[Federal Register Volume 65, Number 216 (Tuesday, November 7, 2000)]
[Notices]
[Pages 66766-66774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28541]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Republic Services, Inc. and Allied Waste 
Industries, Inc., Proposed Final Judgment and Competitive Impact 
Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a Complaint, Hold Separate 
Stipulation and Order, proposed Final Judgment, and Competitive Impact 
Statement have been filed with the U.S. District Court for the District 
of Columbia in United States v. Republic Services, Inc. and Allied 
Waste industries, Inc., No. 1:00CV02311. The civil antitrust Complaint, 
filed on September 27, 2000, alleges that the Republic Services, Inc.'s 
(``Republic'') acquisition of Allied Waste Industries, Inc.'s Akron/
Canton, Ohio small container commercial waste hauling assets would 
substantially lessen competition in the waste collection industry in 
the Akron/Canton, Ohio market in violation of section 7 of the Clayton 
Act, 15 U.S.C. 18. The Akron/Canton market is defined as the cities of 
Akron and Canton, Ohio and counties of Summit, Stark and Portage, Ohio. 
The proposed Final Judgment, filed at the same time as the Complaint, 
requires Republic to divest its Akron/Canton, Ohio small container 
commercial waste collection assets.
    Public comment is invited within the statutory 60-day comment 
period. Such comments and responses 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, U.S. Department of Justice, 1401 H Street, NW., Suite 3000, 
Washington, DC 20530 (telephone: 202-307-0924).
    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 (telephone: 
202-514-2481) and at the office of the Clerk of the U.S. District Court 
for the District of Columbia, Washington, DC. Copies of

[[Page 66767]]

these materials may be obtained upon request and payment of a copying 
fee.

Constance K. Robinson,
Director of Operations & Merger Enforcement.

Hold Separate Stipulation and Order

    It is hereby stipulated and agreed by and between the undersigned 
parties, subject to approval and entry by the Court, that:

I. Definitions

    As used in this Hold Separate Stipulation and Order:
    A. ``Allied'' means defendant Allied Waste Industries, Inc., a 
Delaware corporation with its headquarters in Scottsdale, Arizona, and 
includes its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and their 
directors, officers, managers, agents, and employees.
    B. ``Republic'' means defendant Republic Service, 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.
    C. ``Relevant Akron/Canton Assets'' means Republic's front-end 
loader truck small container commercial routes 91, 92, 94, 96, and 97 
that serve Summit, Stark, and Portage counties, Ohio.
    Relevant Akron/Canton Assets includes, with respect to each of 
Republic's small container routes listed above, all tangible assets 
(including capital equipment, trucks and other vehicles, containers, 
interests, permits, and supplies); and all intangible assets (including 
hauling-related customer lists, contracts, leasehold interests, and 
accounts related to each such route).

II. Objectives

    The Final Judgment filed in this case is meant to ensure Republic's 
prompt divestiture of the Relevant Akron/Canton Assets for the purpose 
of establishing one or more viable competitors in the commercial waste 
hauling business, to remedy the effects that the United States alleges 
would otherwise result from Republic's acquisition of certain Allied 
assets. This Hold Separate Stipulation and Order ensures, prior to such 
divestiture, that the Relevant Akron/Canton Assets remain independent, 
economically viable, and ongoing business concerns that will remain 
independent and uninfluenced by 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. Republic represents 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. Republic shall preserve, maintain, and operate the Relevant 
Akron/Canton 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. Republic shall not coordinate the marketing of, 
or negotiation or terms of sale by, any Relevant Akron/Canton Asset 
with its other operations. Within twenty (20) days after the filing of 
the Hold Separate Stipulation and Order, or thirty (30) days after the 
entry of this Order, whichever is later, Republic will inform the 
United States of the steps Republic has taken to comply with this Hold 
Separate Stipulation and Order.
    B. Republic shall take all steps necessary to ensure that (1) the 
Relevant Akron/Canton Assets will be maintained and operated as 
independent, ongoing, economically viable and active competitors in the 
commercial waste hauling business; (2) the management of the Relevant 
Akron/Canton 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 Akron/Canton 
Assets will be kept separate and apart from Republic's other 
operations. Republic's influence over the Relevant Akron/Canton Assets 
shall be limited to that necessary to carry out defendant Republic's 
obligations under this Hold Separate Stipulation and Order and the 
proposed final Judgment.
    C. Republic shall use all reasonable efforts to maintain and 
increase the sales and revenues of the Relevant Akron/Canton Assets, 
and shall maintain at 2000 or at previously approved levels for 2001, 
whichever are higher, all promotional, advertising, sales, technical 
assistance, marketing, and merchandising support for the Relevant 
Akron/Canton Assets.
    D. Republic shall provide sufficient working capital to maintain 
the Relevant Akron/Canton Assets as economically viable and 
competitive, ongoing businesses, consistent with the requirements of 
Section V (A) and (B).
    E. Republic shall take all steps necessary to ensure that the 
Relevant

