[Federal Register Volume 83, Number 87 (Friday, May 4, 2018)]
[Notices]
[Pages 19822-19836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09458]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Martin Marietta Materials, Inc. et al.; 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, 
Stipulation, and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America v. Martin Marietta Materials, Inc. et al., Civil 
Action No. 1:18-cv-00973. On April 25, 2018, the United States filed a 
Complaint alleging that Martin Marietta Materials, Inc.'s proposed 
acquisition of Panadero Corp. and Panadero Aggregates Holdings, LLC, 
including subsidiary Bluegrass Materials Company, LLC, would violate 
Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final 
Judgment, filed at the same time as the Complaint, requires that 
Defendants divest the lease to Martin Marietta's Forsyth Quarry, 
located in Suwanee, Georgia, and Bluegrass's Beaver Creek quarry, 
located

[[Page 19823]]

in Hagerstown, Maryland, and related assets.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection on the Antitrust 
Division's website at http://www.justice.gov/atr and at the Office of 
the Clerk of the United States District Court for the District of 
Columbia. 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 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be directed to Maribeth Petrizzi, 
Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, 
Department of Justice, 450 Fifth Street NW, Suite 8700, Washington, DC 
20530 (telephone: (202) 307-0924).

Patricia A. Brink,
Director of Civil Enforcement.

United States District Court for the District of Columbia

United States of America, United States Department of Justice, 
Antitrust Division, 450 Fifth Street, NW, Suite 8700, Washington, DC 
20530 and State of Maryland, Attorney General's Office, 200 St. Paul 
Place, 19th Floor, Baltimore, Maryland 21202, Plaintiffs, v. Martin 
Marietta Materials, Inc., 2710 Wycliff Road, Raleigh, North Carolina 
27607; LG Panadero, L.P., 630 Fifth Avenue, 30th Floor, New York, 
New York 10111; Panadero Corp., 200 W. Forsyth Street, 12th Floor, 
Jacksonville, Florida 32202; Panadero Aggregates Holdings, LLC, 200 
W. Forsyth Street, 12th Floor, Jacksonville, Florida 32202; and 
Bluegrass Materials Company, LLC, 200 W. Forsyth Street, 12th Floor, 
Jacksonville, Florida 32202, Defendants.

Civil Action No.: 1:18-cv-00973
Judge: Randolph Moss

COMPLAINT

    Plaintiffs, the United States of America (``United States''), 
acting under the direction of the Attorney General of the United 
States, and the State of Maryland, acting by and through the Attorney 
General of Maryland, bring this civil antitrust action against 
Defendants to enjoin Martin Marietta Materials, Inc.'s (``Martin 
Marietta'') proposed acquisition of Bluegrass Materials Company, LLC 
(``Bluegrass''). Plaintiffs allege as follows:

I. INTRODUCTION

    1. On June 26, 2017, Martin Marietta and Bluegrass announced a 
definitive agreement under which Martin Marietta would acquire 
Bluegrass for $1.625 billion. The merger would expand the reach of one 
of the largest aggregate producers in the United States and create a 
combined firm with annual total revenues of approximately $4 billion.
    2. Aggregate is a key input in asphalt and ready mix concrete and 
is used to build roads, highways, bridges, and other construction 
projects. The proposed acquisition would eliminate head-to-head 
competition between Martin Marietta and Bluegrass in supplying 
aggregate to customers in and immediately around Forsyth and north 
Fulton County, Georgia, and in and immediately around Washington 
County, Maryland. For a significant number of customers in these areas, 
Martin Marietta and Bluegrass are two of only three competitive sources 
of aggregate qualified by the respective states' Departments of 
Transportation (``DOT''). Elimination of competition between Martin 
Marietta and Bluegrass in these areas likely would give Martin Marietta 
the ability to raise prices or decrease the quality of service provided 
to these customers.
    3. As a result, Martin Marietta's proposed acquisition of Bluegrass 
likely would substantially lessen competition for DOT-qualified 
aggregate in and immediately around Forsyth and north Fulton County, 
Georgia, and in and immediately around Washington County, Maryland, in 
violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.

II. THE PARTIES AND THE PROPOSED TRANSACTION

    4. Defendant Martin Marietta is a North Carolina corporation with 
its headquarters in Raleigh, North Carolina. Martin Marietta is a 
leading supplier of aggregate and heavy building materials in the 
United States, with operations in 26 states. In 2017, Martin Marietta 
had net sales of $3.9 billion.
    5. Defendant Bluegrass is a Delaware limited liability company with 
its headquarters in Jacksonville, Florida. Bluegrass operates 17 rock 
quarries, one sand plant, and two concrete manufacturing plants across 
Kentucky, Tennessee, South Carolina, Georgia, Pennsylvania, and 
Maryland.
    6. Defendant Panadero Aggregates Holdings, LLC (``Panadero 
Aggregates'') is a Delaware limited liability company with its 
headquarters in Jacksonville, Florida. Panadero Aggregates was formed 
to acquire, develop, and operate aggregate and other construction 
materials businesses. Panadero Aggregates is the owner of Bluegrass.
    7. Defendant Panadero Corp. (``Panadero'') is a Delaware 
corporation with its headquarters in Jacksonville, Florida. Panadero is 
a wholly-owned subsidiary of LG Panadero and is the majority owner of 
Panadero Aggregates. Panadero, which reported consolidated net sales of 
$199.5 million in 2016, was formed to acquire, develop, and operate 
aggregate and other construction materials businesses.
    8. Defendant LG Panadero, L.P. (``LG Panadero'') is a Delaware 
limited partnership headquartered in New York, New York. LG Panadero is 
the owner of Panadero.
    9. Pursuant to the Securities Purchase Agreement dated June 23, 
2017, Martin Marietta would acquire Panadero and Panadero Aggregates, 
including Bluegrass, from LG Panadero for $1.625 billion.

III. JURISDICTION AND VENUE

    10. The United States brings this action pursuant to Section 15 of 
the Clayton Act, 15 U.S.C. Sec. Sec.  4 and 25, as amended, to prevent 
and restrain Defendants from violating Section 7 of the Clayton Act, 15 
U.S.C. Sec.  18.
    11. The State of Maryland brings this action under Section 16 of 
the Clayton Act, 15 U.S.C. Sec.  26, to prevent and restrain Defendants 
from violating Section 7 of the Clayton Act, as amended, 15 U.S.C. 
Sec.  18. The State of Maryland, by and through the Attorney General of 
Maryland, brings this action as parens patriae on behalf of the 
citizens, general welfare, and the general economy of the State of 
Maryland.
    12. Defendants produce and sell aggregate in the flow of interstate 
commerce. Defendants' activity in the production and sale of aggregate 
substantially affects interstate commerce. The Court has subject matter 
jurisdiction over this action pursuant to Section 15 of the Clayton 
Act, 15 U.S.C. Sec.  25, and 28 U.S.C. Sec. Sec.  1331, 1337(a), and 
1345.
    13. Defendants have consented to venue and personal jurisdiction in 
this judicial district. Venue is therefore proper in this district 
under Section 12 of the Clayton Act, 15 U.S.C. Sec.  22, and 28 U.S.C. 
Sec.  1391(c).

IV. TRADE AND COMMERCE

A. Aggregate Is an Essential Input for Many Road and Construction 
Projects

    14. Aggregate is a category of material used for road and 
construction projects.

[[Page 19824]]

Produced in quarries, mines, and gravel pits, aggregate is 
predominantly limestone, granite, or other dark-colored igneous rock. 
Different types and sizes of rock are needed to meet different 
specifications for use in asphalt concrete, ready mix concrete, 
industrial processes, and other products. Asphalt concrete consists of 
approximately 95 percent aggregate, and ready mix concrete is made of 
up of approximately 75 percent aggregate. Aggregate thus is an integral 
input for road and other construction projects.
    15. For each construction project, a customer establishes 
specifications that must be met for each application for which 
aggregate is used. For example, state DOTs, including the Georgia and 
Maryland DOTs, set specifications for aggregate used to produce asphalt 
concrete, ready mix concrete, and road base for state DOT projects. 
State DOTs specify characteristics such as hardness, durability, size, 
polish value, and a variety of other characteristics. The 
specifications are intended to ensure the longevity and safety of the 
roads, bridges and other projects for which aggregate is used.
    16. State DOTs qualify quarries according to the end uses of the 
aggregate, to ensure that the stone used in an application meets the 
necessary specifications. In addition, state DOTs test the aggregate at 
various points: at the quarry before it is shipped; when the aggregate 
is sent to the purchaser to produce an end product such as asphalt 
concrete; and after the end product has been produced. Many cities, 
counties, commercial entities, and individuals in Georgia and Maryland 
have adopted their respective state DOT-qualified aggregate 
specifications when building roads, bridges, and other construction 
projects in order to optimize the longevity of their projects.

