[Federal Register Volume 64, Number 191 (Monday, October 4, 1999)]
[Notices]
[Pages 53692-53734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24882]


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DEPARTMENT OF JUSTICE

Antitrust Division
[Civil No. 1:98 CV 1616 (AA)]


United States, States of Ohio, Arizona, California, Colorado, 
Florida, Maryland, Michigan, New York, Texas, Washington and Wisconsin 
and Commonwealths of Kentucky and Pennsylvania v. USA Waste Services, 
Inc., Dome Merger Subsidiary, and Waste Management, Inc.

Response to Public Comments on Antitrust Consent Decree

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that on September 14, 1999, the 
United States filed its responses to public comments on the proposed 
Final Judgment in United States, et al. v. USA Waste Services, Inc., et 
al., Civil No. 1:98 CV 1616 (AA) (N.D. Ohio, filed July 16, 1998), with 
the United States District Court in Cleveland, Ohio.
    On July 16, 1998, the United States and 13 states filed a civil 
antitrust complaint, which alleges that USA Waste Services proposed 
acquisition of Waste Management would violate Section 7 of the Clayton 
Act, 15 U.S.C. 18, by substantially lessening competition in waste 
collection and/or disposal services, or both, in a number of markets 
around the country, including Baltimore, MD; Akron/Canton, Cleveland 
and Columbus, OH; Denver, CO; New York, NY; Los Angeles, CA; Detroit, 
Flint and Northern Michigan; Miami; FL; Houston, TX; Louisville, KY; 
Milwaukee, WI; Philadelphia, Pittsburgh, and Allentown, PA; Tucson, AR; 
Portland, OR; and Gainesville, FL.
    The proposed Final Judgment, filed on July 16, 1998, requires USA 
Waste and Waste Management to divest commercial waste collection and/or 
municipal solid waste disposal operations in each of the geographic 
areas alleged in the Complaint. A modified version of the proposed 
Judgment (``Modified Final Judgment''), filed on September 14, 1999, 
would eliminate the defendants' contingent obligation to divest one New 
York City transfer station (the Brooklyn Transfer Station, located on 
Scott Avenue).
    Public comment on the proposed Judgment was invited within the 
statutory 60-day comment period. The public comments and the United 
States' responses thereto are hereby published in the Federal Register 
and have been filed with the Court. Copies of the Complaint Hold 
Separate Stipulation and Order, proposed Final Judgment, Competitive 
Impact Statement, and the United States' Certificate of Compliance with 
Provisions of the Antitrust Procedures and Penalties Act (to which the 
public comments and the United States' responses are attached), 
proposed Modified Final Judgment, and the Memorandum of the United 
States in Support of Entry of the Proposed Modified Final Judgment are 
available for inspection in Room 215 of the Antitrust Division, 
Department of Justice, 325 7th Street, NW, Washington, DC 20530 
(telephone: 202-514-2481), and at the Office of the Clerk of the United 
States District Court for the Northern District of Ohio, Eastern 
Division, 201 Superior Avenue, Cleveland, OH 44114.
    Copies of any of these materials may be obtained upon request and 
payment of a copying fee.
Constance K. Robinson,]
Director of Operations & Merger Enforcement Antitrust Division.

Memorandum of the United States in Support of Entry of the Proposed 
Modified Final Judgment

I. Introduction

A. The Procedural Background

    On July 16, 1998, the United States, and the states of Ohio, 
Arizona, California, Colorado, Florida, Maryland, Michigan, New York, 
Texas, Washington, and Wisconsin, and the commonwealths of Kentucky and 
Pennsylvania filed a civil antitrust complaint, which alleged that USA 
Waste Services, Inc.'s (``USA Waste's'') acquisition of Waste 
Management, Inc. would violate Section 7 of the Clayton Act, 15 U.S.C. 
18. The Complaint alleged that in 19 geographic areas around the 
country, the defendants were two of the most significant competitors in 
commercial waste collection, or disposal of municipal solid waste 
(i.e., operation of landfills, transfer stations and incinerators), or 
both services, and that the elimination of competition as a result of 
the merger could lead to higher prices or reduced services for 
purchasers of waste collection or disposal services.
    At the time the Complaint was filed, the parties submitted a 
proposal Final Judgment that would require the defendants to divest 
assets sufficient to preserve the competition that otherwise would be 
lost in each of the markets in which an antitrust violation had been 
alleged. The parties also filed--and the Court (per Chief Judge Matia) 
entered--a Hold Separate Stipulation and Order, allowing the defendants 
to complete their merger transaction, provided that they keep the 
assets required to be divested separate from their own business 
operations and adhere to the terms of the proposed Final Judgment 
pending the United States' compliance with the notice and comment 
provisions of the Antitrust Penalties and Procedures Act, 15 U.S.C. 
16(b)-(h) (the ``APA'').\1\
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    \1\ Nothing in the Hold Separate Order, however, prevents the 
defendants from promptly selling the assets required to be divested 
to an acceptable purchaser, and in this instance, the defendants 
chose to do so prior to APPA compliance. In a series of transaction 
beginning in September 1998 and ending in February 1999, the 
defendants divested all of the assets available for sale under the 
decree (except the Baltimore disposal assets) to Republic Services, 
Inc. (``Republic'') for approximately $500 million. In October 1998, 
the defendants sold the Baltimore disposal assets to Browning-Ferris 
Industries, Inc. (``BFT'') for roughly $60 million over a ten-year 
time period.
    The United States, after consultation with the relevant states, 
concluded that Republic and BFI were both acceptable purchasers 
under the terms of the proposed Judgment. The defendants informed 
the Court of the pending sales of these assets before consummation. 
(See Letter from James R. Weiss, counsel for defendants USA Waste 
and Waste Management, to Honorable Ann Aldrich, United States 
District Judge, dated October 30, 1998).
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B. The Pending Motion To Enter the Proposed Modified Final Judgment

    Today, the United States has filed a Certificate of Compliance with 
Provisions of the Antitrust Procedures

[[Page 53693]]

and Penalties Act, certifying that it has notified the public of the 
terms of the proposed settlement and fully responded to the public 
comments that were received. The parties also have submitted, and moved 
the Court to enter, a slightly modified version of the Final Judgment 
that was originally proposed. A copy of the proposed Modified Final 
Judgment is attached hereto as Exhibit A.
    The modification affects only a single waste transfer station in a 
single market, New York City, NY.\2\ As originally conceived, the 
proposed Final Judgment contained a contingent divestiture, requiring 
the defendants to sell the Brooklyn (or ``Scott Avenue'') Transfer 
Station, a 1,000 ton/day waste disposal facility located in Brooklyn, 
NY, if the proposed Nekboh Transfer Station, previously sold by the 
defendants, has not been licensed or permitted within a year after 
entry of the proposed Final Judgment. See Final Judgment, 
Secs. II(C)(2)(i) and IV(B). The Modified Final Judgment would 
eliminate the contingent divestiture of the Scott Avenue Transfer 
Station (i.e., remove Secs. II(C)(2)(i) and IV(B) from the decree) and 
substitute instead an immediate divestiture of either of two other New 
York transfer stations, Gesuale (500 ton/day) or Vacarro (400 ton/
day).\3\
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    \2\ To put the proposed modification in perspective, the 
proposed Final Judgment orders the defendants to divest ownership 
rights in twelve waste transfer stations (including four in New York 
City) and disposal rights in as many as five other transfer 
stations. In addition, the defendants were ordered to divest 
disposal or ownership rights in as many as 18 different landfills.
    \3\ The defendants' commitment to sell either the Gesuale or 
Vacarro transfer stations and the government's agreement to join the 
defendants in moving for the entry of the proposed Modified Final 
Judgment, were key elements of a consent decree, filed in December 
1998 in federal district court in Brooklyn, NY, and entered in May 
1999 in settlement of an antitrust suit brought by the United 
States, the State of New York, and others against the defendants' 
acquisition of a major New York City waste industry rival, Eastern 
Environmental Services, Inc. See Final Judgment in United States, 
States of New York and Florida, and Commonwealth of Pennsylvania v. 
Waste Management, Inc., Eastern Environmental Services, Inc., et. 
al, Civil No. 98-7168 (E.D.N.Y., entered May 25, 1999) (the ``Waste/
Eastern'' case), attached hereto as Exhibit B. The federal district 
court in Brooklyn (J. Block), following public notice, comment, and 
government response, entered the Waste/Eastern Final Judgment on May 
25, 1999, concluding that an exchange of the contingent divestiture 
of the Scott Avenue Transfer Station in Brooklyn, NY, for an 
immediate divestiture of the Scott Avenue Transfer Station in 
Brooklyn, NY, for an immediate divestiture of one of the two smaller 
New York transfer stations would be ``in the public interest.'' See 
the Waste/Eastern Judgment, Secs. II(D)(2)(c), IV(A)(2), IV(L), and 
XIII, Ex. B at 5, 7-8, 12 and 22 (emphasis supplied).
    Although this Court must decide for itself whether the Modified 
Final Judgment submitted for entry in this case would be in the 
public interest, the judgment of the federal district court in 
Brooklyn, NY with respect to competitive issues concerning New York 
City waste transfer stations has some bearing on that issue.
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C. Reasons Why Entry of the Proposed Modification Would Be in the 
Public Interest

    As explained below, the United States strongly believes that entry 
of the proposed Modified Final Judgment would be in the public 
interest. The major reasons for including this transfer station in the 
proposed decree are no longer valid. Divestiture of the Scott Avenue 
Transfer Station is not necessary to ensure the defendants' continued 
cooperation in licensing the Nekboh site since the purchaser of the 
Nikboh permit application has the financial resources and economic 
incentive to pursue on its own licensing of that transfer station. 
Further, divestiture of the Scott Avenue Transfer Station is not 
necessary to promote competition in the disposal of the New York City's 
commercial waste because that transfer station is incapable of 
effectively competing for such waste, having entered into a long term 
contract to dispose of the city's residential waste.
    Finally, the United States agreed to join the defendants in a 
motion to eliminate the Scott Avenue Transfer Station from the pending 
Final Judgment in response to the defendant's twin commitments to 
divest either of two smaller, but more capable waste disposal 
facilities in New York City (Gesuale or Vacarro), and two large New 
York City waste transfer stations subsequently acquired by the 
defendants from Eastern Environmental Services, Inc. (PJ's and Atlantic 
Waste).
    In our view, each of these reasons provides an independent basis 
for concluding that entry of the proposed Modified Final Judgment would 
be in the public interest, and taken together, they appear dispositive 
of that issue. (The State of New York, the only state plaintiff whose 
interests are directly affected by the proposed modification, has 
authorized us to state that it concurs in the motion to enter the 
proposed Modified Final Judgment and believes the modification to be in 
the public interest.) \4\
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    \4\ The other twelve government plaintiffs also concur and urge 
the Court to enter the proposed Modified Final Judgment.
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II. Statement of the Case

A. The Complaint, Proposed Final Judgment and Competitive Impact 
Statement

    Although the Complaint in this case alleges that the defendants' 
combination would eliminate competition in a number of waste collection 
and disposal markets around the country, the critical issues here 
relate to competition in the disposal of New York City waste. In that 
market, the Complaint alleged, defendant USA Waste's acquisition of 
defendant Waste Management's transfer stations in Brooklyn and Bronx, 
NY, would substantially lessen competition in the disposal of the 
city's commercial waste.\5\ The Final Judgment sought to remedy this 
problem by requiring the defendants to divest Waste Management's only 
waste disposal asset in the Bronx--the SPM Transfer Station [Final 
Judgment, Secs. II (C)(2)(i)(1) and IV]--and to divest USA Waste's only 
disposal assets in Brooklyn, the All City Transfer Station [id, 
Sec. II(C)(2)(i)(3) and IV] and an application for a permit to 
construct and operate a waste transfer station at 2 North 5th Street, a 
site known as the proposed Nekboh Transfer Station [id., 
Sec. II(C)(2)(i)(2) and IV(B)]. The proposed Judgment further provided 
that if the divested Nekboh site was not permitted within one year 
after entry of the Final Judgment, then the defendants must sell a 
fourth waste transfer station in New York, the Brooklyn (or ``Scott 
Avenue'') Transfer Station, located at 458 Scott Avenue [id., Sec. II 
(c)(2)(i)(4) and IV].
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    \5\ Commercial waste is municipal solid waste generated by 
commercial establishments such as restaurants or department stores, 
private office and apartment buildings. ``Residential waste,'' on 
the other hand, is municipal solid waste produced by single family 
households and state and municipal agencies. In New York, commercial 
waste must be collected and disposed of by private firms. 
Residential waste is collected and disposed of by the city, which, 
until recently, maintained its own network of disposal facilities. 
New York, however, has recently begun contracting with private firms 
for disposal of the city's residential waste since the city landfill 
must be closed by 2001.
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    The defendants' divestiture of the proposed Scott Avenue Transfer 
Station was seen as a way both to ensure the defendant's continued 
cooperation and assistance in permitting the proposed Nekboh Transfer 
Station and to promote competition in disposal of New York City's 
commercial waste if, for some reason, that transfer station was not 
permitted and built within the prescribed time period.
    In August 1998, however, the defendants agreed to divest the Nekboh 
permit to Republic, one of the nation's largest waste collection and 
disposal firms, which has over $2 billion in total assets. And in early 
September 1998, the City of New York awarded the Scott Avenue Transfer 
Station a three to five-year contract for the disposal of the city's 
residential waste. With the bulk of the facility's available capacity 
committed under a long-term municipal contract for disposal of 
residential

[[Page 53694]]

waste, if the defendants were to divest the Scott Avenue Transfer 
Station, the new owner could not complete effectively in the processing 
and disposal of New York City's private commercial waste, the relevant 
market the government alleged would be adversely affected by the 
defendants' combination.

B. The Defendants' Acquisition of Eastern Environmental Services, Inc. 
and the Parties' Resolution of the Competitive Issues Concerning the 
New York City Waste Disposal Market

    In early fall 1998, the defendants \6\ agreed to acquire Eastern 
Environmental Services, Inc. (``Eastern''), a major competitive rival 
in the disposal of New York City's residential and commercial waste. 
This agreement precipitated another government antitrust suit, filed in 
federal district court in Brooklyn, NY, in which the United States and 
the State of New York alleged that the transaction, if consummated, 
would substantially reduce competition in waste disposal services in 
New York.\7\ The parties agreed to settle the Waste/Eastern case in 
late December 1998 and, inter alia, to resolve all of the outstanding 
issues relating to the defendants' acquisition of competitors in the 
New York market.
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    \6\ After the defendants USA Waste Services, Waste Management 
and Dome Merger Subsidiary merged, they named the new firm ``Waste 
Management, Inc.''
    \7\ The complaint also alleged the merger would create 
competitive problems in collection and disposal markets in 
Pennsylvania and Florida, and those states were co-plaintiffs in 
that lawsuit.
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    The defendants agreed to divest the two New York waste transfer 
stations that they would acquire from Eastern, PJ's and Atlantic Waste 
Disposal. Waste/Eastern a Final Judgment, Sec. Sec. II(D)(2)(1) and 
(b), IV(A)(1), Ex. B at 5, 7-8. They also agreed to divest either of 
two smaller waste transfer stations, Gesuale or Vacarro, both located 
in New York, NY.\8\ Id. Secs. II(D)(2)(c) and IV(A)(2). Because the 
United States and the State of New York concluded that circumstances 
had changed and that an immediate divestiture of a transfer station 
with capacity for disposal of commercial waste was competitively better 
than a contingent divestiture of Scott Avenue Transfer Station, which 
no longer had such capacity, they agreed to move for entry of a 
Modified Final Judgment that would eliminate the requirement that the 
defendants divest the Scott Avenue Transfer Station if the Nekboh site 
is not permitted within the prescribed one-year time period. Id. 
Sec. IV(L), Ex. B at 12.
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    \8\ The defendants later opted to divest the Vacarro Transfer 
Station.
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    In essence, the United States and the State of New York agreed to a 
swap, trading a future divestiture of the capacity-constrained Scott 
Avenue Transfer Station for an immediate divestiture of either one of 
two small New York transfer stations, both with capacity available for 
processing commercial waste, and the two waste transfer stations, PJ's 
and Atlantic Waste, that the defendants had agreed to acquire from 
Eastern.
    The parties filed the proposed Waste/Eastern Judgment on December 
31, 1998. Following public notice and response to public comments,\9\ 
the federal district court in Brooklyn entered the Final Judgment in 
the Waste/Eastern case on May 25, 1999, after concluding that that 
decree, including the provision requiring the United States and the 
State of New York to join the defendants in a joint motion to modify 
the Final Judgment in this case, would be ``in the public interest.'' 
Waste/Eastern Final Judgment, Sec. XIII, Ex. B at 22.
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    \9\ In accordance with the APPA, the United States published 
notice of the Waste/Eastern Judgment in the New York Times and the 
Washington Post, newspapers of general circulation in New York, NY 
and Washington, DC. The United States also published a copy of the 
complaint, proposed judgment and competitive impact statement in the 
Federal Register on February 26, 1999 (64 Fed. Reg. 9527), and 
published its responses to the public comments on the Waste/Eastern 
decree on June 11, 1999 (64 FR 31638).
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III. Argument

A. Entry of the Modified Final Judgment Would Be in the Public Interest

    At this stage of the proceedings, after the United States has 
certified its compliance with the public notice and response to comment 
requirements of the APPA, the Court must determine whether entry of the 
proposed Modified Final Judgment ``is in the public interest.'' 15 
U.S.C. 16(e). As noted in our Competitive Impact Statement, 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.'' \10\ Rather,

    \10\ 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 government's 
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.
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absent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH) 
para. 61,508, at 71,980 (W.D. Mo. 1977). And ``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 omittted).'' \11\
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    \11\ 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., 406 F. 
Supp. 713, 716 (D. Mass. 1975); United States v. Alcan Aluminum, 
Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985).
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B. The Public Comments on the Proposed Final Judgment Were Unpersuasive

    ``[T]his is not a case wherein objectors speak with one voice,'' 
United States v. Natl. Broadcasting Co., 449 F. Supp. 1127, 1144 (C.D. 
Cal. 1978) (distinguishing United States v. Gillette Co., 406 F. Supp. 
713, 716 (D. Mass. 1975), where the court confronted ``unified 
opposition'' to a proposed consent decree). Rather, in this case, the 
13 public comments submitted on the proposed Final Judgment expressed a 
wide variety of views, which the United States carefully considered and 
addressed, but which ultimately failed to persuade the United States to 
withdraw its consent to entry of the proposed Judgment. (See 
Certificate of Compliance, Ex. 3-15.)
    In its responses to the public comments, the United States 
carefully explained why requiring the defendants to make extensive 
divestitures (id., Ex. 7-9, 12-15) or imposing more onerous 
restrictions on the defendants' business operations post-merger (id., 
Ex. 1, 10) were unwarranted under the circumstances.\12\ In our view, 
the proposed Final Judgment, without these additional requirements, 
falls well ``within the range of acceptability'' and the broad 
``reaches of the public

[[Page 53695]]

interest.'' United States v. AT&T, 552 F. Supp. at 150.
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    \12\ The only comments related to the contingent divestiture of 
the Scott Avenue transfer Station were from individuals who favored 
converting the proposed site for the Nekboh transfer Station into an 
open space or a public park (see Certificate of Compliance, Ex. 4-
6), comments which do not implicate the proposed modification.
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C. Removing the Contingent Divestiture of the Scott Avenue Transfer 
Station From the Proposed Judgment Would Be in the Public Interest

    This case, however, is somewhat atypical because the Modified Final 
Judgment that the parties now urge the Court to enter differs somewhat 
from the Final Judgment that they originally proposed.\13\ The United 
States strongly believes that the difference--removal of the Scott 
Avenue Transfer Station from the modified decree--is a minor change 
that would make the Modified Final Judgment more effective and 
procompetitive than the earlier decree the parties proposed.
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    \13\ There is no requirement that the government must republish 
the settlement or resolicit public comment simply because it 
proposes that the Court enter a modified version of the final 
judgment originally proposed. The reported cases interpreting the 
APPA strongly suggest that republication is unnecessary. In United 
States v. Nat'l. Broadcasting Co., 449 F. Supp. 1127 (C.D. Cal. 
1978), modified, 1993-2 Trade Case. (CCH) para. 70,418 (C.D. Cal. 
1993), the government amended a proposed consent decree after 
comments were received, then submitted the amended proposed judgment 
for approval by the court. The court said that ``the requirements of 
the APPA concerning publication and consideration of public comments 
have been satisfied'' (id. at 1129), and subsequently approved the 
decree. Id. at 1145. See also Massachusetts Sch. of Law v. United 
States, 118 F.3d 776, 778 (D.C. Cir. 1997) (relating the district 
court's decision to enter a consent judgment after several 
modifications had been made following the end of the public comment 
period). In United States v. American Tel. & Tel. Co., 552 F. Supp. 
131, 225 (D.D.C. 1982) (``AT&T''), aff'd sub nom. Maryland v. United 
States, 460 U.S. 1001 (1983), Judge Greene approved a proposed 
consent decree after the comment period had expired, also on the 
condition that the decree be amended to add a new section. In none 
of the cases did the court require republication of the amended 
proposed consent decree before entry. Rather, by eventually entering 
the consent judgments, the court in each case implicitly concluded 
that the requirements of the APPA were satisfied by the initial 
publication, comment, and response. See, e.g., Nat'l. Broadcasting 
Co., 449 F. Supp. at 1129.
    In any event, to the extent notice and opportunity to comment is 
necessary, it was provided when the United States complied with the 
APPA before entry of the Final Judgment in the Waste/Eastern case. 
The competitive impact statement filed in that case discussed the 
substitution of the Gesuale and Vacarro transfer stations for the 
Scott Avenue Transfer Station. 64 Fed. Reg. 9538. The Judgment in 
that case was published in The New York Times, prior to its entry, 
and thus provided ample notice and opportunity to comment to those 
persons affected most directly by the waste disposal relief in the 
New York City market. See the Certificate of Compliance in the 
Waste/Eastern case, 64 FR 31638, 31639 (July 11, 1999).
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    First, the defendants' divestiture of the Scott Avenue Transfer 
Station is not necessary to ensure that the Nekboh Transfer Station is 
permitted. As noted above, the defendants subsequently sold the permit 
application for the Nekboh site to Republic, now the nation's third 
largest waste collection and disposal firm. With over $2 billion in 
annual revenues, Republic certainly possesses the management skill, 
financial wherewithal and economic incentive to pursue on its own a 
permit for the proposed Nekboh Transfer Station. In addition, the 
proposed Modified Final Judgment requires the defendants to cooperate 
and enjoins them from interfering in any way with Republic's efforts to 
obtain a permit for the Nekboh site. Modified Final Judgment, 
Secs. IV(H) and VIII (B) and (C), Ex. A at 20, 28. Thus, forcing a 
divestiture of the Scott Avenue Transfer Station would not advance the 
timing on the permitting and opening of the Nekboh site.
    Moreover, a divestiture of the defendants' Scott Avenue Transfer 
Station would not promote competition in the disposal of New York 
City's private commercial waste because as a consequence of a long-term 
municipal contract, virtually all of that transfer station's capacity 
is committed to processing the city's residential waste.
    In short, the compromise the parties reached in the Waste/Eastern 
case--returning the Scott Avenue Transfer Station for three transfer 
stations that would resolve the competitive problems created by the 
defendants' series of acquisitions of rivals in the New York City 
market for disposal of commercial waste--not only avoided an expensive 
and resource-intensive trial on the merits in that case, but also 
obtained immediate relief, not merely a contingent remedy, that would 
be more effective than that contained in the proposed Final Judgment in 
this case. In these circumstances, the United States strongly believes 
that entry of the proposed Modified Final Judgment in this case is 
squarely in the public interest.

IV. Conclusion

    For the foregoing reasons, and for the reasons set forth in the 
United States' Certificate of Compliance with Provisions of the 
Antitrust Procedures and Penalties Act, the United States respectfully 
requests that this Court enter the proposed Modified Final Judgment.

    Dated: September 13, 1999.

        Respectfully submitted,
Anthony E. Harris, Illinois Bar No. 1133713,
U.S. Department of Justice, Antitrust Division, Litigation II, 1401 H 
Street, NW, Suite 3000, Washington, DC 20530, (202) 307-6583.

Modified Final Judgment

    Whereas, plaintiffs, the United States of America, the State of 
Ohio, the State of Arizona, the State of California, the State of 
Colorado, the State of Florida, the Commonwealth of Kentucky, the State 
of Maryland, the State of Michigan, the State of New York, the 
Commonwealth of Pennsylvania, the State of Texas, the State of 
Washington, and the State of Wisconsin, and defendants USA Waste 
Services, Inc. (``USA Waste'') and Waste Management, Inc. (``WMI''), by 
their respective attorneys, having consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law 
herein, and without this Final Judgment constituting any evidence 
against or an admission by any party with respect to any issue of law 
or fact herein;
    And whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of the Relevant Disposal Assets and Relevant 
Hauling Assets to assure that competition is not substantially 
lessened;
    And whereas, plaintiffs require defendants to make certain 
divestitures for the purpose of establishing one or more viable 
competitors in the waste disposal business, the commercial waste 
hauling business, or both in the specified areas;
    And whereas, defendants have represented to the plaintiffs that the 
divestitures ordered herein can and will be made and that defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    Now, therefore, before the taking of any testimony, and without 
trial or 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. USA Waste means defendant USA Waste Services, Inc., a Delaware 
corporation with its headquarters in Houston, Texas, and includes its 
successors and assigns, and its subsidiaries (including Dome Merger

[[Page 53696]]

Subsidiary), divisions, groups, affiliates, directors, officers, 
managers, agents, and employees.
    B. WMI means defendant Waste Management, Inc., a Delaware 
corporation with its headquarters in Oak Brook, Illinois, and includes 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, directors, officers, managers, agent, and employees.
    C. Relevant Disposal Assets means, unless otherwise noted, with 
respect to each landfill or transfer station listed and described 
herein, all tangible assets, including all fee and leasehold and 
renewal rights in the listed landfill or transfer station; the garage 
and related facilities; offices; 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 
landfill- or transfer station-related 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 and Airspace Disposal Rights
a. Akron/Canton, OH
    WMI's Countywide R&D Landfill, located at 3619 Gracemont Street, 
SW, East Sparta, OH 44626, and known as the Countywide Landfill;
b. Columbus, OH
    USA Waste's Pine Grove Landfill, located at 5131 Drinkle Road, SW, 
Amanda, OH 43102;
c. Denver, CO
    USA Waste's Front Range Landfill, located at 1830 County Road 5, 
Erie, CO 80516-8005; and at purchaser's option, a two-year waste supply 
agreement that would require defendants to dispose of a minimum of 150 
tons/day of waste at the Front Range Landfill, at disposal fees to be 
negotiated between purchaser and defendants;
d. Detroit, MI
    USA Waste's Carleton Farms Landfill, located at 28800 Clark Road, 
New Boston, MI, subject to two conditions, viz, USA Waste's obligations 
to (1) dispose of ash from the Greater Detroit Resource Recovery 
Center's incinerator at a separate monofill cell on this site pursuant 
to an existing contract, and (2) dispose of waste from the Greater 
Detroit Resource Recovery Center's bypass transfer station at this 
landfill, until defendants transfer such obligation to another 
landfill, which they shall use their best efforts to accomplish 
expeditiously;
e. Flint, MI
    USA Waste's Brent Run Landfill, located at Vienna Road, Montrose 
Township, Genesee County, MI;
f. Houston, TX
    (1) USA Waste's Brazoria County Landfill, located at 10310 FM-523, 
Angleton, TX 77515; and
    (2) Airspace disposal rights at WMI's Security Landfill, located at 
19248 Highway 105E, Cleveland, TX, or WMI's Atascocita Landfill, 
located at 2020 Atascocita Road, Humble, TX, or both, pursuant to which 
defendants will sell to one or more purchasers rights to dispose of at 
least 3.0 million tons of waste, over a ten-year period, under the 
following minimum terms and conditions:
    (a) The purchaser (or all purchasers combined), or their 
designee(s), may dispose of up to 360,000 tons of waste/year, or a 
maximum of 1,200 tons of waste/day, at either, or both of, WMI's 
Security or Atascocita landfills. If more than one person purchases the 
airspace disposal rights, the minimum annual and daily disposal rates 
for each purchaser shall be specified in its purchase agreement, and 
the total of all purchasers' maximum disposal amounts shall be no less 
than 360,000 tons/year and 1,200 tons/day;
    (b) For each purchaser of airspace rights (or their designee), 
defendants must commit to operate the Atascocita Landfill and Security 
Landfill gates, scale houses, and disposal areas under terms and 
conditions no less favorable than those provided to defendants' own 
vehicles or to the vehicles of any municipality in the metropolitan 
Houston area, except as to price and credit terms;
    (c) At the end of the first five years of the agreement, the 
purchaser or purchasers will have been considered to have used a 
minimum of 1.4 million tons of airspace and can have no more than 1.6 
million tons left to use under the purchase agreements. If there is 
more than one purchaser of the airspace, the minimum amounts used 
during the first five years shall be specified in their purchase 
agreements, but the total amount shall be no more than 1.4 million 
tons; and
    (d) At the end of the first seven years of the agreement, the 
purchaser (or purchasers) will have been considered to have used a 
minimum of 2.0 million tons of airspace and can have no more than 1.0 
million tons left to use under the purchase agreements. If there is 
more than one purchaser of the airspace, the minimum amount used during 
the first five years shall be specified in their purchase agreements, 
but the total amount shall be no more than 2.0 million tons;
g. Los Angeles, CA
    USA Waste's Chiquita Canyon Landfill, located at 29201 Henry Mayo 
Drive, Valencia, CA 91355;
h. Louisville, KY
    USA Waste's Valley View Landfill, located at 9120 Sulphur Road, 
Sulphur, KY 40070;
i. Miami, FL
    Airspace disposal rights at USA Waste's Okeechobee Landfill, 
controlled by a subsidiary of USA Waste, and located at 10800 NE 128th 
Avenue, Okeechobee, FL 34972, pursuant to which defendants will sell a 
total of 4.3 million tons of airspace, over a 20-year time period, to 
one or more purchasers, under the following minimum terms and 
conditions:
    (1) The right to dispose of a maximum of 1.8 million tons of South 
Florida Waste, over a 20-year time period, as follows:
    (a) The purchaser (or purchasers) must commit to dispose of no more 
than 600 tons/day, of South Florida Waste;
    (b) The total amount of airspace used in each year may not exceed 
150,000 tons; and
    (2) Three options for additional airspace at Okeechobee Landfill, 
exercisable at the sole discretion of the purchaser of the airspace 
disposal rights, as follows:
    (a) First Option: The right to dispose of an additional 1.0 million 
tons of South Florida Waste at the Okeechobee Landfill, for the 
remaining term of the agreement, as follows:
    (i) The amount of airspace used each weekday must be at least 500 
tons, but not more than 800 tons (including tonnage disposed of under 
prior air space commitments); and
    (ii) the amount of airspace used in the year the option is 
exercised, and in each succeeding year over the term of the agreement, 
may not exceed 225,000 tons (including tonnage disposed of under prior 
air space commitments);
    (b) Second Option: Exercisable at any time after the second 
anniversary of the agreement, and after exercise of the first option, 
the right to dispose of an additional 1.0 million tons of South Florida 
Waste at the Okeechobee Landfill, for the remaining term of the 
agreement, as follows:
    (i) The amount of airspace used each weekday must be at least 600 
tons, but

[[Page 53697]]

not more than 1,000 tons/day (including tonnage disposed of under prior 
air space commitments); and
    (ii) The amount of airspace used in the year Option Two is 
exercised and in each succeeding year of the life of the rights may not 
exceed 300,000 tons (including tonnage disposed of under prior air 
space commitments); and
    (c) Third Option: Exercisable any time after the fifth anniversary 
of the agreement, and after exercise of the second option, the right to 
dispose of an additional 500,000 tons of South Florida Waste, for the 
remaining term of the agreement, as follows:
    (i) The amount of airspace used must be at least 600 tons/weekday, 
but may not exceed 1,100 tons/weekday (including tonnage disposed of 
under prior air space commitments);
    (ii) The amount of airspace used in the year the third option is 
exercised, and in each succeeding year of the life of the rights may 
not exceed 300,000 tons/year (including tonnage disposed of under prior 
air space commitments); provided, that in any event,
    (d) The Okeechobee Landfill Rights shall expire when the purchaser 
has used the maximum tonnages available under the rights and any 
exercised options, or twenty years from the date of purchase of the 
rights, whichever is sooner; and
    (e) For each purchaser of airspace rights (or its designee), 
defendants must commit to operate the Okeechobee Landfill, and its 
gate, scale house, and disposal area under terms and conditions no less 
favorable than those provided to defendants' own vehicles or to the 
vehicles of any municipality in Florida, except as to price and credit 
terms;
j. Milwaukee, WI
    USA Waste's Kestrel Hawk Landfill, located at 1989 Oakes Road, 
Racine, WI 53406; and WMI's Mallard Ridge Landfill, located at W. 8470 
State Road 11, Delavan, WI 53115;
    k. New York, NY/Philadelphia, PA
    WMI's Modern Landfill & Recycling, located at 4400 Mt. Piscah Road, 
York, PA 17402, and known as the Modern Landfill;
l. Northeast Michigan
    USA Waste's Whitefeather Landfill, located at 2401 Whitefeather 
Road, Pinconning, MI; and Elk Run Sanitary Landfill, located at 20676 
Five Mile Highway, Onaway, MI;
m. Pittsburgh, PA
    WMI's Green Ridge Landfill, located at 717 East Huntingdon Landfill 
Road, Scottdale, PA 15683, and variously known as the Green Ridge 
Landfill, the Y&S Landfill, or the Greenridge Reclamation Landfill;
n. Portland, OR
    USA Waste's North WASCO Landfill, located at 2550 Steele Road, the 
Dalles, OR 97058; and
2. Transfer Stations, Disposal Rights and Throughput Agreements
a. Akron/Canton, OH
    Throughput disposal rights of a maximum of 400 tons/day of waste, 
for a ten-year time period, at WMI's Akron Central Transfer Station, 
located at 389 Fountain Street, Akron, OH, under the following terms 
and conditions:
    (1) The purchaser (or its designee) can deliver waste to the Akron 
Central Transfer Station for processing and, at the purchaser's option, 
load the processed waste into the purchaser's (or its designee's) 
vehicles for disposal;
    (2) For each purchaser of such disposal rights (or its designee), 
defendants must commit to operate the listed Akron Central Transfer 
Station's gate, scale house, and disposal area under terms and 
conditions no less favorable than those provided to defendants' own 
vehicles or to the vehicles of any municipality in Ohio, except as to 
price and credit terms;
b. Baltimore, MD
    Disposal rights of at least 600 tons of waste/day, pursuant to 
which defendants will sell to one or more purchasers rights to dispose, 
for a five-year time period, under the following terms and conditions:
    (1) The purchaser(s) or its designee(s) may dispose of waste at any 
one or any combination of the following facilities, as specified in its 
purchase agreement: Southwest Resource Recovery Facility (known as 
Baltimore RESCO or BRESCO), located at 1801 Annapolis Road, Baltimore, 
MD 21230; Baltimore County Resource Recovery Facility, located at 10320 
York Road, Cockeysville, MD; Western Acceptance Facility, located at 
3310 Transway Road, Baltimore, MD; or Annapolis Junction Transfer 
Station, located at 8077 Brock Bridge Road, Jessup, MD 20794. If more 
than one person purchases the disposal rights, the minimum daily 
disposal rates, and the total of all purchasers' maximum disposal 
amounts at all facilities specified shall be no less than 600 tons/day;
    (2) For each purchaser of disposal rights (or its designee), 
defendants must commit to operate the listed Baltimore, MD area 
facilities' gates, scale houses, and disposal areas under terms and 
conditions no less favorable than those provided to defendants' own 
vehicles or to the vehicles of any municipality in Maryland, except as 
to price and credit terms;
c. Cleveland, OH
    At purchaser's option, either USA Waste's Newburgh Heights Transfer 
Station, located at 3227 Harvard Road, Newburgh Heights, OH 44105 (and 
known as the Harvard Road Transfer Station); or all of WMI's right, 
title and interest in the Strongsville Transfer Station, located at 
16099 Foltz Industrial Parkway, Strongsville, OH; provided, however, 
that the City of Strongsville, owner of the transfer station, approves 
such sale or assignment. Defendants will exercise their best efforts to 
secure the assignment to the purchaser of all their rights, title and 
their interests in the Strongsville Transfer Station, and in the event 
the purchaser selects Strongsville, defendants will not reacquire any 
right, title or interest in the Strongsville transfer station. If the 
contract is not assigned, defendants will enter into a disposal rights 
agreement with the purchaser (or purchasers), which will provide, in 
effect, that the purchaser(s) will enjoy all disposal rights and 
privileges now enjoyed by defendants at the Strongsville Transfer 
Station, and that defendants will operate the facility's gate, scale 
house, and disposal areas under terms and conditions no less favorable 
than those provided to defendant's own vehicles or to the vehicles of 
any municipality in Ohio, except as to price and credit terms;
d. Columbus, OH
    WMI's Reynolds Road Transfer Station, located at 805 Reynolds 
Avenue, Columbus, OH 43201;
e. Detroit, MI
    WMI's Detroit Transfer Station, located at 12002 Mack Avenue, 
Detroit, MI 48215;
f. Houston, TX
    USA Waste's Hardy Road Transfer Station, located at 18784 East 
Hardy, Houston, TX;
g. Louisville, KY
    USA Waste's Poplar Level Road Transfer Station, located at 4446 
Poplar Level Road, Louisville, KY;
h. Miami, FL
    All USA Waste's right, title, and interest in the Reuters Transfer 
Station Rights, as conveyed to Chambers Waste Systems of Florida, a 
subsidiary of USA Waste, pursuant to the Final Judgment in United 
States v. Reuter Recycling of

