[Federal Register Volume 65, Number 175 (Friday, September 8, 2000)]
[Notices]
[Pages 54547-54562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22137]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Allied Waste Industries, Inc. and Republic
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 Industrires, Inc., and Repulbic Services,
Inc., Civil No. 1:00CV 01469 on June 21, 2000. A Competitive Impact
Statement was filed on August 15, 2000. The Complaint sought to enjoin
the defendants' proposed sales of waste collection assets in the areas
of Albany, NY; Augusta, GA; Burlington and Camden Counties, NJ;
Clarksville, TN; Columbus, OH; Escambia, Santa Rosa, and Okaloosa
counties, Florida; Lakeland, FL; Louisville, KY/Sellersburg, IN; Macon,
GA; Memphis, TN; Monmouth County, NJ; Nashville, TN and Norfolk, VA.
The Complaint also sought to enjoin the defendants' proposed sales of
municipal solid waste disposal assets in the areas of Anderson, IN and
New York City, NY. The Complaint alleged that these transactions
between Allied and Republic 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 commercial waste collection
operations in the areas of Augusta, GA; Escambia, Santa Rosa, and
Okaloosa counties, FL; Memphis, TN; Nashville, TN; and Norfolk, VA: (2)
Republic divest commercial waste collection operations in the areas of
Columbus, OH; Lakeland, FL; Louisville, KY/Sellersburg, IN; and Macon,
GA; (3) Allied divest disposal assets in the area of New York City, New
York; and (4) Republic divest disposal assets in the areas of Anderson,
IN and Macon, GA. The proposed Final Judgment also requires the
defendants to alter their existing contracts and offer new contracts
meeting certain conditions for (1) commercial waste collection services
in the areas of Albany, NY; Augusta, GA; Burlington and Camden
Counties, NJ; Clarksville, TN; Columbus, OH; Escambia, Santa Rosa, and
Okaloosa counties, FL; Lakeland, FL; Louisville, KY/Sellersburg, IN;
Macon, GA; Monmouth County, NJ; and Nolfolk, VA; and (2) roll-off waste
collection services in Macon, GA.
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.
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:
[[Page 54548]]
I. Definitions
As used in this Hold Separate Stipulation and Order:
A. ``Acquirer'' or ``Acquirers'' means the entity or entities to
whom defendants divest the Divestiture Assets.
B. ``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.
C. ``Republic'' means defendant Republic Services, Inc., a Delaware
corporation with its headquarters in Ft. Lauderdale, Florida, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures, and their
directors, officers, managers, agents, and employees.
D. ``Relevant Allied Assets'' means all Relevant Allied Disposal
Assets and Relevant Allied Hauling Assets, as further defined below.
E. ``Relevant Allied Disposal Assets'' means, unless otherwise
noted, with respect to each transfer station listed and described
herein, all of Allied's rights, titles and interests in any tangible
assets, including all fee and leasehold and renewal rights in the
listed 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 of Allied's rights, titles and interests in any
intangible assets, including all customer lists, contracts, and
accounts, or options to purchase any adjoining property.
Relevant Allied Disposal Assets, as used herein, includes each of
the following properties:
1. Transfer Stations
a. Anderson, IN. Allied's BFI Anderson Transfer Station, located at
201 North Delaware, Anderson, IN 46016.
b. Macon, GA. Allied's S&S Byron Transfer Station, located at 750
Dunbar Road, Byron, GA 31008.
F. ``Relevant Allied Hauling Assets,'' unless otherwise noted,
means with respect to each commercial waste collection route or other
hauling asset described herein, all tangible assets, including capital
equipment, trucks and other vehicles, containers, interests, permits,
supplies; and real property and improvements to real property (i.e.,
buildings and garages). It also includes all intangible assets,
including hauling-related customer lists, contracts, leasehold
interests, and accounts.
Relevant Allied Hauling Assets (to be held separate by Republic),
as used herein, includes the assets in the following locations:
1. Columbus, OH
Allied's front-end and rear-end loader truck small container routes
(hereinafter, ``commercial routes'') 31, 51, 54, 91, 92, 96, and 97
that serve the City of Columbus and Franklin and Delaware counties,
Ohio;
2. Lakeland, FL
Allied's commercial routes 901 and 904, that serve Polk County, FL;
and
3. Macon, GA
Allied's commercial routes 902 and 903 that serve the City of
Macon; and Bibb and Jones counties, Georgia.
For purposes of this Hold Separate Stipulation and Order, the
Relevant Allied Hauling Assets to be held separate by Republic shall
also include the following:
4. Louisville, KY/Sellersburg, IN
Republic's commercial routes 4, 8, 17, 18 and 26 that serve the
cities of Louisville, KY and Sellersburg, IN; Jefferson County, KY; and
the parts of Floyd and Clark counties, IN abutting Jefferson County,
KY.
G. ``Relevant Republic Assets'' means all Relevant Republic
Disposal Assets and Relevant Republic Hauling Assets, as further
defined below.
H. ``Relevant Republic Disposal Assets'' means Republic's All City
Transfer Station, also known as Republic Services of New York II, LLC,
located at 246-252 Plymouth Street, New York, New York. Relevant
Republic Disposal Assets includes, with respect to the transfer station
listed and described herein, all of Republic'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 of Republic's rights, titles and
interests in any intangible assets, including all customer lists,
contracts, and accounts, or options to purchase any adjoining property.
I. ``Relevant Republic Hauling Assets,'' unless otherwise noted,
means with respect to each commercial waste collection route or other
hauling asset described herein, all tangible assets, including capital
equipment, trucks and other vehicles, containers, interests, permits,
supplies; and real property and improvements to real property (i.e.,
buildings and garages). It also includes all intangible assets,
including hauling-related customer lists, contracts, leasehold
interests, and accounts.
Relevant Republic Hauling Assets (to be divested by Allied), as
used herein, includes the assets in the following locations:
1. Augusta, GA
Republic's commercial routes 204 and 238 that serve the City of
Augusta, GA: Richmond and Columbia counties, GA; and Aiken County, SC;
2. Gulf Coast, FL
Republic's commercial routes 1, 4 (a Saturday-only route) and 5
that serve Escambia, Santa Rosa and Okaloosa counties, FL, except for
those contracts with route 4 customers also being served on a Republic
Gulf Coast route not being divested pursuant to this Final Judgment;
3. Memphis, TN
Republic's commercial routes 51, 52 and 53 that serve Shelby
County, TN; Desoto County, MS; and Crittendon County, AR;
4. Nashville, TN
Republic's commercial routes 12, 16, 20, 24 and 30 that serve the
City of Nashville, TN; and Davidson, Sumner, Williamson, Rutherford,
Wilson, the southeastern part of Robertson, and the eastern part of
Cheatham counties, TN; and
5. Norfolk, VA
Republic's commercial routes 1, 2, 3 (except for the Virginia Beach
municipal contract), 6, 7, 9, and 10, that serve the cities of
Chesapeake, Suffolk, Virginia Beach, Norfolk, Poguoson, Newport News
and Plymouth, VA; and York, Surry, James City, Southampton, and Isle of
Wright counties, VA.
