[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Notices]
[Pages 41292-41296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20578]


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DEPARTMENT OF JUSTICE

Antitrust Division


Proposed Final Judgment and Competitive Impact Statement; United 
States v. City of Stilwell, OK, 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 Competitive Impact Statement have been filed with the 
United States District Court for the Eastern District of Oklahoma in 
United States v. City of Stilwell, Oklahoma, et al., CIV 96-196B. The 
proposed Final Judgment is subject to approval by the Court after the 
expiration of the statutory sixty-day public comment period and 
compliance with the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h).
    On April 25, 1996, the United States filed a civil antitrust 
complaint under Section 4 of the Sherman Act, as amended, 15 U.S.C. 4, 
alleging that defendants City of Stilwell, Oklahoma and the Stilwell 
Area Development Authority adopted and enforced a policy by which 
defendants, the sole suppliers of public water and sewer services to 
customers within Stilwell city limits, refused to provide water or 
sewer services to those unless they agreed to purchase electric service 
from the City's Utility Department. The complaint alleged that this 
``all-or-none'' utility policy violated Sections 1 and 2 of the Sherman 
Act, 15 U.S.C. 1 and 2, and sought a judgment by the Court declaring 
the defendants' policy to be an unlawful restraint of trade. The 
complaint also sought an order by the Court to enjoin the defendants 
from requiring any consumer of electricity to purchase retail electric 
service from the City as a condition of receiving water and sewer 
service, or otherwise discriminating against any customer that 
purchases or may purchase electric service elsewhere.
    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA, unless 
the United States withdraws its consent. The Court's entry of the 
proposed Final Judgment will terminate this civil action against the 
defendants, except that the Court will retain jurisdiction over the 
matter for possible further proceedings to construe, modify, terminate 
or enforce the judgment, or to punish violations of any of its 
provisions.
    The proposed Final Judgment contains three principal forms of 
relief. First, the defendants are enjoined from requiring any consumer 
of electricity to

[[Page 41293]]

purchase retail electric service from the defendants as a condition of 
receiving water or sewer service from the defendants. Second, 
defendants are required to include a disclaimer on any application for 
water or sewer service or other written materials distributed by 
defendants to prospective applicants for water and sewer that states 
that defendants do not require any applicants to purchase electric 
service from them as a condition of receiving water or sewer service. 
Third, the proposed Final Judgment requires defendants to implement an 
antitrust compliance program directed toward avoiding a repetition of 
their anticompetitive behavior.
    Public comment is invited within the sixty days of the publication 
of this notice. All comments, and responses thereto, will be published 
in the Federal Register and filed with the Court. Written comments 
should be directed to Roger W. Fones, Chief, Transportation, Energy and 
Agriculture Section, Antitrust Division, 325 Seventh Street, N.W., 
Suite 500, Washington, D.C. 20530 (telephone: (202) 307-6351). Copies 
of the Complaint, Stipulation, proposed Final Judgment and Competitive 
Impact Statement are available for inspection in Room 215 of the U.S. 
Department of Justice, Antitrust Division, 325 Seventh Street, N.W., 
Washington, D.C. 20530 (telephone: (202) 514-2481) and at the office of 
the Clerk of the United States District Court for the Eastern District 
of Oklahoma, United States Courthouse, 5th and Okmulgee Streets, 
Muskogee, Oklahoma 74401.
    Copies of any of these materials may be obtained upon request and 
payment of a copying fee.
Constance K. Robinson,
Acting Director of Civil Non-Merger Enforcement Antitrust Division.
    United States of America, Plaintiff, v. City of Stilwell, 
Oklahoma, et al., Defendants.

[Case No. CIV 96-196B]

Stipulation and Order

    It is hereby 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 Eastern District of 
Oklahoma.
    2. The parties stipulated 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 Procedure and Penalties Act (15 
U.S.C. 16), and without further notice to any party or other 
proceedings, provided that plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed Final 
Judgment by serving notice thereof on defendants and by filing that 
notice with the Court.
    3. Each defendant shall abide by and comply with the provisions of 
the proposed Final Judgment pending entry of the Final Judgment by the 
Court and shall, from the date of the signing of this Stipulation by 
the parties, 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. In the event that plaintiff withdraws its consent, as provided 
in paragraph 2 above, 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.

      Respectfully submitted,

    For Plaintiff, United States of America:
John R. Read,
Michele B. Cano,
Michael D. Billiel,
Attorneys, Antitrust Division, U.S. Department of Justice, 325 Seventh 
Street, N.W., Washington, D.C. 20004, (202) 307-0468.

