[Federal Register Volume 64, Number 38 (Friday, February 26, 1999)]
[Notices]
[Pages 9527-9541]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-3925]


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DEPARTMENT OF JUSTICE

Antitrust Division
[Civ. No. 98 CV 7168 (FB)]


United States, et al. v. Waste Management, Inc., et al.; Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Secs. 16(b)-(h), that a proposed Final 
Judgment, Hold Separate Stipulation and Order, and Competitive Impact 
Statement have been filed with the Untied States District Court for the 
Eastern District of New York, Brooklyn, NY, in United States and States 
of New York and Florida and Commonwealth of Pennsylvania v. Waste 
Management, Inc., Ocho Acquisition Corp., and Eastern Environmental 
Services, Inc., Civ. No. 98 CV 7168 (FB).
    On November 17, 1998, the United States, New York Pennsylvania and 
Florida filed a Complaint, which alleged that Waste Management's 
proposed acquisition of Eastern would violate Section 7 of the Clayton 
Act, 15 U.S.C. 18, by substantially lessening competition in waste 
collection and/or disposal in nine markets around the country, 
including New York, NY (disposal of commercial and residential 
municipal solid waste); Pittsburgh and Bethlehem/Allentown, PA 
(disposal of municipal solid waste); Carlisle/Chambersburg, PA area 
(collection of commercial waste and disposal of municipal solid waste); 
and Miami/Ft. Lauderdale, and suburban Tampa, FL (collection of 
commercial waste). the proposed Final Judgment, filed on December 31, 
1998, requires Waste Management and Eastern to divest commercial waste 
collection and/or municipal solid waste disposal operations in each of 
the geographic areas alleged in the Amended Complaint.
    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 II, Chief, Litigation II Section, Antitrust 
Division, U.S. Department of Justice, 1401 H Street, NW, Suite 3000, 
Washington, D.C. 20530 [telephone: (202) 307-0924].
Constance K. Robinson,
Director of Operations & Merger Enforcement.

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 Stipulation and Order:
    A. ``Waste Management'' means defendant Waste Management, Inc., a 
Delaware corporation with its headquarters in Houston, Texas, and 
includes its successors and assigns, and its subsidiaries (including 
Ocho Acquisition Corp.), divisions, groups, affiliates, directors, 
officers, managers, agents, and employees.
    B. ``Eastern'' means defendant Eastern Environmental Services, 
Inc., a Delaware corporation with its headquarters in Mt. Laurel, New 
Jersey, and includes its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, directors, officers, managers, agents, 
and employees.
    C. ``Rights to Eastern's RFP Proposal'' means (1) all right, title 
and interest in the proposal submitted by Eastern to the New York City 
Department of Sanitation in response to the New York City Request for 
Proposals to Receive Solid Waste at a Marine Transfer Station, 
Procurement Identification No. 82797RR0014, dated June 16, 1997, and 
any amendments, revisions, or modifications thereto; (2) any intangible 
assets relating to that proposal, including any engineering, technical, 
or construction designs, plans or specifications, permit or land use 
applications, and any options, commitments or agreements of any type 
for the design, construction, permitting, lease or sale of any land, 
building or equipment, or to receive, transport store or dispose of 
waste; (3) at purchaser's option, such technical assistance on that 
proposal as the purchaser reasonably may require from Eastern for a 
period of one hundred fifty days (150) after the purchase of the Rights 
to Eastern's RFP Proposal; and (4) at purchaser's option, airspace 
disposal rights for up to a twenty-year time period at Eastern's 
Waverly, VA landfill, pursuant to which defendants will sell rights to 
dispose of up to 4,000 tons of average daily waste pursuant to any 
contract award under the New York City RFP, on the terms and conditions 
specified in the Waste Disposal Agreement, dated December 29, 1998, 
between Atlantic Waste Disposal, Inc. and Republic Services, Inc.
    D. ``Relevant Disposal Assets'' means, with respect to each 
landfill or transfer station listed and described herein: (1) All 
tangible assets, including all fee and leasehold and renewal rights in 
the listed landfill or transfer station; the garage and related 
facilities; offices; and landfill or transfer station-related assets 
including capital equipment, trucks and other vehicles, scales, power 
supply equipment, interests, permits, and supplies; and (2) all 
intangible assets of the listed landfill or transfer station, including 
customer lists, contracts, and accounts, or options to purchase any 
adjoining property.
    Relevant Disposal Assets, as used herein, includes each of the 
following properties:
1. Landfills
    a. Allegheny County, Pennsylvania--Eastern's Kelly Run Sanitation 
Landfill, located at State Route 51 South, Elizabeth, Pennsylvania 
15037, and known as the Kelly Run Landfill (and includes the waste 
disposal agreement between Chambers Development Company, Inc. and 
William H. Martin, Inc. and Eastern Environmental Services, Inc. and 
Kelly Run Sanitation, Inc., dated 1997);
    b. Bethlehem/Allentown, Pennsylvania--Eastern's Eastern Waste of 
Bethlehem Landfill, located at 2335 Applebutter Road, Bethlehem, 
Pennsylvania 18015, and known as the Bethlehem Landfill; and
    c. Chambersburg-Carlisle, Pennsylvania--Eastern's R&A Bender 
Landfill located at 3747 White Church Road, Chambersburg, Pennsylvania

[[Page 9528]]

17201, and known as the Bender Landfill.
2. Transfer Stations
    New York, New York--a. Eastern's PJ's Transfer Station located at 
222 Morgan Avenue, Brooklyn, New York 11237 (also known as the Morgan 
Avenue Transfer Station);
    b. Eastern's Atlantic Waste Transfer Station located at 110-120 
50th Street, Brooklyn, New York 11232, also known as the Atlantic 
Transfer Station; and
    c. Waste Management's Vacarro Transfer Station, located at 577 
Court Street, Brooklyn, NY 11231 (also known as the Court Street 
Transfer Station); and Waste Management's Gesuale Transfer Station, 
located at 38-50 Review Avenue, Queens, NY 11101 (also known as the 
Review Avenue Transfer Station), only one of which must be sold 
pursuant to the terms of the proposed Final Judgment.
    E. ``Relevant Hauling Assets'' means with respect to each 
commercial route or other hauling asset described herein: (1) All 
tangible assets, including capital equipment, trucks and other 
vehicles, containers, interests, permits, and supplies [except real 
property and improvements to real property (i.e., buildings)]; and (2) 
all intangible assets, including hauling-related customer lists, 
contracts, and accounts.
    Relevant Hauling Assets, as used herein, includes each of the 
following assets:
    1. Scranton, Pennsylvania--Waste Management's front-end loader 
truck (``FEL'') commercial routes servicing Luzerne and Lackawanna 
County, Pennsylvania;
    2. Franklin/Adams/Cumberland Counties, Pennsylvania--Eastern's FEL 
commercial routes servicing Franklin, Adams and Cumberland Counties, 
Pennsylvania;
    3. Broward County, Florida--Eastern's FEL commercial routes 
servicing Broward County, Florida;
    4. Dade County, Florida--Eastern's FEL commercial routes servicing 
portions of Dade County, Florida;
    5. Hillsborough County, Florida--Eastern's Kimmins Recycling 
Corporation FEL commercial routes servicing the unincorporated (and 
grandfathered incorporated) areas of Hillsborough County, Florida solid 
waste service area, more specifically defined in RFP#C-277-96, 
Hillsborough County Board of County Commissioners documents 96-2393, as 
modified by 97-1913.
    F. ``Hauling'' means the collection of waste from commercial 
customers and the transporting of the collected waste to disposal 
sites. Hauling, as used herein, does not include collection of roll-off 
containers.
    G. ``Waste'' means municipal solid waste.
    H. ``Disposal'' means the business of disposing of waste into 
approved disposal sites.
    I. ``Relevant Area'' means the county in which the Relevant Hauling 
Assets or Relevant Disposal Assets are located, or with respect to the 
Rights to Eastern's RFP Proposal, New York, New York.
    J. ``Relevant State'' means the state in which the Relevant 
Disposal Assets or Relevant Hauling Assets are located.

II

Objectives

    The Final Judgment filed in this case is meant to ensure 
defendants' prompt divestitures of the Relevant Disposal Assets, 
Relevant Hauling Assets, and the Rights to Eastern's RFP Proposal for 
the purpose of establishing viable competitors in the waste disposal 
business or the commercial waste hauling business, or both, in the 
Relevant Areas to remedy the effects that plaintiffs allege would 
otherwise result from Waste Management's acquisition of Eastern. This 
Hold Separate Stipulation and Order ensures, prior to such 
divestitures, that the Relevant Disposal Assets and the Relevant 
Hauling Assets are independent and, with the exception of assets listed 
in Sections I(D)(2)(a) and (c), economically viable and ongoing 
business concerns; that the Rights to Eastern's RFP Proposal remain 
independent and uninfluenced by Waste Management; and that competition 
is maintained during the pendency of the ordered divestitures.

III

Jurisdiction and Venue

    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 New 
York.

