[Federal Register Volume 62, Number 122 (Wednesday, June 25, 1997)]
[Notices]
[Pages 34305-34310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16593]


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DEPARTMENT OF JUSTICE

Antitrust Division


U.S. v. Seminole Fertilizer Corporation; 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 Judgment, 
Stipulation and Competitive Impact Statement have been filed with the 
United States District Court for the Middle District of Florida in 
United States of America v. Seminole Fertilizer Corporation, Civil No. 
97-1507-CIV-T-17E.
    The Complaint in the case alleges that Seminole restrained trade by 
entering into a secret bidding agreement with its chief rival for the 
purchase of an ammonia storage facility located in Tampa, Florida. The 
Complaint alleges that the agreement had the effect of eliminating 
Seminole as a viable competing bidder.
    In the proposed Final Judgment, Seminole agrees not to enter into 
agreements with others illegally setting the price of fertilizer 
assets. Seminole also agrees not to submit joint bids for fertilizer 
assets without first notifying the seller of the asset and the person 
administering the sale of the asset that the bid has been jointly 
prepared.
    Public Comments on the proposed Final Judgment is invited within 
the statutory 60-day comment period. Such comments and responses 
thereto will be published in the Federal Register and filed with the 
Court. Comments should be directed to John T. Orr, Chief, Atlanta Field 
Office, Antitrust Division, Department of Justice, Suite 1176, Richard 
B. Russell Federal Building, 75 Spring Street, S.W., Atlanta, Georgia 
30303 (telephone: 404-331-7100).
Rebecca P. Dick,
Deputy Director of Operations, Antitrust Division.

Stipulation

Judge Elizabeth A. Kovachevich
    It is stipulated by and between the undersigned parties that:
    1. The Court has jurisdiction over the subject matter of this 
action and over each of the parties thereto, and venue of this action 
is proper in the Middle District of Florida, Tampa Division;

[[Page 34306]]

    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), 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 Defendant and by filing that 
notice with the Court;
    3. In the event 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; and
    4. This Stipulation and the Final Judgment to which it relates are 
for settlement purposes only and do not constitute an admission by 
Defendant in this or any other proceeding; that Section 1 of the 
Sherman Act, 15 U.S.C. 1, or any other provision of law, has been 
violated.

    This 18th day of June, 1997.
Gary R. Trombley,
Attorney for Defendant, Trombley & Associates, P.A., P.O. Box 3356, 
Tampa, Florida 33601, (813) 229-7918.

Karen E. Sampson,

Belinda A. Barnett,
Attorneys for Plaintiff, U.S. Department of Justice, Antitrust 
Division, 75 Spring Street, S.W., Suite 1176, Atlanta, Georgia 30303, 
(404) 331-7100.

Final Judgment

Judge Elizabeth A. Kovachevich

    Whereas plaintiff, United States of America, having filed its 
Complaint in this action on June 18, 1997, and plaintiff and defendant, 
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 against, 
or any admission by, any party with respect to any such issue of fact 
or law.
    And whereas defendant has agreed to be bound by the provisions of 
this Final Judgment pending its approval by the Court.
    Now, therefore, before any testimony is taken, and without trial or 
adjudication of any issue of fact or law, and upon the consent of the 
parties,
    It is hereby ordered, adjudged and decreed as follows:

I

Jurisdiction

    This Court has jurisdiction over the subject matter of this action, 
and over the person of the defendant, Seminole Fertilizer Corporation. 
The Complaint states a claim upon which relief may be granted against 
the defendant under Section 1 of the Sherman Act (15 U.S.C. 1).

II

Definitions

    As used in this Final Judgment:
    A. ``Defendant'' means Seminole Fertilizer Corporation and its 
affiliates, parents, subsidiaries, successors and assigns, directors, 
officers, managers, agents, and employees engaged in the fertilizer 
business, and any other person acting for or on behalf of them with 
respect to the fertilizer business.
    B. ``Fertilizer asset'' means any asset used principally in the 
manufacture, processing, production, storage, distribution, or sale of 
fertilizer or ammonia.
    C. ``Fertilizer business'' means the manufacturing, processing, 
production, storage, distribution, or sale of fertilizer or ammonia.
    D. ``Jointly determined bid'' or ``joint bid'' means any combining, 
pooling, or supplementing of resources, money, or property in 
connection with an actual or proposed offer for property which is to be 
sold through a bid process.
    E. ``Person'' means any individual, association, cooperative, 
partnership, corporation, or other business or legal entity.