B. Transportation Is a Significant Component of the Cost of Aggregate

    17. Aggregate is priced by the ton and is a relatively inexpensive 
product, with prices typically ranging from approximately five to 
twenty dollars per ton. A variety of approaches are used to price 
aggregate. For small volumes, aggregate often is sold according to a 
posted price. For large volumes, customers typically either negotiate 
prices for a particular job or negotiate yearly requirements contracts, 
seeking bids from multiple aggregate suppliers.
    18. In areas where aggregate is locally available, it is 
transported from quarries to customers by truck. Truck transportation 
is expensive, and transportation costs can become a significant portion 
of the total cost of aggregate.

C. Relevant Markets

1. State DOT-Qualified Aggregate Is a Relevant Product Market

    19. Within the broad category of aggregate, different types and 
sizes of stone are used for different purposes. For instance, aggregate 
qualified for use as road base may not be the same size and type of 
rock as aggregate qualified for use in asphalt concrete. Accordingly, 
aggregate types and sizes are not interchangeable with one another and 
demand for each is separate. Thus, each type and size of aggregate 
likely is a separate line of commerce and a relevant product market 
within the meaning of Section 7 of the Clayton Act.
    20. State DOTs qualify aggregate for use in road construction and 
other projects in that particular state. DOT-qualified aggregate meets 
particular standards for size, physical composition, functional 
characteristics, end uses, and availability. A customer whose job 
specifies aggregate qualified by a particular state's DOT cannot 
substitute aggregate or other materials that have not been so 
qualified.
    21. Although numerous narrower product markets exist, the 
competitive dynamic for most types of state DOT-qualified aggregate is 
nearly identical, as a quarry can typically produce all, or nearly all, 
types of DOT-qualified aggregate for a particular state. Therefore, 
most types of DOT-qualified aggregate for a particular state may be 
combined for analytical convenience into a single relevant product 
market for the purpose of evaluating the competitive impact of the 
acquisition.
    22. A small but significant increase in the price of state DOT-
qualified aggregate would not cause a sufficient number of customers to 
substitute to another type of aggregate or another material so as to 
make such a price increase unprofitable. Accordingly, the production 
and sale of Georgia DOT-Qualified Aggregate and Maryland DOT-Qualified 
Aggregate (hereinafter ``DOT-Qualified Aggregate'') are distinct lines 
of commerce and relevant product markets within the meaning of Section 
7 of the Clayton Act.

2. The Relevant Geographic Markets Are Local

    23. Aggregate is a relatively low-cost product that is bulky and 
heavy. As a result, the cost of transporting aggregate is high compared 
to the value of the product.
    24. When customers seek price quotes or bids, the distance from the 
quarry to the project site or plant location will have a considerable 
impact on the selection of a supplier, due to the high cost of 
transporting aggregate relative to the low value of the product. 
Suppliers know the importance of transportation costs to a potential 
customer's selection of an aggregate supplier; they know the locations 
of their competitors, and they often will factor the cost of 
transportation from other suppliers into the price or bid that they 
submit.
    25. The primary factor that determines the area a supplier will 
serve is the location of competing quarries. When quoting prices or 
submitting bids, aggregate suppliers will account for the location of 
the project site or plant, the cost of transporting aggregate to the 
project site or plant, and the locations of the competitors that might 
bid on a job. Therefore, depending on the location of the project site 
or plant, suppliers are able to adjust their bids to account for the 
distance other competitors are from a job.

a. The Forsyth and North Fulton County Area Is a Relevant Geographic 
Market

    26. Martin Marietta operates the Forsyth quarry in Suwanee, 
Georgia, and Bluegrass owns and operates the Cumming quarry in Cumming, 
Georgia. Customers in and immediately around Forsyth County and Fulton 
County north of the Chattahoochee River (hereinafter referred to as the 
``Forsyth and North Fulton County Area'') are served by both the 
Forsyth and Cumming quarries. Customers with plants or jobs in the 
Forsyth and North Fulton County Area may, depending on the location of 
their plant or job sites, economically procure Georgia DOT-Qualified 
Aggregate from the Forsyth and Cumming quarries, or from quarries 
operated by a third firm located in Norcross, Buford, and Ball Ground, 
Georgia. Other more distant quarries cannot compete successfully on a 
regular basis for a significant number of customers with plants or jobs 
in the Forsyth and North Fulton County Area because they are too far 
away and transportation costs are too great.
    27. Customers likely would be unable to switch to suppliers outside 
the Forsyth and North Fulton County Area to defeat a small but 
significant price increase. Accordingly, the Forsyth and North Fulton 
County Area is a relevant geographic market for the production and sale 
of Georgia DOT-Qualified Aggregate within the meaning of Section 7 of 
the Clayton Act.

[[Page 19825]]

b. The Washington County Area Is a Relevant Geographic Market

    28. Martin Marietta owns and operates the Boonsboro quarry in 
Boonsboro, Maryland, and the Pinesburg quarry in Williamsport, 
Maryland, and Bluegrass owns and operates the Beaver Creek quarry in 
Hagerstown, Maryland. The Boonsboro, Pinesburg, and Beaver Creek 
quarries each serve customers in and immediately around Washington 
County, Maryland (hereinafter referred to as the ``Washington County 
Area''). Customers with plants or jobs in the Washington County Area 
may, depending on the location of their plant or job site, economically 
procure Maryland DOT-Qualified Aggregate from the Boonsboro, Pinesburg, 
or Beaver Creek quarries, or from a quarry operated by a third firm 
located in nearby Chambersburg, Pennsylvania. Other more distant 
quarries cannot compete successfully on a regular basis for customers 
with plants or jobs in the Washington County Area because they are too 
far away and transportation costs are too great.
    29. Customers likely would be unable to switch to more distant 
suppliers outside of the Washington County Area to defeat a small but 
significant price increase. Accordingly, the Washington County Area is 
a relevant geographic market for the production and sale of Maryland 
DOT-Qualified Aggregate within the meaning of Section 7 of the Clayton 
Act.

D. Martin Marietta's Acquisition of Bluegrass Is Anticompetitive

    30. Vigorous competition between Martin Marietta and Bluegrass on 
price and customer service in the production and sale of DOT-Qualified 
Aggregate has benefitted customers in the Forsyth and North Fulton 
County Area and in the Washington County Area.
    31. In each of these areas, the competitors that constrain Martin 
Marietta and Bluegrass from raising prices on DOT-Qualified Aggregate 
are limited to those who are qualified by the Georgia and Maryland DOTs 
to supply aggregate and can economically transport the aggregate into 
these areas. As alleged above, for a significant number of customers in 
each area, there is only one other firm that produces DOT-Qualified 
Aggregate and can economically serve customers at their plants or job 
sites. The proposed acquisition will eliminate the competition between 
Martin Marietta and Bluegrass and reduce from three to two the number 
of suppliers of DOT-Qualified Aggregate for a significant number of 
customers in each area.
    32. For a significant number of customers in each area, a combined 
Martin Marietta and Bluegrass will have the ability to increase prices 
for DOT-Qualified Aggregate and decrease service by limiting 
availability or delivery options. DOT-Qualified Aggregate producers 
know the distance from their own quarries and their competitors' 
quarries to a customer's job site. Generally, because of transportation 
costs, the farther a supplier's closest competitor is from a job site, 
the higher the price and margin that supplier can expect for that 
project. Post-acquisition, in instances where Martin Marietta and 
Bluegrass quarries are the closest locations to a customer's project, 
the combined firm, using the knowledge of its competitors' locations, 
will be able to charge such customers higher prices or decrease the 
level of customer service.
    33. The response of other suppliers of DOT-Qualified Aggregate will 
not be sufficient to constrain a unilateral exercise of market power by 
Martin Marietta after the acquisition.
    34. The proposed acquisition will therefore substantially lessen 
competition in the market for DOT-Qualified Aggregate in the Forsyth 
and North Fulton County Area and in the Washington County Area and will 
likely lead to higher prices and reduced customer service for consumers 
of such products, in violation of Section 7 of the Clayton Act.