[[Page 53698]]

Florida, Inc., 1996-1 Trade Cas. (CCH) para. 71,353 (D.D.C. 1996), a 
copy of which is attached as Exhibit A;
i. New York, NY
    (1) WMI's SPM Transfer Station, located at 912 East 132nd Street, 
Bronx, NY 10452, and all rights and interests, legal or otherwise, that 
WMI now enjoys, has had or made use of out of the SPM Transfer Station, 
to deliver waste by truck to rail siding at the Oak Point Rail Yard in 
the Bronx, NY, and at the Harlem River Yards facility, located at St. 
Ann's and Lincoln Avenues at 132nd Street, Bronx, NY 10454;
    (2) All right, title, and interest in USA Waste's pending 
application to construct and operate a waste transfer station located 
at 2 North 5th Street, Brooklyn, NY 11211, and known as the Nekboh 
Transfer Station; and
    (3) USA Waste's All City Transfer Station, located at 246-252 
Plymouth Street, Brooklyn, NY 11202;
j. Philadelphia, PA
    USA Waste's Girard Point Transfer Station, located at 3600 South 
26th Street, Philadelphia, PA 19145; and USA Waste's Quick Way Inc. 
Municipal Waste Transfer Station, located at SE Corner, Bath and 
Orthodox Streets, Philadelphia, PA 19137, subject to the conditions 
that (1) the existing City of Philadelphia waste contract is 
transferred to a WMI transfer station, which defendants must use their 
best efforts to accomplish, and (2) until such transfer is effect3ed, 
USA Waste will be granted throughput capacity at the Quick Way Transfer 
Station to handle this contract.
    D. Relevant Hauling Assets, unless otherwise noted, means with 
respect to each commercial waste collection route or other hauling 
asset described herein, all tangible assets, including capital 
equipment, trucks and other vehicles, containers, interests, permits, 
supplies [except real property and improvements to real property (i.e., 
buildings)]; and it includes all intangible assets, including hauling-
related customer lists, contracts, and accounts.
    Relevant Hauling Assets, as used herein, includes the assets in the 
following locations:
1. Akron, OH
    USA Waste's and American Waste Corporation's front-end loader truck 
(``FEL'') commercial routes that serve the City of Akron and Summit 
County, Ohio;
2. Allentown, PA
    WMI's FEL commercial routes that serve the cities of Allentown and 
Northampton and Lehigh County, PA;
3. Cleveland, OH
    WMI's FEL commercial routes that serve the City of Cleveland and 
Cuyahoga County, Ohio (not including the northwest quadrant);
4. Columbus, OH
    WMI's FEL commercial routes that serve Franklin County, Ohio;
5. Denver, CO
    USA Waste's FEL commercial routes that serve the City of Denver, 
and Denver and Arapahoe County, CO;
6. Detroit, MI
    WMI's FEL commercial routes that serve the City of Detroit and 
Wayne County, MI;
7. Houston, TX
    WMI's FEL commercial routes that serve the City of Houston, the 
Dickinson area, and Harris County, TX;
8. Louisville, KY
    USA Waste's FEL commercial routes that serve the City of Louisville 
and Jefferson County, KY;
9. Pittsburgh, PA
    WMI's FEL commercial routes that serve Allegheny County and 
Westmoreland County, PA, and the garage facility (real estate and 
improvements) located at the Y&S Landfill;
10. Portland, OR
    WMI's FEL commercial routes that serve the City of Portland, OR;
11. Tucson, AZ
    USA's Waste's FEL commercial routes that serve the City of Tucson 
and Pima County, AZ; and
12. Gainesville, FL
    WMI's FEL commercial routes that serve Alachua County, FL.
    E. Hauling means the collection of waste from customers and the 
shipment of the collected waste to disposal sites. Hauling, as used 
herein, does not include collection of roll-off containers.
    F. Waste means municipal solid waste.
    G. Disposal means the business of disposing of waste into approved 
disposal sites.
    H. Relevant Area means the county in which the Relevant Hauling 
Assets or Relevant Disposal Assets are located and any adjacent city or 
county, except with respect to the Modern Landfill [see Section 
II(C)(1)(k)], for which the Relevant Area means Philadelphia, PA, and 
New York, NY.
    I. Relevant State means the state in which the Relevant Disposal 
Assets or Relevant Hauling Assets are located, provided however, that 
state is a party to this Final Judgment. With respect to the Modern 
Landfill [see Section II(C)(1)(k)], the Relevant State means the 
Commonwealth of Pennsylvania and the State of New York. With respect to 
section VII, the Relevant State means each state in which the disposal 
or hauling assets to be acquired are located, provided that state is a 
party to this Final Judgment.
    J. South Florida Waste means waste collected, or delivered directly 
from a transfer station located, in Broward, Dade or Monroe County, FL.

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 of 
participation with any of them who shall have received actual notice of 
this Final Judgment by personal service or otherwise.
    B. Defendants 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 businesses 
in any Relevant Area, that the acquiring party or parties agree to be 
bound by the provisions of this Final Judgment.

IV

Divestitures

    A. 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 Complaint in this matter, or five 
(5) days after notice of the entry of this Final Judgment by the Court, 
whichever is later, to sell all Relevant Disposal Assets and 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.
    B. Defendants shall use their best efforts to accomplish the 
divestitures ordered by this Final Judgment as expediously and timely 
as possible. The United States, in its sole discretion, after 
consultation with the Relevant State, may extend the time period for 
any

[[Page 53699]]

divestiture on additional period of time, not to exceed sixty (60) 
calendar days.
    C. In accomplishing the divestitures ordered by this Final 
Judgment, defendants promptly shall make known, by usual and customary 
means, the availability of the Relevant Disposal Assets and the 
Relevant Hauling Assets. Defendants 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. Defendants shall also offer to furnish to all bona 
fide prospective purchasers, subject to customary confidentiality 
assurances, all information regarding the Relevant Disposal Assets and 
Relevant Hauling Assets customarily provided in a due diligence process 
except such information subject to attorney-client privilege or 
attorney work-product privilege. Defendants shall make available such 
information to the plaintiffs at the same time that such information is 
made available to any other person.
    D. Defendants shall not interfere with any negotiations by any 
purchaser to employ any USA Waste (or former WMI) employee who works 
at, or whose primary responsibility concerns, any disposal or hauling 
business that is part of the Relevant Disposal Assets or Relevant 
Hauling Assets.
    E. Defendants shall permit prospective purchasers of the Relevant 
Disposal Assets or Relevant Hauling Assets to have access to personnel 
and to any and all environmental, zoning, and other permit documents 
and information, and to make inspection of the Relevant Disposal Assets 
and Relevant Hauling Assets and of any and all financial, operational, 
or to other documents and information customarily provided as part of a 
due diligence process.
    F. With the exception of the facilities described in Sections 
II(C)(2) (e), (h) and (i)(2), defendants shall warrant to each 
purchaser of Relevant Disposal Assets or Relevant Hauling Assets that 
each asset will be operational of the date sale.
    G. Defendants shall not take any action, direct or indirect, that 
will impede in any way the operation of the Relevant Disposal Assets or 
Relevant Hauling Assets.
    H. Defendants shall warrant to each purchaser of Relevant Disposal 
Assets or 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 defendants will not undertake, directly or 
indirectly, following the divestiture of each asset, any challenges to 
the environmental, zoning, or other permits or applications for permits 
or licenses 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, or by trustee appointed pursuant to Section V of this 
Judgment, shall include all Relevant Disposal Assets and 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 Disposal Assets or 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. The divestitures, 
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 State's sole satisfaction, after 
consultation with the Relevant State, that: (1) the purchaser(s) has 
the capability and intent of competing effectively in the waste 
disposal or hauling business in the Relevant Area; (2) the purchaser(s) 
has the managerial, operational, and financial capability to compete 
effectively in the waste disposal or hauling business in the Relevant 
Area; and (3) none of the terms of any agreement between the purchaser 
and defendants gives any defendant 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.
    J. A purchaser of any Relevant Disposal Asses or Relevant Hauling 
Assets under this Final Judgment must demonstrate to the satisfaction 
of the United States, after consultation with the Relevant State, that 
the purchaser will comply with any and all applicable federal, state 
and local environmental and licensing laws.
    K. Defendants may enter into an agreement, after review and 
approval of the United States, in its sole discretion, after 
consultation with the Relevant State, with a purchaser or purchasers of 
the Chiquita Canyon, Brazoria or Carleton Farms landfills (See Sections 
II (C)(1)(g), and (d)) for disposal of commercially acceptable waste 
collected or transferred from defendants' own route operations.

V

Appointment of Trustee

    A. In the event that defendants have not sold the Relevant Disposal 
Assets or Relevant Hauling Assets within the time specified in Section 
IV of this Final Judgment, the Court shall appoint, on application of 
the United States, a trustee selected by the United States, to effect 
the divestiture of each Relevant Disposal Asset or Relevant Hauling 
Asset not sold.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Relevant Disposal Assets or 
Relevant Hauling Assets described in Sections II(C) and (D) 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, VI, and IX of this Judgment, and shall have such other 
powers as the Court shall deem appropriate. Subject to Section V(C) of 
this Judgment the trustee shall have the power and authority to hire at 
the cost and expense of defendants any investment bankers, attorneys, 
or other 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. To assist in the sale of the Brent 
Run Landfill, described in Section II II(C)(1)(e) of this Judgment, the 
trustee also shall have the power and authority to commit defendants to 
supply waste from defendants' routes in the Relevant Area to that 
landfill for up to a five-year time period at the best disposal price 
then obtainable upon reasonable effort by 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, in its sole discretion, after consultation with the 
Relevant State, and shall have such other powers as this Court shall 
deem appropriate. Defendants shall not object to a sale by the trustee 
on any ground other than the trustee's malfeasance. Any such objections 
by defendants must be conveyed in writing to the United States and the 
Relevant State 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 defendants, 
on such terms and conditions as the Court may prescribe, and shall 
account for all monies derived from the sale of each Relevant Disposal 
Asset or Relevant Hauling Asset sold by the trustee and all

[[Page 53700]]

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 defendants 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. Defendants shall use their 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 
defendants 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. Defendants shall permit bona fide 
prospective purchasers of each Relevant Disposal Asset or 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

Notice of Proposed Divestitures

    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, defendants or the 
trustee, whichever is then responsible for effecting the divestiture, 
shall notify the United States and the Relevant State of the proposed 
divestiture. If the trustee is responsible, it shall similarly notify 
defendants. 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 the United States and the Relevant State of such notice, 
the United States, in its sole discretion, after consultation with the 
Relevant State, may request from defendants, the proposed purchaser, or 
any other third party additional information concerning the proposed 
divestiture and the proposed purchaser. Defendants and the trustee 
shall furnish any additional information requested from them within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree. Within thirty (30) calendar days after 
receipt of the notice [or within twenty (20) calendar days after the 
United States and the Relevant State have been provided the additional 
information requested from defendants, the proposed purchaser, and any 
third party, whichever is later], the United States, after consultation 
with the Relevant State, shall provide written notice to defendants 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 
defendants (and the trustee, if applicable) that it does not object, 
then the divestiture may be consummated, subject only to defendants' 
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 of this Final Judgment shall not be 
consummated. Upon objection by defendants under the provision in 
Section V(B), a divestiture proposed under Section V shall not be 
consummated unless approved by the Court.

VII

Notice of Future Acquisitions

    A. Defendants shall provide each Relevant State with 30 days' 
written notice (which period may be shortened by permission of the 
Relevant State) before acquiring, directly or indirectly, any interest 
in any business, assets (other than in the ordinary course of 
business), capital stock, or voting securities of any person that, at 
any time during the twelve (12) months immediately preceding such 
acquisition, was engaged in waste disposal or small containerized solid 
waste hauling in any area listed in Section VII(B), where that person's 
annual revenues from waste disposal or small containerized solid waste 
hauling in the area were in excess of $500,000 annually, or its total 
revenues were in excess of $1,000,000 annually.
    B. The notice provisions set forth in Section VII(A) above apply 
whenever defendants seek to acquire any interest in any business, 
assets (other than in the ordinary course of business), capital stock, 
or voting securities of any person that was engaged in waste disposal 
or small containerized solid waste hauling in any of the following 
areas:

[[Page 53701]]



------------------------------------------------------------------------
                                 Area for which defendants must provide
        Relevant State              relevant state notice of future
                                              acquisitions
------------------------------------------------------------------------
Arizona......................  Pima Co. (hauling and disposal).
California...................  Los Angeles and Riverside (hauling and
                                disposal); Ventura and Orange Co.
                                (disposal only).
Colorado.....................  Boulder and Denver Co. (hauling and
                                disposal).
Florida......................  Brevard, Alachua, Marion, Orange,
                                Osceola, Seminole, Lee, Charlotte,
                                Sarastoa, Putnam, Volusia and Flagler
                                Co. (hauling and disposal).
Kentucky.....................  Jefferson and Oldham Co. (hauling and
                                disposal).
Maryland.....................  Baltimore City, Baltimore, Anne Arundel,
                                Harford, Carroll, Howard, Montgomery,
                                and Prince George's Co. (hauling and
                                disposal).
Michigan.....................  Wayne, Macomb, and Oakland Co. (hauling
                                and disposal); Genessee, Shiawassee,
                                Saginaw, Bay, Midland, Wexford, Manistee
                                and Montgomery Co. (disposal only).
New York.....................  New York, Bronx, Kings, Queens, and
                                Richmond Co. (disposal only).
Ohio.........................  Ashtabula, Cuyahoga, Delaware, Fairfield,
                                Franklin, Geauga, Lake, Licking, Lorain,
                                Lucas, Mahoning, Medina, Pickaway,
                                Portage, Stark, Summit, Trumbull, and
                                Wood Co. (hauling and disposal);
                                Carroll, Columbiana, Coshocton, Holmes,
                                Knox, Madison, Tuscarawas, Union and
                                Wayne Co. (disposal only).
Pennsylvania.................  Allegheny, Westmoreland, Washington,
                                Beaver, Butler, Lehigh, Northampton,
                                Dauphin, Cumberland, and Perry Co.
                                (hauling and disposal).
Texas........................  Brazoria, Chambers, Ft. Bend, Galveston,
                                Harris, Liberty, Montgomery, Walker and
                                Waller Co. (hauling and disposal).
Washington...................  Cowlitz and Clark Co. (hauling and
                                disposal).
Wisconsin....................  Milwaukee, Waukesha, Racine, Washington,
                                Kenosha, Ozaukee, Walworth, Jefferson
                                and Dane Co. (disposal only).
------------------------------------------------------------------------

    C. For purposes of this Section VII, the term ``small containerized 
solid waste hauling'' means the provision of solid waste hauling 
service to commercial customers by providing the customer with a one to 
ten cubic yard container, which is picked up mechanically using a 
frontload, rearload or sideload truck, and excludes hand pick-up 
service, and service using a compacter attached to or part of a 
container.

VIII

Defendants' Additional Obligations

    Defendants are hereby ordered and directed to, in accordance with 
the terms of this Final Judgment:
    A. Offer to extend, for an additional ten-year time period, the 
Solid Waste Service Agreement, dated August 8, 1996, by and between the 
Northeast Maryland Waste Disposal Authority and USA Waste's subsidiary, 
Garnet of Maryland, Inc. (attached hereto as Exhibit B), for the 
disposal of Anne Arundel County, MD and Howard County, MD waste at the 
Annapolis Junction Transfer Station;
    B. Use their best efforts, prior to its divestiture, to obtain any 
and all licenses and permits to open and operate USA Waste's Nekboh 
Transfer Station, described in Section II(C)(2)(i)(2); and for a five-
year period following such divestiture, to cooperate and assist the 
purchaser in obtaining any and all licenses or permits required to 
operate Nekboh Transfer Station and to refrain from opposing any 
application by the purchaser to obtain a license or permit to expand 
the Nekboh Transfer Station;
    C. For a one-year period following entry of this Final Judgment, 
refrain from opposing any application by any person for a permit or 
license to operate any waste transfer station in any borough of the 
City of New York, NY;
    D. For a five-year period following entry of this Final Judgment, 
refrain from opposing any application by any person to obtain a license 
or permit to expand the remaining capacity or the average daily 
capacity of the Emerald Park Landfill, Glacier Ridge Landfill, or 
Valley Meadows Landfill, in the Greater Milwaukee, WI area;
    E. Refrain from reacquiring any interest in any Relevant Disposal 
Assets or Relevant Hauling Assets divested pursuant to the terms of 
this Final Judgment, without prior written notice to, and written 
consent of, the United States and the Relevant State;
    F. Refrain from conditioning the sale of any landfill pursuant to 
this Final Judgment on any understanding, agreement or commitment, 
written or understood, that the purchaser (or purchasers) will agree to 
sell airspace or otherwise permit defendants to dispose of waste in 
that landfill; provided, however, that USA Waste's Carleton Farms 
Landfill may be divested subject to USA Waste's obligation to dispose 
of ash from the Greater Detroit Resource Recovery Center's incinerator 
at a separate monofill cell on the Carleton Farms Landfill site;
    G. Refrain from taking any action to enforce any agreement or 
understanding that would prohibit any person from competing in Alachua 
or Marion County, FL; provided, however, that this provision shall not 
apply to a current or former employee of defendants (other than any 
employee who may be responsible in any way for route operations subject 
to divestiture under Sections II(D)(12), IV and V of this Judgment); 
and
    H. Provide access to the gate, scale house and disposal area of the 
WMI Tucson transfer station, located at 5200 West Ina, Tucson, AZ, 
under terms and conditions no less favorable than those provided to 
defendants' own vehicles or to the vehicles of any county or 
municipality in Arizona.

IX

Affidavits

    A. Within twenty (20) calendar days of the filing of the Final 
Judgment in this matter and every thirty (30) calendar days thereafter 
until the divesture has been competed whether pursuant to Section IV or 
Section V of this Final Judgment, defendants 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 defendants have taken to solicit a buyer for any and 
all Relevant Disposal Assets and Relevant Hauling Assets 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 obligation by the

[[Page 53702]]

United States, after consultation with the Relevant State, to 
information provided by defendants, including limitations on 
information, shall be made within fourteen (14) days of receipt of such 
affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to plaintiffs an affidavit 
which describes in detail all actions defendants have taken and all 
steps defendants have implemented on an on-going basis to preserve the 
Relevant Disposal Assets and Relevant Hauling Assets pursuant to 
Section X 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, defendants' efforts to maintain and operate each 
Relevant Disposal Asset and Relevant Hauling Asset as a viable active 
competitor; to maintain separate management, staffing, sales, marketing 
and pricing of each asset; and to maintain each asset in operable 
condition at current capacity configurations. Defendants shall deliver 
to plaintiffs an affidavit describing any changes to the efforts and 
actions outlined in defendants' earlier affidavit(s) filed pursuant to 
this Section within fifteen (15) calendar days after any such change 
has been implemented.
    C. For a one-year period following the completion of each 
divestiture, defendants shall preserve all records of any and all 
efforts made to preserve the Relevant Disposal Assets and Relevant 
Hauling Assets that were divested and to effect the ordered 
divestitures.

X

Hold Separate Order

    Until the divestitures required by the Final Judgment have been 
accomplished, defendants 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 jeopardized the sale of any 
Relevant Disposal Asset or Relevant Hauling Asset.

XI

Financing

    Defendants are 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.

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 other plaintiff, and on reasonable notice to 
defendants made to their principal offices, shall be permitted:
    1. Access during office hours of defendants to inspect and copy all 
books, ledgers, accounts, correspondence, memoranda, and other records 
and documents in the possession or under the control of defendants, 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 defendants and without 
restraint or interference from them, to interview, either informally or 
on the record, their 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 other 
plaintiff, defendants shall submit such written reports, under oath if 
request, 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 in Sections VII or X or 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 other plaintiff, except in the 
course of legal proceedings to which the United States or any other 
plaintiff 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 
defendants to plaintiffs, defendants represent and identify 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 defendants mark 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 defendants prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding) 
to which defendants are 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 ______, 1998.

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

United States's Certificate Of Compliance With Provisions of the 
Antitrust Procedures and Penalties Act

    The United States of America hereby certifies that it has complied 
with the provisions of the Antitrust Procedures and Penalties Act 
(``APPA''), 15 U.S.C. 16(b)-(h), and states:
    1. The Complaint in this case, the proposed Final Judgment 
(``Judgment''), and the Hold Separate Stipulation and Order (``Hold 
Separate Order'') were filed on July 16, 1998. The United States's 
Competitive Impact Statement was filed on July 23, 1998.
    2. Pursuant to 15 U.S.C. 16(b), the Judgment, Hold Separate Order, 
and Competitive Impact Statement were published in the Federal Register 
on September 24, 1998 (63 Fed. Reg. 51125). A copy of that Federal 
Register notice is attached as Exhibit 1.
    3. Pursuant to 15 U.S.C. 16(d), the United States furnished copies 
of the Complaint, Hold Separate Order, proposed Judgment and 
Competitive Impact Statement to anyone requesting them.
    4. Pursuant to 15 U.S.C. 16(c), a summary of the terms of the 
proposed Judgment and the Competitive Impact Statement were published 
in The Cleveland Plain Dealer, a newspaper of

[[Page 53703]]

general circulation in Cleveland, OH, and in The Washington Post, a 
newspaper of general circulation in the District of Columbia. Copies of 
the certificates of publication from The Cleveland Plain Dealer and The 
Washington Post appear in Exhibit 2.
    5. On January 21, 1999, the defendants--USA Waste Services, Inc.; 
Dome Merger Subsidiary; and Waste Management, Inc.--filed with the 
Court a joint statement describing their communications with employees 
of the United States Department of Justice concerning the proposed 
Judgment, as required by 15 U.S.C. 16(g).
    6. During the 60-day comment period after publication of notice in 
the Federal Register, The Cleveland Plain Dealer and The Washington 
Post, the United States received a total of 13 written comments on the 
proposed settlement. The comments were from:

(a) Recycle Worlds Consulting Corp., Madison, WI (Ex. 3);
(b) Honorable Joseph R. Lenthol, New York State Assemblyman for the 
50th District, Brooklyn, NY (Ex. 4);
(c) Sierra Club of New York City Group, New York, NY (Ex. 5);
(d) Neighbors Against Garbage, Brooklyn, NY (Ex. 6);
(e) Red Hook Civic Association, Brooklyn, NY (Ex. 7);
(f) Rose Institute of State and Local Government, Claremont College, 
Claremont, CA (Ex. 8);
(g) Gold Fields Mining Corporation, Los Angeles, CA (Ex. 9);
(h) Coastal Waste Management, Sacramento, CA (Ex. 10);
(i) York County Solid Waste and Refuse Authority, York, PA (Ex. 11);
(j) Calvert Trash Systems, Inc., Owings, MD (Ex. 12);
(k) LaPlata Recycling Center and Depository, Bayfield, CO (Ex. 13);
(l) Conrad S. Magnuson, Kingston, NH (Ex. 14); and
(m) Three Rivers Disposal Company, Bozeman, MT (Ex. 15).

    7. The United States evaluated and responded to each of the 
comments it received. The comments did not convince the United States 
that it should withdraw its consent to the proposed settlement. 
However, for the reasons set forth in its Memorandum in Support of 
Entry of the Modified Final Judgment, the United States was persuaded 
to move for a minor modification of the proposed Judgment, which would 
eliminate the defendants' obligation to divest the Scott Avenue 
Transfer Station in Brooklyn, NY, and substitute a divestiture of one 
of two smaller transfer stations, Vaccarro or Gesuale, also in New York 
City.
    Copies of the comments and the United States's responses appear in 
Exhibits 3-15; they are summarized below.

A. General Comment on the Divestiture Relief in the Proposed Judgment

    Recycle Worlds, a private waste industry consultant, urged the 
United States not to approve any asset divestiture under the proposed 
Judgment to one of the major integrated waste collection and disposal 
firms, such as Republic Services, Inc.; Allied Waste Industries, Inc.; 
or Browning-Ferris Industries, Inc. (Ex. 3). In Recycle Worlds's view, 
these firms may be more inclined to cooperate with the defendants in 
raising prices in some markets in order to avoid potential price wars 
with the defendants elsewhere.
    In response, we noted that the United States could not 
categorically conclude that selling the consent decree assets to a 
large national waste collection and disposal firm, such as Republic, 
would be less competitive than a sale to municipal agency or small 
independent firm, or that large waste companies are more prone to 
collude, when given the opportunity, than small independent firms. 
Also, large waste collection and disposal companies may enjoy some 
competitive advantages, such as better access to capital and more 
extensive experience, that would make them in some respects more 
formidable competitors than small independent firms.
    In a series of transactions beginning in September 1998 and ending 
in early 1999, the United States approved Republic as a purchaser of 
all of the waste collection and disposal assets ordered divested under 
the Judgment, except the Baltimore area disposal assets, which the 
United States approved for sale to BFI in October 1999.

B. Comments on the New York City Divestiture Relief

    The United States received four comments on provisions of the 
proposed Final Judgment that relate to the divestiture relief in the 
New York City area. Three commentators--New York State Assemblyman 
Joseph Lenthol (Ex. 4), the Sierra Club of New York City Group (Ex. 5), 
and Neighbors Against Garbage (Ex. 6)--expressed considerable concern 
that by ordering the defendants to divest the application for a permit 
to construct and open the proposed Nekboh Transfer Station in Brooklyn, 
NY, the Final Judgment would ensure that the new owner would continue 
the attempt to open a transfer station on that site, despite strong 
community opposition. The commentators suggested that the United 
States's move to amend the proposed Judgment in such a way as to end 
the effort to develop the Nekboh site as a waste transfer station 
(e.g., requiring the defendants to sell the Nekboh site to a government 
agency for development as a public park).
    In response, we pointed out that the aesthetic and environmental 
concerns that have fueled community opposition to the proposed Nekboh 
Transfer Station are unrelated to the competitive concerns that 
precipitated the governments' antitrust suit. Issues concerning whether 
a waste transfer station should be constructed on the Nekboh site ought 
to be presented to, and resolved by, the state and local regulatory 
officials responsible for issuing the site's operating permit.
    A fourth commentator Red Hook Civic Association (Ex. 7), wanted to 
know why the United States did not seek divestiture of defendant USA 
Waste's massive proposed Erie Basin Transfer Station, also in Brooklyn, 
NY. We noted that Erie Basin, if it is constructed, would primarily 
handle the city's residential waste, a market unrelated to the disposal 
of commercial waste market in which the United States alleged that the 
defendants' merger would substantially eliminate competition.

C. Comments on the California Divestiture Relief

    The United States received three comments on those provisions of 
the Final Judgment relating to the divestiture relief in the California 
market. Two commentators--the Rose Institute of State and Local 
Government, Claremont College, CA (Ex. 8), and Gold Fields Mining 
Corporation (Ex. 9)--submitted very lengthy papers that questioned our 
definition of the relevant geographic market for the disposal of 
commercial waste from the City of Los Angeles. As these commentators 
see it, the geographic market should be expanded to include public and 
private landfills located up to 170 miles east of Los Angeles. This 
expanded market would include a massive new landfill, Mesquite 
Regional, partly-owned by the defendants. And they would order the 
defendants to divest that landfill in order to alleviate the 
competitive concerns that they believe the combination would raise in 
the expanded geographic market.
    The United States noted, in its response, that it made good 
economic sense to exclude the remote Mesquite Regional Landfill from 
the competitive analysis since it is relatively

[[Page 53704]]

inaccessible to commercial waste haulers from the Los Angeles area. 
Given this landfill's 170 mile distance from Los Angeles, it would be 
very expensive for haulers to ship and dispose of commercial waste 
collected in Los Angeles at Mesquite Regional. Private landfills 
located much closer to Los Angeles could profitably raise disposal 
prices without fear of losing significant revenues to this distant 
landfill. Since Mesquite Regional is not in the relevant market, the 
defendants should not be required to divest it in order to obtain 
effective relief.
    A third commentator, Coastal Waste Management (Ex. 10), questioned 
the United States' decision not to allege in its Complaint or seek 
relief in the proposed judgment relating to commercial waste hauling in 
the Sacramento, CA market. We noted, in response, that based on the 
evidence available to us at the time, injunctive relief was not 
warranted in the Sacramento hauling market. Coastal, however, remains 
free to pursue such a remedy by filing a private antitrust action.

D. Comments on the Divestiture Relief in Other Areas

    The York County Solid Waste and Refuse Authority of York County, 
PA, was very concerned that the ordered divestiture of Waste 
Management's Modern Landfill would adversely affect its contract to 
deliver waste to the Authority's incinerator and dispose of ash and 
noncombustible waste from the incinerator (Ex. 11). Since the proposed 
Judgment orders that the landfill be divested ``subject to'' such 
existing contractual commitments, the sale should not affect these 
local disposal agreements.
    Finally, four commentators--Calvert Waste Systems (Ex. 12), LaPlata 
Recycling (Ex. 13), Conrad Magnuson (Ex. 14), and Three Rivers Disposal 
(Ex. 15)--complained that the United States should have sought 
injunctive relief with respect to several markets not alleged in the 
governments' complaint, viz., the eastern shore of Maryland; Bayfield, 
CO; Kingston, NH; and Bozeman, MT.
    In our response, we noted that the United States did not seek 
divestiture relief as to these markets because it was not convinced, 
based on information available to it at the time, that the merger would 
create serious competitive problems warranting the imposition of this 
remedy. Private parties, such as the commentators, certainly remain 
free to pursue such relief against the defendants by filing a private 
antitrust suit.
    8. Pursuant to 15 U.S.C. 16 (b)-(h), the United States has arranged 
to publish in the Federal Register by September 27, 1999, a copy of the 
comments and the United States's responses.
    9. With these steps having been taken, the parties have fulfilled 
their obligations under the APPA. Pursuant to the Hold Separate Order 
that the Court entered on July 16, 1998, the Court may now enter the 
proposed Judgment, if it determines that the entry of the Judgment is 
in the public interest. For the reasons set forth in the Competitive 
Impact Statement, its responses to the public comments, and in its 
Memorandum in Support of Entry of the Proposed Modified Final Judgment, 
the United States--and all of the other parties--strongly believe that 
the proposed decree, as amended, is in the public interest and that the 
Court therefore promptly should enter it.

    Dated: September 13, 1999.

        Respectfully submitted.
Anthony E. Harris, Illinois Bar No. 1133713,
U.S. Department of Justice, Antitrust Division, Litigation II, 1401 H 
Street, NW, Suite 3000, Washington, DC 20530, (202) 307-6583.

    Note: Exhibits 1 and 2 were unable to be published in the 
Federal Register. A copy can be obtained from the U.S. Department of 
Justice, Documents Office, 325 7th St., Room 215, Washington, DC or 
(202) 514-2481.