IV

Compliance With and Entry of Final Judgment

    A. The parties stipulate that a Final Judgment in the form attached 
hereto as Exhibit A may be filed with and entered by the Court, upon 
the motion of any party or upon the Court's own motion, at any time 
after compliance with the requirements of the Antitrust Procedures and 
Penalties Act (15 U.S.C. Sec. 16), and without further notice to any 
party or other proceedings, provided that the United States 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.
    B. Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment, pending the Judgment's entry by the Court, or 
until expiration of time for all appeals of any Court ruling declining 
entry of the proposed Final Judgment, 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 the same were 
in full force and effect as an order of the Court.
    C. Defendants shall not consummate the transaction sought to be 
enjoined by the Complaint herein before the Court has signed this Hold 
Separate Stipulation and Order.
    D. 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.
    E. In the event (1) the United States has withdrawn its consent, as 
provided in Section IV(A) above, or (2) 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.
    F. Defendants represent that the divestitures ordered in the 
proposed Final Judgment can and will be made, and that 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.

V

Hold Separate Provisions

    Until the divestitures required by the Final Judgment have been 
accomplished:
    A. Defendants shall preserve, maintain, and with the exception of 
assets listed in Sections I (C) and (D)(2)(a) and (c), operate the 
Relevant Disposal Assets, the Relevant Hauling Assets, and the Rights 
to Eastern's RFP Proposal as independent competitive businesses, with 
management, sales and

[[Page 9529]]

operations of such assets held entirely separate, distinct and apart 
from those of defendants' other operations. Defendants shall not 
coordinate the marketing of, or negotiation or sales by, any Relevant 
Disposal Assets, Relevant Hauling Assets, or Rights to Eastern's RFP 
Proposal with defendants' other operations. Within twenty (20) days 
after the filing of the Hold Separate Stipulation and Order, or thirty 
(30) days after the entry of this Order, whichever is later, defendants 
will inform plaintiffs of the steps defendants have taken to comply 
with this Hold Separate Stipulation and Order.
    B. Defendants shall take all steps necessary to ensure that (1) the 
Relevant Disposal Assets and Relevant Hauling Assets will be maintained 
and, with the exception of assets listed in Sections I (D)(2)(a) and 
(c), operated as independent, ongoing, economically viable and active 
competitors in the waste disposal business or waste hauling business, 
or both in the Relevant Area; (2) management of the Relevant Disposal 
Assets, Relevant Hauling Assets, or the Rights to Eastern's RFP 
Proposal will not be influenced by Waste Management; and (3) the books, 
records, competitively sensitive sales, marketing and pricing 
information, and decision-making concerning the Relevant Disposal 
Assets, Relevant Hauling Assets, and Rights to Eastern's RFP Proposal 
will be kept separate and apart from defendants' other operations. 
Waste Management's influence over the Relevant Disposal Assets, 
Relevant Hauling Assets, and the Rights to Eastern's RFP Proposal shall 
be limited to that necessary to carry out Waste Management's 
obligations under this Hold Separate Stipulation and Order and the 
Final Judgment.
    C. Defendants shall use all reasonable efforts to maintain and 
increase the sales and revenues of the Relevant Disposal Assets [with 
the exception of assets listed in Sections I (D)(2)(a) and (c)] and the 
Relevant Hauling Assets, and shall maintain at 1998 or at previously 
approved levels, whichever are higher, all promotional, advertising, 
sales, technical assistance, marketing and merchandising support for 
the Relevant Disposal Assets and Relevant Hauling Assets.
    D. Defendants shall provide sufficient working capital to maintain 
the Relevant Disposal Assets [with the exception of assets listed in 
Sections I(D)(2)(a) and (c)] and the Relevant Hauling Assets as 
economically viable and competitive ongoing businesses.
    E. Defendants shall take all steps necessary to ensure that the 
Relevant Disposal Assets [with the exception of assets listed in 
Sections I(D)(2)(a) and (c)] and the Relevant Hauling Assets are fully 
maintained in operable condition at no lower than their current 
capacity or sales, and shall maintain and adhere to normal repair and 
maintenance schedules for the Relevant Disposal Assets and Relevant 
Hauling Assets.
    F. Defendants shall not, except as part of a divestiture approved 
by plaintiffs in accordance with the terms of the proposed Final 
Judgment, remove, sell, lease, assign, transfer, pledge or otherwise 
dispose of any of the Relevant Disposal Assets, Relevant Hauling 
Assets, or the Rights to Eastern's RFP Proposal.
    G. Defendants 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 the Relevant Disposal 
Assets and Relevant Hauling Assets.
    H. Except in the ordinary course of business or as is otherwise 
consistent with this Hold Separate Stipulation and Order, defendants 
shall not hire, transfer, terminate, or otherwise alter the salary 
agreements for any Waste Management or Eastern employee who, on the 
date of defendants' signing of this Hold Separate Stipulation and 
Order, either: (1) Works at a Relevant Disposal Asset or Relevant 
Hauling Asset, or (2) is a member of management referenced in Section 
V(I) of this Hold Separate Stipulation and Order.
    I. Until such time as the Relevant Disposal Assets and Relevant 
Hauling Assets are divested pursuant to the terms of the Final 
Judgment, the Relevant Disposal Assets and Relevant Hauling Assets of 
Waste Management and Eastern shall be managed by Donald Chappel. Mr. 
Chappel shall have complete managerial responsibility for the Relevant 
Disposal Assets and Relevant Hauling Asset of Waste Management and 
Eastern, subject to the provisions of this Order and the Final 
Judgment. In the event that Donald Chappel is unable to perform his 
duties, defendants shall appoint, subject to the approval of the United 
States, after consultation with the Relevant States, a replacement 
within ten (10) working days. Should defendants fail to appoint a 
replacement acceptable to the United States, after consultation with 
the Relevant States, within ten (10) working days, the United States 
shall appoint a replacement.
    J. Until such time as the Rights to Eastern's RFP Proposal are 
divested pursuant to the terms of the Final Judgment, the Rights to 
Eastern's RFP Proposal shall be managed by Donald Chappel, who shall 
have complete managerial responsibility for the Rights to Eastern's RFP 
Proposal, subject to the provisions of this Hold Separate Stipulation 
and Order, the Final Judgment, any such other written agreement between 
the defendants and both the United States and the State of New York. In 
the event that Donald Chappel is unable to perform his duties, the 
United States and the State of New York jointly shall appoint a 
replacement.
    K. Defendants shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divestitures pursuant to the Final Judgment to purchasers 
acceptable to the United States, after consultation with the Relevant 
State, or in the case of the Rights to Eastern's RFP Proposal and the 
Gesuale or Vaccaro transfer stations, acceptable to both the United 
States and the State of New York.
    L. This Hold Separate Stipulation and Order shall remain in effect 
until consummation of the divestitures contemplated by the Final 
Judgment or until further order of the Court.

    Dated: December 30, 1998.


[[Page 9530]]


    For Plaintiff United States of America:
Anthony E. Harris, Esquire (AH 5876)
U.S. Department of Justice, Antitrust Division, Litigation II Section, 
Suite 3000, Washington, D.C. 20005, (202) 307-6583.

    For Plaintiff State of New York
Dennis C. Vacco,
Attorney General.
Stephen D. Houck,
Assistant Attorney General in Charge.
Richard E. Grimm (RG 6891)
Assistant attorney General, Antitrust Bureau, Office of the Attorney 
Bureau, Office of the Attorney General, 120 Broadway, Suite 26-01, New 
York, NY 10271, (212) 416-8271.

    For Defendants Waste Management, Inc. and Ocho Acquisition Corp.
Steven C. Sunshine, Esquire,
Shearman & Sterling, 801 Pennsylvania Avenue, NW, Washington, DC 20004-
2604, (202) 508-8000.
James R. Weiss, Esquire,
Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW, 
Washington, DC 20006-8425, (202) 662-8425.

    For Defendant Eastern Environmental Services, Inc.
Neal R. Stoll, Esquire,
Skadden, Arps, Slate, Meagher, & Flom, 919 Third Avenue, New York, NY 
10022-3897, (212) 735-3000.

    Of Counsel:
Kay Taylor,
Assistant Attorney General.

    For Plaintiff Commonwealth of Pennsylvania
D. Michael Fisher,
Attorney General.
James A. Donahue, III,
Chief Deputy Attorney General.
Benjamin L. Cox (BC 2146),
Deputy Attorney General, 14th Floor, Strawberry Square, Harrisburg, PA 
17120, (717) 787-4530.
    For Plaintiff State of Florida
Robert A. Butterworth,
Attorney General.
Lizabeth A. Leeds,
Douglas L. Kilby,
Assistant Attorneys General, Antitrust Section, PL-01, The Capitol, 
Tallahassee, FL 32399-1050, (850) 414-3856.

