[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Notices]
[Pages 8643-8653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5033]



-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE
Antitrust Division


United States v. Browning-Ferris, Inc.; Proposed Final Judgment 
and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16 (b)-(h), that a proposed Final Consent 
Judgment, Stipulation, and Competitive Impact Statement have been filed 
with the United States District Court for the District of Columbia in 
the above-captioned case.

[[Page 8644]]

    On February 15, 1996, the United States filed a civil antitrust 
Complaint to prevent and restrain Browning-Ferris Industries, Inc. 
(``BFI''), Browning-Ferris Industries of Iowa, Inc. (``BFII''), and 
Browning-Ferris Industries of Tennessee, Inc. (``BFIT'') from 
maintaining and enhancing their market power by using contracts that 
have restrictive and anticompetitive effects, in violation of Section 2 
of the Sherman Act, 156 U.S.C. 2.
    The Complaint alleges that: (1) Defendant BFIT has market power in 
small containerized hauling service in the Memphis, TN market and 
Defendant BFII has market power in small containerized hauling service 
in the Dubuque, IA market; (2) Defendants, acting with specific intent, 
used and enforced contracts containing restrictive provisions to 
exclude and constrain competition and to maintain and enhance their 
market power in small containerized hauling service in those markets; 
(3) in the context of their large market shares and market power, and 
Dubuque markets has had anticompetitive and exclusionary effects by 
significantly increasing barriers to entry facing new entrants and 
barriers to expansion faced by small incumbents; (4) Defendants' market 
power is maintained and enhanced by their use and enforcement of those 
contracts; and, (5) as a result, there is a dangerous probability that 
Defendants will achieve monopoly power in the Memphis and Dubuque 
markets.
    The proposed Final Judgment would require that in dealing with 
small-container customers in the Memphis and Dubuque markets, 
Defendants only enter into contract containing significantly less 
restrictive terms than the contracts they now use in those markets. 
Specifically, the Defendants will be prohibited from using any contract 
with small-container customers in the Memphis and Dubuque markets that:
    (1) Has an initial term longer than two years (unless a longer term 
is requested by the customer and other conditions are met);
    (2) Has any renewal term longer than one year;
    (3) Requires the customer give notice of termination more than 30 
days prior to the end of a term;
    (4) Requires the customer to pay liquidated damages over 3 times 
the greater of its prior monthly charge or its average monthly charge 
during the first year of the initial term of the customer's contract, 
or over 2 times the greater of its prior monthly charge or its average 
monthly charge thereafter;
    (5) Is not labeled ``Contract for Solid Waste Services'' and is not 
easily readable; or
    (6) Requires a customer to give BFI the right or opportunity to 
provide hauling services for all solid wastes and recyclables, unless 
the customer affirmatively indicates that is its desire.
    The proposed Consent Final Judgment also requires that the 
Defendants notify customers in the two relevant markets of these 
changes and prohibits the Defendants from enforcing terms in existing 
contracts that are inconsistent with the settlement in those markets. 
Furthermore, Defendants would be prohibited from enforcing provisions 
in existing contracts that are inconsistent with the Final Judgment.
    Public comment is invited within the statutory 60-day period. Such 
comments will be published in the Federal Register and filed with the 
Court. Comments should be addressed to Anthony V. Nanni, Chief, 
Litigation I Section, U.S. Department of Justice, Antitrust Division, 
1401 H St., NW., Suite 4000, Washington, DC 20530. (phone 202/307-
6576).
Rebecca P. Dick,
Deputy Director of Operations.

United States District Court for the District of Columbia

    In the matter of United States of America, Plaintiff, v. 
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries 
of Tennessee, Inc., and Browning-Ferris Industries, Inc., 
Defendants.

[Civil Action No.: 1-96-V00297]

    Filed: February 15, 1996.

Stipulation

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto for the purposes of this 
proceeding. Defendant Browning-Ferris Industries, Inc. transacts 
business and is found within the district. Defendants Browning-Ferris 
Industries of Tennessee, Inc. and Browning-Ferris Industries of Iowa, 
Inc. consent to personal jurisdiction in this proceeding. Defendants 
waive any objections as to venue and stipulate that venue for this 
action is proper in the District of Columbia;
    2. The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. 16 (b)-(h)), and without further notice to any party or other 
proceedings, provided that Plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed Final 
Judgment by serving notice thereof on the Defendants and by filing that 
notice with the Court; and
    3. Defendants agree to be bound by the provisions of the proposed 
Final Judgment pending its approval by the Court. If the Plaintiff 
withdraws its consent or if the proposed Final Judgment is not entered 
pursuant to this Stipulation, this Stipulation shall be of no effect 
whatsoever, and the making of this Stipulation shall be without 
prejudice to any party in this or in any other proceeding.

    Dated this 15th day of February, 1996.

    Respectfully submitted,

    For the plaintiff the United States of America:
Anne K. Bingaman,
Assistant Attorney General, Antitrust Division, U.S. Department of 
Justice.
Lawrence R. Fullerton,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director of Operations.
Anthony V. Nanni,
Chief, Litigation I Section.
Willie L. Hudgins, Jr.,
DC Bar #37127.
Nancy H. McMillen.
Peter H. Goldberg,
DC Bar #055608.
Evangelina Almirantearena,
Attorneys, U.S. Department of Justice, Antitrust Division, City Center 
Building, Suite 4000, 1401 H Street, NW., Washington, DC 20530, 202/
307-5777.
    For Defendants Browning-Ferri Industries of Iowa, Inc., 
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris 
Industries, Inc.:
David Foster,
Esquire, DC Bar #358247, Fulbright & Jaworski L.L.P., 801 Pennsylvania 
Ave., NW, Market Square, Washington, DC 20004-2604, 202/662-0200.
Richard N. Carrell,
Esquire, Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100, 
Houston, Texas 77010-3095, 713/651-5151.
Rufus Wallingford,
Esquire, Senior Vice President & General Counsel, Browning-Ferris 
Industries, Inc., 757 N. Eldridge at Memorial Drive, Houston, Texas 
77079, 713/870-8100.
Lee J. Keller,
Esquire, Senior Attorney, Browning-Ferris Industries, Inc., 757 N. 
Eldridge at memorial Drive, Houston, Texas 77079, 713/870-8100.
    Attorneys for Defendants.
    
[[Page 8645]]


United States District Court for the District of Columbia

    In the matter of United States of America, Plaintiff, v. 
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries 
of Tennessee, Inc., and Browning-Ferris Industries, Inc., 
Defendants.

[Civil Action No.: 1-96-V00297]

    Filed: Feb. 15, 1996.

Final Judgment

    Whereas Plaintiff, United States of America, having filed its 
Complaint in this action on February 15, 1996, and Plaintiff and 
Defendants, by their respective attorneys, having consented to the 
entry of this Final Judgment without trial or adjudication of any issue 
of fact or law; and without this Final Judgment constituting any 
evidence or admission by any party with respect to any issue of fact or 
law;
    Now, therefore, before any testimony is taken, and without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is hereby
    Ordered, adjudged and decreed as follows:

I. Jurisdiction

    This Court has jurisdiction of the subject matter of this action 
and of the persons of the Defendants, Browning-Ferris Industries, Inc., 
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris 
Industries of Iowa, Inc. The Complaint states a claim upon which relief 
may be granted against the Defendants under Section 2 of the Sherman 
Act, 15 U.S.C. 2.