Exhibit 3

U.S. Department of Justice Antitrust Division

August 27, 1999.
Mr. Peter Anderson,
Recycle Worlds Consulting Corp., 4513 Vernon Blvd., Suite 15, 
Madison, Wisconsin 53705-4964.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. Anderson: This letter responds to your written comment 
on the proposed Final Judgment in the above case. The Complaint in 
this case charged, among other things, that USA Waste's acquisition 
of Waste Management would substantially lessen competition in the 
disposal of municipal solid waste in 16 markets throughout the 
country. The proposed Judgment, now pending in federal district 
court in Cleveland, Ohio, would settle the case by, inter alia, 
requiring that the defendants divest waste disposal facilities that 
serve each of the disposal markets alleged in the Complaint. In a 
series of transactions in August and December 1998, and in January 
and February 1999, the United States approved, under the terms of 
the Judgment, a sale to Republic Services, Inc. (``Republic'') of 
all assets that had been ordered divested (except the Baltimore area 
disposal assets). The United States subsequently approved a sale to 
Browning Ferris Industries, Inc. (``BFI'') of the Baltimore area 
disposal assets.
    In your letter, you questioned whether Republic or any other 
major waste collection and disposal firm should be allowed to 
acquire the assets ordered divested under the proposed decree. As 
you see it, a sale to a large national or regional firm is 
undesirable because such firms would cooperate with the defendants 
and other market participants in raising prices to customers after a 
divestiture. Competition would be better served if the waste 
collection and disposal assets under the decree were sold to a 
municipal agency or a small independent firm, entities which, you 
contend, would have a greater incentive to vigorously compete 
against the defendants' waste collection and disposal operations.
    The United States, however, does not have any evidence that 
would lead it categorically to conclude that selling the assets 
under the Judgment to a large national waste collection and disposal 
firm, such as Republic, would be a less competitive alternative than 
a sale to municipal agency or small independent firm, or that large 
waste companies are more prone to collude, when given the 
opportunity, than small independent firms. Also, it is possible that 
large waste collection and disposal companies enjoy some competitive 
advantages, such as better access to capital and more extensive 
experience, that would make them in some respects more formidable 
competitors than small independent firms. Thus, United States did 
not object to Republic's purchase of most of the waste collection 
and disposal assets that the defendants divested under the proposed 
Judgment. And since BFI did not compete in the disposal of waste in 
the Baltimore market, the United States saw no reason to prevent 
BFI's acquisition of the transfer station disposal capacity divested 
by the defendants under the proposed Judgment.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. Sec. 16(d), a copy of your 
comments and this response will be published in the Federal Register 
and filed with the Court.

    Sincerely yours,
J. Robert Kramer, II,
Chief, Litigation II Section.

    Note: Letter dated 11/27/98 from Peter Anderson of Recycle 
Worlds Consulting with attachments was unable to be published in the 
Federal Register. A copy can be obtained from the U.S. Department of 
Justice, Documents office, 325 7th St., Room 215, Washington, DC or 
(202) 514-2481.

Exhibit 4

U.S. Department of Justice Antitrust Division

August 27, 1999.
The Honorable Joseph R. Lenthol, Assemblyman 50th District, Kings 
County, New York
State of New York Assembly, 619 Lorimer Street, Brooklyn, NY 11211.

Re: Comment on Proposed Final Judgment in United Statesv. State of 
Ohio et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)


[[Page 53705]]


    Dear Assemblyman Lenthol: This letter responds to your written 
comment on the proposed Final Judgment in United States  USA Waste 
Services, Inc., now pending in federal district court in Cleveland, 
Ohio. The Complaint in that case charged, among other things, that 
USA Waste's acquisition of Waste Management would substantially 
lessen competition in the disposal of New York City's commercial 
waste. The proposed final Judgment would settle the case by, inter 
alia, requiring the defendants to divest (a) the Waste Management's 
SPM Transfer Station in the Bronx, NY; (b) USA Waste's All City 
Waste Transfer Station in Brooklyn, NY; and (c) USA Waste's proposed 
Nekboh Transfer Station in Brooklyn, NY. See Judgment, 
Secs. II(C)(2) (i)(1)-(3), IV(A). To ensure USA Waste's continued 
cooperation with the purchaser in its efforts to permit and 
construct a transfer station on the Nekboh site, the proposed 
Judgment further provides that, if the Nekboh Transfer Station is 
not permitted within one year after entry of the decree, USA Waste 
must, in addition, divest Waste Management's Scott Avenue Transfer 
Station, also in Brooklyn, NY. Judgment, Secs. II(C)(2)(i)(4) and 
IV(B).
    Your letter raises two issues related to the divestiture of the 
Nekboh and Scott Avenue transfer stations. First, you point out that 
the proposed Nekboh facility, though much larger than the Scott 
Avenue station, is still in the permitting stage and may never 
obtain a permit to open and operate. For that reason, you urged that 
we amend the consent decree to require an immediate divestiture of 
the already-permitted Scott Avenue transfer station. Second, you 
note that in any event, the proposed Nekboh facility would be 
adjacent to the Eastern District Terminal, ``a beautiful 20 acre 
parcel of waterfront property'' recently placed on an open-spaces 
list. You suggested that the public interest would be better served 
if the Decree contained a prohibition on the use of the Nekboh site 
as a waste transfer station.

A. The Contingent Divestiture of the Scott Avenue Transfer Station

    After considering your comments, and arguments advanced by the 
defendants and others, the United States (and its New York co-
plaintiff, the State of New York) concluded that the divestiture 
provisions in the proposed Judgment concerning the defendants' Scott 
Avenue Transfer Station should indeed be modified. The United States 
and the State of New York agreed to join the defendants in moving 
the Court to enter a modified Final Judgment that would replace the 
current contingent divestiture of the Scott Avenue Transfer Station 
with a requirement that the defendants immediately divest either of 
two smaller transfer stations, Gesuale or Vacarro, both in New York 
City. That obligation was imposed by a recent consent decree, 
entered in federal district court in Brooklyn, NY, that settled 
another merger case involving a proposed acquisition by Waste 
Management of other transfer stations in the New York market, United 
States, States of New York and Pennsylvania, and Commonwealth of 
Florida v. Waste Management, Inc., Eastern Environmental Services, 
Inc., et al, Civil No. 98-7168 (E.D.N.Y., entered May 25, 1999) (the 
``Waste/Eastern case''). The United States agreed to move to modify 
the proposed Judgment for basically two reasons.
    First, divestiture of the Scott Avenue Transfer Station was 
primarily an inducement to defendants to ensure that they continue 
their efforts to get the Nekboh site permitted. However, the Nekboh 
Transfer Station permit application was divested to a major waste 
industry firm, Republic, which is fully capable of vigorously 
pursuing the permitting process. In August 1998, defendants sold the 
proposed Nekboh Transfer Station (and virtually all of the other 
assets under the decree) to Republic Services, Inc. With over $2 
billion in annual revenues, Republic is the nation's third largest 
waste collection and disposal firm. Republic has the financial 
resources and economic incentive to continue pursuing a permit for 
the proposed Nekboh Transfer Station without defendants' assistance. 
In addition, permanent injunctions in the proposed Judgment prohibit 
the defendants from interfering in any way with Republic's efforts 
to obtain a permit for that site. Thus, the contingent divestiture 
of Scott Avenue is unnecessary to ensure that the defendants 
cooperate in the permitting process.
    Second, by permitting the defendants to retain the Scott Avenue 
Transfer Station, in return for divestiture of the smaller Gesuale 
or Vaccarro sites, the United States and the State of New York were 
able to obtain a favorable settlement of the subsequent Waste/
Eastern merger case. In September 1998, USA Waste agreed to acquire 
Eastern Environmental Services, Inc. (``Eastern''), another major 
competitor in the disposal of New York City's commercial waste. In 
November 1998, the United States, the State of New York and other 
states filed an antitrust suit that sought to block that 
acquisition. To resolve the governments' competitive concerns in 
that litigation, the defendants agreed to divest two large Brooklyn, 
NY transfer stations acquired from Eastern (Atlantic and PJ's) in 
return for the governments' agreement to join the defendants in this 
case in a motion to modify the proposed Final Judgment to substitute 
an immediate divestiture of the Gesuale or Vaccaro transfer station 
for a contingent divestiture of the Scott Avenue Transfer Station. 
(See Waste/Eastern Final Judgment, Secs. II (D)(2)(a)-(c), IV(A)(2) 
and (L), filed in federal district court in Brooklyn, NY on December 
31, 1998, and entered on May 25, 1999, after the United States had 
responded to all public comments submitted during the 60-day public 
comment period.)
    In light of the divestiture of the Nekboh proposal to Republic, 
a well-financed industry giant, the United States does not believe 
that the contingent divestiture of the Scott Avenue transfer station 
was necessary to alleviate any competitive concerns arising from USA 
Waste's acquisition of Waste Management. And by agreeing to join 
Waste Management in seeking to remove that requirement from the Ohio 
consent decree, the United States and the State of New York were 
able to void a trial on the merits of defendants' acquisition of 
Eastern.

B. Prohibiting the Construction of a Waste Transfer Station on the 
Nekboh Site

    Finally you suggest that we modify the decree to prohibit the 
construction of a waste transfer station on the Nekboh site. We 
strongly believe that promptly permitting and operation of the 
Nekboh transfer station is necessary to provide an important 
competitive check on USA Waste in the disposal of New York City's 
commercial waste. Nothing in the proposed decree, however, would 
preclude New York state and city officials from deciding not to 
grant a permit to operate a waste transfer facility on the Nekboh 
site. Whether the transfer station receives an operating permit 
depends on any number of factors, including a considered assessment 
of the environmental impact of the facility. Whether a waste 
transfer facility on the Nekboh site will have detrimental effects 
is an issue that is best left to the regulatory agency to review and 
ultimately resolve.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, a copy of your comment 
and this response will be published in the Federal Register and 
filed with the Court.

        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

The Assembly, State of New York; Albany

August 7, 1998.
Honorable Janet Reno, Attorney General of the United States,
Department of Justice, 950 Pennsylvania Avenue, NW, Room 4400, 
Washington, DC 20530-0001

    Dear Attorney General Reno: I write in regard to the recently 
announced agreement between the United States Justice Department and 
the New York State Attorney General's Office, with USA Waste and 
Waste Management, relative to the proposed merger of these two 
corporations. Unfortunately, I find this settlement to be 
problematic. I believe, however, that these problems can be resolved 
if the following concerns are addressed.
    It is my understanding that this agreement would require USA 
Waste to divest itself of the Nekboh Transfer Station which it is 
planning to operate at 2 North 5th Street in Brooklyn, and that this 
divestiture would be conditioned upon USA Waste being granted the 
necessary operating permits. I cannot understand why, if this 
agreement truly seeks to protect the public from monopoly power, USA 
Waste would be required to divest itself of a transfer station it 
does not yet, and may never have, the authority to operate. Unless 
the administrative hearing process is a mere formality, USA Waste 
may never obtain the necessary permits. Should that be the case, the 
merged company would instead be required to divest itself of USA 
Waste's present transfer station located at 485 Scott Avenue in 
Brooklyn. Unfortunately, the Scott Avenue transfer station is a much 
smaller facility. It only has the capacity to process approximately 
1,000 tons per day, while the proposed Nekboh facility has a 
capacity in

[[Page 53706]]

excess of 5,000 tons per day. These are hardly comparable 
facilities. The only way in which this agreement would truly serve 
to protect the public from an unfair monopoly would be for it to 
require the unconditional divestiture of both properties.
    In addition, it would be an inexcusable waste of resources to 
allow USA Waste to proceed with the permitting process (as would be 
required by the consent agreement) since it would only be forced to 
divest once it has obtained the necessary permits. In order to save 
time and money, the process should be stopped now and USA Waste 
should be required to divest itself of these sites immediately.
    Although it may not fall within the purview of this settlement, 
a provision that would prohibit the future use of the Nekboh 
property, as well as the adjacent Eastern District Terminal 
property, as a transfer station should be added to this agreement. 
The Eastern District Terminal is a beautiful 20-acre parcel of 
waterfront property which has recently been placed on the 
Environmental Bond Act Open Spaces List. This parcel is truly a 
treasure in my community and must be protected at all cost. I urge 
you to join our effort to save this irreplaceable piece of land.
    For the above reasons, I must object to this settlement. I urge 
you to revisit this agreement and revise its terms to (1) require 
that USA Waste divest itself unconditionally of both the Nekboh and 
Scott Avenue properties, and (2) prohibit the future use of the 
Nekboh/Eastern District Terminal property as a waste transfer 
station. Thank you for your kind consideration of my comments.

        Sincerely,
Joseph R. Lentol,
Assemblyman, 50th A.D.

JRL/jl
cc: Vice President Albert Gore

Exhibit 5

U.S. Department of Justice Antitrust Division

August 27, 1999.
Ms. Rosalind Rowen,
Sierra Club New York City Group, c/o 225 East 6th Street--Suite 3H, 
New York, New York 10003.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 19998)

    Dear Ms. Rowen: Thank you for your letter commenting on the 
Final Judgment submitted for entry in the above case. The Complaint 
in this case charged, among other things, that USA Waste's 
acquisition of Waste Management would substantially lessen 
competition in the disposal of New York City's commercial waste. The 
proposed Judgment would settle the competitive concerns with respect 
to the New York City market by, inter alia, requiring the defendants 
to divest (a) the USA Waste's SPM Transfer Station; (b) USA Waste's 
All City Transfer Station; and (c) the pending application by USA 
Waste for a permit to construct and operate the Nekboh Transfer 
Station, also in Brooklyn, NY. See Judgment, Secs. II (C)(2) (i)(1)-
(3) and IV(A). To ensure the defendants' continued cooperation with 
the purchaser in its efforts to get the Nekboh site permitted, the 
proposed Judgment further provides that if the Nekboh Transfer 
Station does not receive an operating permit within one year after 
entry of the Judgment, the defendants must divest the Scott Avenue 
Transfer Station, also in Brooklyn, NY. See Judgment, Secs. II 
(C)(2)(i)(4) and IV(B). In a transaction approved by the United 
States in August 1998, under the terms of the decree, the defendants 
divested All City Waste Transfer Station and their application for a 
permit for the proposed Nekboh site to Republic Services, Inc., 
which previously did not operate any waste disposal sites in the New 
York City area.
    Your comment relates solely to those portions of the Judgment 
that require USA Waste to divest all title and interest in its 
application to construct and operate the Nekboh transfer station in 
Brooklyn, New York. See Judgment, Secs. II (C)(1)(i)(2) and IV(A) 
and (B). As you point out the site of the proposed Nekboh facility 
abuts an area that the state of New York recently identified for 
potential preservation under its Clean Water/Clean Air Bond Act. 
Though Governor Pataki vetoed legislation that would have provided 
funds for purchasing the site for development as a park, he 
instructed the state Department of Environmental Conservation to 
conduct an environmental assessment of the Nekboh site before 
issuing an operating permit for a transfer station on that site.
    You requested that we modify the Judgment to permit the Nekboh 
site to be sold to the state for development as a public park. We 
strongly believe that prompt divestiture of the Nekboh permit 
application, and speedy permitting, construction and opening of a 
transfer situation on the Nekboh site is essential to ensure 
vigorous competition in the disposal of New York City's commercial 
waste. Developing this site as a public park would frustrate that 
goal.
    On the other hand, nothing in the proposed Judgment would 
preclude the appropriate New York permitting authorities from 
lawfully deciding not to issue a permit to operate a waste transfer 
facility on the Nekboh site. Whether Republic obtains an operating 
permit for a transfer station on the Nekboh site would depend on a 
variety of factors, including an assessment of the environmental 
impact of a waste transfer station on that site. Your contention 
that constructing the Nekboh waste transfer station would preclude 
preservation of the site as a public park should be addressed to the 
state and local regulatory agencies that review and ultimately 
resolve such issues in the ordinary course of the permitting 
process.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. section 16(d), a copy of 
your comment and this response will be published in the Federal 
Register and filed with the Court.

        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

    Note: Letter dated 9/14/98 from Rosalind Rowen of Sierra Club 
New York City Group was unable to be published in the Federal 
Register. A copy can be obtained from the U.S. Department of 
Justice, Document Office, 325 7th St., Room 215, Washington, DC 
20530 or (202) 514-2481.

Exhibit 6

U.S. Department of Justice Antitrust Division

August 27, 1999.

Douglas H. Ward, Esquire
Ward, Sommers & Moore, L.L.C., Plaza Office Center, 122 South Swan 
Street, Albany, NY 12210.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. Ward: Thank you for your letter commenting on the 
proposed Final Judgment submitted for entry in the above case. The 
proposed Judgment requires the defendants to divest their interest 
in the proposed Nekboh Transfer Station, which, if permitted by 
local government regulatory officials, would be constructed in 
Brooklyn, NY. Your client, Neighbors Against Garbage, strongly 
opposes permitting, construction and operation of a waste transfer 
station on the Nekboh site. It proposes, instead, that we modify the 
proposed Final Judgment to provide an incentive for using the Nekboh 
site not as a waste transfer facility, but as a public park.
    We strongly believe that divestiture of the Nekboh permit 
application to an acceptable purchaser, and prompt permitting, 
construction and opening of a waste transfer station on the Nekboh 
site are steps that must be taken in order to provide an important 
competitive constraint on defendants' disposal operations in the New 
York City area. There is, however, nothing in the proposed Judgment 
that precludes the responsible New York state and city agencies from 
deciding not to issue a permit to operate a waste transfer station 
on the Nekboh site. In fact, whether these regulatory agencies 
decide to issue an operating permit for the Nekboh site depends on a 
variety of factors, including an assessment of the environmental 
impact of such a waste disposal facility. For that reason, your 
argument that opening a waste transfer station on the Nekboh site 
will have devastating environmental effects should be left to the 
appropriate state and local regulatory agencies to review and 
ultimately resolve.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.


[[Page 53707]]


        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Ward, Sommer & Moore, L.L.C., Counselors at Law

September 14, 1998.
J. Robert Kramer II,
Anti Trust Division, Chief Litigation II Sect., United States 
Department of Justice, 1401 H Street N.W., Suite 3000, Washington, 
DC 20530.

Re: USA Waste et al. v. USA Waste Services Inc., CV 1:98CV1616

    Dear Mr. Kramer: The undersigned represents a group known as 
Neighbors Against Garbage. In conjunction with numerous individuals 
and public representatives, we have participated in New York State 
Administrative proceedings opposing the construction and/or 
operation of a waste transfer station in Brooklyn New York known as 
the Nekboh Transfer Station (attached as Exhibit A). We write to 
oppose approval of the Draft Consent Order which will encourage the 
construction and operation of this ill-advised and unnecessary waste 
transfer station.
    Under the terms of the Draft Consent Order, (DCO at 
II(c)(1)(i)(2), IV (A) and (B) and VIII [B] and [C]), it appears 
that USA Waste must obtain a license for, and transfer its ownership 
in, the Nekboh facility within one year from the entry of Final 
Judgment, or sell its Brooklyn Transfer Station, located at 485 
Scott Ave. While the terms of the agreement are not entirely clear, 
it appears to provide an incentive for Waste Management to obtain 
prompt permitting for the proposed Nekboh facility. My client and 
the parties to this proceeding have steadfastly opposed any use of 
this site as a waste transfer station. Recently, after considerable 
public outcry, Governor Pataki and Mayor Guiliani convinced the NYS 
Department of Environmental Conservation and the NYC Department of 
Sanitation to ``go back to the drawing boards'' and conduct a 
thorough environmental review of the proposal. We are hopeful that 
this is the first step toward rejecting this unnecessary and ill-
conceived plan. Unfortunately, the Draft Consent Order, in pressing 
USA Waste to obtain prompt approval of its application, is contrary 
to the directive of the Governor and Mayor and the ever growing 
factual record which demonstrates that the plan is a bad idea that 
will have devastating, adverse impacts on the environment and the 
neighborhood.
    We suggest that these objectional provisions of the Draft 
Consent Order should be modified. We agree with the divestitive 
requirement, however, the Consent Order should allow that the site 
could (or should) be used for other purposes such as open space or 
recreation. Indeed, the agreement should provide an incentive for 
dedicating the site for park type purposes. This approach would 
conform this Consent Order to the direction of state and local 
efforts and would not undercut the recent progress toward an 
acceptable community compatible use for the Nekboh site.
    Thank you for your attention to this matter.

        Very truly yours,
Douglas H. Ward,
Ward, Sommer & Moore, LLC.
DHW/sak
cc: Cathleen Breen

State of New York--Department of Environmental Conservation

In the Matter of the Application of USA Waste Services of NYC, Inc.

For A Permit to Construct and Operate a Solid Waste Management 
Facility
DEC Application No. 26101-00013/00008

    Petition for Full Party Status of Hon. Howard Golden, Hon. 
Sheldon Silver, Neighbors Against Garbage (``NAG''), Hon. Nydia 
Valazquez, Hon. Joseph R. Lentol, Hon. Martin Connor, Hon. Joan 
Millman, Hon. Felix Ortiz, Hon. Victor L. Robles, Hon. Kenneth 
Fisher, Hon. Angel Rodriguez, Hon. Stephen Di Brienza, Hon. Kathryn 
E. Freed, El Puente, de Williamsburg, Inc. (``El Puenta''), Make a 
Difference Community Action Program (``MADCAP''), Williamsburg 
Around the Bridge Block Association (``WABBA''), Northside Community 
Development Council, Inc., The Watchperson Project, The Sierra Club, 
United Jewish Council of the East Side, Inc., South Manhattan 
Development Corporation, Citizens Action Network, Katherine and Alex 
Kudiash, and Phil Smrek.

Attorneys for Petitioners

Frank J. Pannizzo, Esq.,
Counsel to the President of the Borough of Brooklyn, Borough Hall--209 
Joralemon Street, Brooklyn, New York 11020, (718) 802-3807.
Ward, Sommer & Moore, Llc,
Plaza Office Center, 122 South Swan Street, Albany, New York 12210, 
(518) 472-1776.
Brooklyn Legal Services
Foster Maer, Copoation A, 260 Broadway, Brooklyn, NY 11211, (718) 782-
6195.
New York Lawyers for the Public Interest
Sam Sue, Edward Copeland, of counsel, 30 West 21st St., 9th Floor, New 
York, NY 10010, (212) 727-2270.
Finder and Cuomo, Llp
Attorney for Petitioner Citizens Action Network, Matthew A. Cuomo, of 
counsel, 600 Third Ave., 27th Floor, New York, New York 10016, (212) 
599-2244.

    Dated: April 23, 1998.

Exhibit 7

U.S. Department of Justice Antitrust Division

August 27, 1999.
Mr. John McGettrick,
Co-Chairman, The Red Hook Civic Association, 178 Coffey Street, 
Brooklyn, New York 11231.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. McGettrick: Thank you for your letter commenting on the 
Final Judgment submitted for entry in the above case. The Complaint 
in this case charged, among other things, that USA Waste's 
acquisition of Waste Management would substantially lessen 
competition in the disposal of New York City's commercial waste. The 
proposed Judgment would settle the competitive concerns with respect 
to the New York City market by, inter alia, requiring the defendants 
to divest: (a) the USA Waste's SPM Transfer Station; (b) USA Waste's 
All City Transfer Station; and (c) the pending application by USA 
Waste for a permit to construct and operate the Nekboh Transfer 
Station, also in Brooklyn, NY. See Judgment, Secs. II (C)(2)(i)(1)-
(3) and IV(A). To ensure the defendants' continued cooperation with 
the purchaser in its efforts to get the Nekboh site permitted, the 
proposed Judgment further provides that if the Nekboh Transfer 
Station does not receive an operating permit within one year after 
entry of the Judgment, the defendants must divest the Scott Avenue 
Transfer Station, also in Brooklyn, NY. See Judgment, 
Secs. II(C)(2)(i)(4) and IV(B).
    In a transaction approved by the United States in August 1998, 
under the terms of the proposed Judgment, the defendants divested 
All City Waste Transfer Station and their application for a permit 
for the proposed Nekboh site to Republic Services, Inc., which 
previously did not operate any waste disposal sites in the New York 
City area.
    You have pointed out that although the proposed Final Judgment 
orders the defendants to divest a number of waste transfer stations 
in Brooklyn and in the Bronx, the Judgment does not order them to 
divest their interest in the proposed Erie Basin Marine Transfer 
Terminal, a large waste disposal facility that USA Waste had 
proposed permitting and constructing in the Red Hook section of 
Brooklyn, NY. You asked whether the defendants' retention of this 
disposal facility might nullify the effects of the ordered 
divestitures, and whether the defendants ought to be forced to 
withdraw their proposal to permit and construct the Erie Basin 
facility.
    As noted above, the Complaint alleged that defendants' 
transaction would substantially reduce competition in the disposal 
of the city's commercial waste. The proposed Erie Basin site, 
however, was designed primarily for handling the city's residential 
waste, not its private commercial waste. This waste transfer station 
(and others proposed by competitors) would replace disposal capacity 
that would be lost when New York City closes its only municipal 
landfill, Fresh Kills, in late 2001. Although a portion of the Erie 
Basin facility, if permitted, might handle some private commercial 
waste, at the moment, whether Erie Basin will be permitted is 
somewhat speculative. In any event, we do not see Erie Basin as a 
significant competitive factor in the disposal of private commercial 
waste, and hence, there was no reason for us to insist that the 
defendants divest it to alleviate any competitive concerns regarding 
competition in the disposal of New York City's private commercial 
waste.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this

[[Page 53708]]

response will be published in the Federal Register and filed with 
the Court.
        Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

The Red Hook Civic Association

October 23, 1998.
J. Robert Kramer II,
Chief, Litigation II Section, U.S. Department of Justice, 1401 H 
Street NW, Suite 3000, Washington, D.C. 20530.

Re: Public Comment on U.S. v USA Waste Services, Inc., Civ. No. 1:98 
CV 1616 (E.D. Ohio 7/16/98)

    Dear Mr. Kramer: We would like to comment regarding the adequacy 
of the New York City divestitures required as part of the above 
captioned Final Judgment (the ``Settlement''). As you know, the 
settlement requires the divestiture of the SPM Transfer Station at 
912 East 132nd Street in the Bronx, the 2 North 5th Street waste 
transfer station in Brooklyn, the Plymouth Street station in 
Brooklyn and the Scott Avenue station in Brooklyn (the ``NYC 
Divestitures'').
    Waste Management is currently bidding to construct a huge new 
marine transfer station. The company has recently submitted a 
proposal to the New York Department of Sanitation to construct a 
huge new marine transfer station (``MTS'') in the Erie Basin in 
Brooklyn that would handle between 5,000 and 10,000 tons per day of 
solid waste. We understand that Waste Management and USA Waste 
already collectively control a substantial majority of the waste 
transfer business in New York City. This MTS project would nullify 
the competitive effects of the NYC Divestitures. In order to 
preserve competition we believe that Waste Management should be 
required to withdraw the MTS proposal as a condition of approval of 
the merger contemplated by the merger agreement.
    Please comment on whether Waste Management has disclosed the 
Erie Basin MTS proposal to the Department of Justice and why Waste 
Management should not be required to withdraw the Erie Basin MTS 
proposal in order to give effect to the NYC Divestitures. Should you 
have any questions with regard to the foregoing please do not 
hesitate to call me at (718) 424-4040.
        Yours very truly,
John McGettrick,
The Red Hook Civic Association.
cc: Dennis Vacco NYAG

Exhibit 8

U.S. Department of Justice Antitrust Division

August 27, 1999.
Dr. Alan Heslop,
Director, The Rose Institute of State and Local Government, 
Claremont McKenna College, Adams Hall, 340 E. Ninth Street, 
Claremont, CA 91711-6420.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Dr. Heslop: This letter responds to your written comment on 
the proposed Final Judgment in the above case, now pending in 
federal district court in Cleveland, Ohio. The Complaint in that 
case charged, among other things, that USA Waste's acquisition of 
Waste Management would substantially lessen competition in the 
disposal of commercial waste from portions of the City of Los 
Angeles. The proposed Judgment would settle the case by, inter alia, 
requiring the defendants to divest Chiquita Canyon Landfill, a large 
waste disposal site located about 40 miles northeast of the City of 
Los Angeles. In a transaction approved by the United States in 
August 1998, under the terms of the decree, the defendants divested 
the landfill to Republic Services, Inc., which prior to the sale, 
did not operate any landfills in the greater Los Angeles area.
    Your letter raises two issues related to the competitive effect 
of the proposed acquisition in the Los Angeles area. First, you 
question the governments' allegation that the relevant geographic 
market for purposes of analyzing the effects of the acquisition is 
commercial waste from the City of Los Angeles, an area defined in 
the Complaint as those parts of the city east of the San Diego 
Freeway, Interstate 405. In your view, the relevant market, at a 
minimum, should include a five-county area comprising not only the 
City of Los Angeles, but also Los Angeles, Ventura, Orange, 
Riverside and San Bernardino counties. You note that if the relevant 
geographic market is broadly defined to include these areas, then 
the United States should have taken into account competition from--
and sought divestiture of--defendants' newly-permitted Mesquite 
Regional Landfill, located nearly 170 miles southeast of the city of 
Los Angeles.
    In defining the relevant geographic market for the disposal of 
Los Angeles' commercial waste, the United States took into account 
the extent to which each of the private and public landfills in 
Southern California could compete for the city's waste. In its 
competitive analysis, the United States excluded some firms from the 
relevant geographic market because their landfills were legally 
prohibited from accepting any municipal solid waste from the City of 
Los Angeles (e.g., most of the Los Angeles County landfills). The 
United States excluded other facilities (e.g., Mesquite Regional 
Landfill) because of their distance from, and relative 
inaccessibility to, the Los Angeles area. As noted above, Mesquite 
Regional Landfill is located 170 miles from the city. Rail is the 
only practical way to transport waste from Los Angeles to that 
landfill. With delivered costs in excess of $45/ton (including 
transportation and tipping fees costs), the cost of disposing of 
commercial waste from the City of Los Angeles at Mesquite Regional 
Landfill would be nearly twice as much as the cost of sending such 
waste to close-in LA area landfills, which have average tipping fees 
of about $23/ton. The four firms that own or operate close-in 
landfills can profitably increase their prices for disposal of Los 
Angeles's commercial waste by a small but significant amount, 
without losing significant business to distant landfills such as 
Mesquite Regional. In these circumstances, it made economic sense to 
exclude Mesquite Regional and similarly situated landfills from our 
competitive analysis in determining the significance of the 
defendants' merger in the disposal of Los Angeles's commercial 
waste. See U.S. Department of Justice Horizontal Merger Guidelines 
Secs. 1.2-1.3 (1997 ed.)
    For similar reasons, it made sense to limit the relevant market 
to commercial waste that originates in portions of the City of Los 
Angeles located east of the San Diego Freeway, Interstate 405. 
Private commercial waste generated in areas of the city west of the 
freeway can be legally disposed of in several Los Angeles County 
landfills, and in our view, the availability of the Los Angeles 
County landfills for the disposal of waste from this section of the 
city made it unlikely that the merger would substantially reduce 
competition for such waste.
    Finally, you may have overlooked the fact that expanding the 
relevant geographic market to include the distant Mesquite Regional 
Landfill would sweep into the market a number of other similarly-
situated large landfills that are not owned or otherwise controlled 
by the four firms that operate close-in Los Angeles landfills. 
Including these additional firms in the competitive analysis would 
substantially diminish, perhaps even eliminate, any anticompetitive 
effect of an acquisition by USA Waste of Waste Management, which 
would make it difficult to justify requiring that the defendants 
divest any Los Angeles area landfills.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.
      Sincerely yours,
J. Robert Kramer II,
Chief Litigation II Section.

Claremont McKenna College

November 23, 1998.
J. Robert Kramer II,
Chief, Litigation II Section, Antitrust Division, United States 
Department of Justice, Suite 3000, 1401 H. Street, NW, Washington, 
D.C. 20530.

Re: Proposed Final Judgment and Competitive Impact Statement Federal 
Register, Volume 63, Pages 51125 et seq.

    Dear Mr. Kramer: The Rose Institute of State and Local 
Government at Claremont McKenna College (the ``Rose Institute'') 
respectfully submits the following comments concerning the subject 
Federal Register request for public comment. We note that the 
comments and opinions expressed herein do not necessarily reflect 
the opinions of the Trustees of Claremont McKenna College or the 
Governors of the Rose Institute, but are the findings of the 
scholars and researchers who have worked on the comments.
    By way of introduction, the Rose Institute is a non-profit 
organization founded in 1973 with a goal of building a comprehensive 
and unmatched resource of information on the almost 20 million 
people and several hundred local governments in southern California. 
It is staffed primarily by the faculty and students of Claremont 
McKenna

[[Page 53709]]

College and the Claremont Graduate School, members of the Claremont 
University System. The institute specializes in public policy 
analysis and its researchers are trained in a wide range of 
disciplines, including government, finance, computer science 
(including GIS) and environmental regulation and law. While the Rose 
Institute has been involved in a number of matters of national 
interest, its general policy analyses are focused on matters 
affecting California and, in particular, the Los Angeles County and 
Inland Empire areas of southern California, including the Counties 
of San Bernardino, Riverside, and Imperial.
    One of the major public policy issues which has been the focus 
of long-term and ongoing research within the Rose Institute is that 
of solid waste management--particularly concerning the issues of 
non-hazardous solid waste generation, recycling, reuse, and 
disposal.
    Before the economic recession of the early 1990s, the Rose 
Institute undertook to play an important role in assisting public 
policy-makers as they reviewed and identified issues related to the 
development of plans and methodologies necessary to implement a 
waste-by-mail disposal system for southern California. The effects 
of the recession and the success of state-mandated waste recycling 
requirements delayed what had been projected as a critical need for 
waste-by-rail disposal options. Nevertheless, over the past several 
months, the Rose Institute has undertaken to review again the 
viability and necessity of potential waste-by-rail disposal options 
for southern California. A report, entitled ``Regional Solid Waste 
Management in Southern California for the New Millennium,'' sets 
forth our analysis and conclusions concerning this subject matter 
and is nearing final publication status. We expect formally to 
release the report in the near future. Nevertheless, because of the 
significance of this research for the issues raised in the subject 
Federal Register Notice, we have attached a draft copy of the 
report, noting that it has yet to be finally formatted, bound, etc., 
before formal release. We respectfully request that it be considered 
an integral part of the comments that follow.
    During our research for the attached report, we necessarily 
reviewed the effects of the merger of Waste Management, Inc. and USA 
Waste Services, Inc. While it was not the initial intention of our 
research effort to address the specifics of that merger in our 
region, when the subject Proposed Final Judgment and Competitive 
Impact Statement (``Impact Statement'') appeared in the Federal 
Register, the Rose Institute as a matter of objective analysis, and 
in light of its research and the realities of waste disposal in our 
region, concluded that the Department of Justice had seriously mis-
identified the relevant market area for southern California--at 
least with respect to ``disposal assets'' as that term is used in 
the Impact Statement.
    The comments that follow are strictly limited to issues within 
the southern California geographical area. Furthermore, we express 
no opinion whether the relevant market area has been properly 
defined for purposes of ``hauling assets'' as that term is used in 
the Impact Statement. Based on our primary research related to 
waste-by-rail, our comments are directed only to ``disposal 
assets.''
    In short, our conclusion is that the Department of Justice has 
mis-identified the relevant market area for waste disposal assets in 
Los Angeles and southern California in general and, in doing so, has 
provided a clear opportunity for the creation of substantial anti-
competitive effects within the region related to solid waste 
disposal. Our detailed comments are attached.
    We appreciate the opportunity to submit these comments and would 
be pleased to discuss them further with officials at the Department 
of Justice or before the United States District Court for the 
Northern District of Ohio, Eastern Division.
        Sincerely,
Alan Heslop,
Director.

Comments of the Rose Institute of State and Local Government at 
Claremont McKenna College Regarding the Department of Justice 
Proposed Final Judgment and Competitive Impact Statement \1\ 63 FR 
51125 et seq.

