the
Whole Foods/Wild Oats merger made prior to commencing what is required to be a
fair and impartial administrative proceeding;
-1-
· Failing to keep separate its investigative/prosecutorial functions from its adjudicative

functions; resulting, upon information and belief, in Commissioners conferring with
and giving guidance to the attorneys drafting the Commission’s aforementioned legal
briefs;
· Imposing an unreasonably truncated and arbitrary discovery schedule that was
developed by a Commissioner (not an independent Administrative Law Judge) acting
as Presiding Official over the proceedings, and that prejudices Whole Foods by
giving it just five months to defend its merger in 29 separate geographical markets
across the United States; and
· Appointing as Presiding Official of the administrative proceeding one of its own
Commissioners who had prejudged the case, and then subsequently replacing the
Commissioner with an Administrative Law Judge (“ALJ”) and stripping the ALJ of
his independence to modify the truncated schedule without the full Commission’s
permission.
Each of the foregoing violations alone constitutes sufficient grounds for this Court to
immediately bar the Commissioners from adjudicating the merits of Whole Foods’ case. The
Commissioners have developed an improper “will to win” and are acting not as impartial
adjudicators but like partisans on a mission – like the “the man who has buried himself in one
side of an issue.” See Grolier Inc. v. FTC, 615 F.2d 1215, 1220 (9th Cir. 1980) (condemning
such conduct). The Commissioners’ “will to win” is evidenced by the Commission’s published
prejudgments on the crucial factual and legal issues in this case, its imposition of an unfairly
truncated schedule and its failure to separate investigative/prosecutorial functions from its
adjudicative functions.
As discussed further below, the deprivation of constitutional rights constitutes irreparable
injury. See Goldie’s Bookstore, Inc. v. Superior Court, 739 F.2d 466, 472 (9th Cir. 1984).
Moreover, Whole Foods’ injuries cannot be addressed by monetary damages since Whole Foods
cannot recover damages from the FTC. See Feinerman v. Bernardi, 558 F. Supp. 2d 36, 51
(D.D.C. 2008)
Thus, for the reasons set forth below, preliminary relief staying the FTC’s adjudicatory
proceedings pending resolution of Whole Foods’ constitutional claims is fully warranted.
-2-
STATEMENT OF FACTS
On February 21, 2007, Whole Foods executed an agreement to acquire Wild Oats
Markets, Inc. (“Wild Oats”), and subsequently notified the Commission of the proposed merger
pursuant to the Hart-Scott-Rodino Act. Am. Compl. ¶¶ 14-15; see also Declaration of Paul T.
Denis dated December 15, 2008 ¶ 4 (“hereinafter “Denis Decl.”). The Commission commenced
an investigation, issued a Request for Additional Information and Documentary Material, and
conducted extensive one-way discovery over the next three months. Am. Compl. ¶ 15; see also
Denis Decl. ¶ 5.
On June 27, 2007, the Commission voted unanimously to issue an administrative
complaint challenging the merger. Am. Compl. ¶ 19; see also Denis Decl. ¶ 6. On August 7,
2007, the Commission unilaterally stayed the administrative proceedings “[i]n light of the
pendency of the related federal court proceedings,” i.e., the Commission’s motion for a
preliminary injunction pending its FTC administrative proceedings before the U.S. District Court
for the District of Columbia (the “District Court”). Am. Compl. ¶ 20; see FTC Order Staying
Administrative Proceedings, FTC Docket No. 9324 (Aug. 7, 2007) (attached to Declaration of
Lanny J. Davis dated December 19, 2008 (hereinafter, “Davis Decl.”) at Exhibit 1).
On August 16, 2007, the District Court, after expedited discovery and hearings, denied
the Commission’s motion for a preliminary injunction, finding that the FTC had failed to prove
that it was “likely to prevail on the merits at an administrative proceeding and subsequent appeal
to the court of appeals.” FTC v. Whole Foods Market, Inc., 502 F. Supp. 2d 1, 49 (D.D.C. 2007).
Thereafter, on August 23, 2007, the U.S. Court of Appeals for the District of Columbia Circuit
(the “D.C. Circuit”) unanimously denied the Commission’s emergency motion for an injunction
pending appeal for failing to make a “strong showing that it is likely to prevail on the merits of
-3-
its appeal.” FTC v. Whole Foods Market, Inc., No. 07-5276, 2007 U.S. App. LEXIS 20539
(D.C. Cir. Aug. 23, 2007) (per curiam).
On August 28, 2007, Whole Foods — under obligation to its best efforts to close by
August 31, 2007 and facing a potential $4 million breakup fee if it failed to do so — closed its
merger with Wild Oats. Am. Compl. ¶ 25.
Despite failing to obtain an injunction from either the District Court or the D.C. Circuit,
and despite knowing about the August 31, 2007 closing deadline for the merger, the Commission
did not lift its stay of the administrative proceedings, nor did it request that the D.C. Circuit
expedite the Commission’s appeal. Am. Compl. ¶ 26; see also Denis Decl. ¶ 10. Rather, the
Commission continued to stay its administrative proceedings during the 11 months while its
appeal to the D.C. Circuit was pending.
In its briefs filed with the D.C. Circuit, the Commission categorically stated that it had
a. “established that premium natural and organic supermarkets constitute a distinct
market for antitrust purposes.” See Brief for Appellant FTC, at 40 (D.C. Cir. Jan.
14, 2008) (Davis Decl. at Exhibit 2) (emphasis added).
b. “proved that the premium natural and organic supermarkets market is the
appropriate relevant product market in which to analyze the Whole Foods-Wild
Oats merger.” See Emergency Motion of the FTC for an Injunction Pending
Appeal, at 6-7 (D.C. Cir. Aug. 17, 2007) (Davis Decl. at Exhibit 3) (emphasis
added).
c. reached the “conclusion that the relevant product market is premium natural and
organic supermarkets is supported by extensive evidence presented to the district
court.” See Davis Decl. at Exhibit 3, at 8 (emphasis added).
-4-
d. concluded that “the combination of Whole Foods and Wild Oats will substantially
lessen competition.” See Davis Decl. at Exhibit 3, at 5 (emphasis added).
e. concluded that Whole Foods’ expert economic analysis was “garbage,” a “sheer
guess” and lacked “any” empirical foundation. See Davis Decl. at Exhibit 2, at
52, 24 (emphasis added).
f. concluded that Whole Foods’ industry expert, Dr. Stanton, was a “paid industry
expert” whose testimony “carried no weight.” See Reply Brief for Appellant FTC,
at 12 n.8 (D.C. Cir. Feb. 27, 2008) (Davis Decl. at Exhibit 4) (emphasis added).
g. concluded that Whole Foods’ employees gave “exceptionally unreliable”
testimony and allowed themselves to be “subject to manipulation.” See Davis
Decl. at Exhibit 2, at 24 (emphasis added); Davis Decl. at Exhibit 4, at 10 n.7
(emphasis added).
The above statements were made in briefs to the D.C. Circuit that were worked on, and
jointly signed by, the General Counsel of the Commission and the Bureau of Competition. Am.
Compl. ¶ 31. According to the FTC’s website, members of the Bureau of Competition are the
Commission’s investigative and prosecutorial staff. Thus, upon information and belief,
Commissioners have conferred with and given guidance to the attorneys drafting the
aforementioned briefs, which were communications to the FTC’s investigative and prosecutorial
staff regarding the merits of the Whole Foods merger case. Am. Compl. ¶ 96. In addition, some
of the very same counsel prosecuting the administrative case against Whole Foods were also
counsel for the Commission in the federal court proceeding challenging exactly the same Whole
Foods merger. Am. Compl. ¶ 97.
On July 29, 2008, almost one year after the merger closed, the D.C. Circuit issued an
opinion reversing the District Court and remanding with instructions that the District Court
-5-
balance the equities in determining whether any remedy should issue or the merger should be
allowed to “proceed immediately.” FTC v. Whole Foods Market, Inc., 533 F.3d 869, 891 (D.C.
Cir. July 29, 2008) (J. Tatel, concurring).
Nine days later, on August 8, 2008, the Commission issued an order unilaterally
rescinding its stay of the administrative proceedings. See FTC Order Rescinding Stay of
Administrative Proceeding, Setting Scheduling Conference, and Designating Presiding Official,
FTC Docket No. 9324 (Aug. 8, 2008) (Davis Decl. at Exhibit 5). In that same order, the
Commission set a Scheduling Conference and appointed FTC Commissioner J. Thomas Rosch
(“Commissioner Rosch”) as the Presiding Official. Id. Commissioner Rosch, without recusing
himself from participating in the case as a Commissioner, assumed the role of presiding official
for scheduling purposes. Am. Compl. ¶ 42.
On August 22, 2008, Whole Foods filed a motion to disqualify Commissioner Rosch and
the Commission and to appoint an independent administrative law judge. Whole Foods cited the
Commission’s statements in its D.C. Circuit briefs evidenced impermissible prejudgment and
bias on the merits of Whole Foods’ case and its witnesses and evidence. See Respondent’s
Motion To Disqualify The Commission, FTC Docket No. 9324 (Aug. 22, 2008) (Davis Decl. at
Exhibit 6). That motion was denied on September 5, 2008. See FTC Order Denying
Respondent’s Motion To Disqualify The Commission, FTC Docket No. 9324 (Sept. 5, 2008)
(Davis Decl. at Exhibit 7). Commissioner Rosch participated in that Commission decision. Am.
Compl. ¶ 44.
On September 8, 2008, the Commission issued an amended administrative complaint
challenging the Whole Foods/Wild Oats merger in 29 separate geographical markets across the
country. Am. Compl. ¶ 45; see also Denis Decl. ¶ 14. That same day, Commissioner Rosch
convened a Scheduling Conference. Am. Compl. ¶ 46; see also Denis Decl. ¶ 15.
-6-
Commissioner Rosch rejected the discovery and trial timelines that Whole Foods requested both
in its Joint Case Management Statement and at the Scheduling Conference. Am. Compl. ¶¶ 49-
50; see also Denis Decl. ¶¶ 20-21. Over Whole Foods’ objection, Commissioner Rosch declared
that fact discovery would close by December 19, 2008, depositions would be completed by
January 30, 2009, and trial would commence on February 16, 2009. See Transcript of FTC
