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In a lawsuit, Tempur Sealy and Mattress Firm claim the FTC court

Published: October 8, 2024
Author: HFT

Houston: Tempur Sealy International and Mattress Firm are suing the Federal Trade Commission in federal court in Houston, alleging the government agency should not be able to arbitrate the proposed acquisition of Mattress Firm by its administrative court.

The action asks the court to rule that the agency cannot challenge the deal through its own administrative proceeding on the grounds that it violates the companies’ constitutional protections. It was filed today in the U.S. Court in the Southern District of Texas, the same court where the FTC filed its suit to block the proposed $4 billion acquisition.

The legal dispute over whether the proposed deal should proceed is further complicated by the complaint. This week’s earlier,A two-month extension was sought by Tempur Sealy & Mattress Firm during the administrative hearing scheduled for December 4 in Washington, D.C.

The FTC’s lawsuit opposing the merger is now set to start on November 12.

The FTC “flouts the constitutional requirement” that the “judicial power” can only be tried by an Article III court—a federal court created under the U.S. Constitution—according to Tempur Sealy & Mattress Firm’s filing today.

The businesses go on to claim that “a private agreement between (Tempur Sealy & Mattress Firm) for the transfer of property is void” as a result of the FTC’s action to halt the acquisition. The argument describes the group’s administrative procedure process as intrinsically biased and names the FTC and its five commissioners who voted 5-0 to stop the acquisition as defendants.

According to the lawsuit, “the FTC brought its challenge to Plaintiffs’ private rights in its own administrative proceeding.” The same five Commissioners who first voted to oppose the Plaintiffs’ merger conclude the administrative process, which was initially presided over by an administrative law judge employed by the Federal Trade Commission. Furthermore, it’s an administrative process that, predictably enough, the FTC virtually always prevails in. More is required by the Constitution; the FTC must file its merger challenge in an Article III court.

According to Scott Thompson, the chairman and CEO of Tempur Sealy, “the bedding industry is highly competitive, with thousands of brick-and-mortar storefronts and a vast online marketplace.” “Tempur Sealy and Mattress Firm’s merger will provide opportunities for workers and additional benefits for consumers,”from improved client buying experiences to increased product innovation and fortifying the company’s overall financial position. In the next trial in federal court, which is the appropriate venue to handle this matter, we plan to strongly defend our transaction.”

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