E. Difficulty of Entry

    35. Timely, likely, and sufficient entry in the production and sale 
of DOT-Qualified Aggregate in the Forsyth and North Fulton County Area 
and in the Washington County Area is unlikely, given the substantial 
time and cost required to open a quarry.
    36. Quarries are particularly difficult to locate and permit. 
First, securing the proper site for a quarry is challenging and time-
consuming. Finding land with the correct rock composition requires 
extensive investigation and testing of candidate sites, as well as the 
negotiation of necessary land transfers, leases, and/or easements. 
Further, the site must be close to customer plants and likely job sites 
given the high cost of transporting aggregate.
    37. Second, once a suitable location is chosen, obtaining the 
necessary permits is difficult and time-consuming. Attempts to open a 
new quarry often face fierce public opposition, which can prevent a 
quarry from opening altogether or make the process of opening it much 
more time-consuming and costly.
    38. Third, even after a site is acquired and permitted, the owner 
must spend significant time and resources to prepare the land for 
quarry operations and purchase and install the necessary equipment.
    39. Because of the cost and difficulty of establishing a quarry, 
entry will not be timely, likely or sufficient to mitigate the 
anticompetitive effects of Martin Marietta's proposed acquisition of 
Bluegrass.

V. VIOLATION ALLEGED

    40. Martin Marietta's proposed acquisition of Bluegrass likely will 
substantially lessen competition in the production and sale of DOT-
Qualified Aggregate in the Forsyth and North Fulton County Area and in 
the Washington County Area, in violation of Section 7 of the Clayton 
Act, 15 U.S.C. Sec.  18.
    41. Unless enjoined, the proposed acquisition likely will have the 
following anticompetitive effects, among others:
    (a) actual and potential competition between Martin Marietta and 
Bluegrass in the production and sale of DOT-Qualified Aggregate in the 
Forsyth and North Fulton County Area and in the Washington County Area 
will be eliminated; and
    (b) prices for DOT-Qualified Aggregate in the Forsyth and North 
Fulton County Area and in the Washington County Area likely will 
increase and customer service likely will decrease.

VI. REQUESTED RELIEF

    42. Plaintiffs request that this Court:
    (a) adjudge and decree that Martin Marietta's acquisition of 
Bluegrass would be unlawful and violate Section 7 of the Clayton Act, 
15 U.S.C. Sec.  18;
    (b) preliminarily and permanently enjoin and restrain the 
Defendants and all persons acting on their behalf from consummating the 
proposed acquisition of Bluegrass by Martin Marietta, or from entering 
into or carrying out any other contract, agreement, plan, or 
understanding, the effect of which would be to combine Martin Marietta 
with Bluegrass;
    (c) award Plaintiffs their costs for this action; and
    (d) award Plaintiffs such other and further relief as the Court 
deems just and proper.
Dated: April 25, 2018

For Plaintiff United States of America

-----------------------------------------------------------------------
Makan Delrahim (D.C. Bar #457795)

[[Page 19826]]

Assistant Attorney General

-----------------------------------------------------------------------
Andrew C. Finch (D.C. Bar #494992)
Principal Deputy Assistant Attorney General

-----------------------------------------------------------------------
Bernard A. Nigro, Jr. (D.C. Bar #412357)
Deputy Assistant Attorney General

-----------------------------------------------------------------------
Patricia A. Brink
Director of Civil Enforcement

-----------------------------------------------------------------------
Maribeth Petrizzi (D.C. Bar #435204)
Chief Defense, Industrials, and Aerospace Section

-----------------------------------------------------------------------
Stephanie A. Fleming
Assistant Chief Defense, Industrials, and Aerospace Section

-----------------------------------------------------------------------
David E. Altschuler (D.C. Bar #983023)
 Assistant Chief Defense, Industrials, and Aerospace Section

-----------------------------------------------------------------------
Kerrie J. Freeborn* (D.C. Bar #503143)
 James K. Foster
Stephen A. Harris
John M. Lynch (D.C. Bar #418313)
Jay D. Owen
Angela Y. Ting (D.C. Bar #449576)
Attorneys, United States Department of Justice, Antitrust Division, 
Defense, Industrials, and Aerospace Section, 450 Fifth Street NW, 
Suite 8700, Washington, D.C. 20530, Tel.: (202) 598-2300; Fax: (202) 
514-9033; Email: [email protected], *Attorney of Record.

For Plaintiff State of Maryland

Brian E. Frosh
Maryland Attorney General

-----------------------------------------------------------------------
John R. Tennis
Assistant Attorney General
Chief, Antitrust Division

-----------------------------------------------------------------------
Gary Honick
Senior Assistant Attorney General, 200 St. Paul Place, 19th Floor, 
Baltimore, MD 21202, Tel: (410) 576-6470; Fax: (410) 576-7830; 
Email: [email protected]; Email: [email protected].

United States District Court for the District of Columbia

United States of America and State of Maryland, Plaintiffs, v. 
Martin Marietta Materials, Inc., LG Panadero, L.P., Panadero Corp., 
Panadero Aggregates Holdings, LLC and Bluegrass Materials Company, 
LLC, Defendants.
Civil Action No.: 1:18-cv-00973
Judge: Randolph Moss

PROPOSED FINAL JUDGMENT

    WHEREAS, Plaintiffs, United States of America and the State of 
Maryland, filed their Complaint on April 25, 2018, Plaintiffs and 
Defendants, Martin Marietta Materials, Inc., LG Panadero, L.P., 
Panadero Corp, Panadero Aggregates Holdings, LLC, and Bluegrass 
Materials Company, LLC, 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, Defendants agree 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 or assets by Defendants to assure 
that competition is not substantially lessened;
    AND WHEREAS, Plaintiffs require Defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    AND WHEREAS, Defendants have represented to Plaintiffs that the 
divestitures required below can and will be made and that Defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture 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 Defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. Sec.  18).

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' or ``Acquirers'' means the entity or entities to 
whom Defendants divest the Divestiture Assets.
    B. ``Acquirer of the Georgia Divestiture Assets'' means Midsouth 
Paving, Inc., or another entity to which Defendants divest the Georgia 
Divestiture Assets.
    C. ``Acquirer of the Maryland Divestiture Assets'' means the entity 
to which Defendants divest the Maryland Divestiture Assets.
    D. ``Closing'' means the consummation of the divestiture of all the 
Divestiture Assets pursuant to either Section IV or Section V of this 
Final Judgment.
    E. ``Completion of the Transaction'' means the closing of Martin 
Marietta's acquisition of Panadero Corp. and Panadero Aggregates 
Holdings, LLC, including Bluegrass Materials Company, LLC.
    F. ``Martin Marietta'' means Defendant Martin Marietta Materials, 
Inc., a North Carolina corporation with its headquarters in Raleigh, 
North Carolina, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees.
    G. ``LG Panadero'' means Defendant LG Panadero, L.P., a Delaware 
limited partnership with its headquarters in New York, New York, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    H. ``Panadero'' means Defendant Panadero Corp., a Delaware 
corporation with its headquarters in Jacksonville, Florida, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    I. ``Panadero Aggregates'' means Defendant Panadero Aggregates 
Holdings, LLC, a Delaware limited liability company with its 
headquarters in Jacksonville, Florida, its successors and assigns, and 
its subsidiaries, divisions, groups, affiliates, partnerships, and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    J. ``Bluegrass'' means Defendant Bluegrass Materials Company, LLC, 
a Delaware limited liability company with its headquarters in 
Jacksonville, Florida, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships, and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    K. ``Bluegrass Entities'' means LG Panadero, Panadero, Panadero 
Aggregates, and Bluegrass.
    L. ``Midsouth'' means Midsouth Paving, Inc., a Delaware corporation 
with its headquarters in Birmingham, Alabama, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships, and joint ventures, and their directors, officers, 
managers, agents, and employees. Midsouth is a subsidiary of CRH plc 
and CRH Americas Materials, Inc.
    M. ``Forsyth Quarry'' means Martin Marietta's quarry located at 
3561 Peachtree Pkwy., Suwanee, Georgia 30024.
    N. ``Beaver Creek Quarry'' means Bluegrass's quarry located at 
10101 Mapleville Rd., Hagerstown, Maryland 21740.
    O. ``Georgia Divestiture Assets'' means:

[[Page 19827]]

