[Federal Register Volume 65, Number 139 (Wednesday, July 19, 2000)]
[Notices]
[Pages 44810-44820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18157]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Allied Waste Industries, Inc. and Superior
Services, Inc.; Proposed Final Judgment and Competitive Impact
Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b) through (h), that a Complaint, Hold
Separate Stipulation and Order, and proposed Final Judgment were filed
with the United States District Court for the District of Columbia in
United States v. Allied Waste Industries, Inc., and Superior Services,
Inc., Civil No. 1:00CV 01067 on May 12, 2000. A Competitive Impact
Statement was filed on June 22, 2000. The Complaint sought to enjoin
the following transactions: Allied Waste Industries, Inc.'s
(``Allied'') proposed acquisition of Superior Services, Inc.'s
(``Superior'') waste hauling assets in Mansfield. Ohio; Superior's
proposed acquisition of Allied's waste hauling assets in Milwaukee,
Wisconsin; and Superior's proposed acquisition of a landfill owned by
Allied in Leeper, Pennsylvania. The Complaint alleged that these three
transactions between Allied and Superior would lessen competition
substantially in waste collection and municipal solid waste disposal
services in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
The proposed Final Judgment, filed at the same time as the Complaint,
requires, among other things, that (1) Allied divest certain commercial
waste collection operations and a transfer station in the Milwaukee
area, (2) Superior divest certain commercial waste collection
operations and a transfer station in the Mansfield area, and (3)
Superior abandon its purchase of an Allied Landfill in the Leeper area.
A Competitive Impact statement filed by the United States describes
the Complaint, the proposed Final Judgment, the industry, and remedies
to be implemented by Allied and Superior. Copies of the Complaint, Hold
Separate Stipulation and Order, proposed Final Judgment, and the
Competitive Impact Statement are available for inspection in Room 215
of the U.S. Department of Justice, Antitrust Division, 325 7th Street,
NW, Washington, DC, and at the office of the Clerk of the United States
District Court for the District of Columbia, Washington, DC. Copies of
any of these materials may be obtained upon request and payment of a
copying fee.
Public comment is invited within the statutory 60-day comment
period. Such comments and response thereto will be published in the
Federal Register and filed with the Court. Comments should be directed
to J. Robert Kramer II, Chief, Litigation II Section, Antitrust
Division, United States Department of Justice, 1401 H Street, NW, Suite
3000, Washington, DC 20530 (telephone: 202-307-0924).
Constance K. Robinson,
Director of Operations and Merger Enforcement.
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Allied Waste Industries,
Inc., and Superior Services, Inc., Defendants.
Hold Separate Stipulation and Order
It is hereby stipulated and agreed by and between the undersigned
parties, subject to approval and entry by the Court, that:
I. Definitions
As used in this Hold Separate Stipulation and Order:
A. ``Allied'' means defendant Allied Waste Industries, Inc., a
Delaware corporation with its headquarters in Scottsdale, Arizona, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures, and their
directors, officers, managers, agents, and employees.
B. ``Superior'' means defendant Superior Services, Inc., a
Wisconsin corporation with its headquarters in Milwaukee, Wisconsin,
and includes its successors and assigns, and its subsidiaries,
divisions, groups, affiliates, partnerships and joint ventures, and
their directors, officers, managers, agents, and employees.
C. ``Relevant Milwaukee Asssets'' means:
(1) Allied's two front-end loader and three rear-end loader small
container commercial routes 6, 14, 21, 89, and 95 and recycling routes
73, 75, 705 and 708 that serve Milwaukee and the eastern half of
Waukesha (east of route 83) counties, WI; and
(2) Allied's BFI Town & Country Transfer Station, located at W143
S. 6400 College Court, Muskego, WI 53150.
Relevant Milwaukee Assets includes, with respect to each of
Allied's small container routes listed above, all tangible assets
(including capital equipment, trucks and other vehicles, containers,
interests, permits and supplies); and all intangible assets (including
hauling-related customer lists, contracts, leasehold interests, and
accounts related to each such route). Relevant Milwaukee Assets also
includes, with respect to the BFI Town & Country Transfer Station
described above, all of Allied's rights, titles and interests in any
tangible assets (including all fee and leasehold and renewal rights in
the transfer station); all related assets including capital equipment,
trucks and other vehicles, scales, power supply equipment, interests,
permits, and supplies; and all rights, titles and interests in any
intangible assets, including all customer lists, contracts, and
accounts, or options to purchase any adjoining property.
D. ``Relevant Mansfield Assets'' means:
(1) Superior's small container commercial routs 1, 2, 3 and 4 that
serve Richland and Ashland counties, OH; and
(2) Superior's Transfer Station, located at 621 Newman Street,
Mansfield, OH 44905.
Relevant Mansfield Assets includes, with respect to each of
Superior's small container routes listed above, all tangible assets
(including capital equipment, trucks and other vehicles, containers,
interests, permits, and supplies); all intangible assets (including
hauling-related customer lists, contracts, leasehold interests, and
accounts related to each such route); and, if requested by the
purchaser, real property and improvements to real property (i.e.,
buildings and garages). Relevant Mansfield Assets also includes, with
respect to the Superior Transfer Station described above, all of
Superior's rights, titles and interests in any tangible assets
(including all fee and leasehold and renewal rights in the transfer
station); the garage and related facilities; offices; all related
assets including capital equipment, trucks and other vehicles, scales,
power supply equipment, interests, permits, and supplies; and all
rights, titles and interests in any intangible assets, including all
customer lists, contracts, and accounts, or options to purchase any
adjoining property.
II. Objectives
The Final Judgment filed in this case is meant to ensure
defendants' prompt divestiture of the Relevant Milwaukee Assets and
Relevant Mansfield Assets for the purpose of establishing viable
competitors in the waste disposal
[[Page 44811]]
business or the commercial waste hauling business, or both, to remedy
the effects that the United States alleges would otherwise result from
the exchange of assets between Allied and Superior. This Hold Separate
Stipulation and Order ensures, prior to such divestiture, that the
Relevant Milwaukee Assets and Relevant Mansfield Assets are
independent, economically viable, and ongoing business concerns that
will remain independent and uninfluenced by Allied, in the case of the
Relevant Mansfield Assets, and Superior, in the case of the Relevant
Milwaukee Assets; and that competition is maintained during the
pendency of the ordered divestitures.
III. Jurisdiction and Venue
The Court has jurisdiction over the subject matter of this action
and over each of the parties hereto, and venue of this action is proper
in the United States District Court for the District of Columbia.