III

Applicability

    This Final Judgment shall apply to defendant, including each of its 
directors, officers, managers, agents, employees, affiliates, parents, 
subsidiaries, and successors and assigns engaged now or in the future 
in the fertilizer business, and to all other persons in active concert 
or participation with defendant in the fertilizer business who shall 
have received actual notice of this Final Judgment by personal service 
or otherwise.

IV

Prohibited Conduct

    Defendant is enjoined and restrained from:
    A. Directly, indirectly, or through any joint venture, partnership, 
or other device, entering into, attempting to enter into, organizing or 
attempting to organize, implementing or attempting to implement, or 
soliciting any agreement, understanding, contract, or combination, 
either express or implied, with any other person:
    1. To submit any jointly determined bids for the acquisition of any 
fertilizer asset located in the United States; or
    2. To illegally set or establish the price or other terms and 
conditions of any bids for the acquisition of any fertilizer asset 
located in the United States;
    B. Directly, indirectly, or through any joint venture, partnership, 
or other device, communicating or inquiring about any intentions, 
decisions, or plans to refrain from bidding or to bid, including any 
intentions, decisions, or plans regarding any actual or proposed bid 
amounts, for the acquisition of any fertilizer asset located in the 
United States, where such communication or inquiry is to:
    1. Any other person that is known or reasonably should be known by 
defendant to be a potential bidder on the sale of that fertilizer 
asset; or
    2. Any other person that has announced an intention to bid on the 
sale of that fertilizer asset; and
    C. Directly, indirectly, or through any joint venture, partnership, 
or other device, requesting, suggesting, urging, or advocating that any 
other person not bid on, or suggesting that it would not be profitable, 
desirable, or appropriate for any other person to bid on, the sale of 
any fertilizer asset located in the United States.

V

Limiting Conditions

    A. Nothing in Section IV (A) and (B) shall prohibit defendant from 
entering an agreement, understanding, contract, or combination with any 
other person to submit any jointly determined bids for the acquisition 
of any fertilizer asset located in the United States so long as the 
purpose or effect is not to eliminate or suppress competition and where 
before or at the time of submitting any such jointly determined bids, 
defendant:
    1. Discloses to the seller of the asset and the person 
administering the sale of the asset that a jointly determined bid is 
being submitted, the nature of the joint bid arrangement, and with whom 
the joint bid is being submitted; and
    2. Does not, without disclosing to the seller in advance of the 
sale, violate any of the terms or conditions for bidding imposed by the 
seller of the asset or violate any of the terms or conditions for 
bidding imposed by the person administering the sale of the asset.
    B. Section IV (B) and (C) shall not apply to communications to

[[Page 34307]]

shareholders, potential purchasers of substantially all of the 
defendant's stock or assets, lenders, creditors, or subcontractors, who 
are not competitors, where such communications are limited to the 
context of such relationship.

VI

Notification

    Defendant currently is not engaged in the fertilizer business. If 
defendant re-enters and engages in the fertilizer business at any time 
during the term of this Final Judgment, then within thirty (30) days of 
such re-entry, defendant shall cause to be delivered, by certified 
letter or its equivalent, a copy of this Final Judgment to all persons 
with whom defendant then is engaged in a partnership, joint venture, or 
other similar relation in the fertilizer business, and to all persons 
with whom defendant then is engaged in discussions or negotiations 
regarding the possible submission of a joint bid for the acquisition of 
any fertilizer asset.