[[Page 66768]]

Akron/Canton Assets are fully maintained in operable condition at no 
lower than their current capacity or sales, and shall maintain and 
adhere to normal repair and maintenance schedules for the Relevant 
Akron/Canton Assets.
    F. Republic 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 Akron/Canton Assets.
    G. Republic 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 Akron/
Canton Assets.
    H. Except in the ordinary course of business or as is otherwise 
consistent with this Hold Separate Stipulation and Order. Republic 
shall not hire, transfer, terminate, or otherwise alter the salary 
agreements for any Republic employee who, on the date of Republic's 
signing of this Hold Separate Stipulation and Order, either: (1) Works 
with a Relevant Akron/Canton 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 Akron/Canton Assets are divested 
pursuant to the terms of the final Judgment, the Relevant Akron/Canton 
Assets shall be managed by Raul Rodriguez. Mr. Rodriguez shall have 
complete managerial responsibility for the Relevant Akron/Canton 
Assets, subject to the provisions of this Order and the proposed Final 
Judgment. In the event that Mr. Rodriguez is unable to perform his 
duties, defendants shall appoint, subject to the approval of the United 
States, a replacement within ten (10) working days. Should Republic 
fail to appoint a replacement acceptable to the United States within 
ten (10) working days, the United States shall appoint a replacement.
    J. Republic shall take no action that would interfere with the 
ability of any trustee appointed pursuant to the Final Judgment to 
complete the divestitures pursuant to the Final Judgment to purchasers 
acceptable to the United States.
    K. This Hold Separate Stipulation and Order shall remain in effect 
until consummation of the divestitures contemplated by the proposed 
Final Judgment or until further order of the Court.

    Dated: October 27, 2000

    For Plaintiff, United States of America.

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) 307-0901.

    For Defendant Republic Services, Inc.

Paul B. Hewitt,
Akin, Gump, Strauss, Hauer & Feld, 1333 New Hampshire Avenue, NW, 
Suite 400, Washington, DC 20036, (202) 887-4120.

    For Defendant Allied Waste Industries, Inc.

Tom D. Smith,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC 
20001-2113, (202) 879-3971

Order

    It Is So Ordered on this __ day of __2000.______,

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United States District Judge

    Pursuant to LCvR7.1(k), the following are the attorneys entitled to 
be notified of the entry of the Order

Arthur A. Fieveson, Esq., United States Department of Justice, 
Antitrust Division, Litigation II, 1401 H Street, NW., Suite 3000, 
Washington, DC 20530.
Paul B. Hewitt, Esq., Akin, Gump, Strauss, Hauer & Feld, 1333 New 
Hampshire Avenue, NW., Suite 400, Washington, DC 20036.
Tom D. Smith, Esq., Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, 
NW., Washington, DC 20001-2113

Final Judgment

    Whereas, plaintiff, the United States of America, having filed its 
Complaint in this action on September 27, 2000, and plaintiff and 
defendants, Republic Services, Inc. (``Republic'') and Allied Waste 
Services, Inc., (``Allied''), by their respective attorneys, having 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law herein, and without this Final 
Judgment constituting any evidence against or an admission by any party 
with respect to any issue of law or fact herein;
    And Whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of the Relevant Republic Assets by Republic to 
assure that competition is not substantially lessened;
    And Whereas, the United States requires Republic 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 Republic divests the 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. ``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.
    D. ``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.
    E. ``Relevant Republic 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-