Order

    It is so ordered by the Court, this ______ day of ______.
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United States District Judge

Final Judgment

    Whereas, plaintiffs, the United States of America, the State of New 
York, the Commonwealth of Pennsylvania, and the State of Florida, and 
defendants Eastern Environmental Services, Inc. (``Eastern''), Waste 
Management, Inc. (``Waste Management''), and Ocho Acquisition 
Corporation (``Ocho''), 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 that this Final 
Judgment shall settle all claims made by plaintiffs in their Amended 
Complaint filed on December 2, 1998;
    And whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is, in the event of 
the acquisition of Eastern by Waste Management, the prompt and certain 
divestiture of the identified assets 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, the commercial waste hauling business, or both in 
the specified areas;
    And whereas, defendants have represented to plaintiffs that the 
divestures 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 divesture provisions contained below;
    And whereas, the United States, the states of New York and Florida, 
and the Commonwealth of Pennsylvania currently believe that entry of 
this Final Judgment is in the public interest;
    Now, therefore, before the taking of any testimony, and without 
trial or 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. ``Waste Management'' means defendant Waste Management, 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. ``Eastern'' means defendant Eastern Environmental Services, 
Inc., a Delaware corporation with its headquarters in Mt. Laurel, New 
Jersey, and includes its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, directors, officers, managers, agents, 
and employees.
    C. ``Rights to Eastern's RFP Proposal'' means (1) all right, title 
and interest in the proposal submitted by Eastern to the New York City 
Department of Sanitation in response to the New York City Request for 
Proposals to Receive Solid Waste at a Marine Transfer Station. 
Procurement Identification No. 82797RR0014, dated June 16, 1997, and 
any amendments, revisions, or modifications thereto (hereinafter, the 
``New York City RFP''); (2) any intangible assets relating to that 
proposal, including any engineering, technical, or construction 
designs, plans or specifications, permit or land use applications, and 
any options, commitments or agreements of any type for the design, 
construction, permitting, lease or sale of any land, building or 
equipment, or to receive, transport, store or dispose of waste; (3) at 
purchaser's option, such technical assistance on that proposal as the 
purchaser reasonably may require from Eastern for a period of one 
hundred fifty days (150) after the purchase of the Rights to Eastern's 
RFP Proposal; and (4) at purchaser's option, airspace disposal rights 
for up to a twenty-year time at Eastern's Waverly, VA landfill, 
pursuant to which defendants will sell rights to dispose of up to 4,000 
tons of average daily waste pursuant to any contract award under the 
New York City RFP, on the terms and conditions specified in the Waste 
Disposal Agreement, dated December 29, 1998, between Atlantic Waste 
Disposal, Inc. and Republic Services, Inc.
    D. ``Relevant Disposal Assets'' means, with respect to each 
landfill or transfer station listed and described herein: (1) all 
tangible assets, including all fee and leasehold and renewal rights in 
the listed landfill or transfer station; the garage and related 
facilities; offices; and landfill- or transfer station-related assets 
including capital equipment, trucks and other vehicles, scales, power 
supply equipment, interests, permits, and supplies; and (2) all 
intangible assets of the listed landfill or transfer station, including 
customer lists, contracts, and accounts, or options to purchase any 
adjoining property.

[[Page 9531]]

    Relevant Disposal Assets, as used herein, includes each of the 
following properties:
1. Landfills
    a. Allegheny County, Pennsylvania--Eastern's Kelly Run Sanitation 
Landfill, located at State Route 51 South, Elizabeth, Pennsylvania 
15037, and known as the Kelly Run Landfill (and includes the waste 
disposal agreement between Chambers Development Company, Inc. and 
William H. Martin, Inc. and Eastern Environmental Services, Inc. and 
Kelly Run Sanitation, Inc., dated 1997);
    b. Bethlehem/Allentown, Pennsylvania--Eastern's Eastern Waste of 
Bethlehem Landfill, located at 2335 Applebutter Road, Bethlehem, 
Pennsylvania 18015, and known as the Bethlehem Landfill; and
    c. Chambersburg-Carlisle, Pennsylvania--Eastern's R&A Bender 
Landfill located at 3747 White Church Road, Chambersburg, Pennsylvania 
17201 (also known as the Bender Landfill).
2. Transfer Stations
    New York, New York--a. Eastern's PJ's Transfer Station located at 
222 Morgan Avenue, Brooklyn, New York 11237 (also known as the Morgan 
Avenue Transfer Station);
    b. Eastern's Atlantic Waste Transfer Station located at 110-120 
50th Street, Brooklyn, New York 11232 (also known as the Atlantic 
Transfer Station); and
    c. Waste Management's Vacarro Transfer Station, located at 577 
Court Street, Brooklyn, NY 11231 (also known as the Court Street 
Transfer Station); and Waste Management's Gesuale Transfer Station, 
located at 38-50 Review Avenue, Queens, NY 11101 (also known as Review 
Avenue Transfer Station), only one of which must be sold pursuant to 
the terms of Sections IV or V of this Final Judgment.
    E. ``Relevant Hauling Assets'' means with respect to each 
commercial route or other hauling asset described herein: (1) all 
tangible assets, including capital equipment, trucks and other 
vehicles, containers, interests, permits, and supplies [except real 
property and improvements to real property (i.e., buildings)]; and (2) 
all intangible assets, including hauling-related customer lists, 
contracts, and accounts.
    Relevant Hauling Assets, as used herein, includes each of the 
following assets:
    1. Scranton, Pennsylvania--Waste Management's front-ent loader 
truck (``FEL'') commercial routes servicing Luzerne and Lackawanna 
County, Pennsylvania;
    2. Franklin/Adams/Cumberland Counties, Pennsylvania--Eastern's FEL 
commercial routes servicing Franklin, Adams and Cumberland Counties, 
Pennsylvania;
    3. Broward County, Florida--Eastern's FEL commercial routes 
servicing Broward County, Florida;
    4. Dade County, Florida--Eastern's FEL commercial routes servicing 
portions of Dad County, Florida;
    5. Hillsborough County, Florida--Eastern's Kimmins Recycling 
Corporation FEL commercial routes servicing the unincorporated (and 
grandfathered incorporated) areas of Hillsborough County, Florida solid 
waste service area, more specifically defined in RFP#C-277-96, 
Hillsborough County Board of County Commissioners documents 96-2393, as 
modified by 97-1913.
    F. ``Hauling'' means the collection of waste from commercial 
customers and the transporting of the collected waste to disposal 
sites. Hauling, as used herein, does not include collection of roll-off 
containers.
    G. ``Waste'' means municipal solid waste.
    H. ``Disposal'' means the business of disposing of waste into 
approved disposal sites.
    I. ``Relevant Area'' means the country in which the Relevant 
Hauling Assets or Relevant Disposal Assets are located, or with respect 
to the Rights to Eastern's RFP Proposal, New York, New York.
    J. ``Relevant State'' means the state in which the Relevant 
Disposal Assets or Relevant Hauling Assets are located.

III

Applicability

    A. The provisions of this Final Judgment apply to defendants, their 
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. Waste Management shall require, as a condition of the sale or 
other disposition of all or substantially all of its assets, or of a 
lesser business unit that includes defendants' hauling or disposal 
business in any Relevant Area, that the acquiring party agree to be 
bound by the provisions of this Final Judgment.

IV

Divestitures

    A. In the event that Waste Management acquires Eastern, defendants 
are 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 Hold Separate Stipulation and Order in this case, or 
five (5) days after notice of the entry of this Final Judgment by the 
Court, whichever is later, to:
    (1) Sell the Relevant Disposal Assets (excluding the Gesuale and 
Vaccaro transfer stations defined in Section II(D)(2)(c) hereof) and 
the Relevant Hauling Assets as viable, ongoing businesses to a 
purchaser or purchasers acceptable to the United States in its sole 
discretion, after consultation with the Relevant State; and
    (2) Offer to sell both the Gesuale Transfer Station and the Vacarro 
Transfer Station, defined in Section II(D)(2)(c) hereof, and at Waste 
Management's sole election, sell either one of these two transfer 
stations to a purchaser or purchasers acceptable to both United States 
and the State of New York, in their sole discretion, but subject to the 
standard set forth in Section IV(J) of the Final Judgment.
    B. In the event that Waste Management acquires Eastern, defendants 
are hereby ordered and directed in accordance with the terms of this 
Final Judgment, to sell by January 18, 1999, the Rights to Eastern's 
RFP Proposal to Republic Services, Inc. or any other purchaser 
acceptable to both the United States and the State of New York, in 
their sole discretion.
    C. Defendants shall use their best efforts to accomplish the 
divestitures as expeditiously and timely as possible. The United 
States, in its sole discretion, after consultation with the Relevant 
State--or with respect to the Rights to Eastern's RFP Proposal, both 
the United States and the State of New York jointly, in their sole 
discretion--may extend the time period for any divestiture an 
additional period of time not to exceed sixty (60) calendar days.
    D. In accomplishing the divestitures ordered by this Final 
Judgment, Waste Management promptly shall make known, by usual and 
customary means, the availability of the Relevant Disposal Assets and 
the Relevant Hauling Assets. Waste Management 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. Waste Management shall also offer to 
furnish to all bona fide prospective purchasers, subject to customary 
confidentiality assurances, all information regarding the Relevant 
Disposal Assets, the Relevant Hauling Assets, and the Rights to 
Eastern's RFP Proposal customarily provided in a due