    For Defendants, City of Stilwell and Stilwell Area Development 
Authority:
Lloyd E. Cole, Jr.,
Nason Morton,
Cole Law Office, 120 W. Division Street, Stilwell, OK 74960, (918) 696-
7331.

Order

    It is so ordered, this ____ day of ____, 1998.

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United States District Court Judge
    United States of America, Plaintiff, v. City of Stilwell, 
Oklahoma, et al. Defendants.

Final Judgment

[Case No. CIV 96-196-B]

    Plaintiff, United States of America, filed its Complaint on April 
25, 1996. Plaintiff and defendants, by their respective attorneys, have 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law. This Final Judgment shall not 
be evidence against or an admission by any party with respect to any 
issue of fact or law. Therefore, without trial or adjudication of any 
issue of fact or law herein, and upon consent of the parties, it is 
hereby Ordered, Adjudged, and Decreed, as follows:

I. Jurisdiction

    This Court has jurisdiction of the subject matter of this action 
and of each of the parties consenting hereto. Venue is proper in the 
Eastern District of Oklahoma. The Complaint states a claim upon which 
relief may be granted against the defendants under Sections 1 and 2 of 
the Sherman Act, 15 U.S.C. Secs. 1 & 2.

II. Definitions

    As used herein:
    (A) the term ``defendants'' means the City of Stilwell, Oklahoma 
(``City'') and the Stilwell Area Development Authority;
    (B) the term ``document'' means all ``writing and recordings'' as 
that phrase is defined in Rule 1001(1) of the Federal Rules of 
Evidence;
    (C) two or more products are ``unbundled'' when available 
separately and priced such that the seller's charge for the combination 
is no less than the sum of the individual product prices;
    (D) the term ``person'' means any natural person, corporation, 
firm, company, sole proprietorship, partnership, association, 
institution, governmental unit, public trust, or other legal entity.

III. Applicability

    (A) This Final Judgment applies to the defendants, jointly and 
severally, and to their respective successors, assigns, and to all 
other persons in active concert or participation with any of them who 
shall have received actual notice of the Final Judgment by personal 
service or otherwise.
    (B) Nothing herein contained shall suggest that any portion of this 
Final Judgment is or has been created for the benefit of any third 
party and nothing herein shall be construed to provide any rights to 
any third party.

IV. Prohibited and Mandated Conduct

    (A) The defendants, and each of them, are enjoined and restrained 
from requiring any consumer of electric energy to purchase retail 
electric service from a defendant as a condition of receiving water or 
sewer service from a defendant.
    (B) Any application for water or sewer service or other written 
materials distributed by a defendant to prospective applicants for 
water or sewer service shall include, in a conspicuous manner, the 
following disclaimer:

    Although we provide electric service, as well as water and sewer 
services, we do not require you to purchase electric service from us 
as a condition of receiving water or sewer service and we will not 
discriminate against

[[Page 41294]]

you if you do not purchase electric service from us.

    (C) The defendants, and each of them, are enjoined and restrained 
from denying, withholding, or delaying any service, license or permit, 
or otherwise threatening, discriminating or retaliating against any 
person that has not agreed to purchase or does not purchase electric 
service from a defendant, unless defendants' reason for such conduct is 
unrelated to such person's choice of retail electric provider.

V. Limiting Conditions

    Nothing in this Final Judgment shall prohibit a defendant from:
    (A) Exercising any valid right now or hereafter conferred by State 
law to expropriate facilities used by any retail electric supplier to 
furnish electric energy within the City's corporate boundaries;
    (B) Commencing or prosecuting, in good faith, litigation to 
ascertain or protect any right now or hereafter conferred by State law 
to restrict the furnishing of electric energy within the City's 
corporate boundaries to retail electric suppliers authorized by law to 
do so; and
    (C) Furnishing any premises with more than one utility service on 
an unbundled basis.

VI. Compliance Program

    (A) Defendants are ordered to maintain an antitrust compliance 
program which shall include the following:
    (1) Designating, within 30 days of entry of this Final Judgment, 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 defendants to ensure that they comply with this 
Final Judgment.
    (2) The Antitrust Compliance Officer shall be responsible for 
accomplishing the following activities:
    (a) providing copies of this Final Judgment to individuals 
currently serving on the governing boards, and to non-clerical 
employees of the Stilwell Utility Department and the Stilwell Area 
Development Authority, and to each individual hereafter assuming any 
such position, and obtaining a written certification from such 
individuals that they received, read, understand to the best of their 
ability, and agree to abide by this Final Judgment and that they have 
been advised that noncompliance with the Final Judgment may result in 
conviction for criminal contempt of court; and
    (b) briefing annually the governing boards and the non-clerical 
employees of the Stilwell Utility Department and the Stilwell Area 
Development Authority on this Final Judgment and the antitrust laws.

