[Federal Register Volume 74, Number 168 (Tuesday, September 1, 2009)]
[Notices]
[Pages 45242-45252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-21051]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Microsemi Corporation; 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 proposed Final Judgment and 
Competitive Impact Statement have been filed with the United States 
District Court for the Central District of California in United States 
v. Microsemi Corporation, Civil Action No. 8:09-CV-00275-AG-AN. On 
December 18, 2008, the United States filed a Complaint alleging 
Microsemi Corporation's July 14, 2008 acquisition of the assets of 
Semicoa violated Section 7 of the Clayton Act, 15 U.S.C. 18, and 
Section 2 of the Sherman Act, 15 U.S.C. 2. The United States alleged 
that this acquisition enabled Microsemi to eliminate or reduce 
competition in the development, manufacture, and sale of certain small 
signal transistors and ultrafast recovery rectifier diodes used in 
military and space programs. The proposed Final Judgment, filed on 
August 20, 2009, requires that Microsemi divest all of the assets it 
acquired from Semicoa. A Competitive Impact Statement filed by the 
United States describes the Complaint, the proposed Final Judgment, the 
industry, and the remedies available to private litigants who may have 
been injured by the alleged violation.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at http://www.usdoj.gov/atr, and at the Office of the Clerk of the United States District Court 
for the Central District of California, Southern Division. Copies of 
these materials may be obtained from the Antitrust Division upon 
request and payment of the copying fee set by Department of Justice 
regulations.
    Public comment is invited within sixty (60) days of the date of 
this notice. Such comments, and responses thereto, will be published in 
the Federal Register and filed with the Court. In order to comply with 
publication criteria for the Federal Register, please provide comments 
in an electronic word processing format (preferably Word Perfect or 
Microsoft Word). Comments should be directed to Maribeth Petrizzi, 
Chief, Litigation II Section, Antitrust

[[Page 45243]]

Division, U.S. Department of Justice, 450 Fifth Street, NW., Suite 
8700, Washington, DC 20530 (telephone: 202-307-0924).

J. Robert Kramer, II,
Director of Operations and Civil Enforcement.

In the United States District Court for the Eastern District of 
Virginia Alexandria Division

    United States of America, Plaintiff, V. Microsemi Corporation, 
Defendant. Civil Action No.: 1:08cv1311, Judge: Trenga, Anthony J., 
Date: December 18, 2008

Verified Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action to obtain a temporary restraining order, preliminary 
injunction, and equitable and other relief against defendant 
Microsemi Corporation (``Microsemi'') to remedy the harm to 
competition caused by Microsemi's acquisition of assets of Semicoa, 
Inc. (``Semicoa''). The United States alleges as follows:

I. Nature of Action

    1. This lawsuit challenges Microsemi's July 14, 2008 acquisition 
of substantially all of the assets of Semicoa, which has 
significantly harmed competition in the development, manufacture and 
sale of certain specialized high reliability electronic components 
used in aerospace and military applications. The transaction 
eliminated all competition for several types of transistors used in 
such applications--known as JANS and JANTXV small signal 
transistors--and substantially lessened competition for one type of 
diode used in such applications--known as JANS and JANTXV 5811 
diodes. The high reliability transistors and diodes affected by the 
transaction are manufactured to exacting standards to ensure high 
performance under the most demanding conditions, subject to a U.S. 
government system of qualification and certification that is relied 
upon to assure the required degree of reliability. These components 
are used by customers that include the military services and the 
national security agencies of the United States in a wide range of 
critical applications in space, in the air, on land, and on and 
under the sea. The largest and most complex military applications 
ever designed, ranging from satellites to submarines, depend on 
these components. Civilian space projects ranging from 
communications satellites to the spacecraft under development to 
return astronauts to the moon also require these components. Because 
failure of even a single one of these components could result in the 
failure of a vital, multibillion dollar mission--and potentially 
cost the lives of American servicemen and women and astronauts--
components with lesser degrees of reliability cannot be substituted 
for the products at issue in this case.
    2. The JANTXV and JANS small signal transistors and the JANTXV 
and JANS 5811 diodes at issue in this case are hereinafter referred 
to collectively as the ``relevant products.'' Through its 
acquisition of the Semicoa assets, Microsemi reduced the number of 
suppliers of JANTXV and JANS small signal transistors from two to 
one, and thereby acquired monopolies in the development, manufacture 
and sale of those products. The acquisition also substantially 
reduced competition for JANTXV and JANS 5811 diodes by terminating 
Semicoa's attempt to enter into the manufacture and sale of these 
diodes. The acquisition has thus created monopolies in the 
development, manufacture and sale of JANTXV and JANS small signal 
transistors, and has substantially lessened competition in the 
development, manufacture and sale of all relevant products.
    3. As a result of the transaction, prices for the relevant 
products have increased and likely will continue to increase, 
delivery times have become less reliable, and terms of service 
likely will become less favorable. Accordingly Microsemi's 
acquisition of the Semicoa assets violated Section 7 of the Clayton 
Act, 15 U.S.C. 18, and Section 2 of the Sherman Act, 15 U.S.C. 2.

II. Jurisdiction and Venue

    4. The United States brings this action against defendant 
Microsemi under Section 4 of the Sherman Act and Section 15 of the 
Clayton Act, 15 U.S.C. 4 and 25, as amended, to prevent and restrain 
Microsemi from continuing to violate Section 7 of the Clayton Act, 
15 U.S.C. 18, and Section 2 of the Sherman Act, 15 U.S.C. 2.
    5. Microsemi develops, manufactures and sells the relevant 
products in the flow of interstate commerce. Microsemi's activities 
in developing, manufacturing and selling the relevant products 
substantially affect interstate commerce. This Court has subject 
matter jurisdiction over this action and over the defendant pursuant 
to Section 4 of the Sherman Act and Section 15 of the Clayton Act, 
15 U.S.C. 4 and 25, and 28 U.S.C. 1331, 1337(a), and 1345.
    6. Venue is proper in this district pursuant to Section 12 of 
the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 1391(c), and venue is 
proper in this Division pursuant to Local Rule 3(C). Defendant is a 
corporation that transacts business within this judicial district 
and Division, including by making sales to customers located within 
this judicial district and Division.

III. Parties to the Transaction

    7. Microsemi is a Delaware corporation with its principal place 
of business in Irvine, California. Microsemi's sales were 
approximately $514 million in fiscal year 2008. Microsemi 
manufactures a range of high reliability semiconductors, including 
JANTXV and JANS small signal transistors and JANTXV and JANS 5811 
diodes. Microsemi's facilities for the manufacture of the relevant 
products are located in Massachusetts, California and Arizona. 
Microsemi's relevant products are shipped to customers throughout 
the United States, represent a regular, continuous and substantial 
flow of interstate commerce, and have a substantial effect upon 
interstate commerce.
    8. Semicoa was a California corporation with its principal place 
of business in Costa Mesa, California. Semicoa's sales in the United 
States were approximately $14.7 million in 2007. Prior to the 
acquisition, Semicoa's products included a range of high reliability 
semiconductors. Semicoa's facilities for the manufacture of the 
relevant products were located in Costa Mesa, California. Its 
relevant products were shipped to customers throughout the United 
States and represented a regular, continuous and substantial flow of 
interstate commerce and had a substantial effect upon interstate 
commerce. After the sale of the high reliability semiconductor 
assets to Microsemi, the remainder of the Semicoa business was 
renamed Array Optronics, Inc..