IV. Compliance With and Entry of Final Judgment
A. The parties stipulate that a Final Judgment in the form attached
hereto as Exhibit A may be filed with and entered by the Court, upon
the motion of any party or upon the Court's own motion, at any time
after compliance with the requirements of the Antitrust Procedures and
Penalties Act (15 U.S.C. Sec. 16), and without further notice to any
party or other proceedings, provided that the United States has not
withdrawn its consent, which it may do at any time before the entry of
the proposed Final Judgment by serving notice thereof on defendants and
by filing that notice with the Court.
B. Defendants shall abide by and comply with the provisions of the
proposed Final Judgment, pending the Judgment's entry by the Court, or
until expiration of time for all appeals of any Court ruling declining
entry of the proposed Final Judgment, and shall, from the date of the
signing of this Stipulation by the parties, comply with all the terms
and provisions of the proposed Final Judgment as though the same were
in full force and effect as an order of the Court.
C. Defendants shall not consummate the transactions sought to be
enjoined by the Complaint herein before the Court has signed this Hold
Separate Stipulation and Order.
D. This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
E. In the event (1) the United States has withdrawn its consent, as
provided in Section IV(A) above, or (2) the proposed Final Judgment is
not entered pursuant to this Stipulation, the time has expired for all
appeals of any Court ruling declining entry of the proposed Final
Judgment, and the Court has not otherwise ordered continued compliance
with the terms and provisions of the proposed Final Judgment, then the
parties are released from all further obligations under this
Stipulation, and the making of this Stipulation shall be without
prejudice to any party in this or any other proceeding.
F. Defendants represent that the divestitures ordered in the
proposed Final Judgment can and will be made, and that defendants will
later raise no claim of mistake, hardship or difficulty of compliance
as grounds for asking the Court to modify any of the provisions
contained therein.
V. Hold Separate Provisions
Until the divestitures required by the Final Judgment have been
accomplished:
A. Defendants shall preserve, maintain, and operate the Relevant
Milwaukee Assets and Relevant Mansfield Assets as independent
competitive busineses, with management, sales and operations of such
assets held entirely separate, distinct and apart from the operations
of Superior, in the case of the Relevant Milwaukee Assets, and from
Allied, in the case of the Relevant Mansfield Assets. Superior shall
not coordinate the marketing of, or negotiation of sales by, any
Relevant Milwaukee Asset with its other operations. Allied shall not
coordinate the marketing of, or negotiation of sales by, any Relevant
Mansfield Asset with its other operations. Within twenty (20) days
after the filing of the Hold Separate Stipulation and Order, or thirty
(30) days after the entry of this Order, whichever is later, defendants
will inform the United States of the steps defendants have taken to
comply with this Hold Separate Stipulation and Order.
B. Defendants shall take all steps necessary to ensure that (1) The
Relevant Milwaukee Assets and Relevant Mansfield Assets will be
maintained and operated as independent, ongoing, economically viable
and active competitors in the commercial waste hauling business; (2)
the management of the Relevant Milwaukee Assets will not be influenced
by Superior, and the management of the Relevant Mansfield Assets will
not be influenced by Allied; and (3) the books, records, competitively
sensitive sales, marketing and pricing information, and decision-making
concerning the Relevant Milwaukee Assets will be kept separate and
apart from Superior's other operations, and the books, records,
competitively sensitive sales marketing, and pricing information, and
decision-making concerning the Relevant Mansfield Assets will be kept
separate and apart from Allied's other operations. Superior's influence
over the Relevant Milwaukee Assets and Allied's influence over Relevant
Mansfield Assets shall be limited to that necessary to carry out
defendants' obligations under this Hold Separate Stipulation and Order
and the proposed final Judgment.
C. Defendants shall use all reasonable efforts to maintain and
increase the sales and revenues of the Relevant Milwaukee Assets and
Relevant Mansfield Assets, and shall maintain at 1999 or at previously
approved levels, whichever are higher, all promotional, advertising,
sales, technical assistance, marketing and merchandising support for
the Relevant Milwaukee Assets and Relevant Mansfield Assets.
D. Defendants shall provide sufficient working capital to maintain
the Relevant Milwaukee Assets and Relevant Mansfield Assets as
economically viable and competitive ongoing businesses.
E. Defendants shall take all steps necessary to ensure that the
Relevant Milwaukee Assets and Relevant Mansfield Assets are fully
maintained in operable condition at no lower than their current
capacity or sales, and shall maintain and adhere to normal repair and
maintenance schedules for the Relevant Milwaukee Assets and Relevant
Mansfield Assets.
F. Defendants shall not, except as part of a divestiture approved
by the United States in accordance with the terms of the proposed Final
Judgment, remove, sell, lease, assign, transfer, pledge or otherwise
dispose of any of the Relevant Milwaukee Assets and Relevant Mansfield
Assets.
G. Defendants shall maintain, in accordance with sound accounting
principles, separate, accurate and complete financial ledgers, books
and records that report on a periodic basis, such as the last business
day of every month, consistent with past practices, the assets,
liabilities, expenses, revenues and income of the Relevant Milwaukee
Assets and Relevant Mansfield Assets.
H. Except in the ordinary course of business or as is otherwise
consistent with this Hold Separate Stipulation and
[[Page 44812]]
Order, defendants shall not hire, transfer, terminate, or otherwise
alter the salary agreements for any Allied or Superior employee who, on
the date of defendants' signing of this Hold Separate Stipulation and
Order, either: (1) Works with a Relevant Milwaukee Asset or a Relevant
Mansfield Asset, or (2) is a member of management referenced in Section
V(I) of this Hold Separate Stipulation and Order.
I. Until such time as the Relevant Milwaukee Assets and Relevant
Mansfield Assets are divested pursuant to the terms of the Final
Judgment, the Relevant Milwaukee Assets shall be managed by Ray
Bruckert and the Relevant Mansfield Assets shall be managed by Richard
J. Wojahn. Messrs. Bruckert and Wojahn shall have complete managerial
responsibility for the Relevant Milwaukee Assets and Relevant Mansfield
Assets, subject to the provisions of this Order and the proposed Final
Judgment. In the event that either Mr. Bruckert or Mr. Wojahn is unable
to perform his duties, defendants shall appoint, subject to the
approval of the United States, a replacement within ten (10) working
days. Should defendants fail to appoint a replacement acceptable to the
United States within ten (10) working days, the United States shall
appoint a replacement.
J. Defendants shall take no action that would interfere with the
ability of any trustee appointed pursuant to the Final Judgment to
complete the divestitures pursuant to the Final Judgment to purchasers
acceptable to the United States.
K. This Hold Separate Stipulation and Order shall remain in effect
until consummation of the divestitures contemplated by the proposed
Final Judgment or until further order of the Court.
For Plaintiff United States of America
David R. Bickel,
DC Bar #393409, U.S. Department of Justice, Antitrust Division,
Litigation II Section, 1401 H Street, NW, Suite 3000, Washington, DC
20005, (202) 307-1168.