II. Objectives
The Final Judgment filed in this case is meant to ensure
defendants' prompt divestiture of the Relevant Allied Assets and
Relevant Republic Assets for the purpose of establishing viable
competitors in the municipal solid waste (``MSW'') disposal business
and the small container commercial waste collection business, to remedy
the effects that the United States alleges would otherwise result from
the exchange of assets between Allied and Republic. This Hold Separate
Stipulation and Order ensures, prior to such divestitures, that the
Relevant Allied Assets and Relevant Republic
[[Page 54549]]
Assets remain independent, economically viable, and ongoing business
concerns that will remain independent and uninfluenced by Allied or
Republic, 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. 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
Allied Assets and Relevant Republic Assets as independent, ongoing,
economically viable competitive businesses, with management, sales and
operations of such assets held entirely separate, distinct and apart
from the other operations of Republic, in the case of the Relevant
Allied Assets, and from Allied, in the case of the Relevant Republic
Asserts. Republic shall not coordinate its service, marketing,
negotiation of sales or other business operations with those of any
Relevant Allied Asset. Allied shall not coordinate its service,
marketing, negotiation of sales or other business operations with those
of any Relevant Republic Asset. Within twenty (20) days after the
filing of the Hold Separate Stipulation and Order, 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 Allied Assets and Relevant Republic Assets will be maintained
and operated as independent, ongoing, economically viable and active
competitors in the MSW disposal business and the small container
commercial waste collection business; (2) the management of the
Relevant Republic Assets will not be influenced by Allied, and the
management of the Relevant Allied Assets will not be influenced by
Republic; and (3) the books, records, competitively sensitive sales,
marketing and pricing information, and decision-making concerning the
Relevant Republic Asset will be kept separate and apart from Allied's
other operations, and the books, records, competitively sensitive sales
marketing, and pricing information, and decision-making concerning the
Relevant Allied Assets will be kept separate and apart from Republic's
other operations. Republic's influence over the Relevant Allied Assets
and Allied's influence over the Relevant Republic 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 Allied Assets and
Relevant Republic Assets, and shall maintain at 1999 or at previously
approved levels for 2000, whichever are higher, all promotional,
advertising, sales, technical assistance, marketing and merchandising
support for the Relevant Allied Assets and Relevant Republic Assets.
D. Defendants shall provide sufficient working capital and lines
and sources of credit to continue to maintain the Relevant Allied
Assets and Relevant Republic Assets as economically viable and
competitive ongoing businesses consistent with the requirements of
Sections V(A) and (B).
E. Defendants shall take all steps necessary to ensure that the
Relevant Allied Assets and Relevant Republic Assets are fully
maintained in operable condition at no less than their current capacity
and sales, and shall maintain and adhere to normal repair and
maintenance schedules for the Relevant Allied Assets and Relevant
Republic 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 Allied Assets or Relevant Republic
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 Allied
Assets and Relevant Republic Assets.
H. Except in the ordinary course of business or as in otherwise
consistent with this Hold Separate Stipulation and Order, defendants
shall not hire, transfer, terminate, or otherwise alter the salary
agreements for any Allied or Republic employee who, on the date of
defendants' signing of this Hold Separate Stipulation and Order,
either: (1) Works with a Relevant Allied Asset or a Relevant Republic
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 Allied Assets and Relevant
Republic
[[Page 54550]]
Assets are divested pursuant to the terms of the Final Judgment, the
Relevant Republic Assets shall be managed by Richard J. Wojahn and the
Relevant Allied Assets shall be managed by Raul Rodriguez, Jr. Messrs.
Wojahn and Rodriguez shall have complete managerial responsibility for
the Relevant Allied Assets and Relevant Republic Assets, subject to the
provisions of this Order and the proposed Final Judgment. In the event
that either Mr. Wojahn or Mr. Rodriquez is unable to perform this
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 an Acquirer
or Acquirers 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 20530, (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 Republic Services, Inc.
Paul B. Hewitt,
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1333 New Hampshire Ave.,
N.W., Suite 400, Washington, DC 20036, (202) 887-4000.
Dated: June 21, 2000.
Order
It Is So Ordered On This 21st Day of June, 2000.
Richard M. Urbina,
United States District Judge.
Final Judgment
WHEREAS, plaintiff, the United States of America, having filed its
Complaint in this action on June, 2000, and plaintiff and defendants,
Allied Waste Services, Inc. (``Allied'') and Republic Service, Inc.
(``Republic''), by their respective attorneys, having consented to the
entry of this Final Judgment constituting any evidence against or an
admission by any party with respect to any issue of law or fact herein;
AND WHEREAS, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
AND WHEREAS, the essence of this Final Judgment is the prompt and
certain divestiture of the Relevant Allied Assets and Relevant Republic
Assets by the defendants to assure that competition is not
substantially lessened;
AND WHEREAS, the United States requires defendants to make certain
divestitures for the purpose of remedying the loss of competition
alleged in the Complaint;
AND WHEREAS, defendants have represented to the United States that
the divestitures required below can and will be made and that
defendants will later raise no claims of hardship or difficulty as
grounds for asking the Court to modify any of the divestiture or other
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 under Section 7 of
the Clayton Act, as amended, 15 U.S.C. 18.
II. Definitions
As used in this Final Judgment:
A. ``Acquirer'' or ``Acquirers'' means the entity or entities to
whom defendants divest the Relevant Allied Assets or Relevant Republic
Assets.
B. ``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.
C. ``Disposal'' means the business of disposing of waste into
approved disposal sites.
D. ``Hauling'' means the collection of waste from customers and the
shipment of the collected waste to disposal sites. Hauling, as used
herein, does not include collection of roll-off containers.
E. ``Landfill'' means a waste management facility where waste is
placed into the land.
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. ``Relevant Allied Assets'' means all Relevant Allied Disposal
Assets and Relevant Allied Hauling Assets, as further defined below.
H. ``Relevant Allied Disposal Assets'' means, with respect to each
transfer station listed and described herein, all of Allied's rights,
titles and interests in any tangible assets, including all fee and
leasehold and renewal rights in the listed 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 of Allied's rights, titles
and interests in any intangible assets, including all customer lists,
contracts, and accounts, or options to purchase any adjoining property.
Relevant Allied Disposal Assets, as used herein, includes each of
the following properties:
1. Anderson, IN
Allied's BFI Transfer Station, located at 201 North Delaware,
Anderson, IN 46016; and
2. Macon, GA
Allied's S&S Byron Transfer Station, located at 750 Dunbar Road,
Byron, GA 31008.
I. ``Relevant Allied Hauling Assets,'' means with respect to each
commercial waste collection route or other hauling asset described
herein, all tangible assets, including capital equipment, trucks and
other vehicles, containers, interests, permits, supplies; and if
requested by the purchaser, real property and improvements to real
property (i.e., buildings and garages). It also includes all intangible
assets, including hauling-related customer lists, contracts, leasehold
interests, and accounts.
Relevant Allied Hauling Assets, as used herein, includes the assets
in the following locations:
1. Columbus, OH
Allied's front-end and rear-end loader truck small container routes
(hereinafter, ``commercial routes'') 31, 51, 54, 91, 92, 96 and 97 that
serve the
[[Page 54551]]
City of Columbus; and Franklin and Delaware counties, Ohio.
2. Lakeland, FL
Allied's commercial routes 901 and 904 that serve Polk County, FL.
3. Macon, GA
Allied's commercial routes 902 and 903 that serve the City of
Macon; and Bibb and Jones counties, Georgia.
J. ``Relevant Republic Assets'' means all Relevant Republic
Disposal Assets and Relevant Republic Hauling Assets, as further
defined below.
K. ``Relevant Republic Disposal Assets'' means Republic's All City
Transfer Station, also known as Republic Services of New York II, LLC,
located at 246-252 Plymouth Street, New York, New York. Relevant
Republic Disposal Assets include all of Republic's rights, titles and
interest 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 Republic's rights, titles and interests
in any intangible assets, including all customer lists, contracts, and
accounts, or options to purchase any adjoining property.
L. ``Relevant Republic Hauling Assets'' means with respect to each
commercial waste collection route or other hauling asset described
herein, all tangible assets, including capital equipment, trucks and
other vehicles, containers, interests, permits, supplies; and if
requested by the purchaser, real property and improvements to real
property (i.e., buildings and garages). It also includes all intangible
assets, including hauling-related customer lists, contracts, leasehold
interest, and accounts.
Relevant Republic Hauling Assets, as used herein, includes the
assets in the following locations:
1. Augusta, GA
Republic's commercial routes 204 and 238 that serve the City of
Augusta; GA; Richmond and Columbia counties, GA; and Aiken County, SC.
2. Gulf Coast, FL
Republic's commercial routes 1, 4 (a Saturday-only route), and 5
that serve Escambia, Santa Rosa and Okaloosa counties, FL, except for
those contracts with route 4 customers also being served on a Republic
Gulf Coast route not being divested pursuant to this Final Judgment;
3. Louisville, KY/Sellersburg, IN
Republic's commercial routes 4, 8, 17, 18, and 26 (to be divested
by Republic) that serve the cities of Louisville, KY and Sellersburg,
IN; Jefferson County, KY; and the parts of Floyd and Clark counties, IN
abutting Jefferson County, KY.