Scheduling Conference, FTC Docket No. 9324, at 44-47 (Sept. 8, 2008) (Davis Decl. at Exhibit
8).
On September 10, 2008, the Commission, with Commissioner Rosch participating,
ordered a Scheduling Order that mirrored Commissioner Rosch’s schedule, and expressly
provided that the Scheduling Order “shall not be altered absent leave of the Commission.” See
FTC Scheduling Order, FTC Docket No. 9324 (Sept. 10, 2008) (Davis Decl. at Exhibit 9).
On October 20, 2008, the Commission appointed Administrative Law Judge D. Michael
Chappell to conduct the administrative trial, and noted that all four members of the Commission
would retain jurisdiction to review the ALJ’s Initial Decision. See FTC Order Designating
Administrative Law Judge, FTC Docket No. 9324 (Oct. 20, 2008) (Davis Decl. at Exhibit 10).
However, the Commission precluded Judge Chappell from altering the Commission-set
schedule.
To date, Whole Foods has served third-party subpoenas duces tecum on 96 third parties
who either compete with Whole Foods in some of the 29 alleged geographical markets or supply
Whole Foods and competing firms. See Respondent’s First Status Report, FTC Docket No.
9324, at 3 (Nov. 21, 2008) (Davis Decl. at Exhibit 11). Under the rules governing the
administrative proceeding, third-party depositions cannot start until all parties review the related
documents. Am. Compl. ¶ 64; see also Denis Decl. ¶ 24 Accordingly, Whole Foods has been
unable to take any third-party deposition to date, and it will be impossible to conclude third-party
-7-
discovery before the Commission-imposed discovery cut-off of January 30, 2009. Am. Compl. ¶
64.
On October 7, 2008, the Commission published a Notice of Proposed Rulemaking in the
Federal Register (the “Proposed Rule”), proposing fundamental changes to the Commission’s
administrative proceedings for reviewing merger cases. See Notice of Proposed Rulemaking in
the Federal Register, 73 Fed. Reg. 58832 (Oct. 7, 2008) (Davis Decl. at Exhibit 12). The
Proposed Rule, which virtually mirrors the Scheduling Order in the Whole Foods case, marks
such a fundamental change to existing Commission procedures that the Commission saw fit to
seek public comment on it before applying it to any future cases. Am. Compl. ¶ 69.
The Proposed Rule has drawn negative criticism from such organizations as the
American Bar Association’s Antitrust Section and the U.S. Chamber of Commerce, as well as
from a former Chairman and General Counsel of the Commission — all of whom flagged
potential due process concerns. See Comments of ABA Section of Antitrust Law, at 2, 5-6 (Nov.
6, 2008) (Davis Decl. at Exhibit 13) (the Rule could “compromise respondents’ rights and ability
to mount an effective defense”); Comments of Chamber of Commerce of the United States of
America, at 1-2 (Nov. 6, 2008) (Davis Decl. at Exhibit 14) (“while the additional changes may
speed up certain parts of the process in certain circumstances, they should not be undertaken at
the expense of companies’ due process rights;” the proposed rules eliminate “a vital check on
potential unfairness inherent in the FTC’s administrative procedure.”); Comments of Robert
Pitofsky and Michael N. Sohn, at 8-9 (Nov. 6, 2008) (Davis Decl. at Exhibit 15) (cautioned the
Commission to “review carefully those comments that raise questions as to whether respondents
may be unfairly limited in their pretrial rights” and noting that “the Commission’s interest in
preserving its role as a fair minded expert administrative adjudicator is best served if it abstains
from exploring the outer limits of what is statutorily and constitutionally permissible.”).
-8-
On December 3, 2008, Whole Foods filed a motion requesting a stay of the
Commission’s administrative proceeding until after the remand proceeding in the District Court
and a continuation of the administrative trial to no earlier than September 14, 2009. (Am.
Compl. ¶ 66; see also Denis Decl. ¶ 28. On December 8, 2008, the FTC Complaint Counsel
opposed Whole Foods’ motion. Am. Compl. ¶ 67. Before filing this suit, Whole Foods asked
the Commission to recuse itself from this case, but the Commission did not do so.
ARGUMENT
As discussed in Section I below, this Court has jurisdiction to immediately review Whole
Foods’ constitutional challenges to the Commission’s procedures and proceedings in this case.
As discussed in Section II below, a preliminary injunction pending the resolution of Whole
Foods’ claims is proper here because: (1) Whole Foods has a substantial likelihood of success
on the merits; (2) Whole Foods will be irreparably harmed if the injunction is not granted; (3) the
injunction would not prejudice Commission; and (4) the injunction would further the public
interest. See Ellipso, Inc. v. Mann, 480 F.3d 1153, 1157 (D.C. Cir. 2007).
I. THE DISTRICT COURT HAS JURISDICTION TO HEAR THIS CASE
Telecommunications Research and Action Center v. FCC, 750 F.2d 70 (D.C. Cir. 1984)
(“TRAC”), held that where “a statute commits review of agency action to the Court of Appeal,
any suit seeking relief that might affect the Circuit Court’s future jurisdiction is subject to the
exclusive review of the Court of Appeal.” TRAC is inapplicable for at least three reasons.
· First, unlike the statute at issue in TRAC, the Federal Trade Commission Act (the “FTC
Act”) does not provide exclusive review in the circuit courts for all cases and all agency
actions. Rather, the FTC Act provides that the circuit courts are the exclusive forum only
for (i) appeals from cease and desist orders and (ii) appeals based on FTC rules. See 15
U.S.C. §§ 45(c), (d), 57a. Neither of the foregoing applies here.
-9-
· Second, unlike TRAC, this case presents “questions of constitutional law, which require
no special administrative expertise to resolve, and do not fall within the ‘class of claims’
covered by the typical statutory grant of appellate review power.” 1 Ticor Title Insurance
Co. v. FTC, 814 F.2d 731 (D.C. Cir. 1987) (Green, J., concurring).2 Moreover, Whole
Foods’ equal-protection claim directed at Sections 5 and 13 of the FTC Act (and the
regulations pursuant to those sections) is analogous to the facial constitutional claim at
issue in Time Warner Entertainment Co., v. FCC, 530 F.3d 936 (D.C. Cir. 1996), where
the D.C. Circuit held that the district court had jurisdiction to consider the constitutional
challenge.
· Third, to the extent that this Court determines that the first two reasons set forth above
are insufficient, Whole Foods’ Amended Complaint requests that this Court enjoin the
Commissioners who voted out the Complaint and who participated in the appellate court
briefing from participating in the administrative proceeding or from reviewing de novo
the decision of an independent ALJ, thus making the ALJ decision the final Commission
order appealable to a circuit court of appeals. Such relief would not implicate TRAC.
This case is also ripe for review. When, as here, “an agency violates a clear right of a
petitioner by disregarding a specific and unambiguous . . . constitutional directive, a court will
not require the petitioner to exhaust his administrative remedies and will intervene
immediately.” Standard Oil Co. v. FTC, 475 F. Supp. 1261, 1267 (N.D. Ind. 1979) (intervening
and granting preliminary injunctive relief against FTC on due process grounds) (emphasis
added); accord Amos Treat & Co. v. SEC, 306 F.2d 260, 264 (D.C. Cir. 1962). As the D.C.
1
The TRAC court stated that “appellate courts develop an expertise concerning the agencies assigned them for
review . . . [e]xlusive jurisdiction promotes judicial economy and fairness to the litigants by taking advantage of that
expertise.” TRAC, 750 F.2d at 78.
-10-
Circuit held in Gulf Oil Corp. v. Department of Energy, 663 F.2d 296 (D.C. Cir. 1981),
“interlocutory review of non-final administrative action” is proper where the plaintiff is denied
“a fair proceeding” due to a “fundamental infirmity” in the administrative process. Id. at 312
(citations omitted); accord, Pepsico, Inc. v. FTC, 472 F.2d 179, 187 (2d Cir. 1972) (“one can
find final agency action . . . if an agency refuses to dismiss a proceeding that is . . . being
conducted in a manner that cannot result in a valid order”).
II. A PRELIMINARY INJUNCTION SHOULD BE GRANTED.
A. Whole Foods is likely to prevail on its equal-protection claims.
Count I of the Complaint alleges that provisions of the FTC Act regarding merger
challenges (and regulations promulgated pursuant to those provisions) violate Whole Foods’
right to equal protection under the Fifth Amendment.3 The Fifth Amendment to the U.S.
Constitution guarantees American citizens, including corporate entities, equal protection under
the law, requiring that “persons similarly situated be treated alike.” City of Cleburne v. Cleburne
Living Ctr., 473 U.S. 432, 440 (1985).
The FTC and DOJ are the only two federal enforcement agencies. They allocate mergers
between themselves so that only one of them will challenge any given merger. Merging parties
subject to FTC challenge, however, are treated differently than merging parties subject to
challenge by DOJ. Specifically, the disparate treatment here is based upon specific provisions of
Sections 5 and 13 of the FTC Act (and regulations promulgated pursuant to those provisions)
which impose more onerous legal standards and processes on parties subject to FTC merger
challenge than on parties subject to DOJ merger challenge, and these differences can be outcome
2
In his concurring opinion in Ticor, Judge Edwards, in dicta, incorrectly noted that TRAC covered constitutional
challenges. TRAC did not involve a constitutional challenge, and further, it cited cases based on constitutional law
claims as correctly brought in the district courts. TRAC 814 F.2d at 78.
3
This equal protection challenge is limited to federal merger enforcement only, and does not extend to provisions of
the FTC Act related to consumer protection or other aspects of unfair competition.
-11-
determinative. Because there is no rational basis for treating these similarly situated parties
differently, the statutory scheme violates the Fifth Amendment equal protection rights of
merging parties like Whole Foods.
1. Fifth Amendment requirements of equal protection prohibit the