IV. The Transaction

    9. On July 14, 2008, Microsemi and Semicoa completed an asset 
sale by which Microsemi acquired from Semicoa all of its business 
engaged in the development, manufacture and sale of the relevant 
products. Microsemi announced plans to release most of Semicoa's 
employees and to relocate its operations within a year to Microsemi 
facilities.

V. Trade and Commerce

The Relevant Product Markets

    10. Transistors and diodes are semiconductor devices used to 
control the flow of electric current. In their simplest forms, 
transistors can be viewed as switches and diodes can be viewed as 
one-way valves. Both products begin as silicon wafers produced in a 
furnace, typically referred to as a foundry. They are then cut into 
small sections known as dies. These dies are packaged in various 
ways into transistors and diodes.
    11. Small signal transistors are a class of transistors commonly 
used in communications and other signal processing applications. 
Small signal transistors operate at low power levels and are used to 
amplify electrical signals in a wide range of products, including 
critical military and civilian applications ranging from satellites 
to nuclear missile systems. Small signal transistors are produced 
using equipment, processes and skill sets specific to this type of 
transistor. Other types of transistors have different 
characteristics and cannot perform the tasks required of small 
signal transistors. A small but significant increase in the price of 
small signal transistors would not cause customers to switch to 
other types of transistors.
    12. Rectifier diodes are a class of diodes also commonly used in 
communications and other signal processing applications. Rectifier 
diodes operate at low power levels and are used to convert 
alternating current to direct current in a wide range of products, 
including critical military and civilian applications ranging from 
satellites to nuclear missile systems. Ultrafast recovery rectifier 
diodes, of which the 5811 type (``5811 diode'') is among the most 
common, are distinguished from other rectifier diodes by their 
extremely high alternating speeds, which minimize power loss and 
waste heat generation. Their ability to perform efficiently and 
without generating excess heat is especially important in 
applications

[[Page 45244]]

such as satellites and missiles, where power availability is 
strictly limited and heat dissipation is challenging. The 5811 diode 
performs a specific set of functions not performed by other 
ultrafast recovery rectifier diodes; while there are other types of 
ultrafast recovery rectifier diodes, those diodes have different 
characteristics and cannot perform the functions required of 5811 
diodes. A small but significant increase in the price of 5811 diodes 
would not cause customers to switch to other types of diodes.
    13. Highly reliable performance under demanding conditions is 
absolutely essential in military and space systems, where failure of 
a single component could result in failure of the mission. To ensure 
reliability and proper performance, production of these components 
for use in United States military and space applications is 
supervised by the Defense Supply Center Columbus (``DSCC''), a 
component of the Department of Defense. DSCC maintains a list of 
qualified components and their suppliers generally known as the 
Qualified Manufacturers List, or QML. While the QML is specifically 
intended for reference by military contractors, civilian space 
system manufacturers also require highly reliable components for use 
in a demanding environment, and therefore make use of the QML system 
and specify QML qualified components.
    14. Products listed on the QML are organized into ``slash 
sheets,'' which denote groups of components with similar 
characteristics. Microsemi and Semicoa were the only manufacturers 
on the QML slash sheets for small signal transistors. This Complaint 
hereinafter uses the term ``small signal transistors'' to describe 
the products on these slash sheets.
    15. DSCC grants certifications and qualifications for different 
grades of QML components, known as Joint Army-Navy categories. These 
grades in general represent different levels of reliability. The 
highest reliability grade is Joint Army-Navy Space (``JANS''); one 
level below JANS is Joint Army-Navy Technical Exchange-Visual 
Inspection (``JANTXV''). There are two grades below JANTXV, but the 
distinction between those grades and JANTXV is not as stark as 
between JANTXV and JANS. Therefore, the term JANTXV will be used to 
refer to all QML grades other than JANS.
    16. Manufacturers pursuing JANTXV qualification for their 
components must be audited by DSCC. DSCC audits the manufacturer's 
facility, including fabrication, assembly and testing processes. If 
satisfied that the manufacturer is able to produce consistently 
reliable components at the highest levels of quality and 
performance, DSCC will issue a certification for those processes and 
authorize production of a particular component for qualification 
testing. The manufacturer produces a sample lot and submits test 
results to DSCC. Once satisfied with the manufacturer's test 
results--which may take several rounds of submissions and required 
corrections--DSCC will place the particular component from that 
manufacturer on the QML with a JANTXV qualification.
    17. JANS grade products are required by customers for systems 
that demand the utmost reliability, such as satellites and nuclear 
missile systems. Components used in space must be of the highest 
quality and performance, because the space environment exposes 
components to extremes of temperature, pressure, radiation, and 
vibration during launch. Moreover, because failures in space are 
generally beyond reach of repair, these components must be extremely 
reliable.
    18. Thus, while JANS components may perform functions similar to 
JANTXV components, obtaining JANS certification requires extensive 
additional qualification and testing beyond that required to obtain 
JANTXV certification. Each step in the manufacture of each JANS 
product must be thoroughly documented to ensure traceability in the 
event of a manufacturing defect. In addition, suppliers of JANS 
products must undergo far more demanding ongoing manufacturing and 
testing requirements than suppliers of other QML components. As a 
result, JANS components are regarded by buyers as being 
substantially more reliable than JANTXV components and are much more 
expensive than JANTXV components.
    19. Components for use in commercial applications differ 
substantially from their JANTXV or JANS counterparts. JANTXV and 
JANS components are produced to very narrow tolerances. Commercial 
components, in contrast, are produced to much wider tolerances and 
lack the extensive production control, testing and documentation of 
JANTXV and JANS components. Moreover, commercial components are 
often encased in plastic, whereas JANTXV and JANS components are 
hermetically sealed in glass or metal cases, a far more expensive 
and demanding process that ensures greater reliability. Because of 
these significant differences in production and quality control, 
JANTXV and JANS components are much more reliable and substantially 
more expensive than commercial components.
    20. Customers determine whether their projects require 
commercial grade, JANTXV, or JANS components. Those customers that 
choose JANTXV or JANS components need their reliability and assured 
performance characteristics, as evidenced by their willingness to 
pay the much higher cost of these components compared to commercial 
grade components.
    21. Commercial grade components lack the reliability and assured 
performance of JANTXV components because they have not been produced 
following the thorough and reliable procedures mandated by DSCC for 
JANTXV components. While extensive testing of commercial grade 
components might reduce the risk of failure posed by the use of such 
components, such testing would be costly and time consuming. It 
would delay the project, some degree of risk would still remain, and 
the cost associated with such extensive testing in practice would 
make use of the commercial grade far more costly than use of a 
JANTXV component. Customers therefore do not consider the cost or 
availability of commercial grade components when designing systems 
requiring JANTXV components.
    22. Because JANS components are much more expensive than JANTXV 
components, customers whose needs can be met with JANTXV components 
have no economic incentive to substitute JANS components.
    23. A small but significant increase in the price of JANTXV 
small signal transistors would not cause customers to substitute 
commercial grade small signal transistors or JANS small signal 
transistors to an extent that would make such a price increase 
unprofitable. Accordingly, the development, manufacture and sale of 
JANTXV small signal transistors is a separate and distinct line of 
commerce and a relevant product market for the purpose of analyzing 
the effects of the acquisition under Section 7 of the Clayton Act 
and Section 2 of the Sherman Act.
    24. A small but significant increase in the price of JANTXV 5811 
diodes would not cause customers to substitute commercial grade 5811 
diodes or JANS 5811 diodes to an extent that would make such a price 
increase unprofitable. Accordingly, the development, manufacture and 
sale of JANTXV 5811 diodes is a separate and distinct line of 
commerce and a relevant product market for the purpose of analyzing 
the effects of the acquisition under Section 7 of the Clayton Act 
and Section 2 of the Sherman Act.
    25. Customers specifying JANS small signal transistors and JANS 
5811 diodes for their projects will not substitute JANTXV components 
for JANS components because they do not have the extra reliability 
of JANS components, which results from the much more demanding and 
extensive testing and process control required of JANS components. 
While extensive testing of JANTXV components might reduce the risk 
of failure posed by the use of such components, such testing would 
be costly and time consuming. It would delay the project, some 
degree of risk would still remain, and the cost associated with such 
extensive testing in practice would make use of the JANTXV component 
far more costly than use of a JANS component. Thus, when JANS parts 
are available, customers do not consider JANTXV components 
substitutes when designing systems requiring JANS components or 
purchasing components to build such systems. Because commercial 
grade components are of even lower quality, customers specifying 
JANS components also will not substitute commercial components.
    26. A small but significant increase in the price of JANS small 
signal transistors would not cause customers to substitute 
commercial grade or JANTXV small signal transistors to an extent 
that would make such a price increase unprofitable. Accordingly, the 
development, manufacture and sale of JANS small signal transistors 
is a separate and distinct line of commerce and a relevant product 
market for the purpose of analyzing the effects of the acquisition 
under Section 7 of the Clayton Act and Section 2 of the Sherman Act.
    27. A small but significant increase in the price of JANS 5811 
diodes would not cause customers to substitute commercial grade or 
JANTXV 5811 diodes to an extent that would make such a price 
increase unprofitable. Accordingly, the development, manufacture and 
sale of JANS 5811 diodes is a separate and distinct line of commerce 
and a relevant product market for the purpose of analyzing