    1. Martin Marietta's lease to the Forsyth Quarry;
    2. all tangible assets used at the Forsyth Quarry, including, but 
not limited to, all manufacturing equipment, tooling, and fixed assets, 
mining equipment, aggregate reserves, personal property, inventory, 
office furniture, materials, supplies, on- or off-site warehouses or 
storage facilities, and all other tangible property and assets used in 
connection with the Forsyth Quarry; all licenses, permits, and 
authorizations issued by any governmental organization relating to the 
Forsyth Quarry; all contracts, agreements, teaming arrangements, leases 
(including renewal rights), commitments, certifications and 
understandings, including sales agreements and supply agreements 
relating to the Forsyth Quarry, except for regional or national service 
agreements; all customer lists, contracts, accounts, and credit records 
relating to the Forsyth Quarry; all repair and performance records and 
all other records relating to the Forsyth Quarry; and
    3. all intangible assets used in the production and sale of 
aggregate at the Forsyth Quarry, including but not limited to, all 
contractual rights, patents, licenses and sublicenses, intellectual 
property, copyrights, trademarks, trade names, service marks, service 
names (provided, however, that such marks and names shall not include 
the term ``Martin Marietta''), technical information, computer software 
(including dispatch software and management information systems) and 
related documentation (provided, however, that the Acquirer may elect 
to acquire extracted data relating to the Forsyth Quarry without the 
accompanying software), know-how, trade secrets, drawings, blueprints, 
designs, design protocols, specifications for materials, specifications 
for parts and devices, safety procedures for the handling of materials 
and substances, quality assurance and control procedures, design tools 
and simulation capability, all manuals and technical information Martin 
Marietta provides to its own employees, customers, suppliers, agents, 
or licensees, and all data (including aggregate reserve testing 
information) concerning the Forsyth Quarry.
    P. ``Maryland Divestiture Assets'' means:
    1. the Beaver Creek Quarry;
    2. all tangible assets used at the Beaver Creek Quarry, including, 
but not limited to, all manufacturing equipment, tooling, and fixed 
assets, mining equipment, aggregate reserves, personal property, 
inventory, office furniture, materials, supplies, on- or off-site 
warehouses or storage facilities, and all other tangible property and 
assets used in connection with the Beaver Creek Quarry; all licenses, 
permits, and authorizations issued by any governmental organization 
relating to the Beaver Creek Quarry; all contracts, agreements, teaming 
arrangements, leases (including renewal rights), commitments, 
certifications and understandings, including sales agreements and 
supply agreements, except for regional or national service agreements; 
all customer lists, contracts, accounts, and credit records relating to 
the Beaver Creek Quarry; all repair and performance records and all 
other records relating to the Beaver Creek Quarry; and
    3. all intangible assets used in the production and sale of 
aggregate at the Beaver Creek Quarry, including but not limited to, all 
contractual rights, patents, licenses and sublicenses, intellectual 
property, copyrights, trademarks, trade names, service marks, service 
names (provided, however, that such marks and names shall not include 
the word ``Bluegrass''), technical information, computer software 
(including dispatch software and management information systems) and 
related documentation (provided, however, that the Acquirer may elect 
to acquire extracted data relating to the Beaver Creek Quarry without 
the accompanying software), know-how, trade secrets, drawings, 
blueprints, designs, design protocols, specifications for materials, 
specifications for parts and devices, safety procedures for the 
handling of materials and substances, quality assurance and control 
procedures, design tools and simulation capability, all manuals and 
technical information Bluegrass provides to its own employees, 
customers, suppliers, agents, or licensees, and all data (including 
aggregate reserve testing information) concerning the Beaver Creek 
Quarry.
    Q. ``Divestiture Assets'' means the Georgia Divestiture Assets and 
the Maryland Divestiture Assets.

III. APPLICABILITY

    A. This Final Judgment applies to Martin Marietta and the Bluegrass 
Entities, as defined above, and all other persons in active concert or 
participation with any of them who receive actual notice of this Final 
Judgment by personal service or otherwise.
    B. If, prior to complying with Section IV and Section V of this 
Final Judgment, Defendants sell or otherwise dispose of all or 
substantially all of their assets or of lesser business units that 
include the Divestiture Assets, they shall require the purchaser to be 
bound by the provisions of this Final Judgment. Defendants need not 
obtain such an agreement from the Acquirers of the assets divested 
pursuant to this Final Judgment.

IV. DIVESTITURES

    A. Defendants are ordered and directed, within twenty-one (21) 
calendar days after the Court's signing of the Hold Separate 
Stipulation and Order in this matter, to divest the Georgia Divestiture 
Assets in a manner consistent with this Final Judgment to Midsouth or 
another Acquirer of the Georgia Divestiture Assets acceptable to the 
United States, in its sole discretion. The United States, in its sole 
discretion, may agree to one or more extensions of this time period not 
to exceed sixty (60) calendar days in total, and shall notify the Court 
in such circumstances. Defendants agree to use their best efforts to 
divest the Georgia Divestiture Assets as expeditiously as possible.
    B. Defendants are ordered and directed, within ninety (90) calendar 
days after the filing of the Complaint 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 Maryland Divestiture Assets in 
a manner consistent with this Final Judgment to an Acquirer of the 
Maryland Divestiture Assets acceptable to the United States, in its 
sole discretion, after consultation with the State of Maryland. The 
United States, in its sole discretion, may agree to one or more 
extensions of this time period not to exceed sixty (60) calendar days 
in total, and shall notify the Court in such circumstances. Defendants 
agree to use their best efforts to divest the Maryland Divestiture 
Assets as expeditiously as possible.
    C. In the event Defendants are attempting to divest the Georgia 
Divestiture Assets to an Acquirer other than Midsouth, and in 
accomplishing the divestiture of the Maryland Divestiture Assets 
ordered by this Final Judgment, Defendants promptly shall make known, 
by usual and customary means, the availability of the Divestiture 
Assets. Defendants shall inform any person making an inquiry regarding 
a possible purchase of the Divestiture Assets that they are being 
divested pursuant to this Final Judgment and provide that person with a 
copy of this Final Judgment. Defendants shall offer to furnish to all 
prospective Acquirers, subject to customary confidentiality assurances, 
all information and documents relating to the Divestiture

[[Page 19828]]

Assets customarily provided in a due diligence process except such 
information or documents subject to the attorney-client privilege or 
work-product doctrine. Defendants shall make available such information 
to the United States at the same time that such information is made 
available to any other person.
    D. Defendants shall provide the Acquirer(s) and the United States 
information relating to the personnel involved in the operation of the 
Divestiture Assets to enable the Acquirer(s) to make offers of 
employment. Defendants will not interfere with any negotiations by the 
Acquirer(s) to employ any Defendant employee whose primary 
responsibility is the operation of the Divestiture Assets.
    E. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make inspections 
of the physical facilities of 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.
    F. Defendants shall warrant to the Acquirer(s) that each 
Divestiture Asset will be operational on the date of sale.
    G. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    H. Defendants shall warrant to the Acquirer(s) that (1) there are 
no material defects in the environmental, zoning, or other permits 
pertaining to the operation of each Divestiture Asset, and (2) 
following the sale of the Divestiture Assets, Defendants will not 
undertake, directly or indirectly, any challenges to the environmental, 
zoning, or other permits relating to the operation of the Divestiture 
Assets.
    I. Unless the United States otherwise consents in writing, the 
divestitures pursuant to Section IV, or by Divestiture Trustee 
appointed pursuant to Section V, 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, after 
consultation with the State of Maryland with respect to the Maryland 
Divestiture Assets, that the Divestiture Assets can and will be used by 
the Acquirer(s) as part of a viable, ongoing business in the production 
and sale of Georgia and Maryland Department of Transportation-qualified 
aggregate (``State DOT-Qualified Aggregate''). 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' sole 
judgment, after consultation with the State of Maryland with respect to 
the Maryland Divestiture Assets, has the intent and capability 
(including the necessary managerial, operational, technical, and 
financial capability) of competing effectively in the business of 
producing and selling State DOT-Qualified Aggregate; and
(2) shall be accomplished so as to satisfy the United States, in its 
sole discretion, after consultation with the State of Maryland with 
respect to the Maryland Divestiture Assets, that none of the terms of 
any agreement between an Acquirer and Defendants give Defendants the 
ability unreasonably to raise the Acquirer's or Acquirers' costs, to 
lower the Acquirer's or Acquirers' efficiency, or otherwise to 
interfere in the ability of the Acquirer to compete effectively.

