Attorney General Kris Mayes wants more than $972,000 from two grocery giants for the work her office put into blocking their attempted merger in 2024.
Legal papers filed in federal court in Oregon say that's what Arizona spent in legal fees and costs fighting the proposed bid by Kroger – the parent company of Fry's Foods, Smith's and other grocery stores – to obtain the Albertsons chain and Safeway, which Albertsons had previously acquired.
It's not just Mayes seeking reimbursement. Several other states who were involved in the lawsuit, led by the Federal Trade Commission, also want some money. And all told, their requests total more than $10.3 million.
But the attorneys for the affected states are telling U.S. District Court Judge Adrienne Nelson that the amount is justifiable, citing a filing by Kroger with the Securities and Exchange Commission that it spent more than $1 billion over three years in the unsuccessful merger.
"Thus even when factoring in the FTC's role in the proceedings, the states' request in this case is reasonable,'' they wrote.
There was no immediate response from either company.
Mayes got involved in 2023 when the proposed merger was announced.
In a statement, Kroger said the merger would benefit not just shareholders but would lower prices, provide more choices and establish a more competitive alternative to "large, non-union retailers,'' a reference to Walmart. Though not all Kroger stores are unionized, either.
It also promised to invest $1.3 billion into Albertsons.
That led to Mayes, along with other attorneys general, starting her own probe into what state laws could be violated with the merger.
All that, according to the lawsuit, cost money. There was a database shared by the states to deal with the more than 19 million documents gathered.
"States also issued their own investigative demands, interviewed witnesses in the industry, attended FTC investigative hearings, spoke to consumers and grocers, and conducted market research, the lawyers told Nelson.
In 2024 the FTC sued, with Arizona and other states joining in – and, incurring more costs, the state officials said.
Ultimately federal and state judges issued an order enjoining the $24.6 billion merger. The chains ultimately gave up and remain separate.
But none of that, the state attorneys general say, excuses the two chains from reimbursing them for all of their legal fees and investigative costs, separate from the FTC.
"Each of the states spent a significant amount of time investigating and prosecuting their opposition to the proposed merger,'' they told the judge. "The hours for both investigating and prosecuting the states' antitrust claims for injunctive relief are recoverable.''
Mayes herself said at the time that her office was reviewing things like whether the combination would enable the surviving entity to drive up prices in Arizona, whether stores would close, and how it would affect the 35,000 Arizonans working for both. That also included a series of town halls across the state to hear from residents on how the merger would affect them and their community.
The attorneys pursuing the legal fees estimated in the court documents that the eight states and the District of Columbia – separate from the FTC – spent a total of about 15,000 hours involving 45 attorneys, 16 paralegals and other support staff. And they said the $774 an hour they want for lawyers is reasonable.
"The proposed merger between Albertsons and Kroger represented a significant threat to the competitive market for grocery stores that is fundamental to maintaining lower costs for food,'' the lawyers for the state told the judge.
"Defendants were willing to spend $1.5 billion to see the merger through,'' they said. "The states' request for attorneys' fees and expenses is reasonable in light of the complexity of the issues, the significant impact they had, and the resources required to succeed.''
The bid for legal fees is separate from the state of Washington, which filed its own legal action in state court to block the merger and was awarded $28.4 million.
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