P.M. BRIEFING : Appeals Court Overturns Injunction Against Lucky, Alpha Beta Merger

A federal appeals court today overturned a judge’s order last September that blocked the consolidation of the Lucky and Alpha Beta supermarket chains, ruling that California had no right to undo the merger.

The U.S. 9th Circuit Court of Appeals said there is evidence that the $2.5-billion buyout would lessen competition in the state, creating a chain that controlled 24% of the supermarket business statewide. Lucky is already the state’s largest market chain, with 340 stores.

But the court said the merger had already won Federal Trade Commission approval and been completed by the time California Atty. Gen. John Van de Kamp challenged it.

“California could have sued several months earlier and attempted to enjoin the merger before the stock sale was completed,” said Judge J. Clifford Wallace in the 3-0 ruling. “The attorney general chose not to do so. California must accept the consequences of his choice.”

In his suit last September on behalf of the state, Van de Kamp said the merger could cost California shoppers $400 million by lessening competition and driving up prices.

Michael Strumwasser, special counsel to Van de Kamp, declined comment, saying he had not yet read the ruling.