For Defendant Allied Waste Industries, Inc.
Tom D. Smith,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113, (202) 879-3971.
For Defendant Superior Services, Inc.
James T. McKeown,
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, WI 53202-5367,
(414) 271-2400.
Joseph D. Edmondson, Jr.,
Foley & Lardner, Washington Harbour, 3000 K Street, NW, Washington, DC
20007, 202-672-5354.
Order
It is so ordered on this ____ day of __________, 2000.
United States District Judge
Parties Entitled to Notice of Entry of Order:
Counsel for Plaintiff United States of America,
David R. Bickel,
U.S. Department of Justice, Antitrust Division, Suite 3000, 1401 H
Street, NW, Washington, DC 20037.
Counsel for Defendant Allied Waste Industries, Inc.,
Tom D. Smith,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113.
Counsel for Superior Services, Inc.,
James T. McKeown,
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, WI 53202-5367,
and
Joseph D. Edmondson, Jr.,
Foley & Lardner, Washington Harbour, 3000 K Street, NW, Washington, DC
20007.
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Allied Waste Industries,
Inc., and Superior Services, Inc., Defendants.
Final Judgment
Whereas, Plaintiff, the United States of America, having filed its
Complaint in this action on May 12, 2000, and plaintiff and defendants,
Allied Waste Services, Inc. (``Allied'') and Superior Services, Inc.
(``Superior''), by their respective attorneys, having consented to the
entry of this Final Judgment without trial and adjudication of any
issue of fact or law, 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 certain relevant assets to assure that
competition is not substantially lessened;
And Whereas, Defendants Allied and Superior shall make certain
divestitures for the purpose of establishing one or more viable
competitors in the commercial waste hauling business, in the specified
areas of Milwaukee, Wisconsin and Mansfield, Ohio; and
And Whereas, Defendant Superior shall be enjoined from acquiring
the County Environmental Landfill in Leeper, Pennsylvania except as
provided in this Final Judgment;
And Whereas, Defendants have represented to the United States 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 injunctive 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:
I. Jurisdiction
This Court has jurisdiction over each of the parties hereto and
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against defendants, as hereinafter
defined, under Section 7 of the Clayton Act, as amended, 15 U.S.C.
Sec. 18.
II. Definitions
As used in this Final Judgment:
A. ``Allied'' means defendant Allied Waste Industries, Inc., a
Delaware corporation with its headquarters in Scottsdale, Arizona, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures, and their
directors, officers, managers, agents, and employees.
B. ``Superior'' means defendant Superior Services, Inc., a
Wisconsin corporation with its headquarters in Milwaukee, Wisconsin,
and includes its successors and assigns, and its
[[Page 44813]]
subsidiaries, divisions, groups, affiliates, partnerships and joint
ventures, and their directors, officers, managers, agents, and
employees.
C. ``Relevant Milwaukee Assets'' means:
(1) Allied's two front-end loader and three rear-end loader small
container commercial routes 6, 14, 21, 89, and 95 and recycling routes
73, 75, 705 and 708 that serve Milwaukee and the eastern half of
Waukesha (east of route 83) Counties, WI; and
(2) Allied's BFI Town & Country Transfer Station, located at W143
S. 6400 College Court, Muskego, WI 53150.
Relevant Milwaukee Assets includes, with respect to each of
Allied's small container routes listed above, all tangible assets
(including capital equipment, trucks and other vehicles, containers,
interests, permits, and supplies); and all intangible assets (including
hauling-related customer lists, contracts, leasehold interests, and
accounts related to each such route). Relevant Milwaukee Assets also
includes, with respect to the BFI Town & Country Transfer Station
described above, all of Allied's rights, titles and interests in any
tangible assets (including all fee and leasehold and renewal rights in
the transfer station); all related assets including capital equipment,
trucks and other vehicles, scales, power supply equipment, interests,
permits, and supplies; and all rights, titles and interests in any
intangible assets, including all customer lists, contracts, and
accounts, or options to purchase any adjoining property.
D. ``Relevant Mansfield Assets'' means:
(1) Superior's small container commercial routes 1, 2, 3 and 4 that
serve Richland and Ashland counties, OH; and
(2) Superior's Transfer Station, located at 621 Newman Street,
Mansfield, OH 44905.
Relevant Mansfield Assets includes, with respect to each of
Superior's small container routes listed above, all tangible assets
(including capital equipment, trucks and other vehicles, containers,
interests, permits, and supplies); all intangible assets (including
hauling-related customer lists, contracts, leasehold interests, and
accounts related to each such route); and, if requested by the
purchaser, real property and improvements to real property (i.e.,
buildings and garages). Relevant Mansfield Assets also includes, with
respect to the Superior Transfer Station described above, all of
Superior's rights, titles and interests in any tangible assets
(including all fee and leasehold and renewal rights in the transfer
station); the garage and related facilities; offices; all related
assets including capital equipment, trucks and other vehicles, scales,
power supply equipment, interests, permits, and supplies; and all
rights, titles and interests in any intangible assets, including all
customer lists, contracts, and accounts, or options to purchase any
adjoining property.
E. ``Hauling'' means the collection of waste from customers and the
shipment of the collected waste to disposal sites. Hayling, as used
herein, does not include collection of roll-off containers.
F. ``MSW'' means municipal solid waste, a term of art used to
describe solid putrescible waste generated by households and commercial
establishments such as retail stores, offices, restaurants, warehouses,
and non-manufacturing activities in industrial facilities. MSW does not
include special handling waste (e.g., waste from manufacturing
processes, regulated medical waste, sewage, and sludge), hazardous
waste, or waste generated by construction or demolition sites.
G. ``Disposal'' means the business of disposing of waste into
approved disposal sites.
H. ``Landfill'' means a waste management facility where waste is
placed into the land.
I. ``Small container commercial waste collection service'' means
the business of collecting MSW from commercial and industrial accounts,
usually in ``dumpsters'' (i.e., a small container with one to ten cubic
yards of storage capacity), and transporting or ``hauling'' such waste
to a disposal site by use of a front- or rear-end loader truck. Typical
commercial waste collection customers include office and apartment
buildings and retail establishments (e.g., stores and restaurants).
J. ``Milwaukee area'' means the City of Milwaukee, Milwaukee
County, and the eastern half of Waukesha (east of route 83) County,
Wisconsin.
K. ``Mansfield area'' means the City of Mansfield and Richland and
Ashland Counties, Ohio.
L. ``Leeper area'' means the City of Leeper and Clarion, Elk,
Forest, and Jefferson Counties, Pennsylvania.
III. Applicability
A. The provisions of this Final Judgment apply to Allied and
Superior, as defined above, and all other persons in active concert or
participation with any of them who shall have received actual notice of
this Final Judgment by personal service or otherwise.