[[Page 66769]]

related customer lists, contracts, leasehold interests, and accounts 
related to each such route or asset.
    Relevant Republic Assets includes the following: Republic's front-
end loader truck small container routes (hereinafter, ``commercial 
routes'') 91, 92, 94, 96, and 97 that serve Summit, Stark, and Portage 
counties, Ohio.
    F. ``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.
    G. ``Small container commercial waste collection service'' means 
the business of collecting MSW from commercial and industrial accounts, 
usually in ``dumpsters'' (i.e., a small container with one to ten cubic 
yards of storage capacity), and transporting or ``hauling'' such waste 
to a disposal site by use of a front- or rear-end loader truck. Typical 
commercial waste collection customers include office and apartment 
buildings and retail establishments (e.g., stores and restaurants).

III. Applicability

    A. This Final Judgment applies to Republic and Allied, as defined 
above, and all other persons in active concert or partipation with any 
of them who receive actual notice of this Final Judgment by personal 
service or otherwise.
    B. Republic shall require, as a condition of the sale or other 
disposition of all or substantially all of its assets, or of lesser 
business units that include defendant's Relevant Republic Assets, that 
the Acquirer or Acquirers agree to be bound by the provisions of this 
Final Judgment.

IV. Divestitures

    A. Republic is 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 
Republic Assets in a manner consistent with this Final Judgment to an 
Acquirer(s) acceptable to the United States in its sole discretion. 
Republic agrees to use its best efforts to accomplish the divestitures 
ordered by this Final Judgment as expeditiously and timely as possible. 
The United States, in its sole discretion, may agree to an extension of 
this time period of up to sixty (60) calender days, and shall notify 
the Court in such circumstances.
    B. In accomplishing the divestitures ordered by this Final 
Judgment. Republic promptly shall make known, by usual and customary 
means, the availability of the Relevant Republic Assets. Republic shall 
inform any person making an inquiry regarding a possible purchase of 
the Relevant Republic Assets that they are being divested pursuant to 
this Final Judgment and provide that person with a copy of this Final 
Judgment. Republic shall also offer to furnish to all prospective 
Acquirers, subject to customary confidentiality assurances, all 
information and documents relating to the Relevant Republic Assets 
customarily provided in a due diligence process except such information 
or documents subject to the attorney-client or work-product privileges. 
Republic shall make available such information to the United States at 
the same time that such information is made available to any other 
person.
    C. Republic shall provide the Acquirer(s) and the United States 
information relating to the personnel involved in the operation and 
management of the Relevant Republic Assets to enable the Acquirer to 
make offers of employment. Republic and Allied will not interfere with 
any negotiations by the Acquirer(s) to employ any Republic employee 
whose primary responsibility is the operation or management of the 
Relevant Republic Assets.
    D. Republic shall permit prospective Acquirer(s) of the 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. Republic shall warrant to all Acquirers of the Relevant Republic 
Assets that each asset will be operational on the date of sale.
    F. Republic and Allied shall not take any action that will impede 
in any way the permitting, operation, or divestiture of the Relevant 
Republic Assets.
    G. Republic shall warrant to the Acquirer(s) of the 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 divestiture of the Relevant Republic 
Assets, Republic and Allied will not undertake, directly or indirectly, 
any challenges to the environmental, zoning, or other permits or 
applications for permits or licenses relating to the operation of the 
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 
Republic Assets, and shall be accomplished in such a way to satisfy the 
United States, in its sole discretion, that the Relevant Republic 
Assets can and will be used by the Acquirer(s) as part of a viable, 
ongoing waste hauling business. Divestiture of the 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 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 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 Republic gives Republic or Allied 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 Republic has not divested the Relevant Republic Assets within 
the time period specified in Section IV(A), Republic 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 
Republic Assets.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Relevant Republic Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer or Acquirers acceptable to the United States 
at such price 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 power as this 
Court deems appropriate. Subject to Section V(D) of this Final

[[Page 66770]]

