California v. American Stores
492 U.S. 1301 (1989)

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U.S. Supreme Court

California v. American Stores, 492 U.S. 1301 (1989)

California v. American Stores Company

No. A-151 (89-258)

Decided Aug. 22, 1989

492 U.S. 1301

ON APPLICATION FOR STAY

The request of applicant, the State of California, for a stay of the Court of Appeals' mandate is granted, pending disposition of its petition for a writ of certiorari and conditioned upon the posting of a bond with the Clerk of the District Court. The State, through its attorney general on behalf of himself and as parens patriae, filed in the District Court an action as a private plaintiff to enjoin the merger of respondents, the largest and fourth largest retail grocery chains in the State, contending that the merger would lessen competition in the relevant market in violation of the Clayton and Sherman Acts and state law. The court granted the motion for a preliminary injunction and ordered respondents to operate independently and to refrain from merging or integrating their assets and businesses during the pendency of the action. The Court of Appeals remanded, finding, inter alia, that the order enjoining respondents from integrating their operations amounted to indirect divestiture, a remedy not available to private plaintiffs under the Clayton Act. However, it granted a stay of its mandate to allow the State to file a petition for a writ of certiorari. The District Court conditioned the stay on the posting of a bond. The State declined to post the bond, and the Court of Appeals vacated its stay and ordered issuance of the mandate. The State has set forth sufficient reasons for granting a stay. It has made an adequate showing of irreparable injury, since other appropriate injunctive relief may be inadequate to remedy the injury. There is also a reasonable probability that the petition will be granted, given the conflict among the lower courts on the important and recurring issue whether divestiture constitutes injunctive relief within the meaning of the Clayton Act and the need for uniform enforcement of federal antitrust laws. Moreover, the fact that the weight of academic authority favors a reading of the Act that would permit divestiture as a remedy in private actions suggests that there is at least a fair prospect that a

Page 492 U. S. 1302

majority of the Court will vote to reverse the decision below. Finally, the equities favor the State, since the harm of a substantial lessening of competition in the relevant market outweighs the harm that respondents may suffer as the result of the stay.

Justice O'CONNOR, Circuit Justice.

Applicant, the State of California, requests a stay of the mandate of the judgment of the United States Court of Appeals for the Ninth Circuit, pending disposition of its petition for a writ of certiorari.

Applicant, through its attorney general on behalf of himself and as parens patriae, brought the underlying action as a private plaintiff to enjoin the merger of respondent Lucky Stores, Inc., the largest retail grocery chain in California, and respondent American Stores Company, operator of Alpha Beta, the fourth largest retail grocery chain in California. * Applicant contends that the merger would substantially lessen competition in the relevant markets, in violation of § 7 of the Clayton Act, 38 Stat. 731, as amended, 15 U.S.C. § 18, § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U.S.C. § 1, and California's Cartwright Anti-trust

Page 492 U. S. 1303

and Unfair Competition Acts, Cal.Bus. & Prof.Code §§ 16700-16761 and 17200-17208 (West 1987 and Supp.1989).

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