B. Defendants shall require, as a condition of the sale or other
disposition of all or substantially all of their assets, or of a lesser
business unit that includes defendants' Relevant Milwaukee Assets or
Relevant Mansfield Assets, that the acquiring party or parties agree to
be bound by the provisions of this Final Judgment.
IV. Divestitures
Milwaukee and Mansfield Areas
A. Defendants are hereby ordered and directed, in accordance with
the terms of this Final Judgment, within ninety (90) 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 the Relevant Milwaukee Assets as a viable,
ongoing business to a single purchaser acceptable to the United States,
in its sole discretion, and to sell the Relevant Mansfield Assets, as a
viable, ongoing business, to a single purchaser acceptable to the
United States, in its sole discretion.
B. Defendants shall use their best efforts to accomplish the
divestitures ordered by this Final Judgment as expeditiously and timely
as possible. The United States, in its sole discretion, may extend the
time period for any divestiture an additional period of time, not to
exceed sixty (60) calendar days.
C. In accomplishing the divestitures ordered by this Final
Judgment, defendants promptly shall make known, by usual and customary
means, the availability of the Relevant Milwaukee Assets and Relevant
Mansfield 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 prospective
purchasers, subject to customary confidentiality assurances, all
information regarding the Relevant Milwaukee Assets and Relevant
Mansfield Assets customarily provided in a due diligence process except
such information or documents subject to attorney-client privilege or
attorney work-product privilege. Defendants shall make available such
information to the United States 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 Allied or Superior employee who, prior to the
entry of the Hold Separate Stipulation and Order, works at, or whose
primary responsibility concerns, any disposal or hauling business that
is part of the
[[Page 44814]]
Relevant Milwaukee Assets and Relevant Mansfield Assets.
E. Defendants shall permit prospective purchasers of the Relevant
Milwaukee Assets and Relevant Mansfield Assets to have reasonable
access to personnel and to make inspections of the physical facilities
of the Relevant Milwaukee Assets and Relevant Mansfield Assets; access
to any and all environmental, zoning, and other permit documents and
information; and access to any and all financial, operational, or other
documents and information customarily provided as part of a due
diligence process.
F. Defendants shall warrant to each purchaser of the Relevant
Milwaukee Assets and Relevant Mansfield Assets that each asset will be
operational on the date of sale.
G. Defendants shall not take any action, direct or indirect, that
will impede in any way the permitting, operation, or divestiture of the
Relevant Milwaukee Assets and Relevant Mansfield Assets.
H. Defendants shall warrant to each purchaser of the Relevant
Milwaukee Assets and Relevant Mansfield Assets that there are no
material defects in the environmental, zoning, or other permits
pertaining to the operation of each asset, and that following the
divestiture of each asset, defendants will not undertake, directly or
indirectly, 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 otherwise consents in writing, the
divestitures pursuant to Section IV, or by trustee appointed pursuant
to Section VI of this Final Judgment, shall include all Relevant
Milwaukee Assets and Relevant Mansfield Assets, and shall be
accomplished by selling or otherwise conveying the assets to a
purchaser in such a way as to satisfy the United States, in its sole
discretion, that the Relevant Milwaukee Assets and Relevant Mansfield
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 VI of this
Final Judgment, (1) Shall be made to a purchaser that, in the United
State's sole judgment, has the capability and intent (including the
necessary managerial, operation and financial capability) of competing
effectively in the waste disposal or hauling business in the Milwaukee
and Mansfield areas; and (2) shall be accomplished so as to satisfy the
United States, in its sole discretion, that none of the terms of any
agreement between the purchaser and defendants gives any defendant the
ability unreasonably to raise the purchaser's costs, to lower the
purchaser's efficiency, or otherwise to interfere in the ability of the
purchaser to compete effectively.
V. Ban on Acquisition
Leeper Area
A. Superior shall abandon the purchase agreement between Superior
and Allied, dated August 4, 1999, to acquire the County Environmental
Landfill located at 344 Walley Run Drive, Leeper, PA 16233 (``County
Landfill''). Superior shall not directly or indirectly acquire or
propose to acquire any assets of or any interest, including any
financial, security, loan equity or management interest, in the County
Landfill except as provided in Paragraph V(B).
B. If a new landfill opens in the Leeper area which accepts MSW,
Superior may propose to acquire assets or an interest in the County
Landfill but shall provide advance notification to the Antitrust
Division of any such plan. The obligation to provide notice under this
Paragraph is met when Superior files a premerger notification pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, 15 U.S.C. Sec. 18a (the ``HSR Act''). In the event that such a
transaction is not subject to the reporting and waiting period
prerequirements of the HSR Act, notification under this Paragraph shall
be provided to the Antitrust Division in the same format as, and in
accordance with, the instructions relating to the Notification and
Report Form set forth in the appendix to Part 803 of Title 16 of the
Code of Federal Regulations as amended, except that the information
requested in Items 5 through 9 of the instructions must be provided
only about the Leeper area. Notification shall be provided at least
thirty (30) days prior to the acquisition of any such interest, and
shall include, beyond what may be required by the applicable
instructions, the names of the principal representatives of the parties
to the agreement who negotiated the agreement, and any management or
strategic plans discussing the proposed transaction. If, within the 30-
day period after notification, representatives of the Antitrust
Division make a written request for additional information, Superior
shall not consummate the proposed transaction or agreement until twenty
(20) days after submitting all such additional information. Early
termination of the waiting periods in this Paragraph may be requested
and, where appropriate, granted in the same manner as is applicable
under the requirements and provisions of the HSR Act and the rules
promulgated thereunder. This Paragraph shall be broadly construed, and
any ambiguity or uncertainty regarding the filing of notice under this
Paragraph shall be resolved in favor of filing notice.
VI. Appointment of Trustee
A. If defendants have not divested the Relevant Milwaukee Assets
and Relevant Mansfield Assets within the time period specified in
Section IV(A), defendants shall notify the United States of that fact
in writing. Upon application of the United States, the Court shall
appoint a trustee selected by the United States and approved by the
Court to effect the divestitures.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Relevant Milwaukee Assets and
Relevant Mansfield Assets. The trustee shall have the power and
authority to accomplish the divestiture to a purchaser acceptable to
the Untied States at such price and on such terms as are then
obtainable upon reasonable effort by the trustee, subject to the
provisions of Section IV, VI, and VII of this Final Judgment, and shall
have such other powers as the Court deems appropriate. Subject to
Section VI(D) of this Final Judgment, the trustee may hire at the cost
and expense of defendants any investment bankers, attorneys, or other
agents, reasonably necessary in the trustee's judgment to assist in the
divestiture and such professionals and agents shall be accountable
solely to the trustee.