Judgment, the trustee may hire at the cost and expense of Republic 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. Republic and Allied shall not object to a sale by the trustee on 
any ground other than the trustee's malfeasance. Any such objections by 
Republic or Allied 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 Republic, 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 Republic 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 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. Republic shall use its 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 Republic 
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. Republic and Allied 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 acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contracted or made an 
inquiry about acquiring any interest in the 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 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, Republic 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 Republic. 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 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 
Republic 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 have been 
accomplished, Republic shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. Republic 
and Allied 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, Republic 
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 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 Republic has taken to solicit buyers for the Relevant Republic 
Assets, and to provide required

[[Page 66771]]

information to prospective Acquirers, 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 Republic, 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, Republic shall deliver to the United States and 
affidavit that describes in reasonable detail all actions Republic has 
taken and all steps Republic has implemented on an ongoing basis to 
comply with Section VIII of this Final Judgment. Republic shall deliver 
to the United States an affidavit describing any changes to the efforts 
and actions outlined in Republic's earlier affidavits filed pursuant to 
this section within fifteen (15) calendar days after the change is 
implemented.
    C. Republic shall keep all records of all efforts made to preserve 
and divest the Relevant Republic Assets until one year after such 
divestiture(s) 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.
    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 day notice prior to divulging such 
material in any legal proceeding (other than a grand jury proceeding).

XI. No Reacquisition

    Republic may not reacquire any part of the Relevant Republic Assets 
during the term of this Final Judgment.

XII. 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.

XIII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry.

XIV. 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

[File No. 1:00 CV 2311]

    Judge: Ricardo M. Urbina.
    Deck Type: Antitrust.

Competitive Impact Statement

    The United States, pursuant to Section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. 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 September 
27, 2000, seeking to enjoin the acquisition of certain waste hauling 
assets by Republic Services, Inc. (``Republic'') from Allied Waste 
Industries, Inc. (``Allied''). Republic and Allied had entered into 
agreements pursuant to which Republic would acquire waste hauling 
assets from Allied in the Akron/Canton, Ohio area. The Complaint 
alleges that the likely effects of these acquisitions would be to 
substantially lessen competition for waste collection services in the 
Akron/Canton area in violation of Section 7 of the Clayton Act, 15 
U.S.C. Section 18, resulting in consumers paying higher prices and 
receiving fewer services for the collection of waste.
    At the time the Complaint was filed, the United States also filed a 
proposed Final Judgment and a Hold Separate Stipulation and Order that 
would permit Republic to complete its acquisition of the Allied assets, 
provided divestitures of certain waste collection assets are 
accomplished in such a way as to preserve competition in the market. 
Under the proposed Final Judgment, which is explained more fully below, 
Republic is required within 120 days after September 27, 2000, or five 
(5) days after notice of the entry of the Final Judgment by the Court, 
whichever is later, to divest as viable, ongoing business operations 
certain waste hauling assets in the Akron/Canton area. Under the terms 
of the Hold Separate Stipulation and Order, Republic is required to 
take certain steps to ensure that the assets to be divested will be 
preserved and held separate from Republic's other assets and businesses 
until the divestiture is accomplished. Republic has appointed, subject 
to the United States' approval, an individual to manage the assets to 
be divested and ensure the defendants' compliance with the requirements 
of the proposed Final Judgment and Hold Separate Order.
    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

[[Page 66772]]

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 Transaction

    Republic, with revenues of approximately $1.8 billion in its 1998 
fiscal year, is engaged in providing waste collection and disposal 
services throughout the United States. Allied, with revenues in 1999 of 
approximately $6 billion, is the nation's second-largest waste hauling 
and disposal company, operating throughout the United States. Pursuant 
to a Put/Call Agreement dated December 6, 1999 and a Letter Agreement 
dated August 1, 2000, Republic will acquire from Allied certain waste-
hauling and disposal assets in the Akron/Canton area. This acquisition 
is the subject of the Complaint and proposed Final Judgment filed by 
the United States on September 27, 2000.