4. Memphis, TN
Republic's comemrcial routes 51, 52 and 53 that serve Shelby
County, TN; Desoto County, MS; and Crittenden County, AK.
5. Nashville, TN
Republic's commercial routes 12, 16, 20, 24 and 30 that serve the
City of Nashville, TN; and Davidson, Sumner, Williamson, Rutherford,
Wilson, the southeastern part of Robertson, and the eastern part of
Cheatham counties, TN; and
6. Norfolk, VA
Republic's commercial routes 1, 2, 3 (except for the Virginia Beach
municipal contract), 6, 7, 9, and 10 that serve the cities of
Chesapeake, Suffolk, Virginia Beach, Norfolk, Poquoson, Newport News
and Portsmouth, VA; and York, Surry, James City, Southampton, and Isle
of Wright counties, VA subject to the following conditions of sale: the
new purchaser of the specified hauling assets must obtain a disposal
agreement satisfactory to the United States in advance of any
divestiture approval from the United States. If the United States, in
its sole discretion, deems it necessary for additional tonnages of
processible waste to be divested by Allied in the Norfolk area, Allied
agrees to supplement the assets already offered for sale with
additional waste customers whose total tonnages of processible waste
exceed 800 tons per month. Any supplemental asset divestiture by Allied
will be limited to no more than one (1) additional front-end loader
route, plus the accounts of other Allied waste customers whose total
processible waste, in combination with the waste generated from any
additional front-end loader route, shall equal 800 tons or more of
processible waste per month. The supplemental waste customer accounts
shall not be covered by any separate disposal agreement. The
supplemental customer accounts need not relate to small container
waste.
M. ``Republic'' means defendant Republic Services, Inc., a Delaware
corporation with its headquarters in Ft. Lauderdale, Florida, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, partnerships and joint ventures, and their
directors, officers, managers, agents, and employees.
N. ``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 read-end loader truck. Typical
commercial waste collection customers include office and apartment
buildings and retail establishments (e.g., stores and restaurants).
III. Applicability
A. This Final Judgment applies to Allied and Republic, as defined
above, and all other persons in active concert or participation with
any of them who receive 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 lesser
business units that include defendants' Relevant Allied Assets or
Relevant Republic Assets, that the Acquirer or Acquirers agree to be
bound by the provisions of this Final Judgment.
IV. Divestitures
A. Defendants are hereby ordered and directed, within one hundred
and twenty (120) calendar days after the filing of the Complaint in
this matter, or five (5) days after notice of the entry of this Final
Judgment by the Court, whichever is later, to divest the Relevant
Allied Assets and Relevant Republic Assets in a manner consistent with
this Final Judgment to an Acquirer(s) acceptable to the United States
in its sole discretion. The United States, in its sole discretion, may
agree to an extension of this time period of up to sixty (60) calendar
days, and shall notify the Court in such circumstances. Defendants
agree to use their best efforts to divest the Relevant Allied Assets
and the Relevant Republic Assets as expeditiously as possible.
B. In accomplishing the divestitures ordered by this Final
Judgment, defendants promptly shall make known, by usual and customary
means, the availability of the Relevant Allied Assets and Relevant
Republic Assets. Defendants shall inform any person making inquiry
regarding a possible purchase of the Relevant Allied Assets or Relevant
Republic Assets that they are being divested pursuant to this Final
Judgment and provide that person with a copy of this Final Judgment.
[[Page 54552]]
Defendants shall offer to furnish to all prospective Acquirers, subject
to customary confidentiality assurances, all information and documents
relating to the Relevant Allied Assets and Relevant Republic Assets
customarily provided in a due diligence process except such information
or documents subject to the attorney-client or work-product privileges.
Defendants shall make available such information to the United States
at the same time that such information is made available to any other
person.
C. Defendants shall provide the Acquirers and the United States
information relating to the personnel involved in the operation and
management of the Relevant Allied Assets and Relevant Republic Assets
to enable the Acquirer to make offers of employment. Defendants will
not interfere with any negotiations by the Acquirer[s] to employ any
defendant employee whose primary responsibility is the operation or
management of the Relevant Allied Assets or the Relevant Republic
Assets.
D. Defendants shall permit prospective Acquirers of the Relevant
Allied Assets and Relevant Republic Assets to have reasonable access to
personnel and to make inspections of the physical facilities; 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.
E. With the exception of the facilities described in Section II
(K), defendants shall warrant to all Acquirers of the Relevant Allied
Assets and Relevant Republic Assets that each asset will be operational
on the date of sale.
F. Defendants shall not take any action that will impede in any way
the permitting, operation, or divestiture of the Relevant Allied Assets
and Relevant Republic Assets.
G. Defendants shall warrant to the Acquirer[s] of the Relevant
Allied Assets and Relevant Republic 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 sale of the Relevant
Allied Assets and Relevant Republic Assets, defendants will not
undertake, directly or indirectly, any challenges to the environmental,
zoning, or other permits relating to the operation of the Relevant
Allied Assets and Relevant Republic Assets.
H. Unless the United States otherwise consents in writing, the
divestiture pursuant to Section IV, or by trustee appointed pursuant to
Section V, of this Final Judgment, shall include the entire Relevant
Allied Assets and Relevant Republic Assets, and shall be accomplished
in such a way as to satisfy the United States, in its sole discretion,
that the Relevant Allied Assets and Relevant Republic Assets can and
will be used by the Acquirer(s) as part of a viable, ongoing waste
disposal or hauling business. Divestiture of the Relevant Allied Assets
and Relevant Republic Assets may be made to one or more Acquirers,
provided that in each instance it is demonstrated to the sole
satisfaction of the United States that the Relevant Allied Assets and
Relevant Republic Assets will remain viable and the divestiture of such
assets will remedy the competitive harm alleged in the Complaint. The
divestitures, whether pursuant to Section IV or Section V of this Final
Judgment,
(1) shall be made to an Acquirer (or Acquirers), that, in the
United States's sole judgment, has the intent and capability (including
the necessary managerial, operational, technical and financial
capability) of competing effectively in the waste disposal or hauling
business; 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 an
Acquirer (or Acquirers) and Allied or Republic gives Allied or Republic
the ability unreasonably to raise the Acquirer's costs, to lower the
Acquirer's efficiency, or otherwise to interfere in the ability of the
Acquirer to compete effectively.
V. Appointment of Trustee
A. If defendants have not divested the Relevant Allied Assets and
Relevant Republic 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 divestiture of the Relevant Allied Assets and Relevant
Republic Assets.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Relevant Allied Assets and
Relevant Republic Assets. The trustee shall have the power and
authority to accomplish the divestiture to an Acquirer[s] acceptable to
the United States at such price and on such terms as are then
obtainable upon reasonable effort by the trustee, subject to the
provisions of Sections IV, V, and VI of this Final Judgment, and shall
have such other powers as this Court deems appropriate. Subject to
Section V(D) of this Final Judgment, the trustee may hire at the cost
and expense of defendants any investment bankers, attorneys, or other
agents, who shall be solely accountable to the trustee, reasonably
necessary in the trustee's judgment to assist in the divestiture.
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 VI.
D. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the plaintiff 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 the trustee and any professionals and
agents retained by the trustee shall be reasonable in light of the
value of the Relevant Allied Assets and Relevant Republic Assets and
based on a fee arrangement providing the trustee with an incentive
based on the price and terms of the divestiture and the speed with
which it is accomplished, but timeliness is paramount.
E. Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestiture. 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 business to be divested, and defendants
shall develop financial and other information relevant to such business
as the trustee may reasonably request, subject to reasonable protection
for trade secret or other confidential research, development, or
commercial information. Defendants shall take no action to interfere
with or to impede the trustee's accomplishment of the divestiture.
F. After its appointment, the trustee shall file monthly reports
with the United States and the Court setting forth the trustee's
efforts to accomplish the divestiture ordered under this Final
Judgment. To the extent that such reports contain information that the
trustee deems confidential, such reports shall not be filed in the
public docket of the Court. Such reports shall include the name,
address, and telephone number of each person who, during the preceding
month, made an offer to
[[Page 54553]]
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 Allied Assets and Relevant Republic Assets,
and shall describe in detail each contact with any such person. The
trustee shall maintain full records of all efforts made to divest the
Relevant Allied Assets and Relevant Republic Assets.