VII

Compliance

    A. In view of the fact that defendant is not currently engaged in 
the fertilizer business, all of defendant's compliance obligations 
under Section VII of this Final Judgment are suspended until such time 
as defendant re-enters and engages in the fertilizer business during 
the term of this Final Judgment.
    B. If and when defendant re-enters the fertilizer business during 
the term of this Final Judgment, within thirty (30) days of re-entry 
defendant is ordered to establish and maintain for as long as it 
engages in the fertilizer business an antitrust compliance program 
which shall include designating an Antitrust Compliance Officer with 
responsibility for accomplishing the antitrust compliance program and 
with the purpose of achieving compliance with this Final Judgment. The 
Antitrust Compliance Officer shall, on a continuing basis, supervise 
the review of the current and proposed activities of the defendant to 
ensure that it complies with this Final Judgment. The Antitrust 
Compliance Officer shall be responsible for accomplishing the following 
activities:
    1. Distributing, within ninety (90) days of the date of defendant's 
re-entry in the fertilizer business, a copy of this Final Judgment to 
all officers and directors, and any person who otherwise manages 
defendant with respect to the fertilizer business;
    2. Distributing in a timely manner a copy of this Final Judgment to 
any person who succeeds to a position described in Section VII (B)(1);
    3. Briefing annually defendant's officers and directors engaged in 
the fertilizer business on the meaning and requirements of this Final 
Judgment and the antitrust laws;
    4. Obtaining annually from each officer or employee designated in 
Section VII(B)(1) and (2) a written certification that he or she: (a) 
Has read, understands, and agrees to abide by the term of this Final 
Judgment; (b) understands that failure to comply with this Final 
Judgment may result in conviction for criminal contempt of court; and 
(c) is not aware of any violation of the Final Judgment that has not 
been reported to the Antitrust Compliance Officer;
    5. Maintaining a record of recipients from whom the certification 
required by Section VII(B)(4) has been obtained; and
    6. Distributing in a timely manner, and in all cases before 
entering any agreement, understanding, contract, or combination to 
submit a joint bid and before making the notification to the required 
parties under Section V, above, a copy of this Final Judgment to any 
person with whom the defendant enters into discussions or negotiations 
for the possible submission of a joint bid for the acquisition of any 
fertilizer asset.
    C. Defendant is also ordered to file with this Court and serve upon 
plaintiff, within ninety (90) days after the date of defendant's re-
entry in the fertilizer business, an affidavit as to the fact and 
manner of its compliance with this Final Judgment.
    D. If defendant's Antitrust Compliance Officer learns of any 
violations of this Final Judgment, defendant shall forthwith take 
appropriate action to terminate or modify the activity so as to assure 
compliance with this Final Judgment.

VIII

Plaintiff Access

    A. For the purpose of determining or securing compliance with this 
Final Judgment, and subject to any legally recognized privilege, duly 
authorized representatives of the plaintiff shall, upon written request 
by the Assistant Attorney General in charge of the Antitrust Division, 
and on reasonable notice to the defendant, be permitted:
    1. Access during the defendant's office hours to inspect and copy 
all records and documents in its possession or control relating to the 
fertilizer business specifically described in this Final Judgment; and
    2. Subject to the reasonable convenience of defendant and without 
restraint or interference from defendant, to interview the defendant's 
officers, employees, or agents engaged in the fertilizer business, who 
may have counsel present, regarding the defendant's fertilizer 
business.
    B. Upon written request by the Assistant Attorney General in charge 
of the Antitrust Division, the defendant shall submit such written 
reports, under oath if requested, relating to the fertilizer business 
concerning matters contained in this Final Judgment as may be 
requested, subject to any legally recognized privilege.
    C. No information or documents obtained by the means provided in 
this Section VIII shall be divulged by the plaintiff to any person 
other than a duly authorized representative of the Executive Branch of 
the United States, 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 
defendant to plaintiff, defendant represents and identifies in writing 
the material in any such information or documents to which a claim of 
protection may be asserted under Rule 26(c)(7) of the Federal Rules of 
Civil Procedure, and the defendant marks each pertinent page of such 
material, ``Subject to claim of protection under Rule 26(c)(7) of the 
Federal Rules of Civil Procedure,'' then 20 days' notice shall be given 
by plaintiff to defendant prior to divulging such material in any legal 
proceeding (other than a grand jury proceeding) to which that defendant 
is not a party.

IX

Retention of Jurisdiction

    Jurisdiction is retained by this Court for the purpose of enabling 
either of the parties to this Final Judgment to apply to this Court at 
any time for such 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 provisions, to enforce compliance herewith, and to 
punish any violations of its provisions. Nothing in this provision 
shall give standing to any person not a party to this Final Judgment to 
seek any relief related to it.

X

Term

    This Final Judgment will expire on the tenth anniversary of its 
date of entry.

[[Page 34308]]

XI

Public Interest

    Entry of this Final Judgment is in the public interest.

    Dated: ______

    Court approval subject to the Antitrust Procedures and Penalties 
Act, 15 U.S.C. 16.

