[Federal Register Volume 62, Number 175 (Wednesday, September 10, 1997)]
[Notices]
[Pages 47680-47689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23869]
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DEPARTMENT OF JUSTICE
Antitrust Division
Proposed Final Judgment and Competitive Impact Statement
United States v. USA Waste Services, Inc. et al.
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 Order, Hold Separate Stipulation and Order, and
Competitive Impact Statement have been filed with the United States
District Court in the Western District of Pennsylvania, Pittsburgh
Division, Civil No. 97-1524.
On August 22, 1997, the United States filed a Complaint alleging
that the proposed acquisition by USA Waste through Riviera of the
voting stock of United Waste would violate Section 7 of the Clayton
Act, 15 U.S.C. 18. The Complaint further alleges that competition in
providing disposal services to haulers of MSW generated in Allegheny
County and competition in providing hauling of MSW generated in
Allegheny County would be lessened by the acquisition. The proposed
Final Judgment, filed the same time as the Complaint, requires USA
Waste to divest the Kelly Run Landfill in Pittsburgh, Pennsylvania,
which it will obtain in connection with its acquisition of United
Waste.
Public comment 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 J. Robert Kramer, Chief, Litigation II Section, Antitrust Division,
United States Department of Justice, 1401 H Street, N.W., Suite 3000,
Washington, D.C. 20530 (telephone: 202/307-0924).
Copies of the Complaint, Stipulation and Order, Hold Separate
Stipulation and Order, Proposed Final Judgment, and Competitive Impact
Statement are available for inspection in Room 215 of the U.S.
Department of Justice, Antitrust Division, 325 7th Street, N.W.,
Washington, D.C. 20530, (202) 514-2481. Copies of these materials may
be obtained upon request and payment of a copying fee.
Constance K. Robinson,
Director of Operations.
United States District Court, Western District of Pennsylvania,
Pittsburgh Division
United States of America, and Commonwealth of Pennsylvania
Plaintiffs, v. USA Waste Services, Inc., Riviera Acquisition
Corporation, and United Waste Systems, Inc. Defendants. Civil No.:
97-1524. Filed 8/22/97, Judge Ambrose.
Stipulation and Order
It is stipulated by and between the undersigned parties, by their
respective attorneys, as follows:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the United States District Court for the Western District of
Pennsylvania.
2. The parties stipulate 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), and without further notice to any party or other
proceedings, provided that plaintiffs have not withdrawn their consent,
which they may do at any time before the entry of the proposed Final
Judgment by serving notice thereof on defendants and by filing that
notice with the Court.
3. Defendants shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment, or until
expiration of time for all appeals of any court ruling declining entry
of the
[[Page 47681]]
proposed Final Judgment, and shall, from the date of the signing of
this Stipulation., comply with all the terms and provisions of the
proposed Final Judgment as though they were in full force and effect as
an order of the Court.
4. This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
5. In the event (a) plaintiffs have withdrawn their consent, as
provided in paragraph 2 above, or (b) the proposed Final Judgment is
not entered pursuant to this Stipulation, the time has expired for all
appeals of any Court ruling declining entry of the proposed Final
Judgment, and the Court has not otherwise ordered continued compliance
with the terms and provisions of the proposed Final Judgment, then the
parties are released from all further obligations under this
Stipulation, and the making of this Stipulation shall be without
prejudice to any party in this or any other proceeding.
6. Defendants represent that the divestiture ordered in the
proposed Final Judgment can and will be made, and that the defendants
will later raise no claim of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
therein.
Dated: August 21, 1997.
For Plaintiff United States:
Frederick H. Parmenter,
U.S. Department of Justice, Antitrust Division, Litigation II Section,
Suite 3000, Washington, D.C. 20530, (202) 307-0620.
Linda L. Kelly,
United States Attorney.
Amy Reynolds Hay,
Assistant United States Attorney, Western District of Pennsylvania.
For the Commonwealth of Pennsylvania Office of the Attorney
General:
D. Michael Fisher,
Attorney General.
James A. Donahue, III,
Chief Deputy Attorney General, Antitrust Section.
Garrett F. Gallia,
Deputy Attorney General, Antitrust Section.
Attorneys for the Commonwealth of Pennsylvania:
14th Floor, Strawberry Square,
Harrisburg, Pennsylvania 17120,
(717) 787-4530
For Defendants USA Waste Services, Inc. and Riviera Acquisition
Corporation:
James R. Weiss,
Preston, Gates, Ellis & Rouvelas Meeds, 1735 New York Avenue, N.W.,
Suite 500, Washington, D.C. 20530, (202) 662-8425.
For Defendant United Waste Systems, Inc.
Ilene Knable Gotts,
Wachtell, Lipton, Rosen & Katz, 51 West 52d Street, New York, New York
10019-6150, (212) 403-1247.
Order
It is so ordered, this 22nd day of August, 1997.
Donetta Ambrose,
United States District Judge.
United States District Court, Western District of Pennsylvania,
Pittsburgh Division
United States of America, and Commonwealth of Pennsylvania
Plaintiffs, versus USA Waste Services, Inc., Riviera Acquisition
Corporation, and United Waste Systems, Inc., Defendants. Civil No.:
97-1524. Filed: 8/22/97, Judge Ambrose.
Hold Separate Stipulation and Order
It is hereby stipulated and agreed by and between the undersigned
parties, subject to approval and entry by the Court, that:
I
Definitions
As used in this Hold Separate and Order:
A. ``USA Waste'' means defendant USA Waste Services, Inc., a
Delaware corporation with its headquarters, in Houston, Texas, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, directors, officers, managers, agents, and
employees.
B. ``Riviera'' means defendant Riviera Acquisition Corporation, a
Delaware corporation which is a wholly owned subsidiary of USA Waste,
and includes its successors and assigns, and its subsidiaries,
divisions, groups, affiliates, directors, officers, managers, agents,
and employees.
C. ``United'' means defendant United Waste Systems, Inc., a
Delaware corporation with its headquarters, in Greenwich, Connecticut,
and includes its successors and assigns, and its subsidiaries,
divisions, groups, affiliates, directors, officers, managers, agents,
and employees.
