[Federal Register Volume 64, Number 85 (Tuesday, May 4, 1999)]
[Notices]
[Pages 23859-23869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11076]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States, State of Illinois, and State of Missouri v. Allied 
Waste Industries, Inc. and Browning-Ferris Industries, Inc.; Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, Hold Separate 
Stipulation and Order, and a proposed Final Judgment were filed with 
the United States District Court for the District of Columbia in United 
States, State of Illinois and State of Missouri v. Allied Waste 
Industries, Inc., and Browning-Ferris Industries, Inc., Civil No. 
1:99CV 00894 on April 8, 1999. A Competitive Impact Statement was filed 
on April 21, 1999. The proposed Final Judgment is subject to approval 
by the Court after the expiration of the statutory 60-day public 
comment period and compliance with the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h).
    The Complaint alleged that the proposed acquisition by Allied Waste 
Industries, Inc. (``Allied'') of certain small container waste hauling 
assets from Browning-Ferris Industries, Inc. (``BFI'') in the St. Louis 
market would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The 
St. Louis market was defined as the City of St. Louis and St. Louis 
County in Missouri, and the Illinois counties of St. Clair, Madison, 
and Monroe. The proposed Final Judgment, filed at the same time as the 
Complaint, required Allied, among other things (1) to divest 12 of 
BFI's small container waste hauling routes serving the St. Louis market 
and related assets; (2) to offer less restrictive contracts to small 
container commercial waste hauling customers, and (3) not to acquire 
any commercial waste hauling assets in the St. Louis market for five 
years.
    A Competitive Impact Statement filed by the United States describes 
the Complaint, the proposed Final Judgment, the industry, and the 
remedies to be implemented by Allied. Copies of the Complaint, Hold 
Separate

[[Page 23860]]

Stipulation and Order, proposed Final Judgment, and the Competitive 
Impact Statement are available for inspection in Room 215 in Room 215 
of the U.S. Department of Justice, Antitrust Division, 325 7th Street, 
NW, Washington, DC, and at the office of the Clerk of the United States 
District Court for the District of Columbia, Washington, DC. Copies of 
any of these materials may be obtained upon request and payment of a 
copying fee.
    Public comment is invited within the statutory 60-day comment 
period. Such comments, and response thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to J. Robert Kramer II, Litigation II Section, Antitrust Division, 
United States Department of Justice, 1401 H Street, NW, Suite 3000, 
Washington, DC 20530 (telephone: 202-307-0924).
Constance K. Robinson,
Director of Operations and Merger Enforcement Antitrust Division.

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. ``Allied'' means Allied Waste Industries, Inc. a Delaware 
corporation with its headquarters in Scottsdale, Arizona, and includes 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, directors, officers, managers, agents, and employees.
    B. ``BFI'' means Browning-Ferris Industries, 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.
    C. ``Commercial waste hauling'' means the collection and 
transportation to a disposal site of trash and garbage (but not medical 
waste: organic waste; special waste, such as contaminated soil; sludge; 
or recycled, materials) from commercial and industrial customers. 
Commercial waste hauling means using front-end load and rear-end load 
trucks to service small containers in the St. Louis area. Typical 
customers include office and apartment buildings and retail 
establishments (e.g., stores and restaurants).
    D. ``Relevant Hauling Assets'' means (1) BFI Illinois commercial 
waste hauling routes 906, 909, 916 and 940 (as described in Exhibit A 
attached to the proposed Final Judgment) and BFI Missouri commercial 
waste hauling routes 902, 904, 906, 907, 908, 921, 926 and 940 (as 
described in Exhibit B attached to the proposed Final Judgment) 
including Saturday service in connection with the customers serviced on 
those routes; (2) all tangible assets, including capital equipment, 
trucks and other vehicles, containers, interests, permits, and supplies 
[except real property nd improvements to real property (i.e., 
buildings)] used in connection with those routes; and (3) all 
intangible assets, including hauling-related customer lists, contracts 
and accounts used in connection with those routes.
    E. ``Small container'' means a 1 to 10 cubic yard container 
typically made of steel and often known as a dumpster.
    F. ``St. Louis market'' means the City of St. Louis and St. Louis 
County, Missouri; and the Illinois counties of St. Clair, Madison and 
Monroe.
    G. ``Relevant State'' means the state in which the Relevant Hauling 
assets are located.

II

Objectives

    The Final Judgment filed in this case is meant to ensure Allied's 
prompt divestitures of the Relevant Hauling Assets for the purpose of 
establishing a viable competitor in the commercial waste hauling 
business in the St. Louis market, to remedy the effects that plaintiffs 
allege would otherwise result from Allied's acquisition of certain BFI 
assets. This Hold Separate Stipulation and Order ensures, prior to such 
divestitures, that the Relevant Hauling Assets are an independent, 
economically viable, and ongoing business concern; 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 District of Columbia.