United States District Judge

Competitive Impact Statement

Judge Elizabeth A. Kovachevich

    Pursuant to Section 2(b) of the Antitrust Procedures and Penalties 
Act, 15 U.S.C. 16(b)-(h), the United States submits this Competitive 
Impact Statement relating to the proposed Final Judgment submitted for 
entry with the consent of Seminole Fertilizer Corporation in this civil 
antitrust proceeding.

I

Nature and Purpose of the Proceeding

    On June 18, 1997 the United States filed a civil antitrust 
complaint alleging that defendant and others conspired unreasonably to 
restrain competition in violation of Section 1 of the Sherman Act, 15 
U.S.C. 1. The Complaint alleges that defendant, Norsk Hydro USA Inc. 
(``Norsk USA''), and Farmland Industries, Inc. (``Farmland'') met on 
March 5, 1992, and discussed sharing pipeline capacity and the cost of 
bidding on an ammonia tank and pipeline interest, hereinafter referred 
to as the Tampa Facility. At the conclusion of the meeting, defendant, 
Norsk USA, and Farmland reached a tentative agreement, which was later 
reduced to writing. The Complaint also alleges that on March 9 and 
March 10, 1992, defendant and Norsk USA discussed the terms of the 
agreement by telephone on several occasions and that they executed the 
written agreement two hours before the scheduled auction of the Tampa 
Facility on March 12, 1992. The agreement provided that defendant would 
give bid support of up to $2.5 million to Norsk USA, if necessary, to 
defeat a competing bid. In exchange, Norsk USA agreed to give defendant 
increased pipeline capacity if Norsk USA was the successful bidder.
    This agreement had the effect of eliminating defendant, Norsk USA's 
chief rival, as a viable competing bidder for the Tampa Facility. 
Almost immediately after signing the agreement, defendant stated that 
it was no longer going to attend the auction of the Tampa Facility. At 
the auction on the afternoon of March 12, there were no bids for the 
Tampa Facility other than the one previously submitted by Norsk USA.
    On ____, the United States and defendant filed a Stipulation by 
which they consented to the entry of a proposed Final Judgment 
following compliance with the Antitrust Procedures and Penalties Act, 
15 U.S.C. 16(b)-(h). The proposed Final Judgment, as will be discussed 
in detail in Section IV.A., would order defendant to refrain from 
soliciting, entering, or attempting to enter any agreement to submit 
any jointly determined bids for the acquisition of any fertilizer asset 
(as defined in the Final Judgment) located in the United States with 
any other person that is known or reasonably should be known to 
defendant to be a potential bidder on the sale of that fertilizer 
asset. The Final Judgment would also enjoin defendant from soliciting, 
entering, or attempting to enter any agreement to set or establish the 
price or other terms and conditions of any bids for the acquisition of 
any fertilizer asset located in the United States.

II

Description of Defendant

    Defendant, a wholly owned subsidiary of Tosco Corporation, sold all 
of its assets in May 1993. Before its assets were sold, defendant 
maintained its corporate offices in Stamford, Connecticut, and was a 
manufacturer and distributor of phosphatic fertilizer. It operated 
production and storage facilities in central Florida, near Tampa.