G. If the trustee has not accomplished such divestiture within six
months after its appointment, the trustee shall promptly file with the
Court a report setting forth (1) the trustee's efforts to accomplish
the required divestiture, (2) the reasons, in the trustee's Judgment,
why the required divestiture has not been accomplished, and (3) the
trustee's recommendations. To the extent that 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 plaintiff who shall have the right
to make additional recommendations consistent with the purpose of the
trust. The Court thereafter shall enter such orders as it shall deem
appropriate to carry out the purpose of the Final Judgment, which may,
if necessary, include extending the trust and the term of the trustee's
appointment by a period requested by the United States.
VI. Notice of Proposed Divestiture
A. Within two (2) business days following execution of a definitive
divestiture agreement, defendants or the trustee, whichever is then
responsible for effecting the divestiture required herein, shall notify
the United States of any proposed divestiture required by Section IV or
V of this Final Judgment. 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 or
expressed an interest in or desire to acquire any ownership interest in
the Relevant Allied Assets and Relevant Republic Assets, together with
full details of the same.
B. Within fifteen (15) calendar days of receipt by the United
States of such notice, the United States may request from defendants,
the proposed Acquirer or Acquirers, any other third party, or the
trustee if applicable additional information concerning the proposed
divestiture, the proposed Acquirer or Acquirers, and any other
potential Acquirer. Defendants and the trustee shall furnish any
additional information requested 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 Acquirer or Acquirers, any third party, and the trustee,
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 that it does not object, the divestiture may be
consummated, subject only to defendants' limited right to object to the
sale under Section V(C) of this Final Judgment. Absent written notice
that the United States does not object to the proposed Acquirer or upon
objection by the United States, a divestiture proposed under Section IV
or Section V shall not be consummated. Upon objection by defendants
under Section V(C), a divestiture proposed under Section V shall not be
consummated unless approved by the court.
VII. Financing
Defendants shall not finance all or any part of any purchase made
pursuant to Section IV or V of this Final Judgment.
VIII. Hold Separate
Until the divestitures required by this Final Judgment has 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 divestitures
ordered by this Court.
IX. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter, and every thirty (30) calendar days thereafter until
the divestiture[s] has been completed under Section IV or V, defendants
shall deliver to the United States an affidavit as to the fact and
manner of its compliance with Section IV or V of this Final Judgment.
Each such affidavit shall include the name, address, and telephone
number of each person who, during the preceding thirty days, 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 Allied Assets and Relevant
Republic Assets, 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 defendants have taken to solicit buyers
for the Relevant Allied Assets and Relevant Republic 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
limitation on information, shall be made within fourteen (14) days of
receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter, defendants shall deliver to the United States an
affidavit that describes in reasonable detail all actions defendants
have taken and all steps defendants have implemented on an ongoing
basis to comply with Section VIII 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 affidavits
filed pursuant to this section within fifteen (15) calendar days after
the change is implemented.
C. Defendants shall keep all records of all efforts made to
preserve and divest the Relevant Allied Assets and Relevant Republic
Assets until one year after such divestiture has been completed.
X. Compliance Inspection
A. For the purposes of determining or securing compliance with this
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 a duly authorized
representative of the Assistant Attorney General in charge of the
Antitrust Division, and on reasonable notice to defendants, be
permitted:
(1) access during defendants' office hours to inspect and copy, or
at plaintiff's option demand defendants provide copies of, all books,
ledgers, accounts, records and documents in the possession or control
of defendants, who may have counsel present, relating to any matters
contained in this Final Judgment; and
(2) to interview, either informally or on the record, defendants'
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
interviewees' reasonable convenience and without restraint or
interference by defendants.
[[Page 54554]]
B. Upon the written request of the Assistant Attorney General in
charge of the Antitrust division, defendants shall submit such written
reports, under oath if requested, relating to any of the matters
contained in this Final Judgment as may be requested.
C. No information or documents obtained by the means provided in
this section shall be divulged by the United States to any person other
than an 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 the United States shall
give defendants ten (10) calendar days notice prior to divulging such
material in any legal proceeding (other than a grand jury proceeding).
XI. No Reacquisition
Defendants may not reacquire any part of the Relevant Allied Assets
or Relevant Republic Assets during the term of this Final Judgment.
XII. Revisions to Contracts
A. Allied and Republic shall alter the contracts each uses with its
small container solid waste commercial customers in each of the markets
specified below to the form contained in paragraph XII (B) below.
B. In each of the markets specified below and for the defendant
acquiring the assets as indicated, Allied or Republic shall offer
contracts to all new small container solid waste commercial customers
as well as to existing customers that sign new contracts for small
container solid waste commercial service effective on or after the date
that one defendant acquires the other's assets in accordance with the
following conditions. No contract shall:
(1) have an initial term longer than two (2) years;
(2) have any renewal term longer than one (1) year;
(3) require that the Customer give Defendants notice of termination
more than thirty (30) days prior to the end of any initial term or
renewal term;
(4) require that the Customer pay liquidated damages in excess of
three times its average monthly charge during the first year the
Customer has had service with the Defendant; and
(5) require that the Customer pay liquidated damages in excess of
two times its average monthly charge after the first year the Customer
has had service with the Defendant.
The contract attached as Exhibit A would satisfy the above
conditions. The applicable defendant shall offer such contracts to all
other current small container solid waste commercial customers in the
respective markets detailed below on or before December 1, 2000:
------------------------------------------------------------------------
Defendant Cities Counties or areas
------------------------------------------------------------------------
Allied........................ Albany, NY....... Albany, Schenectady,
Saratoga, and
Rensselaer counties,
NY.
Allied........................ Augusta, GA...... Richmond and Columbia
counties, GA; and
Aiken County, SC.
Allied........................ Clarksville, TN.. Montgomery, Dickson,
Cheatham, and
Robertson counties,
TN.
Republic...................... Columbus, OH..... Franklin and Delaware
counties, OH.
Allied........................ Gulf Coast, FL... Escambia, Santa Rosa,
and Okaloosa
counties, FL.
Republic...................... Lakeland, FL..... Polk County, FL.
Republic...................... Louisville, KY/ Jefferson County, KY;
Sellersberg, IN. and Floyd and Clark
counties, IN.
Republic...................... Macon, GA........ Bibb, Houston, Peach,
Jones and Monroe
counties, GA.
Republic...................... Marlboro, NJ..... Monmouth County, NJ.
Republic...................... Mt. Laurel, NJ... Burlington and Camden
counties, NJ.
Allied........................ Norfolk, VA...... Chesapeake, Suffolk,
Virginia Beach,
Norfolk, Poquoson,
Newport News, and
Portsmouth, and
York, Surry, James
City, Southampton,
and Isle of Wight
counties, VA.
------------------------------------------------------------------------
The defendant acquiring small container assets in each specified
area agrees that it will not attempt to enforce any contract term
affecting small container customers in the specified area that
conflicts with or is inconsistent with the above terms, even if those
customers choose not to sign a contract with the new terms.
C. In accordance with paragraph XII (D) below, Republic shall alter
the contracts it uses with the roll-off customers in Bibb, Houston,
Peach, Jones and Monroe counties, Georgia, except those customers that
regularly rent or lease compactors from Republic for their roll-off
containers.
D. The revised roll-off contracts shall comply with the following
conditions:
(1) No contract shall contain an initial term of greater than three
(3) years.
(2) During the first year that the company is a customer of
Republic, the customer may be forced to pay liquidated damages of no
more than six (6) times its prior average monthly charges if the
contract is terminated by the customer in manner inconsistent with the
termination provisions contained in the agreement. During the second
year that the company is a customer of Republic, the customer may be
forced to pay liquidated damages of no more than four (4) times its
prior average monthly charges if the contract is terminated by the
customer in a manner inconsistent with the termination provisions
contained in the agreement. After the company is a customer of Republic
for two years, the customer may be forced to pay liquidated damages of
no more than two (2) times its prior average monthly charges if the
contract is terminated by the customer in a manner inconsistent with
the termination provisions contained in the agreement.
(3) No roll-off contract may have automatic renewals for terms of
more than one (1) year.