IV

Compliance With and Entry of Final Judgment

    A. The parties stipulate that a Final Judgment in the form attached 
hereto 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 Allied and by filing that 
notice with the Court.
    B. Allied 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. Allied 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 rule 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. Allied represents that the divestitures ordered in the proposed 
Final Judgment can and will be made, and that Allied 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. Allied shall preserve, maintain, and operate the Relevant 
Hauling Assets, as independent competitive

[[Page 23861]]

businesses, with management, sales and operations of such assets held 
entirely separate, distinct and apart from those of Allied's other 
operations. Allied shall not coordinate the marketing of, or 
negotiation or sales by, any Relevant Hauling Asset with Allied's 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, Allied will inform plaintiffs of the 
steps Allied has taken to comply with this Hold Separate Stipulation 
and Order.
    B. Allied shall take steps necessary to ensure that (1) the 
Relevant Hauling Assets will be maintained and operated as independent, 
ongoing, economically viable and active competitors in the waste 
hauling business in the St. Louis market; (2) management of the 
Relevant Hauling Assets will not be influenced by Allied; and (3) the 
books, records, competitively sensitive sales, marketing and pricing 
information, and decision-making concerning the Relevant Hauling 
Assets, will be kept separate and apart from Allied's other operations. 
Allied's influence over the Relevant Hauling Assets shall be limited to 
that necessary to carry out Allied's obligations under this Hold 
Separate Stipulation and Order and the Final Judgment.
    C. Allied shall use all reasonable efforts to maintain and increase 
the sales and revenues of 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 Hauling Assets.
    D. Allied shall provide sufficient working capital to maintain the 
Relevant Hauling Assets as economically viable, and competitive ongoing 
businesses.
    E. Allied shall take all steps necessary to ensure that 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 
Hauling Assets.
    F. Allied 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 Hauling Assets.
    G. Allied shall maintain, in accordance with sound accounting 
principles, separate, accurate and complete financial ledgers, books 
and records and 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 Hauling 
Assets.
    H. Except in the ordinary course of business or as is otherwise 
consistent with this Hold Separate Stipulation and Order, Allied shall 
not hire, transfer, terminate, or otherwise alter the salary agreements 
for the Allied or BFI employee who, on the date of Allied's signing of 
this Hold Separate Stipulation and Order, either: (1) works at a 
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 Hauling Assets are divested 
pursuant to the terms of the final Judgment, the Relevant Hauling 
Assets shall be managed by Stephen Zykan. Mr. Zykan shall have complete 
managerial responsibility for the Relevant Hauling Assets of Allied and 
BFI, subject to the provisions of this Order and the Final Judgment. In 
the event that Mr. Zykan is unable to perform his duties, Allied shall 
appoint, subject to the approval of the United States, after 
consultation with the Relevant States, a replacement within ten (10) 
working days. Should Allied fail to appoint a replacement acceptable to 
the United States, after consultation with the Relevant States, within 
(10) working days, the United States shall appoint a replacement.
    J. Allied 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.
    K. 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.

FOR PLAINTIFF UNITED STATES OF AMERICA:

Arthur A. Feiveson, Illinois Bar No. 3125793
U.S. Department of Justice, Antitrust Division, Litigation II Section, 
1401 H Street, NW, #3000, Washington, DC 20530, (202) 307-0901.

FOR DEFENDANT: ALLIED WASTE INDUSTRIES, INC.

Tom D. Smith,
Jones, Day, Reavis & Pogue, 1450 G Street, NW, Washington, DC 20005.

FOR DEFENDANT BROWNING-FERRIS INDUSTRIES, INC.:

David M. Foster,
Fulbright & Jaworski L.L.P., 801 Pennsylvania Avenue, NW., Washington, 
DC 20004-2615.

FOR PLAINTIFF STATE OF ILLINOIS

James E. Ryan,
Attorney General.
    By:
Christine H. Rosso,
Assistant Attorney General, Antitrust Bureau, Office of the Attorney 
General, State of Illinois, 100 W. Randolph, Chicago, Illinois 60601, 
(312) 814-5610.

FOR PLAINTIFF STATE OF MISSOURI

Jeremiah W. (Jay) Nixon,
Attorney General.
    By:
J. Robert Sears,
Assistant Attorney General, Office of the Attorney General, State of 
Missouri, 1530 Rax Court, Jefferson City, Missouri 65109, (573) 751-
3321.

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 
Illinois, and the State of Missouri, and defendants Allied Waste 
Industries, Inc., (``Allied''), and Browning-Ferris Industries, Inc. 
(``BFI''), 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 Complaint filed on April 8, 1999;
    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 certain BFI assets by Allied, the prompt and 
certain

[[Page 23862]]

divestiture of the identified assets to assure that competition is not 
substantially lessened;
    And whereas, plaintiffs require Allied to make certain divestitures 
for the purpose of establishing a viable competitor in the commercial 
waste hauling business in the St. Louis area;
    And whereas, Allied has represented to plaintiffs that the 
divestitures ordered herein can and will be made and that Allied will 
later raise no claims of hardship or difficulty as grounds for asking 
the Court to modify any of the divestiture provisions contained below;
    And whereas, the United States, the states of Illinois and Missouri 
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. 18).