VII. Certification

    (A) Within 75 days after the entry of this Final Judgment, the 
defendants shall certify to the plaintiff that they have complied with 
Section IV above, designated an Antitrust Compliance Officer, and 
distributed the Final Judgment in accordance with Section VI(A) above.
    (B) For each year of the term of this Final Judgment, the 
defendants shall file with the plaintiff, on or before the anniversary 
date of entry of this Final Judgment, a statement as to the fact and 
manner of their compliance with the provisions of Section IV and VI 
above.

VIII. Plaintiff Access

    (A) To determine or secure compliance with this Final Judgment and 
for no other purpose, duly authorized representatives of the plaintiff 
shall, upon written request of the Assistant Attorney General in charge 
of the Antitrust Division, and on reasonable notice to a defendant made 
to its principal office, be permitted, subject to any legally 
recognized privilege:
    (1) Access during such defendant's office hours to inspect and copy 
all documents in the possession or under the control of the defendant, 
who may have counsel present, relating to any matters contained in this 
Final Judgment; and
    (2) Subject to the reasonable convenience of such defendant and 
without restraint or interference from it, to interview officers, 
employees or agents of the defendant, who may have counsel present, 
regarding such matters.
    (B) Upon the written request of the Assistant Attorney General in 
charge of the Antitrust Division made to a defendant's principal 
office, such defendant shall submit such written reports, under oath if 
requested, relating to any matters contained in this Final Judgment as 
may be reasonably requested, subject to any legally recognized 
privilege.
    (C) No information or documents obtained by the means provided in 
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 (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 to 
plaintiff, the 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 10 days notice shall be given 
by plaintiff to the 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. Further Elements of the Final Judgment

    (A) This Final Judgment shall expire ten years from the date of 
entry.
    (B) 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 further orders and directions as may be necessary 
or appropriate to carry out or construe this Final Judgment, to modify 
or terminate any or all of its provisions, to enforce compliance, and 
to punish violations of its provisions.
    (C) Each party shall bear their respective costs and attorneys 
fees.
    (D) Entry of this Final Judgment is in the public interest.

    Dated: ________.

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United States District Judge
    United States of America, Plaintiff, v. City of Stilwell, 
Oklahoma, et al., Defendants.

[Case No. CIV 96-196 B]

Competitive Impact Statement

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

I. Nature and Purpose of This Proceeding

    On April 25, 1996, the United States filed a Complaint alleging 
that the defendants City of Stilwell, Oklahoma (``City'') and Stilwell 
Area Development Authority (``ADA'') (collectively ``Defendants'') had 
violated the Sections 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1 and 
2. The Complaint challenged a utility policy adopted and implemented by 
Defendants, the sole suppliers of public water and sewer services to

[[Page 41295]]

customers within the Stilwell city limits, by which Defendants refused 
to extend or connect water or sewer lines to customers unless the 
customers also agreed to purchase electric service from the City's 
Utility Department. The effect of this policy, commonly referred to as 
the ``all-or-none utility policy,'' has been to restrict competition in 
the provision of electric services in newly annexed areas of Stilwell.
    On July 15, 1998, the United States and Defendants filed a 
Stipulation and Order consenting to the entry of a proposed Final 
Judgment designed to eliminate the all-or-none utility policy and 
prevent Defendants from implementing any similar restriction in the 
future. Under the proposed Final Judgment, Defendants would be enjoined 
from requiring any consumer of electric energy to purchase retail 
electric service from Defendants as a condition of receiving water or 
sewer service from Defendants, and would be enjoined from taking 
actions to impose any similar restrictions on City residents in the 
future. The proposed Final Judgment also requires that any application 
for water or sewer service or other written materials distributed by 
Defendants to prospective applicants include a disclaimer stating that 
customers are not required to purchase City electricity as a condition 
of receiving water or sewer service.
    The United States and 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