[[Page 9532]]

diligence process except such information subject to attorney-client 
privilege or attorney work-product privilege. Waste Management shall 
make available such information to the plaintiffs at the same time that 
such information is made available to any other person.
    E. Defendants shall not interfere with any negotiations by any 
purchaser to employ any Waste Management (or former Eastern) employee 
(with the exception of Louis D. Paolino, Jr. or Robert M. Kramer) who 
works at, or whose principal responsibility concerns, any disposal or 
hauling business that is part of the Relevant Disposal Assets, the 
Relevant Hauling Assets, or the Rights to Eastern's RFP Proposal.
    F. Waste Management shall permit prospective purchasers of the 
Relevant Disposal Assets, Relevant Hauling Assets, or Rights to 
Eastern's RFP Proposal to have access to personnel and to make such 
inspection of such assets; 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.
    G. With the exception of the assets listed in Sections II (D)(2)(a) 
and (c), Waste Management shall warrant to any and all purchasers of 
the Relevant Disposal Assets or Relevant Hauling Assets that each asset 
will be operational on the date of sale.
    H. Waste Management shall not take any action, direct or indirect, 
that will impede in any way the permitting or operation of the Relevant 
Disposal Assets or Relevant Hauling Assets, or take any action, direct 
or indirect, that will impede in any way the permitting of any facility 
to be built or used pursuant to an award by New York City relating to 
the Rights to Eastern's RFP Proposal.
    I. Waste Management shall warrant to the purchaser of the Relevant 
Disposal Assets or Relevant Hauling Assets that with the exception of 
the assets listed in Sections II(D)(2)(a) and (c), there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of each asset, and that with respect to all 
Relevant Disposal Assets or Relevant Hauling assets, Waste Management 
will not undertake, directly or indirectly, following the divestiture 
of each asset, any challenges to the environmental, zoning, or other 
permits pertaining to the operation of the asset.
    J. Unless the United States, after consultation with the Relevant 
State, otherwise consents in writing, the divestitures pursuant to 
Section IV, whether by defendants or by trustee appointed pursuant to 
Section V of this Final Judgment, shall include all Relevant Disposal 
Assets, Relevant Hauling Assets, and Rights to Eastern's RFP Proposal 
and be accomplished by selling or otherwise conveying each asset to a 
purchaser in such a way as to satisfy the United States, in its sole 
discretion, after consultation with the Relevant State--or with respect 
to the Rights to Eastern's RFP Proposal or Vacarro or Gesuale transfer 
stations [Section II(D)(2)(c)], in such a way as to satisfy both the 
United States and the State of New York--that the Relevant Disposal 
Assets or the Relevant Hauling Assets can and will be used by the 
purchaser as part of a viable, ongoing business or businesses engaged 
in waste disposal or hauling, or with respect to the Rights to 
Eastern's RFP Proposal, in such a way as to satisfy both the United 
States and the State of New York, in their sole discretion, that the 
purchaser will use its best efforts to compete for a contract award 
under the New York City RFP. The divestiture, whether pursuant to 
Section IV or Section V of this Final Judgment, shall be made to a 
purchaser or purchasers for whom it is demonstrated to the United 
States sole satisfaction, after consultation with the Relevant State--
or with respect to the Rights to Eastern's RFP Proposal or Vacarro or 
Gesuale transfer stations [Section II(D)(2)(c)], for whom it is 
demonstrated to both the United States and the State of New York's sole 
satisfaction--that the purchaser: (1) has the capability and intent of 
competing effectively in the waste disposal or hauling business in the 
Relevant Area; (2) has or soon will have the managerial, operational, 
and financial capability to compete effectively in the waste disposal 
or hauling business in the Relevant Area; and (3) is not hindered by 
the terms of any agreement between the purchaser and Waste Management 
which gives Waste Management the ability unreasonably to raise the 
purchaser's costs, lower the purchaser's efficiency, or otherwise 
interfere in the ability of the purchaser to compete effectively in the 
Relevant Area.
    K. Defendants shall not institute any action to challenge the sale 
or assignment of the Rights to Eastern's RFP Proposal pursuant to the 
terms of this Final Judgment, and defendants shall not challenge, on 
the basis of such sale or assignment, the New York City Department of 
Sanitation's consideration of such proposal, as sold or assigned, or 
the New York City Department of Sanitation's award to a purchaser or 
assignee of such proposal under the New York City RFP. If any legal 
action is commenced against such sale or assignment, defendants shall 
support in that action the sale or assignment of the Rights to 
Eastern's RFP Proposal.
    L. The United States and the State of New York shall file a joint 
motion with Waste Management to modify the pending Final Judgment in 
United States v. USA Waste Service, Inc., Civ. No. 98 CV 1616 (N.D. 
Ohio, filed June 16, 1998), to remove from the Judgment the contingent 
divestiture of Waste Managment's Brooklyn Transfer Station, located at 
485 Scott Avenue, Brooklyn, NY 12222 (also known as the Scott Avenue 
Transfer Station).

V

Appointment of Trustee

    A. In the event that Waste Management has not sold the Relevant 
Disposal Assets, the Relevant Hauling Assets, or the Rights to 
Eastern's RFP Proposal within the time period 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 (or with respect 
to the Rights to Eastern's RFP Proposal and Gesuale or Vacarro transfer 
station, a trustee selected by both the United States and the State of 
New York jointly), to effect the divestiture of each such asset not 
sold; provided, however, that if Waste Management has a definitive 
agreement to sell either Vacarro or Gesuale transfer station to a 
purchaser approved by both the United States and the State of New York 
under the Final Judgment, but the sale of the transfer station cannot 
be consummated because of Waste Management's or the purchaser's 
inability to obtain regulatory approval for a change of control of or 
approval to operate the transfer station, then, as long as such 
inability persists, a trustee shall not be appointed with respect to 
the sale of either Vacarro or Gesuale transfer station; and provided 
further that if the inability to obtain such regulatory approval 
persists for one year or more after the signing of a definitive 
agreement to sell the transfer station and approval of the proposed 
purchaser by both the United States and the State of New York, Waste 
Mangement may request that the United States and the State of New York 
select--or both the United States and the State of New York may on 
their own jointly select--a trustee to effect the sale of Gesuale 
Transfer Station, and at the time such request or joint selection is 
made any

[[Page 9533]]

obligation to sell Vacarro Transfer Station shall terminate.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Relevant Disposal Assets, 
Relevant Hauling Assets, or Rights to Eastern's RFP Proposal described 
in Sections II (C), (D) and (E) of this Final Judgment. The trustee 
shall have the power and authority to accomplish any and all 
divestitures at the best price then obtainable upon a reasonable effort 
by the trustee, subject to the provisions of Sections IV and VII of 
this Final Judgment, and shall have such other powers as the Court 
shall deem appropriate. With respect to the Rights to Eastern's RFP 
Proposal, the trustee shall have the power to offer to sell the 
airspace disposal rights option on the terms specified in the Waste 
Disposal Agreement, dated December 29, 1998, between Atlantic Waste 
Disposal, Inc. and Republic Services, Inc. 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 Waste Managment any investment bankers, 
attorneys, or other agents reasonably necesary in the judgment of the 
trustee to assist in the divestitures, and such professionals and 
agents shall be accountable solely to the trustee. The trustee shall 
have the power and authority to accmplish the divestitures at the 
earliest possible time to a purchaser or purchasers acceptable to the 
United States, upon consultation with the Relevant State [except that 
the sale of the Rigths to Eastern's RFP Proposal or the sale of Vaccaro 
or Gesuale transfer station shall be made to a purchaser or purchasers 
acceptable to both the United States and the State of New York], and 
shall have such other powers as this Court shall deem appropriate. 
Waste Management shall not object to a sale by the trustee on any 
grounds other than the trustee's malfeasance. Any such objections by 
Waste Management must be conveyed in writing to the relevant plaintiffs 
and the trustee within ten (10) calender 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 Waste 
Management, on such terms, and conditions as the Court may prescribe, 
and shall account for all monies derived from the sale of each asset 
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 Waste Management and the 
trust shall then be terminated. The compensation of such trustee and of 
any professionals and agents retained by the trustee shall be 
reassonable 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. Waste Management shall use its best effort to assist the trustee 
in accomplishing the required divestitures, 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 businesses to be divested, and Waste 
Mangement shall develop financial or other information relevant to the 
businesses to be divested customarily provided in a due diligence 
process as the trustee may reasonably request, subject to customary 
confidentiality assurances. Waste Management shall permit bona fide 
prospective acquirers of each Relevant Disposal Asset, Relevant Hauling 
Asset, or the Rights to Eastern's RFP Proposal 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 divestitures 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 divestitures 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 businesses to be divested.
    F. If the trustee has not accomplished such divestitures within six 
(6) months after its appointment, the trustee thereupon shall file 
promptly with the Court a report a setting forth (1) the trustee's 
efforts to accomplish their required divestitures, (2) the reasons, in 
the trustee's judgment, why the required divestitures have 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 that 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 orders 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, or with respect 
to the Rights to Eastern's RFP Proposal and Vacarro or transfer station 
Gesuale, requested by both the United States and the State of New York.