II

Definitions

    As used in this Final Judgment:
    A. ``Allied'' means defendant Allied Waste Industries, Inc., A 
Delaware corporation with its headquarters in Scottsdale, Arizona and 
includes its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, directors, officers, managers, agents, and 
employees.
    B. ``BFI'' means defendant Browning-Ferris Industries, 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.
    C. ``Commercial waste hauling'' means the collection and 
transportation to a disposal site of trash and garbage (but not medical 
waste; organic waste; special waste, such as contaminated soil; sludge; 
or recycled materials) from commercial and industrial customers. 
Commercial waste hauling means using frontend load and rearend load 
trucks to service small containers in the St. Louis market. Typical 
customers include office and apartment buildings and retail 
establishments (e.g., stores and restaurants).
    D. ``Small container'' means a 1 to 10 cubic yard container 
typically made of steel and often known as a dumpster.
    E. ``Relevant Hauling Assets'' means (1) BFI Illinois commercial 
waste hauling routes 906, 909, 916 and 940 (as described in Exhibit A) 
and BFI Missouri commercial waste hauling routes 902, 904, 906, 907, 
908, 921, 926 and 940 (as described in Exhibit B) including Saturday 
service in connection with the customers serviced on those routes; (2) 
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)] used in 
connection with those routes; and (3) all intangible assets, including 
hauling-related customer lists, contracts and accounts used in 
connection with those routes.
    F. ``St. Louis market'' means the City of St. Louis and St. Louis 
County, Missouri; and the Illinois counties of St. Clair, Madison and 
Monroe.
    G. ``Relevant State'' means the state in which the 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. Allied shall require, as a condition of the sale or other 
disposition of all or substantially all of its relevant hauling assets, 
that the acquiring party agree to be bound by the provisions of this 
Final Judgment.

IV

Divestitures

    A. Allied is hereby ordered and directed in accordance with the 
terms of this Final Judgment, within one hundred and twenty (120) 
calendar days after the filing of the 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 sell the Relevant 
Hauling Assets as a viable, ongoing business to a purchaser acceptable 
to the United States in its sole discretion, after consultation with 
the Relevant State.
    B. Allied shall use its 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, may extend the 
time period for any divestiture an additional period of time not to 
exceed sixty (60) calendar days.
    C. In accomplishing the divestitures ordered by this Final 
Judgment, Allied promptly shall make known, by usual and customary 
means, the availability of the Relevant Hauling Assets. Allied 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. Allied shall also offer to 
furnish to all prospective purchasers, subject to customary 
confidentiality assurance, all information regarding the Relevant 
Hauling Assets customarily provided in a due diligence process except 
such information subject to attorney-client privilege or attorney work-
product privilege. Allied shall make available such information to the 
plaintiffs at the same time that such information is made available to 
any other person.
    D. Allied shall not interfere with any negotiations by any 
purchaser to employ any Allied (or former BFI employee) who works at, 
or whose principal responsibility concerns, any hauling business that 
is part of the Relevant Hauling Assets.
    E. As customarily provided as part of a due diligence process, 
Allied shall permit prospective purchasers of the Relevant Hauling 
Assets 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.
    F. Allied shall warrant to any and all purchasers of the Relevant 
Hauling Assets that each asset will be operational on the date of sale.
    G. Allied shall not take any action, direct or indirect, that will 
impede in any way the operation of the Relevant Hauling Assets.
    H. Allied shall warrant to the purchaser of the Relevant Hauling 
Assets that 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 Hauling assets, Allied will not undertake, 
directly or indirectly, following the divestiture of each asset, any 
challenges to the environmental,

[[Page 23863]]

zoning, or other permits pertaining to the operation of the asset.
    I. Unless the United States, after consultation with the Relevant 
State, otherwise consents in writing, the divestitures pursuant to 
Section IV, whether by Allied or by trustee appointed pursuant to 
Section V of this Final Judgment, shall include all Relevant Hauling 
Assets, 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, that 
the Relevant Hauling Assets can and will be used by the purchaser as 
part of a viable, ongoing business or businesses engaged in waste 
hauling. 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's sole satisfaction, after 
consultation with the Relevant State, that the purchaser: (1) Has the 
capability and intent of competing effectively in the waste hauling 
business in the Relevant Area; (2) has or soon will have the 
managerial, operational, and financial capability to compete 
effectively in the commercial waste hauling business in the St. Louis 
market; and (3) is not hindered by the terms of any agreement between 
the purchaser and Allied which gives Allied 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 St. Louis market.

V

Appointment of Trustee

    A. In the event that Allied has not sold the Relevant Hauling 
Assets 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, to effect the divestiture of 
each such asset not sold.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Relevant Hauling Assets. 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 VIII of 
this Final Judgment, and shall have such other powers as the Court 
shall deem appropriate. 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 Allied any investment bankers, attorneys, or agents 
reasonably necessary 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 accomplish the divestitures at the earliest possible time to a 
purchaser or purchasers acceptable to the United States, upon 
consultation with the Relevant State, and shall have such other powers 
as this Court shall deem appropriate. Allied shall not object to a sale 
by the trustee on any grounds other than the trustee's malfeasance. Any 
such objections by Allied must be conveyed in writing to the relevant 
plaintiffs and the trustee within ten (10) calendar days after the 
trustee has provided the notice required under Section VI of this Final 
Judgment.
    C. The trustee shall serve at the cost and expense of Allied, 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 Allied and the trust shall then be terminated. 
The compensation of such trustee and of any professionals and agents 
retained by the trustee shall be reasonable in light of the value of 
the divested business and based on a fee arrangement providing the 
trustee with an incentive based on the price and terms of the 
divestiture and the speed with which it is accomplished.
    D. Allied shall use its best efforts 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 Allied 
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. Allied shall permit bona fide prospective acquirers of each 
Relevant Hauling Asset 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 sell 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 setting forth (1) the trustee's 
efforts to accomplish the 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 the same time furnish such 
report to the parties, who shall each have the right to be heard and to 
make additional recommendations consistent with the purpose of the 
trust. The Court shall enter thereafter such orders as it shall deem 
appropriate in order to carry out the purpose of the trust which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by the United States.