federal government from treating similarly situated persons
differently without a rational basis.
The purpose of the equal-protection clause is to secure every person against intentional
and arbitrary discrimination, whether caused by the express terms of a statute or by its improper
execution through duly constituted agents. See Sioux City Bridge Co. v. Dakota Cty., 260 U.S.
441 (1923) (violation of equal protection to assess bridge at a higher rate than other property in
county). The equal-protection test relevant in this case involving a non-suspect class is whether
the disparate treatment is rationally related to a legitimate government end, interest, purpose, or
objective. See, e.g., Zobel v. Williams, 457 U.S. 55, 60 (1982); Cleburne, 473 U.S. at 440.
While the equal protection clause allows the government wider latitude in cases involving
social or economic legislation, courts nevertheless have struck down economic regulation that
lacks a rational basis. Id.. For example, in Allegheny Pittsburgh Coal Co. v. County
Commissioner of Webster County, 488 U.S. 336 (1989), the Court found a violation of the Equal
Protection clause where a county assessed property taxes on recently-acquired property at
significantly higher valuations than valuations of comparable long-held property. Id. at 336. Id.
Similarly, in Village of Willowbrook v. Olech, 528 U.S. 562, 564 (2000), the Court acting per
curiam affirmed that a plaintiff stated an equal-protection claim based upon a municipality’s
demand for a wider easement to connect to a water supply than was required of other property
owners. “Our cases have recognized successful equal protection claims brought … where the
-12-
plaintiff alleges that she has been intentionally treated differently from others similarly situated
and that there is no rational basis for the difference in treatment.”4
Moreover, the courts will scrutinize whether the proffered purposes underlying the
statutory, regulatory or enforcement scheme are, in fact, rationally related to a legitimate state
purpose. In Zobel v. Williams, for example, the Court invalidated on equal-protection grounds an
Alaska dividend distribution plan based on the length of residency, where two of the three
asserted statutory goals advanced by the state did not rationally promote the asserted interest, and
the third purported interest was held not to be legitimate. Zobel, 457 U.S. at 65; accord, Vlandis
v. Kline, 412 U.S. 441, 449-50 (1973) (apportioning state tuition rates by length of residence
contravenes the equal-protection clause); Shapiro v. Thompson, 394 U.S. 618, 632-633 (1969)
(equal-protection clause prohibits apportionment of welfare services based on length of
residency).
2. The FTC Act imposes outcome-determinative differences on merging

parties.
The disparate treatment here is based upon specific provisions of Sections 5 and 13 of the
FTC Act (and regulations promulgated pursuant to those provisions) which impose more onerous
legal standards and processes on parties subject to FTC merger challenge than on parties subject
to DOJ merger challenge, and these differences can be outcome determinative. These
differences in treatment disadvantage and have a disparate impact on merging parties, like Whole
Foods, whose merger is being reviewed by the FTC. These differences can affect whether a
merger challenge succeeds or fails; they can create disparate levels of uncertainty in the
4
Arbitrary enforcement of otherwise lawful statutory or regulatory schemes also will run afoul of the equal-
protection mandate. See, e.g., Falls v. Town of Dyer, 875 F.2d 146, 147 (7th Cir. 1989) (noting that a lawful
ordinance against a business display of portable signs would contravene equal-protection rights if selectively
enforced against one individual or only “one whose last name starts with ‘F’,” and would be just as “whimsical,
capricious, [and] without a rational basis for support” as an unconstitutional ordinance expressly targeting only such
persons).
-13-
marketplace that have direct financial impacts on the merging parties; and they can substantively
impact material terms of settlement agreements entered into by merging parties and federal
antitrust enforcers. See generally Antitrust Modernization Commission, Report and
Recommendations (April 2007) at Ch. II.A.3. (Davis Decl. at Exhibit 17).5
The specific outcome-determinative differences in treatment of similarly-situated
merging parties include the following:
a. Differences in the substantive test of a violation. The substantive test in a DOJ

merger challenge is whether or not the merger substantially lessens competition.
United States v. Baker Hughes, Inc., 908 F.2d 981, 982 (D.C. Cir. 1990) (citing
Clayton Act § 7). In contrast, the FTC can choose to use the substantially-
lessens-competition standard or an “unfair competition” standard having different
elements. See 15 U.S.C. § 45(n) (defining an “unfair” act or practice as one that
“causes or is likely to cause substantial injury to consumers which is not
reasonably avoidable by consumers themselves and not outweighed by
countervailing benefits to consumers or competition”). Thus, it is easier for the
FTC than for the DOJ to challenge mergers.
b. Differences in the preliminary injunction standard. The preliminary injunction