B. The Competitive Effects of the Transaction

    Waste collection firms, or ``haulers,'' contract to collect 
municipal solid waste (``MSW'') from residential and commercial 
customers; they transport the waste to private and public disposal 
facilities (e.g., transfer stations, incinerators and landfills), 
which, for a fee, process and legally dispose of waste. In the Akron/
Canton area, Republic and Allied compete in operating small container 
waste collection routes and waste disposal facilities.
    Small container commercial waste collection service is the 
collection of MSW from commercial businesses such as office and 
apartment buildings and retail establishments (e.g., stores and 
restaurants) for shipment to, and disposal at, an approved disposal 
facility. Because of the type and volume of waste generated by 
commercial accounts and the frequency of service required, haulers 
organize commercial accounts into special routes, and use specialized 
equipment to store, collect and transport waste from these accounts to 
approved disposal sites. This equipment--one to ten cubic yard 
containers for waste storage, plus front-end and rear-end loader trucks 
for collection and transportation--is uniquely well suited for the 
provision of small container commercial waste collection service. 
Providers of other types of waste collection services (e.g., 
residential and roll-off services) are not good substitutes for small 
container commercial waste collection firms. In their waste collection 
efforts, other firms use different waste storage equipment (e.g., 
garbage cans or semi-stationary roll-off containers) and different 
trucks (e.g., side-load trucks), which, for a variety of reasons, 
cannot be conveniently or efficiently used to store, collect or 
transport waste generated by commercial accounts, and hence, are rarely 
used on small container commercial waste collection routes. For 
purposes of antitrust analysis, the provisions of small container 
commercial waste collection services constitutes a line of commerce, or 
relevant service, for analyzing the effects of the acquisition.
    The Complaint alleges that the provision of small container 
commercial waste collection services takes place in compact, highly 
localized geographic markets. It is expensive to ship waste long 
distances in either collection or disposal operations. To minimize 
transportation costs and maximize the scale, density and efficiency of 
their waste collection operations, small container commercial waste 
collection firms concentrate their customers and collection routes in 
small areas. Firms with operations concentrated in a distant area 
cannot easily compete against firms whose routes and customers are 
locally based. Sheer distance may significantly limit a distant firm's 
ability to provide commercial waste collection service as frequently or 
conveniently as that offered by local firms with nearby routes. Also, 
local commercial waste collection firms have significant cost 
advantages over other firms, and can profitably increase their charges 
to local commercial customers without losing significant sales to firms 
outside the area.
    Applying that analysis, the Complaint alleges that the Akron/
Canton, Ohio area constitutes a section of the country, or relevant 
geographic market, for the purpose of assessing the competitive effects 
of a combination of Republic and Allied in the provision of small 
container commercial waste collection services. The Akron/Canton area 
includes the Cities of Akron and Canton, Ohio; and Summit, Stark and 
Portage counties, Ohio. In the Akron/Canton area, Republic's 
acquisition of Allied's assets would reduce from four to three the 
number of major firms competing in small container commercial waste 
collection service. After the acquisition, Republic would control 
approximately 35% of the total market revenue, which exceeds $25 
million annually.
    New entry into this market would be difficult and time consuming 
and is unlikely to be sufficient to constrain any post-merger price 
increase. Many customers of commercial waste collection firms have 
entered into long-term contracts, tying them to a market incumbent for 
indefinitely long periods of time. In competing for uncommitted 
customers, market incumbents can price discriminate, i.e., selectively 
(and temporarily) change unbeatably low prices to customers targeted by 
entrants, a tactic that would strongly discourage a would-be competitor 
from competing for such accounts, which, if won, may be unprofitable to 
serve. Taken together, the prevalence of long-term contracts and the 
ability of market incumbents to price discriminate substantially 
increases any would-be new entrant's costs and the time necessary for 
it to build its customer base and obtain efficient scale and route 
density to become an effective competitor in the market.
    The Complaint alleges that a combination of Republic and Allied in 
Akron/Canton would likely lead to an increase in prices charged to 
consumers of small container commercial waste collection services. The 
acquisition would diminish competition by enabling the few remaining 
competitors to engage more easily, frequently and effectively in 
coordinated pricing interaction that harms consumers.