VI

Notification

    Within two (2) business days following execution of a definitive 
agreement, contingent upon compliance with the terms of this Final 
Judgment, to effect, in whole or in part, any proposed divestiture 
pursuant to Sections IV or V of this Final Judgment, Allied 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 Allied. The notice shall set 
forth the details of the proposed transaction and list the name, 
address, and telephone number of each

[[Page 23864]]

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, may request 
from Allied, the proposed purchaser, or any other third party 
additional information concerning the proposed divestiture and the 
proposed purchaser. Allied and the trustee shall furnish any additional 
information requested from them within fifteen (15) calendar days of 
the receipt of the request, unless the parties shall otherwise agree. 
Within thirty (30) calendar days after receipt of the notice or within 
twenty (20) calendar days after plaintiffs have been provided the 
additional information request from Allied, the proposed purchaser, and 
any third party, whichever is later, the United States, after 
consultation with the Relevant State, shall provide written notice to 
Allied and the trustee, if there is one, stating whether or not it 
objects to the proposed divestiture. If the United States provides 
written notice to Allied and the trustee that it does not object, then 
the divestiture may be consummated, subject only to Allied's limited 
right to object to the sale under Section V(B) of this Final Judgment. 
Upon objection by the United States, a divestiture proposed under 
Section IV or Section V shall not be consummated. Upon objection by 
Allied 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, 
Allied shall deliver to plaintiffs an affidavit as to the fact and 
manner of compliance with Sections IV and 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, entered into negotiations 
to acquire, or was contacted or made an inquiry about acquiring, and 
interest in the businesses to be divested, and shall describe in detail 
each contact with any such persons during that period. Each such 
affidavit shall also include a description of the efforts that Allied 
has taken to solicit a buyer for any and all Relevant Hauling Assets 
and to provide requested 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 Untied States, after consultation with the Relevant 
State, to information provided by Allied, 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. Allied shall deliver to 
plaintiffs an affidavit which describes in detail all actions Allied 
has taken and all steps Allied had implemented on an on-going basis to 
preserve the Relevant Hauling Assets 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, 
Allied's efforts to maintain and operate each 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. Allied shall 
deliver to plaintiffs an affidavit describing any changes to the 
efforts and actions outlined in Allied'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, Allied 
shall preserve all records of all efforts made to preserve the Relevant 
Hauling Assets and to effect the ordered divestitures.

VIII

Hold Separate Order

    Until the divestitures required by the Final Judgment have been 
accomplished, Allied 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 
Hauling Assets.

IX

Financing

    Allied 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

Contractual Revisions

    A. In accordance with paragraph X B, below, Allied shall alter the 
contracts it uses with its smaller container solid waste commercial 
customers in the St. Louis market to the form contained in the attached 
Exhibit C, except for contracts for terms of less than two years.
    B. Except for contracts for terms of less than two years, Allied 
shall offer contracts in the form attached as Exhibit C to all new 
small container solid waste commercial customers or customers that sign 
new contracts for small container solid waste commercial service 
effective on the date Allied acquires the FBI assets. Allied shall 
offer such contracts to all other small container solid waste 
commercial customers in the St. Louis market by December 1, 1999.

XI

Acquisitions

    Allied is hereby ordered and directed that for a period of five (5) 
years after notice of the entry of this Final Judgment, Allied shall 
not acquire any commercial waste hauling company, any commercial waste 
hauling route, or any relevant hauling assets located in the City of 
St. Louis, Missouri; St. Louis County, Missouri; and in the Illinois 
counties of St. Clair, Madison and Monroe.

XII

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 
Allied made to its principal offices, shall be permitted:

    (1) Access during office hours of Allied to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other 
records and documents in the possession or under the control of 
Allied, 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 Allied and without 
restraint or interference from it, to interview, either

[[Page 23865]]

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, Allied 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 XII of this Final Judgment shall be divulged by a 
representative of the plaintiffs to any person other than a duly 
authorized representative of the Executive Branch of the United States, 
or the Attorney General's Office of any Relevant State, except in the 
course of legal proceedings to which the United 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 Allied 
to plaintiffs, Allied 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 Allied marks each pertinent page of such material, 
``Subject to claim of protection under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure,'' then ten (10) calendar days notice shall be 
given by plaintiffs to Allied prior to divulging such material in any 
legal proceeding (other than a grand jury proceeding) to which Allied 
is not a party.

XIII

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.

XIV

Termination

    Unless this Court grants an extension, this Final Judgment will 
expire upon the tenth anniversary of the date of its entry.

XV

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. 16(b)-(h), files 
this Competitive Impact Statement related to the proposed Final 
Judgment submitted for entry in this civil antitrust proceeding.