D. ``Allegheny County'' refers to Allegheny County, Pennsylvania.
E. ``Kelly Run Sanitation'' means Kelly Run Sanitation, Inc., which
is a wholly owned subsidiary of United, and all assets excluding the
hauling business, including:
1. All tangible assets, including all fee and all leasehold and
renewal rights in a landfill located at Road #3, Route 51, Elizabeth,
Pennsylvania 15037 (known as Kelly Run Landfill); the garage and
related facilities; offices; and landfill-related assets including
capital equipment, trucks and other vehicles, scales, power supply
equipment, interests, permits, and supplies; and
2. All intangible assets, including landfill-related customer
lists, contracts, and accounts.
F. ``Hauling Business'' means the Kelly Run Sanitation hauling-
related assets, including.
1. All tangible assets, including capital equipment, trucks and
other vehicles, interest, permits, supplies, and related facilities,
except the garage and related facilities, located at Road #3, Route 51,
Elizabeth, Pa. 15037; and
2. All intangible assets, including hauling-related customer lists,
contracts, and accounts.
G. ``Hauling'' means the collection of nonhazardous solid waste
from customers and the transporting of the collected waste to disposal
sites.
H. ``Waste Disposal Business'' means the business of disposing of
nonhazardous solid waste into Pennsylvania Department of Environmental
Protection approved disposal sites.
II
Objectives
The Final Judgment filed in this case is meant to ensure USA
Waste's prompt divestiture of Kelly Run Sanitation for the purpose of
maintaining a viable competitor in the waste disposal business in
Allegheny County to remedy the effects that the United States and the
Commonwealth of Pennsylvania allege would otherwise result from USA
Waste's proposed acquisition of United. This Hold Separate Stipulation
and Order ensures, prior to such divestiture, that Kelly Run Sanitation
which is being divested be maintained as an independent, economically
viable, ongoing business concern, and that competition is maintained
during the pendency of the divestiture.
III
Hold Separate Provisions
Until the divestiture required by the Final Judgment has been
accomplished:
A. USA Waste shall preserve, maintain, and operate Kelly Run
Sanitation and the Hauling Business as an independent competitor with
management, sales and operations held entirely separate, distinct and
apart from those of USA Waste. USA Waste
[[Page 47682]]
shall not coordinate the marketing or sale of its waste disposal and
hauling business with the waste disposal and hauling business at Kelly
Run Sanitation and the Hauling Business. Within thirty (30) days of the
entering of this Order, USA Waste will inform plaintiffs of the steps
taken to comply with this provision.
B. USA Waste shall take all steps necessary to ensure that Kelly
Run Sanitation and the Hauling Business will be maintained and operated
as an independent, ongoing, economically viable and active competitor
in the waste disposal and hauling business in Allegheny County; and
that the management of Kelly Run Sanitation will not be influenced by
USA Waste, and the books, records, competitively sensitive sales,
marketing and pricing information, and decision-making associated with
Kelly Run Sanitation and the Hauling Business will be kept separate and
apart from the operations of USA Waste. USA Waste's influence over
Kelly Run Sanitation and the Hauling business shall be limited to that
necessary to carry out USA Waste's obligations under this Order and the
Final Judgment.
C. USA Waste shall use all reasonable efforts to maintain and
increase waste disposal and hauling sales at Kelly Run Sanitation and
the Hauling Business, and shall maintain at 1996 or previously approved
levels, whichever are higher, promotional, advertising, sales,
technical assistance, marketing and merchandising support for the
disposal and hauling of waste associated with Kelly Run Sanitation.
D. USA Waste shall provide sufficient working capital to maintain
Kelly Run Sanitation and the Hauling Business as an economically
viable, ongoing business.
E. USA Waste shall take all steps necessary to ensure that the
Kelly Run Landfill is fully maintained in operable condition at no
lower than its current rated capacity, and shall maintain and adhere to
normal repair and maintenance schedules for Kelly Run Sanitation and
the Hauling Business.
F. USA Waste shall not, except as part of a divestiture approved by
plaintiffs, remove, sell, lease, assign, transfer, pledge or otherwise
dispose of any assets of Kelly Run Sanitation, including intangible
assets that relate to the permits described in Section II of the Final
Judgment.
G. USA Waste shall maintain, in accordance with sound accounting
principles, separate, accurate and complete financial ledgers, books
and records that report on a periodic basis, such as the last business
day of every month, consistent with past practices, the assets,
liabilities, expenses, revenues and income of Kelly Run Sanitation and
the Hauling Business.
H. Except in the ordinary course of business or as is otherwise
consistent with this Hold Separate Agreement, defendants shall not hire
and defendants shall not transfer or terminate, or alter any current
employment or salary agreements for any USA Waste or United employees
who (i) on the date of the signing of this Agreement, work at Kelly Run
Sanitation and the Hauling Business or (ii) are members of management
referenced in Section III(I) of this Order.
I. Until such time as Kelly Run Sanitation is divested, the Assets
to be Divested shall be managed by Stephen M. Callahan. Stephen M.
Callahan shall have complete managerial responsibility for Kelly Run
Sanitation and the Hauling Business, subject to the provisions of this
Order and the Final Judgment. In the event that Stephen M. Callahan is
unable to perform his duties, USA Waste shall appoint, subject to
plaintiffs' approval, a replacement within ten (10) working days.
Should USA Waste fail to appoint a replacement acceptable to plaintiffs
within ten (10) working days, plaintiffs shall appoint a replacement.
J. USA Waste shall take no action that would interfere with the
ability of any trustee appointed pursuant to the Final Judgment to
complete the divestiture pursuant to the Final Judgment to a suitable
purchaser.
K. This Hold Separate Stipulation and Order shall remain in effect
until consummation of the divestiture contemplated by the Final
Judgment or until further Order of the Court.
Dated: August 21, 1997.
For Plaintiff United States:
Frederick H. Parmenter,
U.S. Department of Justice, Antitrust Division, Litigation II Section,
Suite 3000, Washington, D.C. 20530, (202) 307-0620.
Linda L. Kelly,
United States Attorney.
