[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