E. Republic shall offer roll-off contracts in compliance with these
requirements to all new roll-off customers, except those customers that
regularly rent or lease one or more compactors from Republic for their
roll-off containers (hereinafter referred to as ``compactor
customers''), as well as to existing roll-off customers, except for
compactor customers, that sign new contracts for non-compactor service
effective on or after the date that Republic acquires Allied's Macon,
Georgia assets in accordance with the terms of this Final Judgment.
Defendant
[[Page 54555]]
shall further offer such revised contracts to all of their other non-
compactor roll-off customers in Bibb, Houston, Peach, Jones and Monroe
counties, Georgia on or before December 1, 2000. Republic agrees that
it will not attempt to enforce any term of its current contracts with
roll-off contract customers, except for compactor customers, in the
Macon area that is inconsistent with the conditions specified above,
even if its customers, except for compactor customers, choose not to
sign a contract with the new terms.
XIII. Retention of Jurisdiction
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
XIV. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall
expire ten years from the date of its entry.
XV. Public Interest Determination
Entry of this Final Judgment is in the public interest.
Date:____________________
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16
----------------------------------------------------------------------
United States District Judge
EXHIBIT A
Contract for Solid Waste Services
Date:____________________
Service location (which Business Name shall be deem to include all
locations to which the identified location is relocated or
reestablished.)
----------------------------------------------------------------------
----------------------------------------------------------------------
Business Name
----------------------------------------------------------------------
Street No. & Name
----------------------------------------------------------------------
City Zip
----------------------------------------------------------------------
Telephone
----------------------------------------------------------------------
Fax
Dear____________________
Thank you for choosing [Name of Company] as your waste services
company. Our aim is to provide this essential service so responsibly
and dependably that you don't need to give it a second thought. We
will do our best to keep you satisfied and want you to tell us when
we don't. This contract will continue in effect for two years and
will renew for successive one-year periods unless terminated in
writing at least 30 days prior to the end of a period. You may also
terminate when appropriate under ``Our Guaranty.''
Our Mission
Our Mission is to provide the highest quality waste collection,
transportation, processing disposal and related services to both
public and private customers worldwide. We will carry out our
Mission efficiently, safely and in an environmentally responsible
manner with respect for the role of government in protecting the
public interest.
Our Guaranty
We guarantee the quality of our waste services. If our services
do not measure up to the standards described in this contract, and
we do not correct the problem within 48 hours (excluding Sundays)
after we receive written notice from you (unless the problem is
caused by circumstances outside our reasonable control), you may
terminate our services and this contract with penalty.
Our Responsibilities
1. The specific services we will provide, and the schedule and
initial charges for each service, are listed below. We will give at
least 30 days written notice if we increase our charges, which we
reserve the right to do from time to time proportionately in
connection with increases in cost for disposal, longer
transportation distances, fuel, regulatory compliance, taxes, and
increases in average weight per container yard. In connection with
increases in the cost of disposal, we frequently do not receive
advance notice of increases. We reserve the right to pass on to you
such increases without 30 days advance notice but will give you as
much notice as possible. Customers will be provided in writing with
the formula used in calculating increases based upon increases in
disposal fees. We will advise Customer in writing of the reason for
the increase and do our best to satisfy any concerns you have about
any increases. Any other type of price increase requires your
written consent.
2. Our employees will be friendly, courteous and responsive.
They will, in writing, have gone through a customer satisfaction and
safety training program, and will provide quality, professional
service.
3. We will provide and maintain the equipment you need for the
deposit and other handling of the materials that we have agreed to
pick up from you.
4. We are committed to making every pick-up as scheduled, but if
we are unable to do so, we will make every effort to let you know in
advance and reschedule it within 24 hours.
Your Responsibilities
1. You agree that [Name of Company] will provide the specified
services for all your nonhazardous waste. You agree not to deposit
any radioactive, volatile, corrosive, highly flammable, explosive,
infectious, toxic or hazardous waste in our equipment and will
indemnify us from resulting liabilities if you do. Anything else
that is deposited in our truck becomes our property at that time.
2. You agree to provide us with access to our equipment over
surfaces that can sustain the weight and operation of our vehicles.
You also agree not to overload (by weight or volume), abuse or move
our equipment, but if it does need to be moved, you will call us.
3. You agree to use your best efforts to keep people from coming
into contact with our equipment other than those who are authorized
and trained to use. it.
4. You agree to pay our bills monthly, within ten days after
they are received. We reserve the right to charge a late fee on all
past due payments.
5. If you terminate this contract during your first 10 months as
an [Name of Company] customer (other than as provided under ``Our
Guaranty''), you agree to pay us, as liquidated damages and not as a
penalty, three times your prior average monthly charges. If you
terminate after you have been an [Name of Company] customer for more
than 10 months (other than as provided under ``Our Guaranty''), you
agree to pay us as liquidated damages an amount equal to two months
average charges.
We look forward to a long-lasting relationship; so please let us
know if you have any problems or concerns as they occur and give us
the opportunity to provide solutions. As we deliver our services, we
will continuously look for ways to keep you satisfied.
Certificate of Service
I hereby certify that a copy of the foregoing has been served
upon Allied Waste Industries, Inc. and Republic Services, Inc. by
placing a copy of this Hold Separate Stipulation and Order and
proposed Final Judgment in the U.S. Mail, postage prepaid directed
to each of the parties in this matter, on this 21st day of June,
2000.
Counsel for Defendant Allied Waste Industries, Inc.
Tom D. Smith, Esq.,
Jones Day Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113
Counsel for Defendant Republic Services, Inc.
Paul B. Hewitt, Esq.,
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1333 New Hampshire
Avenue, NW, Suite 400, Washington, DC 20036
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, 202-307-1168.
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files
this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
The United States filed a civil antitrust Complaint on June 21,
2000, seeking to enjoin an exchange of certain waste-hauling and
disposal assets by
[[Page 54556]]
Allied Waste Industries, Inc. (``Allied'') and Republic Services, Inc.
(``Republic''). Allied and Republic had entered into purchase
agreements pursuant to which the companies would exchange assets in a
number of market areas in the United States. The Complaint alleges that
the likely effects of these asset exchanges would be to substantially
lessen competition for waste collection and disposal services in
several markets 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 Hold Separate Stipulation and Order and proposed Final Judgment
which are 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 120 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
viable business operations, certain waste-hauling and disposal assets.
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. In addition to these asset divestitures,
the proposed Final Judgment also requires the defendants to comply with
certain conditions in their customer contracts in several identified
areas.
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 collection and disposal company,
operating throughout the United States. Republic, with 1998 revenues of
approximately $1.8 billion, is the nation's third largest waste
collection and disposal company. On July 28 and October 7, 1999, Allied
and Republic entered into separate asset purchase agreements in which
they agreed to exchange certain waste-hauling and disposal assets. The
proposed transactions, identified below, would lessen competition
substantially in waste collection and/or disposal services: (1)
Allied's acquisition of hauling assets in Albany, New York; (2)
Allied's acquisition of hauling assets in Augusta, Georgia; (3)
Allied's acquisition of disposal assets in New York, New York; (5)
Allied's acquisition of hauling assets in Norfolk, Virginia; (6)
Allied's acquisition of hauling assets in Okaloosa, Escambia and Santa
Rosa counties, Florida (``Gulf Coast, Florida''); (7) Republic's
acquisition of disposal assets in Anderson, Indiana; (8) Republic's
acquisition of hauling assets in Columbus, Ohio; (9) Republic's
acquisition of hauling assets in Lakeland, Florida; (10) Republic's
acquisition of hauling assets in Louisville, Kentucky and Sellersburg,
Indiana; (11) Republic's acquisition of hauling and disposal assets in
Macon, Georgia; and (12) Republic's acquisition of hauling assets in
Monmouth, Burlington and Camden counties, New Jersey. These
acquisitions are the subject of the Complaint and proposed Final
Judgment filed by the United States on June 21, 2000.