II. Definitions

    As used in this Final Judgment:
    (A) ``Memphis market'' means the counties of Shelby, TN; Fayette, 
TN; Crittenden, AK; DeSoto, MS; Marshall, MS; Tate, MS; and Tunica, MS.
    (B) ``Dubuque market'' means the counties of Dubuque and Jackson, 
IA.
    (C) ``Solid waste hauling'' means the collection and transportation 
to a disposal site of trash and garbage (but not construction and 
demolition debris; medical waste; hazardous waste; organic waste; or 
special waste, such as contaminated soil, or sludge; or recyclable 
materials) from residential, commercial and industrial customers. Solid 
waste hauling includes hand pick-up, containerized pick-up, and roll-
off service.
    (D) ``Defendants'' means defendant Browning-Ferris Industries, 
Inc., a Delaware corporation with its headquarters in Houston, Texas, 
defendant Browning-Ferris Industries of Tennessee, Inc., a Tennessee 
corporation with offices in Memphis, TN, and defendant Browning-Ferris 
Industries of Iowa, Inc., an Iowa corporation with offices in Des 
Moines, IA, and includes their officers, directors, managers, agents, 
employees, successors, assigns, parents and subsidiaries.
    (E) ``Small Container'' means a 1 to 10 cubic yard container.
    (F) ``Small Containerized Solid Waste Hauling Service'' means 
providing solid waste hauling service to customers by providing the 
customer with a Small Container that is picked up mechanically using a 
frontload, rearload, or sideload truck, and expressly excludes hand 
pick-up service, and service using stationary compactors.
    (G) ``Customer'' means a Small Containerized Solid Waste Hauling 
Service customer.

III. Applicability

    This Final Judgment applies to Defendants and to their officers, 
directors, managers, agents, and employees, successors, assigns, 
parents and subsidiaries, and to all other persons in active concert or 
participation with any of them who shall have received actual notice of 
this Final Judgment by personal service or otherwise. Nothing contained 
in this Final Judgment is or has been created for the benefit of any 
third party, and nothing herein shall be construed to provide any 
rights to any third party.

IV. Prohibited Conduct

    Defendants are enjoined and restrained as follows:
    (A) Except as set forth in paragraph IV (B) and (G), Defendants 
shall not enter into any contract with a Customer for a service 
location in the Memphis or Dubuque markets that:
    (1) Has an initial term longer than two (2) years;
    (2) Has any renewal term longer than one (1) year;
    (3) Requires that the Customer give Defendants notice of 
termination more than thirty (3) days prior to the end of any initial 
term or renewal term;
    (4) Requires that the Customer pay liquidated damages in excess of 
three times the greater of its prior monthly charge or its average 
monthly charge over the most recent six months during the first year it 
is a Customer of Defendants;
    (5) Requires that the Customer pay liquidated damages in excess of 
two times the greater of its prior monthly charge or its average 
monthly charge over the most recent six months after the Customer has 
been a Customer of Defendants for a continuous period in excess of one 
(1) year;
    (6) Is not easily readable (e.g., formatting and type-face) and is 
not labeled, in large letters, CONTRACT FOR SOLID WASTE SERVICES; or
    (7) Requires a Customer to give Defendants the right or opportunity 
to provide hauling service for recyclable or more than one type of 
solid waste hauling service for a Customer unless the Customer 
affirmatively indicates its desire for all such services on the front 
of the contract.
    (B) Notwithstanding the provisions of paragraph IV(A) of this Final 
Judgment. Defendants may enter into a contract with a Customer for a 
service location in the Memphis or Dubuque markets with an initial term 
in excess of two years provided that:
    (1) Defendants have not implemented any organized, management--
authorized sales or marketing plan designed, through pricing or other 
incentives, to induce Customers to use other than the form contracts 
Defendants are required herein to offer generally to Customers;
    (2) The Customer has the right to terminate the contract after 2 
years by giving notice to Defendants thirty (30) days or more prior to 
the end of that 2 year period; and,
    (3) The contract otherwise complies with the provisions of 
paragraph IV(A)(2)-(7).
    (C) From the date of filing of an executed Stipulation in the form 
attached hereto as Exhibit A, Defendants shall offer to new Customers 
with service locations in the Memphis and Dubuque markets only 
contracts that conform to the requirements of paragraphs IV(A) or (B) 
of this Final Judgment, except as provided in IV(G).
    (D) Except as provided in IV(G), Defendants shall send to all 
existing Customers with service locations in the Memphis and Dubuque 
markets with contracts having an initial term longer than 2 years and 
which otherwise do not conform with paragraph IV(B) a notice in the 
form attached hereto as Exhibit B (for Memphis customers) and as 
Exhibit C (for Dubuque customers) in accordance with the following 
schedule:
    (1) Defendants shall send notices to Customers with service 
locations in the Memphis market within ninety (90) days following entry 
of this Final Judgment; and
    (2) Defendants shall send notices to Customers with service 
locations in the Dubuque market within thirty (30) days following the 
entry of this Final Judgment.
    (E) Except as provided in IV(G), for each Customer with a contract 
having 

[[Page 8646]]
an initial term longer than 2 years and which otherwise does not 
conform to paragraph IV(B) that enters a renewal term 120 days after 
entry of this Final Judgment, Defendants shall send a reminder to that 
Customer in the form attached hereto as Exhibit D ninety (90) days or 
more prior to the effective date of the renewal term. This reminder may 
be sent to the customer as part of a monthly bill, but if it is, it 
must be displayed on a separate page and in large print.
    (F) Upon entry of this Final Judgment, Defendants may enforce 
existing contract provisions only to an extent consistent with this 
Final Judgment. (For example, if an existing service agreement provides 
for six months' liquidated damages, Defendants may only seek three 
months' worth of such damages, consistent with IV(A)(4)).
    (G) Notwithstanding the provisions of this Final Judgment, 
Defendants may enter into contracts with municipal or governmental 
entities that are not in compliance with paragraphs IV(A)-(F) provided 
that those contracts are awarded to Defendants on the basis of a formal 
request for bids or a formal request for proposals issued by the 
Customer.
    (H) Notwithstanding the provisions of this Final Judgment, 
Defendants shall not be required to do business with any Customer.