C. 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
trustee within ten (10) calendar days after the trustee has provided
the notice required under Section VII.
D. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the United States approves, and shall
account for all monies derived from the sale of the assets sold by the
trustee and all costs and expenses so incurred. After approval by the
Court of the trustee's accounting, including fees for its services and
those of any professionals and agents retained by the trustee, all
remaining money shall be paid to 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
[[Page 44815]]
divested assets and based on a fee arrangement providing the trustee
with an incentive based on the price and terms of the divestitures and
the speed with which the divestitures are accomplished.
E. Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestitures. 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 Relevant Milwaukee Assets and Relevant
Mansfield Assets. Defendants shall develop financial and other
information relevant to the Relevant Milwaukee Assets and Relevant
Mansfield Assets customarily provided in a due diligence process as the
trustee may reasonably request, subject to reasonable protection for
trade secret or other confidential research, development or commercial
information.
F. After the trustee's 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. 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 included 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 Relevant Milwaukee Assets
and the Relevant Mansfield Assets, and shall describe in detail each
contact with any such person. The trustee shall maintain full records
of all efforts made to sell the Relevant Milwaukee Assets and the
Relevant Mansfield Assets.
G. If the trustee has not accomplished such divestitures within six
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 for completing the required
divestitures. 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 thereafter enter 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.
VII. Notice of Proposed Divestitures
A. Within two (2) business days following execution of a definitive
agreement to effect, in whole or in part, any proposed divestiture
pursuant to Section IV or VI of this Final Judgment, defendants or the
trustee, whichever is then responsible for effecting the divestiture,
shall notify the United States of the proposed divestiture. If the
trustee is responsible, it shall similarly notify defendants. The
notice shall set forth the details of the proposed divestiture 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 assets to be divested that are
the subject of the binding contract, together with full details of
same.
B. Within fifteen (15) calendar days of receipt by the United
States of such notice, the United States, in its sole discretion, may
request from defendants, the proposed purchaser, any other third party,
or the trustee, if applicable, 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.
C. Within thirty (30) calendar days after receipt of the notice or
within twenty (20) calendar days after the United States has been
provided the additional information requested from defendants, the
proposed purchaser, and any third party, whichever is later, the United
States 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 VI(C) of this Final Judgment.
Upon objection by the United States, a divestiture proposed under
Section IV or VI of this Final Judgment shall not be consummated. Upon
objection by defendants under the provision in Section VI(C), a
divestiture proposed under Section IV shall not be consummated unless
approved by the Court.
VIII. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter and every twenty (20) calendar days thereafter until the
divestitures have been completed pursuant to Section IV or VI of this
Final Judgment, defendants shall deliver to the United States an
affidavit as to the fact and manner of compliance with Section IV or VI
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 assets 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 the Relevant Milwaukee
Assets and Relevant Mansfield 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 objection by the United States 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 Compliant
in this matter, defendants shall deliver to the United States an
affidavit which describes in detail all actions defendants have taken
and all steps defendants have implemented on an ongoing basis to
preserve the Relevant Milwaukee Assets and Relevant Mansfield Assets
pursuant to Section IX of this Final Judgment. Defendants shall deliver
to the United States 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 Milwaukee Assets and Relevant
Mansfield Assets that were divested and to effect the ordered
divestitures.
[[Page 44816]]
IX. 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 jeopardize the sale of the
Relevant Milwaukee Assets or the Relevant Mansfield Assets.
X. Financing
Defendants shall not finance all or any part of any purchase by any
person made pursuant to Section IV or VI of this Final Judgment.
XI. Compliance Inspection
A. For purposes of determining or securing compliance with the
Final Judgment, or of determining whether the Final Judgment should be
modified or vacated, and subject to any legally recognized privilege,
from time to time, duly authorized representatives of the United States
Department of Justice, including consultants and other persons retained
by the United States, shall, upon written request of the Attorney
General or of the Assistant Attorney General in charge of the Antitrust
Division, and on reasonable notice to defendants, 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. To interview, either informally or on the record, their
officers, employees, and agents, who may have counsel present,
regarding any such matters. The interview shall be subject to
reasonable convenience and without restraint or interference by
defendants.
B. Upon the written request of the Attorney General in charge of
the Antitrust Division, defendants shall submit such written reports,
under oath if requested, relating to any matter contained in the Final
Judgment and the Hold Separate Stipulation and Order as may be
requested.
C. No information or documents obtained by the means provided in
Section XI of this Final Judgment shall be divulged by a representative
of the United States to any person other than a duly authorized
representative of the Executive Branch of the United States, except in
the course of legal proceedings to which the United States is a party
(including grand jury proceedings), or for the purpose of securing
compliance with this Final Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by
defendants to the United States, 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 the United States to defendants prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding) to which defendants are not a party.
XII. 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.
XIII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XIV. Public Interest
Entry of this Final Judgment is in the public interest.
Dated________________, 2000.
United States District Judge________
Parties Entitled to Notice of Entry of Final Judgment:
Counsel for Plaintiff United States of America,
David R. Bickel,
U.S. Department of Justice, Antitrust Division, Suite 3000, 1401 H
Street, NW., Washington, DC 20037.
Counsel for Defendant Allied Waste Industries, Inc.,
Tom D. Smith,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW., Washington, DC
20001-2113.
Counsel for Superior Services, Inc.,
James T. McKeown,
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, WI 53202-5367.
and
Joseph D. Edmondson, Jr.,
Foley & Lardner, Washington Harbour, 3000 K Street, NW., Washington, DC
20007.
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Allied Waste Industries,
Inc. and Superior Services, Inc., Defendants.
File No.: 1:00 CV 01067
Judge: Ricardo M. Urbina
Deck Type: Antitrust
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. Sec. 16(b)-(h),
files this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
Nature and Purpose of the Proceeding
The United States filed a civil antitrust Complaint on May 12,
2000, seeking to enjoin the acquisition of certain waste hauling and
disposal assets by Allied Waste Industries, Inc. (``Allied'') and
Superior Services, Inc. (``Superior''). Allied and Superior had entered
into purchase agreements pursuant to which Superior would acquire
hauling assets from Allied in Milwaukee, Wisconsin; Allied would
acquire hauling assets from Superior in Mansfield, Ohio; and Superior
would acquire Allied's County Environmental Landfill in Leeper,
Pennsylvania. The Complaint alleges that the likely effects of these
acquisitions would be to substantially lessen competition for waste
collection and disposal services in violation of Section 7 of the
Clayton Act. This loss of competition would result in consumers paying
higher prices and receiving fewer services for the collection and
disposal of waste.