Amy Reynolds Hay,
Assistant United States Attorney, Western District of Pennsylvania.
For the Commonwealth of Pennsylvania Office of the Attorney
General:
D. Michael Fisher,
Attorney General.
James A. Donahue, III,
Chief Deputy Attorney General, Antitrust Section.
Garrett F. Gallia,
Deputy Attorney General, Antitrust Section.
Attorneys for the Commonwealth of Pennsylvania:
14th Floor, Strawberry Square, Harrisburg, Pennsylvania 17120, (717)
787-4530
For Defendants USA Waste Services, Inc. and Riviera Acquisition
Corporation
James R. Weiss,
Preston, Gates, Ellis & Rouvelas Meeds, 1735 New York Avenue, N.W.,
Suite 500, Washington, D.C. 20530, (202) 662-8425.
For Defendant United Waste Systems, Inc.
Ilene Knable Gotts,
Wachtell, Lipton, Rosen & Katz, 51 West 52d Street, New York, New York
10019-6150, (212) 403-1247.
Order
It is so ordered, this 22d day of August, 1997.
Donetta Ambrose,
United States District Judge.
United States District Court, Western District of Pennsylvania,
Pittsburgh Division
United States of America, and Commonwealth of Pennsylvania
Plaintiffs, v. USA Waste Services, Inc., Riviera Acquisition
Corporation, and United Waste Systems, Inc. Defendants. Civil No.:
97-1524. Filed: 8/22/97, Judge Ambrose.
Final Judgment
Whereas, plaintiffs, the United States of America and the
Commonwealth of Pennsylvania, and defendants USA Waste Services, Inc.
(``USA Waste''), Riviera Acquisition Corporation (``Riviera''), and
United Waste Systems, Inc. (``United''), by their respective attorneys,
having consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law herein, and without this Final
Judgment constituting any evidence against or an admission by any party
with respect to any issue of law or fact herein;
And whereas, defendants have agreed to be bound by the provision of
this Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is the prompt and
certain divestiture of Kelly Run Sanitation, Inc. to assure that
competition is not substantially lessened;
And whereas, plaintiffs require defendants to make certain
divestitures for the purpose of establishing a viable competitor in the
disposal business in the Allegheny County, Pennsylvania area;
And whereas, defendants have represented to the plaintiffs that the
divestitures ordered herein can and will be made and that defendants
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
below;
Now, therefore, before the taking of any testimony, and without
trial or
[[Page 47683]]
adjudication of any issue of fact or law herein, and upon consent of
the parties hereto, it is hereby ordered, adjudged, and decreed as
follows:
I
Jurisdiction
This Court has jurisdiction over each of the parties hereto and
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against defendants, as hereinafter
defined, under Section 7 of the Clayton Act, as amended (15 U.S.C.
Sec. 18).
II
Definitions
As used in this Final Judgment:
A. ``USA Waste'' means defendant USA Waste Services, Inc., a
Delaware corporation with its headquarters in Houston, Texas, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, directors, officers, managers, agents, and
employees.
B. ``Riviera'' means defendant Riviera Acquisition Corporation, a
Delaware corporation which is a wholly owned subsidiary of USA Waste,
and includes its successors and assigns, and its subsidiaries,
divisions, groups, affiliates, directors, officers, managers, agents,
and employees.
C. ``United'' means defendant United Waste Systems, Inc., a
Delaware corporation with its headquarters in Greenwich, Connecticut,
and includes its successors and assigns, and its subsidiaries,
divisions, groups, affiliates, directors, officers, managers, agents,
and employees.
D. ``Allegheny County'' refers to Allegheny County, Pennsylvania.
E. ``Kelly Run Sanitation'' means Kelly Run Sanitation, Inc., which
is a wholly owned subsidiary of United, and all assets excluding the
Hauling Business, including:
1. All tangible assets, including all fee and all leasehold and
renewal rights in a landfill located at Road #3, Route 51, Elizabeth,
Pennsylvania 15037 (known as Kelly Run Landfill); the garage and
related facilities; offices; and landfill-related assets including
capital equipment, trucks and other vehicles, scales, power supply
equipment, interests, permits, and supplies; and
2. All intangible assets, including landfill-related customer
lists, contracts, and accounts.
F. ``Hauling Business'' means the Kelly Run Sanitation hauling-
related assets, including:
1. All tangible assets, including capital equipment, trucks and
other vehicles, containers, interests, permits, supplies, and related
facilities, except the garage and related facilities, located at Road
#3, Route 51, Elizabeth, PA 15037; and
2. All intangible assets, including hauling-related customer lists,
contracts, and accounts.
G. ``Hauling'' means the collection of nonhazardous solid waste
from customers and the transporting of the collected waste to disposal
sites.
H. ``Waste'' means nonhazardous solid waste.
I. ``Disposal'' means the business of disposing of nonhazardous
solid waste into Pennsylvania Department of Environmental Protection
approved disposal sites.
III
Applicability
A. The provisions of this Final Judgment apply to USA Waste, its
successors and assigns, subsidiaries, directors, officers, managers,
agents, and employees, and 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.
B. USA Waste shall require, as a condition of the sale or other
disposition of all or substantially all of the assets that comprise
Kelly Run Sanitation, that the transferee agrees to be bound by the
provisions of this Final Judgment.
IV
Divestiture
A. USA Waste is hereby ordered and directed in accordance with the
terms of this Final Judgment, within one hundred and twenty (120)
calendar days after the filing of the Complaint in this matter, or five
(5) days after notice of the entry of this Final Judgment by the Court,
whichever is later, to divest Kelly Run Sanitation as an ongoing
business to a purchaser acceptable to the United States in its sole
discretion, after consultation with the Commonwealth of Pennsylvania.
B. USA Waste shall use its best efforts to accomplish the
divestiture as expeditiously and timely as possible. The United States,
in its sole determination after consultation with the Commonwealth of
Pennsylvania, may extend the time period for any divestiture an
additional period of time not to exceed sixty (60) calendar days.