V. Reporting

    (A) To determine or secure compliance with this Final Judgment, 
duly authorized representatives of the Plaintiff shall, upon written 
request of the Assistant Attorney General in charge of the Antitrust 
Division, on reasonable notice given to Defendants at this principal 
offices, subject to any lawful privilege, be promised:
    (1) Access during normal office hours to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda and other documents 
and records in the possession, custody, or control of Defendants, which 
may have counsel present, relating to any matters contained in this 
Final Judgment.
    (2) Subject to the reasonable convenience of Defendants and without 
restraint or interference from them, to interview officers, employees, 
or agents of Defendants, who may have counsel present, regarding any 
matters contained in this Final Judgment.
    (B) Upon written request of the Assistant Attorney General in 
charge of the Antitrust Division, on reasonable notice given to 
Defendants at this principal offices, subject to any lawful privilege, 
Defendants shall submit such written reports, under oath if requested, 
with respect to any matters contained in this Final Judgment.
    (C) No information or documents obtained by the means provided by 
this Section shall be divulged by the Plaintiff to any person other 
than a duly authorized representative of the Executive Branch of the 
United States government, except in the course of legal proceedings to 
which the United States is a party, or for the purpose of securing 
compliance with this Final Judgment, or as otherwise required by law.
    (D) If at the time information or documents are furnished by 
Defendants to Plaintiff, Defendants represent and identify in writing 
the material in any such information or document to which a claim or 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and Defendants mark each pertinent page of such 
material ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then ten days notice shall be given 
by Plaintiff to Defendants prior to divulging such material in any 
legal proceeding (other than a grand jury proceeding) to which 
Defendants are not a party.

VI. Further Elements of Judgment

    (A) This Final Judgment shall expire on the tenth anniversary of 
the date of its entry.
    (B) Jurisdiction is retained by this Court over this action and the 
parties thereto for the purpose of enabling any of the parties thereto 
to apply to this Court at any time for further orders and directions as 
may be necessary or appropriate to carry out or construe this Final 
Judgment, to modify or terminate any of its provision, to enforce 
compliance, and to punish violations of its provisions.

VII. Public Interest

    Entry of this Final Judgment is in the public interest.

Entered: ________

UNITED STATES DISTRICT JUDGE

-----------------------------------------------------------------------

EXHIBIT A

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Browning-Ferris 
Industries of Iowa, Inc., Browning-Ferris Industries of Tennessee, 
Inc., and Browning-Ferris Industries, Inc., Defendants.

[Civil Action No.: 1-96-V00297]

    Filed: February 15, 1996.

Stipulation

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto for the purposes of this 
proceeding. Defendant Browning-Ferris Industries, Inc. transacts 
business and is found within the district. Defendants Browning-Ferris 
Industries of Tennessee, Inc. and Browning-Ferris Industries of Iowa, 
Inc. consent to personal jurisdiction in this proceeding. Defendants 
waive any objections as to venue and stipulate that venue for this 
action is proper in the District of Columbia;
    2. The parties consent that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. Sec. 16 (b)-(h)), and without further notice to any party or 
other proceedings, provided that Plaintiff has not withdrawn its 
consent, which it may do at any time before the entry of the proposed 
Final Judgment by serving notice thereof on the Defendants and by 
filing that notice with the Court; and
    3. Defendants agree to be bound by the provisions of the proposed 
Final Judgment pending its approval by the Court. If the Plaintiff 
withdraws its consent or if the proposed Final Judgment is not entered 
pursuant to this Stipulation, this Stipulation shall be of no effect 
whatsoever, and the making of this Stipulation shall be without 
prejudice to any party in this or in any other proceeding.

    Dated this ______th day of ________, 1996.

    Respectfully submitted,


[[Page 8647]]

    For the Plaintiff the United States of America.
Anne K. Bingaman,
Assistant Attorney General, Antitrust Division, U.S. Department of 
Justice.
Lawrence R. Fullerton,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director of Operations.
Anthony V. Nanni,
Chief, Litigation I Section.
Willie L. Hudgins, Jr.,
DD Bar #37127.
Nancy H. McMillen,
Peter H. Goldberg,
DC Bar #055608.
Evangelina Almirantearena,
Attorneys, U.S. Department of Justice, Antitrust Division, City Center 
Building, Suite 4000, 1401 H Street, NW., Washington, D.C. 20530, 202/
307-5777.
    For defendants Browning-Ferris Industries of Iowa, Inc., 
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris 
Industries, Inc.:
David Foster, Esquire,
DC Bar #358247, Fulbright & Jaworski, 801 Pennsylvania Ave., NW., 
Market Square, Washington, D.C. 20004-2604, 202/662-0200.

EXHIBIT B

Notice to Customers

    Dear Customer:
    BFI is offering a new two year contract to its small 
containerized solid waste hauling customers with service locations 
in [insert market here]. In most cases, this new contract will have 
terms that are more advantageous to customers than their current 
contracts. This new contract has the following features:
     an initial term of no longer than 2 years (unless you 
request a longer term);
     a renewal term of 1 year;
     at the end of your initial term, you may take no action 
and your contract will renew or you may choose not to renew by 
giving us notice at any time up to 30 days prior to the end of the 
initial term;
     if you request a contract with a term longer than 2 
years, you can cancel that contract by giving us notice at any time 
up to 30 days prior to the end of the first 2 years;
     you can choose to terminate the contract at any other 
time, but you will be required to pay, as liquidated damages, no 
more than 3 times the greater of your prior monthly or average 
monthly charge, but if you have been a customer continuously for 
more than 1 year, the liquidated damages would be reduced to 2 times 
the greater of your prior monthly or average monthly charge;
     you will be able to choose on the contract which 
specific types of waste hauling services you would like us to 
perform.
    On or before the termination date of your existing service 
contract, BFI will offer you continued service under the new 
contract. BUT AS AN EXISTING CUSTOMER, YOU WILL IMMEDIATELY GAIN THE 
ADVANTAGES OF THE REVISED CONTRACT SINCE BFI WILL NOT ENFORCE ANY 
PROVISION IN YOUR CONTRACT IN ANY MANNER INCONSISTENT WITH ONE OF 
THE NEW TERMS OFFERED ABOVE. THERE IS, THEREFORE, NO NEED TO SIGN A 
REVISED CONTRACT AT THIS TIME. HOWEVER, IF YOU WOULD LIKE TO ENTER A 
NEW CONTRACT IN THE MEANTIME, PLEASE SEND A LETTER TO [insert name 
and address] AND WE WILL CONTACT YOU.
    Thank you for your attention.

EXHIBIT C

Notice to Customers

    Dear Valued Customer:
    BFI is offering a new two year contract to all small 
containerized solid waste hauling customers with service locations 
in the countries of Dubuque and Jackson, IA. We would like to take 
this opportunity to offer this contract to you. Of course, if you 
prefer, you can continue with your existing contract.
    In most cases, this new contract will have terms that are more 
advantageous to customers than their current contracts. This new 
contract has the following features:

 an initial term of no longer than 2 years (unless you 
request a longer term);
 a renewal term of 1 year;
 you can choose not to renew the contract by simply giving 
us notice at any time up to 30 days prior to the end of your term;
 if you request a contract with a term longer than 2 years, 
you can cancel that contract by giving us notice at any time up to 
30 days prior to the end of the first 2 years;
 you can choose to terminate the contract at any other time, 
but you will be required to pay, as liquidated damages, no more than 
3 times the greater of your prior monthly or average monthly charge. 
If you've been a customer continuously for more than 1 year, the 
liquidated damages would be reduced to 2 times the greater of your 
prior monthly or average monthly charge;
 you will be able to choose on the contract which specific 
types of waste hauling services you would like us to perform.