[[Page 45245]]

the effects of the acquisition under Section 7 of the Clayton Act 
and Section 2 of the Sherman Act.
    28. To the extent there were some customers that could 
substitute JANTXV components in response to a small but significant 
and nontransitory price increase on JANS small signal transistors or 
JANS 5811 diodes, Microsemi would be able to identify those 
customers and charge them a lower price in order to avoid losing 
sales to them, while still raising the price to those customers who 
would not switch. Microsemi would not need to charge the lower price 
to all customers in order to avoid losing contested sales.

The Relevant Geographic Market

    29. Customers that require JANTXV or JANS small signal 
transistors are located throughout the United States. Microsemi 
would be able to identify these customers and increase prices to 
them for JANTXV and JANS small signal transistors. Thus, under 
Section 7 of the Clayton Act and Section 2 of the Sherman Act, the 
relevant geographic market for JANTXV and JANS small signal 
transistors is the United States.
    30. Customers that require JANTXV and JANS 5811 diodes are 
located throughout the United States. Microsemi would be able to 
identify these customers and increase prices to them for JANTXV and 
JANS 5811 diodes. Thus, under Section 7 of the Clayton Act and 
Section 2 of the Sherman Act, the relevant geographic market for 
JANTXV and JANS 5811 diodes is the United States.

Market Concentration

JANTXV and JANS Small Signal Transistors

    31. Prior to the acquisition, Microsemi and Semicoa were the 
only suppliers of JANTXV small signal transistors in the world. 
Microsemi and Semicoa combined sold approximately $15 million of 
JANTXV small signal transistors annually. The transaction was a 
merger to monopoly, and Microsemi faces no current competition.
    32. Prior to the acquisition, Microsemi and Semicoa were the 
only suppliers of JANS small signal transistors in the world. 
Microsemi had approximately $3.5 million in annual sales and Semicoa 
had approximately $3 million in annual sales. The transaction was a 
merger to monopoly, and Microsemi faces no current competition.

JANTXV and JANS 5811 Diodes

    33. Microsemi manufactured JANTXV and JANS 5811 diodes until 
2004, when it attempted to shift production from a plant in 
California to a plant in Arizona. Difficulties associated with that 
shift caused Microsemi to lose its JANTXV and JANS QML 
qualifications for that diode. As a result, there was no other firm 
qualified to make JANS 5811 diodes for several years. However, prior 
to 2004, Microsemi had built up its inventory of JANS 5811 diodes 
and continued to sell these products after its disqualification, 
making it the dominant supplier of these products since 2004.
    34. After 2004, Microsemi's delivery times became very long. 
Customers who were unable to delay their programs further were 
forced to use less reliable commercial grade 5811 diodes at 
increased cost due to the need for additional testing. Microsemi 
produced almost all of the commercial grade products used by those 
customers.
    35. In the meantime, Semicoa took significant steps to enter the 
production of JANTXV and JANS 5811 diodes in competition with 
Microsemi. The shortage led Semicoa to begin developing its own 5811 
diodes to compete with Microsemi, with the assistance of a major 
customer that was dissatisfied with Microsemi as its sole source of 
supply. By July 2008, Semicoa was testing its 5811 diode and, had 
Microsemi not acquired Semicoa's assets later that month, Semicoa 
likely would have obtained JANTXV and JANS qualification and 
competed with Microsemi for JANTXV and JANS 5811 diodes. Semicoa 
already had received $3 million in orders. One other manufacturer, 
with manufacturing operations based in Mexico, is JANTXV qualified 
for 5811 diodes and may obtain JANS qualification, but would not be 
capable of satisfying those customers that require products 
manufactured in the United States, as discussed in Paragraph 41 
below.
    36. Microsemi regained JANTXV and JANS qualifications for its 
5811 diodes in October 2008 after more than three years of effort. 
Had Microsemi not acquired the Semicoa assets in July 2008, 
Microsemi and Semicoa would have competed for the sale of these 
products.

Anticompetitive Effects of the Acquisition

JANTXV and JANS Small Signal Transistors

    37. Prior to the acquisition, Semicoa was the only alternative 
source to Microsemi for JANTXV and JANS small signal transistors, 
and customers benefitted from robust competition between the firms. 
In the two years preceding the acquisition, Semicoa made significant 
investments in capacity expansion, purchasing new equipment and 
increasing its workforce to increase production and improve delivery 
times. Semicoa's shipments of JANTXV and JANS small signal 
transistors rose by more than 40 percent between 2005 and 2007. 
Semicoa aggressively priced its small signal transistors to take 
business from Microsemi, constraining Microsemi's prices.
    38. Post-acquisition, Microsemi has raised prices significantly 
on JANTXV and JANS small signal transistors. Without Semicoa as a 
competitive constraint, Microsemi has the power to selectively raise 
prices to customers that Microsemi is aware cannot substitute lower 
grade components for JANTXV and JANS small signal transistors. In 
addition, Microsemi has announced that it intends to impose on these 
JANTXV and JANS customers less favorable terms of service than were 
provided before the acquisition. Customers will not be able to avoid 
these terms because they no longer possess an alternative to 
Microsemi to ensure timely delivery of their small signal 
transistors. The acquisition is likely to lead to lengthened 
delivery times and less certain delivery, imposing huge risks and 
delays on critical military and space-related programs.
    39. Through its acquisition of the Semicoa assets, Microsemi has 
substantially lessened competition in the markets for JANTXV and 
JANS small signal transistors, in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18, and willfully acquired a monopoly in 
violation of Section 2 of the Sherman Act, 15 U.S.C. 2.