Summary of comments and Conclusions

    The Rose Institute of State and Local Government (``The Rose 
Institute'') at Claremont McKenna College respectfully concludes that 
the Department of Justice (``DOJ'') has not correctly defined the 
``relevant geographic market'' for municipal solid waste (``MSW'') 
disposal in Los Angeles, California.\2\ As a result, DOJ's analysis of 
the competitive impacts of the USA Waste/WMI merger in the Los Angeles 
area and its recommendations regarding the divestiture of ``Relevant 
disposal Assets'' \3\ set forth in the proposed Final Judgment and 
Competitive Impact Statement are deficient. Our analysis indicates that 
the ``relevant geographic market'' should encompass, at a minimum, the 
entire County of Los Angeles and not merely a portion of the City of 
Los Angeles. So defined, the proposed Final Judgment and Competitive 
Impact Statement would necessarily have reached substantially different 
conclusions as to the need for further divestiture of ``Relevant 
Disposal Assets'' in the Los Angeles market. These conclusions are 
based upon the following:
---------------------------------------------------------------------------

    \1\ The proposed Final Judgment, Hold Separate Stipulation and 
Order, and Competitive Impact Statement were prepared in connection 
with a civil antitrust lawsuit filed by the United States of America 
and eleven (11) states, including California, in an effort to enjoin 
the merger of USA Waste Services, Inc. (``USA Waste'') and Waste 
Management, Inc. (``WMI'') as a violation of Section 7 of the 
Clayton Act, 15 U.S.C. Sec. 18. On July 16, 1998, a Complaint for 
Injunctive Relief Case No. 1:98 CV 1616 (the ``Complaint'') and the 
proposed competitive Impact Statement were filed in the United 
States District Court for the Northern District of Ohio Eastern 
Division.
    \2\ The Complaint (page 4) defines ``Los Angeles'' as ``that 
area of the City of Los Angeles, CA, located east of Interstate 405, 
the San Diego Freeway.''
    \3\ The term ``Relevant Disposal Assets'' is defined at 63 FR 
51130.
---------------------------------------------------------------------------

    (1) The definition of the Los Angeles market is overly restrictive 
and narrow in that:
    (a) It is consistent with California state law establishing a 
comprehensive disposal site planning and utilization process that has 
been implemented by both the City and County of Los Angeles.\4\
---------------------------------------------------------------------------

    \4\ The California Integrated Waste Management Act of 1989 (AB 
939), as amended, California Public Resources Code Secs. 40000 et 
seq.
---------------------------------------------------------------------------

    (b) It is inconsistent with the City of Los Angeles' own MSW 
disposal and contracting practices and ignores Los Angeles County's 
state-approved integrated waste management plan and the disposal 
realities throughout southern California.
    (c) The boundaries chosen appear to be arbitrary, artificial, and 
without any meaningful or logical relationship to the demographics, 
economics, or natural geographical features or boundaries of the City 
of Los Angeles.
    (d) It fails to recognize the actual commercial MSW disposal and 
marketing practices of WMI in the City of Los Angeles market.
    (e) It is inconsistent with the definitions of the geographic 
markets for all other metropolitan areas in the proposed Final Judgment 
and Competitive Impact Statement, and it appears to bear no 
relationship to the definition of ``relevant area'' set forth in the 
Hold Separate Stipulation and Order.
    (2) The definition of the geographic market of Los Angeles is 
inconsistent with the DOJ's prior recent review and action taken 
regarding similar waste disposal asset transactions between competitors 
of USA Waste and WMI in the Los Angeles area.
    (3) The proposed Final Judgment and Competitive Impact Statement 
appears to ignore the effects of recent acquisitions of disposal assets 
in the region by USA Waste prior to its merger with WMI and thereby 
compounds the potential anti-competitive effects of the subject merger.
    (4) By expanding the Los Angeles market to include the entire 
county, the analysis of the competitive effects of the transaction 
would necessarily have included additional landfills in southern 
California, as well as outside of the state, in which USA Waste and WMI 
own, control, or hold an interest.
    For the reasons set forth above, the proposed Final Judgment and

[[Page 53710]]

Competitive Impact Statement should be amended to reflect the realities 
of waste disposal in the Los Angeles region consistent with the 
analysis contained in these comments. Divestiture of additional 
``Relevant Disposal Assets'' in the Los Angeles market should be 
required, including the El Sobrante Landfill in western Riverside 
County and USA Waste's interest in the Mesquite Regional Landfill 
waste-by-rail project in Imperial County.

Introduction

    Attached to these comments in the December 1998 report of The Rose 
Institute entitled ``Regional Solid Waste Management in Southern 
California for the New Millenium'' (``The Rose Report''). We 
respectfully request that The Rose Report be read in its entirety to 
provide essential background information for the following specific 
comments. The report provides an important factual and historical 
review of waste disposal in southern California--especially in the City 
and County of Los Angeles, and many of the comments that follow make 
specific reference to portions of that report.
    By way of summary, The Rose Report shows that, for many years, 
issues relating to waste management--in particular that of disposal--
have received regional attention in southern California. Long before 
the passage of AB 939, which mandates that waste disposal be addressed 
through joint city and county planning efforts, the Los Angeles area 
had a regional perspective on waste issues. Examples of the 
regionalization of waste management include Los Angeles' reliance upon 
disposal of organic wastes in San Bernardino ``pig farms'' well into 
the 1950s and the proposed development of large regional waste-to-
energy facilities during the 1970s and 1980s. Regionalization is 
currently reflected in the formalized planning process for, and 
potential embrace of, regional waste-by-rail projects.
    The Rose Report concludes that, despite the successes made in 
diverting waste from landfills into recyclable markets pursuant to AB 
939, with the closure of three (3) large local landfills in the recent 
past,\5\ the need for regional waste disposal capacity is critical--
particularly in view of the extended time required to obtain permits 
and develop new or expanded landfill capacity in the southern 
California area. More importantly, our conclusions are not unique but 
reflect the consensus of other observers of the issue in the region.
---------------------------------------------------------------------------

    \5\ The Lopez Canyon Landfill in the City of Los Angeles, the 
BKK Landfill in the City of West Covina, and the prohibition of 
acceptance of MSW at the Azusa landfill in the City of Azusa.
---------------------------------------------------------------------------

    We believe that, in a very real sense, and in a potentially harmful 
manner to consumers and the public interest, DOJ has failed to evaluate 
properly both the near and long term anti-competitive effects of the 
merger on Los Angeles County, the county with the largest population in 
the United States. We further believe that the consequence of the DOJ 
analysis, if left unamended, will be to place in one operator--WMI--
overwhelming control of private landfill disposal capacity capable of 
serving the City and County of Los Angeles and the entire southern 
California area all the way to the eastern border of the State and 
south to the border of the United States with Mexico.
    Since the late 1980s, the Rose Institute has been a regular 
``player'' in the public policy debate over waste management issues for 
the southern California region. Our programs have been supported and 
attended by most of the major waste management firms operating in 
southern California, including WMI, Browning Ferris Industries 
(``BFI''), Norcal Waste Systems, Mine Reclamation Corporation, and 
others. We have no ``axe to grind'' with any firm, nor are we obviously 
``interested'' from a competitive viewpoint. Rather, effective public 
policy guides our analyses and interests in this matter and underscore 
the obligation we feel to file these comments.
    Finally, by way of limitation, the comments that follow are limited 
to issues related to the definitions of ``relevant geographic market'' 
and ``Relevant Disposal Assets'' as they relate to Los Angeles. The 
Rose Institute takes no position concerning the ``Relevant Hauling 
Assets'' as the term is used in the proposed Hold Separate Stipulation 
and Order that is part of the Final Judgment.

Specific Comments

(1) The Definition of Los Angeles Markets Is Overly Restrictive and 
Narrow

(a) The Definition of the Los Angeles Market Is Inconsistent With 
Applicable California State Law
    The California Integrated Waste Management Act (commonly referred 
to as AB 939), establishes legal requirements for all California 
counties and municipalities to develop and implement a comprehensive 
integrated waste management program. Failure of timely compliance with 
the mandates of AB 939 can result in civil penalties of up to ten 
thousand dollars ($10,000) per day for each day of violation.
    Key among the mandated requirements of AB 939 is that each county 
must prepare a countywide integrated waste management plan. Part of the 
plan includes a Countywide Siting Element that must provide for at 
least fifteen (15) years of waste disposal capacity to meet the 
county's projected needs. The plan must also include Source Reduction 
and Recycling Elements from each of the cities in the county 
demonstrating compliance with the statute's waste diversion 
mandates.\6\ Each countywide plan is required to be prepared by a 
countywide task force made up of representatives of the county and 
cities within that county. The role of the task force is to identify 
waste management issues of countywide or regional concern, determine 
the need for waste facilities that can service more than one 
jurisdiction within the county, facilitate the development of multi-
jurisdictional methods for marketing recyclable materials, and resolve 
conflicts and inconsistencies between the subject county.\7\ The entire 
plan is then submitted to the California Integrated Waste Management 
Board in Sacramento for approval. No provision is made within the law 
for any city, per se (other than the City and County of San Francisco) 
to prepare or implement its own waste disposal siting mechanism. That 
mechanism provided for in the Countrywide Siting Element, is, by law, 
reserved for the county. However, before submitting the Countywide 
Siting Element to the Integrated Waste Management Board, it must first 
be approved by a ``majority of the cities within the county, which have 
a majority of the population of the incorporated areas of the county.'' 
\8\
---------------------------------------------------------------------------

    \6\ The law requires that each county and each city within each 
county demonstrate the ability to achieve 25% diversion (recycling) 
of generated wastes from landfills by the year 1995 and 50% 
diversion by the year 2000.
    \7\ California Public Resources Code Sec. 40950.
    \8\ California Public Resources Code Sec. 41721.
---------------------------------------------------------------------------

    No new landfill may be permitted and no existing landfill expanded 
within a region covered by an approved Siting Element without first 
being identified and included in the approved Siting Element.
    In June 1997, the Los Angeles County Solid Waste Management 
Committee/Integrated Waste Management Task Force, which included 
representatives from the City of Los Angeles, completed its draft of 
the Countywide Siting Element. It was subsequently approved in June 
1998 by the California Integrated Waste Management Board. While a more 
thorough review of a key finding of the

[[Page 53711]]

Siting Element is reserved for discussion below, the unavoidable point 
made here is that DJO's definition of the Los Angeles waste market for 
purposes of determining ``Relevant Disposal Assets'' is wholly 
inconsistent with the basic requirements of state law which addresses 
waste disposal issues and practices on a city or countywide basis. Only 
the county with the approval of the majority of its cities representing 
a majority of the population in that county has the authority to 
complete and promulgate a siting plan. Pursuant to law, Los Angeles 
County, with Los Angeles City's active involvement and approval, did 
precisely that. The geographical extent of that effort is substantially 
broader than the Los Angeles market as defined by DOJ.
(b) The Definition of the Los Angeles Market is Inconsistent With the 
City Los Angeles' Own Waste Disposal Practices
    As reviewed in the Rose Report, the City of Los Angeles has long 
relied on disposal of its wastes at locations outside of its 
jurisdictional boundaries. As disclosed in the official records from 
the waste disposal reporting system maintained by the California 
Integrated Waste Management Board, the City of Los Angeles currently 
disposes of approximately twenty percent (20%) of its MSW at landfill 
facilities outside the City limits. Moreover, official waste disposal 
reports indicate that the City of Los Angeles regularly disposes of MSW 
in landfills in Orange, Riverside, and Ventura Counties in addition to 
landfills in Los Angeles County outside the City limits.\9\ Figure 1 
sets forth a map of the region indicating the sites where Los Angeles 
City wastes are currently disposed.
---------------------------------------------------------------------------

    \9\ ``Total Disposal and Export for Jurisdictions Within a 
County Region'', November 2, 1998, California Integrated Waste 
Management Board.
---------------------------------------------------------------------------

    USA Waste and WMI landfills that provide MSW disposal services to 
the City of Los Angeles include the Azusa Landfill and Lancaster 
Landfill in Los Angeles County, the Simi Valley Landfill in Ventura 
County, and the El Sobrante Landfill in Riverside County (formerly 
owned by Western Waste Industries prior to its 1996 acquisition by USA 
Waste). While DOJ's analysis properly identifies the Chiquita Canyon 
Landfill (which is located outside of the Los Angeles market as defined 
by DOJ) as accepting MSW from the City of Los Angeles, the other USA 
Waste/WMI controlled disposal facilities are also important components 
in the Los Angeles solid waste management program.
    In summary, Los Angeles City's own disposal practices, readily 
determined by review of official public records, are at odds with DOJ's 
delineation of the geographic market for purposes of identifying 
``Relevant Disposal Assets'' to maintain competition in the Los Angeles 
marketplace.
(c) The Boundaries of the Los Angeles Market Area Are Arbitrary
    Since the DOJ analysis apparently did not consider either the 
requirements of state law or the realities of actual disposal practices 
for the City of Los Angeles, there may have been some demographic or 
other factors relied upon by DOJ in defining the Los Angeles market. 
However, nowhere in the Complaint or the proposed final Judgment or 
Competitive Impact Statement is there any indication that DOJ relied on 
demographic or geographical factors in establishing the market. In any 
event, the Rose Institute is not aware of demographic or geographic 
features, waste industry practices, or legal constraints that could 
logically support a determination by DOJ to confine the relevant market 
to an area covering about one-half of the City of Los Angeles. 
Specifically, The Rose Institute is quite certain that there are no 
``flow control'' legal restrictions in Los Angeles City or county that 
could have led the DOJ to restrict the market area to only a portion of 
Los Angeles City. Moreover, southern California is renowned for its 
``regionalization'' of important social and policy matters such as air 
quality control and regulation, mass transportation, water supply and, 
as clearly documented in The Rose Report, solid waste disposal.
    To illustrate further what we believe to be the illogic of the 
limited definition of the relevant area, we set forth in figure 2 a map 
of southern California population distribution, prepared employing the 
Rose Institute's Geographic Informational systems capabilities. The 
population of the Los Angeles market as defined by DOJ is set out 
against geographical population distributions in the region on Figure 
2. In reviewing the population data, the obvious question is why did 
DOJ exclude from its market analysis almost eighty-five percent (85%) 
of the region's entire population--much of which is in jurisdictions 
that currently accept Los Angeles City's MSW for disposal? Also, why 
would DOJ's market analysis only consider a fraction of the total 
actual MSW generated by the City? Clearly, when compared to the 
geographic market definitions developed for the other metropolitan 
areas (discussed more fully below) considered in the Final Judgment and 
Competitive Impact Statement, DOJ's analysis of the Los Angeles market 
cannot be supported.
(d) The Boundaries of the Los Angeles Market Fail To Recognize the 
Actual Commercial Waste Disposal and Marketing Practices of WMI
    Substantial amounts of MSW for the entire City of Los Angeles are 
disposed at the Bradley West Landfill, owned and operated by WMI and 
located within the relevant geographic market. However, the Rose 
Institute is not aware of any public information (including MSW 
disposal contracts) that either accounts for the generation of MSW in 
the area of Los Angeles delineated by DOJ (i.e., east of Interstate 405 
in the City of Los Angeles) or distinguishes between MSW generated 
``east of the 405'' or ``west of the 405.''
    Certainly, given the size and importance of the Los Angeles market, 
if such information existed it would be commonly known. Moreover, as 
detailed in The Rose Report, the information would be reflected in the 
Countywide Siting Element of Los Angeles County (discussed below). The 
Siting element specifically recognizes the possibility of using a 
number of USA Waste and WMI's landfills located in California, Arizona, 
Nevada, and even as far away as Oregon--WMI's Columbia Ridge Landfill. 
And, as noted above, the Siting element is, by law, the official 
``blueprint'' for waste disposal pians for all 88 cities and the 
unincorporated areas in Los Angeles County, including the City of Los 
Angeles. Furthermore, even a cursory review of Los Angeles City and 
County public records would have revealed numerous and ongoing efforts 
of WMI to market these facilities to the City and County. An example is 
the 1989-90 proposal by WMI to the Los Angeles county Sanitation 
Districts to secure a waste commitment to its RailCycle project in San 
Bernardino County and to utilize rail-based transfer station sites in 
El Segundo (west of interstate 405) and in the City of Commerce, as 
discussed in detail in The Rose Report.
(e) The Definition of Los Angeles Market Is Inconsistent With DOJ's 
Analysis of Other Metropolitan Areas
    In each and every other city identified in the Complaint (and 
unlike the approach taken for Los Angeles), the definition of 
``relevant geographic market'' includes not only the entire area and 
population of the city, but also the surrounding or adjacent 
county(ies). Thus, for example:


[[Page 53712]]


--Baltimore--``means the City and Howard, Baltimore, Carroll, and Anne 
Arundel Counties.''
--Cleveland--``means the City of Cleveland and Cuyahoga County.''
--Detroit--``means the City of Detroit and Wayne County.''
--Miami--``means the City of Miami and Broward, Dade, and Monroe 
Counties.''
--New York--``means New York, Bronx, Queens, and Richmond Counties.''
--Pittsburgh--``means the City of Pittsburgh and Allegheny and 
Westmoreland Counties.''

(Complaint at pages 4 and 5, emphasis supplied.)

    The fact of the matter is that Los Angeles is the only municipality 
in the Complaint that is restricted to a size smaller than its own 
municipal boundaries and which does not also include the county in 
which it is, at least in part, situated. The Rose Institute fails 
entirely to understand what type of criteria and methodology could have 
been utilized by DOJ for treating Los Angeles so differently from every 
other metropolitan waste disposal market in the country identified in 
the Complaint. Further, we note that a number of the other waste 
markets, as defined, have greater populations than the Los Angeles 
market, as defined by DOJ, and the market identified for the New York 
area has a substantially greater population that approximates the 
population of the entire County of Los Angeles. Based upon 1990 cenus 
data, the following table sets forth a summary of the populations in 
these areas (including the listed counties):

Baltimore..............................................        1,497,956
Detroit................................................        1,411,209
Miami..................................................        3,309,246
New York...............................................        7,703,051
Pittsburgh.............................................        1,708,696
Portion of Los Angeles City Selected by DOJ............   \10\ 2,936,500
 

Given DOJ's characterization of the New York metropolitan area as the 
relevant market area (an area containing many natural potential 
barriers to the ``flow'' of MSW to landfills) it would seem that it 
should have also characterized the Los Angeles metropolitan areas, 
which contains over nine million people in Los Angeles County alone 
(current estimate), as the relevant market area. We also note that, in 
addition to New York, many of the other jurisdictions also contain some 
natural geographical features such as rivers and major waterways (not 
present in the Los Angeles area) that might have led an analyst to 
conclude that natural barriers exist that affect MSW disposal practices 
in the area. In any event, absent some logical explanation from DOJ for 
its remarkably different treatment of Los Angeles, one is left only to 
speculate over how the conclusions were arrived at.
---------------------------------------------------------------------------

    \10\ Estimated by use of Geographic Information System 
capabilities of the Rose Institute.
---------------------------------------------------------------------------

    In the context of the dissimilar treatment by DOJ of the Los 
Angeles market compared to other metroplitan areas, we also note that 
another key issue arises relating to the absence of any analysis of the 
growing importance of transfer stations generally in California, and 
particularly in the Los Angeles area.
    Whole DOJ correctly analyses the potential for enlarging the 
geographical reach for disposal market purposes through the use of 
transfer stations (Pages 9 and 10 of the Complaint), it does not 
consider this factor in the Los Angeles market analysis. As outlined in 
The Rose Report, municipalties in the southern California regio 
primarily because of the recycling and waste diversion mandates of AB 
939, are moving rapidly to the utilization of ``Materials Recovery 
Facility (``MRF'')/Transfer Stations.'' Because of the increase in 
waste processing through MRFs and Transfer Stations (which involves the 
loading of MSW into larger transfer trucks or containers for shipment 
by rail), the practice necessarily facilities the ability to dispose of 
MSW at greater and greater distances from the point of generation. 
Furthermore, with the closures of Los Angeles City's Lopez Canyon 
Landfill and the BKK Landfill in West Covina, and the prohibition on 
acceptance of MSW at the Azusa Landfill (the latter two of which are 
situated in eastern Los Angeles County), almost 25,000 tons of MSW per 
day is now necessarily moving to outlying landfills in the region. Such 
closures and the mandates of California law are resulting in a growing 
dependence on MRFs/Transfer Stations by local jurisdictions. In fact 
and by way of example, of the eighty-eight (88) cities in Los Angeles 
County, thirty-eight (38) have now committed, as an official part of 
their approved Source Reduction and Recycling Plans to meet state 
recycling mandates, to a MRF/Transfer Station strategy.\11\
---------------------------------------------------------------------------

    \11\ Countywide Siting Element for Los Angeles County, Los 
Angeles Country Department of Public Works Environmental Programs 
Division, June 1997.
---------------------------------------------------------------------------

    The resulting reality of this growing dependence on MRFs/Transfer 
Stations is that MSW may be taken--and today is being taken--greater 
distances from disposal, thus broadening the relevant geographic market 
for Los Angeles for the purpose of waste disposal analysis.
    As a final point, we would note the inconsistency in DOJ's 
definition of ``relevant area'' contained in the Hold Separate 
Stipulation and Order (``Order'') \12\ as applied to the Los Angeles 
area. In the Order, ``relevant areas'':
---------------------------------------------------------------------------

    \12\ 63 Federal Register 51127.
---------------------------------------------------------------------------

    ``* * * means the county in which the * * * Relevant Disposal 
Assets are located and any adjacent city or county * * *''

The Order goes on to state in the portion on ``Objectives'' \13\
---------------------------------------------------------------------------

    \13\ Ibid.
---------------------------------------------------------------------------

    ``The Final Judgment * * * is meant to ensure defendants' prompt 
divestiture * * * for the purpose of establishing viable competitors in 
the waste disposal business * * * in the Relevant Areas * * *''
(emphasis added)

    It appears clear that the DOJ used essentially the same standard in 
defining ``relevant area'' and in delineating the geographic markets 
for all of the other metropolitan areas. However, with respect to Los 
Angeles, DOJ used a different and undetermined methodology to define 
the geographic market. Had DOJ been consistent and taken the same 
approach it took for the other jurisdictions, the definition of the Los 
Angeles market would have included Los Angeles County, and the adjacent 
counties of Ventura, Orange, Riverside, and San Bernardino. Such a 
definition of Los Angeles would have been precisely what the Rose 
Institute maintains is consistent with the common understanding of the 
Los Angeles market area.

(2) The Definition of the Los Angeles Market Is Inconsistent With DOJ's 
Prior Actions

    In 1996, DOJ had occasion to review a transaction between BKK 
Corporation (a privately-held waste management firm which, as alluded 
to above, operated a large regional landfill in eastern Los Angeles 
County) and BFI.\14\ The essence of the transaction was the sale of 
certain assets of BKK in the Los Angeles area to BFI, including BKK's 
interest in two (2) proposed landfill projects located on sites in Los 
Angeles and San Bernardino Counties, as well as BKK's waste recycling 
operations and transfer station in the City of Los Angeles 
(Wilmington). At the time, BFI was the owner of the Sunshine Canyon 
Landfill in Granada Hills (in Los Angeles County) and was then seeking

[[Page 53713]]

to obtain final permits and approvals to initiate operations. The 
Sunshine Canyon Landfill, however, was closed to operations at all 
times relevant to the BKK/BFI transaction.
---------------------------------------------------------------------------

    \14\ Information concerning this transaction was taken from 
conversations with involved counsel.
---------------------------------------------------------------------------

    The original BKK/BFI transaction documents reviewed by DOJ 
contained a provision that would have pre-conditioned the transaction 
on the closing of the BKK Landfill in West Covina, even though that 
landfill was not part of the transaction. Upon review, DOJ objected to 
the condition and refused to approve the transaction until the 
condition related to the West Covina landfill had been deleted. The 
condition was removed and DOJ approval followed. What is interesting 
about this transaction, and DOJ's approach to it, is that even though 
BFI did not operate any landfill in the region at the time,\15\ but was 
merely seeking to resume operations at its Sunshine Canyon Landfill, 
DOJ looked beyond the borders of the City of Los Angeles and, one can 
reasonably infer, made an implicit--if not explicit--decision that the 
Los Angeles waste disposal market extended into eastern Los Angeles 
County.
---------------------------------------------------------------------------

    \15\ It was the owner/operator of the Azusa Landfill in eastern 
Los Angeles County, but that landfill was permitted to receive only 
``inert'' wastes and was prohibited by court order from receiving 
any MSW.
---------------------------------------------------------------------------

    We think that DOJ was correct in that prior instance. We think its 
current analysis is clearly inconsistent with its past view of the Los 
Angeles disposal market and is therefore incorrect.

(3) The Proposed Final Judgment and Competitive Impact Statement Ignore 
the Effects of Prior Acquisitions by USA Waste in the Region

    Over the past two years, USA Waste has made a number of 
acquisitions of landfill assets in southern California--both outright 
and by way of merger. For Example, USA Waste acquired the Chiquita 
Canyon Landfill from the Laidlaw Company; the Azusa Landfill from BFI; 
and the El Sobrante Landfill and Western Waste Industries' interest in 
the Mesquite Regional Landfill (a waste-by-rail project in Imperial 
County) via a merger with Western Waste.
    It is important to note that USA Waste and WMI have not been long-
time competitors in the region. In fact, USA Waste is a relatively new 
organization both locally and in the nation generally. However, USA 
Waste has acquired many firms in the region that were long-time 
competitors of WMI, such as Western Waste Industries. The potentially 
significant anti-competitive consequences of USA Waste's recent 
acquisitions throughout southern California is raised nowhere in the 
proposed Final Judgment and Competitive Impact Statement. We believe 
that it should receive serious independent consideration by DOJ. In 
fact, USA Waste's acquisitions in California during the last three 
years, might not have secured DOJ approval if they had been effected by 
WMI acting on its own account.
    By ignoring the prior USA Waste acquisitions in its analysis of the 
current merger, DOJ is sanctioning a situation in which one private 
landfill operator will have overwhelming control of private waste 
disposal capacity capable of serving the City and County of Los Angeles 
and the entire southern California area all the way to the eastern 
border of the State and extending south to the border of the United 
States with Mexico! With the merger as approved by DOJ in the 
Competitive Impact Statement, WMI will own, control, or hold an 
interest in all but three (3) of the large private landfills and 
landfill projects serving all of Los Angeles County, the country with 
the largest population in the United States.\16\
---------------------------------------------------------------------------

    \16\ The three major private landfills are BFI's Sunshine Canyon 
Landfill, the Chiquita Canyon Landfill to be purchased by Republic 
Services, Inc., and the Eagle Mountain Waste-by-Rail project, being 
developed by Mine Reclamation Corporation in eastern Riverside 
County. Eagle Mountain has been tied up in environmental litigation 
for six years. If the litigation is resolved in favor of the 
project, it may be several more years before all of the necessary 
operating permits could be obtained. See The Rose Report for a more 
complete discussion of the waste-by-rail projects.
---------------------------------------------------------------------------

    Figure 3 shows the general location of private landfills in 
southern California and landfills in neighboring states which have been 
identified by Los Angeles County in the Countrywide Siting Element 
(discussed above) as potential sites for providing landfill disposal 
capacity to the area for the next fifteen (15) years. It also lists the 
current permitted daily tonnage allowed at each facility and the 
remaining capacity (as indicated in the Siting Element). It reveals the 
overwhelming number of landfills that are owned and controlled by WMI 
in the region and that are specifically identified for future potential 
use by the relevant market of Los Angeles County (and City).
    Also important is the information set forth on Figure 4, which 
displays the relative amounts of MSW currently being disposed in the 
same southern California region as shown in Figure 3. As Figure 4 makes 
clear, the amounts of MSW disposed in the region can quite easily be 
accommodated by WMI facilities in terms of allowable daily capacity for 
many years to come. While the potential impact of public landfill 
facilities is not set forth in the Figure, as discussed in The Rose 
Report, the ability of Los Angeles County to control disposal capacity 
sufficient for its own needs within its own boundaries is limited. In 
fact, the County, in its approved Siting Element, specifically relies 
upon a ``mix'' of public and private disposal options. If it is unable 
to permit a significant extension of its Puente Hills Landfill in 
eastern Los Angeles County,\17\ its reliance on private disposal 
options will be dramatically increased. It is precisely for these 
reasons that the County's own plans look to the utilization of other 
potential private sites as depicted in the attached maps. Allowed to go 
unamended, the VMI merger as currently proposed would result in a 
situation where one private operator--WMI--has essential control over 
waste disposal capacity for the entire region.
---------------------------------------------------------------------------

    \17\ The County's land use permit for the facility expires in 
the year 2003. Given the long lead time to permit new or expanded 
landfills in the region, the County will need to initiate formal 
environmental review for that effort in the very near future. The 
Rose Report concludes that this effort, in turn, will likely also 
include initial implementation of a significant waste-by-rail 
operation for the region.
---------------------------------------------------------------------------

    The Rose Institute strongly believes that any analysis of the 
current merger should also include an analysis of recent acquisitions 
of disposal assets in southern California by USA Waste, especially the 
assets acquired in the acquisition of Western Waste Industries.

(4) At a Minimum, the Los Angeles Market Should Have Included all of 
Los Angeles County. The Proper Market Description Would Have Resulted 
in Additions to ``Relevant Disposal Assets'' for Los Angeles

    For the reasons set forth above, especially those relating to the 
solid waste management requirements imposed by California law and the 
realities of current actual waste disposal practices in the City of Los 
Angeles, we argue that the Los Angeles market should include the entire 
County of Los Angeles. In turn, the effect of such a definition should 
substantially change DOJ's view of what are--or are not--``Relevant 
Disposal Assets'' for the ``true Los Angeles market.'' No secret exists 
as to what both the City and County view as the specific landfill 
assets that could be considered for inclusion in the ``Relevant 
Disposal Assets''; they are enumerated in the Countywide Siting 
Element.
    As discussed extensively in The Rose Report, implementation of a 
waste-by-rail project for the region is both imminent and necessary for 
the County

[[Page 53714]]

of Los Angeles and its 88 cities. Recently, the Los Angeles County 
Sanitation Districts secured a site for development of a MRF capable of 
feeding a waste-by-rail system and have held preliminary discussions 
for the purposes of implementing such a system with officials of the 
Eagle Mountain, RailCycle, and the Mesquite Regional Landfill projects. 
In a letter dated September 13, 1996, from Donald Nellor of the Los 
Angeles Sanitation Districts to David Mares of the Planning Department 
for Riverside County, Nellor reaffirmed the Sanitation Districts' 
continuing commitment to developing waste-by-rail:

    There is a clear need for new regional landfills, such as the 
Eagle Mountain site . . . The Sanitation Districts continue to be 
committed to implementing a waste-by-rail system as one component of 
a balanced and multi-faceted approach to effectively manage the 
Districts' long-term waste disposal needs.

To date, the only waste-by-rail project that has obtained all of its 
major land use and operational permits is the Mesquite Regional 
Landfill.
    With an expanded view of the market, any consideration of the 
competitive impacts of the USA Waste/WMI merger on the waste disposal 
market in the City and County of Los Angeles should also take into 
account the resulting position of the merged companies throughout all 
of southern California. As an example, USA Waste's MRF/Transfer Station 
in Carson. California, just south of the Los Angeles City limits, has 
been specifically modified to take MSW from the City of Los Angeles to 
its El Sobrante Landfill in Riverside County, which it does. As noted 
above, Figure 3 sets forth a map of USA Waste's and WMI's landfills in 
the region depicting the permitted daily and overall capacities of each 
facility. That map shows that more than enough capacity exists among 
these facilities to accommodate all of Los Angeles County's needs for 
at least the nest 30 years. Furthermore, should the County of Los 
Angeles decide to dedicate a wastestream for disposal by rail in order 
to promote the development of remote regional landfills, USA Waste, by 
virtue of its recent acquisition of Western Waste Industries, has an 
interest in the Mesquite Regional Landfill, the only currently 
permitted in-state waste-by-rail project.
    Finally, in viewing the realities of the entire region, The Rose 
Report notes that there is only one jurisdiction outside of Los Angeles 
County which may offer disposal capacity held and controlled in the 
public sector--Orange County (see The Rose Report for specific 
discussion of the history of Orange County's capabilities). Even here, 
however, WMI maintains a strong position. In 1995, as part of its 
bankruptcy recovery program, Orange County ``pre-sold'' capacity in 
their public landfill system. WMI purchased, and still controls, 
substantial capacity in that system.

(5) Conclusion--WMI Should Be Required To Divest Additional ``Relevant 
Disposal Assets''

    For all of the reasons set forth above and in the supporting 
analysis contained in The Rose Report, the proposed Final Judgment and 
Competitive Impact Statement should be revised to reflect Los Angeles 
Count as the ``relevant geographic market'' for purposes of analyzing 
the competitive impacts of the USA Waste/WMI merger. The Rose Institute 
maintains that a revised definition of the Los Angeles market should 
result in the divestiture of additional landfill disposal operations of 
the newly-constituted WMI in order to protect the public interest. In 
addition, we believe that much of the concern over the creation of an 
anti-competitive environment in waste disposal in southern California 
could also be lessened by consideration of the divestiture of assets 
that were acquired recently by USA Waste, before the instant merger--in 
particular, the El Sobrante Landfill in western Riverside County and 
the interest of Western Waste, a wholly owned affiliate of USA Waste, 
in the Mesquite Regional Landfill waste-by-rail project in Imperial 
County. The remaining company would still have full ownership and 
developmental rights over the RailCycle waste-by-rail project in San 
Bernardino, as well as numerous other landfills and landfill capacity 
in California and in nearby out-of-state locations that will compete in 
the Los Angeles market.
    Finally, we take note of the following. WMI is no ``stranger'' to 
the Department of Justice, the Attorneys General of numerous states, or 
the district attorneys of many counties in those states, including the 
counties in southern California. Its appetite for growth and ability to 
control aggressively the markets in which it operates are a matter of 
public record. We submit that that is not a public record which 
supports granting to the ``new'' WMI an almost exclusive ``franchise'' 
in waste disposal for southern California for many years to come--a 
situation that will exist if the instant merger is allowed to be 
completed without substantial reconsideration of the Los Angeles 
market. We think the public interest deserves a more relaistic and 
complete ayalysis for southern California and its millions of 
residents. We respectfully submit these comments to the public record 
in this matter.

Exhibit 9

U.S. Department of Justice, Antitrust Division

August 27, 1999.
Joseph Kattan, Esquire
Michael F. Flanagan, Esquire,
Gibson, Dunn & Crutcher, 1050 Connecticut Avenue, NW, Washington, DC 
20036-5306.