C. In accomplishing the divestiture ordered by this Final Judgment.
USA Waste promptly shall make known, by usual and customary means, the
availability of Kelly Run Sanitation. USA Waste shall inform any person
making an inquiry regarding a possible purchase that the sale is being
made pursuant to this Final Judgment and provide such person with a
copy of this Final Judgment. USA Waste shall also offer to furnish to
all bona fide prospective purchasers, subject to customary
confidentiality assurances, all information regarding Kelly Run
Sanitation customarily provided in a due diligence process except such
information subject to attorney-client privilege or attorney work-
product privilege. USA Waste shall make available such information to
the plaintiffs at the same time that such information is made available
to any other person.
D. USA Waste shall not interfere with any negotiations by any
purchaser to employ any USA Waste (or former United) employee who works
at, or whose principal responsibility is the waste disposal business
concerning Kelly Run Sanitation.
E. USA Waste shall permit prospective purchasers of Kelly Run
Sanitation to have access to personnel and to make such inspection of
Kelly Run Sanitation; access to any and all environmental, zoning, and
other permit documents and information; and access to any and all
financial, operational, or other documents and information customarily
provided as part of a due diligence process.
F. USA Waste shall warrant to the purchaser of Kelly Run Sanitation
that Kelly Run Sanitation will be operational on the date of sale.
G. USA Waste shall not take any action, direct or indirect, that
will impede in any way the operation of Kelly Run Sanitation.
H. USA Waste shall warrant to the purchaser of Kelly Run Sanitation
that there are no material defects in the environment, zoning, or other
permits pertaining to the operation of Kelly Run Sanitation and that
USA Waste will not undertake, directly or indirectly, following the
divestiture of Kelly Run Sanitation, any challenges to the environment,
zoning, or other permits pertaining to the operation of Kelly Run
Sanitation.
I. At the option of the purchaser, USA Waste will enter into an
agreement with the purchaser, at commercially available reasonable
terms and conditions, guaranteeing a flow of waste into the Kelly Run
Landfill for the purpose of maintaining Kelly Run Sanitation as a
viable, ongoing waste disposal business and preserving competition in
the disposal and hauling businesses in Allegheny County.
[[Page 47684]]
J. USA Waste shall not be permitted to locate any of its operations
at Kelly Run Sanitation.
K. Unless the United States, after consultation with the
Commonwealth of Pennsylvania, otherwise consents in writing, the
divestiture pursuant to Section IV, or by trustee appointed pursuant to
Section V of this Final Judgment, shall include Kelly Run Sanitation
and be accomplished by selling or otherwise conveying the Kelly Run
Sanitation to a purchaser in such a way as to satisfy the United
States, in its sole discretion, after consultation with the
Commonwealth of Pennsylvania, that Kelly Run Sanitation can and will be
used by the purchaser as part of a viable, ongoing business or
businesses, engaged in the waste disposal business in Allegheny County.
The divestiture, whether pursuant to Section IV or Section V of this
Final Judgment, shall be made to a purchaser for whom it is
demonstrated to the United States' sole satisfaction, after
consultation with the Commonwealth of Pennsylvania: (1) Has the
capability and intent of competing effectively in the waste disposal
business in Allegheny County; (2) has or soon will have the managerial,
operational, and financial capability to compete effectively in the
waste disposal business in Allegheny County; and (3) none of the terms
of any agreement between the purchaser and USA Waste gives USA Waste
the ability unreasonably to raise the purchaser's costs, to lower the
purchaser's efficiency, or otherwise to interfere in the ability of the
purchaser to compete effectively in Allegheny County.
V
Appointment of Trustee
A. In the event that USA Waste has not divested Kelly Run
Sanitation within the time specified in Section IV of this Final
Judgment, the Court shall appoint, on application of the United States,
a trustee selected by the United States, to effect the divestiture of
Kelly Run Sanitation.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell Kelly Run Sanitation described in
Section II(E) of this Final Judgment. The trustee shall have the power
and authority to accomplish the divestiture at the best price then
obtainable upon a reasonable effort by the trustee, subject to the
provisions of Sections IV and VIII of this Final Judgment, and shall
have such other powers as the Court shall deem appropriate. The trustee
shall have the right, in its sole discretion, to include in the package
of assets to be divested the Hauling Business: in such event, all of
the obligations of USA Waste under Section IV of this Final Judgment
shall apply to the Hauling Business as well. Subject to Section V(C) of
this Final Judgment, the trustee shall have the power and authority to
hire at the cost and expense of USA Waste any investment bankers,
attorneys, or other agents reasonably necessary in the judgment of the
trustee to assist in the divestiture, and such professionals and agents
shall be accountable solely to the trustee. The trustee shall have the
power and authority to accomplish the divestiture at the earliest
possible time to a purchaser acceptable to the United States, upon
consultation with the Commonwealth of Pennsylvania, and shall have such
other powers as this Court shall deem appropriate. USA Waste shall not
object to a sale by the trustee on any grounds other than the trustee's
malfeasance. Any such objections by USA Waste must be conveyed in
writing to the plaintiffs and the trustee within ten (10) calendar days
after the trustee has provided the notice required under Section VI of
this Final Judgment.
C. The trustee shall serve at the cost and expense of USA Waste, on
such terms and conditions as the Court may prescribe, and shall account
for all monies derived from the sale of Kelly Run Sanitation sold by
the trustee and all costs and expenses so incurred. After approval by
the Court of the trustee's accounting, including fees for its services
and those of any professionals and agents retained by the trustee, all
remaining money shall be paid to USA Waste and the trust shall then be
terminated. The compensation of such trustee and of any professionals
and agents retained by the trustee shall be reasonable in light of the
value of the divested business and based on a fee arrangement providing
the trustee with an incentive based on the price and terms of the
divestiture and the speed with which it is accomplished.
D. USA Waste shall use its best efforts to assist the trustee in
accomplishing the required divestiture, including best efforts to
effect all necessary regulatory approvals. The trustee and any
consultants, accountants, attorneys, and other persons retained by the
trustee shall have full and complete access to the personnel, books,
records, and facilities of the business to be divested, and USA Waste
shall develop financial or other information relevant to the business
to be divested customarily provided in a due diligence process as the
trustee may reasonably request, subject to customary confidentiality
assurances. USA Waste shall permit bona fide prospective acquirers of
Kelly Run Sanitation to have reasonable access to personnel and to make
such inspection of physical facilities and any and all financial,
operational or other documents and other information as may be relevant
to the divestiture required by this Final Judgment.
