[Federal Register Volume 80, Number 57 (Wednesday, March 25, 2015)]
[Notices]
[Pages 15810-15821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-06810]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Waste Management, Inc. and Deffenbaugh Disposal,
Inc.; Proposed Final Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a 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. Waste Management, Inc. and Deffenbaugh Disposal,
Inc., Civil Action No. 1:15-cv-00366. On March 13, 2015, the United
States filed a Complaint alleging that Waste Management, Inc.'s
proposed acquisition of Deffenbaugh Disposal, Inc. would violate
Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final
Judgment, filed the same time as the Complaint, requires Waste
Management, Inc. to divest small container commercial waste collection
routes it acquired from Deffenbaugh Disposal, Inc. as follows: Five
specified routes in Springdale, Arkansas; two specified routes in the
Van Buren/Fort Smith, Arkansas area; and four specified routes in
Topeka, Kansas. Waste Management must also adhere to other
requirements.
Copies of the Complaint, Stipulation, proposed Final Judgment and
Competitive Impact Statement are available for inspection at the
Department of Justice, Antitrust Division, Antitrust Documents Group,
450 Fifth Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-
514-2481), on the Department of Justice's Web site at http://www.usdoj.gov/atr, and at the Office of the Clerk of the United States
District Court for the 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 Department of Justice,
Antitrust Division's internet Web site, filed with the Court and, under
certain circumstances, published in the Federal Register. Comments
should be directed to James J. Tierney, Chief, Networks and Technology
Enforcement Section, Antitrust Division, Department of Justice, 450
Fifth Street NW., Washington, DC 20530, (telephone: 202-307-6200).
Patricia A. Brink,
Director of Civil Enforcement.
United States District Court for the District of Columbia United States
of America, Plaintiff, v. Waste Management, Inc. and Deffenbaugh
Disposal, Inc., Defendants.
Civil Action No.: 1:15-cv-00366
Description: Antitrust
Date Stamp: 3/13/2015
Complaint
The United States of America, acting under the direction of the
Attorney General of the United States, brings this civil action to
enjoin the proposed acquisition by Defendant Waste Management, Inc.
(``WMI'') of Defendant Deffenbaugh Disposal, Inc. (``DDI''). The United
States alleges as follows:
I. Introduction
1. Pursuant to the Agreement and Plan of Merger dated September 17,
2014, WMI proposes to acquire all of the outstanding securities of DDI.
WMI and DDI compete to provide small container commercial waste
collection service in certain geographic areas in the United
[[Page 15811]]
States. They are two of only a few significant providers of small
container commercial waste collection service in and around Springdale,
Arkansas; Van Buren/Fort Smith, Arkansas; and Topeka, Kansas.
2. WMI and DDI have competed aggressively against one another for
customers in these three areas, which has resulted in lower prices for
small container commercial waste collection service. Unless the
transaction is enjoined, consumers of small container commercial waste
collection services in these areas likely will pay higher prices and
receive lower quality service as a consequence of eliminating the
vigorous competition between WMI and DDI. Accordingly, WMI's
acquisition of DDI likely would substantially lessen competition in the
provision of small container commercial waste collection service in and
around Springdale, Arkansas, Van Buren/Fort Smith, Arkansas, and
Topeka, Kansas, in violation of Section 7 of the Clayton Act, 15 U.S.C.
18.
II. Jurisdiction, Venue, and Interstate Commerce
3. This action is filed by the United States under Section 15 of
the Clayton Act, 15 U.S.C. 25, as amended, to prevent and restrain the
violation by Defendants of Section 7 of the Clayton Act, 15, U.S.C. 18.
4. The Court has subject matter jurisdiction over this action
pursuant to Section 15 of the Clayton Act, 15 U.S.C. 25, and 28 U.S.C.
1331, 1337(a), and 1345. In their small container commercial waste
collection businesses, WMI and DDI makes sales and purchases in
interstate commerce, ship waste in the flow of interstate commerce, and
engage in activities substantially affecting interstate commerce.
5. Defendant WMI transacts business in the District of Columbia,
and WMI and DDI have consented to venue and personal jurisdiction in
the District of Columbia. Venue is therefore proper in this District
under Section 12 of the Clayton Act, 15, U.S.C. 22, and 28 U.S.C.
1391(c).
III. The Defendants and the Transaction
6. WMI is a Delaware corporation headquartered in Houston, Texas.
WMI is the largest waste hauling and disposal company in the United
States providing collection, transfer, recycling, and disposal services
throughout the nation. For fiscal year 2014, WMI reported revenues of
approximately $14 billion.