B. The Competitive Effects of the Transactions
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 Transactions on Competition in Small Container
Commercial Waste Collection Service
a. Small Container Commercial Waste Collection
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 generally use
specialized equipment to store, collect and transport waste from these
accounts to approved disposal sites. This equipment--one to ten cubic
yard containers for waste storage and front-end loader vehicles
commonly used 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, these firms use different waste storage equipment (e.g.,
garbage cans or semi-stationary roll-off containers) and different
vehicles (e.g., rear-load, side-load or roll-off 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. Thus, the Complaint alleges that the provision of small
container commercial waste collection routes. Thus, the Complaint
alleges that the provision of small container commercial waste
collection services constitutes a line of commerce, or relevant
service, for purposes of 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. 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 this analysis, the Complaint alleges that the areas of
Albany, New York; Augusta, Georgia; Burlington and Camden counties, New
Jersey; Clarksville, Tennessee; Columbus, Ohio; Gulf Coast, Florida;
Lakeland, Florida; Louisville, Kentucky and Sellersburg, Indiana;
Macon, Georgia; Memphis,
[[Page 54557]]
Tennessee; Monmouth County, New Jersey; Nashville, Tennessee; and
Norfolk, Virginia constitute sections of the country, or relevant
geographic markets, for the purpose of assessing the competitive
effects of a combination of Allied and Republic in the provision of
small container commercial waste collection services.
There are significant entry barriers into small container
commercial waste collection. An efficient route usually handles 80 or
more containers/customers each day. As most customers have collections
once or twice a week, a new entrant must have several hundred customers
in close proximity to construct an efficient route. However, the common
use of long-term self-renewing ``evergreen'' contracts by existing
commercial waste collection firms can leave too few customers available
to the entrant in a sufficiently confined geographic area to create an
efficient route. These contracts often run for several years and
frequently have high liquidated damage terms which make it costly to a
customer who wishes to change its collection service without giving
proper notice. When giving proper notice, the customer must often
inform the firm in writing 60 days before the contract renews. This
time period allows the incumbent firm an opportunity to react to a
prospective entrant's solicitation to that customer. The incumbent firm
can inquire why the customer wishes to change its service, and if a
prospective entrant has offered a lower price, the incumbent can lower
its price to retain the customer. This can result in price
discrimination; i.e., an incumbent firm can selectively (and
temporarily) charge unbeatably low prices to some customers targeted by
entrants, a tactic that would strongly inhibit a would-be entrant from
competing for such accounts, which, if won, may be unprofitable to
serve, and would limit its ability to build an efficient route. Because
of these factors, a new entrant may find it difficult to compete by
offering its services at pre-entry price levels comparable to the
incumbent.
The need for route density, the use of long-term evergreen
contracts with restrictive terms, and the ability of existing firms to
price discriminate raise significant to entry to new firms, which will
likely be forced to compete a lower than pre-entry price levels. Such
barriers in the market for commercial small container waste collection
have allowed incumbent firms to raise prices successfully.
b. Anticompetitive Effects in Small Container Collection Service
Markets
(1) Memphis and Nashville Areas. In the Memphis and Nashville,
Tennessee market areas, Allied is the acquiring party. Total market
revenues for commercial small container waste collection are over 425
million in Memphis and about $31 million in Nashville. Currently,
Allied already has a substantial share of the commercial small
container collection market in both Memphis and Nashville. In Memphis,
the proposed acquisition would reduce from four to three the number of
significant firms that compete in small container commercial waste
collection service, and in Nashville, it would reduce the number of
significant competitors from three to two. After the acquisition,
Allied would control roughly 69% of the commercial waste collection
market in Memphis, and over 50% of the market in Nashville. In both
cities, after the acquisition, two firms would control over 90% of the
market.
(2) Lakeland, Macon, Augusta, Norfolk, Columbus, Gulf Coast, and
Louisville/Sellersburg Areas. In Lakeland, Florida and Macon, Georgia,
the acquisition would reduce from two to one the number of significant
firms that compete in the collection of small container commercial
waste. After the acquisition, Allied would control about 98% of the
market in Lakeland, and Republic would control over 85% of the small
container commercial market in Macon. In each market, the annual
revenues derived from commercial waste collection are about $5 million.
In Augusta, Georgia and Norfolk, Virginia, the acquisition would
reduce from three to two the number of significant firms that compete
in the collection of small container commercial waste. After the
acquisition, Allied would control over 40% of the market in Augusta,
and over 55% of the market in Norfolk. The annual revenues from
commercial waste collection are about $8 million in Augusta and about
$28 million in Norfolk.
In the Columbus, Ohio; Gulf Coast, Florida; and Louisville,
Kentucky/Sellersburg, Indiana areas, the acquisition would reduce from
four to three the number of significant firms that compete in the
collection of small container commercial waste. After the acquisition,
Republic would control over 50%, and two firms over 80%, of the small
container commercial waste hauling market in Columbus, which has annual
revenues of about $29 million. In Gulf Coast, Florida, after the
acquisition, Allied would control over 50%, and two firms more than
90%, of the commercial market, which has annual revenues of about $10
million. In Louisville/Sellersburg, Republic would control over 50%,
and two firms would control about 90%, of the market after the
acquisition, in a market which has annual revenues exceeding $22
million.
(3) Clarksville, Albany and New Jersey Areas. The acquisition would
reduce the number of significant competitors in small container
commercial waste collection service from five to four in Clarksville,
Tennessee; four to three in Albany, New York and Monmouth County, New
Jersey, and from three to two in Burlington, and Camden counties, New
Jersey. In Clarksville, Tennessee, Allied would control over 40%, and
two firms over 65%, of the market, which has annual revenues of about
$5 million. In Albany, Allied would control over 35%, and two firms
over 80%, of the market, which has annual revenues of about $17
million. In Monmouth County, New Jersey, Republic would control about
40%, and three firms over 75% of the market, which has annual revenues
of about $18 million. In Burlington and Camden counties, New Jersey,
Republic would control about 31%, and two firms over 80%, of the
market, which has annual revenues exceeding $24 million.
The Complaint alleges that a combination of Allied and Republic in
these markets would likely lead to an increase in prices charged to
consumers of small container commercial waste collection services. The
acquisitions would diminish competition by enabling the few remaining
competitors to engage more easily, frequently, and effectively in
coordinated pricing interaction that harms consumers. New entry into
these markets would be difficult, time-consuming, and is unlikely to be
sufficient to constrain any post-merger price increase.
2. The Effects of the Transactions on Competition in Roll-Off Waste
Collection Service
a. Roll-Off Waste Collection Service
Roll-off waste collection service is the collection of large
volumes and/or bulkier items of waste from sources such as construction
sites or industrial plants. Because of its characteristics (e.g.
construction debris) and volume, roll-off waste is deposited by the
customer/generator into a disposal container (usually 20 to 40 cubic
yards in size) which is larger than those routinely used in small
container commercial collection (usually one to 10 cubic yards in
size). When filled, the roll-off container is picked up by roll-off
[[Page 54558]]
trucks, which are specifically designed for roll-off waste collection,
and driven to a nearby disposal site, where the container's contents
are disposed.
Unlike most small container commercial service vehicles, which
routinely employ compaction systems on the truck to increase storage
capacity and can empty numerous small containers located on a schedule
route before being driven to a disposal site, roll-off vehicles have no
compaction system on board and are designed to carry only one large
container at a time to a disposal site. As a result, roll-off waste
collection is often performed on an ``on call'' basis, rather than as
part of any route, and pricing is primarily influenced by the distance
between the customer's location, the hauler's location, and the
disposal site.
The differences in size, type, and volumes of roll-off waste and in
the equipment used to collect it distinguish roll-off waste collection
from all other waste collection services. These differences mean that
roll-off waste collection firms can profitably increase their charges
for roll-off waste collection services without losing significant sales
or revenues to firms engaged in the provision of other types of waste
collection services. Thus, the Complaint alleges that the provision of
roll-off waste collection service is a line of commerce, or relevant
service, for purposes of analyzing the effects of the acquisitions.
Roll-off waste collection services are generally provided in
localized areas because a roll-off truck cannot be efficiently or
profitably driven significantly longer distances than those driven by a
competitor to collect and dispose of the waste. It is economically
impractical for a roll-off waste collection firm to serve metropolitan
areas from a distant base. Roll-off waste haulers, therefore, generally
establish garages and related facilities within each major local area
served.
The Complaint alleges that the Macon, Georgia area is a section of
the country, or relevant geographic market, for purposes of analyzing
the effects of the acquisitions in the provision of roll-off waste
collection service. In this area, local roll-off waste collection firms
can profitably increase charges to local customers without losing
significant sales to more distant competitors.