I

Nature and Purpose of the Proceeding

    The United States filed a civil antitrust Complaint under Section 
15 of the Clayton Act, 15 U.S.C. 25, on April 8, 1999, alleging that 
the proposed acquisition of Browning-Ferris Industries, Inc.'s 
(``BFI'') small container commercial waste hauling assets in the St. 
Louis market by Allied Waste Industries, Inc. (``Allied'') would 
constitute a violation of Section 7 of the Clayton Act, 15 U.S.C. 18. 
The States of Illinois and Missouri, by and through their respective 
Attorneys General, are co-plaintiffs with the United States in this 
action.\1\
---------------------------------------------------------------------------

    \1\ The APPA obligates only the United States to file a 
Competitive Impact Statement.
---------------------------------------------------------------------------

    The Complaint alleges that the effect of the acquisition may be 
substantially to lessen competition in small containerized commercial 
waste hauling services in the St. Louis market, which includes the City 
of St. Louis and St. Louis County in Missouri, and the Illinois 
counties of St. Clair, Madison and Monroe.
    Plaintiffs seek, among other relief, a permanent injunction 
preventing the defendants from, in any manner, combining their small 
container commercial waste hauling assets in the St. Louis market. By 
the terms of a Hold Separate Stipulation and Order, which was filed 
simultaneously with the proposed Final Judgment, defendant Allied must 
take certain steps to ensure that, until the required divestiture has 
been accomplished, the BFI assets as outlined in the proposed Final 
Judgment will be held separate and apart from defendant Allied's other 
assets and businesses. Allied must, until the required divestiture is 
accomplished, preserve and maintain the specified BFI assets as 
saleable and economically viable ongoing concerns.
    The United States, its co-plaintiffs, and the defendants also have 
filed a Hold Separate Stipulation and Order by which the parties 
consented to the entry of a proposed Final Judgment designed to 
eliminate the anticompetitive effects of the acquisition. Under the 
proposed Final Judgment, as explained more fully below, Allied would be 
required within 120 days after the filing of the Hold Separate 
Stipulation and Order, or 5 days after notice of the entry of the Final 
Judgment by the Court, to divest, as viable business operations, a 
specified number of BFI's small container commercial waste hauling 
routes and assets serving the St. Louis market. If Allied did not do so 
within the time frame in the proposed Final Judgment, a trustee 
appointed by the Court would be empowered for an additional six months 
to sell those assets. If the trustee is unable to do so in that time, 
the Court could enter such orders as it shall deem appropriate to carry 
out the purpose of the trust, which may, if necessary, include 
extending the trust and the trustee's appointment by a period requested 
by the United States, after consultation with its co-plaintiffs.
    Additionally, under the proposed Final Judgment, as explained more 
fully below, defendant Allied would be required to offer less 
restrictive contracts to its small container commercial waste hauling 
customers in the St. Louis market; and be prohibited from acquiring any 
commercial waste hauling company, any commercial waste hauling route, 
or any relevant hauling assets in the St. Louis market for 5 years 
after notice of the entry of proposed Final Judgment.
    The United States, its co-plaintiffs, and the defendants have 
stipulated that the proposed Final Judgment may be entered after 
compliance with the APPA. Entry of the proposed Final Judgment would 
terminate this action, except that the Court would retain jurisdiction 
to construe, modify, or enforce the provisions of the proposed Final 
Judgment and to punish violations thereof.

II

Description of the Events Giving Rise to the Alleged Violation

    Allied and BFI are two of the three largest companies engaged in 
the commercial waste hauling and disposal business, with operations 
throughout the United States. In 1998, Allied reported domestic 
revenues of nearly $1.6 billion while BFI reported domestic revenues of 
nearly $4.7 billion.

[[Page 23866]]

    Allied and BFI agreed to a sale to Allied of BFI's small container 
commercial waste hauling assets in St. Louis market, as part of an 
asset swap agreement dated February 11, 1999.

A. The Solid Waste Hauling Industry

    Solid waste hauling involves the collection of paper, food, 
construction material and other solid waste from homes, businesses and 
industries, and the transporting of that waste to a landfill or other 
disposal site. These services may be provided by private haulers 
directly to residential, commercial and industrial customers, or 
indirectly through municipal contracts and franchises.
    Service to commercial customers accounts for a large percentage of 
total hauling revenues. Commercial customers include restaurants, large 
apartment complexes, retail and wholesale stores, office buildings, and 
industrial parks. These customers typically generate a substantially 
larger volume of waste than that generated by residential customers. 
Waste generated by commercial customers is generally placed in metal 
containers of one to ten cubic yards provided by their hauling company. 
One to ten cubic yard containers are called ``small containers.'' Small 
containers are collected primarily by frontend load vehicles that lift 
the containers over the front of the truck by means of a hydraulic 
hoist and empty them into the storage section of the vehicle, where the 
waste is compacted. Specially-rigged rearend load vehicles can also be 
used to service some commercial small container customers, but these 
trucks generally are not as efficient as frontend load vehicles and are 
limited in the sizes of containers they can safely handle. Frontend 
load vehicles can drive directly up to a container and hoist the 
container in a manner similar to a forklift hoisting a pallet: the 
containers do not need to be manually rolled into position by a truck 
crew as with a rearend load vehicle. Service to commercial customers 
that use small containers is called ``small containerized hauling 
service.''
    Solid waste hauling firms also provide service to residential and 
industrial (or ``roll-off'') customers. Residential customers, 
typically households and small apartment complexes that generate small 
amounts of waste, use noncontainerized solid waste hauling service, 
normally placing their waste in plastic bags or trash cans at curbside. 
Rearend load vehicles are generally used to collect waste from 
residential customers and from those commercial customers that generate 
relatively small quantities of solid waste, similar in the amount and 
kind to those generated by residential customers. Generally, rearend 
loaders use a one or two person crew to manually load the waste into 
the rear of the vehicle.
    Industrial or roll-off customers include factories and construction 
sites. These customers either generate non-compactible waste, such as 
concrete or building debris, or very large quantities of compactible 
waste. They deposit their waste into very large containers (usually 20 
to 40 cubic yards) that are loaded onto a roll-off truck and 
transported individually to the disposal site where they are emptied 
before being returned to the customer's premises. Some customers, like 
shopping malls, use large, roll-off containers with compactors. This 
type of customer generally generates compactible trash, like cardboard, 
in very great quantities; it is more economical for this type of 
customer to use roll-off service with compactor than to use a number of 
small containers picked up multiple times a week.