III

The Tampa Facility and Events Leading Up to the Alleged Violation

A. The Tampa Facility
    The Tampa Facility, which consists of an ammonia terminal located 
in the Port of Tampa, Florida, and a one-half interest in a pipeline 
system connected to the ammonia terminal,\1\ is used for storing, 
handling, and delivering anhydrous ammonia, one of the raw materials 
used in the manufacture of phosphatic fertilizers. Located on 
approximately 17\1/2\ acres of land leased from the Tampa Port 
Authority, the Tampa Facility has a single tank with a 35,000 metric 
ton storage capacity. It services five nearby phosphatic fertilizer 
plants,\2\ where the ammonia is combined with phosphoric acid to create 
diammonium phosphate. The Tampa Facility is able to service by truck or 
rail other phosphatic fertilizer plants not connected to it. During the 
early 1990's the Tampa Facility was owned by the Royster Company 
(``Royster''), now known as Mulberry Phosphates, Inc. (``MPI'').
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    \1\ Defendant owned the other one-half interest in the pipeline, 
along with a separate ammonia terminal (consisting of two ammonia 
tanks) that also was connected to the pipeline.
    \2\ If defendant had been successful in acquiring the Tampa 
Facility, it would have been the exclusive supplier to those five 
plants.
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B. The Bankruptcy of Royster and the Failed Auction
    Royster was a manufacturer of phosphatic fertilizers and related 
products for the domestic and export markets. Its principal facilities 
included a plant for the production of diammonium phosphate, located in 
Mulberry, Florida, and the Tampa Facility. Royster filed for bankruptcy 
protection on April 8, 1991, after months of experiencing financial 
hardships. Under the reorganization plan submitted to the Bankruptcy 
Court, Royster proposed to liquidate certain assets, including its 
Tampa Facility. Shortly after news of the potential sale of the Tampa 
Facility went public, Norsk USA and defendant separately expressed 
interest in acquiring it. After extensive negotiations with Royster 
officials, Norsk USA agreed to purchase the property for $15.5 million 
and executed an asset purchase agreement for the property on September 
25, 1991. The agreement guaranteed Royster the right to purchase a 
continuing supply of ammonia from the terminal for its Mulberry plant 
and contained a through-put provision that permitted it to put the 
ammonia through the pipeline from the terminal to the plant. In 
November of that same year, the Bankruptcy Court ordered that the Tampa 
Facility be sold by auction and that bids be taken against Norsk USA's 
offer of $15.5 million. The auction was scheduled for March 12, 1992. 
It was not until the auction was announced that a third Company, CF 
Industries (``CF''),\3\ publicly expressed any interest in acquiring 
that Tampa Facility.
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    \3\ CF is a cooperative which has been a major participant in 
the fertilizer business since the mid-1960's and has operated world-
scale phosphatic fertilizer plants in Florida since 1969.
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    On December 18, 1991, the Bankruptcy Court issued an order 
approving bidding procedures in connection with the proposed sale of 
the Tampa Facility. Any third party offer had to: (1) Be substantially 
similar to the one contained in the Norsk USA Asset Purchase Agreement; 
(2) be at least $1 million more than the Norsk USA offer of $15.5 
million; (3) include an offer to enter into a through-put agreement 
with Royster; and (4) include a confidentiality agreement with Royster 
and Norsk USA regarding disclosure of the terms of the Royster/Norsk 
USA

[[Page 34309]]

