Van de Kamp’s Appeal Could Succeed, O’Connor Says

California Atty. Gen. John K. Van de Kamp would have “a fair prospect” of winning his U.S. Supreme Court appeal against American Stores’ planned merger of the Lucky and Alpha Beta supermarket chains, according to a non-binding opinion by Supreme Court Justice Sandra Day O’Connor.

In the seven-page document, disclosed Wednesday, O’Connor also said there is a “reasonable probability” that at least four justices--the required number--would approve a review of the antitrust case.

Supreme Court observers said such wording is standard when a High Court justice decides to grant an emergency request for relief based on the merits of a case.

O’Connor, who responds to requests involving cases of the U.S. 9th Circuit Court of Appeals in San Francisco, issued the informal opinion to explain her decision the day before to grant Van de Kamp’s emergency request to continue to bar the merger.

Last Friday, the appeals court cleared the way for combining the chains. The decision led to Van de Kamp’s appeal to the U.S. Supreme Court.

Most Requests Denied

One attorney noted that most emergency requests are denied, making it significant that O’Connor agreed. But it is not unusual for the justices subsequently to refuse to review a case.

O’Connor also clarified her order, noting that it was conditioned on the posting by Van de Kamp of a “good and sufficient bond,” the size of which is to be determined by the U.S. District Court in Los Angeles.

Last month, District Judge David Kenyon ordered Van de Kamp to post a $16.3-million bond if he wanted to pursue the appeal, to cover potential losses at American Stores. Van de Kamp appealed, saying he should be exempt from posting a bond because he was suing on behalf of consumers. Van de Kamp has vowed to forgo the Supreme Court appeal rather than post a bond.

Therefore, the appeal appears to hinge on whether he would reverse himself in light of O’Connor’s encouraging statements.

In a statement Wednesday, Andrea Sheridan Ordin, chief assistant attorney general, said: “We are pleased that Justice O’Connor believes that there is a reasonable probability that the Supreme Court will vote to hear our petition but are disappointed that the justice has returned the case to the District Court to set a bond.”

Ordin added that the attorney general’s office intends to file papers today in response to the order.

Intriguing Conflict

In her opinion, O’Connor said she agreed with the lower courts’ findings that the California attorney general “has made an adequate showing of irreparable injury” to consumers should the merger go through. Van de Kamp has argued that the merger would lessen competition and result in higher food prices.

She also noted that the case poses an intriguing conflict among various federal courts.

The 9th Circuit Court had ruled that Van de Kamp could not, under federal antitrust laws, directly or indirectly force American Stores to sell stores. O’Connor noted that other courts have disagreed, saying that divestiture is a remedy available “in appropriate circumstances.”

“Given the conflict . . . and the need for uniform enforcement of federal antitrust laws, I think it fair to say that there is a reasonable probability that the petition for a writ of certiorari will be granted in this case,” O’Connor wrote.

Legal Delays

A petition for a writ of certiorari is a request for review. The Supreme Court, now in recess, is scheduled to reconvene Oct. 2.

American Stores, based in Salt Lake City, paid $2.5 billion for Lucky Stores of Dublin, Calif., in June, 1988. At the time, it said it planned to integrate its Alpha Beta operation with Lucky to reap savings in advertising, distribution and other costs.

Since September, legal delays stemming from Van de Kamp’s challenge have prevented American Stores from putting the chains together. The company estimates that the delays are costing $1.5 million a week, not including legal fees.