V. APPOINTMENT OF DIVESTITURE TRUSTEE

    A. If Defendants have not divested all of the Divestiture Assets 
within the time periods specified in Paragraphs IV(A) and IV(B), 
Defendants shall notify the United States, and the State of Maryland 
with respect to the Maryland Divestiture Assets, of that fact in 
writing. Upon application of the United States, the Court shall appoint 
a Divestiture Trustee selected by the United States and approved by the 
Court to effect the divestiture of the remaining Divestiture Assets.
    B. After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the remaining Divestiture Assets. The Divestiture Trustee shall have 
the power and authority to accomplish the divestitures to an Acquirer 
acceptable to the United States, after consultation with the State of 
Maryland with respect to the Maryland Divestiture Assets, at such price 
and on such terms as are then obtainable upon reasonable effort by the 
Divestiture 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 Paragraph V(D) of this Final 
Judgment, the Divestiture Trustee may hire at the cost and expense of 
Defendants any investment bankers, attorneys, or other agents, who 
shall be solely accountable to the Divestiture Trustee, reasonably 
necessary in the Divestiture Trustee's judgment to assist in the 
divestitures. Any such investment bankers, attorneys, or other agents 
shall serve on such terms and conditions as the United States approves, 
including confidentiality requirements and conflict of interest 
certifications.
    C. Defendants shall not object to a sale by the Divestiture Trustee 
on any ground other than the Divestiture Trustee's malfeasance. Any 
such objections by Defendants must be conveyed in writing to the United 
States and the Divestiture Trustee within ten (10) calendar days after 
the Divestiture Trustee has provided the notice required under Section 
VI.
    D. The Divestiture Trustee shall serve at the cost and expense of 
Defendants pursuant to a written agreement, on such terms and 
conditions as the United States approves, including confidentiality 
requirements and conflict of interest certifications. The Divestiture 
Trustee shall account for all monies derived from the sale of the 
assets sold by the Divestiture Trustee and all costs and expenses so 
incurred. After approval by the Court of the Divestiture Trustee's 
accounting, including fees for its services yet unpaid and those of any 
professionals and agents retained by the Divestiture Trustee, all 
remaining money shall be paid to Defendants and the trust shall then be 
terminated. The compensation of the Divestiture Trustee and any 
professionals and agents retained by the Divestiture Trustee shall be 
reasonable in light of the value of the Divestiture Assets and based on 
a fee arrangement providing the Divestiture Trustee with an incentive 
based on the price and terms of the divestitures and the speed with 
which it is accomplished, but timeliness is paramount. If the 
Divestiture Trustee and Defendants are unable to reach agreement on the 
Divestiture Trustee's or any agents' or consultants' compensation or 
other terms and conditions of engagement within fourteen (14) calendar 
days of appointment of the Divestiture Trustee, the United States may, 
in its sole discretion, take appropriate action, including making a 
recommendation to the Court. The Divestiture Trustee shall, within 
three (3) business days of hiring any other professionals or agents, 
provide written notice of such hiring and the rate of compensation to 
Defendants and the United States.
    E. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestitures. The 
Divestiture Trustee and any consultants, accountants, attorneys, and 
other agents retained by the Divestiture Trustee shall have full

[[Page 19829]]

and complete access to the personnel, books, records, and facilities of 
the business to be divested, and Defendants shall develop financial and 
other information relevant to such business as the Divestiture Trustee 
may reasonably request, subject to reasonable protection for trade 
secret or other confidential research, development, or commercial 
information or any applicable privileges. Defendants shall take no 
action to interfere with or to impede the Divestiture Trustee's 
accomplishment of the divestitures.
    F. After its appointment, the Divestiture Trustee shall file 
monthly reports with the United States and, as appropriate, the Court 
setting forth the Divestiture Trustee's efforts to accomplish the 
divestitures ordered under this Final Judgment. To the extent such 
reports contain information that the Divestiture 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 Divestiture Trustee shall maintain 
full records of all efforts made to divest the Divestiture Assets.
    G. If the Divestiture Trustee has not accomplished the divestitures 
ordered under this Final Judgment within six months after its 
appointment, the Divestiture Trustee shall promptly file with the Court 
a report setting forth (1) the Divestiture Trustee's efforts to 
accomplish the required divestitures, (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestitures have not 
been accomplished, and (3) the Divestiture Trustee's recommendations. 
To the extent such report contains information that the Divestiture 
Trustee deems confidential, such report shall not be filed in the 
public docket of the Court. The Divestiture 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 
Divestiture Trustee's appointment by a period requested by the United 
States.
    H. If the United States determines that the Divestiture Trustee has 
ceased to act or failed to act diligently or in a reasonably cost-
effective manner, it may recommend the Court appoint a substitute 
Divestiture Trustee.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, Defendants or the Divestiture Trustee, whichever 
is then responsible for effecting the divestitures required herein, 
shall notify the United States, and the State of Maryland with respect 
to the Maryland Divestiture Assets, of any proposed divestitures 
required by Section IV or Section V of this Final Judgment. If the 
Divestiture Trustee is responsible, it shall similarly notify 
Defendants. The notice shall set forth the details of the proposed 
divestitures 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, after consultation with the 
State of Maryland with respect to the Maryland Divestiture Assets, may 
request from Defendants, the proposed Acquirer(s), any other third 
party, or the Divestiture Trustee, if applicable, additional 
information concerning the proposed divestitures, the proposed 
Acquirer(s), and any other potential Acquirer. Defendants and the 
Divestiture Trustee shall furnish any additional information requested 
within fifteen (15) calendar days of the receipt of the request, unless 
the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from Defendants, the 
proposed Acquirer(s), any third party, and the Divestiture Trustee, 
whichever is later, the United States shall provide written notice to 
Defendants and the Divestiture Trustee, if there is one, stating 
whether or not it objects to the proposed divestitures. If the United 
States provides written notice that it does not object, the 
divestitures may be consummated, subject only to Defendants' limited 
right to object to the sale under Paragraph V(C) of this Final 
Judgment. Absent written notice that the United States does not object 
to the proposed Acquirer(s) or upon objection by the United States, the 
divestitures proposed under Section IV or Section V shall not be 
consummated. Upon objection by Defendants under Paragraph V(C), the 
divestitures proposed under Section V shall not be consummated unless 
approved by the Court.

VII. FINANCING

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

VIII. HOLD SEPARATE

    Until the divestitures required by this Final Judgment have been 
accomplished, the Bluegrass Entities shall until the Completion of the 
Transaction, and Martin Marietta shall until Closing, take all steps 
necessary to comply with the Hold Separate Stipulation and Order 
entered by this Court. Defendants shall take no action that would 
jeopardize the divestitures ordered by this Court.

IX. AFFIDAVITS

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, and every thirty (30) calendar days thereafter until 
the divestitures have been completed under Section IV or Section V, the 
Bluegrass Entities shall until the Completion of the Transaction, and 
Martin Marietta shall until Closing, deliver to the United States an 
affidavit, which shall describe the fact and manner of Defendants' 
compliance with Section IV or Section V of this Final Judgment. 
Affidavits provided by Martin Marietta must be signed by its Chief 
Financial Officer and General Counsel; each affidavit provided by the 
Bluegrass Entities must be signed by the highest ranking officer of 
each Defendant included in the Bluegrass Entities; and affidavits 
provided by Bluegrass Materials Co., LLC must also be signed by its 
CFO. 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 Defendants have 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 Defendants, 
including limitation on

[[Page 19830]]

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 Complaint 
in this matter the Bluegrass Entities shall until the Completion of the 
Transaction, and Martin Marietta shall until Closing, deliver to the 
United States an affidavit that describes in reasonable detail all 
actions Defendants have taken and all steps Defendants have implemented 
on an ongoing basis to comply with Section VIII of this Final Judgment. 
Defendants shall deliver to the United States an affidavit describing 
any changes to the efforts and actions outlined in Defendants' earlier 
affidavits filed pursuant to this Section within fifteen (15) calendar 
days after the change is implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestitures have been completed.

X. COMPLIANCE INSPECTION

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of any related orders such as any Hold Separate 
Stipulation and Order, 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, 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 Defendants, be 
permitted:

(1) access during Defendants' office hours to inspect and copy, or at 
the option of the United States, to require Defendants to provide hard 
copy or electronic copies of, all books, ledgers, accounts, records, 
data, and documents in the possession, custody, or control of 
Defendants, relating to any matters contained in this Final Judgment; 
and
(2) to interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.

    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants 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, or the Maryland Attorney General's Office, except in the course 
of legal proceedings to which the United States is a party (including 
grand jury proceedings), or for the purpose of securing compliance with 
this Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by 
Defendants to the United States, Defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and Defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give Defendants ten (10) calendar days' notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XI. NO REACQUISITION

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

XII. RETENTION OF JURISDICTION

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. ENFORCEMENT OF FINAL JUDGMENT

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including its right to seek an order 
of contempt from this Court. Defendants agree that in any civil 
contempt action, any motion to show cause, or any similar action 
brought by the United States regarding an alleged violation of this 
Final Judgment, the United States may establish a violation of the 
decree and the appropriateness of any remedy therefor by a 
preponderance of the evidence, and they waive any argument that a 
different standard of proof should apply.
    B. In any enforcement proceeding in which the Court finds that the 
Defendants have violated this Final Judgment, the United States may 
apply to the Court for a one-time extension of this Final Judgment, 
together with such other relief as may be appropriate. In connection 
with any successful effort by the United States to enforce this Final 
Judgment against a Defendant, whether litigated or resolved prior to 
litigation, that Defendant agrees to reimburse the United States for 
any attorneys' fees, experts' fees, and costs incurred in connection 
with that enforcement effort, including the investigation of the 
potential violation.