Through-put Agreement. In addition, the Order required that the third 
party deposit $1 million in escrow no later than the time at which it 
submitted an offer. The money deposited was to remain in escrow pending 
the earlier of (a) the closing of the sale to the third party if its 
offer was approved by the Bankruptcy Court or (b) the entry of an order 
approving the sale of the Tampa Facility to either Norsk USA or another 
third party bidder. After depositing the $1 million, the third party 
was entitled to receive documents setting forth the results of the 
inspection of the Tampa Facility's tank, the cost of repair, the terms 
of the Royster/Norsk USA Through-put Agreement, and the terms of any 
through-put agreements submitted by any other third parties.
    In February 1992, CF deposited $1 million in escrow. Defendant made 
its escrow deposit on March 9, 1992, three days before the auction. At 
the time of the auction, there were four bidders who were qualified to 
bid: Norsk USA, CF, defendant, and Superfos Investments Limited 
(``Superfos'').\4\ CF informed Royster shortly before the auction that 
it would not be bidding, because of environmental concerns raised by a 
just-completed study it had done. Only Norsk USA appeared at the 
auction site on the afternoon of March 12 to bid on the Tampa Facility. 
There having been no new bids tendered, Norsk USA's standing offer of 
$15.5 million was accepted, pending approval by the Bankruptcy Court. 
In a meeting later that afternoon to finalize the details of the sale 
before a March 13 court hearing, Royster representatives discovered 
that Norsk USA and defendant had executed a joint bidding agreement 
approximately two hours before the auction was scheduled to begin.
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    \4\ Since Superfos was a major creditor of Royster, the 
Bankruptcy Court exempted Superfos from the $1 million escrow 
requirement and gave it permission to submit a credit bid. Thus, 
Superfos could deduct from its bid offer the amount it was owed by 
Royster.
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    At the hearing the following day, Royster representatives advised 
the Bankruptcy Court of the agreement between defendant and Norsk USA. 
The Bankruptcy Court deferred ratification of the sale and ordered 
discovery to be taken. A few days later, the Bankruptcy Court received 
two anonymous communications regarding the bidding agreement. One 
communication was a letter alleging that defendant had agreed to 
backstop Norsk USA's bid and that defendant's bid supplement was leaked 
to CF, causing them to withdraw. The letter pinpointed Steve Yurman, 
defendant's president, as the villain in the alleged deal. The other 
communication was one of defendant's internal memoranda written by 
Yurman describing the terms of the March 12 agreement. After reviewing 
the information obtained during discovery in light of the anonymous 
correspondence, the Bankruptcy Court, at a hearing on March 20, refused 
to ratify the sale of the Tampa Facility to Norsk USA and ordered that 
a second auction be held. At the second auction, on June 17, 1992, CF 
and Norsk USA submitted bids, and CF won the Tampa Facility with a 
final bid of $21.6 million. (By the time of the second auction, CF had 
been able to resolve its environmental concerns.)
C. Evidence of Collusion
    On February 26, 1992, representatives of defendant, Norsk USA, and 
Farmland met at the Rihga Royal Hotel in New York to discuss an alleged 
``joint venture'' proposal by defendant. The proposal involved Norsk 
USA buying the Tampa Facility and keeping the interest in the pipeline, 
but possibly selling the tank to CF. The meeting concluded with no 
agreements being reached.
    The same parties met again on March 5, 1992, at the same hotel. 
They primarily discussed sharing pipeline capacity and the cost of 
bidding on the terminal. Specifically, Norsk USA, Farmland, and 
defendant proposed that Norsk USA and defendant enter into an agreement 
whereby defendant would supplement Norsk USA's bid and consent to 
Royster's transfer of its pipeline interest to Norsk USA in return for 
Norsk USA giving defendant extra pipeline capacity.\5\ A tentative 
agreement was reached and Norsk USA indicated that it would have its 
attorneys reduce the agreement to writing and send defendant a draft to 
review. Norsk USA sent the first written draft to defendant on March 6, 
and on March 9 and March 10 representatives of Norsk USA and defendant 
discussed, via telephone on several occasions, the terms of the draft 
agreement.
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    \5\ As owner of the other one-half interest in the Tampa 
Facility's pipeline lease, defendant already had the right to use 
450,000 tons of the pipeline's 900,000 ton capacity.
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    On the morning of March 12, officials of Farmland, Norsk USA, 
Tosco, and defendant, along with their attorneys, met in Tampa, 
Florida, at the law offices of MacFarlane Ferguson, Norsk USA's local 
counsel, to resume negotiating the details of the proposed agreement. 
After hours of negotiations, the parties agreed, in part, that (a) 
defendant would supplement Norsk USA's bid up to $2.5 million and 
consent to Royster's assignment of its one-half interest in the 
pipeline lease to Norsk USA and (b) Norsk USA, in return, would give 
defendant the right to use an extra 40,000 tons of the pipeline's 
capacity. Almost immediately after signing the agreement, defendant 
stated that it was no longer attending the auction.
    One of defendant's representatives appeared at the auction moments 
before it started and advised Royster that it was withdrawing from the 
bidding. Later that evening, representatives of Norsk USA and defendant 
talked by telephone and agreed to instruct their counsel to confer with 
one another to prepare for the court hearing the next day.
    In this case, there was virtually no evidence of covert activity, 
which indicated that the subjects of the investigation were not aware 
of, or did not appreciate, the full consequences of their actions. This 
lack of covertness is one of the main reasons this case is being filed 
civilly rather than criminally. See Antitrust Division Manual, Section 
III.E., at III-12 (October 18, 1987) (Second Edition).

IV

Explanation of Proposed Final Judgment

A. Prohibited Conduct
    Section IV. A. enjoins defendant from directly, indirectly, or 
through any joint venture, partnership, or other device, entering into, 
attempting to enter into, organizing or attempting to organize, 
implementing or attempting to implement, or soliciting any agreement, 
understanding, contract, or combination, either express or implied, 
with any other person: (1) To submit any jointly determined bids for 
the acquisition of any fertilizer asset located in the United States; 
or (2) to illegally set or establish the price or other terms and 
conditions of any bids for the acquisition of any fertilizer asset 
located in the United States.
    Paragraph B. of Section IV. also enjoins defendant from directly, 
indirectly, or through any joint venture, partnership, or other device, 
communicating or inquiring about any intentions, decisions, or plans to 
refrain from bidding or to bid, including any intentions, decisions, or 
plans regarding any actual or proposed bid amounts, for the acquisition 
of any fertilizer asset located in the United States, where such 
communication or inquiry is to (1) any other person that is known or 
reasonably should be known by defendant to be a potential bidder on the 
sale of that fertilizer asset or (2) any other person that has 
announced an