    You may obtain a new contract containing these terms by calling 
[insert BFI contact and number].
    If you prefer, you may continue with your existing contract. If 
you retain your existing contract, we will not enforce any terms 
that are inconsistent with the new form contract terms.
    If you have any questions, please call [BFI contact person and 
phone number.]

EXHIBIT D

    REMINDER: Your contract will automatically renew 90 days from 
the date of this notice unless we receive your cancellation within 
60 days from the date of this notice.
    You may also obtain a new form contract for solid waste hauling 
services with some terms more advantageous to you than your current 
contract. We will send you a copy on request.
    Existing contract terms inconsistent with the new form will not 
be enforced against you.

United States District Court for the District of Columbia

    In the matter of United States of America, Plaintiff, v. 
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries 
of Tennessee, Inc., and Browning-Ferris Industries Inc., Defendants.

[Case Number: 1-96-V00297]

    JUDGE: Thomas Pennfield Jackson.
    DATE STAMP: February 15, 1996.

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h), 
files this Competitive Impact Statement relating to the proposed Final 
Judgment submitted for entry in this civil proceeding.

I. Nature and Purpose of the Proceeding

    On February 15, 1996, the United States filed a civil antitrust 
Complaint to prevent and restrain Browning-Ferris Industries, Inc. 
(``BFI''), Browning-Ferris Industries of Iowa, Inc. (``BFII''), and 
Browning-Ferris Industries of Tennessee, Inc. (``BFIT'') from using 
contracts that have restrictive and anticompetitive effects on small 
containerized hauling service markets in Memphis and Dubuque, in 
violation of Section 2 of the Sherman Act, 15 U.S.C. 2. As alleged in 
the Complaint, Defendants have attempted to monopolize small 
containerized hauling service in the Memphis and Dubuque geographic 
markets by using and enforcing contracts containing restrictive 
provisions to maintain and enhance their existing market power there.
    The Complaint alleges that: (1) Defendant BFIT has market power in 
small containerized hauling service in the Memphis, TN market and 
Defendant BFII has market power in small containerized hauling service 
in the Dubuque, IA market; (2) Defendants, acting with specific intent, 
used and enforced contracts containing restrictive provisions to 
exclude and constrain competition and to maintain and enhance their 
market power in small containerized hauling service in those markets; 
(3) in the context of their large market shares and market power, 
Defendants' use and enforcement of those contracts in the Memphis and 
Dubuque markets has had anticompetitive and exclusionary effects by 
significantly increasing barriers to entry facing new entrants and 
barriers to expansion faced by small incumbents; (4) Defendants' market 
power is maintained and enhanced by their use and enforcement of those 
contracts; and, (5) as a result, there is a dangerous probability that 
Defendants will achieve 

[[Page 8648]]
monopoly power in the Memphis and Dubuque markets.
    In its Complaint, Plaintiffs seeks, among other relief, a permanent 
injunction preventing Defendants from continuing any of the 
anticompetitive practices alleged to violate the Sherman Act, and thus 
affording fair opportunities for other firms to compete in small 
containerized hauling service in the Memphis and Dubuque markets.
    The United States and Defendants also have filed a Stipulation by 
which the parties consented to the entry of a proposed Final Judgment 
designed to eliminate the anticompetitive effects of Defendants' 
actions in the Memphis and Dubuque markets. Under the proposed Final 
Judgment, as explained more fully below, in dealing with small-
container customers in the Memphis and Dubuque markets, Defendants 
would only be permitted to enter into contracts containing 
significantly less restrictive terms than the contracts they now use in 
those markets. Furthermore, Defendants would be prohibited from 
enforcing provisions in existing contracts that are inconsistent with 
the Final Judgment.
    The United States and the Defendants have stipulated that the 
proposed Final Judgment may be entered after compliance with the APPA. 
Entry of the proposed Final Judgment would terminate the action, except 
that the Court would retain jurisdiction to construe, modify, or 
enforce the provisions of the proposed Final Judgment and to punish 
violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

    Browning-Ferris Industries, Inc. (``BFI''), is the world's second-
largest company engaged in the solid waste hauling and disposal 
business, with operations throughout the United States. Browning-Ferris 
Industries, Inc. had revenues of approximately $4 billion in its 1994 
fiscal year.
    Browning-Ferris Industries of Iowa, Inc. (``BFII'') is a subsidiary 
of BFI with its principal offices in Des Moines, IA. It is the largest 
solid waste hauling and disposal company in the Dubuque, IA market. 
BFII had revenues of over $2.6 million in its 1994 fiscal year.
    Browning-Ferris Industries of Tennessee, Inc., (``BFIT'') is also a 
subsidiary of BFI. It has its principal offices in Memphis, TN. It is 
the largest solid waste hauling and disposal company in the Memphis, TN 
market. BFIT had revenues over $40.9 million in its 1994 fiscal year.

A. The Solid Waste Hauling Industry

    Solid waste hauling involves the collection of paper, food, 
construction material and other solid waste from homes, businesses and 
industries, and the transporting of that waste to a landfill or other 
disposal site. These services may be provided by private haulers 
directly to residential, commercial and industrial customers, or 
indirectly through municipal contracts and franchises.
    Service to commercial customers accounts for a large percentage of 
total hauling revenues. Commercial customers include restaurants, large 
apartment complexes, retail and wholesale stores, office buildings, and 
industrial parks. These customers typically generate a substantially 
larger volume of waste than do residential customers. Waste generated 
by commercial customers is generally placed in metal containers of one 
to ten cubic yards provided by their hauling company. One to ten cubic 
yards containers are called ``small containers.'' Small containers are 
collected primarily by frontend load vehicles that lift the containers 
over the front of the truck by means of a hydraulic hoist and empty 
them into the storage section of the vehicle, where the waste is 
compacted. Service to commercial customers that use small containers is 
called ``small containerized hauling service.''
    Solid waste hauling firms also provide service to residential and 
industrial (or ``roll-off'') customers. Residential customers, 
typically households and small apartment complexes that generate small 
amounts of waste, use noncontainerized solid waste hauling service, 
normally placing their waste in plastic bags, trash cans, or small 
plastic containers at curbside.
    Industrial or roll-off customers include factories and construction 
sites. These customers either generate noncompactible waste, such as 
concrete or building debris, or very large quantities of compactible 
waste. They deposit their waste into very large containers (usually 20 
to 40 cubic yards) that are loaded onto a roll-off truck and 
transported individually to the disposal site where they are emptied 
before being returned to the customers' premises. Some customers, like 
shopping malls, use large, roll-off containers with compactors. This 
type of customer generally generates compactible trash similar to the 
waste of commercial customers, but in much greater quantities; it is 
more economical for this type of customer to use roll-off service with 
a compactor than to use a number of small containers picked up multiple 
times a week.

B. Relevant Product Market

    The relevant product market is a small containerized hauling 
service. There are no practical substitutes for this service. Small 
containerized hauling service customers will not generally switch to 
noncontainerized service in the event of a price increase, because it 
is too impractical and more costly for those customers to bag and carry 
their volume of trash to the curb for hand pick-up. Similarly, roll-off 
service is much too costly and the container takes up too much space 
for most small containerized hauling service customers. Only customers 
that generate the largest volumes of compactible solid waste can 
economically consider roll-off service, and for customers that do 
generate large volumes of waste, roll-off service is usually the only 
viable option.