A barrier to entry with roll-off waste collection is the nature of
the contracts with customers used by some market participants. They are
often long-term evergreen contracts which renew automatically unless
canceled during a short window, with liquidated damages clauses. These
contracts restrict the ability of a new or an existing firm to compete
for customers. Entry into roll-off waste collection is also difficult
where the major competitors in roll-off collection control the local
disposal facilities because new entrants will be at a disadvantage in
obtaining access to competitive disposal sites.
b. Anticompetitive Effects in the Macon, GA Area for Roll-Off
Collection Service
In the Macon, Georgia area, the acquisition by Republic would
combine the two largest firms that compete in roll-off waste collection
service. After the acquisition, Republic would control over 60% of the
roll-off hauling market, which has annual revenues of about $8 million.
In addition, Republic already controls the most accessible landfill in
the area. Its acquisition of Allied's transfer station would likely put
its roll-off collection competitors at an even greater competitive
disadvantage because it would have the ability to raise prices
selectively to its roll-off collection competitors at two of the area's
best disposal facilities.
The Complaint alleges that a combination of Allied and Republic
would likely lead to an increase in prices charged to roll-off waste
collection customers in the Macon, Georgia area. The acquisition would
diminish competition by the loss of competition between the two largest
firms engaging in roll-off waste collection service. Because of the
limited disposal options and use of long-term evergreen contracts with
a large number of customers, new entry in the area would be difficult
and unlikely to be sufficient to constrain any post-merger price
increase.
3. The Effects of the Transactions on Competition in the Disposal of
Municipal Solid Waste
a. Municipal Solid Waste
Municipal solid waste (MSW) is solid putrescible waste generated by
households and commercial establishments. 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. In many cases, landfills or incinerators may not be
located close to where the waste is generated. In such instances, the
waste is brought to a nearby transfer station by collection trucks
where it is compacted and combined with other waste and transported to
the more distant disposal site.
There are no good substitutes for MSW disposal. Firms that compete
in the disposal of MSW can profitably increase their charges to haulers
of MSW without losing significant sales to any other firms. Thus, for
purposes of antitrust analysis, the disposal of MSW constitutes a line
of commerce, or relevant service, for purposes of analyzing the
acquisitions.
The disposal of MSW generally occurs in localized markets. The
Complaint alleges that the Anderson, Indiana and New York City, New
York (defined as the Borough of Brooklyn in the Complaint) areas each
constitute sections of the country, or relevant geographic markets, for
purposes of assessing the competitive effects of the transaction.
Virtually all of the MSW generated in each of these areas is disposed
of in local transfer stations. Firms that compete in the disposal of
MSW generated in the Anderson or New York City areas can profitably
increase their charges for MSW disposal without losing significant
sales to more distant disposal sites.
There are significant barriers to entry in MSW disposal. Obtaining
a permit to construct a new disposal facility or expand an existing one
is a costly and time consuming process, which typically takes many
years to conclude. Local public opposition often makes it more
difficult and costly, and increases the time and uncertainty of
successfully permitting a facility. In the Anderson, Indiana and New
York City, New York areas, entry by any new MSW disposal facility would
be an extremely costly and time-consuming process, and unlikely to
prevent market incumbents from significantly raising prices for the
disposal of MSW following the acquisition.
b. Anticompetitive Effects in Anderson, Indiana and New York City, New
York areas for Disposal of Municipal Solid Waste
In the Anderson, Indiana area, almost all of the MSW generated is
disposed of in one of three transfer stations. These three transfer
stations are currently owned by Allied, Republic and another
competitor. The proposed acquisition would reduce from three to two the
number of significant competitors for the disposal of MSW. After the
acquisition, Republic would own two of the three transfer stations,
which together would control in excess of 65 percent of the MSW
disposal market,
[[Page 54559]]
which has annual revenues in excess of $3 million.
In the New York City area, the acquisition would reduce from five
to four the number of significant firms competing to dispose of MSW.
After the acquisition, Allied would control roughly 30 percent--and two
firms about 66 percent--of the New York City area MSW disposal market,
which has annual revenues of about $40 million.
The Complaint alleges that a combination of Allied and Republic in
Anderson, Indiana and New York City, New York would likely lead to an
increase in prices for disposal of MSW. The acquisitions would diminish
competition in MSW disposal by eliminating actual and potential
competition between Allied and Republic in disposal of MSW in these
areas and enabling the remaining firms to engage more easily in
coordinated pricing. New entry into these markets would be difficult,
time consuming and unlikely to be sufficient to constrain any post
merger price increases.
III. Explanation of the Proposed Final Judgment
A. Small Container Commercial and Roll-Off Waste Collection Service
The divestiture and contract provisions of the proposed Final
Judgment will eliminate the anticompetitive effects of the acquisition
in small container commercial waste collection services in the market
areas identified in the Complaint by establishing a new, independent
and economically viable competitor in each of those markets and/or
reducing the barriers to entry and expansion that the evergreen
contracts currently in use raise. The proposed Final Judgment requires
defendants, within 120 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 collections assets (e.g.,
routes, trucks, containers, and customer lists) in the market areas of
Augusta, GA; Columbus; OH; Gulf Coast, FL; Lakeland, FL; Louisville,
KY/Sellersburg, IN; Macon, GA; Memphis, TN; Nashville, TN; and Norfolk,
VA. On or before December 1, 2000, the proposed Final Judgment also
requires the defendants to alter the contracts each uses with its
existing and new small container solid waste commercial customers in
the market areas of Albany, NY; Augusta, GA; Clarksville, TN; Columbus,
OH; Gulf Coast, FL; Lakeland, FL; Louisville, KY/Sellersburg, IN;
Macon, GA; Norfolk, VA; Burlington and Camden counties, NJ; and
Monmouth County, NJ. On or before that same date, defendant Republic is
required to alter the contracts it uses with roll-off customers in the
five counties in the Macon, Georgia area. The assets to be divested
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 or businesses 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.
1. Memphis and Nashville Areas
The divestiture provisions of the proposed Final Judgment will
fully eliminate the anticompetitive effects of the acquisition in small
container commercial waste collection services in the Memphis and
Nashville, Tennessee areas by divesting all of the assets being
acquired to a new, independent and economically viable competitor in
each of those markets. The relief sought in the Memphis and Nashville
areas will maintain the pre-acquisition structure of each market with
no increase in concentration 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.
2. Lakeland, Macon, Augusta, Gulf Coast, Norfolk, Columbus, and
Louisville/Sellersburg Areas
In these market areas, the Department of Justice determined that
competition would be best maintained by obtaining a combination of
divestiture and contract relief. The Department's experience after many
years of investigating this industry is that contract relief is
significant because it lowers entry barriers and is effective at
enabling smaller competitors to grow and new competitors to enter. The
divestiture relief requires certain small container commercial routes
to be divested in each market. In Macon, Georgia, the transfer station
is also being divested as attendant to the small container routes and
to facilitate disposal of the waste by the purchaser of the divested
routes.
In each case the divestiture that has been agreed to is of a size
that will create a substantial competitor capable of competing
immediately in the market. The divestitures are augmented by decree
provisions that obligate the acquiring company to alter all of its
contracts with its commercial small container customers to provide
terms that are less restrictive in terms of the length of the
contracts, the renewal provisions, and the liquidated damages for a
customer who wishes to change its service. This contract relief will
make it easier for customers to consider competitive alternatives,
easier for existing small firms to compete and expand in the future,
and will make it more difficult for incumbent firms to price
discriminate successfully. The contract provisions also make it easier
for new firms to enter a market and raise the prospect that the markets
will become less concentrated and more competitive than they were pre-
acquisition. In Macon, Georgia, similar contract relief is also
required for roll-off waste collection. This relief will make it easier
for smaller firms to compete for customers under contract with
incumbent collection firms.
a. Norfolk, Columbus and Louisville/Sellersburg Areas
In these market areas (Norfolk, VA; Columbus, OH; and Louisville,
KY/Sellersburg, IN), the market shares of the acquiring firm before the
acquisition were not as great as in Memphis and Nashville, or there
were more market participants. The divestitures required in each market
enable a new competitor to restore the competition that otherwise would
have been lost. The purchasers of the assets to be divested in each
market will have routes producing over two
[[Page 54560]]
million dollars in annual sales and at least a 10% market share from
those assets.