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, except that after 
five (5) years from the date of its entry, this Final Judgment may be 
terminated upon notice by the United States to the Court and the 
Defendants that the divestitures have been completed and that the 
continuation of the Final Judgment no longer is necessary or in the 
public interest.

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. Sec.  16, including making copies available to 
the public of this Final Judgment, the Competitive Impact Statement, 
and any comments thereon and the United States' responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and responses to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Date:------------------------------------------------------------------

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

-----------------------------------------------------------------------

United States District Judge

United States District Court for the District of Columbia

United States of America and State of Maryland, Plaintiffs, v. 
Martin Marietta Materials, Inc., LG Panadero, L.P., Panadero Corp., 
Panadero Aggregates Holdings, LLC, and Bluegrass Materials Company, 
LLC, Defendants.
Civil Action No.: 1:18-cv-00973
Judge: Randolph Moss

[[Page 19831]]

COMPETITIVE IMPACT STATEMENT

    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 June 26, 2017, Martin Marietta Materials, Inc. (``Martin 
Marietta'') and Bluegrass Materials Company, LLC (``Bluegrass'') 
announced a definitive agreement under which Martin Marietta would 
acquire Bluegrass for approximately $1.625 billion. The United States 
and the State of Maryland (``Plaintiffs'') filed a civil antitrust 
Complaint on April 25, 2018, seeking to enjoin the proposed 
acquisition. The Complaint alleges that the likely effect of the 
proposed acquisition would be to substantially lessen competition in 
the production and sale of Department of Transportation (``DOT'')-
qualified aggregate in and immediately around Forsyth and north Fulton 
County, Georgia and in and immediately around Washington County, 
Maryland, in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  
18. This loss of competition likely would result in increased prices 
and decreased customer service for customers in those areas.
    At the same time the Complaint was filed, Plaintiffs also filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects of the acquisition. Under the proposed Final Judgment, which is 
explained more fully below, Defendants are required to divest the lease 
to Martin Marietta's Forsyth quarry and all of the quarry's assets to 
Midsouth Paving, Inc., a subsidiary of CRH, plc and CRH Americas 
Materials, Inc., and to divest Bluegrass's Beaver Creek quarry and all 
of the quarry's assets to a yet-to-be determined purchaser that must be 
approved by the United States (collectively, the ``Divestiture 
Assets''). Under the terms of the Hold Separate, Defendants will take 
certain steps to ensure that prior to their divestiture the Divestiture 
Assets are operated as competitively independent, economically viable 
and ongoing business concerns, that they will remain independent and 
uninfluenced by the consummation of the acquisition, and that 
competition is maintained during the pendency of the ordered 
divestitures.
    Plaintiffs and Defendants have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA. Entry of the 
proposed Final Judgment would terminate this action, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION

A. The Defendants and the Proposed Transaction

    Defendant Martin Marietta is a North Carolina corporation with its 
headquarters in Raleigh, North Carolina. Martin Marietta is a leading 
supplier of aggregates and heavy building operations, with operations 
in 26 states. In 2017, Martin Marietta had net sales of $3.9 billion.
    Defendant Bluegrass is a Delaware limited liability company with 
its headquarters in Jacksonville, Florida. Bluegrass operates 17 rock 
quarries, one sand plant, and two concrete manufacturing plants across 
Kentucky, Tennessee, South Carolina, Georgia, Pennsylvania, and 
Maryland.
    Defendant Panadero Aggregates Holdings, LLC (``Panadero 
Aggregates'') is a Delaware limited liability company with its 
headquarters in Jacksonville, Florida. Panadero Aggregates was formed 
to acquire, develop, and operate aggregate and other construction 
materials businesses, and is the owner of Bluegrass.
    Defendant Panadero Corp. (``Panadero'') is a Delaware corporation 
with its headquarters in Jacksonville, Florida. Panadero is a wholly-
owned subsidiary of LG Panadero and is the majority owner of Panadero 
Aggregates. Panadero, which reported consolidated net sales of $199.5 
million in 2016, was formed to acquire, develop, and operate aggregate 
and other construction materials businesses.
    Defendant LG Panadero, L.P. (``LG Panadero'') is a Delaware limited 
partnership headquartered in New York, New York. LG Panadero is the 
owner of Panadero.
    Pursuant to a Securities Purchase Agreement dated June 23, 2017, 
Martin Marietta would acquire Panadero and Panadero Aggregates, 
including Bluegrass, from LG Panadero for $1.625 billion. The proposed 
transaction, as initially agreed to by Defendants on June 23, 2017, 
would lessen competition substantially in the production and sale of 
DOT-qualified aggregate in and immediately around Forsyth and north 
Fulton County, Georgia and in and immediately around the Washington 
County, Maryland Area. This acquisition is the subject of the Complaint 
and proposed Final Judgment that Plaintiffs filed today.

B. Industry Overview

    Aggregate is a category of material used for road and construction 
projects. Produced in quarries, mines, and gravel pits, aggregate is 
predominantly limestone, granite, or other dark-colored igneous rock. 
Different types and sizes of rock are needed to meet different 
specifications for use in asphalt concrete, ready mix concrete, 
industrial processes, and other products. Asphalt concrete consists of 
approximately 95 percent aggregate, and ready mix concrete is made of 
up of approximately 75 percent aggregate. Aggregate thus is an integral 
input for road and other construction projects.
    For each construction project, a customer establishes 
specifications that must be met for each application for which 
aggregate is used. For example, state DOTs, including the Georgia and 
Maryland DOTs, set specifications for aggregate used to produce asphalt 
concrete, ready mix concrete, and road base for state DOT projects. 
State DOTs specify characteristics such as hardness, durability, size, 
polish value, and a variety of other characteristics. The 
specifications are intended to ensure the longevity and safety of the 
roads, bridges and other projects for which aggregate is used.
    State DOTs qualify quarries according to the end uses of the 
aggregate, to ensure that the stone used in an application meets the 
necessary specifications. In addition, state DOTs test the aggregate at 
various points: at the quarry before it is shipped; when the aggregate 
is sent to the purchaser to produce an end product such as asphalt 
concrete; and after the end product has been produced. Many cities, 
counties, commercial entities, and individuals in Georgia and Maryland 
have adopted their respective state DOT-qualified aggregate 
specifications when building roads, bridges, and other construction 
projects in order to help ensure the longevity of their projects.
    Aggregate is priced by the ton and is a relatively inexpensive 
product, with prices typically ranging from approximately five to 
twenty dollars per ton. A variety of approaches are used to price 
aggregate. For small volumes, aggregate often is sold according to a

[[Page 19832]]

posted price. For large volumes, customers typically either negotiate 
prices for a particular job or negotiate yearly requirements contracts, 
seeking bids from multiple aggregate suppliers.
    In areas where aggregate is locally available, it is transported 
from quarries to customers by truck. Truck transportation is expensive 
relative to the cost of the product itself, and transportation costs 
can become a significant portion of the total cost of aggregate.

C. Relevant Markets

1. State DOT-Qualified Aggregate Is a Relevant Product Market

    According to the Complaint, within the broad category of aggregate, 
different types and sizes of stone are used for different purposes. For 
instance, aggregate qualified for use as road base may not be the same 
size and type of rock as aggregate qualified for use in asphalt 
concrete. Accordingly, aggregate types and sizes are not 
interchangeable for one another and demand for each is separate. Thus, 
the Complaint alleges that each type and size of aggregate likely is a 
separate line of commerce and a relevant product market within the 
meaning of Section 7 of the Clayton Act.
    State DOTs qualify aggregate for use in road construction and other 
projects in that particular state. DOT-qualified aggregate meets 
particular standards for size, physical composition, functional 
characteristics, end uses, and availability. A customer whose job 
specifies aggregate qualified by a particular state's DOT cannot 
substitute aggregate or other materials that have not been so 
qualified.
    The Complaint alleges that although numerous narrower product 
markets exist, the competitive dynamic for most types of state DOT-
qualified aggregate is nearly identical, as a quarry can typically 
produce all, or nearly all, types of DOT-qualified aggregate for a 
particular state. Therefore, most types of DOT-qualified aggregate for 
a particular state may be combined for analytical convenience into a 
single relevant product market for the purpose of evaluating the 
competitive impact of the acquisition.
    According to the Complaint, a small but significant increase in the 
price of state DOT-qualified aggregate would not cause a sufficient 
number of customers to substitute to another type of aggregate or 
another material so as to make such a price increase unprofitable. 
Accordingly, the Complaint alleges that the production and sale of 
Georgia DOT-Qualified Aggregate and Maryland DOT-Qualified Aggregate 
(hereinafter ``DOT-Qualified Aggregate'') are distinct lines of 
commerce and relevant product markets within the meaning of Section 7 
of the Clayton Act.