JANTXV and JANS 5811 Diodes

    40. 5811 diodes are produced using processes, skill sets and 
equipment unique to this kind of diode. Microsemi is the sole 
supplier of JANS 5811 diodes, and one of only two suppliers of 
JANTXV 5811 diodes. Before the acquisition, Semicoa had the 
capability to enter the markets for JANTXV and JANS 5811 diodes, and 
was well along the way toward completing that entry. Microsemi's 
purchase of the Semicoa assets eliminated Semicoa's likely entry to 
these markets, thereby leaving Microsemi alone in the market, and 
facing the potential entry of only one other firm, which would 
manufacture these products in Mexico. As a result, the transaction 
reduced from three to two the number of competitors that were likely 
to compete in these markets.
    41. Competition from the firm with manufacturing facilities in 
Mexico will not be sufficient to constrain Microsemi's ability to 
raise the prices of JANTXV and JANS 5811 diodes. As the only other 
domestic supplier of JANTXV and JANS 5811 diodes, Semicoa would have 
been the best alternative source to Microsemi for these customers. 
Because of concerns relating to classified data, sensitive end uses, 
and lack of the ability of the United States government to 
prioritize delivery of product, many customers will hesitate to 
purchase these products from the firm with manufacturing facilities 
in Mexico.
    42. Semicoa's entry into the market for JANTXV and JANS 5811 
diodes likely would have benefited customers with lower prices, 
shorter delivery times, and more favorable terms of service, just as 
Semicoa's competition for sales of JANTXV and JANS small signal 
transistors benefited customers for those products. Microsemi's 
acquisition of the Semicoa assets prevented this entry and therefore 
substantially lessened competition in the markets for JANTXV and 
JANS 5811 diodes, in violation of Section 7 of the Clayton Act, 15 
U.S.C. 18.

Entry into the Development, Manufacture and Sale of the Relevant 
Products

    43. Entry into the development, manufacture and sale of JANTXV 
small signal transistors and JANTXV 5811 diodes will not be timely, 
likely, and sufficient to counter the anticompetitive effects of the 
acquisition. The process required to obtain QML certification and 
DSCC qualification for JANTXV small signal transistors and JANTXV 
5811 diodes is lengthy. Entry resulting in significant market impact 
likely would take more than two years.
    44. Entry into the development, manufacture and sale of JANS 
small signal transistors and JANS 5811 diodes sold to United States 
is even less likely to be timely, likely, and sufficient to counter 
the anticompetitive effects of the acquisition. The additional 
process required to obtain DSCC certification and qualification at 
the JANS level would require at least another year following JANTXV 
certification and

[[Page 45246]]

qualification. Moreover, because JANS parts are used for the most 
demanding and critical applications, customers are unlikely to shift 
significant amounts of JANS purchases to an entrant until that 
entrant has established a record of quality, consistency, and 
reliability at the JANS level. Entry resulting in significant market 
impact likely would take more than three years for firms that, 
unlike Semicoa as to 5811 diodes, did not already have JANS 
qualification for other products and significant backing from 
important customers.
    45. The uncertainties and risks associated with any entry, and 
the likelihood that such entry would not be timely in any event, is 
demonstrated by Microsemi's own inability to transfer production of 
JANTXV and JANS 5811 diodes without losing QML qualification. 
Although Microsemi is a large and diversified manufacturer of QML 
products, and attempted to transfer production to a facility in 
Arizona from a facility that it had used to manufacture QML 
components for many years, Microsemi lost its qualification and 
needed three to four years to requalify to produce these components.
    46. Further, to provide the degree of price competition that 
would have existed absent the acquisition, entrants would have to 
reach a scale sufficient to achieve production costs comparable to 
those of Semicoa. This would require significant investment, 
particularly in equipment dedicated to automated production, and is 
unlikely to occur given the small size of the potential markets.

VI. First Cause of Action

(Violation of Section 7 of the Clayton Act)

    47. The United States incorporates the allegations of paragraphs 
1 through 46 above.
    48. Microsemi's acquisition of the assets of Semicoa used in the 
development, manufacture and sale of JANTXV and JANS small signal 
transistors and JANTXV and JANS 5811 diodes has substantially 
lessened competition in interstate trade and commerce in violation 
of Section 7 of the Clayton Act.
    49. The transaction has had the following effects, among others:
    a. Competition between Microsemi and Semicoa in the development, 
manufacture and sale of JANTXV and JANS small signal transistors and 
JANTXV and JANS 5811 diodes has been eliminated;
    b. prices for JANTXV and JANS small signal transistors and 
JANTXV and JANS 5811 diodes have increased and likely will continue 
to increase, delivery times likely will lengthen, and terms of 
service likely will become less favorable.

VII. Second Cause of Action

(Violation of Section 2 of the Sherman Act)

    50. The United States incorporates the allegations of paragraphs 
1 through 46 above.
    51. On or about July 14, 2008, Microsemi willfully obtained 
monopoly power by acquiring the assets of Semicoa used in the 
development, manufacture and sale of JANTXV and JANS small signal 
transistors. Semicoa was Microsemi's only competitor, and the effect 
of this acquisition has been to create a monopoly in violation of 
Section 2 of the Sherman Act.
    52. The transaction has had the following effects, among others:
    a. The combination created a monopoly for the development, 
manufacture and sale of JANTXV and JANS small signal transistors;
    b. Competition between Microsemi and Semicoa in the development, 
manufacture and sale of JANTXV and JANS small signal transistors has 
been eliminated; and
    c. Prices for JANTXV and JANS small signal transistors have 
increased and likely will continue to increase, delivery times 
likely will lengthen, and terms of service likely will become less 
favorable.

XII. Requested Relief

    53. The United States requests that this Court:
    a. Adjudge and decree the acquisition of the assets of Semicoa 
by defendant Microsemi to violate Section 7 of the Clayton Act, 15 
U.S.C. 18 and Section 2 of the Sherman Act, 15 U.S.C. 2;
    b. Compel Microsemi to divest all of Semicoa's tangible and 
intangible assets related to the development, manufacture and sale 
of the relevant products, and to take any further actions necessary 
to restore the markets to the competitive position that existed 
prior to the acquisition;
    c. Award such temporary and preliminary injunctive and ancillary 
relief as may be necessary to avert the likelihood of the 
dissipation of Semicoa's tangible and intangible assets during the 
pendency of this action and to preserve the possibility of effective 
final relief;
    d. Award the United States the cost of this action; and
    e. Grant the United States such other and further relief as the 
case requires and the Court deems just and proper.

Respectfully submitted,

Date: December 18, 2008.

For Plaintiff United States:

/s/--------------------------------------------------------------------
Deborah A. Garza,
Acting Assistant Attorney General.

    ------/s/------
David L. Meyer,
Principal Deputy Assistant Attorney General.

/s/--------------------------------------------------------------------
J. Robert Kramer II,
Director of Operations.

/s/--------------------------------------------------------------------
Maribeth Petrizzi,
Chief, Litigation II Section.

/s/--------------------------------------------------------------------
Dorothy B. Fountain,
Assistant Chief, Litigation II Section.

/s/--------------------------------------------------------------------
Lowell R. Stern (VA Bar 33460),
Trial Attorney,
Antitrust Division, Litigation II Section,
1401 H Street, NW., Suite 3000, Washington, DC 20530,
(202) 514-3676, (202) 307-6283 (fax), [email protected].

    ------/s/------
Kevin C. Quin,
Robert W. Wilder (VA Bar 14479),
Janet A. Nash,
Stephanie A. Fleming,
Christine A. Hill,
Helena M. Gardner,
Jay D. Owen,
Rachel J. Adcox,
Attorneys,
U.S. Department of Justice,
Antitrust Division,
Litigation II Section,
1401 H Street NW., Suite 3000,
Washington, DC 20530.

United States District Court Central District of California

    United States of America, Plaintiff, v. Microsemi Corporation, 
Defendant. Case No.: 8:09-cv-00275-AG-AN.