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, and proposed divestiture 
pursuant to Sections IV or V of this Final Judgment, Waste Management 
or 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 Waste Management. 
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 Relevant State--or with respect to the 
Rights to Eastern's RFP Proposal or the sale of Vacarro or Gesuale 
transfer station [Section II(d)(2)(c)], both the United States and the 
State of New York jointly, in their sole discretion--may request from 
Waste Management, the proposed purchaser, or any other third party 
additional information concerning the proposed divestiture and the 
proposed purchaser. Waste Management 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

[[Page 9534]]

otherwise agree. Within thirty (30) calendar days after receipt of the 
notice or within twenty (20) calendar days after plaintiffs have been 
provided the additional information requested form Waste Management, 
the proposed purchaser, and any third party, whichever is later, the 
United States, after consultation with the Relevant State--or with 
respect to the Rights to Eastern's RFP Proposal or the sale of Vaccaro 
or Gesuale transfer station, both the United States and the State of 
New York jointly--shall provide written notice to Waste Management and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If the United States (or with respect to the 
Rights to Eastern's RFP Proposal and Vacarro or Gesuale transfer 
station, both the United States and the State of New York jointly) 
provide written notice to Waste Management and the trustee that it does 
not object, then the divestiture may be consummated, subject only to 
Waste Management's limited right to object to the sale under Section 
V(B) of this Final Judgment. Upon objection by the United States (or 
with respect to the Rights to Eastern's RFP Proposal and Vacarro or 
Gesuale transfer station, both the United States and the State of New 
York), and divestiture proposed under Section IV or Section V shall not 
be consummated. Upon objection by Waste Management 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 Hold 
Separate Stipulation and Order in this matter and every thirty (30) 
calendar days thereafter until the divestiture has been completed 
whether pursuant to Section IV or Section V of this Final Judgment, 
Waste Management shall deliver to plaintiffs an affidavit as to the 
fact and manner of compliance with Sections IV or 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 contacted or made an inquiry about acquiring, any 
interest in the businesses to be divested, and shall describe in detail 
each contact with any such person during that period. Each such 
affidavit shall also include a description of the efforts that Waste 
Management has taken to solicit a buyer for any and all Relevant 
Disposal Assets, Relevant Hauling Assets, or Rights to Eastern's RFP 
Proposal 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 consultation with the Relevant 
State--or with respect to the Rights to Eastern's RFP Proposal, and 
Vacarro or Gesuale transfer station, any objection by both the United 
States and the State of New York--to information provided by Waste 
Management, 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 Hold 
Separate Stipulation and Order in this matter, Waste Management shall 
deliver to plaintiffs an affidavit which describes in detail all 
actions Waste Management has taken and all steps Waste Management has 
implemented on an on-going basis to preserve the Relevant Disposal 
Assets, Relevant Hauling Assets, and Rights to Eastern's RFP Proposal 
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, Waste Management's efforts to maintain 
and operate each Relevant Disposal Asset and Relevant Hauling Asset as 
an active competitor, maintain the management, staffing, sales, 
marketing and pricing of each asset, and maintain each asset in 
operable condition at current capacity configurations. Waste Management 
shall deliver to plaintiffs an affidavit describing any changes to the 
efforts and actions outlined in Waste Management'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, Waste 
Management shall preserve all records of all efforts made to preserve 
the Relevant Disposal Assets, Relevant Hauling Assets, and Rights to 
Eastern's RFP Proposal and to effect the ordered divestitures.

VIII

Hold Separate Order

    Until the divestitures required by the Final Judgment have been 
accomplished, Waste Management 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 sale of the 
Relevant Disposal Assets, Relevant Hauling Assets, or the Rights to 
Eastern's RFP Proposal.

IX

Financing

    Waste Management is ordered and directed not to finance all or any 
part of any acquisition by any person made pursuant to Sections IV or V 
of this Final Judgment.

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 any Relevant State, and on reasonable notice to 
Waste Management made to its principal offices, shall be permitted:
    (1) Access during office hours of Waste Management to inspect and 
copy all books, ledgers, accounts, correspondence, memoranda, and other 
records and documents in the possession or under the control of Waste 
Management, 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 Waste Management 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 any Relevant 
State, Waste Management 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 Board of the United States, 
or the Attorney General's Office of any Relevant State, except in the 
course of legal proceedings to which the United

[[Page 9535]]

States or any Relevant State 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 Waste 
Management to plaintiffs, Waste Management 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 Waste Management marks each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(7) of the Federal Rule of Civil Procedure,'' then ten (10) 
calendar days notice shall be given by plaintiffs to Waste Management 
prior to divulging such material in any legal proceeding (other than a 
grand jury proceeding) to which Waste Management 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: ________.

----------------------------------------------------------------------
United States District Judge

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 the Proceeding

    On November 17, 1998, the United States, and the states of New York 
and Florida, and the Commonwealth of Pennsylvania (``the governments'') 
filed a civil antitrust suit alleging that the proposed acquisition by 
Waste Management, Inc. of Eastern Environmental Services, Inc. 
(``Eastern'') would violate Section 7 of the Clayton Act, 15 U.S.C. 
Sec. 18. The Amended Complaint, filed on December 2, 1998, alleges that 
in nine markets in the eastern United States, Waste Management and 
Eastern are two of the most significant competitors in commercial waste 
collection, or disposal of municipal solid waste (``MSW'') (i.e., 
operation of landfills, transfer stations and incinerators), or both 
services.
    The Amended Compliant alleges that a combination of Waste 
Management and Eastern would substantially lessen competition for the 
massive $6 billion contract to dispose of residential waste collected 
by the New City Department of Sanitation following the closure of the 
city's Fresh Kills Landfill in late 2001. The Amended Complaint alleges 
that the combination would also substantially reduce competition in 
disposal of municipal solid waste in four other highly concentrated 
markets--Pittsburgh (Allegheny County), Allentown/Bethlehem, and 
Chambersburg/Carlisle, Pennsylvania, and New York, New York (commercial 
waste)--and that it would substantially lessen competition in 
commercial waste collection services in four highly concentrated, 
relevant geographic markets: Scranton and Carlisle/Chamberburg, 
Pennsylvania; and the Miami/Ft. Lauderdale and suburban Tampa 
(Hillsborough County), Florida areas.
    According to the Amended Complaint, the loss of competition would 
likely result in consumers paying higher prices and receiving fewer or 
lesser quality services for the collection and disposal of waste. The 
prayer for relief in the Amended Complaint seeks: (1) a judgment that 
the proposed acquisition would violate Section 7 of the Clayton Act and 
(2) a permanent injunction that would prevent Waste Management from 
acquiring control of or otherwise combining its assets with Eastern.
    On December 31, 1998, the governments filed a proposed settlement 
that would permit Waste Management to complete its acquisition of 
Eastern, but require the defendants to divest certain waste collection 
and disposal assets in such a way as to preserve competition in the 
affected markets. This settlement consists of Hold Separate Stipulation 
and Oder, a proposed Final Judgment, and correspondence that outlines a 
methodology for selecting which commercial waste collection routes 
should be divested in the Miami area and sets forth the standard by 
which the governments determined whether routes that serve a given 
geographic area should be divested under the Judgment (Appendix B).\1\
---------------------------------------------------------------------------

    \1\ Defendants are required to divest front end loader (FEL) 
commercial waste collection routes that serve certain geographic 
areas specified in the Judgment. Because some FEL commercial routes 
may serve more than one area, the governments agreed that in 
determining whether a defendant's routes that serve a given area are 
subject to divestiture under the Judgment the following standard 
would apply: if a defendant's FEL route obtained 10% or more of its 
commercial revenues from a geographic area set forth in the Judgment 
[Secs. II(E)(1)-(5)] in the route's most recent year of operation, 
defendants must divest that FEL commercial route. Applying this 
principle in the Franklin/Adams/Cumberland area are Pennsylvania, 
for instance, would require defendants to divest any Eastern FEL 
commercial route from which 10 percent or more of its revenues 
derive from customers located in the Franklin, Adams or Cumberland 
County, PA area. Under this standard, route which serves an area but 
has a de minimis amount of revenue would be excluded.
    Defendants have specifically noted the total number of FEL 
commercial routes they believe must be divested under the Judgment. 
At this time, the governments, however, have not verified 
defendants' representations.
---------------------------------------------------------------------------

    The proposed Final Judgment orders Waste Management and Eastern to 
divest commercial waste collection routes in each of the relevant areas 
in which the Complaint alleges the merger would substantially reduce 
competition in commercial waste collection services. In addition, the 
Judgment orders Waste Management and Eastern to divest landfills, 
transfer stations, or disposal rights in such facilities in each of the 
relevant markets in which the merger would substantially reduce 
competition in disposal of municipal solid waste. (A summary of the 
commercial waste collection and waste disposal assets that defendants 
must divest pursuant to the Judgment appears below in Appendix A.) 
Waste Management and Eastern must complete their divestitures of the 
rights to Eastern's RFP proposal by January 18, 1999, \2\ and complete 
their divestitures of the other waste collection and disposal assets 
within 120 days after December 31, 1998, or five days after entry of 
the Final Judgment, whichever is later.
---------------------------------------------------------------------------

    \2\ The rights to Eastern's RFP proposal were divested to 
Republic Services, Inc. in a transaction that closed on January 18, 
1999.
---------------------------------------------------------------------------

    The Hold Separate Stipulation and Order (``Hold Separate Order'') 
and the proposed Final Judgment ensure that until the divestitures 
mandated by the Judgment are accomplished, the currently operating 
waste collection and disposal assets that are to be divested will be 
maintained and operated as saleable, economically viable, ongoing 
concerns, with competitively sensitive

[[Page 9536]]

business information and decision-making divorced from that of the 
combined company. Subject to the United States' approval. Waste 
Management will appoint a person to manage the operations to be 
divested and ensure defendants' compliance with the requirements of the 
proposed Judgment and Hold Separate Order.
    The parties have stipulated that the proposed Final Judgment may be 
entered after compliance with the APPA. Entry of the proposed Judgment 
would terminate this action, except that the Count would retain 
jurisdiction to construe, modify or enforce the provisions of the 
proposed Judgment and to punish violations thereof.