standard facing DOJ in a merger challenge includes elements of the traditional
test such as likelihood of success on the merits and balancing of the equities.
United States v. Gillette Co., 828 F. Supp. 78, 80 (D.D.C. 1993). In contrast the
D.C. Circuit has held that the preliminary injunction standard facing the FTC in a
merger challenge “depart[s] from . . . the more stringent, traditional ‘equity’
standard” faced by the DOJ and instead focuses on “a unique ‘public interest’
standard.” FTC v. Heinz, 246 F.3d 708, 714 (D.C. Cir. 2001); FTC v. Exxon
Corp., 636 F.2d 1336, 1343 (D.C. Cir. 1980).6
c. Differences in the forum for adjudicating the merits. The DOJ must adjudicate
the merits of the merger challenge, if at all, in a U.S. district court. 15 U.S.C. §
18(f). In contrast, the FTC can choose to adjudicate the merits of the merger
challenge at an administrative proceeding within the FTC itself as well as in U.S.
district court. Id.; 15 U.S.C. § 53(b).
5
The Antitrust Modernization Commission (“AMC”) was a bipartisan federal commission of antitrust experts
appointed by the President and Congress to undertake a comprehensive review of the nation’s federal antitrust laws.
The AMC’s report included, inter alia, a recommendation to prohibit the FTC from pursuing administrative
litigation within the FTC to challenge mergers under the FTC Act. See AMC Report at 140 (Davis Decl. at Ex. 17).
On this point, the AMC concluded that “[t]he FTC’s ability to pursue administrative litigation even after losing a
preliminary injunction proceeding can impose unreasonable costs and uncertainty on parties whose mergers are
reviewed by the FTC, as compared to the DOJ.” Id.
6
It was Whole Foods’ position during the FTC’s appeal of this Court’s denial of a preliminary injunction of the
Whole Food/Wild Oats merger that these standards should be, and are, the same for DOJ and the FTC. The D.C.
Circuit did not agree.
-14-
d. Differences if a U.S. district court rules against the merger challenge. If a U.S.
district court rules against DOJ’s challenge of a merger, DOJ has no legal
recourse except to appeal to the circuit court. 28 U.S.C. § 1291; Fed.R.App.P.
3(a)(1); see also AMC Report at 139 (Davis Decl. at Exhibit 17)(“the decision of
the district court in a consolidated DOJ proceeding is final (barring an appeal) . . .
.”). In contrast, if the FTC chooses to challenge a merger in U.S. district court –
which the FTC need not do at all – and that U.S. district court rules against the
challenge, the FTC subsequently can retry the entire merits proceeding in an
administrative proceeding within the FTC itself. 15 U.S.C. § 45(b); see also
AMC at 139 (Davis Decl. at Exhibit 17)(“if the DOJ loses [in district court], the
parties can be certain that the challenge is finished. In contrast, if the FTC fails to
obtain a preliminary injunction, it may pursue relief in a potentially lengthy and
costly internal administrative proceeding”).
e. Differences in independence of the merits fact finder. In adjudicating the merits

of a merger challenge and making a trial record, DOJ must face an independent
fact finder who is a confirmed federal judge, unbiased, and has no allegiance to
DOJ. 15 U.S.C. § 18(f). In contrast, the FTC can choose to avoid facing an
independent fact-finder altogether. The FTC can perform the fact-finding itself
without any input or oversight from any independent fact-finder. The presiding
officer at an administrative proceeding within the FTC is determined by the FTC,
and can be an individual Commissioner, all of the Commissioners collectively, or
an ALJ who the Commissioners can constrain or replace at any time and can
reverse on a de novo review. 16 C.F.R. § 3.42 (“Hearings in adjudicative
proceedings shall be presided over by a duly qualified Administrative Law Judge
or by the [Federal Trade] Commission or one or more members of the
Commission sitting as ALJs; and the term Administrative Law Judge as used in
this part means and applies to the Commission or any of its members when so
sitting”); 16 C.F.R. § 3.54.
f. Differences in applicable procedural rules. Because merger challenges by DOJ

must be adjudicated in U.S. district court, the Federal Rules of Civil Procedure
and Federal Rules of Evidence govern. 15 U.S.C. § 18(f); Fed. R. Civ. P. 1
(“These rules govern the procedure in all civil actions and proceedings in the
United States district courts . . . “); Fed. R. Evid. 101 (“these rules govern
proceedings in the courts of the United States”). In contrast, the FTC can choose
to ignore the Federal Rules of Civil Procedure and the Federal Rules of Evidence,
relying instead on different rules the FTC itself created by regulation that are
codified in 16 C.F.R. Part 3 and govern administrative hearings held within the
FTC. 16 C.F.R. § 3.1 (“The rules in this part govern procedure in adjudicative
proceedings”). Indeed, the FTC has proposed a rule permitting hearsay testimony.
g. Differences in appellate standards. A circuit court cannot reverse a successful

merger challenge by DOJ unless it is clearly erroneous. Baker Hughes, Inc., 908
F.2d at 983. In contrast, a circuit court cannot overturn a merger challenge by the
FTC if there is substantial evidence supporting it. Hosp. Corp. of America v.
FTC, 807 F.2d 1381, 1385 (7th Cir. 1986) (“Our only function is to determine
-15-
whether the Commission’s analysis of the probable effects of these acquisitions . .

. is so implausible, so feebly supported by the record, that it flunks even the
deferential test of substantial evidence.”).
h. Difference in ability to change merits decision prior to appeal to a circuit court.

DOJ has no ability to make any changes to the merits decision by the fact-finder
in U.S. district court before that decision is appealed to the circuit court. In
contrast, the FTC can completely change an adverse merits decision prior to
appeal to the circuit court. 15 U.S.C. § 45(c) (“The Commission may modify its
findings as to the facts, or make new findings, by reason of the additional
evidence so taken, and it shall file such modified or new findings, which, if
supported by evidence, shall be conclusive, and its recommendation, if any, for
the modification or setting aside of its original order, with the return of such
additional evidence. “); 16 C.F.R. § 3.54(b) (“In rendering its decision, the
Commission will adopt, modify, or set aside the findings, conclusions, and rule or
order contained in the initial decision, and will include in the decision a statement
of the reasons or basis for its action and any concurring and dissenting opinions”);
In the Matter of Rambus, Inc., 2006-2 Trade Cas. P 75,634, 2006 WL 2330117
(F.T.C. Aug. 2, 2006). Even where the presiding officer in an administrative
proceeding is an independent ALJ, the Commissioners can ignore that ALJ’s
determinations in their entirety and substitute the Commission’s own legal and
factual findings. It is those substituted legal and factual findings that are subject
to appeal to the circuit court. 16 C.F.R. § 3.54.
Any one of these differences makes it substantially more onerous for a merging party
subject to FTC merger review than to DOJ merger review. Taken together, there can be no
doubt that some or all of these indisputable differences in treatment are material and arbitrary
with no rational basis under equal-protection jurisprudence.
3. There is no rational basis for these outcome-determinative differences

in treatment of similar merging parties.
The equal protection violation at issue here is based upon differences in how federal
antitrust enforcers challenge similar mergers. There is no rational basis for this difference in
treatment. The government has no legitimate end, interest, purpose, or objective in treating
merging parties in certain industries, such as the grocery industry, differently from merging
parties in other industries. Like the hypothetical in Falls v. Town of Dyer in which the
government treated persons differently depending on whether or not their last name started with
-16-
the letter “F,” there is no rational basis for the difference in treatment of merging parties under
the statutory scheme at issue here.
The mere identity, per se, of the specific antitrust enforcement agency challenging any
given merger is irrelevant to this equal protection analysis. In fact, there would be no equal
protection violation if the same legal standards and processes applied regardless of whether the
DOJ or the FTC was challenging a merger. Whole Foods is not challenging the allocation of
mergers between DOJ and the FTC. Standing alone, that allocation of mergers so that only one
of the agencies will challenge any given merger – apparently based upon relative agency
expertise regarding the industry at issue – may be rational. The constitutional infirmity is that
there is no rational basis for the differences in the treatment of merging parties.
Even if the FTC has relatively more expertise than DOJ in certain industries, that does
not provide any rational basis for subjecting merging parties in those industries to more onerous
and outcome-determinative legal standards and processes than merging parties in other
industries. Such a difference in treatment is arbitrary and has no fair or substantial relation to the
object of merger policy.
In sum, these outcome-determinative differences in the legal standards and processes
between merger challenges by DOJ and the FTC violate the merging parties’ guarantee of equal
protection under the Fifth Amendment of the U.S. Constitution.
B. Whole Foods is likely to prevail on its due-process claims.
Count II of Whole Foods’ Complaint alleges that the Commission has unconstitutionally
denied Whole Foods the appearance, if not the reality, of an administrative proceeding before
“an impartial and disinterested tribunal,” and has denied Whole Foods the right to “appropriate
discovery in time to reasonably and adequately prepare” for trial. See Amos, 306 F.2d at 264;
Standard Oil, 475 F. Supp. at 1274. It has also impermissibly failed to respect the Commission’s
-17-
firewall between the investigative and prosecutorial functions and adjudicatory functions. See 16
C.F.R. § 4.7. As set forth below, Whole Foods is likely to prevail on the merits.
1. The Commission has violated due process by publicly prejudging the