2. The Relevant Geographic Markets Are Local

    When customers seek price quotes or bids for aggregate, the 
distance from the quarry to the project site or plant location will 
have a considerable impact on the selection of a supplier, due to the 
high cost of transporting aggregate relative to the low value of the 
product. Suppliers know the importance of transportation costs to a 
potential customer's selection of an aggregate supplier; they know the 
locations of their competitors, and they often will factor the cost of 
transportation from other suppliers into the price or bid that they 
submit. For these reasons, the primary factor that determines the area 
a supplier will serve is the location of competing quarries.

a. The Forsyth and North Fulton County Area Is a Relevant Geographic 
Market

    According to the Complaint, Martin Marietta operates the Forsyth 
quarry in Suwanee, Georgia, and Bluegrass owns and operates the Cumming 
quarry in Cumming, Georgia. Customers in and immediately around Forsyth 
County and Fulton County north of the Chattahoochee River (hereinafter 
referred to as the ``Forsyth and North Fulton County Area'') are served 
by both the Forsyth and Cumming quarries. Customers with plants or jobs 
in the Forsyth and North Fulton County Area may, depending on the 
location of their plant or job sites, economically procure Georgia DOT-
Qualified Aggregate from the Forsyth and Cumming quarries, or from 
quarries operated by a third firm located in Norcross, Buford, and Ball 
Ground, Georgia. Other more distant quarries cannot compete 
successfully on a regular basis for a significant number of customers 
with plants or jobs in the Forsyth and North Fulton County Area because 
they are too far away and transportation costs are too great.
    According to the Complaint, customers likely would be unable to 
switch to suppliers outside the Forsyth and North Fulton County Area to 
defeat a small but significant price increase. The Complaint therefore 
alleges that the Forsyth and North Fulton County Area is a relevant 
geographic market for the production and sale of Georgia DOT-Qualified 
Aggregate within the meaning of Section 7 of the Clayton Act.

b. The Washington County Area Is a Relevant Geographic Market

    According to the Complaint, Martin Marietta owns and operates the 
Boonsboro quarry in Boonsboro, Maryland, and the Pinesburg quarry in 
Williamsport, Maryland, and Bluegrass owns and operates the Beaver 
Creek quarry in Hagerstown, Maryland. The Boonsboro, Pinesburg, and 
Beaver Creek quarries each serve customers in and immediately around 
Washington County, Maryland (hereinafter referred to as the 
``Washington County Area''). Customers with plants or jobs in the 
Washington County Area may, depending on the location of their plant or 
job site, economically procure Maryland DOT-Qualified Aggregate from 
the Boonsboro, Pinesburg, or Beaver Creek quarries, or from a quarry 
operated by a third firm located in nearby Chambersburg, Pennsylvania. 
Other more distant quarries cannot compete successfully on a regular 
basis for customers with plants or jobs in the Washington County Area 
because they are too far away and transportation costs are too great.
    According to the Complaint, customers likely would be unable to 
switch to more distant suppliers outside of the Washington County Area 
to defeat a small but significant price increase. The Complaint 
therefore alleges that the Washington County Area is a relevant 
geographic market for the production and sale of Maryland DOT-Qualified 
Aggregate within the meaning of Section 7 of the Clayton Act.

D. Martin Marietta's Acquisition of Bluegrass Is Anticompetitive

    According to the Complaint, vigorous competition between Martin 
Marietta and Bluegrass on price and customer service in the production 
and sale of DOT-Qualified Aggregate has benefitted customers in the 
Forsyth and North Fulton County Area and in the Washington County Area.
    The Complaint alleges that in each of these areas, the competitors 
that constrain Martin Marietta and Bluegrass from raising prices on 
DOT-Qualified Aggregate are limited to those who are qualified by the 
Georgia and Maryland DOTs to supply aggregate and can economically 
transport the aggregate into these areas. According to the Complaint, 
for a significant number of customers in each area, there is only one 
other firm that produces DOT-Qualified Aggregate and can economically 
serve customers at their plants or job sites. The proposed acquisition 
will eliminate the competition between Martin Marietta and Bluegrass 
and reduce from

[[Page 19833]]

three to two the number of suppliers of DOT-Qualified Aggregate for a 
significant number of customers in each area.
    According to the Complaint, for a significant number of customers 
in each area, a combined Martin Marietta and Bluegrass will have the 
ability to increase prices for DOT-Qualified Aggregate and decrease 
service by limiting availability or delivery options. DOT-Qualified 
Aggregate producers know the distance from their own quarries and their 
competitors' quarries to a customer's job site. Generally, because of 
transportation costs, the farther a supplier's closest competitor is 
from a job site, the higher the price and margin that supplier can 
expect for that project. Post-acquisition, in instances where Martin 
Marietta and Bluegrass quarries are the closest locations to a 
customer's project, the combined firm, using the knowledge of its 
competitors' locations, will be able to charge such customers higher 
prices or decrease the level of customer service.
    The Complaint alleges that the response of other suppliers of DOT-
Qualified Aggregate will not be sufficient to constrain a unilateral 
exercise of market power by Martin Marietta after the acquisition. For 
all of these reasons, the Complaint alleges that the proposed 
acquisition will therefore substantially lessen competition in the 
market for DOT-Qualified Aggregate in the Forsyth and North Fulton 
County Area and in the Washington County Area and likely lead to higher 
prices and reduced customer service for consumers of such products, in 
violation of Section 7 of the Clayton Act.

E. Barriers to Entry

    The Complaint alleges that entry in the production and sale of DOT-
Qualified Aggregate in the Forsyth and North Fulton County Area and in 
the Washington County Area is unlikely to be timely or sufficient to 
offset the anticompetitive effects of the acquisition, given the 
substantial time and cost required to open a quarry.
    According to the Complaint, quarries are particularly difficult to 
locate and permit. First, securing the proper site for a quarry is 
challenging and time-consuming. Finding land with the correct rock 
composition requires extensive investigation and testing of candidate 
sites, as well as the negotiation of necessary land transfers, leases, 
and/or easements. Further, the site must be close to customer plants 
and likely job sites given the high cost of transporting aggregate. 
Second, once a suitable location is chosen, obtaining the necessary 
permits is difficult and time-consuming. Attempts to open a new quarry 
often face fierce public opposition, which can prevent a quarry from 
opening altogether or make the process of opening it much more time-
consuming and costly. Finally, even after a site is acquired and 
permitted, the owner must spend significant time and resources to 
prepare the land for quarry operations and purchase and install the 
necessary equipment.
    For all of these reasons, the Complaint alleges that entry will not 
be timely, likely or sufficient to mitigate the anticompetitive effects 
of the acquisition.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the 
production and sale of DOT-qualified aggregate in the Forsyth and North 
Fulton County Area and the Washington County Area by establishing a 
new, independent, and economically viable competitor in each area.

A. Divestiture

    In the Forsyth and North Fulton County Area, Paragraph IV(A) of the 
proposed Final Judgment requires Defendants to divest the lease to 
Martin Marietta's Forsyth quarry and all tangible and intangible assets 
related to the quarry (the ``Georgia Divestiture Assets'') to Midsouth 
Paving, Inc. (``Midsouth''), or an alternative Acquirer acceptable to 
the United States, in its sole discretion, within twenty-one (21) days 
after the Court's signing of the Hold Separate. The United States 
required an upfront buyer for the divestiture of the Georgia 
Divestiture Assets because of the unique nature of the short-term lease 
being divested and the accompanying need to minimize the time before an 
Acquirer assumed control of the Forsyth quarry's operations. Midsouth, 
which is a subsidiary of CRH plc and CRH Americas Materials, Inc. 
(commonly known in the industry as ``Oldcastle''), is an experienced 
operator of quarries in the region, with locations in Georgia, Alabama, 
and Tennessee.
    In the Washington County Area, Paragraph IV(B) of the proposed 
Final Judgment requires the Defendants to divest Bluegrass's Beaver 
Creek quarry and all tangible and intangible assets related to the 
quarry (the ``Maryland Divestiture Assets'') to an Acquirer acceptable 
to the United States, in its sole discretion, after consultation with 
the State of Maryland. Defendants must complete the divestiture within 
ninety (90) days after the filing of the Complaint, or five (5) days 
after notice of entry of the Final Judgment by the Court, whichever is 
later.
    With respect to the divestiture of both the Georgia and Maryland 
Divestiture Assets, Defendants must take all reasonable steps necessary 
to accomplish the divestitures quickly and shall cooperate with 
prospective purchasers. Paragraph IV(I) of the proposed Final Judgment 
further provides that Defendants must accomplish the divestitures in 
such a way as to satisfy the United States in its sole discretion, 
after consultation with the State of Maryland with respect to the 
Maryland Divestiture Assets, that the Divestiture Assets can and will 
be operated by the respective purchasers as viable, ongoing businesses 
that can compete effectively in the production and sale of State DOT-
Qualified Aggregate.
    The proposed Final Judgment also contains provisions intended to 
facilitate the respective purchasers' efforts to hire the employees 
involved in the operation of the Divestiture Assets. Paragraph IV(D) of 
the proposed Final Judgment requires Defendants to provide the 
Acquirers of the Divestiture Assets with information relating to the 
personnel involved in the operation of the Divestiture Assets to enable 
the Acquirers to make offers of employment, and provides that 
Defendants will not interfere with any negotiations by the Acquirers to 
hire these employees.
    In the event that Defendants do not accomplish the divestitures 
within the periods prescribed in the proposed Final Judgment, Paragraph 
V(A) of the Final Judgment provides that the Court will appoint a 
trustee selected by the United States to effect the divestiture of any 
remaining Divestiture Assets. If a trustee is appointed, the proposed 
Final Judgment provides that Defendants 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. Paragraph V(F) of 
the proposed Final Judgment requires that, 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. Paragraph V(G) of the proposed Final Judgment requires 
that, at the end of six months, if the divestiture has not been 
accomplished, the trustee and the United States will make 
recommendations to the Court,

[[Page 19834]]

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.

B. Compliance Affidavits

    The proposed Final Judgment requires, in Paragraph IX(A), that the 
Defendants inform the United States of their compliance with the 
divestiture requirements of the proposed Final Judgment by delivering 
affidavits to the United States 20 days after the filing of the 
Complaint, and every 30 days thereafter until the divestitures have 
been completed. Martin Marietta's affidavits must be signed by its 
Chief Financial Officer and General Counsel. Defendants LG Panadero, 
Panadero, and Panadero Aggregates lack both a General Counsel and a 
Chief Financial Officer, so those entities must submit affidavits from 
each company's highest ranking officer. Bluegrass also is not 
represented by a General Counsel, but will submit affidavits from both 
its highest ranking officer and Chief Financial Officer.

C. Enforcement and Expiration of the Final Judgment

    The proposed Final Judgment contains provisions designed to promote 
compliance and make enforcement of Division consent decrees as 
effective as possible. Paragraph XIII(A) provides that the United 
States retains and reserves all rights to enforce the provisions of the 
proposed Final Judgment, including its right to seek an order of 
contempt from the Court. Under the terms of this paragraph, Defendants 
have agreed that in any civil contempt action, any motion to show 
cause, or any similar action brought by the United States regarding an 
alleged violation of the Final Judgment, the United States may 
establish the violation and the appropriateness of any remedy by a 
preponderance of the evidence and that the Defendants have waived any 
argument that a different standard of proof should apply. This 
provision aligns the standard for compliance obligations with the 
standard of proof that applies to the underlying offense that the 
compliance commitments address.
    Paragraph XIII(B) of the proposed Final Judgment further provides 
that should the Court find in an enforcement proceeding that the 
Defendants have violated the Final Judgment, the United States may 
apply to the Court for a one-time extension of the Final Judgment, 
together with such other relief as may be appropriate. In addition, in 
order to compensate American taxpayers for any costs associated with 
the investigation and enforcement of violations of the proposed Final 
Judgment, Paragraph XIII(B) provides that in any successful effort by 
the United States to enforce this Final Judgment against a Defendant, 
whether litigated or resolved prior to litigation, that Defendant 
agrees to reimburse the United States for any attorneys' fees, experts' 
fees, or costs incurred in connection with any enforcement effort, 
including the investigation of the potential violation.
    Finally, Section XIV of the proposed Final Judgment provides that 
the Final Judgment shall expire ten (10) years from the date of its 
entry, except that after five (5) years from the date of its entry, the 
Final Judgment may be terminated upon notice by the United States to 
the Court and Defendants that the divestitures have been completed and 
that the continuation of the Final Judgment is no longer necessary or 
in the public interest.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. Sec.  15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
Sec.  16(a), the proposed Final Judgment has no prima facie effect in 
any subsequent private lawsuit that may be brought against Defendants.

V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT

    Plaintiffs and Defendants have stipulated that the proposed Final 
Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (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 United States 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. In 
addition, comments will be posted on the U.S. Department of Justice, 
Antitrust Division's internet website and, under certain circumstances, 
published in the Federal Register.
    Written comments should be submitted to:

Maribeth Petrizzi
Chief, Defense, Industrials, and Aerospace Section
Antitrust Division
United States Department of Justice
450 Fifth Street, NW, Suite 8700
Washington, D.C. 20530

The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT

    Plaintiffs considered, as an alternative to the proposed Final 
Judgment, a full trial on the merits against Defendants. Plaintiffs 
could have continued the litigation and sought preliminary and 
permanent injunctions against Martin Marietta's acquisition of 
Bluegrass. Plaintiffs are satisfied, however, that the divestiture of 
assets described in the proposed Final Judgment will preserve 
competition for the production and sale of DOT-Qualified Aggregate in 
the Forsyth and North Fulton County and Washington County Areas. Thus, 
the proposed Final Judgment would achieve all or substantially all of 
the relief Plaintiffs 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. Sec.  16(e)(1). In making that 
determination, the court, in

[[Page 19835]]

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. Sec.  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); United 
States v. U.S. Airways Group, Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) 
(explaining that the ``court's inquiry is limited'' in Tunney Act 
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009-
2 Trade Cas. (CCH) ] 76,736, 2009 U.S. Dist. LEXIS 84787, at *3, 
(D.D.C. Aug. 11, 2009) (noting that the court's review of a consent 
judgment is limited and only inquires ``into whether the government's 
determination that the proposed remedies will cure the antitrust 
violations alleged in the complaint was reasonable, and whether the 
mechanism to enforce the final judgment are clear and 
manageable.'').\1\
---------------------------------------------------------------------------

    \1\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for 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).
---------------------------------------------------------------------------

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, 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) (quoting 
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); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. 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).\2\ 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 U.S. Airways, 38 F. Supp. 3d at 75 (noting 
that a court should not reject the proposed remedies because it 
believes others are preferable); 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' prediction as 
to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case).
---------------------------------------------------------------------------

    \2\ 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 (1983); see also U.S. 
Airways, 38 F. Supp. 3d at 74 (noting that room must be made for the 
government to grant concessions in the negotiation process for 
settlements (citing Microsoft, 56 F.3d at 1461); United States 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; see also U.S. Airways, 
38 F. Supp. 3d at 74 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public 
interest' is not to be measured by comparing the violations alleged in 
the complaint against those the court believes could have, or even 
should have, been alleged''). 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. As this Court confirmed in SBC Communications, courts 
``cannot look beyond the complaint in making the public interest 
determination unless the

[[Page 19836]]

complaint is drafted so narrowly as to make a mockery of judicial 
power.'' SBC Commc'ns, 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. Sec.  16(e)(2); see also U.S. Airways, 38 F. 
Supp. 3d at 75 (indicating that a court is not required to hold an 
evidentiary hearing or to permit intervenors as part of its review 
under the Tunney Act). 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 
Sen. 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.\3\ A court can make its public 
interest determination based on the competitive impact statement and 
response to public comments alone. U.S. Airways, 38 F. Supp. 3d at 75.
---------------------------------------------------------------------------

    \3\ 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., No. 73-CV-681-W-1, 1977-1 
Trade Cas. (CCH) ] 61,508, at 71,980, *22 (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, 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.'').
---------------------------------------------------------------------------

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: April 25, 2018

Respectfully submitted,

FOR PLAINTIFF UNITED STATES OF AMERICA

Kerrie J. Freeborn* (D.C. Bar #503143)
United States Department of Justice
Antitrust Division
Defense, Industrials, and Aerospace Section
450 Fifth Street, N.W., Suite 8700
Washington, D.C. 20530
Tel: (202) 598-2300
Fax: (202) 514-9033
Email: [email protected]
*Attorney of Record
[FR Doc. 2018-09458 Filed 5-3-18; 8:45 am]
 BILLING CODE 4410-11-P