Re: Comment on Proposed Final Judgment in United States of Ohio, et 
al. v. USA Waste Services, Inc. Waste Management, Inc., et al., 
Civil No. 98-161 (N.D. Ohio, filed July 16, 1998)

    Dear Messrs. Kattan and Flanagan: This letter responds to your 
letter, submitted on behalf of your client, Gold Fields Mining 
Corporation (``Gold Fields''), commenting on the proposed Final 
Judgment in the above case. The Complaint in that case charged, 
among other things, that USA Waste's acquisition of Waste Management 
would substantially lessen competition in the disposal of commercial 
waste from portions of the City of Los Angeles, The proposed 
Judgment would settle the case by, inter alia, requiring the 
defendants to divest Chiquita Canyon Landfill, a large USA Waste 
landfill located about 40 miles northeast of the City of Los 
Angeles. In a transaction approved by the United States in August 
1998, under the terms of the decree, the defendants divested that 
landfill to Republic Services, Inc., which previously did not 
operate any landfills in the greater Los Angeles area.
    Your client, Gold Fields, together with Union Pacific Railroad 
Company and defendant USA Waste, own Mesquite Regional Landfill. 
Gold Fields is very concerned that the proposed divestiture of 
defendants' Chiquita Canyon Landfill does not go far enough to 
prevent the defendants from exercising market power after the 
acquisition. Specifically, Gold Fields is concerned that following 
the merger, the defendants will attempt to reduce the disposal 
capacity available to the Los Angeles market by using its ownership 
interest in Mesquite Regional to prevent this large new landfill 
from aggressively competing for commercial waste from the city.
    In our view, the relevant geographic market for analyzing the 
competitive effects of the USA Waste's acquisition of Waste 
Management does not include Mesquite Regional Landfill. In defining 
the relevant geographic market for the disposal of Los Angeles's 
commercial waste, the United States took into account the extent to 
which each of the private and public landfills in Southern 
California could compete for the disposal of commercial waste that 
originates in the city of Los Angeles. In the course of its 
competitive analysis, the United States excluded some firms from its 
relevant geographic market because their landfills were legally 
prohibited from accepting any

[[Page 53715]]

municipal solid waste from the city of Los Angeles (e.g., most of 
the LA County landfills). The United States excluded other disposal 
facilities (e.g., Mesquite Regional) because of their distance from, 
and relative inaccessibility to, the Los Angeles area.
    USA Waste's Mesquite Regional Landfill is located 170 miles from 
the City of Los Angeles. Rail is the only practical way to transport 
waste from Los Angeles to that landfill. With delivered costs in 
excess of $45/ton (including transportation and tipping fee costs), 
it would be nearly twice as expensive to dispose of commercial waste 
from the City of Los Angeles at Mesquite Regional Landfill as 
sending such waste to close-in LA area landfills, which have average 
actual landfill tipping fees of about $23/ton.\1\ The four firms 
that own or operate landfills reasonably close to Los Angeles can 
profitably increase their tipping fees for disposal of Los Angeles's 
commercial waste by a small but significant amount without losing 
significant business to distant landfills such as Mesquite Regional. 
Thus, is makes sense to exclude Mesquite Regional and similar 
landfills from the competitive analysis in determining the 
significance of the defendants' transaction for the disposal of Los 
Angeles' commercial waste. See U.S. Department of Justice Horizonal 
Merger Guidelines Sec. Sec. 1.2-1.3 (1997 ed.).
---------------------------------------------------------------------------

    \1\ In your letter, you point out that the ``posted'' rates at 
Los Angeles's transfer stations and resource recovery facilities are 
about $45/ton, which would be comparable to the delivered cost of 
waste disposal at Mesquite Regional Landfill. Many of Los Angeles's 
large haulers, however, receive contractual discounts for waste 
disposal at area landfills, and these discounted disposal rates, or 
``tipping'' fees, actually average about $23/ton for commercial 
waste from the city.
---------------------------------------------------------------------------

    Finally, you implicitly assume that expanding the relevant 
geographic market to include Mesquite Regional Landfill would make 
USA Waste's acquisition of Waste Management more, not less, 
anticompetitive. However, expanding the market to include this 
distant landfill would sweep into the competitive analysis a number 
of other large landfills now owned or otherwise controlled by the 
four firms that own the close-in Los Angeles landfills. Including in 
the market the disposal capacity of those distant firms would 
substantially diminish, or even eliminate, the anticompetitive 
effects of defendants' transaction, and hence, make it questionable 
whether the defendants should be required to divest any Los Angeles 
area landfills.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.
      Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Gibson, Dunn & Crutcher, LLP

November 23, 1998.

Via Hand Delivery

J. Robert Kramer, II, Esq.,
Chief, Litigation II Section, Antitrust Division, U.S. Department of 
Justice, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20530.

Re: United States v. USA Waste Services, Inc., Civ. No. 1:98 CV 1616

    Dear Mr. Kramer: Pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h) (the ``Tunney Act''), we submit 
the comments of Gold Fields Mining Corporation (``Gold Fields'') on 
the proposed consent decree filed by the Justice Department 
contemporaneously with the filing of its complaint in the above-
referenced lawsuit.
    In a complaint filed on July 16, 1998, the Department (and a 
number of individual states) alleged that the proposed acquisition 
of Waste Management, Inc. (``WMI''), by USA Waste Services, Inc. 
(``USA Waste''), would violate Section 7 of the Clayton Act, 15 
U.S.C. 18.\1\ As required by the Tunney Act, the Department 
published a proposed Final Judgment and a Competitive Impact 
Statement (``CIS'') in the Federal Register on September 24, 1998. 
63 FR 51,126. Under the Tunney Act , the court is required to make a 
determination, prior to approving the proposed consent judgment, 
that ``the entry of such judgment is the public interest.'' 15 
U.S.C. 16(e); see also United States v. Airline Tariff Publ'g Co., 
836 F. Supp. 9, 11 (D.D.C. 1993).
---------------------------------------------------------------------------

    \1\ The entity resulting from the combination of USA Waste and 
WMI is referred to herein as ``Waste Management.''
---------------------------------------------------------------------------

    Although the Department is to be commended for intervening and 
requiring divestitures to reduce the impact of this anticompetitive 
acquisition, the remedy mandated by the consent decree with regard 
to one of the markets alleged in that complaint, the Los Angeles 
area, is insufficient to cure the competitive harm brought about by 
the transaction. The Department's remedy is inadequate because it 
leaves the merged company with ownership of sufficient local and 
remote disposal assets to harm competition for waste disposal in the 
market. If the merged company is able to retain such power and 
control, it also will be able to thwart or delay the entry of cost-
effective disposal alternatives for customers in the Los Angeles 
market, such as the Mesquite Regional Landfill in Imperial County, 
California, which is owned by Gold Fields.
    The public interest requires that the decree be modified to 
address the competitive harm more effectively. To protect 
competition in the Los Angeles market, for the reasons set forth 
below, we ask that the Department reexamine its definition of the 
Los Angeles market,\2\ which is necessary in order to more 
accurately assess the full impact of the transaction. We further 
request that the Department require the divestiture of additional 
waste disposal assets by the merged entity, in order to further 
reduce the merger's anticompetitive effect. Specifically, we request 
that the Department require Waste Management, acting through its 
wholly owned affiliate Western Waste Industries (``WWI''), to give 
up any claim it may have to an ownership stake in the Mesquite 
Regional Landfill.
---------------------------------------------------------------------------

    \2\ As defined in the complaint, Los Angeles means ``that area 
of the City of Los Angeles, CA, located east of Interstate 405, the 
San Diego Freeway.'' Compl. para. 19.
---------------------------------------------------------------------------

I. Factual Background

A. The Complaint and Competitive Impact Statement

    The complaint in this matter alleged that USA Waste and WMI are 
two of the most significant competitors in the disposal of municipal 
solid waste (``MSW'') in a number of markets throughout the country. 
Because of the significant competitive positions of both companies, 
the complaint alleged that the acquisition would substantially 
lessen competition in the disposal of MSW in seventeen geographic 
markets throughout the United States, including Los Angeles, 
California. Compl. Paras.  45-78. The complaint further alleged the 
existence of significant barriers to entry in the MSW disposal 
business in the Los Angeles area and other ``difficult-to-enter'' 
markets, due to a variety of important factors, including various 
``federal, state and local safety, environmental, zoning and permit 
laws and regulations'' that ``dictate critical aspects'' of the 
disposal of MSW, and make the process of obtaining a permit to 
construct or expand a disposal site ``an expensive and time-
consuming task.'' Id. para. 76; see also CIS at 8, 10, 63 FR at 
51,156 (1998). The Department alleged that the diminution in 
competition brought about by the acquisition is likely to result in 
consumers paying higher prices and receiving fewer or lesser quality 
services for the disposal of MSW. Compl. para. 78. Indeed, the 
complaint alleged that operators of local disposal facilities 
``can--and do--price discriminate, i.e., charge higher prices to 
customers who have fewer local options for waste disposal.'' CIS at 
9, 63 FR at 51,156 (1998).
    Together with the complaint, the Department filed a proposed 
consent decree under which USA Waste was able to complete its 
acquisition of WMI, but which required the divestiture of certain 
assets in order to preserve competition in the affected markets. As 
it relates to the Los Angeles area, the proposed consent decree 
required the divestiture of USA Waste's Chiquita Canyon Landfill, 
located at 29201 Henry Mayo Drive in Valencia, California. We 
understand that an agreement for the divestiture of this facility to 
Republic Services, Inc., has been effectuated.
    Although we believe that the complaint correctly identified a 
number of significant competitive problems created by the proposed 
combination of these two large competitors, the remedy set forth in 
the proposed consent decree with respect to the Los Angeles area is 
insufficient to protect the public interest in preserving present 
and future competition for the disposal of MSW generated in the Lost 
Angeles area. In particular, the definition of the Los Angeles 
market is inconsistent with applicable state law an contrary to the 
commercial realities of the Los Angeles marketplace. Consequently, 
the remedy set forth in the decree fails to protect the long term 
interests of purchasers of MSW disposal capacity in a competitive 
market, as the combined entity now has an

[[Page 53716]]

incentive to block or significantly delay the development of the 
Mesquite Regional Landfill. However, even if the market definition 
set forth in the complaint is correct, the remedy set forth in the 
decree still falls short of the minimum needed to protect consumers 
in the market defined by the complaint.

B. The Mesquite Regional Landfill

    From October 1991 through November 30, 1997, Gold Fields, 
Western Waste Industries (``WWI''), which since 1996 has been a 
subsidiary of USA Waste,\3\ and SP Environmental Systems, Inc., an 
affiliate of Southern Pacific Transportation Company (now known as 
Union Systems, Inc., an affiliate of Southern Pacific Transportation 
Company (now known as Union Pacific Railroad Company (``UP'')), were 
engaged in a venture to explore the feasibility of permitting, 
developing, and operating the Mesquite Regional Landfill. The 
landfill was to be developed as a MSW regional facility located in 
Imperial County, California, 170 miles southeast of Los Angeles. The 
parties believed that the enterprise, which could serve as a 
disposal site for MSW transported by rail from Los Angeles County 
and other parts of Southern California, would lessen the need for, 
and reliance upon, urban landfills and provide an environmentally 
safe means of disposing of waste at a competitive price.
---------------------------------------------------------------------------

    \3\ WWI merged with USA Waste in a transaction that closed on 
May 7, 1996.
---------------------------------------------------------------------------

    Gold Fields or Arid Operations, Inc. (``AOI''), its wholly-owned 
subsidiary, served as manager of the venture and has undertaken all 
permitting and land acquisition activities requested for the 
development of the Mesquite Regional Landfill. Gold Fields and AOI 
have been actively marketing the project throughout Los Angeles 
County, which is expected to be the primary source of MSW for the 
facility. Actual construction of the Mesquite Regional Landfill will 
begin once a contract is awarded.\4\ It is projected that MSW 
disposal will begin within one year of the commencement of 
construction.
---------------------------------------------------------------------------

    \4\ Construction of the facility is the least time-consuming 
aspect of market entry. Thus, while the permitting process for a new 
MSW disposal facility can last an entire decade, construction of a 
facility such as the Mesquite Regional Landfill can be accomplished 
within one year.
---------------------------------------------------------------------------

    The Mesquite Regional Landfill project is the largest permitted 
waste-by-rail facility in the United States. During the initial year 
of operation, the facility will receive up to 3,400 tons of MSW per 
day, an amount that will increase to 20,000 tons per day over the 
100-year life of the project.
    Although public and private landfill operators frequently 
encounter strong opposition to the construction of new landfills and 
the expansion of existing facilities in densely populated areas, the 
permitting of the Mesquite Regional Landfill has encountered 
relatively few difficulties. This is attributable in large measure 
to the fact that the site of the Mesquite Regional Landfill is 
especially well suited for the development of a landfill. The site 
covers 4,250 acres in a deserted portion of the southeastern portion 
of Imperial County, California. For the past 13 years, the site has 
been used by Gold Fields and its successor for gold mining 
activities and as a gravel quarry. The geography of the site--with a 
base of dense conglomerate and basement rock--contains no active 
faults and provides a low-permeability barrier that will supplement 
the engineered leachate and landfill gas containment systems.
    The average annual temperature is 74 deg.F, with average highs 
during the summer months of 105 deg.F to 110 deg.F, and the mean 
annual rainfall is only 4 inches. This arid climate greatly reduces 
the potential for leachate to be developed in the landfill. Because 
of the desert conditions, only low density populations of plant and 
animal species exist in the area. In addition, because the majority 
of the site already has been disturbed by mining and gravel 
extraction activities, any additional impact on plant and animal 
life will be limited. Finally, the site is located in an area where 
there are no bodies of water or permanent surface flows.
    In September 1995, after three years of public review and 
comment, the Environmental Impact Report/Environmental Impact 
Statement for the project was finalized, and local land use 
approvals and a conditional use permit were issued by Imperial 
County. In November 1995, all of the municipalities in Imperial 
County reviewed and approved the project, and a Waste Discharge 
Order was issued by the California Regional Water Quality Control 
Board in December of that year. The California Integrated Waste 
Management Board issued a Solid Waste Facilities Permit in March 
1997, and earlier this month, the Imperial County Air Pollution 
Control District issued an Authority to Construct permit, which 
addressed air quality issues for the project. As a result, the 
Mesquite Regional Landfill became the only permitted waste-by-rail 
project in California. Throughout the permitting process, Gold 
Fields and AOI prevailed on all administrative and judicial appeals 
filed in state and federal courts by environmental groups opposing 
the project.
    On November 30, 1997, the venture agreement terminated by its 
terms. Since the termination of the venture, Gold Fields has been 
engaged in discussion with SPES, UP, and WWI attempting to wind up 
the venture. Concurrently, at their sole cost and expense, Gold 
Fields and AOI have continued the permitting and marketing programs 
for the project. USA Waste, one behalf of WWI, expressed an interest 
in participating in the project, however, Gold Fields and USA Waste 
have irreconcilable differences over plans for the development of 
the Mesquite Regional Landfill which preclude the parties from being 
able to conclude a new agreement.
    On March 10, 1998, USA Waste, the nation's third largest waste 
collection and disposal firm, agreed to acquire WMI, the largest 
waste collection and disposal firm in the country. USA waste's 
incentive to compete the wind up of the prior venture and negotiate 
a new agreement with Gold Fields for the continued development of 
the Mesquite Regional Landfill has been significantly reduced 
following this acquisition. As a result of the acquisition, the 
merged company now controls at least four (4) additional major 
proposed and existing remote waste disposal sites that have either 
been actively pursuing contracts or are capable of providing waste 
disposal services to Los Angeles County by transporting waste to 
their landfills via rail--the RailCycle (Bolo Station) landfill 
project in California,\5\ and the Butterfield Station, Copper 
Mountain, and Franconia landfills in Arizona. Thus, the merged 
company now has an incentive to impede the wind up of the venture 
and thereby frustrated development of the Mesquite Regional 
Landfill, which is intended to provide the assurance of long term 
MSW disposal capacity for the Los Angeles area.
---------------------------------------------------------------------------

    \5\ WMI's RailCycle project in San Bernardino, California is 
still in the permitting phase, although WMI is now the subject of a 
major criminal investigation arising from a dispute with a local 
property owner.
---------------------------------------------------------------------------

    Prior to the transaction, WWI and subsequently, USA Waste were 
committed to the development of the Mesquite Regional Landfill, and 
the site was posied to compete with WMI's facilities. A 1995 
memorandum by Richard Widrig, a vice president of WWI, set out the 
Mesquite Regional Landfill's goal is being ``the lowest cost'' MSW 
disposal facility. See July 28, 1995 memorandum from Richard Widrig, 
attached hereto as Exhibit A, at 2.\6\ Given its acquisition of 
competing sites that were owned prior to the merger by WMI, it is 
likely that the combined entity will seek to suprress development of 
the Mesquite Regional Landfill site in order to thwart a low-cost 
competitive alternative to those sites.
---------------------------------------------------------------------------

    \6\ Although this memorandum referred to ``many competitors for 
this waste stream,'' most of the privately-owned competitive sites 
are now owned by Waste Management. Mr. Widrig's memorandum states 
that ``[o]ur competition is primarily RailCycle and LaPaz and local 
landfills.'' Ex. A, at 2 (emphasis in original). RailCycle, with a 
proposed capacity of 430 million tons, is owned by Waste Management. 
La Paz, with an estimated capacity of 20 million tons, is jointly 
owned by BFI and La Paz County. With the exception of the Chiquita 
Canyon facility, which USA Waste was forced to divest, and BFI's 
Sunshine Canyon Landfill, both of which are located in northwestern 
Los Angeles County, Waste Management owns all of the other major 
private landfills in Los Angeles County.
---------------------------------------------------------------------------

II. The Development of the Mesquite Regional Landfill Is Essential for 
Effective Waste Management in the Los Angeles Area

    The Mesquite Regional Landfill project will be an essential 
component of the solid waste management program for the Los Angeles 
area. The location is also particularly well-suited for the disposal 
of MSW from that area. The site is a short rail haul away from Los 
Angeles, and offers very large disposal capacity without many of the 
environmental problems that frequently plague the development of new 
sites. The Mesquite Regional Landfill, as a newly constructed 
facility, will be fully lined to comply with current environmental 
regulations. By contrast, much of the current capacity in the Los 
Angeles area is the result of the expansion of older landfills that 
have

[[Page 53717]]

limited or non-existent liner systems. In addition, remote locations 
eliminate the traffic congestion and other public health and safety 
risks associated with operating a landfill in a heavily populated 
area.
    Governmental authorities have recognized the need to utilize 
remote facilities, such as the Mesquite Regional Landfill, to meet 
the MSW disposal needs of the Los Angeles area. For example, Steve 
Maguin, the head of the Solid Waste Management Department with the 
Los Angeles County Sanitation Districts testified in February 1997 
that ``as early as the beginning of the next decade,'' or a little 
over a year from the filing of this comment, Los Angeles County 
would have to export MSW to other locations. See Eagle Mountain 
Public Hearing before Riverside County Planning Commission, dated 
Feb. 5, 1997, attached hereto as Exhibit B, at 1.
    Mr. Maguin's testimony is consistent with many other projects 
over the past ten years. Indeed, these projections played a 
substantial role in creating the impetus for the development of the 
Mesquite Regional Landfill. For example, as April 1988 study by the 
Southern California Association of Governments, titled ``The 
Feasibility of Hauling Solid Waste by Railroad From the San Gabriel 
Valley to Remote Disposal Sites'' (the ``1988 Study''), attached 
hereto as Exhibit C, forecasted a shortfall in the landfill capacity 
for Los Angeles County by the end of 1998. 1988 Study, at 1-13. The 
projected shortfall in disposal capacity was the driving force 
behind the development of the Mesquite Regional Landfill and which 
makes development of that facility a matter of significant 
importance to Los Angeles area customers. Similarly, the study's 
conclusions were not lost on the Los Angeles County Sanitation 
Districts, and in May 1991, an Ad Hoc committee was convened to 
guide the development of a waste-by-rail system to diversify the 
solid waste options available to the metropolitan area. See ``Final 
Waste-by-Rail Master Plan,'' County Sanitation Districts of Los 
Angeles County, January 1997, attached hereto as Exhibit D, at 1.
    In a January 1998 status report on Regional Solid Waste 
Management within Los Angeles County, prepared by the County 
Sanitation Districts of Los Angeles County, Mr. Charles W. Carry, 
the Chief Engineer and General Manager noted that ``[d]evelopment of 
a waste-by-rail infrastructure is important to the Sanitation 
Districts in the effort to achieve more effective and diverse waste 
management in the County.'' See ``Status Report on Regional Solid 
Waste Management Within Los Angeles County,'' County Sanitation 
Districts of Los Angeles, January 1998, attached hereto as Exhibit 
E. The report noted that, because of the closure of three major 
solid waste landfills in 1996, which resulted in a net reduction of 
about 25% of the County's daily permitted capacity, ``out-of-County 
disposal capacity will be heavily relied upon to provide future 
needs.'' Id, at 2. Two of the nine major landfills permitted to 
accept solid waste in Los Angeles County are projected to close 
within the next two years and, without the development of new in-
County capacity, Los Angeles will become dependent on waste export.

III. Remedial Action Is Required To Ensure the Development of a Low-
Cost Disposal Alternative for Los Angeles Area Customers

    The complaint and accompanying competitive impact statement 
recognized that the proposed combination of USA Waste and WMI would 
substantially lessen competition in the disposal of MSW in Los 
Angeles. The Department also has recognized that, because the 
process of obtaining the permits necessary to construct or expand a 
disposal site is both time-consuming and expensive, entry into the 
market for the disposal of solid waste is difficult. Compl. para.76; 
CIS at 9, 63 FR at 51,156 (1998). Indeed, the Department contends 
that ``[s]ignificant 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.'' CIS at 10; 63 FR 
at 51,156 (1998).
    Based on the recent landfill permitting activities of Gold 
Fields and others in Southern California, seven to ten years is now 
commonly accepted as the lead time needed to obtain the necessary 
permits to expand an existing facility or to construct a new 
facility, with costs associated with the permitting process ranging 
from $20 to more than $75 million. Virtually every project will 
encounter public and/or political opposition, legal challenges, and 
appeals of administrative determinations. Of course, recovering any 
such investment is conditioned upon successfully obtaining all of 
the required permits. For example, the developer of the Weldon 
Canyon proposal in Ventura County spent $14 million over the course 
of eleven years before the project failed in the face of public 
opposition. See ``Southern California Landfill Capacity Analysis,'' 
prepared by JBS Associates, dated January 1997, attached hereto as 
Exhibit F, at 3.
    The Mesquite Regional Landfill offers a low-cost alternative 
that can now enter the Los Angeles market because it has essentially 
completed the permitting process. This makes the facility a 
formidable competitor of Waste Management's disposal sites within 
and outside the Los Angeles market, furthering the goal of 
diversifying the waste disposal options for Los Angeles.
    The remedy proposed by the Department, the divestiture of the 
Chiquita Canyon landfill, is inadequate to preserve competition in 
the rapidly evolving market in Los Angeles because it will not 
affect the merged entity's ability to impede the development of a 
promising potential low-cost entrant into the market--the Mesquite 
Regional Landfill. Unless the merged entity is forced to relinquish 
any claim to the assets of the Mesquite Regional Landfill, the 
development of the project is likely to be delayed and consumers in 
Los Angeles will be deprived of a major competitor whose goal, as 
expressed by WWI's Widrig in 1995, is to make the Mesquite Regional 
Landfill the ``lowest cost'' major MSW disposal facility. We 
therefore respectfully request that the consent decree be modified 
to contain such a remedy.
    The inadequate nature of the existing remedy may have resulted 
from a failure to appreciate the truly regional nature of waste 
disposal in the Los Angeles area, and a corresponding failure to 
identify the appropriate market, thereby eliminating from the 
Department's analysis the important role of remote sites in 
providing disposal services for the Los Angeles metropolitan area. 
That market is today regional in scope, owing to changes in the 
relative costs of local and remote sites based on a change in the 
regulatory regime governing waste disposal. Specifically, in 1989, 
California enacted the California Integrated Waste Management Act 
(A.B. 939), as amended.\7\ A.B. 939 requires each county, as part of 
its Integrated Waste Management Plan, to prepare a Siting Element 
demonstrating a minimum of fifteen years of environmentally safe and 
technically feasible solid waste disposal capacity. In the 
Countywide Siting Element for the Los Angeles area, published in 
June 1997 (``County Siting Element''), the Los Angeles County 
Department of Public Works' Environmental Programs Division stated 
that:

    \7\ Cal. Pub. Res. Code Secs. 40,000 et seq.
---------------------------------------------------------------------------

    It is important to incorporate into the planning process a 
number of alternatives to ensure that solid waste disposal, an 
essential public service, continues to be provided to all residents 
and businesses in Los Angeles County without interruption during the 
planning period and the long term. One of these alternatives is the 
development of out-of-County solid waste disposal facilities, 
together with the infrastructure necessary to provide access to 
these facilities.

Id. at 9-1, attached hereto as Exhibit G. Thus, solid waste 
management in Southern California has evolved into a regional system 
in which local governments are forced to rely on resources outside 
their boundaries to fulfill the mandates of A.B. 939.

    A.B. 939 also imposes stringent diversion and recycling 
requirements on cities and counties. In order to meet A.B. 939's 
diversion mandates, MSW is increasingly processed through Materials 
Recovery Facilities (``MRF'')/transfer stations making railhaul 
facilities, such as the Mesquite Regional Landfill (which requires 
transfer stations for loading intermodal containers), viable full-
fledged competitors with local firms.
    Although the cost of transporting MSW by rail to sites such as 
Mesquite is somewhat higher than the transportation cost associated 
with local disposal, the Mesquite site enjoys a number of 
significant cost advantages that ameliorate and overcome this 
disadvantage. Labor costs, air emissions reduction credits, and host 
fees all are expected to be lower at a remote facility. Indeed, at 
the time of projected operation of the facility, these cost 
advantages are expected to be decisive. One reason for this is that 
the diversion and recycling requirements of A.B. 939 has diminished 
some of the cost advantages associated with local MSW disposal. 
Because the Act has imposed higher costs on local disposal without 
affecting the cost of disposing of MSW at sites such as the Mesquite 
Regional Landfill, it has narrowed and in some cases eliminated 
altogether the cost advantage associated with local disposal.
    Under A.B. 939, 25% of all solid waste generated in California 
must be diverted from

[[Page 53718]]

landfill disposal by January 1, 1995, and 50% of all solid waste 
must be diverted by January 1, 2000.\8\ Cal. Pub. Res. Code 
Sec. 41,850. This diversion requirement imposes significant 
increased treatment costs and has resulted in a substantial and 
continuing increase in the use of transfer stations and MFRs 
throughout Los Angeles County and the surrounding area.\9\ The 
services provided by these facilities generally include handling, 
processing and loading in transfer trucks or intermodal containers; 
transportation from the facility to the landfill; and all landfill 
disposal costs.
---------------------------------------------------------------------------

    \8\ The estimated statewide division rate for 1997 was 32%. See 
Integrated Waste Management Board News Release, titled ``State 
Recognizes Communities' Recycling Success on 2nd America Recycles 
Day,'' dated Nov. 15, 1998, attached hereto as Exhibit H. More than 
100 million tons of solid waste have been diverted from landfills 
since 1990. Id.
    \9\ For example, based on data submitted in annual reports filed 
by local jurisdictions with the California Integrated Waste 
Management Board (``CIWMB''), 38 of the 45 jurisdictions within Los 
Angeles County for which data was available opted for a strategy of 
utilizing MFRs, in addition to transfer stations, to meet the 
diversion mandates of A.B. 939. Data compiled by the CIWMB's Solid 
Waste Information System indicates that approximately 10,000 tons of 
waste per day (approximately 25% of the daily waste stream for the 
county) flow through transfer/processing facilities in Los Angeles 
County.
---------------------------------------------------------------------------

    With these increased handling costs now being imposed on an 
increasingly large percentage of the waste stream, the geographic 
area within which waste is transported for disposal has broadened 
considerably, and the incremental transportation cost of longer 
hauls to regional facilities has become much less significant as a 
proportion of the overall cost. Posted tip fees at large volume 
transfer stations and MRFs in Los Angeles currently average $41 per 
ton and range up to $56.65 per ton. Consequently, as the cost 
advantages of local disposal dissipate, regional facilities, which 
enjoy certain cost advantages of their own, become more competitive. 
By means of comparison to the transfer station costs cited above, 
the projected total disposal costs at the Mesquite Regional Landfill 
are $40-$45 per ton.
    Thus, even today, before the depletion of capacity at some of 
the major disposal facilities in the Los Angeles area, the Mesquite 
Regional Landfill would be cost competitive with in-county 
facilities handling waste processed through a MFR or transfer 
station. The cost equation will continue to tilt over time in favor 
of the Mesquite Regional Landfill if the facility goes forward.
    Over the course of the next few years, the difference in the 
prince of local and regional disposal will narrow as efforts to meet 
the 50% diversion rate by the year 2000 will subject a higher 
percentage of the waste flow to additional costs. As Mr. Maguin, the 
head of the Los Angeles County Solid Waste Management Department, 
recently noted, the County's needs for remote disposal could be 
greater still if the County were unsuccessful in meeting its 
diversion mandate of 50%. Ex. B, at 2. Although the estimated 
statewise diversion rate for 1997 was 32%, data compiled by the 
CIWMB's Solid Waste Information System reports that approximately 
25% of the daily waste stream for Los Angeles County flows through 
transfer/processing facilities in the county. Unless the present 
diversion rate improves dramatically, the exhaustion of local 
landfill capacity will be accelerated, and the resulting need to 
export MSW will be exacerbated in the near future. And, whether or 
not the diversion rate improves to the mandated 50% level, the cost 
advantage of local disposal will continue to dissipate.
    Requiring Waste Management to relinquish any claim to an 
interest in the Mesquite Regional Landfill will protect the public 
interest for the long term and will effectively constrain Waste 
Management's ability to increase disposal costs and lower the 
quality of service to the citizens of Los Angeles.

IV. The Harm to Competition Caused by Waste Management's Efforts To 
Block Development of the Mesquite Regional Landfill Require 
Modification of the Proposed Remedy

    Under the Tunney Act, a district court has both the power and 
the duty to review antitrust consent decrees and, in an appropriate 
case, to exercise its powers to require modification of a decree. 
``In order to prevent `judicial rubber stamping,' district courts 
are required to make an independent evaluation of proposed decrees: 
`Before entering any consent judgment * * * the court shall 
determine that the entry of such judgment is in the public 
interest.' 15 U.S.C. Sec. 16(e).'' United States v. BNS Inc., 858 F. 
2d 456, 459 (9th Cir. 1988) (quoting H.R. Rep. No. 1463, 93d Cong., 
2d Sess. 6 (1974), reprinted in 1974 U.S.C.C.A.N. 6535, 6536) 
(internal citation removed). As the Ninth Circuit noted in BNS, 
although ``Congress may specifically limit available remedies in 
defining the jurisdiction of a federal court * * * [i]n this case, 
however, it has not chosen to do so.'' Id. at 462.
    In making its independent public interest review, the 
independent analysis mandated by the Tunney Act is quite broad:

    [T]he statute clearly indicates that the court may consider the 
impact of the consent judgment on the public interest, even though 
that effect may be on an unrelated sphere of economic activity. For 
example, the government's complaint might allege a substantial 
lessening of competition in the marketing of grain in a specified 
area. It would be permissible for the court to consider the 
resulting increase in the price of bread in related areas.

Id. at 463. Thus, even though a court may not ``base its public 
interest determination on antitrust concerns in markets other than 
those alleged in the government's complaint,'' id. at 462-63, the 
court may consider broader potentially adverse effects of a decree, 
id. at 464.

