California v. American Stores Co.
United States Supreme Court
495 U.S. 271 (1990)
American Stores Company (American) (defendant) is a supermarket chain operating in California. American executed a merger with a major competitor that more than doubled the number of supermarkets owned by American in California. Believing that the merger constituted an antitrust violation, the State of California (the state) (plaintiff) brought an action against American as a private plaintiff. The state claimed that the merger would harm consumers in 62 cities in California and sought a preliminary injunction that would require American to operate the newly acquired stores independently until resolution of the case. The state also sought divesture consisting of an injunction requiring American to divest itself of the assets in California that American had acquired through the merger. The district court held in favor of the state and issued an order for American to divest. American appealed, arguing that the district court did not have the authority to order divesture. The court of appeals found for American and reversed the decision of the district court. The state appealed the decision.
Rule of Law
Holding and Reasoning (Stevens, J.)
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