FINAL JUDGMENT

    Hon. Andrew J. Guilford.

Final Judgment

    Whereas, plaintiff, United States of America, filed its 
Complaint on December 18, 2008, and the United States and Microsemi 
Corporation (``Microsemi''), by their respective attorneys, have 
consented to the entry of this Final Judgment without trial or 
adjudication of any issue of fact or law, and without this Final 
Judgment constituting any evidence against or admission by any party 
regarding any issue of fact or law;
    And whereas, Microsemi agrees to be bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is the prompt 
and certain divestiture of certain rights and assets by Microsemi to 
assure that competition is substantially restored;
    And whereas, Microsemi has represented to the United States that 
the divestiture required below can and will be made and that 
Microsemi will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the provisions 
contained below;
    Now therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each 
of the parties to this action. The Complaint states a claim upon 
which relief may be granted against Microsemi under Section 7 of the 
Clayton Act, 15 U.S.C. 18, as amended, and Section 2 of the Sherman 
Act, 15 U.S.C. 2.

II. Definitions

    As used in this Final Judgment:
    A. ``Microsemi'' means defendant Microsemi Corporation, a 
Delaware corporation with its headquarters in Irvine, California, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    B. ``Semicoa'' means Semicoa, a California corporation with its 
headquarters in Costa Mesa, California, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships, 
and joint ventures, and their directors, officers, managers, agents, 
and employees.

[[Page 45247]]

    C. ``Acquirer'' means the entity to whom defendant divests the 
Divestiture Assets.
    D. ``Divestiture Assets'' means all assets acquired by Microsemi 
from Semicoa on July 14, 2008, including but not limited to:
    (1) All specifications, manufacturing plans, assembly 
instructions, standard operating procedures, and work instructions 
related to the manufacturing process, including all right, title and 
interest in or to all other assets of every kind and nature used or 
intended to be used in the operation of Semicoa's business, 
including, but not limited to, any finished or unfinished devices, 
any materials, data or know-how wherever found or of whatever kind 
reasonably required to manufacture and sell the goods and services 
previously produced by Semicoa, as well as all books and records, 
and all files, documents, papers and agreements that are material to 
the continuing operation of Semicoa's business;
    (2) All finished goods, works in progress, piece parts and 
materials inventory, packaging, and labels, supplies and other 
related personal property, except that which has been sold since the 
closing of the July 14, 2008 transaction between Microsemi and 
Semicoa;
    (3) All equipment, machinery or software used in the 
development, design, manufacturing and testing of goods previously 
manufactured by Semicoa;
    (4) All right, title and interest in, and all information 
related to, any tooling, molds, equipment and proprietary 
specifications Semicoa previously had with any and all vendors from 
which Semicoa purchased goods or services, whether or not there are 
any ``open'' purchase orders issued to such vendors, as well as 
names and other information concerning any vendor that provides 
goods or services that were material to the operation of Semicoa's 
business;
    (5) any list of customers to which Semicoa previously sold 
products or provided services over the three years prior to July 14, 
2008, whether or not there are any ``open'' sales orders from such 
customers;
    (6) all sales, marketing and promotional literature, cost and 
pricing data, promotion list, marketing data and other compilations 
of names and requirements, customer lists and other sales-related 
materials;
    (7) all intellectual property (``IP'') assets or rights that 
have been used in the development, production, servicing, and sale 
of QML Small Signal Transistors and QML Ultrafast Recovery Rectifier 
Diodes, including but not limited to: All licenses, rights, and 
sublicenses, trademarks, trade names, service marks, service names, 
technical information, computer software and related documentation, 
know-how, trade secrets, approvals, certifications, advertising 
literature, and all manuals and technical information provided to 
the employees, customers, suppliers, agents, or licensees of Semicoa 
and used in connection with the development, design, manufacture, 
testing, markets, sale, or distribution of QML Small Signal 
Transistors or QML Ultrafast Recovery Rectifier Diodes;
    (8) all rights under all contracts, licenses, sublicenses, 
agreements, leases, building leases, commitments, purchase orders, 
bids and offers; and
    (9) all rights acquired pursuant to municipal, state and federal 
franchises, permits, licenses, agreements, waivers and 
authorizations.
    E. ``QML Ultrafast Recovery Rectifier Diode'' means each JAN, 
JANS, JANTX, and JANTXV part listed on slash sheets 477 and 590 in 
the Qualified Products Database maintained by the Defense Supply 
Center Columbus.
    F. ``QML Small Signal Transistor'' means each JAN, JANS, JANTX, 
and JANTXV part listed on slash sheets 182, 251, 253, 255, 270, 290, 
291, 301, 317, 336, 349, 354, 366, 374, 376, 382, 391, 392, 394, 
395, 423, 455, 512, 534, 535, 544, 545, 558, 559, 560, and 561 in 
the Qualified Products Database maintained by the Defense Supply 
Center Columbus.

III. Applicability

    This Final Judgment applies to Microsemi, as defined above, and 
all other persons in active concert or participation with it who 
receive actual notice of this Final Judgment by personal service or 
otherwise.

IV. Divestiture

    A. Microsemi is hereby ordered and directed, within thirty (30) 
calendar days after the filing of the proposed Final Judgment in 
this matter, or five (5) calendar days after notice of the entry of 
this Final Judgment by the Court, whichever is later, to divest the 
Divestiture Assets to an Acquirer in a manner consistent with this 
Final Judgment. The United States, in its sole discretion, may agree 
to one extension of this time period, not to exceed thirty (30) 
calendar days, and shall notify the Court of such extension. 
Microsemi agrees to use its best efforts to divest the Divestiture 
Assets as expeditiously as possible.
    B. Microsemi shall provide the Acquirer and the United States 
information relating to the personnel involved in the development, 
production, operation, testing, management, or sales at the 
Divestiture Assets to enable the Acquirer to make offers of 
employment. Microsemi will not interfere with any negotiations by 
the Acquirer to employ any Microsemi employee whose primary 
responsibility was the development, production, operation, testing, 
management, or sales at the Divestiture Assets.
    C. Microsemi shall permit the Acquirer to have reasonable access 
to personnel and to make inspections of the physical facilities 
included in the Divestiture Assets; access to any and all 
environmental, zoning, and other permit documents and information; 
and access to any and all financial, operational, or other documents 
and information customarily provided as part of a due diligence 
process.
    D. Microsemi shall warrant to the Acquirer that each asset will 
be operational on the date of sale.
    E. Microsemi shall not take any action that will impede in any 
way the permitting, operation, or divestiture of the Divestiture 
Assets.
    F. Microsemi shall warrant to the Acquirer that there are no 
material defects in the environmental, zoning, permitting, 
qualification, or other permits pertaining to the operation of the 
Divestiture Assets, and that following the sale of the Divestiture 
Assets, Microsemi will not undertake directly or indirectly, any 
challenges to the environmental, zoning, or other permits relating 
to the operation of the Divestiture Assets.
    G. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV of this Final Judgment shall 
include the entire Divestiture Assets, and shall be accomplished in 
such a way as to satisfy the United States, in its sole discretion, 
that the Divestiture 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 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 business of developing, 
producing, and selling QML Small Signal Transistors and QML 
Ultrafast Recovery Rectifier Diodes; 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 and Microsemi give Microsemi 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 in the business of developing, producing and selling QML 
Small Signal Transistors or QML Ultrafast Recovery Rectifier Diodes.

V. Appointment of Trustee to Effect Divestiture

    A. If Microsemi has not divested the Divestiture Assets within 
the time period specified in Section IV(A), Microsemi 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 Divestiture Assets.
    B. After the appointment of a trustee becomes effective, only 
the trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer 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 Microsemi 
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. Microsemi shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
Microsemi 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.