E. After its appointment, the trustee shall file monthly reports
with the parties and the Court setting forth the trustee's efforts to
accomplish the divestiture ordered under this Final Judgment; provided,
however, that to the extent such reports contain information that the
trustee deems confidential, such reports shall not be filed in the
public docket of the court. Such reports shall include the name,
address and telephone number of each person who, during the preceding
month, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the business to be divested,
and shall describe in detail each contact with any such person during
that period. The trustee shall maintain full records of all efforts
made to divest the business to be divested.
F. If the trustee has not accomplished such divestiture within six
(6) months after its appointment, the trustee thereupon shall file
promptly with the Court a report setting forth: (1) The trustee's
efforts to accomplish the required divestiture, (2) the reasons, in the
trustee's judgment, why the required divestiture has not been
accomplished, and (3) the trustee's recommendations; provided, however,
that to the extent such reports contain information that the trustee
deems confidential, such reports shall not be filed in the public
docket of the Court. The trustee shall at the same time furnish such
report to the parties, who shall each have the right to be heard and to
make additional recommendations consistent with the purpose of the
trust. The Court shall enter thereafter such orders as it shall deem
appropriate in order to carry out the purpose of the trust which may,
if necessary, include extending the trust and the term of the trustee's
appointment by a period requested by the United States.
VI
Notification
Within two (2) business days following execution of a definitive
agreement contingent upon compliance with the terms of this Final
Judgment to effect, in whole or in part, any proposed divestiture
pursuant to Sections IV of V of this Final Judgment, USA Waste or
[[Page 47685]]
the trustee, whichever is then responsible for effecting the
divestiture, shall notify plaintiffs of the proposed divestiture. If
the trustee is responsible, it shall similarly notify USA Waste. The
notice shall set forth the details of the proposed transaction and list
the name, address, and telephone number of each person not previously
identified who offered to, or expressed an interest in or a desire to,
acquire any ownership interest in the business to be divested that is
the subject of the binding contract, together with full details of
same. Within fifteen (15) calendar days of receipt by plaintiffs of
such notice, the United States, in its sole discretion, after
consultation with the Commonwealth of Pennsylvania, may request from
USA Waste, the proposed purchaser, or any other third party additional
information concerning the proposed divestiture and the proposed
purchaser. USA Waste and the trustee shall furnish any additional
information requested from them within fifteen (15) calendar days of
the receipt of the request, unless the parties shall otherwise agree.
Within thirty (30) calendar days after receipt of the notice or within
twenty (20) calendar days after the plaintiffs have been provided the
additional information requested from USA Waste, the proposed
purchaser, and any third party, whichever is later, the United States,
after consultation with the Commonwealth of Pennsylvania, shall provide
written notice to USA Waste and the trustee, if there is one, stating
whether or not it objects to the propose divestiture. If the United
States provides written notice to USA Waste and the trustee that it
does not object, then the divestiture may be consummated, subject only
to USA Waste's limited right to object to the sale under Section V(B)
of this Final Judgment. Upon objection by the United States, a
divestiture proposed under Section IV or Section V shall not be
consummated. Upon objection by USA Waste under the provision in Section
V(B), a divestiture proposed under Section V shall not be consummated
unless approved by the Court.
VII
Affidavits
A. Within twenty (20) calendar days of the filing of the Final
Judgment in this matter and every thirty (30) calendar days thereafter
until the divestiture has been completed whether pursuant to Section IV
of Section V of this Final Judgment, USA Waste shall deliver to
plaintiffs an affidavit as to the fact and manner of compliance with
Section IV of Section V of this Final Judgment. Each such affidavit
shall include, inter alia, the name, address, and telephone number of
each person who, at any time after the period covered by the last such
report, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contact or made an inquiry
about acquiring, any interest in the business to be divested, and shall
described in detail each contact with any such person during that
period. Each such affidavit shall also include a description of the
efforts that USA Waste has taken to solicit a buyer for Kelly Run
Sanitation and to provide required information to prospective
purchasers including the limitations, if any, on such information.
Assuming the information set forth in the affidavit is true and
complete, any objection by the United States after the consultation
with the Commonwealth of Pennsylvania to information provided by USA
Waste including limitations on information, shall be made within
fourteen (14) days of receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter USA Waste shall deliver to plaintiffs and affidavit
which describes in detail all actions USA Waste has taken and all steps
USA Waste has implemented on an on-going basis to preserve Kelly Run
Sanitation and the Hauling Business pursuant to Section VIII of this
Final Judgment and the Hold Separate Stipulation and Order entered by
the Court. The affidavit also shall describe, but not be limited to,
USA Waste's efforts to maintain and operate Kelly Run Sanitation and
the Hauling Business as an active competitor, maintain the management,
staffing, sales, marketing and pricing of Kelly Run Sanitation and
Hauling Business, and maintain the Kelly Run Landfill in operable
condition at current capacity configurations. USA Waste shall deliver
to plaintiffs an affidavit describing any changes to the efforts and
actions outlined in USA Waste's earlier affidavit(s) filed pursuant to
this Section within fifteen (15) calendar days after the change is
implemented.
C. Until one year after such divestiture has been completed, USA
Waste shall preserve all records of all efforts made to preserve the
business to be divested and effect the divestiture.
Hold Separate Order
Until the divestitures required by the Final Judgment have been
accomplished. USA Waste shall take all steps necessary to comply with
the Hold Separate Stipulation and Order entered by this Court.
Defendants shall take no action that would jeopardize the divestiture
of Kelly Run Sanitation.
IX
Financing
USA Waste is ordered and directed not to finance all or any part of
any purchase by an acquirer made pursuant to Sections IV or V of this
Final Judgment without prior written consent of the United States, in
it sole discretion, after consultation with the Commonwealth of
Pennsylvania.