merits of Whole Foods’ merger and credibility of its witnesses and
evidence, and thus has in appearance, if not in fact, gutted any
potential for an impartial and disinterested tribunal.
An “essential” requirement of due process in an agency proceeding is “the resolution of
contested questions by an impartial and disinterested tribunal.” Amos, 306 F.2d at 264 (D.C.
Cir. 1962) (emphasis added). This is impossible where, as here, the Commission has already
“made exceedingly important findings of fact [and] already thrown [its] weight on the other
side.” Id. The Commission reached conclusions on the ultimate factual and legal issues on the
merits of Whole Foods’ case before the administrative trial had even scheduled. For example,
the Commission stated in public briefs to the D.C. Circuit that it had “proved that the premium
natural and organic supermarkets market is the appropriate relevant product market” and that
“the combination of Whole Foods and Wild Oats will substantially lessen competition.” See,
e.g., Davis Decl. at Exhibit 2, at 40 and Exhibit 3, at 5 (emphasis added).
The Commission, like every other administrative agency, must respect and comply with
the strictures of Due Process. See Gibson v. Berryhill, 411 U.S. 564, 579 (1973). As the D.C.
Circuit has held, the minimum requirement is “fair play.” Amos, 306 F.2d at 264; see also
Grolier Inc. v. FTC, 615 F.2d 1215, 1220 (9th Cir. 1980) (“Congress intended to preclude from
decision-making in a particular case not only individuals with the title of ‘investigator’ or
‘prosecutor,’ but all persons . . . who had developed, by prior involvement with the case, a ‘will
to win.’”); Withrow v. Larkin, 421 U.S. 35, 58 (1975) (“risk of bias or prejudgment” deemed
“intolerably high” where “adjudicators would be so psychologically wedded to their complaints
-18-
that they would consciously or unconsciously avoid the appearance of having erred or changed
position”).
As itemized above, the Commission’s legal briefs to the D.C. Circuit — submitted well
before the administrative trial was ever scheduled — contained multiple, unqualified statements
of prejudgment and bias on “exceedingly important findings of fact” and law pertaining to the
merits of Whole Foods’ case, and the application of the law to those facts. The Commission
declared that it had proven not only the relevant market but also that competition had been
harmed in that market. These statements demonstrate that the Commission had prejudged the
merits of the merger, not just the merits of the preliminary injunction that was on appeal to the
D.C. Circuit, and had developed an improper “will to win.” Grolier, 615 F.2d at 1220.7
Even assuming the Commission had not in fact prejudged Whole Foods’ case, its
statements create the improper “appearance” of prejudgment and bias. “[A]n administrative
hearing . . . must be attended, not only with every element of fairness but with the very
appearance of complete fairness.” Amos, 306 F.2d at 267 (emphasis added); see also Withrow,
421 U.S. at 47 (“Not only is a biased decision-maker constitutionally unacceptable but ‘our
system of law has always endeavored to prevent even the probability of unfairness.’”); Utica
Packing Co. v. Block, 781 F.2d 71, 77 (6th Cir. 1986) (noting that due process “requires the
appearance of fairness . . . it does not require proof of actual partiality”).
7
In contrast, in past legal briefs to the federal courts, the Commission has demonstrated greater care to qualify
important assertions of facts and law regarding merger cases that were still pending on its administrative docket.
For example, in FTC v. H.J. Heinz, et al., 246 F.3d 708 (D.C. Cir. 2001), the Commission’s brief referred to “a
reasonable probability” that the merger would “increase[] the likelihood” of anticompetitive conduct. (Emphasis
added.). In FTC v. Arch Coal, No. 04-5291, 2004 WL 2066879 (D.C. Cir. 2004), the Commission’s brief in support
of an injunction pending appeal stated that “[t]he testimony of numerous customers confirmed that the SPRB coal
market is susceptible to coordinated interaction and the proposed acquisition is likely to increase the risk of such
coordination” and “that acquisition makes anticompetitive coordination among the major producers more profitable
and easier, and thus more likely.” (Emphasis added.) In FTC v. Tenet Health Corp., et al., 186 F.3d 1045 (8th Cir.
1998), the Commission’s brief stated that “plaintiffs made an extensive factual showing, uncontradicted by credible
evidence from defendants, that it was unlikely there would be such defections [to alternative hospitals to make a
price increase unprofitable].” (Emphasis added.)
-19-
The Commission itself acknowledges that disqualification would be proper “if a
Commissioner [gave] a speech discussing the merits of a pending case.” See Davis Decl. at
Exhibit 7, at 3 (citing Cinderella Career and Finishing School v. FTC, 425 F.2d 584 (D.C. Cir.
1970). The conduct here is worse. If a single Commissioner’s public speech on the merits of a
case is proper grounds for disqualification, then so is an entire Commission’s prejudgments on
the merits of a case made in public legal briefs — precisely what occurred here.
Notwithstanding, the Commission refused to remove itself from serving as the Presiding Official
over scheduling and the ultimate adjudicator in this case. See Davis Decl. at Exhibits 7, 10.
“The test for disqualification has been succinctly stated as being whether ‘a disinterested
observer may conclude that (the agency) has in some measure adjudged the facts as well as the
law of a particular case in advance of a hearing.’” Cinderella, 425 F.2d at 591. Here, instead of
disqualifying itself, the Commission appointed Commissioner Rosch as the Presiding Official,
locked in a prejudicial Scheduling Order, and will retain jurisdiction to hear any appeal from the
ALJ’s Initial Decision. See Davis Decl. at Exhibits 7, 10. Absent immediate relief from this
Court, “the ultimate determination of the merits [of Whole Foods’ administrative case] will move
in predestined grooves.” Cinderella, 425 F.2d at 590.
2. The Commission has violated due process by imposing a prejudicial

Scheduling Order that denies Whole Foods appropriate discovery to
reasonably and adequately prepare for trial.
Any doubt that the Commission has prejudged the ultimate outcome of Whole Foods’
case is put to rest by the Commission’s September 10, 2008 Scheduling Order — which deprives
Whole Foods of needed discovery and thus of a reasonable opportunity to prepare its defense.
Indeed, the Commission’s failure to permit Whole Foods “appropriate discovery in time to
reasonably and adequately prepare” for trial — standing alone — is sufficient to (i) establish a
violation of due process and (ii) justify immediate judicial review and preliminary relief. See
-20-
Standard Oil, 475 F. Supp. at 1274-75 (N.D. Ind. 1979) (“it is, and only is, the matter of
discovery that compels the court to intervene”); cf. McClelland v. Andrus, 606 F.2d 1278, (D.C.
Cir. 1979) (“discovery must be granted if in the particular situation a refusal to do so would so
prejudice a party as to deny him due process”).
In Standard Oil, the district court intervened in an ongoing FTC administrative
proceeding because the ALJ refused to allow the respondents any discovery until they complied
with the complaint counsel’s subpoenas. Standard Oil, 475 F. Supp. at 1277. In noting that the
issue was “one of timing,” the court found that a delay of several years before the respondents
might obtain discovery was problematic because evidence could be lost. Id. More
fundamentally,
. . . what troubles the Court is that the [ALJ], according to the