[[Page 34310]]

intention to bid on the sale of that fertilizer asset.
    Paragraph C. of Section IV. enjoins the defendant from directly, 
indirectly, or through any joint venture, partnership, or other device, 
requesting, suggesting, urging, or advocating that any other person not 
bid on, or suggesting that it would not be profitable, desirable, or 
appropriate for any other person to bid on, the sale of any fertilizer 
asset located in the United States.
B. Compliance Program and Certification
    The Final Judgment acknowledges that defendant currently is not 
engaged in the fertilizer business and, as a result, suspends all of 
defendant's compliance obligations under Section VII. of the Final 
Judgment until such time as defendant re-enters and engages in the 
fertilizer business during the term of the Final Judgment. If and when 
defendant re-enters the fertilizer business during the term of the 
Final Judgment, within thirty (30) days of re-entery defendant must 
establish and maintain for as long as it engages in the fertilizer 
business an antitrust compliance program which shall include 
designating an Antitrust Compliance Officer with responsibility for 
accomplishing the compliance program. The Antitrust Compliance Officer 
is required to, on a continuing basis, supervise the review of the 
current and proposed activities of the defendant to ensure that it is 
in compliance with the program. The Antitrust Compliance Officer is 
also required to (1) distribute a copy of the Final Judgment to all 
officers and directors, and any person who otherwise manages defendant 
with respect to the fertilizer business, (2) distribute in a timely 
manner copy of the Final Judgment to any person who succeeds to a 
position described in Section VII.B.1. of the Final Judgment, (3) brief 
annually defendant's officers and directors engaged in the fertilizer 
business on the meaning and requirements of the Final Judgment and the 
antitrust laws, and (4) obtain annually from each officer or employee 
designated in Section VII.B.1 and 2. of the Final Judgment a written 
certification that he or she: (a) Has read, understands, and agrees to 
abide by the terms of the Final Judgment; (b) understands that failure 
to comply with the Final Judgment may result in conviction for criminal 
contempt of court; and (c) is not aware of any violation of the Final 
Judgment that has not been reported to the Antitrust Compliance 
Officer.
    Moreover, defendant is required to distribute in a timely manner a 
copy of the Final Judgment to any person with whom the defendant enters 
into discussions or negotiations for the possible submission of a joint 
bid for the acquisition of any fertilizer asset and file with this 
Court and serve upon plaintiff, within ninety (90) days after the date 
of defendant's re-entry in the fertilizer business, an affidavit as to 
the fact and manner of its compliance with this Final Judgment. 
Defendant is also required to take appropriate action to terminate or 
modify any activities it uncovers that violate any provision of the 
Final Judgment.

V

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 being 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 actions under 
the Clayton Act. 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 private lawsuit that may be brought against the 
defendant.

VI

Procedures Available for Modification of the Proposed Final Judgment

    As provided by the Antitrust Procedures and Penalties Act, any 
person believing that the proposed Final Judgment should be modified 
may submit written comments to John T. Orr, Chief, Atlanta Field 
Office, U.S. Department of Justice, Antitrust Division, 75 Spring 
Street, S.W., Suite 1176, Atlanta, Georgia, 30303, within the 60-day 
period provided by the Act. These comments, and the Department's 
responses, will be filed with the Court and published in the Federal 
Register. All comments will be given due consideration by the 
Department of Justice, which remains free to withdraw its consent to 
the proposed Final Judgment at any time prior to entry.

VII

Alternative to the Proposed Final Judgment

    The Department considered, as an alternative to the proposed Final 
Judgment, litigation seeking comparable equitable relief. In the view 
of the Department of Justice, a trial would involve substantial cost to 
the United States and is not warranted because the Proposed Judgment 
provides relief that will remedy the violations of the Sherman Act 
alleged in the Complaint of the United States.

VIII

Determinative Materials and Documents

    No materials and documents described in Section 2(b) of the 
Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b), were used in 
formulating the proposed Final Judgment.

    Date: ______

Respectfully submitted,

Karen E. Sampson,
Belinda A. Barnett,
Attorneys for Plaintiff, U.S. Department of Justice, Antitrust 
Division, 75 Spring Street, S.W., Suite 1176, Atlanta, Georgia 30303, 
(404) 331-7100.
[FR Doc. 97-16593 Filed 6-24-97; 8:45 am]
BILLING CODE 4410-11-M