X
Compliance Inspection
For purposes of determining or securing compliance with the Final
Judgment and subject to any legally recognized privilege from time to
time:
A. Duly authorized representatives of the United States Department
of Justice, upon written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, or upon
written request of duly authorized representatives of the Attorney
General's Office of the Commonwealth of Pennsylvania, and on reasonable
notice to USA Waste made to its principal offices, shall be permitted:
1. Access during office hours of USA Waste to inspect and copy all
books, ledgers, accounts, correspondence, memoranda, and other records
and documents in the possession or under the control of USA Waste, who
may have counsel present, relating to the matters contained in this
Final judgment and the Hold Separate Stipulation and Order; and
2. Subject to the reasonable convenience of USA Waste and without
restraint or interference from it, to interview, either informally or
on the record, its officers, employees, and agents, who may have
counsel present, regarding any such matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, or upon
the written request of the Attorney General's Office of the
Commonwealth of Pennsylvania. USA Waste shall submit such written
reports, under oath if requested, with respect to any matter contained
in the Final Judgment and the Hold Separate Stipulation and Order.
C. No information or documents obtained by the means provided in
Sections VII or X of this Final Judgment shall be divulged by a
representative of the plaintiffs to any person other than a duly
authorized representative of the Executive Branch of the United States,
or the Attorney General's Office of the Commonwealth of Pennsylvania,
except
[[Page 47686]]
in the course of legal proceedings to which the United States or the
Commonwealth of Pennsylvania is a party (including grand jury
proceedings), 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 USA
Waste to plaintiffs, USA Waste 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 USA Waste 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 ten (10) calendar days notice
shall be given by plaintiffs to USA Waste prior to divulging such
material in any legal proceeding (other than a grand jury proceeding)
to which USA Waste is not a party.
XI
Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any 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 for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XII
Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XIII
Public Interest
Entry of this Final Judgment is in the public interest.
Dated ____________________, 1997.
----------------------------------------------------------------------
United States District Judge
United States District Court, Western District of Pennsylvania,
Pittsburgh Division
United States of America, and Commonwealth of Pennsylvania,
Plaintiffs, versus USA Waste Services, Inc., Riviera Acquisition
Corporation, and United Waste Systems, Inc., Defendants. Civil No:
97-1524. Filed: 8/22/97, Judge Ambrose.
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. 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 August 22, 1997, the United States filed a civil antitrust
Complaint which alleges that the proposed acquisition of the voting
stock of United Waste Systems, Inc. (``United'') by USA Waste Services,
Inc. (``USA Waste'') would violate Section 7 of the Clayton Act, 15
U.S.C. 18. The Complaint alleges that the combination of these two
significant competitors would substantially lessen competition in
providing disposal services to haulers of municipal solid waste
(``MSW'') generated in Allegheny County, Pennsylvania. MSW means
garbage, refuse, industrial lunchroom and office waste and other
materials generated by residential, municipal, commercial or industrial
establishments. It does not include special hauling waste or
construction demolition debris. The prayer for relief in the Complaint
seeks: (1) A judgment that the proposed acquisition would violate
Section 7 of the Clayton Act; and (2) a permanent injunction preventing
USA Waste from acquiring control of United.
When the Complaint was filed, the United States also filed a
proposed settlement that would permit USA Waste to complete its
acquisition of United but requires a divestiture that will preserve
competition in the Allegheny County market. This settlement consists of
a Stipulation and Order, a Hold Separate Stipulation and Order, and a
proposed Final Judgment.
The proposed Final Judgment orders USA Waste to divest Kelly Run
Sanitation, Inc. (``Kelly Run Sanitation'') which is located in
Pittsburgh, Pennsylvania. Kelly Run Sanitation is a subsidiary of
United and owns the Kelly Run Landfill. The proposed Final Judgment
excludes the hauling-related Kelly Run Sanitation assets from
divestiture. At the option of the purchaser of Kelly Run Sanitation,
USA Waste will enter into an agreement with the purchaser, containing
reasonable terms and conditions, guaranteeing a flow of waste into the
Kelly Run Landfill for the purpose of maintaining Kelly Run Sanitation
as a viable ongoing waste disposal business.
The Stipulation and Order, Hold Separate Stipulation and Order, and
proposed Final Judgment require USA Waste to ensure that, until the
divestitures mandated by the proposed Final Judgment have been
accomplished, Kelly Run Sanitation will be maintained and operated as
an independent, ongoing, economically viable and active competitor. USA
Waste must preserve and maintain Kelly Run Sanitation as a saleable,
ongoing concern, with competitively sensitive business information and
decision-making divorced from that of USA Waste. USA Waste will appoint
a person or persons to monitor and ensure its compliance with these
requirements of the proposed 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
USA Waste is a Delaware corporation with its principal office in
Houston, Texas. USA Waste is engaged in providing nonhazardous solid
waste hauling and/or disposal services in 36 states in the United
States; Washington, D.C., and Puerto Rico. In 1996, USA Waste had total
revenues of approximately $1.3 billion.
United is a Delaware corporation with its principal office in
Greenwich, Connecticut. United is engaged in providing nonhazardous
solid waste hauling and/or disposal services in 23 states in the United
States. In 1996, United had total revenues of approximately
$335,743,000.
Rivera is a Delaware corporation. It is a wholly owned subsidiary
of USA Waste. USA Waste, Riviera, and United entered into an Agreement
and Plan of Merger on April 13, 1997 through which Riviera will be
merged with United and United's common stock will be converted into USA
Waste common stock. As a result of the Agreement and Plan of Merger,
USA Waste will hold 100 percent of the voting securities of United.
This transaction, which would take place in a highly concentrated
Allegheny County, Pennsylvania MSW disposal market, precipitated the
government's suit.
[[Page 47687]]
A. The Transaction's Effects in the Allegheny County, Pennsylvania
Market
The Complaint alleges that MSW disposal services constitutes a line
of commerce, or relevant product market, for antitrust purposes, and
that Allegheny County constitutes an appropriate section of the
country, or relevant geographic market. The Complaint alleges the
effect of USA Waste's acquisition may be to substantially lessen
competition in providing disposal services to haulers of MSW generated
in Allegheny County.