terms of his orders . . . is no longer making individual
considerations and rulings; he is no longer “exercising his
discretion to move this case along as expeditiously as is possible.”
He has, in effect, decided to quit deciding, at least as regarding
plaintiffs’ discovery requests, all of which must be channeled
through him. . . . the [ALJ] cannot simply turn his head to
plaintiffs’ requests. . . . if the [ALJ] refuses to listen, there can be
no [] mitigation of the danger of plaintiffs losing their rights to a
fair hearing.
Id. at 1278-79 (emphasis added). Thus, the court vacated the ALJ’s discovery orders as
“tantamount to depriving plaintiffs of a fair opportunity to be heard” and ordered the ALJ to
proceed in a manner that “acknowledges plaintiffs’ constitutional rights.” Id. at 1278, 1280.8
The present case is arguably worse than Standard Oil. While the ALJ in Standard Oil
improperly delayed plaintiffs’ discovery under a schedule that was too long, the Commission
here, as discussed below, has denied Whole Foods critical discovery under a schedule that is too
short.
8
Notably, the Standard Oil court rejected the FTC’s arguments that plaintiffs were “merely challenging the legality
of a series of discovery rulings.” Id. at 1276.
-21-
The Commission and Commissioner Rosch have repeatedly rejected Whole Foods’
requests for appropriate time to reasonably and adequately prepare for trial — they simply
refused to “listen” and “turned [their] head[s] to [Whole Foods’] requests.” See Standard Oil,
475 F. Supp. at 1278-79. As stated above, the administrative case alleges antitrust violations in
29 separate geographical markets across the country. Whole Foods must conduct fact discovery
and expert analyses on the competitive dynamics (e.g., products, prices, competitors, re-
positioning, entry barriers, and efficiencies, etc.) that exist in each of the 29 alleged markets.
This is equivalent to litigating 29 antitrust cases in 29 separate markets.9
Based on this immense task, Whole Foods explained in a Joint Case Management
Statement (“JCMS”) that “Complaint Counsel’s proposed schedule -- 2 months of fact discovery
beginning in 11 days after the scheduling conference -- does not provide sufficient time for third
party discovery, which is critical to the defense in this matter.” See Joint Case Management
Statement, FTC Docket No. 9324, at 15-16 (Aug. 28, 2008) (Davis. Decl. at Exhibit 16); see also
Denis Decl. ¶ 18. Whole Foods argued that, unlike Complaint Counsel, it took “no discovery
during the Commission’s Second Request investigation, and had only two weeks in which to
conduct fact discovery in the district court proceeding.”10 (Davis Decl. at Exhibit 16). It further
explained that Whole Foods “in advance of the only plenary trial on the merits,” needed an
“opportunity to obtain evidence from third parties in each of the markets contested by the
Commission.” Id. This would require “issuing subpoenas to third parties throughout the land,
negotiating the scope of the subpoenas, potentially litigating motions to enforce or to quash,
collecting, reviewing and analyzing documents, and subpoenaing third party witnesses for
9
Indeed, Circuit Judge Brown in ruling on the District Court’s denial of the Commission’s preliminary injunction
action held that “if . . . it remains possible to reopen or preserve a Wild Oats store in just one of these markets, such
a result would at least give the FTC a change to prevent a [Clayton Act] § 7 violation in that market.” FTC v. Whole
Foods Market, Inc., 533 F.3d 869, 875 (D.C. Cir. 2008) (Emphasis added.)
-22-
deposition throughout the nation.” Id. Complaint Counsel’s proposed schedule for fact
discovery was “not sufficient for Whole Foods to conduct all of the necessary fact witness
depositions in the proposed time period, especially when many third party witnesses require
substantial advance notice prior to a deposition in a matter in which they are not a party.” Id.
Thus, Whole Foods requested that fact discovery close in or around May 2009, and that
trial commence in or around October 2009. See Davis. Decl. at Exhibit 16, at 17. Commissioner
Rosch rejected this timetable at the September 8, 2008 Scheduling Conference. He declared that
fact discovery would close on December 19, 2008 (i.e., four weeks later than Complaint
Counsel’s request) and trial to commence on February 16, 2009 (i.e., three weeks later than
Complaint Counsel’s request). See Davis Decl. at Exhibit 8, at 44, 46-47. Whole Foods
reiterated on the record that the schedule “circumscribed” the ability of Whole Foods to “marshal
the evidence and present the evidence” necessary from potentially over 100 third-party witnesses
in a complex case involving 29 separate markets. Id. at 50-51. Commissioner Rosch did not
change his mind.
The Commission went still further. The full Commission (including Commissioner
Rosch), issued a Scheduling Order on September 10, 2008 that mirrored Commissioner Rosch’s
schedule. See Davis Decl. at Exhibit 9. It then, in a highly irregular move, cemented the order in
place by providing that it “shall not be altered absent leave of the Commission.” Id.
Confronted by the futility of requesting additional time from the Commission for
appropriate discovery, Whole Foods attempted to comply in good faith with the Scheduling
Order. However, it is now clear that it is impossible for Whole Foods to reasonably and
adequately prepare for an antitrust trial encompassing 29 alleged geographical markets across the
10
Moreover, in the District Court proceeding, 11 of the 29 markets that the Commission now challenges were either
not contested (4 markets) and/or no evidence was presented on them (7 markets). Davis Decl., at Exhibit 16, at 14.
-23-
country and nearly 100 third-party witnesses by the scheduled February 16, 2009 trial date, much
less the January 30, 2009 discovery cut-off date. See Denis Decl. ¶¶ 24-26.
In its November 24, 2008 Status Report, Whole Foods informed the ALJ that it had
issued third-party subpoenas duces tecum on 96 third parties — representing only a subset of the
total number of firms that either compete with Whole Foods in some of the 29 alleged markets or
supply Whole Foods and competing firms. See Davis Decl. at Exhibit 11, at 3; see also Denis
Decl. ¶ 25. As of that date, only 37 out of the 96 subpoenaed parties (and currently, still less
than 40% of the parties) have even partially complied by producing documents, which had only
recently begun to trickle in to Whole Foods’ counsel. Id. Given that the Scheduling Order
requires depositions to occur only after the produced documents are given to Complaint Counsel,
and due to the intervening holidays and other scheduling difficulties on the part of the third
parties, Whole Foods has been unable to even notice, much less take, a single third-party
deposition. See Davis Decl. at Exhibit 11, at 4-5 (One of the third-party supermarkets, New
Season’s Market, Inc., has moved to quash its subpoena.); see also Denis Decl. ¶¶ 4-5.
The foregoing says nothing of Whole Foods’ additional obligations to among other
things, respond to Complaint Counsel’s voluminous document and interrogatory submissions
(which to date have totaled over 1.6 million pages and 53 gigabytes of data providing over 300
million records of weekly transaction prices, and 280 spreadsheets). See Davis Decl. at Exhibit
11, at 1-2. It must also depositions noticed by Complaint Counsel; work with experts on
reviewing evidence, preparing reports and depositions; prepare for direct and cross examinations;
identify and mark trial exhibits; and engage in pre-trial and dispositive motions practice.
These duties, along with the limited time for third-party discovery under the Scheduling
Order — e.g., all depositions must be completed by January 30, 2009 — make it impossible for
Whole Foods to adequately prepare its defense by February 16, 2009. See Davis Decl. at Exhibit
-24-
11 at 3. The foregoing is a denial of Due Process under any test. Cf. McClelland v. Andrus, 606
F.2d 1278, (D.C. Cir. 1979) (holding that “discovery must be granted if in the particular situation
a refusal to do so would so prejudice a party as to deny him due process” and finding that Civil
Service Commission improperly denied plaintiff certain key evidentiary materials).
As in Standard Oil, despite Whole Foods’ best efforts to obtain relief in the
administrative forum, Commissioner Rosch and the Commission have “clearly said what [they]
had to say and [have] made up [their] mind . . . [and] that decision is final.” Standard Oil, 475 F.
Supp. at 1280; cf. Mercy Hosp. of Laredo v. Heckler, 777 F.2d 1028, 1033-34 (5th Cir. 1985) (“it
would be futile to comply with the administrative procedures because it is clear that the claim
will be rejected”) (citation omitted). The ALJ, of course, has been stripped of his independence
to conduct the proceedings in light of the facts and circumstances of the case. Thus, absent
immediate relief from this Court, it is guaranteed that Whole Foods will be denied its rights to a
fair proceeding.
3. The Commission has violated due process by failing to separate its

prosecutorial/investigative functions from its adjudicatory functions.
The Commission’s Rules of Practice provide that “[w]hile a proceeding is in adjudicative
status within the Commission,”
[n]o member of the Commission, the Administrative Law Judge, or