    The City of Stilwell is a charter municipality, organized and 
existing under the laws of the State of Oklahoma. Its Utility 
Department was established by Section 106 of the City's Charter as a 
business enterprise to provide electricity within and around the City's 
corporate boundaries. The Utility Department is governed by a Utility 
Board of five members appointed by the Mayor with the approval of the 
City Council and is subject to the Council's oversight.
    The Stilwell Area Development Authority (``ADA'') is a public 
trust, organized and existing under Oklahoma law, to provide water and 
sewer service for compensation within and around the City's corporate 
boundaries. It is governed by a Board of Trustees whose membership is 
identical to that of the City's Utility Board and which is likewise 
subject to the Council's oversight.
    Defendants provide water, sewer, and electric service in Stilwell. 
Within the pre-1961 boundaries of Stilwell, the City's Utility 
Department is the sole provider of electric service. But in areas of 
Stilwell annexed since that time, the City competes with Ozarks Rural 
Electric Cooperative (``Ozarks'') for sales to new electric service 
customers. In both pre-1961 Stilwell and areas subsequently annexed, 
Defendants have virtual monopoly on the sale of water and sewer 
services.
    Beginning as early as 1985, the Defendants adopted an all-or-none 
utility policy, refusing water and sewer services to any customer who 
did not agree to purchase electric service from the City. The purpose 
of the policy was to prevent Ozarks from obtaining new electric 
customers in the annexed areas. The Utility Department and ADA 
formalized the all-or-none utility policy in 1994, and the Stilwell 
City Council subsequently approved the policy.
    To enforce its all-or-none policy, the Defendants denied water and 
sewer connections, turned off already connected lines, and otherwise 
discriminated against those customers in annexed areas who tried to 
obtain electric service from Ozarks. Defendants' enforcement of the 
policy deprived customers of their right to choose freely among 
competing electric service providers on the basis of price and quality 
of service and eliminated competition in the provision of electric 
service in the annexed areas.

III. Explanation of the Proposed Final Judgment

    The provisions of the proposed Final Judgment are designed to 
eliminate Defendants' all-or-none utility policy and to prevent future 
actions by Defendants to place similar restrictions on electric 
consumers. The proposed Final Judgment would enjoin Defendants from 
requiring any consumer of electricity to purchase the City's retail 
electric service as a condition of receiving water or sewer service 
from the City (Section IV(A)). In addition,the proposed Final Judgment 
would require defendants to include the following disclaimer in a 
conspicuous manner in any application for water or sewer service or in 
any other written materials they distribute to prospective applicants 
for water or sewer services:

    Although we provide electric service, as well as water and sewer 
services, we do not require you to purchase electric service from us 
as a condition of receiving water or sewer service and we will not 
discriminate against you if you do not purchase electric service 
from us.

(Section IV(B)). Defendants would also be enjoined from threatening or 
discriminating or retaliating against any person because that person 
had not agreed to purchase or did not purchase electric service from 
Defendants (Section IV(C)).
    The proposed Final Judgment would further require Defendants to 
establish and maintain an antitrust compliance program (Section VI) and 
file an annual certificate of compliance with the United States 
(Section VII). It would also provide that the United States may obtain 
information from the Defendants concerning possible violations of the 
Final Judgment (Section VIII).
    The proposed Final Judgment would not prohibit Defendants from 
exercising any right under State law to expropriate facilities used by 
any retail electric supplier to furnish electricity within the City's 
corporate boundaries, or from commencing or prosecuting, in good faith, 
litigation to ascertain or protect any right they might have under 
State law to restrict the furnishing of electricity within the City's 
corporate boundaries to retail electric suppliers authorized by law to 
do so (Section V(A) and (B)).

IV. Remedies Available to Potential Private Litigants

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

V. Procedures Available for Modification of the Proposed Final 
Judgment

    The United States and Defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty days preceding the 
effective

[[Page 41296]]

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 
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 
responses of the United States will be filed with the Court and 
published in the Federal Register. Written comments should be submitted 
to: Roger W. Fones, Chief, Transportation, Energy & Agriculture 
Section, Antitrust Division, United States Department of Justice, 325 
Seventh Street, N.W., Suite 500, Washington, D.C. 20004.
    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. The Proposed 
Final Judgment would expire ten (10) years from the date of its entry.

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. In the 
view of the Department of Justice, such a trial would involve 
substantial cost to the United States and is not warranted. The 
proposed Final Judgment provides relief that fully remedies the alleged 
violations of the Sherman Act set forth in the Complaint.

VII. 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:

    Dated: July ______, 1998.

      Respectfully submitted,
John R. Read,
Michele B. Cano,
Michael D. Billiel,
Trial Attorneys, U.S. Department of Justice, Antitrust Division, 325 
Seventh Street, N.W., Suite 500, Washington, D.C. 20004, 202-307-0468, 
202-616-2441 (Facsimile).

[FR Doc. 98-20578 Filed 7-31-98; 8:45 am]
BILLING CODE 4410-11-M