At the same time the Complaint was filed, the United States also
filed a
[[Page 44817]]
proposed Final Judgment and a Hold Separate Stipulation and Order that
were designed to eliminate the anticompetitive effects of the
acquisitions. Under the proposed Final Judgment, which is explained
more fully below, the defendants are required within 90 days after the
filing of the Hold Separate Stipulation and Order, or five (5) days
after notice of the entry of the Final Judgment by the Court, to
divest, as viable business operations, certain waste hauling assets and
related transfer stations in the Milwaukee and Mansfield areas. The
proposed Final Judgment also requires Superior to abandon its proposed
acquisition of Allied's landfill in Leeper. Under the terms of the Hold
Separate Stipulation and Order, the defendants are required to take
certain steps to ensure that the assets to be divested will be
preserved and held separate from the defendants' other assets and
businesses.
The United States and the defendants have stipulated that the
proposed Final Judgment may be entered after compliance with the APPA.
Entry of the proposed Final Judgment would terminate this action,
except that the Court would retain jurisdiction to construe, modify, or
enforce the provisions of the proposed Final Judgment and to punish
violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transactions
Allied, with revenues in 1999 of approximately $6 billion, is the
nation's second largest waste hauling and disposal company, operating
throughout the United States. Superior, with 1999 revenues of
approximately $319.7 million, is a multi-state waste collection and
disposal company. On August 4, 1999, Allied and Superior entered into
nine separate agreements in which they agreed to exchange certain waste
hauling and disposal assets. Three of those nine agreements involve
acquisitions of waste hauling and disposal assets in the Milwaukee,
Mansfield, and Leeper areas. These acquisitions are the subject of the
Complaint and proposed Final Judgment filed by the United States on May
12, 2000.
B. The Competitive Effects of the Transaction
Waste collection firms, or ``haulers,'' contract to collect
municipal solid waste (``MSW'') from residential and commercial
customers; they transport the waste to private and public disposal
facilities (e.g., transfer stations, incinerators and landfills),
which, for a fee, process and legally dispose of waste. Allied and
Superior compete in operating waste collection routes and waste
disposal facilities.
1. The Effects of the Transaction on Competition in the Markets for
Small Container Commercial Waste Collection Services.
Small container commercial waste collection service is the
collection of MSW from commercial businesses such as office and
apartment buildings and retail establishments (e.g., stores and
restaurants) for shipment to, and disposal at, an approved disposal
facility. Because of the type and volume of waste generated by
commercial accounts and the frequency of service required, haulers
organize commercial accounts into special routes, and use specialized
equipment to store, collect and transport waste from these accounts to
approved disposal sites. This equipment--one to ten cubic yard
container for waste storage, plus front-end and rear-end loader
vehicles for collection and transportation--is uniquely well suited for
the provision of small container commercial waste collection service.
Providers of other types of waste collection services (e.g.,
residential and roll-off services) are not good substitutes for small
container commercial waste collection firms. In their waste collection
efforts, other firms use different waste storage equipment (e.g.,
garbage cans or semi-stationary roll-off containers) and different
vehicles (e.g., side-load trucks), which, for a variety of reasons,
cannot be conveniently or efficiently used to store, collect or
transport waste generated by commercial accounts, and hence, are rarely
used on small container commercial waste collection routes. For
purposes of antitrust analysis, the provision of small container
commercial waste collection services constitutes a line of commerce, or
relevant service., for analyzing the effects of the acquisitions.
The Complaint alleges that the provision of small container
commercial waste collection services takes place in compact, highly
localized geographic markets. It is expensive to ship waste long
distances in either collection or disposal operations. To minimize
transportation costs and maximize the scale, density, and efficiency of
their waste collection operations, small container commercial waste
collection firms concentrate their customers and collection routes in
small areas. Firms with operations concentrated in a distant area
cannot easily compete against firms whose routes and customers are
locally based. Sheer distance may significantly limit a distant firm's
ability to provide commercial waste collection service as frequently or
conveniently as that offered by local firms with nearby routes. Also,
local commercial waste collection firms have significant cost
advantages over other firms, and can profitably increase their charges
to local commercial customers without losing significant sales to firms
outside the area.
Applying that analysis, the Complaint alleges that the Milwaukee
and Mansfield areas constitute sections of the country, or relevant
geographic markets, for the purpose of assessing the competitive
effects of a combination of Allied and Superior in the provision of
small container commercial waste collection services. The Milwaukee
area includes the City of Milwaukee. Milwaukee County and the eastern
half east of route 83 of Waukesha County, Wisconsin. The Mansfield area
includes the city of Mansfield, and Richland and Ashland counties,
Ohio.
In the Milwaukee area, Superior's acquisition of Allied's assets
would reduce from three to two the number of significant firms
competing in small container commercial waste collection service. After
the acquisition, Superior would control approximately 40%, and two
firms would control over 80%, of total market revenue, which is about
$22 million annually. The acquisition would increase the Herfindahl-
Hirschmann Index (``HHI''),\1\ a measure of market concentration, by
about 700 points to about 4700 in the Milwaukee area.
---------------------------------------------------------------------------
\1\ The Herfindahl-Hirschmann Index (``HHI'') is a measure of
market concentration calculated by squaring the market share of each
firm competing in the market and then summing the resulting numbers.
For example, for a market consisting of four firms with shares of
30, 30, 20, and 20 percent, the HHI is 2600 (30 squared (900) plus
30 squared (900) plus 20 squared (400) plus 20 squared (400) =
2600). The HHI, which takes into account the relative size and
distribution of the firms in a market, ranges from virtually zero to
10,000. The index approaches zero when a market is occupied by a
large number of firms of relatively equal size. The index increases
as the number of firms in the market decreases and as the disparity
in size between the leading firms and the remaining firms increases.
---------------------------------------------------------------------------
In the Mansfield area, Allied's acquisition of Superior's assets
would reduce from two to one the number of significant firms that
compete in small container commercial waste collection service. After
the acquisition, Allied would control over 80% of the market. The
acquisition would increase the HHI by over 3000 points to about 7300 in
the
[[Page 44818]]
Mansfield area, where total revenues exceed $3.5 million annually.
New entry into these markets would be difficult, time consuming,
and is unlikely to be sufficient to constrain any post-merger price
increase. Many customers of commercial waste collection firms have
entered into long-term contracts, tying them to a market incumbent for
indefinitely long periods of time. In competing for uncommitted
customers, market incumbents can price discriminate, i.e., selectively
(and temporarily) charge unbeatably low prices to customers targeted by
entrants, a tactic that would strongly discourage a would-be competitor
from competing for such accounts, which, if won, may be unprofitable to
serve. Taken together, the prevalence of long-term contracts and the
ability of market incumbents to price discriminate substantially
increases any would-be new entrant's costs and time necessary for it to
build its customer base and obtain efficient scale and route density to
become an effective competitor in the market.