III. Explanation of the Proposed Final Judgment

    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in small 
container commercial waste collection services in the Akron/Canton area 
by establishing a new, independent and economically viable competitor 
in the markets. The proposed Final Judgment requires Republic, within 
120 days after September 27, 2000, 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 its small container 
commercial waste collection assets (e.g., routes, trucks, containers, 
and customer lists) relating to the Akron/Canton market to a purchaser 
acceptable to the United States in its sole discretion.
    These assets must be divested in such a way as to satisfy the 
United States that the operaitons can and will be operated by the 
purchaser or purchasers as a viable, ongoing business that can compete 
effectively in the relevant

[[Page 66773]]

market. Republic must take all reasonable steps necessary to accomplish 
the divestiture quickly and shall cooperate with prospective 
purchasers.
    In the event that Republic does not accomplish the divestiture 
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 Republic 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 the 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 
the divestiture. At the end of six months, if the divestiture has not 
been accomplished, the trustee and the parties will make 
recommendations to the Court, which shall enter such orders as 
appropriate in order to carry out the purpose of the trust, including 
extending the trust or the term of the trustee's appointment.
    The relief sought in the Akron/Canton area will maintain the pre-
acquisition structure of the market and thereby ensure that consumers 
of small container commercial waste collection services will continue 
to receive the benefits of competition--lower prices and better 
service.

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 sixty 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 to the United States will be filed with the Court and 
published in theFederal Register. Written comments should be submitted 
to: J. Robert Kramer II, Chief, Litigation II Section, Antitrust 
Division, United States Department of Justice, 1401 H Street, N.W., 
Suite 3000, Washington, D.C. 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against defendants Republic 
and Allied. The United States could have continued the litigation and 
sought preliminary and permanent injunctions against Republic's 
acquisition of the Allied assets. The United States is satisfied, 
however, that the divestiture of hauling assets will preserve 
competition for small container commercial waste collection services in 
the Akron/Canton area. To this end, the United States is convinced that 
the proposed relief, once implemented by the Court, will prevent 
Republic's acquisition of the Allied assets from having adverse 
competitive effects.

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 an 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). 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. 24,598 (1973) see also United States v. 
Gillette Co. 406 F. Supp. 713, 715 (D. Mass. 1975), aff'd sub norm. 
Maryland v. United States, 406 U.S. 1001 (1983). 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, see 15 U.S.C. Sec. 16(f), those procedures are 
discretionary. A court need not invoke any of them unless it 
believes that the comments have raised significant issues and that 
further proceedings would aid the court in resolving those issues. 
See H.R. Rep. 93-1463, at 8-9 (1974), reprinted in 1974 U.S.C.C.A.N. 
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 
---------------------------------------------------------------------------
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

[[Page 66774]]

(9th Cir. 1988) (quoting United States v. Bechtel Corp., 648 F.2d 660, 
666 (9th Cir.), cert. denied, 454 U.S. 1083 (1981)); see also 
Microsoft, 56 F.3d 1448 (D.C. cir. 1995). Precedent requires that

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree. \2\
---------------------------------------------------------------------------

    \2\ Bechtel Corp., 648 F.2d at 666 (citations omitted and 
emphasis added); see BNS, Inc., 858 F.2d at 463; United States v. 
National Broad Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); s 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).

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest' '' \3\
---------------------------------------------------------------------------

    \3\ United States v. American Tel. and Tel. Co., 552 F.Supp. 
131, 150 (D.D.C. 1982) (citations omitted) quoting Gillette Co., 406 
F. Supp. at 716; United States v. Alcan Aluminum, Ltd., 605 F.Supp. 
619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------

    Moreover, the Court's role under the Tunney Act is limited to 
reviewing the remedy in relation 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. Because ``[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. at 1459-60.

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: October 23, 2000.

    Respectfully submitted.

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) 307-0901.

[Civil No. 00 2311]

    Filed: 9/27/00.

Certificate of Service

    I hereby certify that copies of the Competitive Impact Statement 
have been served upon Republic Services, Inc. and Allied Waste 
Industries, Inc. by U.S. mail, postage prepaid, to the attorneys listed 
below, this 23rd day of October, 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, 1333 New Hampshire Avenue, NW, Suite 
400, Washington, DC 20036.

Arthur A. Feiveson,
IL Bar #3125793, U.S. Department of Justice, Antitrust Division, 
Suite 3000, 1401 H Street, NW, Washington, DC 20530, (202) 307-0901.
[FR Doc. 00-28541 Filed 11-6-00; 8:45 am]
BILLING CODE 4410-11-M