Retail Grocery and Drug Firms

Corporations Code Title 1, Division 3, Part 14 deals with retail grocery firms and retail drug firms under the California Corporation Law.

Section 14700 prohibits any person from acquiring, directly or indirectly, any voting securities or assets of a retail grocery firm or retail drug firm unless both parties give, or in the case of a tender offer, the acquiring party gives, written notice to the Attorney General in accordance with this part. The terms “acquiring party,” “retail drug firm,” and “retail grocery firm” are defined.

Section 14701 requires the written notice to be filed with the Attorney General no less than 180 days before the acquisition is made effective. The notice is to be made under oath or affirmation, and shall comply with the requirements of law. The notice required to be given to the Attorney General is to comply with either of two specified actions.

The Attorney General is required to charge the acquiring party a filing fee for the cost to the Attorney General to receive, review, and analyze any notice under this section, which cannot exceed the reasonable regulatory costs to the Attorney General incident to performing its administrative duties under this section.

Section 14702 authorizes the Attorney General to adopt regulations to effectuate this part that are necessary or appropriate for the protection of workers, consumers, and the public interest.

Section 14703 states that, if the Attorney General determines that they cannot complete an evaluation of the competitive effects of the acquisition before the parties intend to consummate the acquisition, the Attorney General may seek an order from the Superior Court of the County of Sacramento temporarily staying or preliminarily enjoining the acquisition for such time as is reasonably necessary for the Attorney General to complete the analysis.

Section 14704 requires the Attorney General, with certain types of acquisitions, to consider the extent to which information required to be submitted to the United States Department of Justice and the Federal Trade Commission may satisfy some or all of the need to carry out the applicable state laws. Any information that has been submitted to the Attorney General under provisions of federal law rendering them confidential is deemed to be confidential under California law.

Section 14706 explains that nothing in this section or any other law precludes the Attorney General or any person from bringing an action pursuant to this article or any other law to enjoin or seek divestiture of assets or ownership interests obtained in a completed acquisition or otherwise to restore competition.

Section 14707 provides that the failure to provide written notice, amendment to written notice, or other material required to be provided pursuant to this part are a violation of this part. The Attorney General is entitled to injunctive relief and other equitable remedies a court deems appropriate for a violation of this part.