[[Page 45248]]

    D. The trustee shall serve at the cost and expense of Microsemi, 
on such terms and conditions as the United States approves, and 
shall account for all monies derived from the sale of the 
Divestiture Assets 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 Microsemi 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 Divestiture 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. Microsemi 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 
Microsemi 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. Microsemi 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 such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the 
preceding month, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the Divestiture 
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 Divestiture Assets.
    G. If the trustee has not accomplished the divestiture ordered 
under this Final Judgment within six (6) 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 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 United States, which 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, Microsemi 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 Microsemi. 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 Divestiture 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 Microsemi, 
the proposed Acquirer, any other third party, or the trustee, if 
applicable, additional information concerning the proposed 
divestiture and the proposed Acquirer. Microsemi 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 Microsemi, the 
proposed Acquirer, any third party, and the trustee, whichever is 
later, the United States shall provide written notice to Microsemi 
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 Microsemi's 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 
Microsemi under Section V(C), a divestiture proposed under Section V 
shall not be consummated unless approved by the Court.

VII. Financing

    Microsemi shall not finance all or any part of any purchase or 
divestiture made pursuant to Section IV or V of this Final Judgment.

VIII. Preserving and Maintaining Divestiture Assets

    Until the divestiture required by this Final Judgment has been 
accomplished, Microsemi shall take all steps necessary to comply 
with the Order Approving Stipulation Modifying Order to Preserve and 
Maintain Assets and Stipulation Modifying Order to Preserve and 
Maintain Assets. Microsemi shall take no action that would 
jeopardize the divestiture ordered by this Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the 
proposed Final Judgment in this matter, and every thirty (30) 
calendar days thereafter until the divestiture has been completed 
under Section IV or V, Microsemi 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 (30) calendar 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 Divestiture 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 Microsemi has taken to solicit buyers for the Divestiture 
Assets, and to provide required 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 Microsemi, including limitation on information, shall be made 
within fourteen (14) calendar days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the 
proposed Final Judgment in this matter, Microsemi shall deliver to 
the United States an affidavit that describes in reasonable detail 
all actions Microsemi has taken and all steps Microsemi has 
implemented on an ongoing basis to comply with Section VIII of this 
Final Judgment. Microsemi shall deliver to the United States an 
affidavit describing any changes to the efforts and actions outlined 
in Microsemi's earlier affidavits filed pursuant to this section 
within fifteen (15) calendar days after the change is implemented.
    C. Microsemi shall keep all records of all efforts made to 
preserve and divest the Divestiture 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 authorized representatives of the 
United States Department of Justice Antitrust Division, including 
consultants and other persons retained by the United States, shall, 
upon written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, and 
on reasonable notice to Microsemi, be permitted:

    (1) Access during Microsemi's office hours to inspect and copy, 
or at the option of the United States, to require Microsemi to 
provide hard copy or electronic copies of, all books, ledgers, 
accounts, records, data, and documents in the possession, custody, 
or control of Microsemi, relating to any matters contained in this 
Final Judgment; and
    (2) To interview, either informally or on the record, 
Microsemi's officers, employees, or agents, who may have their 
individual counsel present, regarding such matters. The interviews 
shall be subject to the reasonable

[[Page 45249]]

convenience of the interviewee and without restraint or interference 
by Microsemi.

    B. Upon the written request of an authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, 
Microsemi shall submit written reports or response to written 
interrogatories, 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 
Microsemi to the United States, Microsemi represents and identifies 
in writing the material in any such information or documents to 
which a claim of protection may be asserted under Rule 26(c)(1)(G) 
of the Federal Rules of Civil Procedure, and Microsemi marks each 
pertinent page of such material, ``Subject to claim of protection 
under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure,'' 
then the United States shall give Microsemi ten (10) calendar days 
notice prior to divulging such material in any legal proceeding 
(other than a grand jury proceeding).

XI. Notification

    Unless such transaction is otherwise subject to the reporting 
and waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR 
Act''), Microsemi, without providing advance notification to the 
Antitrust Division, shall not directly or indirectly acquire any 
assets of or any interest, including any financial, security, loan, 
equity or management interest, in any entity engaged in the 
development, production, or sale of QML Small Signal Transistors or 
QML Ultrafast Recovery Rectifier Diodes during the term of this 
Final Judgment.
    Such notification shall be provided to the Antitrust Division in 
the same format as, and per the instructions relating to, the 
Notification and Report Form set forth in the Appendix to Part 803 
of Title 16 of the Code of Federal Regulations as amended, except 
that the information requested in Items 5 through 9 of the 
instructions must be provided only about QML Small Signal 
Transistors or QML Ultrafast Recovery Rectifier Diodes. Notification 
shall be provided at least thirty (30) calendar days prior to 
acquiring any such interest, and shall include, beyond what may be 
required by the applicable instructions, the names of the principal 
representatives of the parties to the agreement who negotiated the 
agreement, and any management or strategic plans discussing the 
proposed transaction. Early termination of the waiting periods in 
this paragraph may be requested and, where appropriate, granted in 
the same manner as is applicable under the requirements and 
provisions of the HSR Act and rules promulgated thereunder. This 
Section shall be broadly construed and any ambiguity or uncertainty 
regarding the filing of notice under this Section shall be resolved 
in favor of filing notice.

XII. No Reacquisition

    Microsemi may not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment.

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 (10) years from the date of its entry.

XV. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The 
parties have complied with the requirements of the Antitrust 
Procedures and Penalties Act, 15 U.S.C. 16, including making copies 
available to the public of this Final Judgment, the Competitive 
Impact Statement, and any comments thereon and the United States's 
responses to comments. Based upon the record before the Court, which 
includes the Competitive Impact Statement and any comments and 
response to comments filed with the Court, entry of this Final 
Judgment is in the public interest.
    Date: --------, 2009

Court approval subject to procedures of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16.

-----------------------------------------------------------------------
Honorable Andrew J. Guilford,
United States District Judge.
LOWELL R. STERN,
[email protected],
United States Department of Justice,
Antitrust Division, 450 5th Street, NW., Suite 8700, Washington, DC 
20530,
Telephone: (202) 307-0922,
Facsimile: (202) 307-6283, Attorney for Plaintiff.

United States District Court Central District of California

    United States of America, Plaintiff, v. Microsemi Corporation, 
Defendant.

Case No.: 8:09-cv-00275-AG-AN
Competitive Impact Statement

Hon. Andrew J. Guilford

    Plaintiff United States of America (``United States''), pursuant 
to Section 2(b) of the Antitrust Procedures and Penalties Act 
(``APPA'' or ``Tunney Act''), 15 U.S.C. Sec.  16(b)-(h), files this 
Competitive Impact Statement relating to the proposed Final Judgment 
submitted for entry in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    On July 14, 2008, defendant Microsemi Corporation 
(``Microsemi'') acquired most of the assets of Semicoa. After 
investigating the competitive impact of that acquisition, the United 
States filed a civil antitrust Complaint on December 18, 2008, 
seeking an order compelling Microsemi to divest the Semicoa assets 
and other relief to restore competition. The Complaint alleges that 
the acquisition significantly lessened competition in the 
development, manufacture and sale of certain high reliability small 
signal transistors and ultrafast recovery rectifier diodes used in 
aerospace and military applications, in violation of Section 7 of 
the Clayton Act, 15 U.S.C. 18, and Section 2 of the Sherman Act, 15 
U.S.C. 2. As a result of the acquisition, prices for these products 
did or would have increased, delivery times would have lengthened, 
and terms of service would have become less favorable. Pursuant to 
an Order to Preserve and Maintain Assets, which was entered on 
December 24, 2008 and modified on August 6, 2009, Microsemi may not, 
without written consent of the United States, dispose of the 
acquired assets prior to resolution of this proceeding.
    Concurrent with the filing of this Competitive Impact Statement, 
the United States and Microsemi have filed a Stipulation Regarding 
Proposed Final Judgment and a proposed Final Judgment. These filings 
are designed to restore competition through a divestiture of the 
acquired assets. The proposed Final Judgment, which is explained 
more fully below, requires Microsemi to divest the Semicoa assets, 
thus restoring the competition that was lost as a result of the 
acquisition.
    The United States and Microsemi have stipulated that the 
proposed Final Judgment may be entered after compliance with the 
APPA. Entry of the Final Judgment would terminate this action, 
except that the Court would retain jurisdiction to construe, modify, 
or enforce the provisions of the Final Judgment and to punish 
violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. Microsemi and the Semicoa Acquisition