C. Relevant Geographic Markets

    The relevant geographic markets are the Memphis market and the 
Dubuque market. Small containerized solid waste hauling services are 
generally provided in very localized areas. Route density (a large 
number of customers that are close together) is necessary for small 
containerized solid waste hauling firms to be profitable. In addition, 
it is not economically efficient for heavy trash hauling equipment to 
travel long distances from customers without collecting significant 
amounts of waste. Thus, it is not efficient for a hauler to serve major 
metropolitan areas from a distant base. Haulers, therefore, generally 
establish garages and related facilities within each major local area 
served.

D. Defendants' Attempt to Monopolize

    Defendant BFIT has market power in small containerized hauling 
service in the Memphis market. BFIT has maintained a very high market 
share for over 10 years--consistently in excess of 60 percent.
    Defendant BFII has market power in small containerized hauling 
service in the Dubuque market. BFII entered that market in 1979. It 
maintains a very high market share--in excess of 60 percent.
    There are substantial barriers to entry and to expansion into the 
small containerized hauling markets in Memphis and in Dubuque. A new 
entrant or small incumbent hauler must be able to achieve minimum 
efficient scale to be competitive. First, it must be able to generate 
enough revenues to cover significant fixed costs and overhead.

[[Page 8649]]

    Second, a new entrant or small incumbent hauler must be able to 
obtain enough customers to use its trucks efficiently. For example, it 
is not efficient to use a truck half a day because the firm doesn't 
have enough customers to fill up the truck.
    Third, a new entrant or small incumbent hauler needs to obtain 
customers that are close together on its routes (called ``route 
density''). Having customers close together enables a company to pick 
up more waste in less time (and generate more revenues in less time). 
The better a firm's route density, the lower its operating costs.
    Until a firm overcomes these barriers, the new entrant or small 
incumbent will have higher operating costs than Defendants in the 
relevant geographic markets, may not operate at a profit, and will be 
unable effectively to constrain pricing by Defendants in those markets.
    Defendant BFIT in the Memphis market and Defendant BFII in the 
Dubuque market have entered into written contracts with the vast 
majority of their small containerized hauling customers. Many of these 
contracts contain terms that, when taken together in the relevant 
markets where Defendants have market power, make it more difficult and 
costly for customers to switch to a competitor of Defendants and allows 
Defendants to bid to retain customers approached by a competitor.
    The contracts enhance and maintain Defendants' market power in the 
Memphis and Dubuque markets by significantly raising the cost and time 
required by a new entrant or small incumbent firm to build its customer 
base and obtain efficient scale and route density. Therefore, 
Defendants' use and enforcement of these contracts in the Memphis and 
Dubuque markets raise barriers to entry and expansion in those markets. 
Those contract terms are:
    a. A provision giving Defendants the exclusive right or opportunity 
to collect and dispose of all the customers' solid waste and 
recyclables;
    b. An initial term of three years;
    c. A renewal term of three years that automatically renews unless 
the customer sends Defendants a written notice of cancellation by 
certified mail more than 60 days from the end of the initial or renewal 
term; and
    d. A term that requires a customer that terminates the contract at 
any other time to pay Defendants, as liquidated damages, its most 
recent monthly charge times six (if the remaining term is six or more 
months) or its most recent monthly charge times the number of months 
remaining under the contract (if the remaining term is less than six 
months).
    The appearance and format of the contracts also enhances 
Defendants' ability to use the contracts to maintain their market power 
in these markets. The provisions that make it difficult for a customer 
to switch to a competing hauler are not obvious to customers in the 
relevant markets. The document is not labeled ``Contract'' so its 
legally binding nature is not always apparent to the customer. Also, 
all the restrictive provisions mentioned above are in small print and 
the provision described in (d) is on the back of the document.
    Defendants' use and enforcement of the contracts described above in 
the Memphis and Dubuque markets have raised the barriers already faced 
by new entrants and small existing firms in those markets. Defendants' 
use and enforcement of the contracts has reduced the likelihood that 
customers will switch to a Defendant's competitor. Given Defendants' 
market power, this has made it more difficult for competitors to 
achieve efficient scale, obtain sufficient customers to use their 
trucks efficiently, and develop sufficient route density to be 
profitable and to constrain Defendants' pricing in those markets.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment will end the unlawful practices 
currently used by Defendants to perpetuate and enhance their market 
power in the Memphis and Dubuque markets. It requires Defendants to 
offer less restrictive contracts to small containerized hauling 
customers in the Memphis and Dubuque markets.\1\

    \1\ The proposed Final Judgment applies to all contracts entered 
into by Defendants with customers for service locations in the 
relevant markets except contracts described in Paragraph IV(G). 
Contracts awarded to Defendants by municipal or government entities 
as a result of a formal request for bids or a formal request for 
proposals need not contain the provisions dictated by the proposed 
Final Judgment. These contracts were excluded from the decree to 
assure that competition for such bids would not be adversely 
affected by preventing Defendants from bidding.
---------------------------------------------------------------------------

    In particular, Paragraphs IV (A) and (B) prohibit Defendants from 
entering into contracts containing the type of restrictive terms 
described above. Paragraphs IV (C), (D), (E), and (F) are designed to 
bring existing contracts into compliance with the proposed Final 
Judgment on an expeditious basis.

A. Prohibition of Contract Terms and Formats

    The contracts used most frequently by Defendants in the relevant 
markets have an initial term of three years and renew automatically and 
perpetually for additional three-year terms unless cancelled by the 
customer. In these markets, given that the Defendants have market power 
and a vast majority of their existing customers are subject to such 
contracts, the long initial term and long renewal terms prevent new 
entrants and small incumbents, no matter how competitive, from quickly 
obtaining enough customers that are close together to be profitable. 
Shortening the initial term and the renewal term will allow competitors 
to compete for more of the customer base each year and, if they compete 
effectively, to obtain efficient scale and route density more quickly. 
This, in turn, will enhance competition in the relevant markets and 
will help offset Defendants' market power.
    Paragraph IV(A)(1) prohibits Defendants from using contracts for 
service locations in the Memphis and Dubuque markets that have an 
initial term longer than two years, except under certain very limited 
circumstances.
    A contract with an initial term in excess of two years in the 
relevant markets is permitted, under limited circumstances, pursuant to 
Paragraph IV(B) of the proposed Final Judgment, but the contracts must 
otherwise conform to the Final Judgment. The United States is aware 
that some customers, for valid business reasons such as long-term price 
assurance, want contracts with an initial term longer than two years. 
Paragraph IV(B) is intended to permit customers who want them to have 
such contracts, while ensuring that customers who have not made such a 
choice do not, nevertheless, find themselves with long contracts. Under 
Paragraph IV(B)(1), Defendants may sign a contract of longer than two 
years with a customer, but only if the Defendants have not implemented 
any organized, management-authorized sales or marketing plan designed, 
through pricing or other incentives to induce customers to use other 
than the form contracts Defendants are required to offer by the 
proposed Final Judgment. Even if the customer signs a contract with an 
initial term longer than two years, the customer retains the right to 
terminate that contract at the end of the first 2 years without payment 
of any liquidated damages, pursuant to Paragraph IV(B)(2). Paragraph 
IV(B) was included to give Defendants the ability to contract with 
customers who truly want a longer term, for the United States 
anticipates that contracts with initial terms longer than two years 
will be the exception, not the rule.