B. Small Containerized Commercial Waste Hauling Service

    There are no practical substitutes for small containerized 
commercial waste hauling service. Small containerized commercial waste 
hauling service customers will not generally switch to noncontainerized 
service because it is too impractical and costly for those customers to 
bag and carry their trash to the curb for hand pick-up. Small 
containerized commercial waste hauling service customers also value the 
cleanliness and relative freedom from scavengers afforded by that 
service. Similarly, roll-off service is much too costly and takes up 
too much space for most small containerized commercial waste hauling 
service customers. Only customers that generate the largest volumes of 
solid waste can economically consider roll-off service, and for 
customers that do generate large volumes of waste, roll-off service is 
usually the only viable option. Accordingly, small container commercial 
waste hauling service is a line of commerce and a relevant product 
market.
    Solid waste hauling services are generally provided in very 
localized areas. Route density (a large number of customers that are 
close together) is necessary for small containerized commercial waste 
hauling firms to be profitable. In addition, it is not economically 
efficient for heavy trash hauling equipment to travel long distances 
from customers without collecting significant amounts of waste. Thus, 
it is not efficient for a hauler to serve major metropolitan areas from 
a distant base. Haulers, therefore, generally establish garages and 
related facilities within each major local area served. Local laws or 
regulations that restrict where waste can be disposed of may further 
localize markets. Flow control regulations designate the disposal 
facilities where trash picked up within a geographic area must be 
disposed. Other local regulations may also prohibit the depositing of 
trash from outside a particular jurisdiction in disposal facilities 
located within that jurisdiction. These laws and regulations dictate 
that haulers operate only in these local jurisdictions so that they may 
use the designated disposal facilities.
    The Complaint alleges the St. Louis market as a relevant geographic 
market for small containerized commercial waste hauling services. This 
market includes the City of St. Louis and St. Louis County in Missouri, 
and the Illinois counties of St. Clair, Madison and Monroe.
    Allied and BFI compete with each other in small containerized 
commercial waste hauling services in the relevant geographic market, 
which is highly concentrated and becomes substantially more 
concentrated as a result of the proposed acquisition. In the St. Louis 
market, Allied and BFI each have over a 25% share of the small 
containerized commercial waste hauling business. The acquisition would 
increase the Herfindahl-Hirschmann Index (``HHI''),\2\ a measure of 
market concentration, by about 1400 to about 3900 in the St. Louis 
market.
---------------------------------------------------------------------------

    \2\ The Herfindahl-Hirschmann Index (``HHI'') is a measure of 
market concentration calculated by squaring the market share of each 
firm competing in the market and then summing the resulting numbers. 
For example, for a market consisting of four firms with shares of 
30, 30, 20, and 20 percent, the HHI is 2600 (30 squared (900) plus 
30 squared (900) plus 20 squared (400) plus 20 squared (400) = 
2600). The HHI, which takes into account the relative size and 
distribution of the firms in a market, ranges from virtually zero to 
10,000. The index approaches zero when a market is occupied by a 
large number of firms of relatively equal size. The index increases 
as the number of firms in the market decreases and as the disparity 
in size between the leading firms and the remaining firms increases.
---------------------------------------------------------------------------

    A new entrant cannot constrain the prices of larger incumbents 
until it achieves minimum efficient scale and operating efficiencies 
comparable to the incumbent firms. In small containerized commercial 
waste hauling service, achieving comparable operating efficiencies 
required achieving route destiny comparable to existing firms, which 
typically takes a substantial

[[Page 23867]]

period of time. A substantial barrier to entry is the use of long-term 
contracts coupled with selective pricing practices by incumbent firms 
to deter new entrants into small containerized commercial waste hauling 
service and to hinder them in winning enough customers to build 
efficient routes. Further, even if a new entrant endures and grows to a 
point near minimum efficient scale, the entrant will often be purchased 
by an incumbent firm and will be removed as a competitive threat.
    Solid waste hauling is an industry highly susceptible to tacit or 
overt collusion among competing firms. Overt collusion has been 
documented in more than a dozen criminal and civil antitrust cases 
brought in the last decade and a half. Such collusion typically 
involves customer allocation and price fixing, and where it has 
occurred, has been shown to persist for many years.
    The elimination of one of a small number of significant 
competitors, such as would occur as a result of the proposed 
transaction in the St. Louis market, significantly increases the 
likelihood that consumers in these markets are likely to face higher 
prices or poorer quality service.
    Based on the foregoing and other facts, the Complaint alleges that 
the effect of the proposed acquisition may be substantially to lessen 
competition in the above-described geographic area in the small 
containerized commercial waste hauling service market in violation of 
Section 7 of the Clayton Act.