Disposal of MSW in the Commonwealth of Pennsylvania is regulated
and the requirements imposed by Pennsylvania law limit the means by
which MSW can properly be disposed. The Pennsylvania Solid Waste
Management Act (``Solid Waste Act''), 35 P.S. 6018.101 et seq., is
intended to protect the public by setting forth requirements for the
proposed disposal of solid waste in the Commonwealth of Pennsylvania.
The statute authorizes the Pennsylvania Department of Environmental
Protection to oversee the storage, collection, transportation,
processing, treatment and disposal of non-hazardous solid waste
through, among other things, a comprehensive system of permits and
regulations governing Pennsylvania landfills. MSW regulated by the
Solid Waste Act include garbage, refuse, industrial lunchroom and
office waste, and other materials generated by residential, municipal,
commercial or institutional establishments.
In Pennsylvania, MSW is a separate and distinct waste product. The
statutes and regulations of the Commonwealth of Pennsylvania which
regulate MSW and the physical characteristics of MSW result in MSW
being stored, handled, hauled, and disposed of differently from other
types of waste.
MSW haulers use landfills to dispose of waste. Access to landfills
at competitive prices where a hauler is operating (e.g. Allegheny
County) is essential to hauling companies. Disposal costs account for
approximately 30 to 40 percent of the amount a hauler charges for
collection services. A large amount of MSW is generated in Allegheny
County and the defendants' landfills are the recipients of a very large
percentage of the MSW generated in Allegheny County.
MSW generated in Allegheny County is generally transported by
collection trucks to landfills, and the availability of landfills close
to a hauler's MSW routes is a major element that determines a hauler's
competitiveness and profitability. In addition, MSW haulers must
achieve route density (a large number of customers that are located
close together in a small geographic area) for them to be profitable.
As a result, local haulers generally establish MSW routes, utilize
landfills, and establish garages and related facilities in a local
geographic area.
Due to the high costs of transporting MSW, and the substantial
travel time to other landfills based on distance, natural barriers and
congested roadways, haulers of MSW generated in Allegheny County are
limited to landfills located in Allegheny County and in central
Washington County, western Westmoreland County and Butler County,
(hereinafter the ``greater Pittsburgh area''). Virtually all of the MSW
generated in Allegheny County is disposed of exclusively in landfills
in the greater Pittsburgh area. In addition, landfills in the greater
Pittsburgh area price discriminate--in other words, they charge higher
prices to haulers of MSW generated in Allegheny County than they charge
to other haulers outside of Allegheny County where more MSW disposal
facilities are available to them. In the event of a small but
significant and non-transitory price increase by landfills in the
greater Pittsburgh area, haulers of MSW generated in Allegheny County
would not turn to disposal facilities outside the greater Pittsburgh
area.
USA Waste and United compete with each other and with other
companies to provide disposal for MSW generated in Allegheny County.
USA Waste and United are the first and third largest disposers of MSW
generated in Allegheny County. USA Waste, Browning Ferris Industries
(``BFI''), and United dispose of more than 90 percent of the MSW
generated in Allegheny County at their landfills. During 1996, based on
Allegheny County MSW disposal data, USA Waste accounted for 51.3
percent of the market and United accounted for 8.2 percent. The
acquisition would give USA Waste almost 60 percent of the market (59.5
percent) and two firms would control over 90 percent of the MSW
disposal market for MSW generated in Allegheny County. The post-merger
HHI based on the amount of municipal waste from Allegheny County
disposed in 1996 would be approximately 4600, an increase of about 840
over the pre-acquisition HHI. Alternatively, the post merger HHI, based
on the daily capacity available for MSW generated in Allegheny County,
would be approximately 3480 with a change of about 590.
The substantial increase in concentration in the market for
disposal of MSW generated in Allegheny County caused by the acquisition
by USA Waste of United's Kelly Run Landfill would likely understate the
impact of the acquisition on competition. Downtown Pittsburgh and other
heavily populated areas of Allegheny County are located on the southern
side of the Ohio and Allegheny Rivers. Travel from north to south in
the county is time-consuming because of the need to use bridges and
tunnels. These physical constraints on travel result in three firms,
USA Waste, United and BFI, having substantial locational advantages in
serving Pittsburgh and its close-in suburbs. After the acquisition, USA
Waste will control four of the five landfills that are within 20 miles
of downtown Pittsburgh and in the area of highest population in
Allegheny County. More distant landfills in the greater Pittsburgh
area, such as those located in Butler County, would not be realistic
competitive alternatives south of the Allegheny and Ohio Rivers in the
event of a small but significant and non-transitory price increase by
landfills in that area.
USA Waste is also engaged in the collection and hauling of MSW in
Allegheny County. Because USA Waste will control four of the five
landfills that are within 20 miles of downtown Pittsburgh and the area
of highest population in Allegheny County. USA Waste will be able to
raise landfill rates to haulers competing against them for MSW
collection in many of the highest populated areas of Allegheny County.
In outlying areas of Allegheny County where alternative landfill
operation may exist, USA Waste can charge lower prices to haulers
(price discriminate) to retain their business. Because disposal costs
range from approximately 30 percent to 40 percent of a hauler's
revenue, USA Waste's ability to raise the competitions' hauling prices
in many of the most populated areas of Allegheny County will quickly
make those haulers uncompetitive.
Entry by a new landfill would not be timely, likely or sufficient
to prevent substantial harm to competition. Opening a new landfill in
the greater Pittsburgh area is considered to be difficult, time
consuming, and costly. Commonwealth of Pennsylvania Executive Order
1996-5, Municipal Waste Facilities Review program, August 29, 1996,
makes it difficult if not impossible to obtain a landfill permit. Local
opposition to a new landfill would be considerable. In addition, it
would be extremely difficult to obtain the necessary land and building
the landfill would be very costly. A new
[[Page 47688]]
landfill built in the greater Pittsburgh area to serve Allegheny County
is not expected in the next 10 years. Similarly, it is very difficult
and possibly unlikely that a transfer station permit could be obtained
to serve the populated areas of Allegheny County. Executive Order 1996-
5 and opposition from local citizens would make it unlikely.