[[Page 8650]]

    Paragraph IV(A)(2) prohibits Defendants from signing a contract 
with a renewal term longer than one year in length, down from the 
three-year renewal term used as a standard in the Memphis and Dubuque 
markets.
    Paragraph IV(A)(3) increases the period of time that a customer may 
notify Defendants of its intention not to renew the contract from a 
period ending 60 days before the end of any initial or renewal term to 
a period ending 30 days before the end of any such term. This allows 
the customer to make a decision concerning renewal closer to the end of 
the contract term. A customer is more likely to consider whether or not 
it wants its existing contract renewed the closer that customer is to 
the end of the contract term. Paragraph IV(A)(3) assures that a 
customer will be able to choose not to renew its contract up to 30 days 
from the end of the contract term. Paragraph IV(A)(3) also eliminates 
the requirement that a customer give its nonrenewal notice in writing 
and send it to Defendants by certified mail. A telephone call or letter 
is sufficient under the proposed Final Judgment. These changes in the 
notification provisions make it easier for the customer not to renew 
within the terms of the contract. This, in turn, enhances customer 
choice and enables small incumbents to compete for more customers.
    A liquidated damages provision is intended to allow a seller to 
recover otherwise unrecoverable costs where the amount of the damage 
resulting from a breach of contract is difficult to determine. 
Defendants do incur some unrecoverable costs, including sales costs, in 
contracting with customers for small containerized solid waste hauling 
services. The contract currently most widely used by Defendants in the 
relevant markets contains the following liquidated damages provision 
for early termination: the customer must pay six times its most recent 
monthly charge unless the contract has a remaining term of less than 
six months, in which case the customer pays its most recent monthly 
charge times the number of months remaining in its contract term. If 
this case went to trial, the United States believes it could prove that 
these liquidated damages far surpass the contracting costs the 
Defendants incur, and that, in the relevant markets where Defendants 
have market power, Defendants have threatened to enforce such 
liquidated damages provisions with the effect that customers did not 
switch to new entrants and small incumbents when they desired to do so. 
In the presence of market power, the threat of enforcing large 
liquidated damages provisions can deter sufficient customers from 
switching to a competitor and harm competition.
    Paragraphs IV(A) (4) and (5) reduce the amount of liquidated 
damages Defendants can collect from a customer. The liquidated damages 
Defendants may collect from a customer in the relevant markets during 
the first year of the initial term of a customer's contract are reduced 
to the greater of three times the customer's prior monthly charge or 
average monthly charge over the prior six months. A firm that has been 
a customer of a Defendant for a continuous period in excess of one year 
can be required to pay Defendants no more than two times the greater of 
the customer's prior monthly charge or average monthly charge over the 
prior six months. The changes made in the liquidated damages provisions 
make it less expensive (and therefore more likely) that a customer can 
switch to a competing hauler should it choose to do so during the 
contract term. Defendants have incurred costs to sign small 
containerized solid waste hauling customers to contracts. However, as 
customers pay their monthly bills over time, the unrecovered amount of 
those costs decreases. That fact is reflected in the proposed Final 
Judgment by the reduction of the liquidated damages Defendants may 
collect once a firm has been Defendants' customer for more than one 
year.
    The contracts predominantly used by Defendants in the relevant 
markets currently give Defendants the exclusive right to perform all of 
a customer's solid waste hauling services and recycling, just because 
the customer has signed a contract for small containerized solid waste 
hauling service. Those contracts also contain a provision requiring the 
customer to give BFI the opportunity to provide the customer's need for 
additional services during the contract term.\2\ Paragraph IV(A)(7) of 
the proposed Final Judgment prohibits these provisions in the relevant 
markets. Instead, it provides that Defendants may perform only those 
services a customer selects. Defendants may perform all types of solid 
waste hauling services and recycling for a customer, but only if the 
customer chooses to have Defendants do so by affirmatively indicating 
its desire for such additional services on the front of the 
contract.\3\ The United States does not intend this provision to 
prohibit Defendants from requiring that it be the exclusive supplier of 
any one type of service for which it contracts with a customer. For 
example, if a customer contracts with Defendants to perform small 
containerized solid waste hauling service at a specific service 
location, Defendants may require that it be the exclusive supplier for 
that service at the location.

    \2\ That provision reads: ``OPPORTUNITY TO PROVIDE ADDITIONAL 
SERVICES. BFI values the opportunity to meet all of Customer's 
nonhazardous waste collection and disposal needs. Customer will 
provide BFI the opportunity to meet those needs and to provide, on a 
competitive basis, any additional nonhazardous waste disposal and 
collection services during the term of this Agreement.''
    \3\ The United States anticipates that the customer should be 
able to affirmatively indicate its choice of service types by 
checking a box, or writing in the type of service it wants on the 
front of the contract, or by some similar mechanism.
---------------------------------------------------------------------------

    Paragraph IV(A)(6) of the proposed Final Judgment requires 
Defendant to change the appearance and format of its contracts in the 
relevant markets. If this case went to trial, evidence from customers 
in those markets would show that some of them were not aware they had 
signed legally binding documents. Therefore, the proposed Final 
Judgment requires that the document be labeled ``CONTRACT FOR SOLID 
WASTE SERVICES'' in large letters. Furthermore, evidence from customers 
in the relevant markets would show that the contractual provisions that 
enable a firm with market power to restrict customers from switching to 
a competitor are in small print and not readily noticed by all 
customers. The proposed Final Judgment requires that the contracts used 
in the relevant markets be easily readable in formatting and type-face.

B. Transition Rules

    In the Stipulation consenting to the entry of the proposed Final 
Judgment, Defendants agreed to abide by the provisions of the proposed 
Final Judgment immediately upon the filing of the Complaint, i.e., as 
of February 15, 1996. Among other things, the transition provisions 
described herein will require Defendants to abide by the foregoing 
limitations and prohibitions when entering into any contracts with new 
small containerized hauling customers after February 15, 1996. Certain 
additional provisions of the proposed Final Judgment also apply to 
existing customer contracts that are inconsistent with the proposed 
Final Judgment's requirements for new customer contracts.
    Under Paragraph IV(C), Defendants must offer contracts that conform 
with Paragraphs IV (A) or (B) of the proposed Final Judgment to all new 
customers with service locations in the Memphis and Dubuque markets 
beginning today, 