The Complaint alleges that a combination of Allied and Superior in
Milwaukee and Mansfield would likely lead to an increase in prices
charged to consumers of small container commercial waste collection
services. The two acquisitions would diminish competition by enabling
the few remaining competitors to engage more easily, frequently, and
effectively in coordinated pricing interaction that harms consumers.
2. The Effects of the Transaction on Competition in the Leeper Area for
Disposal of Municipal Solid Waste.
A number of federal, state and local safety, environmental, zoning
and permit laws and regulations dictate critical aspects of storage,
handling, transportation, processing and disposal of MSW. MSW can be
sent for disposal only to a transfer station, sanitary landfill, or
incinerator permitted to accept MSW. Anyone who attempts to dispose of
MSW in a facility that has not been approved for disposal of such waste
risks severe civil and criminal penalties. Firms that compete in the
disposal of MSW can profitably increase their charges to haulers for
disposal of MSW without losing significant sales to other firms. For
these reasons, there are no good substitutes for disposal of MSW. The
disposal of MSW therefore constitutes a line of commerce, or relevant
service, for the purposes of analyzing the acquisition.
Disposal of MSW generally tends to occur in localized markets.
Disposal costs are a significant component of waste collection
services, often comprising 40% or more of overall operating costs. It
is expensive to transport waste significant distances for disposal.
Consequently, waste collection firms strongly prefer to send waste to
local disposal sites. Sending a vehicle to dump waste at a remote
landfill increases both the actual and opportunity costs of a hauler's
collection service. Natural and man-made obstacles (e.g., mountains and
traffic congestion), sheer distance and relative isolation from
population centers (and collection operations) substantially limit the
ability of a remote disposal site to compete for MSW from closer, more
accessible sites. Thus, waste collection firms will pay a premium to
dispose of waste at more convenient and accessible sites. Operators of
such disposal facilities can--and do--price discriminate, i.e., charge
higher prices to customers who have fewer local options for waste
disposal.
For these reasons, the Complaint alleges that, for purposes of
antitrust analysis, the Leeper area is a relevant geographic market for
disposal of MSW. The Leeper area includes the City of Leeper, and
Clarion, Elk, Forest, and Jefferson counties, Pennsylvania.
In the Leeper area, Superior's acquisition of Allied's County
Environmental Landfill would reduce from two to one the number of
significant firms competing in the disposal of MSW, resulting in a
monopoly. In 1998, approximately 66,000 tons of MSW were generated from
this market. In that same year, these two landfills disposed of about
97% of that MSW. Based on quantity disposed, the post-merger HHIs for
disposal of MSW would be about 9500, with an increase of approximately
4500 points.
Obtaining a permit to construct or expand an existing disposal site
is an expensive and time consuming task. Local public opposition often
makes it more difficult and costly and increases the uncertainty of
successfully permitting a facility. Significant new entry in the Leeper
area is unlikely to prevent the exercise of market power after the
acquisition.
The elimination of one of only two significant competitors, such as
would occur as a result of the proposed transaction in the Leeper area,
virtually ensures that consumers in this market will face higher prices
for the disposal of MSW or the collection of small container commercial
waste.
III. Explanation of the Proposed Final Judgment
A. Divestitures in the Milwaukee and Mansfield Areas
The divestiture provisions of the proposed Final Judgment will
eliminate the anticompetitive effects of the acquisition in small
containerized commercial waste collection services in the Milwaukee and
Mansfield areas by establishing a new, independent and economically
viable competitor in each of those markets. The proposed Final Judgment
requires defendants, within 90 days after the filing of the Complaint,
or five (5) days after notice of the entry of the Final Judgment by the
Court, whichever is later to divest, as a viable ongoing business or
businesses, small container commercial waste collection assets (e.g.,
routes, trucks, containers, and customer lists) relating to the
Milwaukee and Mansfield markets, as well as a transfer station in each
market. The transfer stations must be divested because they are likely
to make the buyer of the waste collection assets a more effective
competitor.
These assets must be divested in such a way as to satisfy the
United States that the operations can and will be operated by the
purchaser or purchasers as a viable, ongoing business that can compete
effectively in each relevant market. Defendants must take all
reasonable steps necessary to accomplish the divestitures quickly and
shall cooperate with prospective purchasers.
In the event that defendants do not accomplish the divestitures
within the above-described period, the proposed Final Judgment provides
that the Court will appoint a trustee selected by the United States to
effect the divestitures. If a trustee is appointed, the proposed Final
Judgment provides that the defendant affected will pay all costs and
expenses of the trustee. The trustee's commission will be structured so
as to provide an incentive for the trustee based on the price obtained
and the speed with which divestiture is accomplished. After his or her
appointment becomes effective, the trustee will file monthly reports
with the parties and the Court, setting forth its efforts to accomplish
divestitures. At the end of six months, if the divestiture has not been
accomplished, the trustee and the parties will make recommendations to
the Court, which shall enter such orders as appropriate in order to
carry out the purpose of the trust, including extending the trust or
the term of the trustee's appointment.
The relief sought in the Milwaukee and Mansfield areas will
maintain the
[[Page 44819]]
pre-acquisition structure of each market and thereby ensure that
consumers of small container commercial waste collection services will
continue to receive the benefits of competition--lower prices and
better service.
B. Ban on Acquisition of County Environmental Landfill
The proposed Final Judgment also requires Superior to abandon its
purchase agreement with Allied, dated August 4, 1999, to acquire the
County Environmental Landfill (``County Landfill'') in Leeper,
Pennsylvania. Superior is banned from acquiring the landfill for the
ten-year term of the Final Judgment unless a new landfill opens in the
Leeper area. If a new landfill opens, Superior may propose to acquire
County Landfill, but it must give the Antitrust Division advance notice
of any such plan.
Typically, the United States does not require parties who have
abandoned an acquisition to enter into a Final Judgment preventing them
from engaging in the same or a similar transaction in the future. In
this case, however, such a provision was necessary because the
acquisition of County landfill, standing alone, probably would not be
large enough to trigger the reporting requirements of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, 15 U.S.C.
Sec. 18a. Absent such a provision, Superior could subsequently acquire
the landfill without the United States knowing about the acquisition
until well after it had taken place.
As noted above, the proposed Final Judgment does not completely bar
Superior from acquiring County Landfill, but, rather, it permits
superior to propose such an acquisition in the event that another
landfill opens in the Leeper area. The United States does not believe
entry is likely within the next two years or that foreseeable entry
would be sufficient to counteract the anticompetitive effects of
Superior's acquisition of County Landfill. The proposed Final Judgment
has a term of ten years, however, and it is possible that entry during
that period would sufficiently alter the market conditions so as to
render competitively harmless an acquisition of County Landfill by
Superior. Hence, the proposed Final Judgment requires Superior to
provide the Antitrust Division with notice before consummating an
acquisition of County Landfill. This will give the Antitrust Division
time to evaluate the proposed transaction and take action to block the
deal if the situation so warrants.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. Sec. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.