III

Explanation of the Proposed Final Judgment

    The provisions of the proposed Final Judgment are designed to 
eliminate the anticompetitive effects of the acquisition in small 
containerized commercial waste hauling services in the St. Louis market 
by establishing a new, independent and economically viable competitor 
in that market. The proposed Final Judgment requires Allied, within 120 
days after the filing of the Hold Separate Stipulation and Order, or 5 
days after notice of the entry of the Final Judgment by the Court, to 
divest, as a viable ongoing business or businesses, a specified number 
of BFI's small container commercial waste hauling routes and assets 
serving the St. Louis market. The divestiture would include both the 
small containerized commercial waste hauling service assets and other 
assets as may be necessary to insure the viability of the small 
container business. If Allied cannot accomplish this divestiture within 
the above-described period, the proposed Final Judgment provides that, 
upon application by the United States as plaintiff, the Court will 
appoint a trustee to effect the divestiture.
    The proposed Final Judgment provides that the assets must be 
divested in such a way as to satisfy plaintiff United States (after 
consultation with the states of Illinois and Missouri) that the 
operations can and will be operated by the purchaser or purchasers as a 
viable, ongoing business or businesses that can compete effectively in 
the relevant market. Similarly, if the divestiture is accomplished by 
the trustee, the assets must be divested in such a way as to satisfy 
plaintiff United States (after consultation with the states of Illinois 
and Missouri) that the business or businesses can and will be operated 
as viable, independent competitors by the purchaser or purchasers. The 
defendants must take all reasonable steps necessary to accomplish the 
divestiture and shall cooperate with prospective purchasers and, if one 
is appointed, with the trustee.
    If a trustee is appointed, the proposed Final Judgment provides 
that Allied will pay all costs and expenses of the trustee. The 
trustee's commission will be structured so as to provide an incentive 
for the trustee based on the price obtained and the speed with which 
divestiture is accomplished. After his or her appointment becomes 
effective, the trustee will file monthly reports with the parties and 
the Court, setting forth the trustee's efforts to accomplish 
divestiture. At the end of six months, if the divestiture has not been 
accomplished, the trustee and the parties will make recommendations to 
the Court which shall enter such orders as appropriate in order to 
carry out the purpose of the trust, including extending the trust or 
the term of the trustee's appointment.
    The proposed Final Judgment also requires Allied to offer less 
restrictive contracts (attached to the proposed Final Judgment as 
Exhibit C) to small containerized commercial waste hauling customers in 
the St. Louis market. These contractual changes involve shortening from 
three years to two years the term of contracts Allied uses, limiting 
renewals to one year periods, and substantially reducing the amount of 
liquidated damages. The proposed Final Judgment requires that these 
revised contracts shall be offered to all new, small, containerized 
commercial waste hauling customers and to existing customers that sign 
new contracts for small containerized commercial waste hauling service, 
effective beginning the date Allied acquires the BFI assets. By 
December 1, 1999, Allied must offer the revised contract to all other 
small containerized commercial waste hauling service customers in the 
St. Louis market.
    The United States concluded that a change in the types of contracts 
used with small containerized commercial waste hauling service 
customers in the St. Louis market, in conjunction with the required 
divestiture, will adequately address the competitive concerns posed by 
Allied's acquisition of the BFI assets. Several factors led to the 
decision, including the number of existing competitors in the market; 
the size of the population and number and density of commercial 
establishments requiring small containerized commercial waste hauling 
service; and the number of haulers that currently do not provide, but, 
absent the long-term contracts that now exist, could provide small 
containerized commercial waste hauling service in the market. Requiring 
Allied to offer less restrictive contracts within the St. Louis market 
eliminates a major barrier to entry and expansion. Haulers already 
serving the market will be able to more easily expand their current or 
build new routes and nearby haulers will be able to build routes, thus 
constraining any possible anticompetitive price increase by the post-
acquisition firm.
    The proposed Final Judgment also prohibits Allied from acquiring 
any commercial waste hauling company, any commercial waste hauling 
route, or any relevant hauling assets in the St. Louis market for 5 
years after notice of the entry of the proposed Final Judgment. The 
United States concluded that this restriction would ensure continued 
competition in the market by preventing Allied from acquiring small 
containerized commercial waste hauling routes which would have had the 
effect of undercutting the relief required by the proposed Final 
Judgment by effecting the entry and expansion of other market 
participants and stifling competition in small containerized commercial 
waste hauling.
    The relief sought in the St. Louis market alleged in the complaint 
has been tailored to insure that, given the specific conditions in this 
market, the relief will protect consumers of small containerized 
commercial waste hauling services from higher prices and poorer quality 
service that might otherwise result from the acquisition.