[[Page 8651]]
the date of the filing of the executed Stipulation.
    Under Paragraph IV(D), within ninety (90) days following entry of 
the Final Judgment Defendants must notify existing customers with 
service locations in the Memphis market who have an initial term longer 
than two years and do not otherwise comply with the proposed Final 
Judgment of their right to sign a new contract complying with the 
proposed Final Judgment. Defendants must send a similar notice within 
thirty (30) days following entry of the Final Judgment for customers 
with service locations in the Dubuque market. These notices must also 
inform any customers choosing to retain their existing contracts that 
no provisions inconsistent with the proposed Final Judgment will be 
enforced against them. The Final Judgment provides more time for 
Defendants to notify customers in Memphis than in Dubuque because 
Defendants have vastly more customers in Memphis than in Dubuque; they 
will need a longer time to provide the required notices and answer 
consumer inquiries in Memphis than they will need in Dubuque. With 
regard to municipal and government entities, Defendants are not 
required to notify those entities with nonconforming contracts that 
were awarded on the basis of a formal request for bids or a formal 
request for proposals issued by the customer.
    Paragraph IV(E) requires Defendants to give an additional notice in 
the form of a reminder to any customer subject to a nonconforming 
contract that enters a renewal term 120 days or more after the entry to 
the proposed Final Judgment. Defendants must send the reminder to each 
such customer ninety days or more prior to the effective date of the 
renewal term. The reminder informs the customer that it must cancel its 
contract by a certain date or the contract will renew. It also reminds 
the customer that it may enter into a new contract conforming to the 
proposed Final Judgment on request and that terms in the customer's 
existing contract that are inconsistent with the new form will not be 
enforced against it. Defendants may send this reminder as part of a 
monthly bill, as long as it appears on a separate page and in large 
print so that it will be noticeable.
    Under Paragraph IV(F), Defendants may enforce existing contract 
provisions only to the extent consistent with the Final Judgment upon 
entry of the Final Judgment by the Court.
    Finally, under paragraphs IV (G) and (H), the proposed Final 
Judgment makes clear that contracts awarded by municipal or government 
entities on the basis of a formal request for bids or proposals issued 
by the customer need not comply with Paragraphs IV(A)-(F). Moreover, 
nothing in the proposed Final Judgment requires Defendants to do 
business with any customer.
    Paragraphs IV (C)-(F) further two consistent goals. Opportunities 
for competition in small containerized hauling service in the relevant 
markets will be fostered by a rapid end to the provisions that 
significantly raise entry barriers in the relevant markets. At the same 
time, the transition rules avoid creating any unnecessary disruption of 
the customers' trash hauling service that might result from voiding all 
nonconforming contracts. Existing customers are not required to 
terminate or amend their existing contracts with Defendants; the choice 
belongs to the customer. However, Defendants may not enforce against 
any customer any provision inconsistent with the proposed Final 
Judgment.
    To ensure that existing customers learn of their rights under the 
proposed Final Judgment, Paragraphs IV (D) and (E) require Defendants 
to notify customers of their rights under the Final Judgment and remind 
them annually of their right to terminate their existing contract or to 
sign a new contract form.

C. Enforcement

    Section V of the proposed Final Judgment establishes standards and 
procedures by which the Department of Justice may obtain access to 
documents and information from Defendants related to their compliance 
with the proposed Final Judgment.

D. Duration

    Section VI of the proposed Final Judgment provides that the Final 
Judgment will expire on the tenth year after its entry. Jurisdiction 
will be retained by the Court to conduct further proceedings relating 
to the Final Judgment, as specified in Section VI.

IV. Remedies Available To Potential Private Litigants

    Section 4 of the Clayton Act (15 U.S.C. 15) provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C. 
16(a)), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
sixty (60) days of the date of publication of this Competitive Impact 
Statement in the Federal Register. The United States will evaluate and 
respond to the comments. All comments will be given due consideration 
by the Department of Justice, which remains free to withdraw its 
consent to the proposed Judgment at any time prior to entry. The 
comments and the response of the United States will be filed with the 
Court and published in the Federal Register.
    Written comments should be submitted to: Anthony V. Nanni, Chief, 
Litigation I Section, Antitrust Division, United States Department of 
Justice, 1401 H Street, N.W., Suite 4000, Washington, D.C. 20530. The 
proposed Final Judgment provides that the Court retains jurisdiction 
over this action, and the parties may apply to the Court for any order 
necessary or appropriate for the modification, interpretation, or 
enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, litigation against Defendants. The United States could 
have brought suit and sought preliminary and permanent injunctions 
against the use and enforcement of these contracts by Defendants in the 
relevant markets. The United States is satisfied, however, that the 
relief outlined in the proposed Final Judgment will eliminate 
Defendants' ability to use restrictive and anticompetitive contracts to 
maintain and enhance their market power in the relevant markets. The 
United States believes that these contracts will no longer inhibit the 
ability of a new entrant to compete with the Defendants. The relief 
sought will allow new entry 

[[Page 8652]]
and expansion by existing firms in those markets.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty-day comment 
period, after which the court shall determine whether entry of the 
proposed Final Judgment ``is in the public interest.'' In making that 
determination, the court may consider--

    (1) the competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) the impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. 16(e). As the D.C. Circuit recently held, this statute 
permits a court to consider, among other things, the relationship 
between the remedy secured and the specific allegations set forth in 
the government's complaint, whether the decree is sufficiently clear, 
whether enforcement mechanisms are sufficient, and whether the decree 
may positively harm third parties. See United States v. Microsoft, 56 
F.3d 1448, 1462 (D.C. Cir. 1995). In conducting this inquiry, ``the 
Court is nowhere compelled to go to trial or to engage in extended 
proceedings which might have the effect of vitiating the benefits of 
prompt and less costly settlement through the consent decree process.'' 
\4\

    \4\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court 
need not invoke any of them unless it believes that the comments 
have raised significant issues and that further proceedings would 
aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd 
Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 
6535, 6538.
---------------------------------------------------------------------------

    Rather, absent a showing of corrupt failure of the government to 
discharge its duty, the Court, in making its public interest 
finding, should . . . carefully consider the explanations of the 
government in the competitive impact statement and its responses to 
comments in order to determine whether those explanations are 
reasonable under the circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para. 
61,508, at 71,980 (W.D. Mo. 1977).
    The Court's inquiry, under the APPA, is whether the settlement is 
``within the reaches of the public interest.'' \5\ The proposed Final 
Judgment enjoins the Defendants' continued use of overly restrictive 
contract terms and opens local markets to increased competition, thus 
effectively furthering the public interest.

    \5\ United States v. Bechtel, 648 F.2d 660, 666 (9th Cir.), 
cert. denied, 454 U.S. 1083 (1981); see United States v. BNS, Inc., 
858 F.2d 456, 463 (9th Cir. 1988); United States v. National 
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); United 
States v. Gillette Co., 406 F. Supp. at 716. See also United States 
v. American Cyanamid Co., 719 F.2d 558, 565 (2d Cir. 1983), cert. 
denied, 465 U.S. 1101 (1984); United States v. American Tel. and Tel 
Co., 552 F. Supp. 131, 150 (D.D.C. 1982), aff'd sub nom. Maryland v. 
United States, 460 U.S. 1001 (1983) quoting United States v. 
Gillette Co., supra, 406 F. Supp. at 716; United States v. Alcan 
Aluminum, Ltd., 605 F. Supp. 619, 622 (W.D. Ky 1985).
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

    Dated: February 15, 1996.

    Respectfully submitted,
Nancy H. McMillen,
Peter H. Goldberg,
DC Bar #055608,
Evangelina Almirantearena,
Attorneys, Antitrust Division, U.S. Department of Justice, 1401 H. 
Street, N.W., Suite 4000, Washington, D.C. 20530, (202) 307-5777.