    Here, the proposed remedy is not in the public interest because, 
despite the divestiture of the Chiquita Canyon facility, Waste 
Management will dominate the market for MSW disposal in the Los 
Angeles area as a result of the transaction. There are nine major 
landfills permitted to accept solid waste in Los Angeles County. 
Five of the nine, with a combined daily permitted capacity of 22,800 
tons, are owned by the county, a city, or other government agency. 
Two other facilities, with a combined daily permitted capacity of 
11,000 tons are owned by Waste Management and the remaining two 
facilities, with a daily permitted capacity of 11,000 tons are owned 
by other private companies.
    In addition to facilities within the county, the Los Angeles 
County Department of Public Works Environmental Programs Division 
recently identified 14 existing and four proposed landfills located 
outside Los Angeles County (including the Mesquite Regional 
Landfill) that had the capability of accepting MSW transported by 
rail and/or truck from Los Angeles County. See County Siting 
Element, Ex. G, at 9-8. The merged entity owns, controls, or claims 
an interest in eight out of the 18 facilities outside the county--
six existing landfills and two proposed sites, including the 
Mesquite Regional Landfill. The merged entity's disposal capacity in 
these 18 existing and proposed sites exceeds 50% of the total of the 
sites.
    As a result of the transaction, the merged entity will control 
more than half of the capacity that can serve the Los Angeles area 
in the near term, when in-County capacity is exhausted. Such control 
will give Waste Management an ability to exercise market power that 
will not be remedied by the decree. For example, the merged entity 
is likely to interfere with the rapid development of the low-cost 
Mesquite Regional Landfill.
    Given the diminishing supply of MSW disposal capacity within Los 
Angeles County, the key to Waste Management ability to exercise 
market power is whether other firms will be able to meet the 
requirements of customers in the marketplace. See United States v. 
E.I. du Pont de Nemours & Co., 351 U.S. 377, 391-92 (1956) (defining 
market power as the ``power to control prices or exclude 
competition''). This is particularly critical in a market that is 
characterized by very significant barriers to entry. ``If entry 
barriers are substantial, a market participant may be able to 
achieve or maintain market or monopoly power and use that power 
anticompetitively because its actions can go unchecked by new 
competitors.'' Reazin v. Blue Cross and Blue Shield of Kansas, 899 
F.2d 951, 974 (10th Cir. 1990). The ability of an incumbent supplier 
to frustrate the entry by competitors into the market entrenches its 
dominance by preventing the addition of capacity that would compete 
with the incumbent's facilities and restrain its ability to charge 
prices above the competitive level. Here, the transaction creates an 
incentive for the merged entity to prevent the entry of the low-cost 
Mesquite facility.
    Prior to the transaction, USA Waste had an interest in only 
three of the 18 sites outside Los Angeles County that may be 
suitable to serving the County's needs. These are the El Sobrante 
facility in Riverside County, the Mesquite Regional Landfill in 
Imperial County, and the Copper Mountain facility in Arizona. The 
incentives of the merged entity have changed dramatically because of 
its

[[Page 53719]]

newly-acquired control of more than 50% of the capacity of suitable 
out-of-county sites. Unless the Mesquite Regional Landfill is 
allowed to proceed without the interference of the merged entity, 
consumers in Los Angeles will be deprived of an entrant that will be 
able to constrain the ability of Waste Management to dominate the 
market once local capacity is depleted.
    The Los Angeles market plainly encompasses out-of-county 
facilities, including the Mesquite Regional Landfill. As noted 
earlier, Los Angeles County will soon run out of disposal capacity 
and will be forced to transfer its MSW to out-of-county facilities. 
These facilities are already becoming cost-competitive with within-
county sites and are likely to become more competitive over time as 
the diversion requirements of A.B. 939 are implemented. The relevant 
geographic market is the geographic area in which sellers of the 
particular product operate and to which purchasers can practicably 
turn for the product. Tampa Electric Co. v. Nashville Coal Co., 365 
U.S. 320, 327 (1961); Standard Oil Co. v. United States, 337 U.S. 
293, 299 n.5 (1949). This market necessarily includes the area 
within which facilities to which customers will turn for MSW 
disposal are located. See United States v. Philadelphia Nat'l Bank, 
374 U.S. 321, 359 (1963) (geographic market is ``the `area of 
effective competition * * * in which the seller operates, and to 
which the purchaser can practicably turn for supplies' ''). The cost 
relationship between local and out-of-county locations is such that 
customers will be forced to use the out-of-county disposal sites 
within the very near future because of the practical depletion of 
Los Angeles County facilities. In these circumstances, the area of 
effective competition includes out-of-county locations that are 
practical alternatives to within-county disposal, an area in which 
the merged entity is dominant. In this area, the Mesquite Regional 
Landfill is likely to be an important low-cost supplier if its entry 
into the market is not frustrated by the USA Waste-WMI transaction.
    Gold Fields requests that the Department require Waste 
Management to relinquish any claim it may have to the assets of the 
Mesquite Regional Landfill venture. Remedies requiring the 
forbearance of legal claims, such as that sought there, have been 
used by the Department in other consent decrees. In United States v. 
Thomson Corp., 1997-1 Trade Cas. (CCH) para. 71,754 (D.D.C. Mar. 7, 
1997), the complaint alleged, inter alia, that Thomson Corp.'s 
acquisition of West Publishing Co. would likely lessen competition 
in the markets for primary and secondary law products because West's 
assertion that other legal publishers needed a license in order to 
``star paginate'' its publications constituted an important barrier 
to entry. At the time, West was involved in litigation over the 
validity of its copyright claim. In order to eliminate this barrier 
to entry, the consent decree required West to grant other legal 
publishers a license to star paginate its publications on specified 
terms, effectively forcing West to renounce its claim.
    The Department has required a merged entity to relinquish legal 
claims as a condition of allowing a transaction to go forward in at 
least one prior case. In the consent decree entered into in 
connection with the complaint filed in United States v. Borland 
Int'l, Inc., Civ. Action No. C91 3666 (MHP) (N.D. Cal. 1992) the 
Department challenged the acquisition of Ashton-Tate Corporation by 
Borland International, Inc. (``Borland''), the complaint alleged 
that the effect of the acquisition would be to substantially lessen 
competition in the sale of certain software for IBM and IBM-
compatible personal computers. As set forth in the accompanying 
competitive impact statement, ``the United States sought to assure 
the continued availability of competitive alternatives by requiring 
Borland to relinquish certain copyright claims''. The purpose of the 
remedy was ``to protect against the possible exercise of market 
power by Borland after the acquisition.'' Thus, the proposed final 
judgment enjoined Borland from asserting legal claims, and directed 
Borland to dismiss with prejudice a copyright infringement suit that 
Ashton-Tate had initiated against another company. See 57 FR 8359 
(1992).
    The similar remedy sought by Gold Fields here would protect 
against the possible exercise of market power by Waste Management 
after the acquisition, as local disposal options in the Los Angeles 
area are depleted. Such a remedy is necessary to protect the public 
interest of consumers in the fast-evolving Los Angeles market.

      Sincerely,
Joseph Kattan
Michael F. Flanagan

Appendix of Exhibits to Letter Commenting on Proposed Consent 
Decree in United States v. USA Waste Services, Inc., Civ. No. 1:98 
CV 1616

    Dated: November 23, 1998.

Table of Contents

------------------------------------------------------------------------
                                                                 Exhibit
------------------------------------------------------------------------
July 28, 1995 memorandum from Richard Widrig..................         A
Eagle Mountain Public Hearing before Riverside County Planning         B
 Commission, dated Feb. 5, 1997...............................
Southern California Association of Governments study, titled           C
 ``The Feasibility of Hauling Solid Waste by Railroad From the
 San Gabriel Valley to Remote Disposal Sites,'' April 21, 1988
``Final Waste-by-Rail Master Plan,'' County Sanitation                 D
 Districts of Los Angeles County, January 1997................
``Status Report on Regional Solid Waste Management Within Los          E
 Angeles County,'' County Sanitation Districts of Los Angeles,
 January 1998.................................................
``Southern California Landfill Capacity Analysis,'' prepared           F
 by JBS associates, January 1997..............................
Los Angeles County Department of Public Works, Environmental           G
 Programs Division, County Siting Element, June 1997..........
Integrated Waste Management Board News Release, titled ``State         H
 Recognizes Communities' Recycling Success on 2nd America
 Recycles Day,'' dated Nov. 15, 1998..........................
------------------------------------------------------------------------

    Note: Exhibits A through H were unable to be published in the 
Federal Register. A copy can be obtained from the U.S. Department of 
Justice, Documents office, 325 7th St., Room 215, Washington, DC or 
(202) 514-2481.

Exhibit 10

U.S. Department of Justice Antitrust Division

August 27, 1999.
Kirk S. Rimmer, Esquire,
Offices of Arthur M. Traugh, The Pacific Stables Building, 1126 
Second Street, Old Sacramento, California 95814.

Re: Comments on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. Rimmer: This letter responds to your comment on the 
proposed Final Judgment, submitted on behalf of Coastal Waste 
Management (``Coastal''), a small waste hauler in Sacramento, CA. 
The Complaint in this case charged, among other things, that USA 
Waste's acquisition of Waste Management would substantially lessen 
competition in the collection or disposal of municipal solid waste 
in a number of markets throughout the country. In California, the 
Complaint alleged, the merger would substantially reduce competition 
in commercial waste disposal in the City of Los Angeles. The 
proposed Judgment, now pending in federal district court in 
Cleveland, Ohio, would settle the case with respect to the Los 
Angeles market by, inter alia, requiring that the defendants divest 
Chiquita Canyon Landfill, a large facility located about 40 miles 
north of Los Angeles, CA. In a transaction approved by the United 
States in August 1998, under the terms of the decree, the defendants 
divested Chiquita Canyon Landfill to Republic Services, Inc., which 
prior to the sale did not operate any waste disposal facilities in 
the Los Angeles area.
    In your letter, you expressed concern that USA Waste's 
acquisition of Waste

[[Page 53720]]

Management would also substantially reduce competition in the 
collection of commercial waste in the Sacramento area, with the 
combined firm controlling 65-80 percent of commercial waste 
collection after the merger. To eliminate the alleged adverse 
effects of the merger in this market, you suggest that we revise the 
proposed Judgment by adding provision that would, among other 
things, limit the duration of defendant's commercial waste 
collection contracts to no more than two years, with perhaps a 
single one-year renewal period.
    We believe that the defendants' divestiture of Chiquita Canyon 
Landfill to an acceptable purchaser, Republic, alleviated by 
competitive concerns created by the defendant's merger in the Los 
Angeles, CA market alleged in the Complaint. As to your statement 
that additional injunctive relief is necessary to eliminate 
competitive problems the merger would create in the Sacramento area, 
we note that at the time of the government's Complaint, we had seen 
no evidence that the defendant's merger would raise competitive 
problems warranting the imposition of the relief that you propose. 
Of course, should we find in a subsequent investigation that the 
defendant's activities have unreasonably restrained competition in 
Sacramento, CA or any other waste collection or disposal market, the 
United States will take appropriate legal action, including 
requesting that a court impose injunctive relief. Depending on the 
nature of the violation, that relief may perhaps be similar to that 
which you have outlined in your comment on this decree. In the 
meantime, if you believe that your operations have been injured as a 
result of the proposed merger, you are certainly free to institute a 
private antitrust action for damages or injunctive relief in federal 
district court.
    Thank you for brining your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. Sec. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

    Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Arthur M. Traugh

September 22, 1998.
United States Department of Justice,
New Case Unit, Attn: Dania Gorriz, 1401 H Street N.W., #3000, 
Washington, D.C. 20530.

    Dear Ms. Gorriz: I represent Coastal Waste Management, a small 
waste hauling company headquartered in Sacramento, California. For 
the reasons stated below, I am writing this letter to urge you to 
stop the proposed merger of USA Waste and Waste Management 
Incorporated (``WMI''), or, in the alternative, if the merger is 
allowed to occur, to impose certain operating restrictions on the 
merged companies. If the merger is approved without restrictions, 
the newly formed waste hauling duopoly will be ripe for a 
continuation of predatory business practices.

Summary of The Waste Hauling Business

    By way of introduction to waste hauling industry practices, we 
submit the following summary.
    There are primarily two types of waste hauling:
    (1) Small containerized bins range from two to eight cubic yards 
in size. They are predominately used to service multifamily 
apartments or industrial, retail and commercial businesses on a 
weekly or semi-weekly basis, and a customer has typically executed a 
contract or service agreement for the servicing of these bins. We 
estimate that if the merger is allowed to occur, USA Waste will 
control 65-70% of the front-loader small containerized bins in the 
Sacramento marketplace, including the only available collection 
route not run by the City or County of Sacramento.
    (2) Large drop boxes vary in size from fifteen to forty cubic 
yards. This service does not typically have a service contract.
    Some landfill operations are controlled by a company that is 
also a waste hauler, thereby creating a vertically integrated 
monopoly. The purchase of a landfill by a small waste hauler is not 
economically feasible. The problem of vertically integrated landfill 
operations and waste hauling will only be exacerbated by the recent 
passage of California Assembly Bill 939, which requires all 
California counties to recycle 50% of all accepted waste. A 
recycling center controlled by a dominant company that is also a 
waste hauler will enable the waste hauler to set monopolistic 
pricing against a small independent waste hauler.

Antitrust Problems

    Several problems currently exist that reduce competition and 
thwart the entrance of new waste haulers into the marketplace. These 
problems will be aggravated by the proposed merger. Notably, the 
Antitrust Division of the U.S. Department of Justice filed a 
complaint against WMI based on the Antitrust Procedures and 
Penalties Act (``APPA''), 5 U.S.C. 16(b)-(h), in United States 
District Court for the Southern Division of Georgia, Savannah 
Division (``Justice Complaint against WMI''). A copy of the final 
judgment in that action is enclosed for your ease of reference.
    The prohibited conduct set forth in the enclosed judgment has 
allegedly occurred, and is continuing to occur, in the Sacramento 
marketplace. The trio of predominant waste haulers in Sacramento--
BFI, WMI and USA Waste (collectively the ``Sacramento Controlling 
Companies'')--that control more than eighty percent of the front 
load marketplace have contracts which mirror the contracts subject 
to the judgment in the Justice complaint against WMI. For example, 
but without limitation, the prolix fine print contracts of the 
Sacramento Controlling Companies have automatic three-year 
``rollover'' provisions, no requirement of notice of the expiration 
of the contract prior to the automatic three-year renewal, and a 
provision for unilateral price increases. The use of the three-year 
automatic rollover provision in the contracts of the Sacramento 
Controlling Companies has made it nearly impossible for new waste 
hauling companies to enter the marketplace, since virtually every 
customer is locked into a contract with the Sacramento Controlling 
Companies. We can provide written verification that the following 
tactics have allegedly been employed by Sacramento Controlling 
Companies when other companies have attempted to enter into service 
contracts with customers who had a presently existing rollover 
contract with the Sacramento Controlling Companies:
    (1) Allegedly slandering the new hauler as to capacity, service, 
quality of equipment and adequacy of insurance; (2) Keeping service 
in place by the predominant hauler after notice was given by the 
customer to remove the bins; \1\ (3) Sending invoices to customers 
after cancellation of service; (4) Sending accounts to collection 
agencies and threatening legal recourse and liquidated damages under 
the rollover contracts, thereby chilling the resolve of customers to 
use new waste haulers; (5) Repeatedly calling and harassing 
customers who terminated their contracts, even though the customers 
continually requested that they cease calling; and (6) Reducing 
their services to below cost after a new waste hauler has submitted 
an offer for services.
---------------------------------------------------------------------------

    \1\ This occurs even when the rollover contracts have been 
cancelled according to the terms of the contract.
---------------------------------------------------------------------------

    When a customer requests a change in service, he or she is sent 
a seemingly benign letter or revised agreement which contains the 
same egregious terms stated above. Customers have repeatedly 
informed my client that they were not aware they were signing 
contracts which bound them to automatic three-year rollovers and 
unilateral price increases.

Suggestions for Enforcement Policies

    We suggest the following policies be imposed on the proposed 
merged companies:
    1. The same injunction and restraints that are set forth 
commencing at page four of the enclosed judgment in the Justice 
Complaint against WMI.
    2. That enforceability of any contract that is beyond a two-year 
period and that previously contained a three-year rollover period be 
eliminated.
    3. That options for three-year contracts be eliminated unless a 
separate document in highlighted bold print plainly states the 
three-year term, and the customer separately initials the yearly 
term.
    4. That rollover contracts beyond one year be eliminated. The 
contracts should become month-to-month after the expiration of the 
written term.
    5. That a selloff of routes in the front loader business be 
required to reduce the concentration to below fifty percent in the 
Sacramento marketplace.
    6. That ownership of landfills by waste haulers be prohibited in 
the marketplace where there is greater than fifty percent domination 
and no municipal alternative dump location.
    My client indicates that there are several other independent 
waster hauling companies in Sacramento who share my client's 
concerns as set forth in this letter, and I can

[[Page 53721]]

supply you with those names if you so desire. We are attempting to 
determine through your office the effect of the previous consent 
decrees.
    We appreciate your attention to this matter. If you have any 
questions please do not hesitate to contact the undersigned.
Kirk S. Rimmer,
Attorney for Coastal Waste and Recycling.
    Note: Attachment to the letter from Arthur M. Traugh of the 
Pacific Stables Building was unable to be published in the Federal 
Register. A copy can be obtained from the U.S. Department of 
Justice, Documents Office, 325 7th St., Room 215, Washington, DC or 
(202) 514-2481.
-----------------------------------------------------------------------


DEPARTMENT OF JUSTICE
U.S. Department of Justice Antitrust Division

August 27, 1999.
Mr. William A. Ehrman,
Executive Director, York County Solid Waste and, Refuse Authority, 
2700 Blackridge Road, York, PA 17402.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. Ehrman: This letter responds to your letter, submitted 
on behalf of the York County Solid Waste and Refuse Authority 
(``Solid Waste Authority''), commenting on the proposed Final 
Judgment pending in federal district court in Cleveland, Ohio. The 
Complaint in the case charged, among other things, that USA Waste's 
acquisition of Waste Management would substantially lessen 
competition in the disposal of municipal solid waste from the New 
York, NY and Philadelphia, PA areas. The proposed Judgment would 
settle the case with respect to these markets by, inter alia, 
requiring that the defendants divest Waste Management's Modern 
Landfill, a large facility located in York County, Pennsylvania. See 
Judgment, Secs. II(C)(1)(k) and IV(A). In a transaction approved by 
the United States in August 1998, under the terms of the decree, the 
defendants divested Modern Landfill to Republic Services, Inc., 
which prior to the sale did not operate any waste disposal 
facilities in the Philadelphia or New York areas.
    In your letter, you expressed concern that the defendants' 
divestiture of Modern Landfill may interfere with defendant Waste 
Management's contractual commitment to deliver waste to the Solid 
Waste Authority's incinerator and dispose of noncombustible material 
and ash from the incinerator. You also question whether the 
defendants' divestiture of this landfill would promote competition 
in the Philadelphia market.
    The proposed Judgment does not in any way affect the defendants' 
commitment to deliver waste to the Solid Waste Authority. Nor does 
it affect in any way their commitment to dispose of material at 
Modern Landfill. Under the terms of the proposed Judgment, Waste 
Management must divest Modern Landfill subject to any contractual 
commitments it has with the Solid Waste Authority to accept 
noncombustible material or ash for disposal. See Judgment, 
Secs. II(C) and (C)(1)(k), and IV(A) (defining landfill-related 
contracts and accounts as among the intangible assets that must be 
divested along with Modern Landfill).
    As to your concern that divesting Modern Landfill is unnecessary 
to alleviate any competitive problems created by the proposed 
merger, it suffices to say that Modern would be one of only a 
handful of landfills capable of accepting municipal solid waste from 
the Philadelphia or New York City area that is not currently owned 
or controlled by the defendants. Divesting Modern Landfill to a 
capable new competitor such as Republic will surely enhance 
competition for the disposal of waste from both of these major 
metropolitan areas.
    Thank you for bringing your concerns to our attention; we hoe 
this information will help alleviate them. Pursuant to the Antitrust 
Procedure and Penalties Act, 15 U.S.C. 16(b), a copy of your comment 
and this response will be published in the Federal Register and 
filed with the Court.

      Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

York County Solid Waste and Refuse Authority

July 24, 1998.
J. Robert Kramer II, Esq.,
Chief, Litigation II Section, Antitrust Division, U.S. Department of 
Justice, 140 H Street, NW, Suite 3000, Washington, D.C. 20008.

Re: USA Waste Acquisition of Waste Management Inc.

    Dear Mr. Kramer: On behalf of the York County Solid Waste and 
Refuse Authority (``Authority''), the following is submitted in 
response to the solicitation for written comments concerning the 
proposed acquisition of Waste Management Inc. by USA Waste Services 
Inc., as reflected in the press release issued by the Pennsylvania 
Office of Attorney General on July 16, 1998. As set forth in said 
release, Waste Management's Modern Landfill, located in York County, 
Pennsylvania, is to be sold pursuant to a proposed settlement 
presented to the U.S. District Court for the Northern District of 
Ohio in conjunction with a lawsuit filed by the Department of 
Justice and various state attorneys general in connection with the 
proposed acquisition.
    The Authority is a public entity, created under Commonwealth 
law, which is responsible for the management of municipal solid 
waste generated within the County pursuant to the County-wide Solid 
Waste Management Plan, adopted in accordance with Commonwealth law. 
In such capacity, the Authority has issued bonds for the 
construction of solid waste management facilities, and has entered 
into long-term management and disposal services agreements in 
furtherance of its responsibilities under the Plan. Among those 
agreements, the Authority is party to an agreement executed by Waste 
Management of Pennsylvania Inc. and Modern Trash Removal of York, 
Inc. This agreement was originally executed in 1990, and 
subsequently amended in 1995, and provides for the delivery of waste 
to the Authority's Resource Recovery Center and for the disposal of 
noncombustible material and ash residue material at the Modern 
Landfill until the year 2010 and through mutual agreement, until 
2020. The disposal services contemplated by the agreement are 
essential to the implementation of the Plan, which provides for 
long-term assurance of solid waste management for the citizens of 
York County.
    The Authority is, by submittal of these written comments, 
requesting that the following major concerns be taken into account 
by the Department of Justice and the District Court when considering 
the proposed settlement as described in the public release discussed 
above:
    1. The Authority is concerned that divestiture of Modern 
Landfill under the terms of the proposed settlement could adversely 
impact the ability of Waste Management and Modern Trash Removal of 
York to continue waste deliveries to the Resource Recovery Center 
and disposal services at the Modern Landfill under the Authority's 
existing agreement with those companies;
    2. The Authority questions whether divestiture of the Modern 
Landfill would enhance competition in the Philadelphia area, which 
is more than ninety miles to the east of the Modern Landfill.
    Thanking you in advance for your careful consideration of the 
comments raised herein, I remain.

      Very truly yours,
William A. Ehrman,
Executive Director.

WAE/mc
cc: The Honorable Michael Fisher, Attorney General, Waste Management 
of PA, Inc., Modern Trash Removal of York, Inc.

Exhibit 12

U.S. Department of Justice Antitrust Division

August 27, 1999.
Mr. Gregory G. Strott,
President, Calvert Trash Systems, Inc., P.O. Box 9, Owings, Maryland 
20736-0009.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al.,  Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. Strott: This letter responds to your two letters 
commenting on the proposed Final Judgment, currently pending in 
federal district court in Cleveland, Ohio. The Complaint in this 
case charged, among other things, that USA Waste's acquisition of 
Waste Management would substantially lessen competition in the 
disposal of commercial waste from the Baltimore, Maryland area. The 
proposed Judgment would settle the case by, inter alia, requiring 
that the defendants divest disposal capacity at three Baltimore area 
transfer stations owned by USA Waste and Waste Management. In a 
transaction approved by the United States in early January 1999, 
under the terms of the decree, the defendants divested that disposal 
capacity to Browning-Ferris Industries, Inc. (``BFT''), which 
previously did not own or

[[Page 53722]]

operate any waste transfer stations in the greater Baltimore area.
    In your letters, you expressed concern that the proposed 
Judgment did not eliminate the effects of USA Waste's acquisition of 
Waste Management in several markets that were not alleged in the 
governments' Complaint. Specifically, you charged that the 
defendants should be: (a) enjoined from entering into any small 
container commercial waste hauling agreements that exceed a year 
with Baltimore area customers; (b) required to divest their small 
container commercial waste hauling operations in southern Maryland; 
(c) enjoined from raising their waste disposal prices, presumably at 
any of their Maryland facilities; and finally, (d) required to 
provide their competitors access to a transfer station on the 
Eastern Shore of Maryland on the same terms on conditions as the 
defendants enjoy at that facility.
    The United States strongly believes that the ordered divestiture 
of Baltimore area disposal capacity and other injunctive relief 
contained in the proposed Judgment [see Secs. II(C)(2)(b) IV(A), 
VII(A)] will alleviate the competitive concerns alleged in the 
Complaint by introducing a major new competitor into the waste 
disposal market, capable of providing a competitive alternative to 
the defendants' own Baltimore area waste disposal facilities.
    As to your statement that additional injunctive relief is 
necessary to eliminate competitive problems the merger would create 
in Baltimore, and the southern and Eastern Shore areas of Maryland, 
we note that at the time of the governments' Complaint, we had seen 
no evidence that the defendants' merger would raise competitive 
problems warranting the imposition of the relief that you propose. 
Of course, should we find in a subsequent investigation that the 
defendants' activities have unreasonably restrained competition in 
these or any other waste collection or disposal markets, the United 
States will take appropriate legal action, including requesting that 
a court impose injunctive relief. Depending on the nature of the 
violation, that relief may perhaps be similar to that you outlined 
in your comments on this proposed Judgment. In the meantime, if you 
believe that your operations have been injured as a result of the 
proposed merger, you are certainly free to institute a private 
antitrust action for damages or injunctive relief in federal 
district court.
    Thank you for bringing your concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

    Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Calvert Trash--Systems Inc.

July 28, 1998.
John R. Tennis,
Assistant Attorney General, State of Maryland, Office of the 
Attorney General, Antitrust Division, 200 Saint Paul Place, 
Baltimore, Maryland 21202-2021.

Re: USA Waste Acquisition of Waste Management

    Dear Mr. Tennis: After reading the Final Judgement etc. I find 
several things missing:
    1. One Year Service Agreements--Why would you include this 
provision in BFI/Attwoods merger but not in USA/Waste Management?
    2. Southern Maryland Divestiture--With the merger USA/Waste 
Management controls approximately 85% of the customer base. Why is 
this not part of the Final Judgement?
    3. Eastern Shore of Maryland--Waste Management has a possible 
preferred deal with Maryland Environment Service for a transfer 
facility at the Tri-County Landfill in Easton. All haulers in this 
area should have the same ``preferred Deal''.
    Please provide answers to my questions, better yet change the 
Final Judgement to include One Year Contracts, Southern Maryland 
Divestiture and equal disposal rates on Maryland Eastern Shore.
    I eagerly await your reply.

      Sincerely yours, Calvert Trash Systems, Inc.
Gregory G. Strott,
President.
GGS/jw
cc: Anthony E. Harris Esquire, U.S. Department of Justice, Antitrust 
Division, Litigation II Section, Suite 3000, Washington, DC 20005

Calvert Trash Systems

September 15, 1998.
Robert Kramer II,
Chief, Litigation II Section, Antitrust Division, United States 
Dept. of Justice, 1401 4th Street, N.W., Washington, D.C. 20530.

    Dear Mr. Kramer: The USA/Waste Management merger reminds me of a 
song. Is That All There Is?
    Is that all the Justice Department is going to do? The 
department has really dropped the ball on this deal. My company is 
facing disposal fee increase of 14% at Waste Management controlled 
facility effective October 1, 1998. Waste Management is also 
increasing the rates to their customers by 8%.
    Please review your decision and include:
    1. One year service agreements.
    2. A limit on disposal fee increases.
    3. Greater than 50% market share--divest asset. (Southern 
Maryland, Eastern Shore Maryland)
    Please review and comment.

      Sincerely,

    P.S. I am waiting for a reply to the first letter I sent to you. 
(Copy enclosed.)
Gregory C. Strott,
President, Calvert Trash Systems, Inc.

GGS:jw
cc: John Tennis, Assistant Attorney General, State of Maryland, 
Office of Attorney General, Antitrust Division, 200 St. Paul Place, 
Baltimore, Maryland 21202-2021
Anthony E. Harris, Esquire, U.S. Department of Justice, Antitrust 
Division, Litigation II Section, Suite 3000, Washington, DC 20005

Exhibit 13

U.S. Department of Justice Antitrust Division

August 27, 1999.
Mr. Darry A. Ferguson,
Director, La Plata Recycling Center and Depository, 357 North 
Mountain View Drive, P.O. Box 1430, Bayfield, Colorado 81122.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, Filed July 16, 1998).

    Dear Mr. Ferguson: This letter responds to your letter 
commenting on the proposed Final Judgment currently pending in 
federal district court in Cleveland, Ohio. The Compliant in the case 
charged, among other things, that USA Waste's acquisition of Waste 
Management would substantially lessen competition in the collection 
or disposal of municipal solid waste in many markets throughout the 
country. The Complaint alleges that in Colorado, the proposed merger 
would substantially lessen competition in collection and disposal of 
commercial waste in the Denver area. The proposed Judgment would 
settle the case by, inter alia, requiring that the defendants divest 
commercial waste collection operations and landfill disposal 
operations in the Denver area. See Judgment, Secs. II (C)(1)(c) and 
(D)(5), and IV(A). In a transaction approved by the United States in 
August 1998, under the terms of the decree, the defendants divested 
the Denver area collection and disposal assets to Republic Services, 
Inc., which prior to the sale did not operate any waste collection 
or disposal facilities in that market.
    In your letter, you expressed concern that the United States 
have alleged a competitive problem in, and obtained relief that 
would alleviate the competitive effects of, the combination of the 
defendant's commercial and residential waste collection operations 
in the Bayfield, CO area, a small region of Colorado approximately 
150 miles southwest of the Denver metropolitan area.
    The United States strongly believes that the ordered divestiture 
of defendants' Denver area collection and disposal operations will 
alleviate the competitive concerns alleged in the government's 
Complaint by introducing a new competitor, Republic, that should 
provide a significant competitive alternative to defendants' waste 
collection and disposal services in the Denver market.
    As to your statement that additional injunctive relief is 
necessary to eliminate competitive problems the merger would create 
in the Bayfield, CO area, we note that at the time of the 
governments' Complaint, we had seen no evidence that the defendants' 
merger would create competitive problems warranting the imposition 
of the relief that you propose. Of course, should we find in a 
subsequent investigation that the defendants' activities have 
unreasonably restrained competition in the Bayfield, CO market or 
any other waste collection or disposal market, the United States 
will take appropriate legal action, including requesting that a 
court impose injunctive relief. Depending on the nature of the 
violation, that relief may perhaps be similar to that which

[[Page 53723]]

you have outlined in your comment on this decree. In the meantime, 
if you believe that your operations have been injured as a result of 
the proposed merger, you are certainly free to institute a private 
antitrust action for damages or injunctive relief in federal 
district court.
    Thank you for bringing you concerns to our attention; we hope 
this information will help alleviate them. Pursuant to the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the Court.

      Sincerely yours.
J. Robert Kramer II,
Chief, Litigation II Section.

Plata Recycling Center and Depository

June 26, 1998.
Mr. Fred H. Parmenter, Esq.,
U.S. Department of Justice, Anti-Trust Division, City Center 
Building, 1401 H. St, NW., Washington, DC 20530.

Re: Retail Waste Monopoly, Waste Management & USA Waste Services, 
Inc Merger, La Plata, Montezuma, and Archuleta, Counties, Colorado

    Dear Mr. Parmenter: We are writing you this letter to acquaint 
you with the local effect of the pending merger between Waste 
Management and USA Waste Services, Inc., the $20 billion merger 
between the number 1 and number 4 waste companies in the U.S. 
Locally these companies compete under the names of Waste Management 
and Baker Sanitation. Prior to this merger the two companies have 
competed against each other in the commercial and residential waste 
collection markets in our local region.
    The LaPlata Recycling Center and Depository is a privately-owned 
landfill, recently permitted and constructed under the Subtitle D 
requirements of the Resource Conservation Recovery Act. It was 
opened in July, 1997 and provided the opportunity for retail waste 
collection competition to southwest Colorado. Since opening, our 
biggest customer has been Baker Sanitation, a subsidiary of USA 
Waste Services, Inc. It should be noted that Waste Management has 
not used our landfill even though their landfill is located some 40 
miles further south in New Mexico. As a competitor landfill to Waste 
Management, Waste Management has elected to burden the consumer with 
higher prices rather that use our disposal facility, which meets the 
same regulatory stringency as their landfill located some 40 miles 
away. Some of these higher prices were mitigated by the competition 
created by Baker Sanitation, using our landfill as a disposal site.
    Over the last year, the results of their competition can be seen 
across the area by a lowering of consumer costs from 20% to 40% for 
each category of customer. Examples of the lowering of prices from 
competition between the two companies are as follows:
     Fort Lewis College had their annual waste cost for 1998 
reduced by some 42% (from $68,000 to $39,500) when USA Waste 
competitive bidding brought an alternative to the college for Waste 
Management.
     The town of Bayfield, Colorado had the residential 
collection cost for 1998 and future years reduced from $11.80 per 
month to $8.90 per month (25% reduction in price) when competitive 
bidders to Waste Management came to the area.
     The average rural residential consumer had their price 
brought down 18%, from $19.25 per month to an average of $16.00 per 
month, when the two companies bid for the business.
    Now that these two industry giants are merging, the citizens of 
the southwest Colorado counties will have no competitive 
alternatives and they will again face unregulated price gouging from 
the combined entity.
    With this letter we are seeking your intervention to have one of 
the companies divest their retail operations in the above counties 
to maintain the competitive nature of waste collection. As you know, 
the merger is proposed to be closed in the next few weeks, so your 
attention in the near-term would be greatly appreciated.
    Additionally, I will be most happy to visit with you or your 
staff concerning this very important issue and the details of our 
local needs. I hope your schedule will permit your attention to this 
matter, for it is the average resident and each commercial business 
who will suffer from the price abuse from the monopoly created by 
this merger.
    Thank you for the opportunity to discuss this matter with you.
      Sincerely,
Darry A. Ferguson,
Director.

Exhibit 14

U.S. Department of Justice Antitrust Division

August 27, 1999.
Mr. Conrad S. Magnuson,
261 Route 125, Kingston, NH 03848.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al., v. USA Waste Services, Inc., Waste Management, Inc., 
et al., Civil No. 98-1616 (N.D. Ohio filed July 16, 1998)

    Dear Mr. Magnuson: Thank you for your letter commenting on the 
proposed Final Judgment submitted for entry in the above case. Your 
letter indicates that you are a caretaker for a city landfill in 
Kingston, NH, and that Waste Management, Inc. recently acquired two 
local haulers, SDW and Astro, who account for much of the volume of 
waste delivered to the city landfill. Waste Management, however, has 
assured you that its acquisitions will not affect the amount of 
waste it delivers to the Kingston landfill since the company's own 
landfill in Rochester, NH, is full. (You have promised to let us 
know whether Waste Management later reneges on this commitment.)
    In deciding whether entry of the proposed Final Judgment would 
be in the public interest, the Court's principal task is to 
determine whether the relief contained in the proposed decree 
adequately addresses the competitive concerns alleged in the 
governments' Complaint. By this standard, we find it very difficult 
to see how your private contractual dispute with the defendants 
bears on the competitive merits of the proposed Judgment. The 
governments' Complaint does not allege that the proposed merger 
would create any competitive problems in the Manchester, NH area, 
nor does the proposed Judgment contain any relief concerning the 
Manchester area. If you believe that the merger would create 
significant competitive problems in that area, then you are free to 
file a private action against the proposed merger.
    Thank you for bringing your concerns to our attention. Pursuant 
to the Antitrust Procedures and Penalties Act, 15 U.S.C. Sec. 16(d), 
a copy of your comment and this response will be published in the 
Federal Register and filed with the decree court.

  Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

    Note: Letter dated October 14, 1998 from Conrad L. Magnusson was 
not able to be published in the Federal Register. A copy can be 
obtained from the U.S. Department of Justice, Documents office, 325 
7th St., Room 215, Washington, DC or (202) 514-2481.

Exhibit 15

U.S. Department of Justice, Antitrust Division

August 27, 1999.
Daniel J. Roth, Esquire,
Kommers & Roth,
Bridger Professional Center,
517 South 22nd Avenue, Suite 5,
Bozeman, Montana 50718-6842.

Re: Comment on Proposed Final Judgment in United States, State of 
Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et 
al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

    Dear Mr. Roth: Thank you for your letter commenting on the 
proposed Final Judgment submitted for entry in the above case. Your 
submission largely consists of copies of a complaint and other 
pleadings filed by your client, Three Rivers Disposal Co., in a 
lawsuit against defendants USA Waste Services, Inc. and Waste 
Management, Inc. in Montana state court. In that suit, Three Rivers 
contends that USA Waste's acquisition of Waste Management would 
violate Waste Management's agreement not to compete with Three 
Rivers in hauling waste in the Bozeman, Montana area.
    In deciding whether entry of the Final Judgment would be in the 
public interest, the Court's principal task is to determine whether 
the relief contained in the proposed decree adequately addresses the 
competitive problems that the United States has alleged in its 
Complaint. By this standard, it is difficult to see how Three Rivers 
Disposal's private contractual dispute bears on the competitive 
merits of the proposed Final Judgment in this case. The Complaint in 
the case does not allege that the defendants' proposed merger would 
create a competitive problem in the Bozeman area, and for that 
reason, the proposed Judgment contains no relief relating to the 
Bozeman market. Of course, if you believe that the merger would 
create significant competitive problems in that area, then you are 
free to file a private action against the defendants' proposed 
merger, as it appears you have, in fact, done.
    Thank you for bringing your concerns to our attention. Pursuant 
to the Antitrust

[[Page 53724]]

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your 
comment and this response will be published in the Federal Register 
and filed with the decree court.

      Sincerely yours,
J. Robert Kramer II,
Chief, Litigation II Section.