II. Description of the Events Giving Rise to the Violations Alleged in 
the Complaint

A. The Defendants and the Proposed Transaction
    Waste Management is the largest waste collection and disposal firm 
in the United States. Based in Houston, Texas, it provides waste 
collection and disposal services throughout the country. In 1998, Waste 
Management's total operating revenues exceeded $12 billion.
    Eastern, based in Mt. Laurel, New Jersey, is a large regional waste 
collection and disposal firm, with operations concentrated in New York, 
New Jersey, Pennsylvania, Delaware and Florida, often in direct 
competition with Waste Management. In 1997, Eastern reported total 
operating revenues of over $90 million.
    In August 1998, Waste Management announced an agreement to acquire 
Eastern in a stock transaction worth nearly $1.2 billion. This 
transaction, which would combine two major competitors and 
substantially increase concentration in a number of already highly 
concentrated, difficult-to-enter waste disposal and collection markets, 
precipitated the governments' suit.
B. The Competitive Effects of the Transaction
    Waste collection firms, or ``haulers,'' contract to collect 
municipal solid waste (``MSW'') from residential and commercial 
customers; they transport the waste to private and public disposal 
facilities (e.g., transfer stations, incinerators and landfills), 
which, for a fee, process and legally dispose of waste. Waste 
Management and Eastern compete in operating waste collection routes and 
waste disposal facilities.
1. The Effects of the Transaction on Competition in the Markets for 
Commercial Waste Collection
    Commercial waste collection is the collection of MSW from 
commercial businesses such as office and apartment buildings and retail 
establishments (e.g., stores and restaurants) for shipment to, and 
disposal at, an approved disposal facility. Because of the type and 
volume of waste generated by commercial accounts and the frequency of 
service required, haulers organize commercial accounts into special 
routes, and use specialized equipment to store, collect and transport 
waste from these accounts to approved disposal sites. This equipment--
one to ten cubic yard containers for waste storage, and front-end 
loader vehicles for collection and transportation--is uniquely well 
suited to commercial waste collection service. Providers of other types 
of waste collection services (e.g., residential and roll-off services) 
are not good substitutes for commercial waste collection firms. In 
their waste collection efforts, other firms use different waste storage 
equipment (e.g., garbage cans or semi-stationary roll-off containers) 
and different vehicles (e.g., rear- or side-load trucks), which, for a 
variety of reasons, cannot be conveniently or efficiently used to 
store, collect or transport waste generated by most commercial 
accounts, and hence, are infrequently used on commercial waste 
collection routes. For purposes of antitrust analysis, commercial waste 
collection constitutes a line of commerce, or relevant service, for 
analyzing the effects of the merger.
    The Amended Complaint alleges that provision of commercial waste 
collection services takes place in compact, highly localized geographic 
markets. It is expensive to ship waste long distances in either 
collection or disposal operations. To minimize transportation costs and 
maximize the scale, density, and efficiency of their waste collection 
operations, commercial waste collection firms concentrate their 
customers and collection routes in small areas. Firms with operations 
concentrated in a distant area cannot easily compete against firms 
whose routes and customers are locally based. Sheer distance may 
significantly limit a distant firm's ability to provide commercial 
waste collection service as frequently or conveniently as that offered 
by local firms with nearby routes. Also, local commercial waste 
collection firms have significant cost advantages over other firms, and 
can profitably increase their charges to local commercial customers 
without losing significant sales to firms outside the area.
    Applying that analysis, the Amended Complaint alleges that four 
areas--Scranton and the Chambersburg/Carlisle area (Franklin/Adams/
Cumberland counties), Pennsylvania, and Miami/Ft. Lauderdale and 
suburban Tampa (Hillsborough County), Florida areas--constitute 
sections of the country, or relevant geographic markets, for the 
purpose of assessing the competitive effects of a combination of Waste 
Management and Eastern in the provision of commercial waste collection 
services. In each of these markets, Waste Management and Eastern are 
two of the largest competitors, and the combined firm would command 
from 50 to 75 percent or more of total market revenues. These five 
commercial waste collection markets generate from $7 million to well 
over $150 million in annual revenues.
    Significant new entry into these markets would be difficult, time 
consuming, and is unlikely to occur soon. Many customers of commercial 
waste collection firms have entered into ``evergreen'' contracts, tying 
them to a market incumbent for indefinitely long periods of time. In 
competing for uncommitted customers, market incumbents can price 
discriminate, i.e., selectively (and temporarily) charge unbeatably low 
prices to customers targeted by entrants, a tactic that would strongly 
discourage a would-be competitor from competing for such accounts, 
which, if won, may be very unprofitable to serve. The existence of long 
term contracts and price discrimination substantially increases any 
would-be new entrant's costs and time necessary for it to build its 
customer base and obtain efficient scale and route density to become an 
effective competitor in the market.
    The Amended Complaint alleges that a combination of Waste 
Management and Eastern would likely lead to an increase in prices 
charged to consumers of commercial waste collection services. The 
acquisition would diminish competition by enabling the few remaining 
competitors to engage more easily, frequently, and effectively in 
coordinated pricing interaction that harms consumers. This is 
especially troublesome in markets where entry has not proved an 
effective deterrent to the exercise of market power.
2. The Effect of the Transaction on Competition for the Disposal of New 
York City's Residential Waste After the Closing of Fresh Kills Landfill
    A combination of Waste Management and Eastern would have some of 
its

[[Page 9537]]

most immediate, far-reaching and severe effects on competition for the 
New York City Department of Sanitation's 20-30 year, multi-billion 
dollar contracts for disposal of the city's residential waste following 
the state-mandated December 2001 closing of Fresh Kills Landfill, the 
only landfill that handles the disposal of the city's residential 
waste. In a lengthy competitive process known as the ``RFP,'' between 
June 1997 and October 1998, the New York City Department of Sanitation 
solicited and evaluated proposals from a number of vendors for the 
disposal of the city's waste, and it recently concluded that Waste 
Management and Eastern are two of only three firms that remain in 
contention for contracts under this major procurement.
    The RFP, once the contracts are awarded and the proposals 
implemented, would create a new infrastructure for processing and 
disposal of New York City's residential waste. The winning contractors 
would purchase and operate a fleet of barges that would collect up to 
9,000 tons of residential waste each day from city-owned transfer 
stations, and deliver it to one or more new, privately-owned and 
operated enclosed marine barge unloading facilities (``EBUFs''). The 
EBUFs would process the residential waste and ship it by rail, truck or 
ocean-going barge primarily to massive distant landfills for final 
disposal far from New York.
    New York City currently anticipates paying private contractors more 
than $200 million annually, over a 20-30 year time period, to 
construct, operate and manage the waste processing and disposal 
facilities outlined in its RFP. With total estimated payments of well 
over $6 billion over the length of the contracts, the RFP would be the 
single largest municipal procurement in the history of New York City.
    A combination of Waste Management and Eastern would significantly 
reduce from three to two the city's competitive options for the 
disposal of its residential waste, and likely result in an increase (or 
a refusal to negotiate further reductions) in the finalists' charges 
for disposal of the city's residential waste. As it stands now, Eastern 
is a competitive alternative for a third or more of any final RFP 
award. With the elimination of Eastern, the market incumbents, Waste 
Management and Browning-Ferris Industries, Inc., would no longer 
compete as aggressively since they would no longer have to worry about 
losing business to Eastern.
3. The Effects of the Transaction on Competition in Other Markets for 
Disposal of Municipal Solid Waste
    A number of federal, state and local safety, environmental, zoning 
and permit laws and regulations dictate critical aspects of storage, 
handling, transportation, processing and disposal of MSW. MSW can only 
be sent for disposal to a transfer station, sanitary landfill, or 
incinerator permitted to accept MSW. Anyone who attempts to dispose of 
MSW in a facility that has not been approved for disposal of such waste 
risks severe civil and criminal penalties. Firms that compete in the 
disposal of MSW can profitably increase their charges to haulers for 
disposal of MSW without losing significant sales to other firms. For 
these reasons, there are no good substitutes for disposal of MSW.
    Disposal of MSW tends to occur in highly localized markets.\3\ 
Disposal costs are a significant component of waste collection 
services, often comprising 40 percent or more of overall operating 
costs. It is expensive to transport waste significant distances for 
disposal. Consequently, waste collection firms strongly prefer to send 
waste to local disposal sites. Sending a vehicle to dump waste at a 
remote landfill increases both the actual and opportunity costs of a 
hauler's collection service. Natural and man-made obstacles (e.g., 
mountains and traffic congestion), sheer distance and relative 
isolation from population centers (and collection operations) all 
substantially limit the ability of a remote disposal site to compete 
for MSW from closer, more accessible sites. Thus, waste collection 
firms will pay a premium to dispose of waste at more convenient and 
accessible sites. Operators of such disposal facilities can--and do--
price discriminate, i.e., charge higher prices to customers who have 
fewer local options for waste disposal.
---------------------------------------------------------------------------

    \1\ Though disposal of municipal solid waste is primarily a 
local activity, in some densely populated urban areas there are few, 
if any, local landfills or incinerators available for final disposal 
of waste. In these areas, transfer stations are the principal 
disposal option. A transfer station collects, processes and 
temporarily stores waste for later bulk shipment by truck, rail or 
barge to a more distant disposal site, typically a sanitary 
landfill, for final disposal. In such markets, local transfer 
stations compete for municipal solid waste for processing and 
temporary storage, and sanitary landfills may compete in a broader 
regional market for permanent disposal of area waste. The Complaint 
in this case alleges that in one relevant area--New York, NY--
transfer stations are the principal method for disposal of MSW.
---------------------------------------------------------------------------

    For these reasons, the Complaint alleges that, for purposes of 
antitrust analysis, five areas--New York City, NY; Pittsburgh 
(Allegheny County), Allentown/Bethlehem, and Carlisle/Chambersburg, 
PA--are relevant geographic markets for disposal of municipal solid 
waste. In each of these markets, Waste Management and Eastern are two 
of only a few significant competitors. Their combination would command 
from over 50 to well over 90 percent of disposal capacity for municipal 
solid waste, in markets that generate annual disposal revenues of from 
$10 million to over $100 million annually.
    Entry into the disposal of municipal solid waste is difficult. 
Government permitting laws and regulations make obtaining a permit to 
construct or expand a disposal site an expensive and time-consuming 
task. Significant new entry into these markets is unlikely to occur in 
any reasonable period of time, and is not likely to prevent exercise of 
market power after the acquisition.
    In each listed market, Waste Management's acquisition of Eastern 
would remove a significant competitor in disposal of municipal solid 
waste. With the elimination of Eastern, market incumbents will no 
longer compete as aggressively since they will not have to worry about 
losing business to Eastern. The resulting substantial increase in 
concentration, loss of competition, and absence of reasonable prospect 
of significant new entry or expansion by market incumbents likely 
ensure that consumers will pay substantially higher prices for disposal 
of MSW, collection of commercial waste, or both, following the 
acquisition.