    Microsemi is a Delaware corporation with its principal place of 
business in Irvine, California. Microsemi's sales were approximately 
$514 million in fiscal year 2008. Microsemi's products include a 
range of electronic components, including high reliability small 
signal transistors and ultrafast recovery rectifier diodes.
    Semicoa was a California corporation that operated from a 
manufacturing facility in Costa Mesa, California. Semicoa's sales 
were approximately $14.7 million in 2007. Semicoa manufactured a 
range of high reliability electronic devices for the military, 
aerospace, and satellite markets, including high reliability small 
signal transistors and ultrafast recovery rectifier diodes.
    On July 14, 2008, Microsemi acquired substantially all of the 
assets of Semicoa. The transaction was not subject to the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, which requires 
companies to notify and provide information to the Department of

[[Page 45250]]

Justice and the Federal Trade Commission before consummating certain 
acquisitions. As a result, the Department of Justice did not learn 
of the transaction until after it had been consummated.

B. The Competitive Impact of the Acquisition on the Markets for QML 
Small Signal Transistors and QML Ultrafast Recovery Rectifier 
Diodes

    Transistors and diodes are semiconductor devices used to control 
the flow of electric current. In their simplest forms, transistors 
can be viewed as switches and diodes can be viewed as one-way 
valves. Both products begin as silicon wafers produced in a furnace, 
typically referred to as a foundry. They are then cut into small 
sections known as dies. These dies are packaged in various ways into 
transistors and diodes.
    Small signal transistors are a class of transistors commonly 
used in communications and other signal processing applications. 
Small signal transistors operate at low power levels and typically 
are used to amplify electrical signals in a wide range of products, 
including critical military and civilian applications ranging from 
satellites to nuclear missile systems.
    Rectifier diodes are a class of diodes also commonly used in 
communications and other signal processing applications. Rectifier 
diodes operate at low power levels and are used to convert 
alternating current to direct current in a wide range of products, 
including critical military and civilian applications ranging from 
satellites to nuclear missile systems. Ultrafast recovery rectifier 
diodes are distinguished from other rectifier diodes by their 
extremely high alternating speeds, which minimize power loss and 
waste heat generation. Their ability to perform efficiently and 
without generating excess heat is especially important in 
applications such as satellites and missiles, where power 
availability is strictly limited and heat dissipation is 
challenging.
    Highly reliable performance under demanding conditions is 
absolutely essential in military and space systems, where failure of 
a single component could result in failure of the mission. To ensure 
reliability and proper performance, production of these components 
for use in United States military and space applications is 
supervised by the Defense Supply Center Columbus (``DSCC''), a 
component of the Department of Defense. DSCC maintains a list of 
qualified components and their suppliers generally known as the 
Qualified Manufacturers List, or QML. Manufacturers seeking 
placement on the QML must pass rigorous audits of their facilities, 
production processes, assembly and test procedures, equipment, 
documentation, and personnel.
    Prior to the acquisition, Microsemi and Semicoa were the only 
QML-listed manufacturers of small signal transistors. In addition, 
Semicoa and Microsemi were both poised to obtain QML listing for 
ultrafast recovery rectifier diodes, which at the time were in 
critically short supply.\1\ While a firm with production facilities 
in Mexico did produce some QML Ultrafast Recovery Rectifier Diodes, 
concerns related to classified data, sensitive end uses, and the 
inability of the United States government to prioritize product 
deliveries beyond the nation's borders make many customers reluctant 
to purchase such products from non-domestic sources.
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    \1\ Products listed on the QML are organized into ``slash 
sheets,'' which generally denote groups of components produced by 
similar processes and having somewhat similar characteristics. Small 
signal transistors are denoted on slash sheets 182, 251, 253, 255, 
270, 290, 291, 301, 317, 336, 349, 354, 366, 374, 376, 382, 391, 
392, 394, 395, 423, 455, 512, 534, 535, 544, 545, 558, 559, 560, and 
561. Ultrafast recovery rectifier diodes are denoted on slash sheets 
477 and 590. This Competitive Impact Statement will hereinafter 
refer to the products on these slash sheets as ``QML Small Signal 
Transistors'' and ``QML Ultrafast Recovery Rectifier Diodes.''
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    As discussed in the Complaint, customers benefitted from robust 
competition between the two firms. In the two years before the 
acquisition, Semicoa expanded its capacity, improved delivery times, 
and priced aggressively to take business from Microsemi. As a 
result, it increased its shipments by more than 40 percent between 
2005 and 2007. Without the constraining effect of Semicoa, Microsemi 
has the power to raise prices and lengthen delivery times on QML 
Small Signal Transistors and QML Ultrafast Recovery Rectifier 
Diodes.\2\
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    \2\ The Complaint describes the various reliability grades of 
QML products. In particular, it distinguishes products qualified for 
use in space (``JANS'') from lower reliability grades (collectively 
referred to in the Complaint as ``JANTXV''). The terms of the 
proposed Final Judgment, however, do not vary among the different 
QML reliability grades. Therefore, this Competitive Impact Statement 
uses the terms ``QML Small Signal Transistors'' and ``QML Ultrafast 
Recovery Rectifier Diodes'' to include products of all QML 
reliability grades.
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    There are no practical substitutes for QML Small Signal 
Transistors or QML Ultrafast Recovery Rectifier Diodes. While 
commercial grade analogues of these components exist, such 
components are produced to much wider tolerances than QML 
components, and lack the extensive production control, testing and 
documentation--and thus the reliability and guaranteed performance--
of QML components. While extensive testing of commercial grade 
components might somewhat reduce the risk of failure posed by the 
use of such components, such testing would be costly and time 
consuming, and some risk would still remain. Military and aerospace 
customers therefore do not regard commercial grade components as 
viable substitutes for QML components.
    Entry of new firms into the production of QML Small Signal 
Transistors or QML Ultrafast Recovery Rectifier Diodes is highly 
unlikely to alleviate the harm to competition resulting from 
Microsemi's acquisition of Semicoa. Obtaining QML listing is a 
lengthy and uncertain process. Even at the lowest QML reliability 
grades, entry resulting in sufficient market impact likely would 
take more than two years. Moreover, entry on a scale sufficient to 
match the competitive impact of Semicoa prior to the acquisition 
would require significant investment, particularly in equipment 
dedicated to automated production, and is unlikely to occur given 
the small size of the potential markets.