Certification of Service

    I hereby certify that a copy of the foregoing has been served upon 
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries of 
Tennessee, Inc., and Browning-Ferris Industries, Inc., by placing a 
copy of this Competitive Impact Statement in the U.S. mail, directed to 
each of the above-named parties at the addresses given below, this 15th 
day of February, 1996.
Rufus Wallingfood,
Esquire, Executive Vice President and General Counsel,
Lee Keller,
Esquire, Senior Litigation Counsel, Browning-Ferris Industries, Inc., 
757 North Eldridge Street, Houston, TX 77079.
David Foster,
Esquire, Fulbright & Jaworski, L.L.P., 801 Pennsylvania Avenue, NW, 
Market Square, Washington, D.C. 20004-2604.
Richard N. Carrell,
Esquire, Fulbright & Jaworski, L.L.P., 1301 McKinney, Suite 5100, 
Houston, Texas 77010-3095.
Nancy H. McMillen,
Attorney, U.S. Department of Justice, Antitrust Division, 1401 H. 
Street, N.W., Suite 4000, Washington, D.C. 20530, (202) 307-5777.

United States District Court for the District of Columbia

    In the matter of United States of America, Plaintiff, v. 
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries 
of Tennessee, Inc., and Browning-Ferris Industries, Inc., 
Defendants.

[Case number: 1-96-V00297]

    Judge: Thomas Penfield Jackson
    Deck Type: Antitrust.
    Date Stamp: Feb. 15, 1996.

Motion of United States to Exclude Case From all Discovery Requirements 
and to Follow the Procedures of the Antitrust Procedures and Penalties 
Act

    The United States of America hereby moves the Court for an order to 
exclude this case from all discovery requirements under the Federal 
Rules of Civil Procedure given that the disposition of a negotiated 
civil antitrust case brought and settled by the United States is 
governed by the Antitrust Procedures and Penalties Act, 15 U.S.C. 16 
(b)-(h) [hereinafter ``the APPA''].
    As set forth below, the parties have consented to the entry of the 
proposed Final Judgment without trial or adjudication of any issue of 
fact or law, and without the Final Judgment constituting any evidence 
against or an admission by any party with respect to any such issue. 
Pursuant to the procedures of the APPA, discovery between the parties 
is unnecessary and would be contrary to the intentions of the parties. 
Therefore, the United States respectfully requests that the Court enter 
the attached Order which excludes the case from discovery requirements 
of the Federal Rules of Civil Procedure, and states that the 
disposition of the case will be consistent with the APPA.
    1. On February 15, 1996, the United States filed a Complaint and a 

[[Page 8653]]
    Stipulation by which the parties agreed to the Court's entry of an 
attached proposed Final Judgment following compliance with the APPA.
    2. The United States also filed on February 15, 1996, a Competitive 
Impact Statement as required by 15 U.S.C. 16(b).
    3. The APPA also requires the United States to publish a copy of 
the proposed Final Judgment and the Competitive Impact Statement in the 
Federal Register. It further requires the publication of summaries of 
the terms of the proposed Final Judgment and the Competitive Impact 
Statement in at least two newspapers of general circulation. This 
notice will inform members of the public that they may submit comments 
about the Final Judgment to the United States Department of Justice, 
Antitrust Division. 15 U.S.C. 16 (b)-(c).
    4. Following such publication in the newspapers and Federal 
Register, a sixty-day waiting period will begin. During this time, the 
United States will consider, and at the close of that period respond 
to, any public comments that it receives. It will publish the comments 
and its responses in the Federal Register. 15 U.S.C. 16(d).
    5. After the expiration of the sixty-day period, the United States 
will file with the Court the comments, the Government's responses, and 
a Motion For Entry of the Final Judgment. 15 U.S.C. 16(d).
    6. After the filing of the Motion for Entry of the Final Judgment, 
the Court may enter the Final Judgment without a hearing, if it finds 
that the Final Judgment is in the public interest. 15 U.S.C. 16 (e)-
(f).
    7. The parties fully intend to comply with the requirements of the 
APPA.
    As stated above, the Antitrust Procedures and Penalties Act governs 
the disposition of civil antitrust cases brought and settled by the 
United States. Discovery between the parties, which have consented to 
the proposed settlement filed with the Court, is unnecessary. 
Accordingly, the attached Order is justified and should be entered by 
the Court.

    Respectfully submitted,
Nancy H. McMillen,
Trial Attorney, U.S. Department of Justice, Antitrust Division, 1401 H 
Street, NW., Suite 4000, Washington, DC 20530, Tel: (202) 307-5777.

Certificate of Service

    I hereby certify that on February 15, 1996, a true and correct copy 
of the foregoing has been served on the parties below by placing a copy 
of this MOTION OF UNITED STATES TO EXCLUDE CASE FROM ALL DISCOVERY 
REQUIREMENTS AND TO FOLLOW THE PROCEDURES OF THE ANTITRUST PROCEDURES 
AND PENALTIES ACT in the U.S. Mail, postage prepaid, to the address 
given below:

    For Defendants Browning-Ferris Industries of Iowa, Inc., 
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris 
Industries, Inc.:
David Foster, Esquire,
Fulbright & Jaworski, L.L.P., 801 Pennsylvania Ave., N.W., Market 
Square, Washington, D.C. 20004-2604.
Rufus Wallingford, Esquire,
Executive Vice President and General Counsel,
Lee Keller, Esquire,
Senior Litigation Counsel, Browning-Ferris Industries, Inc., 757 North 
Eldridge Street, Houston, TX 77079.
Richard N. Carrell, Esquire,
Fulbright & Jaworski, L.L.P., 1301 McKinney, Suite 5100, Houston, TX 
77010-3095.
Nancy H. McMillen,
Trial Attorney, U.S. Department of Justice, Antitrust Division, 1401 H 
Street, N.W., Suite 4000, Washington, D.C. 20530, (202) 307-5777.

United States District Court for the District of Columbia

    In the matter of United States of America, Plaintiff, v. 
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries 
of Tennessee, Inc., and Browning-Ferris Industries, Inc., 
Defendants.

[Civil Action No.: 1-96-V00297]

    Filed: Feb. 15, 1996.

Order Excluding Case From All Discovery Requirements and To Follow the 
Procedures of the Antitrust Procedures and Penalties Act

    Plaintiff, the United States of America, has moved the Court to 
exclude this case from all discovery requirements under the Federal 
Rules of Civil Procedure given that the disposition of negotiated civil 
antitrust consent decrees are governed by the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16 (b)-(h). The Court is of the opinion that 
this motion should be granted.
    It is therefore ORDERED that this case is excluded from all 
discovery requirements under the Federal Rules of Civil Procedure.
    It is also therefore ORDERED that the procedures to be followed in 
this case shall be consistent with the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec. 16 (b)-(h).

    Dated: __________

-----------------------------------------------------------------------

UNITED STATES DISTRICT JUDGE.

[FR Doc. 96-5033 Filed 3-4-96; 8:45 am]
BILLING CODE 4410-01-M