IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

FEDERAL TRADE COMMISSION,
Washington, D.C. 20580

Plaintiff,

v.

RITE AID CORPORATION, 30 Hunter Lane Camp Hill, Pennsylvania 17011

Defendant.

Civil Action No.

COMPLAINT

Plaintiff, the Federal Trade Commission, by its undersigned attorneys designated by it, brings this action under Sections 16(a)(1) and 5(l) of the Federal Trade Commission Act, as amended, 15 U.S.C. §§ 56(a)(1) and 45(l), for civil penalties and for such other equitable relief as the court deems appropriate, for violations of a final order to cease and desist issued by the Federal Trade Commission.

JURISDICTION AND VENUE

1. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337, 1345, and 1355, and 15 U.S.C. §§ 45(l) and 56(a)(1).

2. Venue in this District is proper by virtue of the fact that defendant is operating and doing business in this District.

3. Rite Aid Corporation ("Rite Aid") is made a defendant herein. Rite Aid is a Delaware corporation with its principal place of business located at 30 Hunter Lane, Camp Hill, Pennsylvania 17011. Rite Aid is engaged in the retail drugstore business in the United States.

4. At all times relevant to this proceeding, Rite Aid has been engaged in commerce, as "commerce" is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44.

PRIOR COMMISSION PROCEEDINGS

5. In a proceeding entitled In the Matter of RITE AID CORPORATION, FTC Docket No. C-3546, the Commission issued an administrative complaint charging Rite Aid with violating Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45. A copy of the administrative complaint is attached and made a part hereof. The administrative complaint alleged, inter alia, that the April 29, 1994, stock purchase agreement ("Agreement") entered into by Rite Aid with LaVerdiere’s Enterprises, Inc. ("LEI") violated Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45. The complaint alleged that the acquisition would lessen competition in the sale of prescription drugs in retail stores in Bucksport, Maine; Lincoln, Maine; and Berlin, New Hampshire.

6. At the time Rite Aid and LEI entered into the Agreement, LEI operated 72 retail stores, 67 of which had full- service pharmacies.

7. On December 15, 1994, the Commission issued its final order in FTC Docket No. C-3546 ("Order"), with the consent of Rite Aid. The Order was duly served upon Rite Aid and became final on December 21, 1994. The Order has not at any time been modified or set aside, and is now and has been at all times since December 21, 1994, in full force and effect. A copy of the Order is attached and made a part hereof.

8. Paragraph II of the Order requires, in part, that Rite Aid divest, to an acquirer or acquirers that receive the prior approval of the Commission, the defined pharmacy assets to be divested at three of six locations ("Assets to be Divested") within twelve months of the date the Order becomes final. Specifically, in each of the three specified cities or towns, Rite Aid was required to divest either the defined LEI pharmacy assets or the defined Rite Aid pharmacy assets.

9. Paragraph III of the Order requires, in part, that the Commission may appoint a trustee to divest the Assets to be Divested, if Rite Aid has not divested them, as required.

10. Paragraph V of the Order provides, in part, that within sixty days after the Order becomes final and every sixty days thereafter until Rite Aid has fully complied with the provisions of Paragraphs II and III thereof, Rite Aid shall submit to the Commission a verified written report ("sixty day report") setting forth in detail the manner and form of its compliance with those provisions.

11. During the period from December 21, 1994, through December 21, 1995, Rite Aid failed to divest the Assets to be Divested, as required by the Order.

12. The sixty day reports filed by Rite Aid during the period from December 21, 1994, through December 21, 1995, failed to contain information sufficient to demonstrate that Rite Aid attempted to divest the Assets to be Divested as required by the Order.

13. On or about February 19, 1996, the Commission, pursuant to Order Paragraph III, appointed R. Steven Thing trustee ("Trustee") to divest the Assets to be Divested.

14. On or about November 21, 1996, the Trustee filed his Application for Approval of Divestiture of the Berlin, New Hampshire Assets to be Divested to Maxi Drug, Inc.

15. On or about January 7, 1997, the Federal Trade Commission granted its approval to divest to Maxi Drug, Inc.; and the Trustee divested the Berlin, New Hampshire, Assets to be Divested on or about January 16, 1997.

16. On or about December 9, 1996, the Trustee filed his Application for Approval of Divestiture of the Lincoln, Maine, Assets to be Divested to Hannaford Bros. Co.

17. On or about January 2, 1997, the Federal Trade Commission granted its approval to divest to Hannaford Bros. Co; and the Trustee divested the Lincoln, Maine, Assets to be Divested on or about March 10, 1997.

18. As a result of Rite Aid’s failures to divest, consumers were denied the full benefits of competition anticipated by the Order, and the remedial purposes of the Order were not achieved.

Violations Alleged

Count 1

19. The violations alleged in Paragraphs 11 - 18 hereof are repeated and realleged as though fully set forth herein.

20. Rite Aid failed to divest the Berlin, New Hampshire, Assets to be Divested, as required by Paragraph II.A. of the Order.

21. Rite Aid was continuously in violation of the Order for each day of the period from December 22, 1995 through January 16, 1997.

Count 2

22. The violations alleged in Paragraphs 11 - 18 hereof are repeated and realleged as though fully set forth herein.

23. Rite Aid failed to divest the Lincoln, Maine, Assets to be Divested, as required by Paragraph II.A. of the Order.

24. Rite Aid was continuously in violation of the Order for each day of the period from December 22, 1995 through March 10, 1997.

Count 3

25. The violations alleged in Paragraphs 11 - 18 hereof are repeated and realleged as though fully set forth herein.

26. Rite Aid failed to divest the Bucksport, Maine, Assets to be Divested, as required by Paragraph II.A. of the Order.

27. Rite Aid continues to be in violation of the Order for each day of the period from December 22, 1995 through the date it divests such Assets to be Divested.

PRAYER

WHEREFORE PLAINTIFF PRAYS:

1. That this Court adjudge and decree that, with respect to the violation alleged in Count 1, the defendant was in violation of the Order from December 22, 1995, through January 16, 1997.
2. That this Court adjudge and decree that, with respect to the violation alleged in Count 2, the defendant was in violation of the Order from December 22, 1995, through March 10, 1997.
3. That this Court adjudge and decree that, with respect to the violation alleged in Count 3, the defendant is in violation of the Order from December 22, 1995, through the date this judgment is entered.
4. That this Court enter judgment against the defendant for an appropriate civil penalty as allowed by law, 15 U.S.C. § 45(l).
5. That plaintiff be awarded costs and disbursements of this action and such other and further relief as the Court may deem just and proper.

Dated: , 1998

FOR THE PLAINTIFF FEDERAL TRADE COMMISSION: