[Federal Register Volume 77, Number 157 (Tuesday, August 14, 2012)]
[Notices]
[Pages 48542-48549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-19831]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. SG Interests I, Ltd., et al.; Public Comments 
and Response on the Proposed Final Judgment

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes below the United States' 
Response to Public Comments on the proposed Final Judgment in United 
States v. SG Interests I, Ltd. et. al., Civil Action No. 12-cv-000395-
RPM-MEH, which was filed in the United States District Court for the 
District of Colorado on August 3, 2012, together with copies of the 76 
comments received by the United States.
    Pursuant to the Court's June 5, 2012 order, comments were published 
electronically and are available to be viewed and downloaded at the 
Antitrust Division's Web site, at: http://www.justice.gov/atr/cases/sggunnison.html. A copy of the United States' Response to Comments is 
also available at the same location.
    Copies of the comments and the response are available for 
inspection at the Department of Justice, Antitrust Division, 450 Fifth 
Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-2481), 
and at the Office of the Clerk of the United States District Court for 
the District of Colorado, Alfred A. Arraj United States Courthouse, 901 
19th Street, Room A105, Denver, CO 30294-3589. Copies of any of these 
materials may also be obtained upon request and payment of a copying 
fee.

Patricia A. Brink,
Director of Civil Enforcement.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Senior Judge Richard P. Matsch

    Civil Action No. 12-cv-00395-RPM-MEH

    UNITED STATES OF AMERICA Plaintiff, v. SG INTERESTS I, LTD., SG 
INTERESTS VII, LTD., and GUNNISON ENERGY CORPORATION, Defendants.

RESPONSE OF PLAINTIFF UNITED STATES TO PUBLIC COMMENTS ON THE PROPOSED 
FINAL JUDGMENT

    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16(b)-(h) (``Tunney Act''), the United 
States files the public comments concerning the proposed Final Judgment 
in this case and its response to those comments. After careful 
consideration, the United States continues to believe that the relief 
sought in the proposed Final Judgment will provide an effective and 
appropriate remedy for the antitrust violation alleged in the 
Complaint. The United States will move the Court for entry of the 
proposed Final Judgment after it has posted all public comments and 
this response on the Antitrust Division Web site and published in the 
Federal Register this response and the Web site address at which the 
public comments may be viewed and downloaded, as set forth in the 
Court's order of June 5, 2012.
    On February 15, 2012, the United States filed a civil antitrust 
complaint against Defendant Gunnison Energy Corporation (``GEC'') and 
Defendants SG Interests I, Ltd. and SG Interests VII, Ltd. (``SGI'') 
seeking damages and other relief to remedy the effects of an 
anticompetitive agreement between SGI and GEC that eliminated 
competitive bidding between the companies for four leases of federal 
land in the Ragged Mountain Area (``RMA'') of Western Colorado. As 
alleged in the Complaint, this agreement significantly reduced 
competition for these leases, and as a result, the United States 
received substantially less revenue from the sale of the leases than it 
would have had SGI and GEC competed against each other at the auctions.
    Simultaneously with the filing of the Complaint, the United States 
filed a proposed Final Judgment and a Stipulation signed by the United 
States and Defendants consenting to the entry of the proposed Final 
Judgment after compliance with the requirements of the Tunney Act. 
Pursuant to those requirements, the United States filed a Competitive 
Impact Statement (``CIS'') in this Court on February 15, 2012; 
published the proposed Final Judgment and CIS in the Federal Register 
on February 23, 2012, see United States v. SG Interests I LTD., et al., 
Proposed Final Judgment and Competitive Impact Statement, 77 Fed. Reg. 
10775 (Feb. 23, 2012); and caused to be published summaries of the 
terms of the proposed Final Judgment and CIS, together with directions 
for the submission of written comments relating to the proposed Final 
Judgment, in The Washington Times for seven days (March 1 and March 2, 
and March 5 through March 9, 2012) and in The Denver Post for seven 
days (March 1 through March 7, 2012). The 60-day period for public 
comments ended on May 7, 2012. The United States received seventy-six 
comments, as described below, which are attached hereto.

I. THE INVESTIGATION AND PROPOSED FINAL JUDGMENT

A. The Investigation

    The proposed Final Judgment is the culmination of an investigation 
into two agreements executed by SGI and GEC pursuant to which they 
jointly bid for and acquired twenty-two leases of federal lands in the 
RMA. As part of its investigation, the United States issued Civil 
Investigative Demands to both firms; reviewed the documents and other 
materials produced in response to these Demands; and interviewed market 
participants.
    After carefully analyzing the investigatory materials and 
evaluating the competitive effects of these two agreements in light of 
all relevant circumstances, the United States concluded that 
Defendants' Memorandum of Understanding (``MOU''), executed in February 
2005 and amended in May 2005, was an unlawful restraint of trade in 
violation of Section 1 of the Sherman Act, 15 U.S.C. Sec.  1. 
Accordingly, the United States filed the Complaint in this action 
challenging Defendants' joint acquisition of four leases pursuant to 
this agreement.
    In contrast, the United States concluded that Defendants' 
subsequent noncompete agreement was ancillary to a broader joint 
development and production collaboration established by Defendants in 
the summer of 2005. On this basis, the United States determined not to 
challenge Defendants' joint

[[Page 48543]]

acquisition of eighteen leases in the latter half of 2005 and 2006.

B. The Facts Surrounding the Violation

    As discussed more fully in the CIS at 3-6, the federal government 
owns hundreds of millions of acres of land in the United States, and 
the Bureau of Land Management (``BLM'') manages the rights to 
subsurface oil and natural gas on these federal lands. Private parties, 
such as oil and gas companies, typically acquire oil and gas leases on 
federal lands at regional auctions conducted by the BLM.
    Defendants GEC and SGI are oil and gas companies engaged in the 
exploration and development of natural gas resources on federal lands 
in the RMA. Prior to 2003, their activities generally focused on 
different parts of the RMA, with SGI acquiring leases on the eastern 
side of the area while GEC acquired leases along the southern boundary. 
However, over the course of 2003 and 2004, their interests began to 
overlap.
    Recognizing that they would be the primary competitors to acquire 
three natural gas leases that were to be auctioned by the BLM in 
February 2005, GEC and SGI executed, on the eve of the auction, the MOU 
pursuant to which they agreed not to compete for the leases. Instead, 
SGI bid for and won the three leases at the February BLM auction for 
$72, $30 and $22 per acre--prices substantially lower than likely would 
have prevailed had SGI and GEC bid against each other. GEC attended the 
auction, but, honoring the terms of the MOU, did not bid; and SGI later 
assigned to GEC at cost a 50 percent interest in the three leases.
    In early May 2005, Defendants amended the MOU to include an 
additional lease that was adjacent to one of the parcels from the 
February auction and set to be auctioned by the BLM on May 12, 2005. At 
the auction, SGI bid for and obtained the fourth lease pursuant to the 
terms of the MOU. Again, GEC attended the auction but did not bid, and 
again, SGI won the lease--this time with a bid of only $2 per acre.
    In June 2005, Defendants, who had been discussing the possibility 
of a joint venture since October 2004, executed an agreement to engage 
in a broad collaboration to jointly acquire and develop leases and 
pipelines in the RMA. Defendants' broad agreement encompassed jointly 
acquiring the leases and other assets of a third company, BDS 
International, LLC, including the only existing pipeline out of the 
RMA. The broad agreement also encompassed joint development and 
ownership of a new, larger pipeline to handle the large volumes of 
natural gas anticipated from the RMA. As part of this collaboration, 
Defendants agreed to share ownership of any oil and gas leases within 
the RMA acquired by either party in the future. This agreement 
eliminated the incentive for the Defendants to bid against each other 
at future auctions for such leases.
    Pursuant to the broad agreement, Defendants have jointly acquired 
eighteen additional leases in the area of the RMA served by the new 
pipeline. They have also jointly invested approximately $80 million 
over the past five years to develop wells, improve existing pipelines, 
and build a new pipeline.

C. The Proposed Final Judgment

    The MOU significantly reduced competition for the four leases at 
the February and May 2005 auctions, and resulted in the BLM receiving 
lower payments than it would have received had GEC and SGI competed for 
the leases. The proposed Final Judgment is designed, inter alia, to 
compensate the United States for the loss in revenue sustained as a 
result of Defendants' unlawful agreement. Specifically, it requires GEC 
and SGI to each pay $275,000, for a total of $550,000, to the United 
States.
    As described in the CIS at 6-7, the proposed Final Judgment relates 
to a qui tam action arising from common facts, and settlements with the 
United States Attorney's Office for the District of Colorado. The 
payments to the United States specified in the proposed Final Judgment 
will satisfy claims that the United States has against GEC and SGI 
under Section 1 of the Sherman Act, as alleged in this action, and the 
False Claims Act, as set forth in the separate agreements reached 
between GEC and SGI and the United States Attorney's Office for the 
District of Colorado (which are Attachments 1 and 2 to the proposed 
Final Judgment).

II. STANDARDS GOVERNING THE COURT'S PUBLIC INTEREST DETERMINATION UNDER 
THE TUNNEY ACT

    The Tunney Act requires that proposed consent judgments in 
antitrust cases brought by the United States be subject to a 60-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. 
Sec.  16(e)(1). In making that determination, The Tunney Act calls for 
the Court 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. Sec.  16(e)(1)(A)-(B). These statutory factors call for 
consideration of, 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).
    The public interest 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.'' 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'''); 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). Under the Tunney Act, the 
``Court's function is not to determine whether the proposed [d]ecree 
results in the balance of rights and liabilities that is the one that 
will best serve society, but only to ensure that the resulting 
settlement is within the reaches of the public interest.'' United 
States v. KeySpan, 763 F. Supp. 2d 633, 637 (S.D.N.Y. 2011) (internal 
citations and quotations omitted; emphasis in original); see also 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (court 
should not ``engage in an unrestricted evaluation of what relief would 
best serve the public'').
    With respect to the scope of the complaint, the Tunney Act review 
does not provide for an examination of possible competitive harms the 
United States did not allege ``unless the complaint is drafted so 
narrowly as to make a mockery of judicial power.'' SBC

[[Page 48544]]

Commc'ns, 489 F. Supp. 2d at 14-15 (citing Microsoft, 56 F.3d at 1462).
    With respect to the sufficiency of the proposed remedy, the United 
States is entitled to deference as to its views of the nature of the 
case, its perception of the market structure, and its predictions as to 
the effect of proposed remedies. See, e.g., KeySpan, 763 F. Supp. 2d at 
642; SBC Commc'ns, 489 F. Supp. 2d at 17.\1\ A court should not reject 
the United States's proposed remedies merely because other remedies may 
be preferable. KeySpan, 763 F. Supp. 2d at 637-38; 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'').
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    \1\ Under this standard, the United States need not show that a 
settlement will perfectly remedy the alleged antitrust harm; rather, 
it need only provide a factual basis for concluding that the 
settlement is a reasonably adequate remedy for the alleged harm. SBC 
Commc'ns, 489 F. Supp. 2d at 17.
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    The procedure for the public-interest determination is left to the 
discretion of the court. SBC Commc'ns, 489 F. Supp. 2d at 11; 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''). In its 2004 amendments to 
the Tunney Act,\2\ Congress made clear its intent to preserve the 
practical benefits of utilizing consent decrees in antitrust 
enforcement, stating ``[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. Sec.  16(e)(2).
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    \2\ The 2004 amendments substituted the word ``shall'' for 
``may'' when directing the courts to consider the enumerated factors 
and amended the list of factors to focus on competitive 
considerations and 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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III. SUMMARY OF THE PUBLIC COMMENTS

    The United States received seventy-six public comments. The 
comments are being filed in the Court's docket and will be posted on 
the Web site of the Antitrust Division pursuant to this Court's June 5, 
2012 Order.\3\ The comments are summarized below:
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    \3\ The comments do not contain the types of private information 
listed in Fed. R. Civ. P. 5.2(a); accordingly, the United States 
will not redact any material from the set of comments to be filed in 
the Court's docket. The United States, however, will redact in the 
set of comments to be published on the Antitrust Division's public 
Web site portions of individual commenter's personal email 
addresses.
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     Seventy-two comments were filed by individuals. Almost all 
of these individuals express concern about the alleged disparity 
between the terms of the proposed Final Judgment in this case compared 
with criminal sanctions imposed on Tim DeChristopher, an individual who 
was prosecuted for false statements in connection with, and disruption 
of, an unrelated federal oil and gas lease auction. A large number of 
the individual comments also assert that the remedy in this case is 
inadequate to cure the alleged violation. Some of the comments raise 
other issues relating to the general conduct of Defendants' oil and gas 
operations in Colorado.
     A coalition of environment and public health groups from 
across western Colorado \4\ wrote comments (``Coalition Cmts'') 
expressing concern that the proposed settlement (1) allows Defendants 
to retain the four leases at issue and does not debar them from future 
auctions; (2) does not address the other eighteen leases that 
Defendants acquired; (3) does not deter anticompetitive conduct; and 
(4) ``markedly departs'' from the sanctions imposed on DeChristopher. 
Coalition Cmts at 2.
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    \4\ The coalition includes Citizens for a Healthy Community, 
High Country Citizens' Alliance, NFRIA-WSERC Conservation Center, 
Western Colorado Congress, and the Wilderness Workshop.
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     The Board of County Commissioners for Pitkin County 
(``P.C. Cmts''), an area which encompasses portions of the RMA and is 
impacted by development of oil and gas leaseholds, filed comments in 
which it commends the Department of Justice for enforcing the antitrust 
laws in the federal oil and gas leasing context. P.C. Cmts at 10. The 
comments, however, assert that the settlement is ``lenient'' and will 
not deter future antitrust violations in that it does not take into 
account the egregiousness of the conduct, does not impose liability for 
the other eighteen leases subject to joint bidding, does not impose 
treble damages, and ignores other violations of the U.S. Code. The 
comments also assert that Defendants have not complied with the 
disclosure provisions of the Tunney Act. P.C. Cmts at 21-22.
     Scott Thurner, who has had business dealings with--and 
litigation against--Defendants, expressed concern that the proposed 
settlement ``does not address the majority of the predatory and 
monopolistic activities'' that Defendants have allegedly committed and 
is inadequate to deter Defendants from further engaging in 
anticompetitive conduct. Thurner Cmts at 1-4.
     Gunnison Energy Corporation, a defendant in this case, 
filed a comment in which it supports the settlement while stressing 
that it has not been found to have violated any laws. It asserts that 
it did not cause the government to lose revenue on any of the four 
leases at issue, that joint ventures and joint bidding are common 
industry practices and recognized by the BLM and the antitrust laws; 
that it settled ``not because it engaged in any illegal or improper 
conduct, but because the cost of defending itself would far exceed the 
cost of settling;'' and that the monetary payment it is required to 
make under the proposed Final Judgment is to settle the qui tam 
lawsuit. GEC Cmts at 1-2.

IV. THE DEPARTMENT'S RESPONSE TO SPECIFIC COMMENTS

    In the remainder of this Response, the United States addresses the 
categories of issues raised by the public comments. Although the United 
States has reviewed every comment individually, it is not responding to 
comments on an individual comment-by-comment basis as many comments 
raise similar issues. Unless otherwise noted, citations to specific 
comments merely are representative of comments on that issue, and 
should not be interpreted as an indication that other comments were not 
reviewed.

A. Comparison to the Federal Prosecution of Tim DeChristopher

    The primary issue raised by almost all of the individual comments 
concerns the federal prosecution of Tim DeChristopher, an individual 
who was found guilty of criminal conduct involving an unrelated BLM gas 
lease auction. Commentors allege inequities between the civil charges 
and remedy in the present case compared with the criminal charges--and 
resulting incarceration of--DeChristopher.
    DeChristopher was indicted in 2009 on two federal charges arising 
from his alleged disruption of a December 19, 2008 government oil and 
gas lease auction that occurred in Salt Lake City, Utah. The indictment 
alleged that DeChristopher attended the BLM auction, ``represented 
himself as a bona fide bidder, when in fact he was not,'' ``completed a 
Bidder Registration Form certifying that he had a good faith intention 
to acquire an oil and gas lease on the offered lands,'' and ``bid on 
and purchased oil and gas leases that he had neither the intention nor 
the means to acquire.'' \5\ The government offered

[[Page 48545]]

evidence at trial that DeChristopher intentionally disrupted the 
auction to further environmental activism goals and that his acts 
resulted in harm, including the cancellation of the auction.\6\ 
DeChristopher claimed that he was acting to hold the oil industry 
accountable for alleged environmental concerns and that he was engaged 
in civil disobedience. After a full trial, the jury found DeChristopher 
guilty on both counts. The court sentenced DeChristopher to 24 months' 
imprisonment and a fine.\7\ The case is currently on appeal in the 
United States Court of Appeals for the Tenth Circuit.
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    \5\ Indictment ]] 4-6, United States v. DeChristopher, 2:09-cr-
00183-DB (filed April 1, 2009). The two count indictment charged 
DeChristopher with violating the Federal Onshore Oil and Gas Leasing 
Reform Act, 30 U.S.C. Sec.  195(a)(1), and making false statements 
in violation of 18 U.S.C. Sec.  1001.
    \6\ The brief filed by the United States in the appeal of 
DeChristopher's conviction sets forth additional details relating to 
his alleged conduct and the trial. See Brief for Appellee United 
States of America (filed Jan. 26, 2012), United States v. 
DeChristopher, 10th Cir., Case No. 11-4151 (``U.S. App. Brief''), at 
3-20.
    \7\ See generally U.S. App. Brief at 3-8 & 17-20. The government 
argued that DeChristopher deserved a significant period of 
incarceration for, inter alia, failure to accept responsibility, 
encouraging others to violate the law, and the damage caused by his 
acts. See id.
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    Commenters in this proceeding are concerned that both this case and 
the DeChristopher case involve conduct that affected BLM auctions of 
oil and gas leases, yet DeChristopher was incarcerated following a 
criminal conviction while Defendants in this case are paying money 
damages to settle a civil charge. For example, one commenter stated, 
``It seems wrong to sentence one man to prison for what was basically 
an act of civil disobedience and then to slap the wrists of two major 
corporations for plotting with the help of attorneys to underbid on gas 
lease auctions.'' E. Marston Cmts at 2. Such views are representative 
of almost all of the other commenters on this issue.\8\
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    \8\ See, e.g., Coalition Cmts at 2 & 4 (``The [settlement] 
markedly departs from sanctions sought in a recent highly publicized 
trial involving an alleged bidder engaged in an act of civil 
disobedience at a federal oil and gas lease sale, resulting in 
disruption to a lease sale but arguably no harm to BLM or taxpayers 
* * * . [T]he proposed settlement is demonstrably out of line with 
charges DOJ has pursued against other parties who have disrupted 
lease sales--rendering this settlement patently prejudicial on its 
face.'').
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    The United States appreciates the concerns raised by the commenters 
but respectfully submits that a comparison to the DeChristopher case is 
inapt. The proposed Final Judgment currently before the Court would 
resolve--before trial--a civil antitrust claim for which the government 
is obtaining monetary relief for damages it suffered. Cf. 15 U.S.C. 
Sec.  15a (damages available to United States when it is ``injured in 
its business or property'' as a result of an antitrust violation). The 
DeChristopher case, on the other hand, was a criminal action in which 
the jury convicted the defendant of false statements and other conduct 
following an indictment and full trial. These substantial differences 
necessarily lead to the different outcomes of the two cases.
    Moreover, an examination of alleged inequities between this case 
and the DeChristopher case is beyond the scope of the Tunney Act. As 
discussed above, the appropriate public interest inquiry in this case 
involves an evaluation of the relationship between the remedy secured 
and the specific allegations set forth in the Complaint; i.e., a civil 
violation of the antitrust laws that caused harm to the United States. 
See 15 U.S.C. Sec.  16(e)(1) (factors for court to consider in Tunney 
Act proceeding relate to the remedy at issue and its relationship to 
the allegations in the complaint; none of the factors involve 
comparisons to other matters); Microsoft, 56 F.3d at 1459 (purpose of 
Tunney Act proceeding is to evaluate the adequacy of the remedy only 
for the antitrust violations alleged in the complaint).
    To the extent commenters are requesting that Defendants in this 
case be charged with a criminal violation of the antitrust laws, such 
an inquiry is likewise beyond Tunney Act review. As a general matter, 
the Tunney Act does not provide an opportunity to challenge the 
prosecutorial decisions of the United States regarding the nature of 
the claims brought in the first instance. 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. 
Microsoft, 56 F.3d at 1459-60.\9\ In this case, the United States, 
based on a full and complete investigation of all the facts and 
circumstances, decided to proceed civilly, not criminally,\10\ and that 
determination should not be second-guessed in this proceeding.
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    \9\ See also SBC Commc'ns, 489 F. Supp. 2d at 14 (``a district 
court is not permitted to reach beyond the complaint to evaluate 
claims that the government did not make and to inquire as to why 
they were not made'') (internal quotations omitted; emphasis in 
original); accord BNS, 858 F.2d at 462-63 (``[T]he [Tunney Act] does 
not authorize a district court to base its public interest 
determination on antitrust concerns in markets other than those 
alleged in the government's complaint.'').
    \10\ There are some situations in which the decision to proceed 
criminally or civilly under the antitrust laws can require 
``considerable deliberation.'' U.S. Dep't of Justice, Antitrust 
Division Manual, at III-20 (4th ed. 2008, rev. 2009),available at 
http://www.justice.gov/atr/public/divisionmanual/index.html. Here, 
the United States chose to pursue the conduct as a civil violation. 
This is the first time that the United States has challenged a joint 
bidding arrangement for BLM mineral rights leases and, as noted in 
the Competitive Impact Statement, the joint bidding arrangement at 
issue was performed under the written MOU drafted by attorneys.
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B. The Decision Not to Challenge Under the Antitrust Laws Defendants' 
Joint Acquisition of the Other Eighteen Leases

    The Complaint alleges that Defendants' joint acquisition of four 
leases pursuant to their MOU was a violation of the antitrust laws. As 
discussed above, Defendants also agreed not to compete against each 
other with respect to eighteen additional leases they acquired pursuant 
to a broad development collaboration formed subsequent to the MOU. 
Numerous comments questioned why the United States did not challenge 
under the antitrust laws Defendants' acquisition of these other 
eighteen leases. E.g., Coalition Cmts at 2-3.
    As discussed above, the United States's decision as to the claims 
it made was based on a full and complete investigation of all the facts 
and circumstances at issue. The Tunney Act review is limited to the 
relationship of the remedy to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to reach 
beyond the Complaint to evaluate claims that the government did not 
make and to inquire as to why they were not made. See supra Sec.  V.A.
    Although our decision not to challenge the eighteen additional 
leases has no bearing on whether entry of the proposed Final Judgment 
would be in the public interest, the following provides information as 
to why the United States did not challenge the eighteen additional 
leases.
1. Relevant Legal Framework
    Section 1 of the Sherman Act prohibits ``[e]very contract, 
combination in the form of trust or otherwise, or conspiracy, in 
restraint of trade or commerce among the several States.'' 15 U.S.C. 
Sec.  1. The Sherman Act ``rests on the premise that the unrestrained 
interaction of competitive forces will yield the best allocation of our 
economic resources, the lowest prices, the highest quality and the 
greatest

[[Page 48546]]

material progress * * * .'' National Collegiate Athletic Ass'n v. Board 
of Regents of Univ. of Okla., 468 U.S. 85, 104 n. 27 (1984) (quoting 
Northern Pac. R. Co. v. United States, 356 U.S. 1, 4-5 (1958)).
    The law has long recognized that ``certain agreements or practices 
which because of their pernicious effect on competition and lack of any 
redeeming virtue are conclusively presumed to be unreasonable and 
therefore illegal without elaborate inquiry as to the precise harm they 
have caused or the business excuse for their use.'' Northern Pac. R. 
Co., 356 U.S. at 5; accord, Catalano, Inc. v. Target Sales, Inc., 446 
U.S. 643, 646 n.9 (1980). Bid rigging agreements are among the types of 
restraints courts have condemned as per se unlawful.
    Nevertheless, even an agreement that would ordinarily be condemned 
as unlawful per se may escape such condemnation if it is ancillary to a 
legitimate procompetitive collaboration. Under established antitrust 
law, a restraint is deemed ancillary to a legitimate collaboration if 
it is ``reasonably necessary'' to achieve the procompetitive benefits 
of the collaboration.\11\ Ancillary restraints are evaluated as part of 
the collaboration under a rule of reason analysis. Salvino, 542 F.3d at 
339 (Sotomayor, J., concurring). In contrast, a restraint that is not 
reasonably necessary--or is broader than necessary--to achieve the 
efficiencies from a collaboration will be evaluated on a stand-alone 
basis and may be per se illegal even if the remainder of the 
collaboration is entirely lawful. Id.
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    \11\ See generally Department of Justice, Antitrust Division, 
and Federal Trade Commission, Antitrust Guidelines for 
Collaborations Among Competitors Sec.  1.2 (2000) (``Collaboration 
Guidelines''). See also Major League Baseball v. Salvino, 542 F.3d 
290, 338 (2d Cir. 2008) (Sotomayor, J., concurring) (``a per se or 
quick look approach may apply * * * where a particular restraint is 
not reasonably necessary to achieve any of the efficiency-enhancing 
benefits of a joint venture and serves only as a naked restraint 
against competition''); Rothery Storage & Van Co. v. Atlas Van 
Lines, Inc., 792 F.2d 210, 224 (D.C. Cir. 1986) (Bork, J.) (``To be 
ancillary, and hence exempt from the per se rule, an agreement 
eliminating competition must be subordinate and collateral to a 
separate, legitimate transaction. The ancillary restraint is 
subordinate and collateral in the sense that it serves to make the 
main transaction more effective in accomplishing its purpose.''); 
Los Angeles Mem'l Coliseum Comm'n v. NFL, 726 F.2d 1381, 1395 (9th 
Cir. 1984) (discussing ancillary restraints doctrine); In re 
Polygram Holdings, Inc., 2003 WL 21770765 (F.T.C. 2003) (parties 
must prove that the restraint was ``reasonably necessary'' to permit 
them to achieve particular alleged efficiency), aff'd, Polygram 
Holdings, Inc. v. F.T.C., 416 F.3d 29 (D.C. Cir. 2005).
---------------------------------------------------------------------------

    Applying this analysis to an auction setting, a naked agreement 
between competitors not to bid against each other is properly treated 
as per se unlawful. On the other hand, a joint bidding agreement that 
is ancillary to a procompetitive or efficiency-enhancing collaboration 
may be lawful under the rule of reason. Significantly, lawful joint 
bidding ``contemplates subsequent joint productive activity, which 
entails a measure of risk sharing or joint provision of some good or 
service.'' 12 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ] 
2005d, at 75 (2d ed. 2005). For example, if a firm, which cannot or 
might not otherwise compete on a particular bid, joins with another 
firm to pool resources or share risk, their joint bidding might 
increase competition by increasing the number of bidders.
2. Analysis
    After carefully analyzing the investigatory materials and 
evaluating the competitive effects of these two agreements in light of 
all relevant circumstances, the United States concluded that 
Defendants' MOU was a per se unlawful restraint of trade in violation 
of Section 1 of the Sherman Act, 15 U.S.C. Sec.  1. As stated in the 
CIS, the MOU was not ancillary to a procompetitive or efficiency-
enhancing collaboration between the Defendants. See CIS at 5; see also 
Complaint ] 20.
    Defendants had been discussing the possibility of a broad joint 
venture since October 2004; however, by early February 2005 those 
discussions had broken down. With the auction imminent, Defendants 
executed the MOU, which eliminated competitive bidding between the 
companies for the leases.\12\ Although Defendants continued to 
entertain the possibility of establishing a broader, efficiency-
enhancing collaboration, significantly, at the time they executed the 
MOU and obtained the leases, any such collaboration remained just 
that--a vague possibility.\13\ The fact that Defendants ultimately 
established such a collaboration does not transform their prior 
agreement not to compete into a lawful ancillary restraint.\14\
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    \12\ GEC asserts in its comments that it ``believes it can 
establish that as to some or all of those 4 leases there would not 
have been competitive bidding even if GEC and SG had not bid 
jointly.'' GEC Cmts at 1. Contemporaneous GEC business documents 
demonstrate, however, that after the February 2005 auction, senior 
GEC executives congratulated each other on having successfully 
avoided a bidding contest with SGI.
    \13\ The United States assesses competitive effects arising from 
an agreement as of the time of possible harm to competition. See 
Collaboration Guidelines at Sec.  2.4.
    \14\ See, e.g., Polk Bros., Inc. v. Forest City Enters., 776 
F.2d 185, 189 n.17 (7th Cir. 1985) (holding that ancillarity is 
determined by evaluating the likely purpose of the restraint ``at 
the time it was adopted''); see also 11 Phillip E. Areeda & Herbert 
Hovenkamp, Antitrust Law ] 1908, at 273 (2d ed. 2005).
---------------------------------------------------------------------------

    In contrast, the United States concluded that Defendants' joint 
acquisition of eighteen leases starting in August 2005 and continuing 
through November 2006 was reasonably related to, and reasonably 
necessary to achieve, the potential benefits of their broad 
collaboration. That collaboration, formed in June 2005 after 
significant negotiations between the parties, was reflected in an 
agreement that provided for joint exploration and development of lands 
located within the defined area. It was specifically designed to 
facilitate the efficient production of gas and included provisions for 
the joint acquisition and ownership of leases in the area, for 
conducting joint operations, and for building and operating a pipeline 
system to transport gas to end-users which required substantial capital 
investment. Defendants' agreement to share ownership of future leases 
acquired by either party aligned their incentives to cooperate in 
achieving the goals of the collaboration and discouraged any one 
Defendant from appropriating an undue share of the collaboration's 
benefits. Defendants' collaboration, thus, allowed them to pool their 
resources and share the risks of exploration for, and development of, 
the natural resources, which provided an opportunity to realize 
significant production efficiencies. Accordingly, based on a review of 
the facts and circumstances, the United States decided not to challenge 
Defendants' joint acquisition of the eighteen leases that occurred 
pursuant to, and in furtherance of, the broad collaboration.\15\
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    \15\ Contrary to GEC's representations in its comments, the 
Department has not investigated ``every aspect of GEC's BLM lease 
activities from the company's inception to the present, and 
determined that with the exception of 4 leases acquired jointly with 
SG Interests in early 2005, GEC's activities were efficiency-
enhancing and pro-competitive, and violated no laws.'' GEC Cmts at 
1. As set forth in the Stipulation, entry of the proposed Final 
Judgment settles only those antitrust claims of the United States 
arising from the specific events giving rise to the allegations 
described in the Complaint. Stipulation at ] 4. It does not settle 
any antitrust claims of the United States against Defendants arising 
outside the scope of the Complaint, including from Defendants' 
acquisition and operation of the Ragged Mountain pipeline. Id.
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C. Sufficiency of the Proposed Final Judgment

    Commenters raise three related concerns as to the sufficiency of 
the proposed Final Judgment: (1) Whether the dollar amount of the 
settlement is too low to remedy the harm or deter anticompetitive 
conduct; (2) whether Defendants should have to admit

[[Page 48547]]

wrongdoing; and (3) whether Defendants should be required to disgorge 
the leases and be debarred from future auctions. Each is addressed in 
turn below.
a. Dollar Amount
    Commenters characterize the monetary payment as an inadequate 
``fine'' that amounts to a ``slap on the wrist'' for the defendants. 
E.g., Outes Cmts at 1. For example, Pitkin County calls the proposed 
judgment ``lenient'' and insufficient to deter future violations. P.C. 
Cmts at 10. Thurner also argues it is ``inadequate to keep GEC and SGI 
from further participating in [illegal] antitrust activities.'' Thurner 
Cmts at 3.
    The proposed remedy, however, constitutes significant and 
meaningful relief. As a result of the unlawful agreement, the BLM 
received lower payments for the leases. The payment of damages to the 
United States reflects additional auction revenues that the BLM likely 
would have received had SGI and GEC acted as independent competitors at 
the February and May 2005 auctions. This is the first time that the 
United States has challenged under the antitrust laws a joint bidding 
arrangement for BLM mineral rights leases. The fact of the challenge 
and the relief obtained will serve to deter the parties and other 
industry participants from engaging in such conduct as this case places 
a marker that any ill-gotten benefit that potential violators may 
realize from anticompetitive joint bidding agreements will be subject 
to damages claims.
    Pitkin County nevertheless criticizes the settlement amount and 
argues that it should be increased to approximate treble damages to 
which those who suffer monetary harm are entitled upon a finding of 
antitrust liability. P.C. Cmts at 15-17. Commenters' position ignores 
the fact that there has been no finding of liability in this case; that 
securing a finding of liability involves litigation risks; and that 
even if liability is established, there are risks in determining and 
securing damages.\16\ Indeed, Commenters appear to assume, incorrectly, 
that the precise amount of damages is uncontested here. Calculation of 
damages in this case would require a determination of the price the 
United States would have received for the leases had Defendants bid 
against each other at auction--a multi-variable exercise. Were this 
case to proceed to trial, both the amount of damages and the 
calculation methodology would be heavily disputed by the parties. The 
settlement resolves this dispute by requiring Defendants to make a 
significant monetary payment, one that is seven times the amount they 
initially paid.\17\
---------------------------------------------------------------------------

    \16\ For example, if this case were to proceed to trial, the 
parties likely would litigate whether the four-year statute of 
limitations, 15 U.S.C. Sec.  15b, would act to bar a claim for 
damages.
    \17\ In 2005, GEC and SGI paid approximately $94,000 for the 
four leases they acquired pursuant to the MOU, resulting in an 
average per acre price of approximately $25. By paying an additional 
$550,000, GEC and SGI in effect will have paid approximately $175 
per acre, seven times the initial bid amount.
---------------------------------------------------------------------------

    The United States recognizes that it has not proved its case at 
trial and that ``a court considering a proposed settlement does not 
have actual findings that the defendants [] engaged in illegal 
practices, as would exist after a trial.'' SBC Commc'ns, 489 F. Supp. 
2d at 15 (citing Microsoft, 56 F.3d at 1461). The monetary amount is 
the product of settlement and accounts for litigation risk and costs. 
It is appropriate to consider litigation risk and the context of 
settlement when evaluating whether a proposed remedy is in the public 
interest as ``room must be made for the government to grant concessions 
in the negotiation process for settlements.'' SBC Commc'ns, 489 F. 
Supp. 2d at 15; see also KeySpan, 763 F. Supp. 2d at 642 (``The 
adequacy of the [settlement] amount must be evaluated in view of the 
Government's decision to settle its claims and seek entry of the 
consent decree. When a litigant chooses to forgo discovery and trial in 
favor of settlement, full damages cannot be expected.'').
    In assessing criticisms about the dollar amount of the 
settlement,\18\ the United States, in Tunney Act review of antitrust 
settlements, is entitled to deference as to predictions about the 
efficacy of its remedies. E.g., SBC Commc'ns, 489 F. Supp. 2d at 17; 
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). Such deference is not unique to antitrust cases; in a recent 
case involving a government settlement of an alleged securities law 
violation, the Second Circuit Court of Appeals emphasized, ``The scope 
of a court's authority to second-guess an agency's discretionary and 
policy-based decision to settle is at best minimal.'' SEC v. Citigroup, 
673 F.3d 158, 164 (2d Cir. 2012) (per curiam opinion of motions panel). 
As such, the commenters' concerns about the sufficiency of the dollar 
amount of the remedy are misplaced.
---------------------------------------------------------------------------

    \18\ E.g., Coalition Cmts at 4 (asserting that settlement amount 
should have been higher based on comparisons to other potential 
bidding scenarios).
---------------------------------------------------------------------------

    In addition, commenters mischaracterize the remedy when they refer 
to the settlement as a ``fine'' or equate the settlement amount to 
Defendants' overall resources or ability to pay (i.e., a ``slap on the 
wrist''). As discussed above, this is a civil case in which the United 
States suffered harm. The Clayton Act provides that the United States 
is entitled to damages when it is injured in its business or property, 
see 15 U.S.C. Sec.  15a, and the $550,000 payment is compensation for 
those damages. The Sherman Act does not provide for civil penalties or 
civil fines.
b. No admission of wrongdoing
    Commenters argue that the proposed Final Judgment is insufficient 
because it does not contain an admission or finding that Defendants 
violated the law. Lyons Cmts at 1; Morrison Cmts at 1-2 (defendants 
``show no contrition''). Commenters' concerns are misplaced. The 
government routinely enters into antitrust consent decrees in which no 
findings are made and defendants do not admit liability. Requiring 
admissions or findings of liability as a prerequisite to entering a 
consent decree would undercut Congress's purpose and contravene the 
public interest in allowing the government to obtain relief without the 
risk and delay of litigation.
    Congress has designed the remedial provisions of the antitrust laws 
to encourage consent judgments, which allow the government to obtain 
relief without the ``time, expense and inevitable risk of litigation.'' 
United States v. Armour and Co., 402 U.S. 673, 681 (1971). Section 5 of 
the Clayton Act provides that litigated final judgments establishing a 
violation in government antitrust cases shall be ``prima facie 
evidence'' against the defendant in subsequent private litigation, but 
the statute specifies that this provision does not apply to ``consent 
judgments or decrees entered before any testimony has been taken.'' 15 
U.S.C. Sec.  16(a). Congress provided this exception to the Clayton 
Act's prima facie evidence provision ``in order to encourage defendants 
to settle promptly government-initiated antitrust claims and thereby to 
save the government the time and expense of further litigation.'' 
United States v. National Ass'n of Broadcasters, 553 F. Supp. 621, 623 
(D.D.C. 1982) (collecting cases).
    Congress confirmed its continuing recognition of the importance of 
consent

[[Page 48548]]

decrees when it passed the Tunney Act in 1974. The legislative history 
unambiguously demonstrates Congress's understanding that government 
antitrust settlements typically occur without an admission or finding 
of liability.\19\ Following enactment of the Tunney Act, courts have 
expressly recognized the Congressional intent to preserve the policy of 
encouraging antitrust consent decrees.\20\
---------------------------------------------------------------------------

    \19\ See S. Rep. No. 298, 93d Cong., 1st Sess. (1973) at 5 
(``Pursuant to the terms of the [consent] decree, the defendant 
agrees to abide by certain conditions in the future. However the 
defendant does not admit to having violated the law as alleged in 
the complaint. Obviously, the consent decree is of crucial 
importance as an enforcement tool, since it permits the allocation 
of resources elsewhere.'') (emphasis added); 119 Cong. Rec. 3451 
(Floor statement of Senator Tunney, ``Essentially the decree is a 
device by which the defendant, while refusing to admit guilt, agrees 
to modify its conduct and in some cases to accept certain remedies 
designed to correct the violation asserted by the Government.''); H. 
Rep. No. 1463, 93 Cong., 2d Sess. 6 (1974) at 6 (``Ordinarily, 
defendants do not admit to having violated the antitrust or other 
laws alleged as violated in complaints that are settled.'').
    \20\ E.g., United States v. Alex. Brown & Sons, Inc., 963 F. 
Supp. 235, 238-39 (S.D.N.Y. 1997) (``In enacting the Tunney Act, 
Congress recognized the high rate of settlement in public antitrust 
cases and wished to encourage settlement by consent decrees as part 
of the legal policies expressed in the antitrust laws.'') (internal 
quotations omitted).
---------------------------------------------------------------------------

    The Supreme Court has long endorsed the entry of consent judgments 
in which there is no finding of liability, and it has done so even when 
the defendant has affirmatively asserted its innocence.\21\ Only once, 
to our knowledge, has a district court questioned an antitrust consent 
decree on that basis, and its criticism was specifically rejected on 
appeal. In United States v. Microsoft, the Court of Appeals reversed a 
district court's refusal to enter a consent decree, holding as 
``unjustified'' the district court's criticism of the defendant ``for 
declining to admit that the practices charged in the complaint actually 
violated the antitrust laws.'' United States v. Microsoft, 56 F.3d at 
1448, 1461 (D.C. Cir. 1995). The Court of Appeals emphasized that the 
``important question is whether [the defendant] will abide by the terms 
of the consent decree regardless of whether it is willing to admit 
wrongdoing.'' Id. Similarly, in a recent case arising under the 
securities laws, the Court of Appeals for the Second Circuit--deciding 
whether to stay district court proceedings--found that the SEC had a 
strong likelihood of overturning the district court's decision to block 
a settlement that did not contain an admission or finding of liability. 
In so doing, the Court of Appeals explained:
---------------------------------------------------------------------------

    \21\ See Swift & Co. v. United States, 276 U.S. 311, 327 (1928) 
(refusing to vacate injunctive relief in consent judgment that 
contained recitals in which defendants asserted their innocence); 
Armour, 402 U.S. at 681 (interpreting consent decree in which 
defendants had denied liability for the allegations raised in the 
complaint); see also 18A Charles A. Wright, Arthur R. Miller & 
Edward H. Cooper, Federal Practice and Procedure Sec.  4443, at 256-
57 (2d ed. 2002) (``central characteristic of a consent judgment is 
that the court has not actually resolved the substance of the issues 
presented'').
---------------------------------------------------------------------------

    It is commonplace for settlements to include no binding admission 
of liability. A settlement is by definition a compromise. * * * We 
doubt whether it lies within a court's proper discretion to reject a 
settlement on the basis that liability has not been conclusively 
determined.

SEC v. Citgroup, 673 F.3d 158, 165-66 (2d Cir. 2012). Accordingly, 
there is no basis here to insist that the public interest requires an 
admission or a finding of liability.

c. Forfeiture of Leases/Debarment from Future Auctions
    Commenters question why the settlement only includes monetary 
relief and not further sanctions. Pitkin County argues that Defendants 
should be subject to ``debarment,'' a penalty under the Mineral Leasing 
Act which provides for ``prohibition from participation in exploration, 
leasing, or development of any Federal mineral,'' 30 U.S.C. Sec.  
195(c). P.C. Cmts at 17-19. Other commenters seek forfeiture of the 
leases at issue so that Defendants cannot develop the properties. E.g. 
Coalition Cmts at 2-3 (``Issuance and development of these leases is 
arguably in direct contravention of the public interest. If development 
proceeds, it should not be undertaken by operators known to disregard 
the public trust--the values at stake are simply too great.'').
    As discussed above, the United States is entitled to deference as 
to its predictions about the efficacy of its remedies. In this case, 
Defendants' anticompetitive conduct caused monetary harm to the United 
States in the form of lost auction revenues. As such, the payment 
called for in the proposed Final Judgment is an appropriate remedy 
because it will compensate the United States for that harm; there is no 
need for the disgorgement of the actual lease interests themselves or 
debarment from future auctions.
3. The United States Should Investigate Other Issues
    Commenters request investigations and action relating to a wide 
variety of conduct engaged in by the defendants. For example, Thurner--
who has been engaged in litigation with Defendants--stated, ``The 
proposed settlement does not address the majority of the predatory and 
monopolistic activities in which GEC and SGI have engaged, and they are 
continuing to engage in [illegal] antitrust activities.'' Thurner Cmts 
at 1. Other commenters have raised numerous concerns with Defendants' 
general conduct in the oil and gas industry. For example commenters 
express concern about a proposed land exchange involving the Bear Ranch 
(Brill Cmts at 3, E. Marston Cmts at 2); alleged environmental harm 
caused by Defendants' development of leased land (Coalition Cmts at 3-
4, Brett Cmts; McCarthy Cmts); and an employee of one of the Defendants 
serving on a BLM advisory council (E. Marston Cmts at 1-2; Swackhamer 
Cmts at 2).
    The proposed Final Judgment should not be measured by how it would 
resolve general industry concerns that are not at issue in the 
Complaint. The Tunney Act issue before the Court is whether the relief 
resolves the violation identified in the Complaint in a manner that is 
within the reaches of the public interest. See Microsoft, 56 F.3d at 
1460 (``And since the claim is not made, a remedy directed to that 
claim is hardly appropriate.''); SBC Commc'ns, 489 F. Supp. 2d at 15 
(courts ``cannot look beyond the complaint * * * unless the complaint 
is drafted so narrowly as to make a mockery of judicial power''). We 
note, however, that nothing in the proposed Final Judgment would 
prevent the Antitrust Division from challenging other conduct under the 
antitrust laws in the future and that the judgment does not displace 
any existing state and federal statutes.
4. Defendants' Compliance With Section 16(g) of the Tunney Act
    Pitkin County questioned whether Defendants made adequate 
disclosures under 15 U.S.C. Sec.  16(g). P.C. Cmts at 21-22. The United 
States supplies the following information concerning the purpose of the 
disclosures required pursuant to Section 16(g), but does not respond to 
the substance of the comments that question Defendants' compliance with 
the requirements of Section 16(g). We note that Defendant GEC filed its 
16(g) disclosure on May 1, 2012 (Docket 12) and Defendant SGI 
filed its disclosure on May 2, 2012 (Docket 13), with each 
defendant certifying that no communications relevant to Section 16(g) 
were made other than communications involving only the employees of the 
Department of Justice and counsel of record for Defendants.
    The Tunney Act treats disclosure requirements intended to inform 
public comment regarding a proposed consent judgment entirely 
separately from the

[[Page 48549]]

other disclosure requirements set forth in the Act. To facilitate 
public comment on a proposed consent judgment in a government civil 
antitrust case, the Tunney Act provides, in a single subsection, that 
the proposed decree itself must be published in the Federal Register, 
along with a CIS, which the United States must furnish to any person 
requesting it. 15 U.S.C. Sec.  16(b). The next subsection, 15 U.S.C. 
Sec.  16(c), requires the United States to publish, repeatedly, 
summaries of the proposal and the CIS in general circulation 
newspapers.
    By contrast, the provision at issue here, Section 16(g), is a 
disclosure requirement aimed at informing the courts about lobbying 
activities. It requires defendants in antitrust cases to file their 
disclosure statements with the Tunney Act court, but there are no 
requirements of public notice, Federal Register publication, or 
newspaper summaries. Moreover, the statutory provisions addressing 
disclosure of information supporting informed public comment (Sections 
16(b), (c)) appear immediately before the provisions dealing with 
consideration of, and response to, public comment (Section 16(d)) and 
the court's public interest determination (Sections 16(e), (f)). The 
lobbying provision comes after all of those Sections. Thus, the 
statutory structure thus makes clear the different purposes of the two 
different kinds of disclosure provisions.
    Even if Defendants failed to satisfy the timing requirements of 
Section 16(g), that would not provide a basis to begin the comment 
period anew and further delay entry of the proposed Final Judgment. See 
generally United States v. Microsoft, 215 F. Supp. 2d 1, 18-22 (D.D.C. 
2002) (discussing 16(g) standards and whether the timing of the 
defendant's filing is prejudicial to the parties, the Court, or the 
public). Here, there is no prejudice as the certifications have been 
made to the Court prior to its determination of whether to enter the 
proposed Final Judgment, and those certifications show no 
communications other than those involving Department of Justice 
employees.

V. CONCLUSION

    The purpose of this proceeding is to determine whether the proposed 
remedy resolves the violation identified in the Complaint in a manner 
that is within the reaches of the public interest. The relief that 
would be afforded by the proposed decree is appropriate to the 
violation alleged. The Tunney Act and the public interest require no 
more. To insist on more is to impose substantial resource costs on 
government antitrust enforcement, to risk the possibility of litigation 
resulting in no relief at all, to contravene congressional and judicial 
policy, and to establish a precedent that could impede enforcement of 
the antitrust laws in the future.
    After carefully reviewing the public comments, the United States 
has determined that the proposed Final Judgment, as drafted, provides 
an effective and appropriate remedy for the antitrust violation alleged 
in the Complaint, and is therefore in the public interest. The United 
States will move this Court to enter the proposed Final Judgment after 
it has posted all public comments and this response on the Antitrust 
Division Web site and published in the Federal Register the Web site 
address at which the public comments will be posted.

Dated: August 3, 2012
     Respectfully submitted,
s/Sarah L. Wagner/-----------------------------------------------------
Sarah L. Wagner,
    U.S. Department of Justice,
Antitrust Division, Transportation, Energy & Agriculture Section, 
450 Fifth Street NW., Suite 8000, Washington, DC 20530.

Telephone: (202) 305-8915.
FAX: (202) 616-2441.
Email: [email protected].

Attorney for Plaintiff United States.

CERTIFICATE OF SERVICE

    I hereby certify that on August 3, 2012, I electronically filed the 
foregoing with the Clerk of Court using the CM/ECF system which will 
send notification of such filing to the following email addresses:

L. Poe Leggette, [email protected]
Timothy R. Beyer, [email protected]

s/Sarah L. Wagner/-----------------------------------------------------
Sarah L. Wagner,

U.S. Department of Justice, Antitrust Division, Transportation, 
Energy & Agriculture Section, 450 Fifth Street NW., Suite 8000, 
Washington, DC 20530.

Telephone: (202) 305-8915.
FAX: (202) 616-2441.
Email: [email protected].

Attorney for Plaintiff United States.

[FR Doc. 2012-19831 Filed 8-13-12; 8:45 am]
BILLING CODE 4410-11-P