any other employee who is or who reasonably may be expected to
be involved in the decisional process in the proceeding, shall make
or knowingly cause to be made to . . . any employee or agent of the
Commission who performs investigative or prosecuting functions
in adjudicative proceedings, an ex parte communication relevant
to the merits of that or a factually related proceeding.
16 C.F.R. § 4.7(b)(2) (emphasis added); see also id. at § 4.7(b)(1) (same prohibition on
communications from investigative/prosecutorial staff to the Commission or ALJ). An
administrative proceeding enters “adjudicative status” as soon as “the complaint has issued and
-25-
the adjudication phase has begun.” See Complaint Counsel’s Response to Respondents’ Motion
For Recusal of Commissioner Rosch, In the matter of Inova Health System Foundation, et al.,
FTC Docket No. 9326, at 5 (May 27, 2008) (Davis Decl. at Exhibit 18). “For this reason, after a
Part III complaint is voted out, the Commissioners, ALJ, and staff adhere to a strict firewall that
prohibits ex parte communications.” Id. (emphasis added).
Here, the Commission voted out the administrative complaint against Whole Foods on
June 27, 2007 — at which time the case entered “adjudicative status” and a “firewall” was
erected between the Commissioners and the investigative/prosecutorial staff. See 16 C.F.R. §
4.7(b)(1). However, subsequently, both the General Counsel of the Commission (thus the
Commissioners) and the investigative/prosecutorial staff (including the Bureau of Competition)11
worked on and jointly signed briefs to the D.C. Circuit that contained the statements of
prejudgment and bias on the factual and legal merits of Whole Foods’ case. (Am. Compl. at
¶94.) Upon information and belief, Commissioners conferred with and gave guidance to the
counsel drafting and working on these legal briefs. (Id. at ¶95.) In addition, some of the exact
same Complaint Counsel that are prosecuting the administrative action against Whole Foods also
served as counsel and signed at least one brief to the D.C. Circuit along with the Commission’s
General Counsel. See Response of FTC to Petition for Rehearing En Banc, No. 07-5276 (D.C.
Cir. 2008)(Davis Decl. at Exhibit 19).
11
The D.C. Circuit briefs were signed by both the Director and Deputy Director of the Bureau of Competition, and
the Bureau’s Director of Litigation. According to the FTC’s website: “[t]he Bureau of Competition investigates
potential law violations and seeks legal remedies in federal court or before the FTC’s administrative law judges.”
Statement by David Wales, Acting Director of Bureau of Competition, “About the Bureau of Competition,”
available at http://www.ftc.gov/bc/about.htm (last accessed Dec. 13, 2008) (emphasis added).
-26-
While in certain contexts it may be proper for the Commissioners to confer with and give
guidance to federal court counsel (e.g., where the counsel are not also prosecuting an
administrative action against the same respondents and same merger), it is not proper here, where
some FTC attorneys serve as both federal court and administrative complaint counsel. By
communicating with the foregoing counsel, the Commissioners have effectively “ma[de] or
knowingly caused to be made” communications to the FTC’s investigative and prosecutorial
staff regarding the merits of the Whole Foods/Wild Oats merger. See 16 C.F.R. § 4.7(b)(1).
Indeed, the Complaint Counsel in the Inova Health case, supra, stated that there, “the
Commission ha[d] gone out of its way to limit the conflict inherent in every proceeding before
the members of an administrative body which both votes out and adjudicates complaints.” See
Complaint Counsel’s Response to Respondents’ Motion For Recusal of Commissioner Rosch,
Inova, at 5-6 (May 27, 2008) (Davis Decl. at Exhibit 18). No such limitations on this “inherent”
conflict were implemented in the Whole Foods case, as demonstrated below:
Inova Health - FTC Docket No. 9326 Whole Foods - FTC Docket No. 9324
Commissioner Rosch did not participate in the Commissioner Rosch participated in the
Commission’s issuance of the administrative Commission’s issuance of the administrative
complaint. complaint. (June 27, 2008)
Commission’s order appointing him as the Commission’s order appointing him as the ALJ
Administrative Law Judge (“ALJ”). for the Scheduling Conference.12 (Aug. 8,
2008)
12
The Commission’s Rules of Practice provide in § 3.42 (titled “Presiding officials”) provides:
(a) Who presides. Hearings in adjudicative proceedings shall be presided over by a duly qualified
Administrative Law Judge or by the Commission or one or more members of the Commission
sitting as Administrative Law Judges; and the term Administrative Law Judge as used in this part
means and applies to the Commission or any of its members when so sitting.
16 C.F.R. §3.42(a) (emphasis added).
-27-
Commissioner Rosch participated in the

Commission’s issuance of the amended
administrative complaint during his service as
the ALJ. (Sept. 8, 2008)
Commissioner Rosch (as the ALJ) set the Commissioner Rosch (as the ALJ) set the
discovery/trial schedule and the Commission discovery/trial schedule and participated in the
did not issue a binding Scheduling Order that Commission’s issuance of a Scheduling Order
limited the ALJ’s discretion to change the that precluded any subsequent modifications to
schedule in any manner. the schedule absent leave of the Commission.
(Sept. 10, 2008)
Commission’s order that stated Commissioner Commission’s order that stated Commissioner
Rosch would not participate in any appeal from Rosch would participate in any appeal from
ALJ’s initial decision. the newly-appointed ALJ’s initial decision.
(Oct. 20, 2008)
C. Whole Foods Has Suffered And Will Continue To Suffer Irreparable Harm.
1. Deprivation of constitutional guaranteed rights constitutes

irreparable injury.
Abridgements of Constitutional rights “give rise to a presumption of irreparable harm.”
See Citicorp Servs., Inc. v. Gillespie, 712 F. Supp. 749, 753-54 (N.D. Cal. 1989); see also
Goldie’s Bookstore, Inc. v. Superior Court, 739 F.2d 466, 472 (9th Cir. 1984) (“[a]n alleged
constitutional infringement will often alone constitute irreparable harm”). Thus, in Amos, the
D.C. Circuit found irreparable injury “solely on due process grounds” without even referring to
irreparable injury. Amos, 306 F.2d at 267. Similarly, the district court in Standard Oil made no
mention of “irreparable harm,” but ordered injunctive relief in ongoing FTC proceedings to
protect the plaintiffs’ rights to appropriate discovery to prepare their defenses. See Standard Oil,
475 F. Supp. at 1274; see also Gulf Oil, 663 F.2d at 307 (holding in case where parties alleged
that Department of Energy caused inter alia “irremediable injury by depriving them of
substantial procedural rights . . . the district court . . . acted in an appropriately limited way to
-28-
protect the litigants’ rights to a fair proceeding”). The reasoning in Amos, Standard Oil, and
Gulf Oil applies equally to the present case.
2. Whole Foods has suffered and will continue to suffer irreparable

harm per se because there is no legal avenue by which Whole Foods
could recover any monetary damages against the Commission.
Whole Foods has suffered irreparable injury for a second reason – the monetary damages
it is suffering cannot be recovered against the FTC. “[W]here, as here, the plaintiff in question
cannot recover damages from the defendant due to the defendant’s sovereign immunity . . . any
loss of income suffered by a plaintiff is irreparable per se.” Feinerman v. Bernardi, 558 F. Supp.
2d 36, 51 (D.D.C. 2008) (granting preliminary injunction against Secretary of HUD from
effectuating HUD’s debarment determination even though plaintiff “hardly present[ed] an
overwhelming case for a finding of irreparably injury”) (emphasis added); see also United States
v. New York, 708 F.2d 92, 93-94 (2d Cir.1983) (finding irreparable injury where plaintiff unable
to recover damages due to defendant’s invocation of Eleventh Amendment protections).
Neither the Administrative Procedure Act (“APA”) or the Federal Tort Claims Act
(“FTCA”) provides any legal avenue for recovering money damages against the Commission.
The APA provides that “[a]n action in a court of the United States seeking relief other than
money damages and stating a claim that an agency or an officer or employee thereof acted or
failed to act in an official capacity or under color of legal authority shall not be dismissed . . . on
the ground that it is against the United States or that the United States is an indispensable party.”
5 U.S.C. § 702 (emphasis added); see also Bowen v. Massachusetts, 487 U.S. 879, 893-95 (1988)
(confirming that APA does not waive sovereign immunity for actions seeking “money damages”
as compensatory relief). Thus, the APA permits actions against the Commission solely for non-
money-damages relief.
-29-
The FTCA is equally unavailing to Whole Foods. Although the FTCA waives sovereign
immunity for certain damage suits against the agencies, that waiver does not apply to claims
“based upon the exercise or performance or the failure to exercise or perform a discretionary
function or duty . . . whether or not the discretion involved be abused.” 28 U.S.C. § 2680
(emphasis added); see also United States v. S.A. Empresa De Viacao Aerea Rio Grandense, 467
U.S. 797, 808 (1984) (holding that the discretionary acts of federal officials are immune from
actions for money damages under the FTCA).
Whole Foods’ monetary damages are substantial. Whole Foods has spent more than $12
million dollars in legal and expert fees and costs in complying with the Commission’s Second
Request and investigation and defending the merger through September of 2007 — and has spent
through September 2008 an additional $4.5 million in defending the merger. Am. Compl. ¶16.
Whole Foods has also incurred over $2 million in vendors’ costs and fees — not including
outside counsel’s fees and costs — just in responding to Complaint Counsel’s voluminous
document requests and interrogatories. See Davis Decl. at Exhibit 11, at 2. These injuries are
irreparable per se because the Commission is immune in this case from suits for money damages.
D. The Commission Will Not Be Harmed By A Preliminary Injunction.
There is no colorable argument that the Commission could possibly be injured in any way
by a preliminary injunction that briefly delays the administrative proceedings pending resolution
of Whole Foods’ Complaint. Indeed, the Commission stayed the administrative proceedings on
its own motion for just over 12 months due to “the pendency of the federal court proceedings.”
Davis Decl. at Exhibit 1. Moreover, despite failing to obtain a preliminary injunction from the
District Court or an emergency injunction pending appeal from the D.C. Circuit, and despite
knowing about the August 31, 2007 closing deadline for the merger, the Commission did not lift
its stay on the administrative proceedings, nor request expedited briefing or oral argument on its
-30-
appeal to the D.C. Circuit. It was only after the D.C. Circuit reversed the District Court some 11
months later that the Commission rushed to restart its administrative action despite the continued
“pendency” of the District Court remand proceedings
To be sure, the Commission has an interest in expeditious decision-making. The
Commission’s Rule 3.1 for adjudicative proceedings provides that Commission’s policy is that
“to the extent practicable and consistent with requirements of law, such proceedings shall be
conducted expeditiously.” 16 C.F.R. § 3.1 (emphasis added). However, there is no “practical”
need for an accelerated schedule in this case where the Whole Foods/Wild Oats merger closed
over 15 months ago, and Whole Foods is seeking an adequate opportunity to take third-party
discovery.
E. A Preliminary Injunction Will Further the Public Interest in Ensuring That