In Louisville and Columbus, where Republic is the acquiring
company, there are two other significant competitors, one large and one
small, and several disposal options. With Republic implementing the
contract relief specified in the proposed Final Judgment, the purchaser
of the divested assets, and other competitors, should be able to gain
customers more easily if Republic seeks to raise prices in these
markets. In Norfolk, where Allied is the acquiring company, there is
only one other significant competitor, but the divestiture creates a
substantial competitor and represents over 70% of the open commercial
work being acquired from Republic (in addition to certain municipal
work). One reason why the Norfolk market has few significant
competitors is because the major disposal option in the area has a high
volume threshold for a meaningful discount. Only the defendants and the
other large competitor have been able to qualify for this discount. The
amount of assets required to be divested will make it easer for the
purchasing firm to apply for this or a similar disposal discount. The
proposed Final Judgment provides that Allied will divest additional
customers with acceptable waste if necessary for the purchaser to
qualify for this discount. Contract relief should make it easier for
the divested firm and other competitors to maintain efficient routes
and gain new customers should Allied raise prices.
b. Augusta and Gulf Coast Areas
In these two markets (Augusta, GA and Gulf Cost, FL), the market is
small, the acquired firm is significantly smaller than the acquiring
firm, and there is another significant competitor. Divestitures with
contract relief are desirable in these markets as they will both create
a new competitor and help it and other competitors to compete in the
market.
In Augusta, where Allied is acquiring assets from Republic,
disposal is provided by municipally owned facilities. With the
divestiture and contract relief, the existing competitors will be
better able to compete because it will be easier for them to expand and
gain new customers.
In the Gulf Coast, where Allied is also the acquiring company,
disposal is provided by municipally owned facilities. There is also a
public company that competes in the market which is constrained in its
ability to compete by restrictive long-term contracts used by the
defendants. The contract relief provisions in the proposed Final
Judgment should help it--and the owner of the divested assets--to
compete by making it easier for customers to change collection
companies.
c. Lakeland and Macon Areas
In these two areas (Lakeland, FL and Macon, GA), the acquisitions
result in market shares greater than those in Memphis and Nashville,
but other factors make the partial divestiture obtained and contract
relief a better remedy than full divestiture. In both markets, the
purchaser of the divested assets will become a significant competitor
with over 20% of the open commercial work in the market.
In the Lakeland area, most of the cities are franchised. Haulers in
nearby counties and the cities indicated that the merger was unlikely
to effect prices for these franchises because haulers in adjacent
counties could compete for that work. Administrators of Polk County
expect the County will be franchising the remaining areas in the
county. Under franchising, the municipality or other franchising
authority solicits bids for all of the commercial work in an area so
that setting up a route is not difficult and a newcomer can compete
with an incumbent company in the bidding process. The divestiture
involved requires Republic to divest two of the three routes being
acquired from Allied that currently do non-franchised work. The
purchaser of the divested asset will have over 20% of the open market
and the contract relief should make it easier for it to expand or for
firms in neighboring counties to enter if prices are raised by
Republic. The major disposal site in the county is controlled by the
county, so that no firm has a disposal advantage.
In the Macon, Georgia area, Republic is being required to divest a
transfer station and two of the four small container commercial routes
being acquired from Allied. Republic and Allied control the two best
disposal options in the market. Divesting the transfer station will
assist competition by providing a disposal option not controlled by the
major competitor. Republic agreed to provide contract relief in Macon
for roll-off service as well as commercial service. Small firms often
enter an area by starting to provide roll-off service. These firms are
in a position to enter the commercial market. by making it easier for
roll-off companies to succeed and providing a good disposal option,
contract relief should make it easier for the divested firm to expand
or new entrants to create an efficient small container route if
Republic raises prices.
3. Albany; Clarksville; and the New Jersey Area
In Albany, New York; Clarksville, Tennessee; and the two New Jersey
areas (Burlington/Camden counties and Monmouth County) the market share
after the transaction created a competitive problem but not one which
was as substantial as the market areas above. In all of these markets,
the post-acquisition market concentration or change in concentration
from the acquisition was lower than the other market areas. In each
market, except Clarksville (which has the lowest market concentration),
one of the two merging firms had less than a 10% market share. There
was more than one other firm as big or bigger than the acquired firm
and/or there were a number of other significant competitors in the
surrounding area. In these market areas, the acquiring party is
required to modify its contracts with customers to make them less
restrictive, which will have the effect of lowering entry barriers and
making it easier for competing firms to expand if attempts to increase
prices occur.
In the Albany market, after the merger, Allied will be only the
second largest firm. There is a third firm about the same size as
Republic along with a number of small competitors. Disposal is
primarily municipally owned. In the Clarksville market, the post-
acquisition levels of concentration are lower than in the other markets
above, and in addition to the presence of a large competitor, there are
three additional competitors about the same size as the acquired firm.
As with Albany, disposal is primarily municipally owned. In the
Burlington/Camden market the post-acquisition change in concentration
is lower than in the other markets described above and the acquired
firm has a low (approximately a 6%) market share. In the Monmouth area,
the post-acquisition market concentration is lower than the other
markets and there are at least two firms with market shares bigger than
the acquired firm.
B. Disposal of Municipal Solid Waste in Anderson, Indiana, and New
York City Areas
The divestiture provisions of the proposed Final Judgment will
fully eliminate the anticompetitive effects of the acquisition in
disposal services in the Anderson, Indiana and New York city, New York
(defined as the Borough of Brooklyn in the Complaint) areas. The
proposed Final Judgment requires divestiture of all the disposal assets
[[Page 54561]]
being acquired to a new independent and economically viable competitor
in each of those markets. The relief sought will maintain the pre-
acquisition structure of each market with no increase in concentration
and thereby ensure that users of disposal services in these areas will
continue to receive the benefits of competition--lower prices and
better services.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.
16(a)), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against the defendants.
V. Procedures Available for Modification of the Proposed Final
Judgment
The United States and 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, NW., Suite 3000, Washington, DC
20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against defendants Allied
and Republic. The United States could have continued the litigation and
sought preliminary and permanent injunctions against Allied's
acquisition of the Republic assets and Republic's acquisition of the
Allied assets. The United States is satisfied, however, that the
divestiture of assets and the contract relief described in the proposed
Final Judgment will preserve competition for small container commercial
waste collection services, roll-off waste collection services, and MSW
disposal in the relevant markets identified by the United States.
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 or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment:
(2) The impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the
issues at trial.
15 U.S.C. 16(e) (emphasis added). As the Court of Appeals for the
District of Columbia Circuit 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., 56
F.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 settlement
through the consent decree process.''\1\ Rather,
---------------------------------------------------------------------------
\1\ 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. 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.
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
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circumstances.
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 at 1448. 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 best will 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.\2\
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\2\ United States v. Bechtel Corp., 648 F.2d at 666 (citations
omitted) (emphasis added); see also, United Statesv. BNS, Inc., 858
F.2d at 463; United Statesv. National Broadcasting Co., 449 F. Supp.
1127, 1143 (C.D. Cal. 1978); United States v. Gillette Co., 406 F.
Supp. at 716; see also United States v. American Cyanamid Co., 719
F.2d 558, 565 (2d Cir. 1983), cert. denied, 465 U.S. 1101 (1984).
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The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of
[[Page 54562]]
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 fall 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.' '' \3\
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\3\ 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 no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: August 15, 2000.
Respectfully submitted,
David R. Bickel,
DC Bar #393409.
Arthur A. Feiveson,
IL Bar #3125793.
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 Republic 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 15 day of August, 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 Republic Services, Inc.
Paul B. Hewitt,
Akin, Gump, Strauss, Hauer & Feld, L.L.P., 1333 New Hampshire
Avenue, NW, Suite 400, Washington, DC 20036
David R. Bickel,
DC Bar #393409, U.S. Department of Justice, Antitrust Division, Suite
3000, 1401 H Street, NW, Washington, DC 20530.
[FR Doc. 00-22137 Filed 9-7-00; 8:45 am]
BILLING CODE 4410-11-M