III. Explanation of the Proposed Final Judgment

    The relief described in the proposed Final Judgment will eliminate 
the anticompetitive effects of the acquisition in commercial waste 
collection and in disposal of MSW from the relevant markets by 
establishing new, independent and economically viable competitors in 
each affected market.
A. The Proposed Divestitures
    First, the proposed Final Judgment requires Waste Management and 
Eastern to sell by January 18th the rights to Eastern's RFP Proposal to 
Republic Services, Inc. or any other purchaser acceptable to both the 
United States and the State of New York.\4\ That divestiture must be 
made promptly so as to not delay the New York Department of 
Sanitation's plans to quickly conduct

[[Page 9538]]

and complete its final negotiations for contracts to dispose of the 
city's residential waste before the city must close its only landfill 
in 2001.\5\
---------------------------------------------------------------------------

    \4\ As noted above, defendants sold the rights to Eastern's RFP 
proposal to Republic Services, Inc. on January 18, 1999.
    \5\ On December 30, 1998, the governments agreed that Donald 
Chappel be substituted for Robert Donna as interim trustee for the 
rights to Eastern's RFP proposal and defendants agreed to restrict 
Waste Management's access to highly confidential information 
contained in the rights to Eastern's RFP proposal prior to the 
proposal's divestiture by Waste Management or by a trustee appointed 
pursuant to the terms of the Judgment.
---------------------------------------------------------------------------

    The proposed Final Judgment also requires Waste Management and 
Eastern, within 120 days after the December 31, 1998 filing of the Hold 
Separate Stipulation and Order, or five days after notice of the entry 
of this Final Judgment by the Court, whichever is later, to sell 
certain commercial waste collection assets (``Relevant Hauling 
Assets'') and disposal assets (``Relevant Disposal Assets'') as viable, 
ongoing businesses to a purchaser or purchasers acceptable to the 
United States, in its sole discretion, after consultation with the 
relevant state, or in the case of certain New York City transfer 
stations, to a purchaser or purchasers acceptable to both the United 
States and the State of New York.\6\ The collection assets to be 
divested include front-end loader commercial waste collection routes, 
trucks and customer lists. The disposal assets to be divested include 
landfills, transfer stations, disposal rights in such facilities, and 
certain other assets (e.g., leasehold and renewal rights in the 
particular landfill or transfer station, garages and offices, trucks 
and vehicles, scales, permits, and intangible assets such as landfill 
or transfer station-related customer lists and contracts).
---------------------------------------------------------------------------

    \6\ The governments interpret Section VI of the proposed Final 
Judgment as meaning that any request for information involving the 
rights to Eastern's RFP proposal or Vacarro or Gesuale transfer 
stations must be a joint request from New York and the Antitrust 
Division. Since a request continues until such time as it is 
answered, it can effectively be withdrawn by either New York or the 
Antitrust Division withdrawing the request--under the decree, such 
action would mean that there was no ongoing ``joint'' request for 
additional information.
---------------------------------------------------------------------------

    Finally, the proposed Judgment [Sec. IV(L)] provides that the 
United States and the State of New York will join a Waste Management 
motion to modify the pending consent decree in United States v. USA 
Waste Services, Inc., No. 98 CV 1616 (N.D. Ohio, filed July 16, 1998), 
to eliminate this proposed Judgment would substitute an immediate 
divestiture or either Waste Management's Gesuale or Vacarro transfer 
station [Secs. II(D)(2)(c) and IV(A)(2)]. A day after the filing of the 
proposed decree in that case, counsel for defendants informed the 
United States, New York and the other governments that defendants had 
mistakenly agreed to a contingent divestiture of the Brooklyn Transfer 
Station, when they had actually meant to agree to a contingent 
divestiture of the Gesuale Transfer Station, located at 38-50 Review 
Avenue, Queens NY. In addition, defendants contended that they needed 
to retain the Scott Transfer Station in order to provide disposal 
services under a New York residential waste contract, which they 
expected to receive, and that in any event, there was no assurance 
under the proposed Judgment that after defendants receive the 
residential waste contract, the Scott Avenue Transfer Station, if 
divested, would have any capacity remaining for disposal of commercial 
waste.
    The United States and the State of New York agreed to join a motion 
to revise the proposed decree in the Ohio case, substituting a 
divestiture of either Vacarro or Gesuale, only if Waste Management 
agreed to divest both New York City transfer stations it would gain by 
acquiring Eastern--divestitures which defendants have agreed to make 
[see Judgment, Secs. II(D)(2)(a) and (b) and IV(A)(1)].
B. Trustee Provisions
    If Waste Management and Eastern cannot accomplish the divestitures 
within the prescribed time, the Final Judgment provides that, upon 
application of the United States (or in the case of certain New York 
City transfer stations, application by both the United States and the 
State of New York), the Court will appoint a trustee to complete the 
divestiture of each relevant disposal asset or relevant hauling asset 
not sold. The proposed Final Judgment generally provides that the 
assets must be divested in such a way as to satisfy the United States, 
in its sole discretion, after consultation with the relevant state, 
that the assets can and will be used by the purchaser as part of a 
viable, ongoing business or businesses engaged in waste collection or 
disposal that can compete effectively in the relevant area. Defendants 
must take all reasonable steps necessary to accomplish the 
divestitures, 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 defendants 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 
the divestitures are accomplished. After his or her appointment becomes 
effective, the trustee will file monthly reports with the parties and 
the Court, setting forth the trustee's efforts to accomplish the 
divestitures. At the end of six months, if the divestitures have 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. Sec. 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 
attorney's 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. 
Sec. 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 parties 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 of the decree 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

[[Page 9539]]

Street, NW., Suite 3000, Washington, DC 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 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 Waste 
Management and Eastern. The United States could have continued the 
litigation to seek preliminary and permanent injunctions against Waste 
Management's acquisition of Eastern. The United States is satisfied, 
however, that defendants' divestiture of the assets described in the 
Judgment will establish, preserve and ensure viable competitors in each 
of the relevant markets identified by the governments. To this end, the 
United States is convinced that the proposed relief, once implemented 
by the Court, will prevent Waste Management's acquisition of Eastern 
from having adverse competitive effects.

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.`` \7\ Rather, absent a showing of 
corrupt failure of the government to discharge its duty, the Court, in 
making its public interest finding, should * * * carefully consider the 
explanations of the government in the competitive impact statement and 
its responses to comments in order to determine whether those 
explanations are reasonable under the circumstances.

    \7\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court 
need not invoke any of them unless it believes that the comments 
have raised significant issues and that further proceedings would 
aid the court in resolving those issues. See H.R. 93-1463, 93rd 
Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 
6535, 6538.
---------------------------------------------------------------------------

United States v. Mid-America Dairymen, Inc., 1977-1 CCH 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.\8\

    \8\ 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).'' \9\
---------------------------------------------------------------------------

    \9\ 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 with the meaning 
of the APPA that were considered by the United States in formulating 
the proposed Final Judgment.

    Dated: February 1, 1999.

    Filed: February 2, 1999.

      Respectfully submitted,
Anthony E. Harris (AH 5876),
U.S. Department of Justice, Antitrust Division, Litigation II Section 
1401 H Street, NW, Suite 3000, Washington, DC 20530, (202) 307-6583.

Appendix A--Summary of Waste Disposal and Collection Assets That 
Must Be Divested Under the Proposed Final Judgment

I. The Rights to Eastern's RFP Proposal

    The proposed Final Judgment (Secs. II(C), IV and V) requires 
Waste Management and Eastern to divest to Republic Services, Inc. 
(or any other purchaser acceptable to the United States and the 
State of New York) the rights to Eastern's proposal to accept 
residential waste at a marine transfer terminal from the New York 
City Department of Sanitation. The rights to Eastern's RFP proposal 
include not only the rights to Eastern's original proposal, but also 
any amendments, revisions, or modifications to that proposal and any 
intangible assets relating to the proposal (e.g., any engineering, 
technical, or construction designs, plans or specifications, permit 
or land use applications, and any options, commitments or agreements 
of any type for the design, construction, permitting, lease or sale 
of any land, building or equipment, or to receive, transport, store 
or dispose of waste).
    The purchaser of the Rights to Eastern's RFP Proposal, in 
addition, may obtain such technical assistance on that proposal as 
the purchaser reasonably may require from Eastern for a period of 
one hundred fifty days (150) after the purchase of the rights; and 
at purchaser's option, airspace disposal rights for up to a twenty-
year time period at Eastern's Waverly, VA landfill, pursuant to 
which defendants will sell rights to dispose

[[Page 9540]]

of up to 4,000 tons of average daily waste pursuant to any contract 
award under the New York City RFP. The optional airspace agreement 
must be entered into on the terms and conditions specified in the 
Waste Disposal Agreement, dated December 29, 1998, between Atlantic 
Waste Disposal, Inc. and Republic Services, Inc.