FTC Proceedings Are Fundamentally Fair to Respondents.
There is a strong public interest in ensuring that the Commission, as an administrative
agency of the United States, complies with its duty to respect respondents’ due process rights and
to comply with the APA in its adjudicatory proceedings. See, e.g., Jacksonville Port Auth. v.
Adams, 556 F.2d 52, 59 (D.C. Cir. 1977) (“there is an overriding public interest . . . in the
general importance of an agency’s faithful adherence to its statutory mandate”).
The public interest also demands that the constitutional rights of a respondent be
protected by the courts before the administrative proceedings conclude. As noted above, courts
routinely hold that immediate judicial intervention is proper to rectify fundamental infirmities in
agency proceedings without the need to “exhaust remedies” or await “final agency action.” See,
e.g., Amos, 306 F.2d at 264; Standard Oil, 475 F. Supp. at 1274.
Finally, the public interest weighs in favor of bringing to light that the one-size-fits-all
approach of the Commission’s new Proposed Rule could — as it has in Whole Foods’ case —
-31-
violate fundamental due process rights. As discussed above, the Proposed Rule has drawn a
series of high-profile negative comments that collectively express a near consensus concern that
the new adjudicatory structure could undermine the ability of respondents to defend themselves
in a fair proceeding before the FTC.
RELIEF REQUESTED
For the foregoing reasons, Whole Foods respectfully requests that this Court enter a
preliminary injunction order staying the Commission from any further prosecution of its
administrative action against Whole Foods pending the resolution of the constitutional claims
alleged in Whole Foods’ Amended Complaint For Declaratory And Injunctive Relief.
Dated: December 19, 2008 Respectfully submitted,
/s/ Lanny J. Davis

Garret G. Rasmussen (D.C. Bar No. 239616)
Antony P. Kim (D.C. Bar No. 489553) (app. pending)
ORRICK, HERRINGTON & SUTCLIFFE LLP
1152 15th Street, N.W.
Telephone: (202) 339-8400
W. Stephen Cannon (D.C. Bar No. 303727)

Todd Anderson (D.C. Bar No. 462136)
CONSTANTINE CANNON, LLP
1627 I Street, N.W.
Telephone: (202) 204-3500
Attorneys for Plaintiff Whole Foods

Market, Inc.
-32-
CERTIFICATE OF SERVICE
Pursuant to LCvR 5.3, I hereby certify that on the 19th day of December, 2008, I
electronically filed the with the Clerk of the Court Plaintiff Whole Foods Market, Inc.’s Motion
for a Preliminary Injunction, a supporting memorandum and declarations, and a proposed order,
using the CM/ECF system, which will automatically send notification of the filing to the
following counsel of record:
W. Mark Nebeker
Assistant United States Attorney
Civil Division
U.S. Attorney’s Office for the District of Columbia
555 4th Street, NW
Washington, DC 20530
/s/ Lanny Davis___________________

Orrick, Herrington & Sutcliffe LLP
1152 15th Street, NW
Washington, DC 20005
(202) 339-8400
-1-

Whole Foods v. FTC - Motion For Preliminary Injunction

Enviado por

Dados do documento

Descrição original:

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Whole Foods v. FTC - Motion For Preliminary Injunction

Enviado por

Direitos autorais:

Formatos disponíveis

Case 1:08-cv-02121-PLF Document 12 Filed 12/19/2008 Page 1 of 42

IN THE UNITED STATES DISTRICT COURT

PLAINTIFF WHOLE FOODS MARKET, INC.’S

Declarations of Paul T. Denis and Lanny J. Davis, attached hereto.

accompanying Memorandum of Points and Authorities, Whole Foods respectfully requests a

hearing on this motion at the earliest possible date.

Dated: December 19, 2008 Respectfully submitted,

/s/ Lanny J. Davis

W. Stephen Cannon (D.C. Bar No. 303727)

Attorneys for Plaintiff Whole Foods

IN THE UNITED STATES DISTRICT COURT

PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES

TABLE OF AUTHORITIES ..................................................................................................... ii

Allegheny Pittsburgh Coal Co. v. Cty. Comm’r of Webster Cty.,

Amos Treat & Co. v. SEC,

Cinderella Career & Finishing School v. FTC,

Citicorp Services, Inc. v. Gillespie,

City of Cleburne v. Cleburne Living Center,

Ellipso, Inc. v. Mann,

Falls v. Town of Dyer,

FTC v. Exxon Corp.,

FTC v. H.J. Heinz, et al.,

FTC v. Whole Foods Market, Inc.,

FTC v. Whole Foods Market, Inc.,

FTC v. Whole Foods Market, Inc.,

Goldie’s Bookstore, Inc. v. Superior Court,

Grolier Inc. v. FTC,

Gulf Oil Corp. v. Department of Energy,

Hosp. Corp. of America v. FTC,

Jacksonville Port Authority v. Adams,

Mercy Hosp. of Laredo v. Heckler,

Pepsico, Inc. v. FTC,

In the Matter of Rambus, Inc.,

Sioux City Bridge Co. v. Dakota Cty.,

Standard Oil Co. v. FTC,

Telecommunication’s Research and Action Center v. FCC,

Ticor Title Insurance Co. v. FTC,

814 F.2d 731 (D.C. Cir. 1987) ................................................................................................ 10

Time Warner Entm’t Co. v. FCC,

United States v. Baker Hughes, Inc.,

United States v. Gillette Co.,

United States v. S.A. Empresa De Viacao Aerea Rio Grandense,

United States v. State of New York,

Utica Packing Co. v. Block,

Village of Willowbrook v. Olech,

16 C.F.R. § 3.1 ....................................................................................................................... 15, 31

16 C.F.R. § 3.42 ..................................................................................................................... 15, 27

16 C.F.R. 3.54 ........................................................................................................................ 15, 16

16 C.F.R. § 4.7……………………………………………………………………….....17, 25, 26, 27

15 U.S.C. § 18........................................................................................................................ 13, 14, 15

15 U.S.C. § 45........................................................................................................................ 9, 14, 16

28 U.S.C. § 1291 .......................................................................................................................... 15

28 U.S.C. § 2680 .......................................................................................................................... 30

Fed. R. App. P. 3……………………………………………………………………………………15

Declaration of Paul T. Denis dated December 15, 2008.

Declaration of Lanny J. Davis dated December 18, 2008:

Exhibit 1 - FTC Order Staying Administrative Proceedings, FTC Docket No.

Exhibit 3 - Emergency Motion of the FTC for an Injunction Pending Appeal

Exhibit 5- FTC Order Rescinding Stay of Administrative Proceeding, Setting

Exhibit 6 - Motion To Disqualify The Commission As Administrative Law

Exhibit 7- FTC Order Denying Respondent’s Motion To Disqualify The

Exhibit 8 - Transcript of FTC Scheduling Conference, FTC Docket No. 9324