Sec. 16(a)), the proposed Final Judgment has no prima facie effect in
any subsequent private lawsuit that may be brought against the
defendants.
V. Procedures Available for Modification of the Proposed Final
Judgment
The United States and the defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the APPA, provided that the United States has
not withdrawn its consent. The APPA conditions entry upon the court's
determination that the proposed Final Judgment is in the public
interest.
The APPA provides a period of at least 60 days preceding the
effective date of the proposed Final Judgment within which any person
may submit to the United States written comments regarding the proposed
Final Judgment. Any person who wishes to comment should do so within 60
days of the date of publication of this Competitive Impact Statement in
the Federal Register. The United States will evaluate and respond to
the comments. All comments will be given due consideration by the
Department of Justice, which remains free to withdraw its consent to
the proposed Final Judgment at any time prior to entry. The comments
and the response of the United States will be filed with the Court and
published in the Federal Register.
Written comments should be submitted to: J. Robert Kramer II,
Chief, Litigation II Section, Antitrust Division, United States
Department of Justice, 1401 H Street, N.W., Suite 3000, Washington,
D.C. 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against defendants Allied
and Superior. The United States could have continued the litigation and
sought preliminary and permanent injunctions against Allied's
acquisition of the Superior assets, and Superior's acquisition of the
Allied assets. The United States is satisfied, however, that the
divestiture of hauling assets and the abandonment of the County
Landfill acquisition will preserve competition for small containerized
commercial waste collection services in the Milwaukee and Mansfield
areas, as well as competition for the disposal of MSW in the Leeper
area.
VII. Standard of Review Under the APPA for the Proposed Final
Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty-day comment
period, after which the court shall determine whether entry of the
proposed Final Judgment ``is in the public interest.'' In making that
determination, the court may consider--
(1) The competitive impact of such judgment, including termination
of alleged violations, provisions for enforcement and modification,
duration of relief sought, anticipated effects of alternative remedies
actually considered, and any other considerations bearing upon the
adequacy of such judgment;
(2) The impact of entry of such judgment upon the public generally
and individual alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if any,
to be derived from a determination of the issues at trial.
15 U.S.C. Sec. 16(e) (emphasis added). As the Court of Appeals for
the District of Columbia Circuit has held, the APPA permits a court to
consider, among other things, the relationship between the remedy
secured and the specific allegations set forth in the government's
complaint, whether the decree is sufficiently clear, whether
enforcement mechanisms are sufficient, and whether the decree may
positively harm third parties. See United States v. Microsoft Corp.,
56F.3d 1448, 1458-62 (D.C. Cir. 1995).
In conducting this inquiry, ``the Court is nowhere compelled to go
to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly
[[Page 44820]]
settlement through the consent decree process.'' \2\ Rather, absent a
showing of corrupt failure of the government to discharge its duty, the
Court, in making its public interest finding, should * * * carefully
consider the explanations of the government in the competitive impact
statement and its responses to comments in order to determine whether
those explanations are reasonable under the circumstances.
\2\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''
determination can be made properly on the basis of the Competitive
Impact Statement and Response to Comments filed pursuant to the
APPA. Although the APPA authorizes the use of additional procedures,
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court
need not invoke any of them unless it believes that the comments
have raised significant issues and that further proceedings would
aid the court in resolving those issues. See H.R. 93-1463, 93rd
Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News
6535, 6538.
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United States. v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH)
para. 61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States. v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988) (quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083
(1981)); see also Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent
requires that
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\3\
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\3\ United States v. Bechtel Corp., 648 F.2d at 666 (citations
omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d
at 463; United States v. National Broadcasting Co., 449 F. Supp.
1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F.
Supp. at 746; see also United States v. American Cyanamid Co., 719
F.2d 558, 565 (2d Cir. 1983), cert. denied. 465 U.S. 1101 (1984).
The proposed Final Judgment, therefore should not be reviewed under
a standard of whether it is certain to eliminate every anticompetitive
effect of a particular practice or whether it mandates certainty of
free competition in the future. Court approval of a final judgment
requires a standard more flexible and less strict than the standard
required for a finding of liability. ``[A] proposed decree must be
approved even if it falls short of the remedy the court would impose on
its own, as long as it falls within the range of acceptability or is
`within the reaches of public interest.' '' \4\
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\4\ United States v. American Tel. and Tel. Co., 552 F. Supp.
131, 150 (D.D.C. 1982) (citations omitted), quoting United States v.
Gillette Co., supra, 406 F. Supp. at 716 aff'd sub nom. Maryland v.
United States, 460 U.S. 1001 (1983); United States v. Alcan
Aluminum, Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985).
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Moreover, the court's role under the Tunney Act is limited to
reviewing the remedy in relationship to the violations that the United
States has alleged in its complaint, and does not authorize the Court
to ``construct [its] own hypothetical case and then evaluate the decree
against that case,'' Microsoft, 56 F.3d at 1459. Since ``[t]he court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by bringing a case in the first
place,'' it follows that the court ``is only authorized to review the
decree itself,'' and not to ``effectively redraft the complaint'' to
inquire into other matters that the United States might have but did
not pursue. Id.
VIII. Determinative Documents
There are not determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: June 22, 2000.
Respectfully submitted,
David R. Bickel,
DC Bar #393409, U.S. Department of Justice, Antitrust Division,
Litigation II Section, 1401 H Street, NW, Suite 3000, Washington, DC
20530, (202) 307-0924.
Certificate of Service
I hereby certify that a copy of the foregoing has been served upon
Allied Waste Industries, Inc. and Superior Services, Inc. by placing a
copy of this Competitive Impact Statement in the U.S. mail, postage
prepaid directed to each of the above-named parties at the addresses
given below, this 22nd day of June, 2000.
Counsel for Defendant Allied Waste Industries, Inc.
Tom D. Smith,
Jones Day Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113.
Counsel for Defendant Superior Services, Inc.
James T. McKeown,
Foley & Lardner, 777 East Wisconsin Avenue, Milwaukee, WI 53202-
5367.
and
Joseph D. Edmondson, Jr.,
Foley & Lardner, Washington Harbour, 3000 K Street, NW, Washington,
DC 20007.
David R. Bickel,
DC Bar #393409, U.S. Department of Justice, Antitrust Division, Suite
3000, 1401 H Street, NW, Washington, DC 20530.
[FR Doc. 00-18157 Filed 7-18-00; 8:45 am]
BILLING CODE 4410-11-M