III. Explanation of the Proposed Final Judgment

    The divestiture required by the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the 
markets for QML Small Signal Transistors and QML Ultrafast Recovery 
Rectifier Diodes by reestablishing Semicoa as an independent and 
economically viable competitor. The assets to be divested include 
essentially all of the assets \3\ acquired by Microsemi in the July 
14, 2008 transaction. The divestiture provisions of the proposed 
Final Judgment will eliminate the anticompetitive effects of the 
acquisition in the provision of QML Small Signal Transistors and QML 
Ultrafast Recovery Rectifier Diodes.
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    \3\ Inventory and/or work-in-progress that Microsemi sold in the 
ordinary course of business after the July 14, 2008 acquisition of 
the Semicoa assets are excluded from the divestiture. The Acquirer 
will acquire all of the assets necessary to restore competition in 
the relevant markets.
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    The proposed Final Judgment requires Microsemi, within thirty 
(30) days after the filing of the proposed Final Judgment, or five 
(5) calendar days after notice of the entry of the Final Judgment by 
the Court, whichever is later, to divest the Semicoa assets as a 
viable ongoing business. The United States may, in its discretion, 
extend this period by an additional period of up to thirty (30) 
days. The assets must be divested in such a way as to satisfy the 
United States, in its sole discretion, that the assets can and will 
be operated by the purchaser as a viable, ongoing business that can 
compete effectively in the relevant markets. Microsemi must use its 
best efforts to accomplish the divestiture as expeditiously as 
possible and shall cooperate with prospective purchasers.
    In the event that Microsemi does not accomplish the divestiture 
within the periods prescribed in the proposed Final Judgment, the 
proposed Final Judgment provides that the Court will appoint a 
trustee selected by the United States to effect the divestiture. If 
a trustee is appointed, the Final Judgment provides that Microsemi 
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 Court and 
the United States setting forth his or her efforts to accomplish the 
divestiture. At the end of six (6) months, if the divestiture has 
not been accomplished, the trustee and the United States 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.
    In addition to the divestiture provisions, the proposed Final 
Judgment, in Section XI, provides that Microsemi will provide the 
United States at least thirty (30) days' advance notice of any 
acquisition of the assets of, or any interest in, any entity

[[Page 45251]]

engaged in the development, production or sale of QML Small Signal 
Transistors or QML Ultrafast Recovery Rectifier Diodes. The 
notification shall be provided in the same format as, and per the 
instructions relating to, the Notification and Report Form set forth 
in the Appendix to Part 803 of Title 16 of the Code of Federal 
Regulations as amended, except that the information requested in 
Items 5 through 9 of the instructions need be provided only for QML 
Small Signal Transistors and QML Ultrafast Recovery Rectifier 
Diodes.

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 defendant.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and Microsemi 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 (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 sixty (60) days of the date of publication of this 
Competitive Impact Statement in the Federal Register, or the last 
date of publication in a newspaper of the summary of this 
Competitive Impact Statement, whichever is later. All comments 
received during this period will be considered by the Department of 
Justice, which remains free to withdraw its consent to the proposed 
Final Judgment at any time prior to the Court's entry of judgment. 
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: Maribeth Petrizzi, 
Chief, Litigation II Section, Antitrust Division, United States 
Department of Justice, Liberty Square Building, 450 5th Street, NW., 
Suite 8700, 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 Microsemi. The 
United States could have continued the litigation and sought 
divestiture of the Semicoa assets. The United States is satisfied, 
however, that the divestiture of the assets in the manner prescribed 
in the proposed Final Judgment will restore competition in the 
markets for QML Small Signal Transistors and QML Ultrafast Recovery 
Rectifier Diodes. The proposed Final Judgment would achieve all of 
the relief the government would have obtained through litigation, 
but avoids the time, expense and uncertainty of a full trial on the 
merits of the Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The Clayton Act, as amended by 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.'' 15 U.S.C. 16(e)(1). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to consider:
    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, 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)(1)(A) & (B). In considering these statutory factors, 
the court's inquiry is necessarily a limited one as the government 
is entitled to ``broad discretion to settle with the defendant 
within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); see generally 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 
(assessing public interest standard under the Tunney Act).\4\

    \4\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for the court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
Sec.  16(e) (2004), with 15 U.S.C. Sec.  16(e)(1) (2006); see also 
SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 
amendments ``effected minimal changes'' to Tunney Act review).
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    Under the APPA a court considers, 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 
Microsoft, 56 F.3d at 1458-62. 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) (citing United States v. Bechtel Corp., 648 F.2d 660, 666 (9th 
Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62; United States 
v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001). Courts have 
held that:

[t]he 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.

    Bechtel, 648 F.2d at 666 (emphasis added) (citations 
omitted).\5\ In determining whether a proposed settlement is in the 
public interest, a district court ``must accord deference to the 
government's predictions about the efficacy of its remedies, and may 
not require that the remedies perfectly match the alleged 
violations.'' SBC Commc'ns, 489 F. Supp. 2d at 17; see also 
Microsoft, 56 F.3d at 1461 (noting the need for courts to be 
``deferential to the government's predictions as to the effect of 
the proposed remedies''); United States v. Archer-Daniels-Midland 
Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court 
should grant due respect to the United States's prediction as to the 
effect of proposed remedies, its perception of the market structure, 
and its views of the nature of the case).
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    \5\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
---------------------------------------------------------------------------

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[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.' '' United States v. Am. 
Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations 
omitted) (quoting United States v. Gillette Co., 406 F. Supp. 713, 
716 (D. Mass. 1975)), aff'd sub nom. Maryland v. United States, 460 
U.S. 1001, 103 S. Ct. 1240, 75 L.Ed.2d 472 (1983); see also United 
States

[[Page 45252]]

v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985), 
(approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the 
settlements are reasonably adequate remedies for the alleged 
harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17.
    Moreover, the court's role under the APPA 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. 
Because the ``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 did not pursue. Id. at 1459-60. As confirmed 
in SBC Communications, courts ``cannot look beyond the complaint in 
making the public interest determination unless the complaint is 
drafted so narrowly as to make a mockery of judicial power.'' 489 F. 
Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to 
preserve the practical benefits of utilizing consent decrees in 
antitrust enforcement, adding the unambiguous instruction that 
``[n]othing in this section shall be construed to require the court 
to conduct an evidentiary hearing or to require the court to permit 
anyone to intervene.'' 15 U.S.C. 16(e)(2). The language wrote into 
the statute what Congress intended when it enacted the Tunney Act in 
1974, as Senator Tunney explained: ``[t]he 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.'' 119 Cong. 
Rec. 24,598 (1973) (statement of Senator Tunney). Rather, the 
procedure for the public interest determination is left to the 
discretion of the court, with the recognition that the court's 
``scope of review remains sharply proscribed by precedent and the 
nature of Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 
11.\6\
---------------------------------------------------------------------------

    \6\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``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.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
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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 20, 2009.

Respectfully submitted,
By: ------/s/------
Lowell R. Stern, Attorney for Plaintiff.

Certificate of Service

    I hereby certify that on the 20th day of August, 2009, I will 
electronically file the foregoing with the Clerk of Court using the CM/
ECF system, which will then send a notification of such filing (NEF) to 
the following:

Brett J. Williamson,
Darin J. Glasser,
O'Melveny & Myers LLP, 610 Newport Center Drive, 17th Floor, Newport 
Beach, CA 92660-6429.
Michael E. Antalics,
Benjamin G. Bradshaw,
O'Melveny & Myers LLP, 1625 Eye Street, NW., Washington, DC 20006.
------/s/------
Lowell R. Stern,
Attorney for Plaintiff.
[FR Doc. E9-21051 Filed 8-31-09; 8:45 am]
BILLING CODE 4410-11-P