[[Page 23868]]

IV

Remedies Available to Potential Private Litigants

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

V

Procedures Available for Modification of the Proposed Final Judgment

    The United States and defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 
(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 Final Judgment at any time prior to entry. The 
comments and the response of the United States will be filed with the 
Court and published in the Federal Register.
    Written comments should be submitted to: J. Robert Kramer II, 
Chief, Litigation II Section, Antitrust Division, United States 
Department of Justice, 1401 H Street, NW, Suite 3000, Washington, 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 Final Judgment.

VI

Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, litigation against defendants Allied and BFI. The 
United States could have brought suit and sought preliminary and 
permanent injunctions against Allied's acquisition of the BFI assets. 
The United States is satisfied, however, that the divestiture of the 
assets, the contract relief, and the prohibition on acquisitions, as 
outlined in the proposed Final Judgment, will promote small 
containerized commercial waste hauling service competition in the St. 
Louis market and lower entry barriers that would otherwise 
substantially lessen competition in this market. The United States is 
satisfied that the proposed relief will prevent the acquisition from 
having anticompetitive effects in the St. Louis market, will maintain 
the structure of the St. Louis market that existed prior to the 
acquisition, will preserve the existence of independent competitors in 
this area, and will allow for new entry and expansion by existing firms 
in this market.

VII

Standard of Review Under the APPA for the Proposed Supplemental Order

    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 supplemental Order ``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, 1458-62 (D.C. Cir. 1995). The courts have recognized that the 
term `` `public interest' take[s] meaning from the purposes of the 
regulatory legislation.'' NAACP v. Federal Power Comm'n, 425 U.S. 662, 
669 (1976). Since the purpose of the antitrust laws is to preserve 
``free and unfettered competition as the rule of trade,'' Northern 
Pacific Railway Co. v. United States, 356 U.S. 1, 4 (1958), the focus 
of the ``public interest'' inquiry under the APPA is whether the 
proposed Final Judgment would serve the public interest in free and 
unfettered competition. United States v. American Cyanamid Co., 719 F. 
2d 558, 565 (2d Cir. 1983), cert. denied, 465 U.S. 1101 (1984); United 
States v. Waste Management, Inc., 1985-2 Trade Cas. para.66,651, at 
63,046 (D.D.C. 1985). 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.'' \3\ 
Rather,
---------------------------------------------------------------------------

    \3\ 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.

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

United States v. Mid/America Dairymen, Inc., 1977-1 Trade Cas. 
para.61,508, at 71,980 (W.D. Mo. 1977).
    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a Court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F. 2d 456, 462 (9th Cir. 1988) quoting United States v. Bechtel 
Corp., 648 F. 2d 660, 666 (9th Cir.), cert denied, 454 U.S. 1083 
(1981). See also Microsoft, 56 F. 3d 1448 (D.C. Cir. 1995). Precedent 
requires that:


[[Page 23869]]


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.\4\

    \4\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.
---------------------------------------------------------------------------

    A proposed consent decree is an agreement between the parties which 
is reached after exhaustive negotiations and discussions. Parties do 
not hastily and thoughtlessly stipulate to a decree because, in doing 
so, they

waive their right to litigate the issues involved in the case and 
thus save themselves the time, expense, and inevitable risk of 
litigation. Naturally, the agreement reached normally embodies a 
compromise; in exchange for the saving of cost and the elimination 
of risk, the parties each give up something they might have won had 
they proceeded with the litigation.

United States v. Armour & Co., 402 U.S. 673, 681 (1971).
    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).'' \5\
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    \5\ 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).
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VIII

Determinative Documents

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

    Dated: April 22, 1999.
    Respectfully submitted,
Arthur A. Feiveson,
IL Bar #3125793.
David R. Bickel,
DC Bar #393409.
Thomas J. Horton
Denise Cheung,
U.S. Department of Justice, Antitrust Division, Litigation II Section, 
1401 H Street, NW, Suite 3000, Washington, DC 20530, (202) 307-0924.

Certificate of Service

    I hereby certify that a copy of the foregoing has been served upon 
Allied Waste Industries, Inc., Browning-Ferris Industries, Inc., the 
Office of the Attorney General of the State of Illinois, and the Office 
of the Attorney General of the State of Missouri, by placing a copy of 
this Competitive Impact Statement in the U.S. mail, directed to each of 
the above-named parties at the address given below, this 22d day of 
April, 1999.

Allied Waste Industries, Inc., c/o Tom D. Smith, Jones Day Reavis & 
Pogue, Metropolitan Square, 1450 G Street, NW, Washington, DC 20005-
2088
Browning-Ferris Industries, Inc., c/o David M. Foster, Fulbright & 
Jaworski, 801 Pennsylvania Avenue, NW, Washington, DC 20004-2615
State of Illinois, Christine H. Rosso, Assistant Attorney General, 
Office of the Attorney General, Antitrust Bureau, 100 W. Randolph, 
Chicago, IL 60601
State of Missouri, J. Robert Sears, Assistant Atorney General, 
Office of the Attorney General, 1530 Rax Court, Jefferson City, 
Missouri 65109
Arthur A. Feiveson,
Attorney, U.S. Department of Justice, Antitrust Division, 1401 H 
Street, NW, Suite 3000, Washington, DC 20530, (202) 307-0924.
[FR Doc. 99-11076 Filed 5-3-99; 8:45 am]
BILLING CODE 4410-11-M