Kommers & Roth

September 9, 1998.
Anthony E. Harris,
U.S. Department of Justice,
Antitrust Division--Litigation II Section,
Suite 3000,
Washington, DC 20005.

Re: Three Rivers Disposal, Inc. v. Waste Management, Inc., et al. 
Eighteenth Judicial District Court--Gallatin County, Montana Cause 
No: DV 98-266

    Dear Mr. Harris: Enclosed for your information, and as a comment 
to the proposed acquisition of Waste Management, Inc. by USA Waste 
Services, Inc., referencing that proposed Consent Decree entered in 
the United States District Court, Northern District of Ohio, Eastern 
Division, captioned United States of America, et al v. USA Waste 
Services, Inc.; Dome Merger Subsidiary; and Waste Management, Inc., 
Cause No: 1:98CV-1616, please find the following pleadings filed in 
the Montana Eighteenth Judicial District Court, Gallatin County, 
Cause No: DV 98-266:
    1. Summons;
    2. Verified complaint;
    3. Motion For Preliminary Injunction;
    4. Brief In Support Of Motion For Preliminary Injunction;
    5. Order To Show Cause.
    This matter is scheduled for hearing on October 2, 1998, before 
the Honorable Mike Salvagni, State of Montana, Eighteenth Judicial 
District Court Judge, upon plaintiffs application to enjoin the 
waste hauling activities of USA Waste Services, Inc., 
d/b/a Customized Services of Bozeman, Montana and Waste Management, 
all of which are alleged to be in violation of a non-competition 
agreement contained within that certain asset purchase agreement 
attached to plaintiffs' Verified Complaint.
    Should you wish to discuss any of this, please do not hesitate 
to contact the undersigned.

      Sincerely yours,
Daniel J. Roth.

DJR/rss
Enclosures
cc: Jerrold E. Arbini

Montana Eighteenth Judicial District Court, Gallatin County

[Cause No. DV 98-266]
    Three Rivers Disposal, Inc., a Montana corporation and Jerrold 
E. Arbini, Individually, Plaintiffs, v. Waste Management Partners, 
Inc., a Delaware corporation, Waste Management Partners of Bozeman, 
Ltd., an Illinois Limited partnership, a/k/a JVCo., Waste Management 
of Colorado Inc., a Colorado corporation; U.S.A. Waste Services, 
Inc., d/b/a Customized Services of Bozeman, Montana, Harry Ellis, 
and WMX Technologies, Inc., a/k/a Waste Management, Inc., 
Defendants.

Order To Show Cause

    Pursuant to Motion for Preliminary Injunction of Plaintiffs and 
good cause appearing, it is hereby ordered:
    That the parties shall appear before this Court on the 2nd day of 
October 1998, at 9:30*a.m. at which time Defendants must show cause, if 
any they have, why the injunctive relief sought by Plaintiffs should 
not be granted.

    Dated this 4th day of September, 1998.
Hon. Mike Salvagni,
District Judge.

    *Case #2 on the Court's calendar.
Lorraine Van Ausdol,
Clerk of District Court in and for Gallatin County, State of Montana.

    By:
Kim Bladeau,
Deputy.

James M. Kommers
Daniel J. Roth
Ralph W. Steele,
Kommers & Roth, Bridger Professional Center, 517 So. 22nd Avenue, 
Suite 5, Bozeman, MT 59718, (406) 587-7717

Attorneys for Plaintiffs

Montana Eighteenth Judicial District Court, Gallatin County

[Cause No: DV98-266]
    Three Rivers Disposal, Inc., a Montana corporation and Jerrold 
E. Arbini, Individually, Plaintiffs, v. Waste Management Partners, 
Inc., a Delaware corporation, Waste Management Partners of Bozeman, 
Ltd., an Illinois Limited Partnership, a/k/a JVCo., Waste Management 
of Colorado, Inc., a Colorado corporation; U.S.A. Waste Services, 
Inc., d/b/a Customized Services of Bozeman, Montana, Harry Ellis, 
and WMX Technologies, Inc., a/k/a Waste Management, Inc., 
Defendants.

Summons

    The State of Montana Sends Greetings to the Above-Named 
Defendant:

U.S.A. Waste Services, Inc., d/b/a Customized Services of Bozeman, 
Montana

    You are hereby summoned to answer the Complaint in this action, 
which is filed in the office of the Clerk of Court, a copy of which 
is herewith served upon you, and to file your answer and serve a 
copy thereof upon the Plaintiffs' attorney within twenty days after 
the service of this Summons, exclusive of the day of service; in 
case of your failure to appear or answer, judgment will be taken 
against you by default for the relief demanded in the Complaint.
    Witness my hand and the seal of said Court this 24th day of 
August 1998.
Lorraine Van Ausdol,
Clerk of Court.

    By: Mary Ann Hostetler,
Deputy Clerk.
James M. Kommers
Daniel J. Roth
Ralph W. Steele,
Kommers & Roth, Bridger Professional Center, 517 So. 22nd Avenue, 
Suite 5, Bozeman, MT 59718, (406) 587-7717

Attorneys for Plaintiffs

Montana Eighteenth Judicial District Court, Gallatin County

[Cause No. DV98-266]
    Three Rivers Disposal, Inc., a Montana corporation and Jerrold 
E. Arbini, Individually, Plaintiffs, v. Waste Management Partners, 
Inc., a Delaware corporation, Waste, Management Partners of Bozeman, 
Ltd., an Illinois Limited Partnership, a/k/a JVCo., Waste Management 
of Colorado, Inc., a Colorado corporation; U.S.A. Waste Services, 
Inc., d/b/a Customized Services of Bozeman, Montana, Harry Ellis, 
and WMX Technologies, Inc. a/k/a Waste Management, Inc., Defendants.
    The State of Montana Sends Greetings to the Above-Named 
Defendant:

WMX Technologies, Inc., a/k/a Waste Management, Inc.

    You are hereby summoned to answer the Complaint in this action, 
which is filed in the office of the Clerk of Court, a copy of which 
is herewith served upon you, and to file your answer and serve a 
copy thereof upon the Plaintiffs' attorney within twenty days after 
the service of this Summons, exclusive of the day of service; in 
case of your failure to appear or answer, judgment will be taken 
against you by default for the relief demanded in the Complaint.
    WITNESS my hand and the seal of said Court this 24th day of 
August, 1998.
Lorraine Van Ausdol,
Clerk of Court.

    By:
Mary Ann Hostetler,
Deputy Clerk.

James M. Kommers
Daniel J. Roth
Ralph W. Steele,
Kommers & Roth, Bridger Professional Center, 517 South 22nd Avenue, 
Suite 5, Bozeman, MT 59718, (406) 587-7717

Attorneys for Plaintiffs

Montana Eighteenth Judicial District Court, Gallatin County

[Cause No. DV98-266]
    Three Rivers Disposal, Inc., a Montana corporation and Jerrold 
E. Arbini, individually, Plaintiffs, v. Waste Management Partners, 
Inc., a Delaware corporation, Waste Management Partners of Bozeman, 
Ltd., an Illinois Limited Partnership, a/k/a JVCo., Waste Management

[[Page 53725]]

of Colorado, Inc., a Colorado corporation; U.S.A. Waste Service, 
Inc., d/b/a Customized Services of Bozeman, Montana, Harry Ellis, 
and WMX Technologies, Inc., a/k/a Waste Management, Inc., 
Defendants.

Verified Complaint

    The Plaintiffs, hereinafter for convenience may be collectively 
referred to as ``Three Rivers'', for their claim against the 
Defendants, states:
    1. Three Rivers Disposal, Inc., is a Montana corporation with its 
principal place of business in Bozeman, Montana. Jerrold E. Arbini is a 
sole shareholder of Three Rivers Disposal, Inc. and is a resident of 
Bozeman, Gallatin County, Montana. Three Rivers Disposal is a common 
carrier holding a certificate from the Montana Public Service 
Commission to provide waste collection within Montana.
    Count I of this action is brought to enforce the terms of a written 
contract between Three Rivers and the Defendants, that contains a 
covenant not to compete in Section 6.7 which is to be performed in 
Gallatin, Madison and other counties within Montana. This is the 
operating area within which Three Rivers obtains almost all of its 
revenues.
    Count II of this action claims damages by Three Rivers against 
defendants for violation of the Montana Unfair Trade Practices and 
Consumer Protection Act of 1973, which may for convenience be referred 
to as ``UTPA''.
    Count III of this action alleges actions by defendants constituting 
international interference with contractual relations.

Count I

    2. On or about March 1, 1996, Waste Management of Colorado, Inc., a 
Colorado corporation; Waste Management Partners, Inc., a Delaware 
corporation; Waste Management Partners of Bozeman, Ltd., an Illinois 
Limited Partnership therein referred to as ``JVCo.'', or as sellers, 
and Three Rivers Disposal, Inc., a Montana corporation and Jerrold E. 
Arbini, purchasers, entered into a buy-back transaction in the form of 
an Asset Purchase Agreement through which Three Rivers re-acquired from 
the sellers all their right, title, and interest in its refuse 
collection business as well as equipment and other assets. The sellers 
themselves, as well as acting on behalf of WMX Technologies, Inc., a/k/
a Waste Management, Inc., covenanted they would not have any interest, 
direct or indirect, in any business in competition with Three Rivers 
Disposal, Inc. WMX Technologies, Inc., a/k/a Waste Management, Inc., is 
a necessary party to this action because of the contractual obligations 
imposed by its agents or representatives. Additionally, Waste 
Management, Inc. owns or controls all of the other defendant 
corporations which were signatories to the Asset Purchase Agreement. 
Even though Waste Management, Inc. was not a signatory to the Asset 
Purchase Agreement, because of its corporate relationship to the 
sellers, it is bound by the provisions of the restrictive covenant.
    3. Waste Management of Colorado, Inc., Waste Management Partners, 
Inc., and Waste Management Partners of Bozeman, Ltd., contracted as 
parties to the agreement, neither they nor WMX Technologies, Inc., or 
any successors in interest would engage in any business, directly or 
indirectly, in competition with Three Rivers in Gallatin County, 
Madison County, Park County, Broadwater County and Sweetgrass County, 
Montana.
    The Asset Purchase Agreement dated March 1, 1996, is attached 
hereto as Exhibit ``A'' and incorporated herein by reference.
    4. The covenant not to compete specially provides in part:

    In the event of a breach of any covenant contained in this 
Section 6.7, Three Rivers shall be entitled to an injunction 
restraining such breach in addition to any other remedies provided 
by law or equity.

    Prior to July 16, 1998, U.S.A. Waste Services, Inc. acquired 
Customized Services, a business already in direct competition with 
Three Rivers.
    5. On or about July 16, 1998, U.S.A. Waste Services, Inc., acquired 
WMX Technologies, Inc., a/k/a Waste Management, Inc. as well as all of 
the sellers' interest in the March 1, 1996 Asset Purchase Agreement, 
these sellers being Waste Management Partners, Inc., a Delaware 
corporation, Waste Management Partners of Bozeman, Ltd., an Illinois 
Limited Partnership, a/k/a JV Co., Waste Management of Colorado, Inc., 
a Colorado corporation, and are now bound by its terms.
    6. Defendants, as successors in interest, are now in violation of 
the terms of the Asset Purchase Agreement because Customized Services 
is in direct competition with Plaintiffs within almost the entire 
operating area served by the Plaintiffs' refuse collection business. 
U.S.A. Waste Services, Inc. and Defendants operate their business in 
competition with Plaintiffs pursuant to a certificate issued by the 
Montana Public Service Commission which overlaps and duplicates almost 
all of the operating rights set forth in the Plaintiffs' certificate of 
public convenience and necessity.
    7. Three Rivers tendered written demand to Defendants to cease and 
desist any and all competition in violation of Section 6.7 of the Asset 
Purchase Agreement by letter dated July 28, 1998.
    8. The full nature and extent of Plaintiffs' damages associated 
with the Defendants' breach of the contract cannot be ascertained. 
Pecuniary compensation would not afford adequate relief because the 
Defendants have and will continue to be capable of accessing 
confidential and proprietary information such as pricing policies, 
customer lists and even the rates charged by Three Rivers, all to the 
detriment of Three Rivers. Three Rivers, because of the breach of this 
restrictive covenant, will lose their customer base which cannot be 
restored, rendering Three Rivers unable to service their debts to 
Defendants which results in a double punishment to Three Rivers and 
provides a double benefit to Defendants. Plaintiffs have incurred court 
costs and attorney fees and other damages for which they are entitled 
to indemnification from defendants pursuant to Section 6.2 of the 
Agreement well as specific Performance in the form of injunctive relief 
pursuant to Section 6.2 of the Agreement as well as Section 6.7 of the 
Agreement.
    9. Plaintiffs are entitled to an order of specific performance of 
the covenant not to compete since both parties anticipated this being 
the only equitable remedy when they agreed to injunctive relief in 
Section 6.7 in the Asset Purchase Agreement.

Count II

    10. Plaintiffs reallege and incorporate by reference all preceding 
paragraphs herein.
    11. Defendants have violated the Unfair Trade Practices and 
Consumer Protection Act, MCA Sec. 30-14-101, et seq. Defendants have 
and are now engaged in a wilful, deliberate and intentional course of 
conduct which constitutes unfair and discriminatory practices by which 
fair and honest competition is destroyed or prevented.
    12. The anti-competitive, unfair and discriminatory practices by 
defendants include engaging in:
    (a) Unfair competition in sales (MCA Sec. 30-14-207), including but 
not limited to, submitting and performing exceedingly low bids for 
refuse collection services at price levels which are far lower than any 
reasonable, competitive price, with the intent to destroy competition 
by plaintiffs, a regular established dealer of the same article of 
commerce.
    (b) Anti-competitive conduct by wrongfully soliciting and taking 
over plaintiff's existing customers.

[[Page 53726]]

    (c) Price discrimination in violation of Sec. 30-14-901, making it 
unlawful for any business to discriminate, directly or indirectly, the 
price charged to different purchasers of commodities of like grade and 
quality with the affect of substantially lessening, injuring, 
destroying or preventing competition with another business.
    (d) Purposely and intentionally, with the intent of destroying or 
eliminating competition, undercutting pricing and services charged for 
refuse collection to purchasers of commodities of like grade and 
quality.
    13. Some or all of the defendants have engaged in unfair 
competition in sales and price discrimination alleged herein because 
defendants have possession of and access to confidential and 
proprietary information about Three Rivers' collection operation 
including Three Rivers' customer base, customer list, rates and pricing 
policies.
    14. As a result of defendants' violations of the UTPA plaintiffs, 
in addition to injunctive relief, are entitled to three (3) times the 
amount of actual sustained plus attorney fees and costs provided in MCA 
Sec. 30-14-906.

Count III

    15. Plaintiffs reallege and incorporate by reference all preceding 
allegations contained herein.
    16. Defendants and their agents have engaged in a systematic, 
intentional course of conduct which has included making false, 
misleading and defamatory statements concerning Three River's business 
practices and policies to existing customers of Three Rivers in order 
to illegally eliminate competition in the relevant service area in 
which only the defendants and Three Rivers can service under their 
certificates.
    17. As a direct and proximate result of defendants' actions, 
defendants have caused substantial economic impairment and damage to 
Three River in an amount to be determined at trial.
    Wherefore, for its claims against Defendants, Plaintiffs demand 
judgment as follows:
    A. For injunctive relief and specific performance, on an expedited 
hearing basis, by preliminary and permanent injunction of this court to 
prohibit the Defendants or any of their associated or affiliated 
corporations, partnerships, businesses or sole proprietorships from 
operating directly or indirectly in violation of the covenant not to 
compete within the entire area set forth in Section 6.7 of the 
Agreement;
    B. For all monetary damages arising from Section 6.7 of the Asset 
Purchase Agreement in an amount to be determined;
    C. For all monetary damages arising from Section 6.2 for 
indemnification for all damages for which Defendants agreed to be 
responsible;
    D. For all monetary damages arising from the Montana Unfair Trade 
Practices and Consumer Protection Act including three (3) times actual 
damages plus attorney fees and costs of suit;
    E. For all monetary damages arising from defendants interference 
with contractual relations in an amount to be determined;
    F. For plaintiffs' costs and reasonable attorney fees associated 
with prosecuting this action;
    G. For such other remedies provided by law or equity contemplated 
by the contract terms which may be identified during the course of this 
action; and,
    H. For such other and further relief deemed just and proper by the 
Court.

    Dated this 24th day of August, 1998.

Kommers & Roth, 517 S. 22nd Ave., Suite 5, Bozeman, MT 59718-6842, 
(406) 587-7717

    By:
James M. Kommers
Daniel J. Roth
Ralph W. Steele,

Demand for Jury Trial

    Plaintiffs demand that all issues of fact be tried by a jury of 
twelve.

Kommers & Roth, 517 S. 22nd Ave., Suite 5, Bozeman, MT 59718-6842, 
(406) 587-7717

    By:
James M. Kommers
Daniel J. Roth
Ralph W. Steele

Verification

State of Montana, County of Gallatin

    Jerrold E. Arbini, being first duly sworn upon oath, deposes and 
says as follows:
    1. That he is the individual Plaintiff and sole shareholder of 
Three Rivers Disposal, Inc. herein; and
    2. That he has read the foregoing Complaint, and the information 
contained therein is true and accurate to the best of his knowledge and 
belief.
Jerrold E. Arbini

    Subscribed and Sworn to before me this 24th day of August, 1998.
Daniel J. Roth,
Notary Public, State of Montana, Residing at: Bozeman. May commission 
expires: 2/27/99.

Asset Purchase Agreement

    This Asset Purchase Agreement (the ``Agreement'') is made this 
first day of March, 1996, by and among the following persons and 
entities.
    (a) WASTE MANAGEMENT OF COLORADO, INC., a Colorado corporation, 
referred to as ``WMI Colorado'', herein;
    (b) WASTE MANAGEMENT PARTNERS, INC., a Delaware corporation 
referred to as ``Partners'' herein; and together with WMI Colorado, the 
``Sellers'';
    (c) WASTE MANAGEMENT PARTNERS OF BOZEMAN, LTD., an Illinois limited 
partnership referred to as ``JVCo.'' herein;
    (d) THREE RIVERS DISPOSAL, INC., a Montana corporation referred to 
as ``Three Rivers'' herein. Three Rivers is the successor to Three 
Rivers Disposal, a Montana general partnership;
    (e) JERROLD E. ARBINI, the sole shareholder of Three Rivers, who is 
referred to as the ``Owner'' herein.

Recitals

    A. On April 5, 1984, Waste Management Inc. (``Partners''), Waste 
Management Partners of Bozeman, Ltd. (``JVCo.''), Three Rivers Disposal 
(``Company'' or ``Operator'') and Jerrold Arbini (along with 
individuals Gross and Nicoletti who no longer have any interest in any 
asset dealt with herein) entered into an agreement represented by the 
following documents: (i) Limited Partnership Agreement dated April 5, 
1984, between Three Rivers Disposal and Sellers (the ``Partnership 
Agreement''); (ii) Account Purchase Agreement dated April 5, 1984, by 
and among Partners, JVCo., Three Rivers Disposal, Owner and Richard A. 
Gross and John Nicoletti; (ii) Operating Agreement dated April 5, 1984, 
by and among Partners, JVCo., Owner and Richard A. Gross and John 
Nicoletti (and amendment thereto); (iv) Services Agreement dated April 
5, 1984, between Partners and Three Rivers Disposal; (v) Cross-Purchase 
Agreement dated April 5, 1984, and among Three Rivers, Partners, JVCo., 
Owners and Richard A. Gross and John Nicoletti; (vi) an Acquisition 
Participation Agreement No. 1; and (vii) a Lease Agreement (by which 
the company leased its permits to JVCo.). These agreements, excluding 
the Partnership Agreement, are hereinafter collectively referred to as 
the ``Other Agreements''.
    B. Partners desire to sell, transfer and assign to Three Rivers and 
Three Rivers desires to purchase from Partners all of its right, title 
and interest in JVCo. WMI Colorado desires to sell, transfer and assign 
to Three Rivers and Three Rivers desires to purchase from WMI Colorado 
certain equipment. The parties also desire to restructure certain 
obligations among themselves and to settle conflicting claims between 
themselves.

[[Page 53727]]

Agreements

    In consideration of the premises and the mutual representations, 
warranties and covenants and subject to the conditions herein 
contained, the parties agree as follows:

1. Purchase and Sale: Closing

    Section 1.1  A Summary of Payments: The following is a summary of 
the payments agreed to be made for the consideration stated, all as 
more particularly described in this Part 1.

$1,156,000.00--JVCo. Consideration (See Section 1.2)
$151,344.00--Equipment purchased (See Section 1.3)
$254,153.68--Back lease payments (See Section 1.4)
$75,000.00--Equipment credit (See Section 1.5)
$1,486,497.68--Total consideration from Three Rivers to Sellers

    Section 1.2  JVCo. Interest: Partners agrees to and hereby does 
sell, transfer, assign and deliver to Three Rivers at the Closing (as 
hereinafter defined) free and clear of all liens, claims and 
encumbrances, except for the security interest granted to WMI Colorado 
pursuant to Section 6.3 hereof, all of its right, title and interest in 
and to JVCo., such general partner interest and limited partner 
interest being hereinafter collectively referred to as the ``JVCo. 
Interest'', and including without limitation the following: its share 
of the capital, profits, losses and distributions of JVCo., its 
interest in the accounts receivable of JVCo. and any interest in JVCo. 
litigation and/or causes of action which are accrued or unaccrued, 
filed or as yet unfiled. Pending litigation includes but is not limited 
to litigation against  Montana  Bank of Bozeman/Norwest Bank. Partners 
shall execute and deliver at Closing a Transfer and Assignment in the 
form set out on Exhibit 1.2 hereto. Three Rivers shall pay to Partners 
the sum of $1,156,000.00 in consideration of said transfer.
    Section 1.3  Equipment: WMI Colorado agrees and hereby does 
(effective at Closing) sell, transfer, assign and deliver to Three 
Rivers free and clear of all liens, claims and encumbrances, except for 
the security interest granted to WMI Colorado pursuant to Section 6.3 
hereof, the trucks and containers referred to as the ``Equipment'' and 
described as follows:

1987 White with Heil SL
2960--96 gallon carts
80 300/400 gallon carts
208--64 gallon carts

Three Rivers shall pay as set out herein a purchase price of 
$151,344.00 subject to the credit described at section 1.5 herein. WMI 
Colorado shall execute and deliver at Closing an Assignment and Bill of 
Sale in the form set out in EXHIBIT 1.3 attached hereto. Sellers shall 
obtain and deliver to Three Rivers at closing a document which extends 
to Three Rivers the warranty provided by the original manufacturer of 
the carts to its first purchaser.
    Section 1.4  Accrued and Unpaid Lease Payments: As of October 31, 
1995, Three Rivers owes to WMI Colorado the sum of $254,153.68, 
representing accrued but unpaid payments for the equipment presently 
rented to Three Rivers by WMI Colorado. Three Rivers agrees to repay 
such amount at the Time of Closing by delivery of a guaranteed 
promissory note in the aggregate principal amount of $254,153.68 
payable in thirty-six (36) consecutive monthly installments of 
principal together with interest computed at an annual rate equal to 
6%. WMI Colorado hereby waives any other rental payments due through 
February of 1996. Three Rivers shall pay lease payments under the Lease 
Agreement in a timely fashion from and after March 1, 1996, and from 
March 1, 1996, the 13.6% of gross paid to Sellers under the original 
agreement is suspended.
    Section 1.5  Credit of $75,000: As partial consideration for the 
agreement to lease set out in Section 1.8, WMI Colorado agrees to 
accept and Three Rivers shall transfer to WMI Colorado at Closing the 
following equipment:

3 Front End Loader Trucks
60 Front End Loader Containers 6 cy and 8 cy

    The three FEL Trucks are identified as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                             Size
               #                   Vin      Year          Model               Body           (yd)      License
----------------------------------------------------------------------------------------------------------------
1. 211.........................     3770     1989  Peterbuilt........  Amrep.............       42  3U63109
2. 76..........................     6096     1983  White.............  Amrep.............       32  648QXJ
3. 77..........................     8812     1979  International.....  Dempster..........       28  1N29020
----------------------------------------------------------------------------------------------------------------

This equipment shall be free and clear of all liens, claims and 
encumbrances and shall have an agreed value of $75,000, which sum is a 
credit as indicated in Section 1.1.

$220,000.00--Cash Payment [See 1.6(a)]
$11,000.00--Cash Payment [See 1.6(b)]
$936,000.00--Promissory Note [See 1.6(c)]
$65,344.00--Promissory Note [See 1.6(d)]
$254,153.68--Promissory Note [See 1.6(e)]
$1,486,497.68--Total Consideration

    (a) At Closing Three Rivers shall pay to Partners the sum of 
$220,000 as partial payment of the JVCo. consideration described in 
Section 1.2.
    (b) At Closing Three Rivers shall pay to WMI Colorado the sum of 
$11,000 partial payment of the Section 1.3 equipment purchase.
    (c) At Closing Three Rivers shall deliver to Partners a guaranteed 
note in the face amount of $936,000 which note is the balance of the 
JVCo. consideration described in Section 1.1 and 1.2. The terms of this 
note shall be as follows: (a) Interest shall be 6% per annum; (b) 
Payments shall commence on the first day of the month next following 
Closing; (c) Payments shall be in an amount which will retire principal 
and interest over ten years in 120 equal, monthly payments; (d) Payment 
shall be due on the first of each and every month over the ten-year 
period; The form of the note shall be as in EXHIBIT 1.6(c) attached 
hereto.
    (d) At Closing Three Rivers shall deliver to WMI Colorado a 
guaranteed note in the face amount of $65,344.00 which note is the 
balance of the Section 1.3 equipment purchase consideration ($151,344 
less the $11,000 in cash, less the $75,000 credit). The form and terms 
of this note shall be as set out on EXHIBIT 1.6(d) which is attached 
hereto.
    (e) At Closing Three Rivers shall deliver to WMI Colorado a 
guaranteed note in the face amount of $254,153.68 which note reflects 
the accrued payment consideration described in Section 1.4. The format 
and terms of this note shall be as set forth in EXHIBIT 1.6(e) attached 
hereto.
    Section 1.7  Returned Vehicles: Three Rivers has returned two 1993 
White FEL vehicles and a 1992 Ford Service Truck which were subject to 
an oral agreement that is now terminated.
    Section 1.8  Lease of Vehicles to Three Rivers: At Closing Three 
Rivers shall execute a separate lease agreement with respect to two 
1993 White side

[[Page 53728]]

load vehicles, which lease shall be effective from and after March 2, 
1996. Said lease shall remain in effect for the shorter of the 
following periods: (a) Until June 30, 1996, or (b) until replacement 
vehicles (Witkie, automated side loader trucks) purchased by Three 
Rivers are delivered. Upon termination of the written lease by the 
occurrence of one of the stated conditions, Three Rivers shall return 
the leased vehicles to WMI Colorado. The monthly rental payment for 
said vehicles shall be $3,949 which sum shall be paid as a monthly 
lease payment from Three Rivers to WMI Colorado until return of the 
vehicles. Where inconsistent, the lease shall control over the terms of 
this paragraph.
    Section 1.9  This Section Is Deleted.
    Section 1.10  Time of Closing: The Closing of the sale of the JVCo. 
Interest (the ``Closing'') shall take place on the date all of the 
conditions precedent contemplated by Section 1.11 have been satisfied 
or waived and the contents of the escrow contemplated thereby have been 
released (the ``Time of Closing''); provided that, if the Closing shall 
not have taken place on or before May 30, 1996, any party to this 
Agreement shall have the right to terminate this Agreement upon 10 days 
written notice to the other parties.
    Section 1.11  Escrow: Closing Procedure:
    (a) This Agreement shall be executed and delivered on or before 
March 1, 1996. Within seven days of such execution and delivery, the 
parties shall execute and deliver to counsel for the Sellers the 
following documents, to be held in escrow pending their release as 
contemplated by paragraph (b) below:
    (i) The Sellers shall execute and deliver to counsel such bills of 
sale and other instruments in such form as is reasonably satisfactory 
to Three Rivers and as shall be sufficient to vest in Three Rivers good 
and marketable title to the JVCo. Interest and the Equipment, free and 
clear of all liens, claims and encumbrances, except as contemplated by 
Section 6.3 hereof;
    (ii) Three Rivers shall deliver to Sellers' counsel $220,000 in 
cash [see 1.6(a)], the guaranteed promissory note [see 1.6(c)] in the 
aggregate principal amount of $936,000, an Amendment to the Partnership 
Agreement (prepared by Sellers), and such other documents and 
agreements as Sellers may reasonably request; and
    (iii) Three Rivers shall deliver to Sellers' counsel such bills of 
sale, titles and other instruments as are sufficient to vest in WMI 
Colorado good and marketable title, free and clear of all liens, claims 
and encumbrances, to the Equipment contemplated by Section 1.5, $11,000 
in cash as contemplated by Section 1.6(b) and the guaranteed promissory 
notes contemplated by Sections 1.6(d) and 1.6(e) in the amounts of 
$65,344 and $254,153.68, respectively.
    (b) On the date that the State of Montana approves the transfer to 
Three Rivers of the permits presently held by JVCo. or issues new 
permits in Three Rivers' name sufficient to permit Three Rivers to 
service JVCo.'s customers, counsel for Sellers shall deliver to Sellers 
and Three Rivers all of the materials held in escrow by such counsel. 
It is the intent of the parties that the permits transferred to Three 
Rivers shall not be subject to more onerous conditions than attain to 
the current permits, and such permits shall be in form and substance 
reasonably acceptable to Three Rivers. If the closing shall not have 
occurred on or before May 30, 1996, and any party hereto shall have 
terminated this Agreement, counsel for Sellers shall return the cash, 
promissory notes and other documents to the parties that delivered such 
cash, promissory notes and other agreements to such counsel and the 
parties shall have no further rights under this Agreement.
    Section 1.12  Rights in Underlying Partners Agreements:
    The parties hereby agree and acknowledge that Sellers have no 
rights of purchase or repurchase under the Partnership Agreement and/or 
under the Other Agreements as the same are referenced in the Recitals 
hereto and that Sellers shall cooperate with Three Rivers to obtain all 
interest (ownership, leasehold or other interest) in permits, licenses 
or other rights issued by the State of Montana or any political 
subdivision thereof to JVCo. and which permits, licenses or rights 
relate to the business of JVCo.
    Section 1.13  Permit Transfer Contingency:
    The parties acknowledge that the transfer of the JVCo. interest to 
Three Rivers as set out herein is without substantial value to Three 
Rivers unless the permits presently held by JVCo. are successfully 
transferred to Three Rivers. Immediately upon closing or before, JVCo. 
shall apply for approval of said transfer, and the parties shall do all 
acts required to successfully transfer said permits. If, for any 
reason, the permits are not transferred to Three Rivers on or before 
May 30, 1996, then this agreement is null and void. Any consideration 
exchanged shall in such event be forthwith returned by transferee to 
the transferor. The escrow shall in such event immediately return all 
cash and documents to the party who deposited same to escrow.

2. Representations and Warranties of the Sellers

    Sellers make the following representations, warranties and 
covenants:
    Section 2.1  Organization, Power and Authority: Partners is a 
corporation duly organized and validly existing under the laws of the 
State of Delaware and has full corporate power and authority to enter 
into this Agreement and to sell, convey, assign, transfer and deliver 
the JVCo. Interest to Three Rivers. WMI Colorado is a corporation duly 
organized and validly existing under the laws of the State of Colorado 
and has full corporate power and authority to enter into this Agreement 
and to sell, convey, assign, transfer and deliver the Equipment to 
Three Rivers.
    Section 2.2  Title: Partners has good and marketable title to the 
JVCo. interest, free and clear of all liens, claims or other 
encumbrances of any kind or character. WMI Colorado has good and 
marketable title to the Equipment, free and clear of all liens, claims 
or other encumbrances of any kind of character.
    Section 2.3  Due Authorization: Binding Obligation: The execution, 
delivery and performance of this Agreement and the consummation of the 
transactions contemplated hereby have been duly authorized by all 
necessary corporate action of each Seller. This Agreement has been duly 
executed and delivered by each Seller and is a valid and binding 
obligation of each Seller, enforceable in accordance with its terms.
    Section 2.4  Obligations as General Partner: Partners has not, 
during the existence of JVCo., incurred any material obligation on 
behalf of JVCo. of which Three Rivers was not made aware.

3. Representations and Warranties of Three Rivers

    Three Rivers makes the following representation and warranties:
    Section 3.1  Organization, Power and Authority: Three Rivers is a 
corporation duly organized and validly existing under the laws of the 
State of Montana and has full corporate power and authority to enter 
into this Agreement and perform its obligations hereunder. Three Rivers 
is the successor to Three Rivers Disposal, a Montana general 
partnership, and has all rights and obligations of such partnership 
under the Partnership Agreement and the Other Agreements.

[[Page 53729]]

    Section 3.2  Title: Three Rivers has or by Closing will have good 
and marketable title to the equipment listed on Section 1.5, free and 
clear of all liens, claims or other encumbrances of any kind or 
character.
    Section 3.3  Due Authorization/Binding Obligation: The execution, 
delivery and performance of this Agreement and the consummation of the 
transactions contemplated hereby have been duly authorized by all 
necessary corporate action of Three Rivers. This Agreement has been 
duly executed and delivered by Three Rivers and is a valid and binding 
obligation of Three Rivers, enforceable in accordance with its terms.
    Section 3.4  Obligations as Limited Partner: Sellers have not, 
during the existence of JVCo., incurred any material obligation on 
behalf of JVCo. of which Three Rivers was not made aware.