II. Waste Disposal Assets

    The proposed Final Judgment (Secs. II (D) and (E), and (E), IV 
and V) requires Waste Management and Eastern to divest certain 
``relevant disposal assets.'' In general, this means, with respect 
to each landfill or transfer station, all tangible assets, including 
all fee and leasehold and renewal rights in the listed landfill or 
transfer station; the garage and related facilities; offices; and 
landfill- or transfer station-related assets including capital 
equipment, trucks and other vehicles, scales, power supply 
equipment, interests, permits, and supplies; and all intangible 
assets of the listed landfill or transfer station, including 
customer lists, contracts, and accounts, or options to purchase any 
adjoining property. The list of disposal facilities that must be 
divested includes properties in the following locations, under the 
listed terms and conditions:

A. Landfills

1. Allegheny County, Pennsylvania

    Eastern's Kelly Run Sanitation Landfill, located at State Route 
51 South, Elizabeth, Pennsylvania 15037, and known as the Kelly Run 
Landfill (and includes the waste disposal agreement between Chambers 
Development Company, Inc. and William H. Martin, Inc. and Eastern 
Environmental Services, Inc. and Kelly Run Sanitation, Inc., dated 
1997);

2. Bethlehem/Allentown, Pennsylvania

    Eastern's Eastern Waste of Bethlehem Landfill, located at 2335 
Applebutter Road, Bethlehem, Pennsylvania 18015, and known as the 
Bethlehem Landfill; and

3. Chambersburg-Carlisle, Pennsylvania

    Eastern's R&A Bender Landfill located at 3747 White Church Road, 
Chambersburg, Pennsylvania 17201 (also known as the Bender 
Landfill).

B. Transfer Stations

New York, New York

    1. Eastern's PJ's Transfer Station located at 222 Morgan Avenue, 
Brooklyn, New York 11237 (also known as the Morgan Avenue Transfer 
Station);
    2. Eastern's Atlantic Waste Transfer Station located at 110-120 
50th Street, Brooklyn, New York 11232 (also known as the Atlantic 
Transfer Station); and
    3. Waste Management's Vacarro Transfer Station, located at 577 
Court Street, Brooklyn, NY 11231 (also known as the Court Street 
Transfer Station); and Waste Management's Gesuale Transfer Station, 
located at 38-50 Review Avenue, Queens, NY 11101 (also known as the 
Review Avenue Transfer Station), only one of which must be sold 
pursuant to the terms of Sections IV or V of this Final Judgment.

III. Commercial Waste Collection Assets

    The Final Judgment also orders Waste Management and Eastern to 
divest certain commercial waste collection assets. Those assets 
primarily include routes, capital equipment trucks and other 
vehicles, containers, interests, permits, supplies, customer lists, 
contracts, and accounts used to service customers along the routes 
in the following locations:

A. Scranton, Pennsylvania

    Waste Management's front-end loader truck (``FEL'') commercial 
routes servicing Luzerne and Lackawanna County, Pennsylvania;

B. Franklin/Adams/Cumberland Counties, Pennsylvania

    Eastern's FEL commercial routes serving Franklin, Adams and 
Cumberland Counties, Pennsylvania;

C. Broward County, Florida

    Eastern's FEL commercial routes servicing Broward County, 
Florida;

D. Dade County, Florida

    Eastern's FEL commercial route servicing portions of Dade 
County, Florida; and

E. Hillsborough County, Florida

    Eastern's Kimmins Recycling Corporation FEL commercial routes 
servicing the unincorporated (and grandfathered incorporated) areas 
of Hillsborough County, Florida solid waste service area, more 
specifically defined in RFP#-277-96, Hillsborough County Board of 
County Commissioners documents 96-2393, as modified by 97-1913.

Appendix B--Correspondence Between Counsel for Waste Management, 
Inc. and Eastern Environmental Services, Inc. and Counsel for the 
United States (Methodology for Determining Which FEL Commercial 
Routes Must Be Divested Under the Judgment)

Shearman & Sterling

801 Pennsylvania Avenue, NW., Washington, DC 20004-2604

December 30, 1998.

By Hand

Anthony E. Harris, Esq.,
Litigation II Section, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, NW., Washington, DC 20530

United States, et al. v. Waste Management, Inc. et al.

    Dear Tony: I write regarding the Proposed Final Judgment in the 
above-referenced actions.
    Section II(E) of the Proposed Final Judgment defines ``Relevant 
Hauling Assets'' and does so by reference to counties ``serviced'' 
by a designated defendant's front-end loader commercial routes. The 
United States and each of the Relevant States, as defined in the 
Proposed Final Judgment and Hold Separate Order, have agreed that a 
front-end loader commercial route of a designated company is engaged 
in ``servicing'' a particular county if, in the most recent year of 
the route's operation, 10% or more of its revenues were generated by 
customers in that county.
    Section II(E)(4) of the Proposed Final Judgment, titled ``Dade 
County, Florida,'' reads ``Eastern's FEL commercial routes servicing 
portions of Dade County, Florida.'' The United States, the State of 
Florida, and Defendants have further agreed that this provision 
means the following:
    (a) one of Eastern's three largest front-end loader commercial 
routes servicing Dade County, Florida (calculated on the basis of 
monthly revenues); and
    (b) four additional Eastern front-end loader commercial routes 
servicing Dade County, Florida to be selected by Waste Management in 
its sole discretion.

Eastern Environmental Services, Inc. has represented that it 
presently has 10 commercial FEL routes serving Dade County and that 
Eastern's three largest routes in Dade County are Routes 5, 6, and 
11.

    I have listed below for each area described in the Proposed 
Final Judgment the number of front-end loader commercial routes 
operated by the company whose routes will be divested and that have 
generated at least 10% of their revenues in the most recent year of 
operation from customers in the counties set forth in the definition 
of Section II(e). It is the Defendants' understanding that these 
routes are all those that need to be divested pursuant to the terms 
of the Proposed Final Judgment.

Scranton, Pennsylvania
    Waste Management's three commercial FEL routes servicing Luzerne 
and Lackawana Counties.
Franklin/Adams/Cumberland Counties, Pennsylvania
    Eastern's two commercial FEL routes servicing Franklin County, 
two commercial FEL routes servicing Adams County, and one commercial 
FEL route serving Cumberland County.
Broward County, Florida
    Eastern's two commercial FEL routes servicing Broward County.
Dade County, Florida
    Five of Eastern's ten commercial FEL routes servicing Dade 
County as described above in this letter.
Hillsborough County, Florida
    Eastern's five commercial FEL routes servicing the 
unincorporated and grandfathered incorporated area of Hillsborough 
County.

    Defendants understand that the United States and each of the 
relevant states have not, at this stage, verified the Defendants' 
representations as to which particular routes or the total number of 
routes that must be divested pursuant to the terms of the Proposed 
Final Judgment.


[[Page 9541]]


        Very truly yours,
Steven C. Sunshine,
Counsel for Waste Management, Inc.
Neal R. Stoll,
Counsel for Eastern Environmental Services, Inc.
    Agreed and Acknowledged:
Anthony E. Harris,
U.S. Department of Justice.

cc: Douglas L. Kilby, Esq., State of Florida
James A. Donahue, III, Esq., Commonwealth of Pennsylvania
Richard F. Grimm, Esq., State of New York

Certificate of Service

    I certify that on February 1, 1999, I caused a copy of the 
foregoing Competitive Impact Statement to be served on the parties 
in this case by mailing the pleading first-class, postage prepaid, 
to a duly authorized legal representative of each of the parties as 
follows:
Jonathan L. Greenblatt, Esquire
Steven C. Sunshine, Esquire
Michael Strub, Jr., Esquire,
Shearman & Sterling, 801 Pennsylvania Avenue, NW, Washington, DC 20004-
2604.
James R. Weiss, Esquire,
Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW, 
Washington, DC 20006-8425.

Counsel for Defendants Waste Management, Inc. and Ocho Acquisition 
Corp.

Neal R. Stoll, Esquire,
Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, NY 
10022-3897.

Counsel for Defendant Eastern Environmental Services, Inc.

Richard E. Grimm
Kay Taylor,
Assistant Attorneys General, Antitrust Bureau, Office of the Attorney 
General, State of New York, 120 Broadway, Suite 26-01, New York, NY 
10271.

Counsel for Plaintiff State of New York

James A. Donahue, III,
Chief Deputy Attorney General
Benjamin L. Cox,
Deputy Attorney General, 14th Floor, Strawberry Square, Harrisburg, PA 
17120.

Counsel for Plaintiff Commonwealth of Pennsylvania

Lizabeth A. Leeds
Douglas L. Kilby,
Assistant Attorneys General, Antitrust Section, PL-01, The Capitol, 
Tallahassee, FL 32399-1050.

Counsel for Plaintiff State of Florida

Anthony E. Harris, Esq.,
U.S. Department of Justice, Antitrust Division, 1401 H Street, NW, 
Suite 3000, Washington, DC 20530, (202) 307-6583.
[FR Doc. 99-3925 Filed 2-25-99; 8:45 am]
BILLING CODE 4410-11-M