B. Harm to Competition as a Consequence of the Acquisition
The Complaint alleges that the transaction would have the following
effects, among others: competition in providing disposal services to
haulers of MSW generated in Allegheny County will be substantially
lessened; actual and potential competition between USA Waste and United
in providing disposal services to haulers of MSW generated in Allegheny
County will be eliminated; and prices for disposal services to haulers
of MSW generated in Allegheny County are likely to increase above
competitive levels.
III
Explanation of the Proposed Final Judgment
The provisions of the proposed Final Judgment are designed to
eliminate the anticompetitive effects of the acquisition in the market
for the disposal of MSW generated in Allegheny County by establishing a
new, independent and economically viable competitor in that market. The
proposed Final Judgment requires USA Waste and United, within 120 days
after the filing of the Complaint in this matter, or five days after
notice of entry of this Final Judgment by the Court, whichever is
later, to divest, as a viable ongoing business, Kelly Run Sanitation
and related assets, but excludes the Kelly Run Sanitation hauling-
related assets. The divestiture would include, among other assets, the
Kelly Run Landfill, the garage and office, trucks and vehicles, scales,
permits, and intangible assets such as landfill customer contracts. In
addition, the proposed Final Judgment intends to eliminate the
anticompetitive effects of the acquisition by providing that, at the
option of the purchaser, USA Waste will enter into an agreement with
the purchaser, containing reasonable terms and conditions, guaranteeing
a flow of waste into the Kelly Run Landfill. Such a waste flow
agreement would help assure the viability of the purchaser.
If USA Waste and United cannot accomplish this divestiture within
the above-described period, the Final Judgment provides that, upon
application (after consultation with the Commonwealth of Pennsylvania)
by the United States as plaintiff, the Court will appoint a trustee to
effect divestiture. The trustee has the power to include with Kelly Run
Sanitation the Kelly Run Sanitation hauling-related assets to make
Kelly Run Sanitation saleable.
The proposed Final Judgment provides that the assets must be
divested in such a way as to satisfy plaintiff United States (after
consultation with the Commonwealth of Pennsylvania) that the operation
can and will be operated by the purchaser or purchasers as a viable,
ongoing business that can compete effectively in the relevant market.
The defendants must take all reasonable steps necessary to accomplish
the divestiture, and shall cooperate with bona fide prospective
purchasers and, if one is appointed, with the trustee.
If a trustee is appointed, the proposed Final Judgment provides
that USA Waste will pay all costs and expenses of the trustee. The
trustee's commission will be structured so as to provide an incentive
for the trustee based on the price obtained and the speed with which
divestiture is accomplished. After his or her appointment becomes
effective, the trustee will file monthly reports with the parties and
the Court, setting forth the trustees efforts to accomplish
divestiture. At the end of six months, if the divestiture has not been
accomplished, the trustee and the parties will make recommendations to
the Court which shall enter such orders as appropriate in order to
carry out the purpose of the trust, including extending the trust or
the term of the trustee's appointment.
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 defendant.
V
Procedures Available for Modification of the Proposed Final Judgment
The United States 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 and 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: J. Robert Kramer II, Chief, Litigation II Section,
Antitrust Division, United States Department of Justice, 1401 H Street,
NW., Suite 3000, 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, a full trial on the merits against defendants USA Waste
and United. The United States could have brought suit and sought
preliminary and permanent injunctions against USA Waste's acquisition
of the voting stock of United. The United States is satisfied, however,
that the divestiture of the described assets outlined in the proposed
Final Judgment will encourage viable competitors in the market
identified by the United States as requiring the relief implemented.
The United States is satisfied that the proposed relief will prevent
the
[[Page 47689]]
acquisition from having anticompetitive effects in this market. The
divestiture will restore the market to the structure that existed prior
to the acquisition, and will preserve the existence of independent
competitors in this area.
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) (emphasis added). As the Court of Appeals for the
District of Columbia Circuit recently held, the APPA 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 (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.'' \1\ Rather.
\1\ 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. 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. 93-1463, 93rd Cong. 2d
Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 6535,
6538.
---------------------------------------------------------------------------
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).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988) quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083
(1981); see also, Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent
requires that
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\2\
\2\ United States v. Bechtel, 648 F.2d at 666 (citations
omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d
at 463; 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 at 565.
---------------------------------------------------------------------------
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' (citations
omitted).'' \3\
---------------------------------------------------------------------------
\3\ 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.
For Plaintiff United States of America:
----------------------------------------------------------------------
Frederick H. Parmenter
----------------------------------------------------------------------
Arthur A. Feiveson
----------------------------------------------------------------------
Stephen F. Sonnett
----------------------------------------------------------------------
Viqar M. Shariff
Attorneys, U.S. Department of Justice, Antitrust Division, 1401
H St., N.W., Washington, D.C. 20530 (202) 307-0620.
Certification of Service
I hereby certify that a copy of the foregoing has been served upon
USA Waste Services, Inc., United Waste Systems, Inc., and the Office of
the Attorney General of the Commonwealth of Pennsylvania, 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
______ day of August, 1997.
USA Waste Services, Inc.: c/o James R. Weiss, Preston, Gates, Ellis &
Rouvelas Meeds, Suite 500, 1735 New York Ave., NW, Washington, D.C.
20006-5209
United Waste Systems, Inc.: c/o Ilene Knable Gotts, Wachtell, Lipton,
Rosen & Katz, 51 West 52d Street, New York, NY 10019-6150
Commonwealth of Pennsylvania: James A. Donahue, III, Chief Deputy
Attorney General, Antitrust Section, 14th Floor, Strawberry Square,
Harrisburg, PA 17120
----------------------------------------------------------------------
Fredrick H. Parmenter,
Attorney, U.S. Department of Justice, Antitrust Division, 1401 H.
Street, N.W., Suite 3000, Washington, D.C. 20530, (202) 307-0620.
[FR Doc. 97-23869 Filed 9-9-97; 8:45 am]
BILLING CODE 4410-11-M