4. Conditions to the Obligations of Three Rivers

    The obligation of Three Rivers to purchase the JVCo. interest and 
the Equipment and to consummate the transactions contemplated hereby 
shall be subject tot he fulfillment at or prior to the Time of Closing 
of each of the following conditions:
    Section 4.1  Certified Resolutions: Each Seller shall have 
delivered to Three Rivers copies of resolutions adopted by the board of 
directors of the Sellers authorizing the transactions contemplated by 
this Agreement, certified in each case as of the Time of Closing by the 
Secretary or Assistant Secretary of the Sellers.
    Section 4.2  Releae: WASTE MANAGEMENT OF COLORADO, INC., a Colorado 
corporation, and WASTE MANAGEMENT PARTNERS, INC., a Delaware 
corporation shall have executed and delivered to Owner and to Three 
Rivers a General Release in the form set out at Section 5.2

5. Conditions to Obligations of the Sellers

    The obligations of the Sellers to sell the JVCo. Interest and the 
Equipment and to consummate the transactions contemplated hereby shall 
be subject to the fulfillment at or prior to the Time of Closing of 
each of the following conditions:
    Section 5.1  Certified Resolutions: Three Rivers shall have 
delivered to the Sellers copies of resolutions adopted by the board of 
directors of Three Rivers authorizing the transactions contemplated by 
this Agreement, certified in each case as of the Time of Closing by the 
Secretary or Assistant Secretary of Three Rivers.
    Section 5.2  Release: Three Rivers, Owner and JVCo. shall have 
executed and delivered each to the Sellers a General Release in the 
form set out below:

General Release

    In consideration of the execution of that certain Asset Purchase 
Agreement, executed and delivered to each releasee herein, and for 
other good and valuable consideration Sellers release Buyers and 
Buyers release Sellers as set out herein.
    For the purpose of this release, ``Sellers'' is defined as the 
following entities: Waste Management of Colorado, Inc., a Colorado 
corporation, and Waste Management Partners, Inc., a Delaware 
corporation.
    For the purpose of this release, ``Buyer'' is defined as the 
following persons and entities: Jerrold Arbini; Three Rivers 
Disposal, a Montana corporation and successor to Three Rivers 
Disposal, a Montana general partnership; and Waste Management of 
Bozeman, an Illinois limited partnership (referred to as JVCo.).
    A release by or in favor of a party herein is a release by or in 
favor of that party and by or in favor of that party's predecessors 
or affiliates, corporations or entities, and its successors, 
assigns, heirs, personal representatives, executors, administrators, 
attorneys, employees, agents, servants, and shareholders.
    Seller by execution of this Release does release, remise, and 
forever discharge Buyer from all actions, causes of action, suits, 
debt, controversies, bonds, bills, covenants, agreements, damages, 
judgment, claims and demands whatsoever, as such may relate to the 
relationship of Seller and Buyer prior to the date hereof or to any 
of the assets sold or conveyed pursuant to the Asset Purchase 
Agreement, or to any rights or obligations under the Partnership 
Agreement or any of the Other Agreements (as those terms are defined 
in the Asset Purchase Agreement), which Seller now has, ever had or 
hereafter may have against the Buyer; provided, however, that this 
General Release shall not release any party from its obligations 
under or contemplated by the Asset Purchase Agreement or from 
documents required by said agreement and exchanged at Closing of 
said purchase, including but not limited to Section 1.9 and Section 
6.1(c).
    Buyer by execution of this Release does release, remise, and 
forever discharge Seller from all actions, causes of action, suits, 
debt, controversies, bonds, bills, covenants, agreements, damages, 
judgments, claims and demands whatsoever, as such may relate to the 
relationship of Seller and Buyer prior to the date hereof or to any 
of the assets sold or conveyed pursuant to the Asset Purchase 
Agreement, or to any rights or obligations under the Partnership 
Agreement or any of the Other Agreements (as those terms are defined 
in the Asset Purchase Agreement), which Buyer now has, ever had or 
hereafter may have against the Seller; provided, however, that this 
General Release shall not release any party from its obligations 
under or contemplated by the Asset Purchase Agreement or from 
documents required by said agreement and exchanged at Closing of 
said purchase, including but not limited to Section 1.9 and Section 
6.1(c).
    The parties exclude from this release the following: any 
liability and/or damages which arise out of or which are alleged to 
arise out of the transportation and deposit of refuse to landfills 
within the areas serviced by Three Rivers Disposal, Inc., during the 
course of the underlying agreements. Should any such claim arise, 
liability and apportionment thereof (if any) shall be determined by 
state and federal law pertaining to liability arising from the 
transportation of refuse and by the underlying documents referenced 
in the Recitals hereto.
    In executing this General Release, each Releasor acknowledges 
that he/she/they have relief on their own judgment and that of their 
counsel and have in no way relied on or been induced by any 
representation, statement, act of omission to act by any Releasee.
    Each Releasor acknowledges he has read and understand that this 
is a General Release and intend to be legally bound by it.
    Witness the execution hereof this General Release as of the 
______ day of ________, 1996.

(Signature Blocks to be inserted for each party indicating name of 
party, execution ``by'', and the name and title of the person 
signing)

6. Additional Agreement of the Parties

    Section 6.1  Amendment of Partnership Agreement:
    (a) Partners and Three Rivers shall execute and deliver the 
Amendment to the Partnership Agreement in the form attached hereto as 
EXHIBIT 6.1, removing Partners as general and a limited partner and 
admitting Three Rivers as general and a limited partner. Promptly after 
the Time of Closing, Partners and Three Rivers shall cause the 
Certificate of Amendment to the Certificate of Limited Partnership to 
be filed with the Secretary of State of the State of Illinois. 
Effective as of March 1, 1996, the rights of Partners to share in the 
revenues of JVCo. with respect to solid waste collection, 
transportation and disposal services rendered to the Customer Accounts 
of JVCo. (the ``Customer Accounts'') shall terminate.
    (b) Effective as of the Time of Closing, the Other Agreements and 
the relationship of the parties thereunder (except as specifically set 
forth in this Agreement) are hereby terminated.
    (c) The parties agree that nothing in this Agreement shall affect 
or impair the rights or obligations of any party to the Operating 
Agreement which were intended by the parties thereto to survive the 
termination of such agreement, specifically the rights and obligations 
arising under Sections 6.1 and 6.2 of the Operating Agreement.

[[Page 53730]]

    Section 6.2  Indemnification:
    (a) Three Rivers and Owner, jointly and severally, agree that they 
will defend, indemnify and hold Sellers and their affiliates harmless 
from and against any and all indemnifiable damages of the Sellers. For 
this purpose, ``indemnifiable damages'' of the Sellers means the 
aggregate of all expenses, losses, costs, deficiencies, liabilities and 
damages (including attorneys' fees and court costs) incurred or 
suffered by the Sellers or any of their directors, agents, employees or 
affiliates or their affiliates' directors, agents or employees, as a 
result of or in connection with: (i) any inaccurate representation or 
warranty made by Three Rivers or Owner in or pursuant to this 
Agreement, (ii) any default in the performance of any of the covenants 
or agreements made by Three Rivers or Owner in or pursuant to this 
Agreement, or (iii) any occurrence, act or omission of Three Rivers or 
any shareholder, director, officer, employee, consultant or agent of 
Three Rivers or the Owner relating to the provision of services to the 
Customer Accounts which occurred prior to or after the Time of Closing, 
and causes damage to the Sellers or its affiliates.
    (b) Sellers agree that they will defend, indemnify and hold Three 
Rivers, Owner, and their affiliates harmless from and against any and 
all indemnifiable damages of Three Rivers or Owner. For this purpose, 
``indemnifiable damages'' of Three Rivers and Owner means the aggregate 
of all expenses, losses, costs, deficiencies, liabilities and damages 
(including attorneys' fees and court costs) incurred or suffered by 
Three Rivers, Owner, or any of their directors, agents, employees or 
affiliates or their affiliates' directors, agents or employees, as a 
result of or in connection with: (i) any inaccurate representation or 
warranty made by the Sellers in or pursuant to this Agreement, or (ii) 
any default in the performance of any of the covenants or agreements 
made by the Sellers in or pursuant to this Agreement.
    Section 6.3  Security Interest: Three Rivers hereby grants to 
Sellers a security interest in the Customer Accounts and the Equipment. 
Three Rivers agrees to deliver to Sellers a security agreement (in the 
form attached as EXHIBIT 6.3) to secure Three Rivers obligations under 
the three guaranteed promissory notes delivered pursuant to Section 
1.6(c), 1.6(d) and 1.6(e) hereof. Three Rivers shall further execute 
and deliver any documents reasonably requested by Sellers to create 
and/or to perfect said security interest.
    Section 6.4  Execution of Further Documents: From and after the 
Time of Closing, upon the reasonable request of Three Rivers, the 
Sellers shall execute, acknowledge and deliver all such further 
documents as may be required to convey and transfer to and vest in 
Three Rivers the right, title and interest in the JVCo. Interest, and 
as may be appropriate otherwise to carry out the transactions 
contemplated by this Agreement.
    Section 6.5  CIMS Billing System: Sellers will make the CIMS 
billing system available to Three Rivers at current pricing until Three 
Rivers is able to replace such billing system, which replacement shall 
be no later than June 30, 1996. If Three Rivers is unable to replace 
the system by that time, a reasonable extension of the use of the 
system shall be granted by Sellers at current pricing. All computer 
equipment utilized in connection therewith will be returned to Sellers 
at such time as the replacement system is operational. Billings shall 
be mailed in a timely fashion as measured by the history of Three 
Rivers' billing.
    Section 6.6  This Section is Deleted.
    Section 6.7  Covenant-Not-to-Compete: The Sellers, jointly and 
severally, agree and warrant as set out below. As further consideration 
for this agreement Sellers have obtained the signature to this covenant 
not to compete of Waste Management of Montana, Inc., which corporation, 
by its signature hereto, warrants that it has received good and 
sufficient consideration for the execution of this covenant not to 
compete. For purposes of this Section 6.7 and no other, ``Waste 
Management'' shall refer to Waste Management of Colorado, Inc., Waste 
Management of Montana, Inc., and Waste Management Partners, Inc.
    Waste Management, as defined above, agree that for a period ending 
the earlier of (i) ten years from and after the Time of Closing and 
(ii) two years after any sale of the assets of or Three Rivers' 
interest in the business of JVCo., Waste Management, neither WMX 
Technologies, Inc., (which corporation is not a party to this 
agreement) nor Waste Management as defined in this paragraph will 
engage in (as an individual or as a stockholder, trustee, partner, 
financier, agent, employee or representative of any person, firm, 
corporation or association), or have any interest, direct or indirect, 
in any business in competition with the business of JVCo. and/or Three 
Rivers, as that business is constituted at the Time of Closing (whether 
or not such business is subsequently carried on by Three Rivers or by 
any successor or subsequent purchaser of such business), in any area 
within the following Montana counties: Galatin County, Madison County, 
Park County, Broadwater County, and Sweetgrass County; provided that 
this Covenant-Not-to-Compete shall not prevent the Sellers from 
acquiring and holding not to exceed two percent (2%) of the outstanding 
shares of any corporation engaged in such a competitive business, if 
such shares are available to the general public on a national 
securities exchange. In the event of a breach of any covenant contained 
in this Section 6.7, Three Rivers shall be entitled to an injunction 
restraining such breach in addition to any other remedies provided by 
law or equity.
    Section 6.8  Right of First Refusal: Three Rivers and Owner hereby 
grant to the Sellers a right of first refusal on the business or shares 
of Three Rivers as follows:
    (a) If Three rivers or Owner desires within ten years from the date 
of this agreement to accept an offer to purchase either all or a 
majority of the outstanding capital stock of Three Rivers or 
substantially all of the assets of Three Rivers or the Purchased 
Assets, Sellers shall have a first right of refusal as follows: First, 
Three Rivers shall deliver to Sellers a copy of the offer to sell to 
Sellers on the same terms and conditions; Second Sellers shall have 
thirty days in which to accept said offer upon terms equivalent to 
those in the said offer; Third, providing only that Sellers have 
properly exercised their right of first refusal as set out herein, 
Three Rivers shall sell to Sellers on the terms as defined in this 
paragraph. Upon any merger of Three Rivers with or into another entity, 
the surviving entity shall be bound by the provisions hereof. Delivery 
of an offer to Sellers shall be satisfied by certified mail, return 
receipt requested, to the address for Sellers set out in section 8.6.
    (b) If the Sellers exercise their right of first refusal within 
thirty days after the delivery of such offer, payment shall be made at 
the time and in the manner provided for in the offer. If the Sellers do 
not accept the offer within thirty days after delivery of the offer to 
the Sellers, the Sellers shall be deemed to have rejected the offer and 
Three Rivers may then enter into the transaction described in the offer 
with the person or persons making such offer during the period of one 
hundred twenty days after the receipt thereof upon the terms and 
conditions stated therein. If Three Rivers does not enter into the 
transaction described in the Offer within such one hundred twenty day 
period, the foregoing right of first refusal shall be reinstated.

[[Page 53731]]

7. Miscellaneous Agreements

    Section 7.1  The Belgrade Bond: There is presently a performance 
bond for the Belgrade contract, which bond has been obtained through 
Waste Management and which was obtained at a discounted price available 
to and obtained by Waste Management and Sellers. Sellers agree that 
said bond or renewal thereof shall continue for a period of five years 
from Closing. Actual cost of the bond shall be paid by Three Rivers.
    Section 7.2  Manhattan and Three Forks Performance Bonds: For a 
period not to exceed five years, Sellers and Waste Management shall 
cooperate in obtaining a discounted price for performance bonds 
obtained for the Manhattan and Three Forks contracts and shall do so in 
the same manner that renewal cooperation is described in Section 7.1.
    Section 7.3  National Accounts: Three Rivers has serviced certain 
national account customers of Sellers and Sellers' affiliates with 
locations in the Montana counties contemplated by Section 6.7. WMI 
Colorado agrees to notify such national account customers that Sellers 
are no longer able to provide service in those counties and to suggest 
that such national account customers contract directly with Three 
Rivers. Immediately upon execution of this agreement, Sellers shall 
make said notification in writing with a copy thereof to Three Rivers.
    Section 7.4  Indemnity: Owner and Three Rivers shall indemnify and 
hold Sellers harmless from all costs and expenses of obtaining bonds 
under this Part 7.
    Owner and Three Rivers shall further indemnify and hold Sellers 
harmless from all liability, costs and damages which arise out of the 
existence of said bonds; said duty of indemnity shall include but shall 
not be limited to providing a defense for Sellers in any litigation on 
said bonds and paying all of the following: court costs, attorney fees 
and any damages awarded against Sellers in such litigation.

8. General Provisions

    Section 8.1  Survival of Representations and Warranties: All of the 
representations and warranties of the parties to this Agreement shall 
survive the consummation of the transactions contemplated hereby.
    Section 8.2  Binding Effect: This Agreement shall be binding upon 
and inure to the benefit of the parties and their respective successors 
and assigns.
    Section 8.3  Entire Agreement: This agreement supersedes any and 
all other agreements, oral or in writing, between the parties with 
respect to the subject of this agreement. This agreement contains all 
of the covenants and agreements between the parties with reference to 
its subject, and each party acknowledges that no representations, 
inducement, promises or agreements have been made by or on behalf of 
any party except those covenants and agreements embodied in writing 
herein. No agreement, statement or promise not contained herein shall 
be binding or valid.
    Section 8.4  Headings: The descriptive headings in this Agreement 
are inserted for convenience only and do not constitute a part of this 
Agreement.
    Section 8.5  Execution in Counterparts: This Agreement may be 
executed in any number of counterparts, each of which shall be deemed 
an original.
    Section 8.6  Notices: Any notice, request, information or other 
document to be given hereunder to any of the parties by any other party 
shall be in writing and hand delivered, sent by certified mail, postage 
prepaid, or by overnight courier service as follows:
    (a) If to the Sellers, addressed to both:

Waste Management Partners, Inc., 3003 Butterfield Road, Oak Brook, 
Illinois 60521, Attn: General Counsel
Waste Management of Colorado, 3900 S. Wadsworth Blvd., Suite 800, 
Lakewood, Colorado 80235, Attn: General Counsel

    (b) If to Three Rivers or Owner, addressed to both:

Mr. Jerrold E. Arbini, Three Rivers Disposal, Inc., 8600 Huffine Lane, 
P.O. Box 3588, Bozeman, MT 59772
Richard Scheuler, Counsel for Three Rivers, 437 Washington Street, P.O. 
Box 8548, Red Bluff, CA 96080

    Any party may change the address to which notices hereunder are to 
be sent to it by giving written notice of such change of address.
    Section 8.7  Severability: If any provision of this Agreement is 
determined to be illegal or unenforceable, such provision will be 
deemed amended to the extent necessary to conform to applicable law or, 
if it cannot be so amended without materially altering the intention of 
the parties, it will be deemed stricken and the remainder of the 
Agreement will remain in full force and effect.
    Section 8.8  Governing Law: This Agreement shall be governed by and 
construed in accordance with the laws of the State of Illinois 
applicable to contracts made and to be performed therein.
    In Witness Whereof, the parties hereto have caused this Agreement 
to be duly executed as of the day and year first above written.

Waste Management Partners, Inc.

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

Waste Management of Montana, Inc.

    By: Waste Management of Montana, Inc.
Name:------------------------------------------------------------------
  Vice President

Waste Management Partners of Bozeman, Ltd.

    By: Waste Management Partners, Inc.
Name:------------------------------------------------------------------
    Vice President

Waste Management of Colorado, Inc.

By:--------------------------------------------------------------------
Name:------------------------------------------------------------------
Title:-----------------------------------------------------------------

Three Rivers Disposal, Inc., of Bozeman, Ltd.

    By: Jerrold Arbini
Name: Jerrold Arbini
Title: President
Jerrold- Arbini--Owner

    Section 8.8  Governing Law: This Agreement shall be governed by and 
construed in-accordance with the laws of the State of Illinois 
applicable to contracts made and to be performed therein.
    In Witness Whereof, the parties hereto have caused this Agreement 
to be duly executed as of the day and year first above written.

Waste Management Partners, Inc.

    By:

Name: Robert P. Damico
Title: Authorized Signatory

Waste Management of Montana, Inc.

    By: Waste Management of Montana, Inc.

Name: Robert P. Damico, President

Waste Management Partners of Bozeman, Ltd.

    By:

Waste Management Partners, Inc. General Partner
Name: Robert P. Damico, Authorized Signatory

Waste Management of Colorado, Inc.

    By:

Name: Robert P. Damico
Title: President

Three Rivers Disposal, Inc., of Bozeman, Ltd.

    By: Jerrold Arbini

Name: Jerrold Arbini
Title: President
Jerrold Arbini--Owner

James M. Kommers
Daniel J. Roth
Ralph W. Steele
Kommers & Roth, Bridger Professional Center, 517 South 22nd Avenue, 
Suite 5, Bozeman, MT 59718, (406) 587-7717

[[Page 53732]]

Attorneys for Plaintiffs

Montana Eighteenth Judicial District Court, Gallatin County

[Cause No. DV98-266]

    Three Rivers Disposal, Inc., a Montana corporation and Jerrold 
E. Arbini, individually, Plaintiffs, v. Waste Management Partners, 
Inc., a Delaware corporation, Waste Management Partners of Bozeman, 
Ltd., an Illinois Limited Partnership, a/k/a JVCo., Waste Management 
of Colorado, Inc., a Colorado corporation; U.S.A. Waste Services, 
Inc., d/b/a Customized Services of Bozeman, Montana, Harry Ellis, 
and WMX Technologies, Inc., a/k/a Waste Management, Inc., 
Defendants.

Motion for Preliminary Injunction

    Plaintiffs, Three Rivers Disposal, Inc. and Jerrold E. Arbini 
(hereinafter ``Three Rivers''), moved, on an expedited basis, for a 
preliminary injunction pursuant to MCA Secs. 27-19-201(1) and (2). The 
applicants are entitled to equitable relief they seek to enforce a 
restrictive covenant not to compete under the terms of the Asset 
Purchase Agreement dated March 1, 1996. Three Rivers' request for 
equitable relief is appropriate because the agreed terms of the Asset 
Purchase Agreement, Section 6.7, specifically permits the applicant to 
seek specific performance in the form of an injunction restraining 
breach of the restrictive covenants in the agreement. No other remedy 
would be adequate at law except the injunctive relief agreed to by the 
parties and sought by Three Rivers herein.
    Direct competition from U.S.A. Waste Services, Inc., a publicly 
owned corporation listed on the New York Stock Exchange, d/b/a 
Customized Services, Inc., will and has irreparably damaged Three 
Rivers through the permanent loss of its customer base within its 
entire operating area. Sellers and their successors in interest, 
because of the violation of the agreement, have, and will continue to 
have, the capacity to access proprietary and confidential information 
regarding Three River Disposal, Inc.'s customer lists, rates, and 
pricing policies.
    The restrictive covenant was obviously intended to prevent the 
sellers and any successors in interest from accessing confidential 
information such as the rates and customers being served by Three 
Rivers. It is irrefutable that substantial economic impairment will 
result to Three Rivers because Defendants are systematically sabotaging 
Three Rivers' customer base and simultaneously Three Rivers must 
service its debt to Defendants under the Asset Purchase Agreement. The 
court's failure to grant specific performance in the form of injunctive 
relief will result in doubly punishing Three Rivers and doubly 
rewarding the Defendants in their breach of the restrictive covenants.
    The Plaintiffs have fully and fairly performed all conditions 
precedent under their obligation to Defendant, MCA Sec. 27-1-416. There 
is no other adequate remedy but injunctive relief to stop the 
substantial economic impairment to Three Rivers' business which has and 
will continue as a result of Defendants' breach of the restrictive 
covenant.
    The basis for this motion is stated in the Verified Complaint 
concomitantly filed in support of this request for specific 
performance, which Plaintiffs incorporate herein by reference.
    Venue is proper because the contract as well as the covenant not to 
complete is to be performed in Gallatin County and other counties in 
the State of Montana. MCA Sec. 25-2-121(1)(b).
    The relief sought by this motion is a preliminary injunction of 
this court which prohibits Defendants from doing business as Customized 
Services or under any assumed business name or through any other kind 
or type of affiliation by which they continue to control or operate as 
a business in violation of the restrictive covenant. Violation of the 
covenant not to compete commenced on or about July 16, 1998, and the 
aforementioned irreparable economic damage will continue until an order 
of this court prohibits the violation of the restrictive covenant 
within the area set forth in the covenant. If there was an adequate 
remedy at law, the parties would never have agreed to injunctive relief 
in the Asset Purchase Agreement.
    Three Rivers must seek injunctive relief to prohibit breach of the 
restrictive covenant for the reasons set forth in the Verified 
Complaint and this motion. The Verified Complaint seeks relief for 
entry of a permanent order enforcing the restrictive covenant within 
the area set forth in Section 6.7 of the Asset Purchase Agreement.
    Pecuniary compensation will not afford adequate relief because 
continued competition will not only result in the substantial economic 
impairment to Three Rivers' business but also will significantly affect 
their ability to service their debt obligation owed to these very 
Defendants arising out of the Asset Purchase Agreement. Three Rivers 
has in the past and will presently and in the future be able to service 
all of the customers of U.S.A. Waste, Inc., d/b/a Customized Services 
if this court grants the injunctive relief sought by Plaintiffs under 
authority of MCA Secs. 27-19-102 (1) and (2).


    Dated this 26th day of August, 1998.

Kommers & Roth, 517 S. 22nd Ave., Suite 5, Bozeman, MT 59718-6842, 
(406) 587-7717

    By: Daniel J. Roth
James M. Kommers
Ralph W. Steele

James M. Kommers
Daniel J. Roth
Ralph W. Steele
Kommers & Roth, Bridger Professional Center, 517 South 22nd Avenue, 
Suite 5, Bozeman, MT 5718, (406) 587-57717

Attorneys for Plaintiffs

Montana Eighteenth Judicial District Court, Gallatin County

[Cause No. DV98-266]

    Three Rivers Disposal, Inc., a Montana corporation and Jerrold 
E. Arbini, individually, Plaintiffs, v. Waste Management Partners, 
Inc., a Delaware corporation, Waste Management Partners of Bozeman, 
Ltd., an Illinois Limited Partnership, a/k/a JVCo., Waste Management 
of Colorado, Inc., a Colorado corporation; U.S.A. Waste Services, 
Inc., d/b/a Customized Services of Bozeman, Montana, Harry Ellis, 
and WMX Technologies, Inc., 
a/k/a Waste Management, Inc., Defendants.

Brief in Support of Motion for Preliminary Injunction

    The Motion for Preliminary Injunction is seeking equitable relief 
based on a breach of a restrictive covenant which involves the sale of 
assets of a refuse collection business in southwest Montana, including 
Gallatin County. The Asset Purchase Agreement of March 1, 1996, 
contains a covenant not to compete which is in the contract attached to 
the Complaint at Section 6.7, pages 16 and 17. The covenant not to 
compete states:

    Section 6.7  Covenant-Not-to-Compete: The Sellers, jointly and 
severally, agree and warrant as set out below. As further 
consideration for this agreement Sellers have obtained the signature 
to this covenant not to compete of Waste Management of Montana, 
Inc., which corporation by its signature hereto, warrants that it 
has received good and sufficient consideration for the execution of 
this covenant not to compete. For purposes of this Section 6.7 and 
no other. `Waste Management' shall refer to Waste Management of 
Colorado, Inc., Waste Management of Montana, Inc., and Waste 
Management Partners, Inc.
    Waste Management, as defined above, agree that for a period 
ending the earlier of (I) ten years from and after the Time of 
Closing and (ii) two years after any sale of the assets of or Three 
Rivers' interest in the business JVCo., Waste Management, neither 
WMX Technologies, Inc. (which corporation is not a party to this 
agreement) nor Waste Management as defined in this paragraph will 
engage in (as an individual or as a stockholder, trustee, partner, 
financier, agent, employee or representative of any person, firm, 
corporation or association), or have any

[[Page 53733]]

interest, direct or indirect, in any business in competition with 
the business of JVCo. and/or Three Rivers, as that business is 
constituted at the Time of Closing (whether or not such business is 
subsequently carried on by Three Rivers or by any successor or 
subsequent purchaser of such business), in any area within the 
following Montana counties: Gallatin County, Madison County, Park 
County, Broadwater County, and Sweetgrass County; provided that this 
Covenant-Not-to-Compete shall not prevent the Sellers from acquiring 
and holding not to exceed two percent (2%) of the outstanding shares 
of any corporation engaged in such a competitive business, if such 
shares are available to the general public on a national securities 
exchange. In the event of a breach of any covenant contained in this 
Section 6.7, Three Rivers shall be entitled to an injunction 
restraining such breach in addition to any other remedies provided 
by law or equity.

    A preliminary injunction is appropriate under the facts of this 
case because the terms of the contract satisfies the statutory 
requirements for specific performance. MCA Sec. 27-19-103(5) prescribes 
certain injunctive actions involving breach of contract except when 
``the performance of which would not be specifically enforced.'' 
[emphasis added] Further, all parties to the agreement anticipated 
injunctive relief because the contract states:

    In the event of a breach of any covenant contained in this 
Section 6.7, Three Rivers shall be entitled to an injunction 
restraining such breach in addition to any other remedies provided 
by law or equity.

    This case arises out of a violation of Section 6.7 concerning the 
restrictive covenant not to compete contained in the Asset Purchase 
Agreement. The Montana Public Service Commission regulates entry of 
carriers into the collection of solid waste but its jurisdictional 
authority does not encompass the rates charged by refuse removal 
companies. See, Rozel Corporation v. Department of Public Service 
Regulation, Public Service Commission, 226 Mont. 237, 735 .2d 282, 285 
(1987).
    This case involves two refuse collection businesses which hold a 
common carrier certificate issued by the Montana Public Service 
Commission. MCA Sec. 27-19-203 permits entry of a restraining order 
even though a matter be subject to Public Service Commission 
proceedings.
    The Defendants are operating contrary to the restrictive covenants 
of the Asset Purchase Agreement as a result of the acquisition by 
U.S.A. Waste Services, Inc. of all of the remaining Defendants on or 
after July 16, 1998. This acquisition by U.S.A. Waste Services, Inc. 
resulted in retaining the corporate name of Waste Management, Inc. The 
acquisition by U.S.A. Waste Services, Inc. of Customized Services, 
which is and will be in direct competition with Three Rivers, occurred 
prior to July 16, 1998.
    The applicable portions of MCA Secs. 27-19-201(1) and (2) 
empowering the court to enter a preliminary injunction are as follows:

    27-19-201. When preliminary injunction may be granted. An 
injunction order may be granted in the following cases:
    (1) When it appears that the applicant is entitled to the relief 
demanded and the relief of any part of the relief consists in 
restraining the commission or continuance of the act complained of, 
either for a limited period or perpetually;
    (2) When it appears that the commission or continuance of some 
act during the litigation would produce a great or irreparable 
injury to the applicant;

    Plaintiffs are clearly entitled to the relief demanded because the 
parties agreed in writing, in Section 6.7 of the agreement, to specific 
performance and injunctive relief. In addition, Defendants have failed 
to refuse to acknowledge the cease and desist letter served upon them 
weeks ago. More importantly, the Defendants' have and will continue to 
have illegal access to confidential and proprietary information about 
Three Rivers' collection operation. This permits defendants to continue 
to economically ravage Plaintiffs' disposal business. Defendants 
continued operation in violation of the restrictive covenant not only 
substantially diminishes gross revenues, but it is from these very 
revenues Three Rivers is required to make significant monthly payments 
to service the substantial debt owed to Defendants as a result of the 
Buy-Back Agreement. Three Rivers has no adequate remedy at law other 
than the immediate remedy of injunctive relief.
    The injunctive relief sought herein is particularly appropriate 
under the doctrine of specific performance. Although this relief is not 
allowed under some circumstances, (see, MCA Sec. 27-19-103), the 
present case falls squarely under the statutory provision permitting 
specific performance as a remedy because the parties anticipated and 
agreed to this remedy as part of the consideration in their agreement. 
MCA Sec. 27-1-411(4) provides in part:
    Specific performance of an obligation may be compelled when:
* * * * *
    (4) it has been expressly agreed in writing, between the parties 
to the contract, that specific performance thereof may be required 
by either party or that damages shall not be considered adequate 
relief.

    The Montana Supreme Court in Halcro v. Moon, 226 Mont. 121, 733 
P.2d 1305 (1987), held 027-1-411(4) MCA provides that ``specific 
performance may be compelled when the parties to a contract have 
expressly agreed in writing that specific performance shall be an 
available remedy.'' Id. 733 P.2d 1307.
    Additionally authority for the entry of injunctive relief in this 
case is found in Marco and Company LLC. v. Deaconess/Billings Clinic 
Health System, 55 St. Rep. 91, 1998 WL 67544, ______Mont.______, 
______P.2d______, (February 12, 1998) (opinion not published, copy 
attached). The supreme court found the district court in error for 
failure to follow the agreement of the parties providing for injunctive 
relief. The Montana Supreme Court affirmed and followed Maxted v. 
Barrett, 198 Mont. 81, 86,643 P.2d 1161, (1982), in the Marco case 
affirming that the Montana court will enforce specific enforcement of 
remedies agreed upon by parties in written agreements, including, the 
remedy of injunction.
    This court should therefore enter the injunctive relief requested 
at the conclusion of the hearing on the Order to Show Cause why the 
Motion for Preliminary Injunction should not be granted.
    The Defendants are entitled to received reasonable notice of the 
time and place of the making of the application for this order 
requesting specific performance. MCA Sec. 27-19-301. Plaintiffs request 
the matter be set before this Court on an expedited basis. In support 
of its Motion for Preliminary Injunction, the Plaintiffs will offer 
proof that Defendants are and will be competing in direct violation of 
the restrictive covenant set forth in Section 6.7 of the Asset Purchase 
Agreement.

    Respectfully submitted this 24th day of August, 1998.

Kommers & Roth, 517 S. 22nd Ave., Suite 5, Bozeman, MT 59718-6842, 
(406) 587-7717

    By:
James M. Kommers
Daniel J. Roth
Ralph W. Steele

Certificate of Service

    I, Anthony E. Harris, hereby certify that on August 27, 1999, I 
caused copies of the foregoing United States's Certificate of 
Compliance with Provisions of the Antitrust Procedures and Penalties 
Act to be served on plaintiffs--the states of Ohio, Arizona, 
California, Colorado, Florida, Maryland, Michigan, New York, Texas, 
Washington and Wisconsin, and the commonwealths of Kentucky and

[[Page 53734]]

Pennsylvania--and defendants USA Waste Services, Inc., Dome Merger 
Subsidiary, and Waste Management, Inc., by mailing a copy of the 
pleading first-class, postage prepaid, to a duly authorized legal 
representative of those parties as follows:

James R. Weiss, Esquire, Preston Gates Ellis & Rouvelas Meeds LLP, 
1735 New York Avenue, NW, Washington, DC 20006-8425

Counsel for Defendants USA Waste Services, Inc. and Dome Merger 
Subsidiary

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

Counsel for Defendant Waste Management, Inc.

Doreen C. Johnson, Assistant Attorney General, Chief, Antitrust 
Section, Ohio Bar No. 0024725,
Mitchell L. Gentile, Senior Attorney, Ohio Bar No. 0022274
Ohio Attorney General's Office, 30 East Broad Street, 16th Floor, 
Columbus, OH 43215

Counsel for Plaintiff State of Ohio

Nancy M. Bonnell, Assistant Attorney General, Antitrust Unit, Civil 
Division, 1275 West Washington, Phoenix, AZ 85007

Counsel for Plaintiff State of Arizona

Barbara Motz, Acting Assistant Attorney General
Natalie S. Manzo, Deputy Attorney General, Office of the Attorney 
General, 300 South Spring Street, Room 5212, Los Angeles, CA 90013

Counsel for Plaintiff State of California

Jan Michael Zavislan, First Assistant Attorney General
Maria E. Berkenkotter, Assistant Attorney General, State Services 
Building, 1525 Sherman Street, 5th Floor, Denver, CO 80203

Counsel for Plaintiff State of Colorado

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

David R. Vandeventer, Assistant Attorney General, Consumer 
Protection, 1024 Capital Center Drive, Frankfort, KY 40601-8204

Counsel for Plaintiff Commonwealth of Kentucky

Ellen S. Cooper, Assistant Attorney General, Chief, Antitrust 
Division
John R. Tennis, Assistant Attorney General,
Office of the Attorney General, 200 St. Paul Place, Suite 17, 
Baltimore, MD 21202-2021

Counsel for Plaintiff State of Maryland

Paul F. Novak, Assistant Attorney General, Consumer Protection 
Division, Franchise/Antitrust Section, P.O. Box 30213, Lansing, MI 
48909

Counsel for Plaintiff State of Michigan

Richard E. Grimm
Kay Taylor
Assistant Attorneys General, Antitrust Bureau, Office of the 
Attorneys 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
Garrett F. Gallia
Terry A. Lupia
Deputy Attorneys General, 14th Floor, Strawberry Square, 
Harrisburg, PA 17120

Counsel for Plaintiff Commonwealth of Pennsylvania

Mark Tobey
Kim Van Winkle
Assistant Attorneys General, P.O. Box 12548, Austin, TX 78711-2548

Counsel for Plaintiff State of Texas

Marta Lowy, Assistant Attorney General, Office of the Attorney 
General, 900 4th Avenue, Suite 2000, Seattle, WA 98164-1012

Counsel for Plaintiff State of Washington

Edwin J. Hughes, Assistant Attorney General, Wisconsin Department of 
Justice, P.O. Box 7857, Madison, WI 53707-7857

Counsel for Plaintiff State of Wisconsin

Anthony E. Harris, Esquire,
Illinois Bar No. 1133713, U.S. Department of Justice, Antitrust 
Division, 1401 H Street, NW, Suite 3000, Washington, DC 20530, (202) 
307-0924.

[FR Doc. 99-24882 Filed 10-1-99; 8:45 am]
BILLING CODE 4410-11-M