7. DDI is a Delaware corporation headquartered in Kansas City,
Kansas. DDI provides waste collection, transfer, recycling and disposal
services in Kansas, Missouri, Arkansas, Nebraska, and Iowa. DDI's
revenues for 2013 were approximately $180 million.
8. On September 17, 2014, WMI and DDI entered into an Agreement and
Plan of Merger by which WMI proposes to acquire all of the outstanding
securities of DDI for approximately $405 million.
IV. Trade and Commerce
A. Relevant Service Market: Small Container Commercial Waste
Collection
9. Waste collection firms, also referred to as ``haulers,'' collect
municipal solid waste (``MSW'') from residential, commercial, and
industrial establishments and transport the waste to a disposal site,
such as a transfer station, landfill, or incinerator, for processing
and disposal. Commercial customers typically contract directly with
private waste collection firms, such as WMI and DDI, for the collection
of MWS generated by their businesses. MSW generated by residential
customers, on the other hand, often is collected either by local
governments or by private waste collection firms pursuant to contracts,
or franchises granted by, municipal authorities.
10. Small container commercial waste collection service is the
business of collecting MSW from commercial and industrial accounts,
usually in dumpsters (i.e., a small container with one to ten cubic
yards of storage capacity), and transporting such waste to a disposal
site by use of a front- or rear-end load truck. Typical small container
commercial waste collection customers include office and apartment
buildings and retail establishments (e.g., stores and restaurants).
Small container commercial waste collection does not include other
types of waste collection services, such as residential collection
service or the collection of roll-off containers.
11. Small container commercial waste collection service differs in
many important respects from residential waste collection or other
types of collection services. An individual commercial customer
typically generates substantially more MSW than a residential customer.
To handle this high volume of MSW efficiently, commercial customers are
provided with small containers, also called dumpsters, for storing the
waste. Commercial accounts are organized into routes, and the MSW
generated by these accounts is collected and transported in front-end
load (``FEL'') trucks uniquely well-suited for commercial waste
collection. Less frequently, haulers may use more maneuverable, but
less efficient, rear-end load (``REL'') trucks, especially in those
areas in which a collection route includes narrow alleyways or streets
which are difficult to navigate with FEL trucks. Because FEL trucks are
unable to navigate narrow passageways easily they cannot efficiently
collect the waste located in them.
12. On a typical small container commercial waste collection route,
an operator drives a FEL truck to the customer's container, engages a
mechanism that grasps and lifts the container over the front of the
truck, and empties the container into the truck's storage section where
the waste is compacted and stored. The operator continues along the
route, collecting MSW from each of the commercial accounts, until the
vehicle is full. The operator then drives the truck to a disposal
facility, such as a transfer station, landfill or incinerator, and
empties the content of the truck. Depending on the number of locations
and the amount of waste collected on that route, the operator may make
one or more trips to the disposal facility during the servicing of the
route.
13. In contrast to a small container commercial waste collection
route, a residential waste collection route is significantly more
labor-intensive. The customer's MSW is stored in much smaller
containers (e.g., garbage bags or trash cans) and, instead of FEL
trucks, waste collection firms routinely use REL trucks or side-load
trucks manned by larger crews (usually, two- or three-person teams). On
residential routes, crews generally hand-load the customer's MSW,
typically by tossing garbage bags and emptying trash cans into the
vehicle's storage section. Because of the differences in the collection
processes, residential customers and commercial customers usually are
organized into separate routes.
14. Other types of collection activities, such as the use of roll-
off containers (typically used for construction debris) and the
collection of liquid or hazardous waste, also are rarely combined with
small container commercial waste collection. This is due to differences
in the hauling equipment required, the volume of waste collected,
health and safety concerns, government regulations, and the ultimate
disposal option used.
15. The differences in the types and volume of MSW collected and in
the equipment used in collection services distinguish small container
commercial waste collection from all other types of waste collection
activities. Absent competition from other small container
[[Page 15812]]
commercial waste collection firms, a small container commercial waste
collection service provider profitably could increase its charges
without losing significant sales or revenues to firms engaged in the
provision of other types of waste collection services. Thus, small
container commercial waste collection is a line of commerce, or
relevant service, for purposes of analyzing the effects of the
acquisition under Section 7 of the Clayton Act, 15 U.S.C. 18.
B. Relevant Geographic Markets
16. Small container commercial waste collection service is
generally provided in highly localized areas because a firm must have
sufficient density (i.e., a large number of commercial accounts that
are reasonably close together) in its small container commercial waste
collection operations to operate efficiently and profitably. If a
hauler has to drive significant distances between customers, it earns
less money for the time the truck is operating.
17. Accounts must also be near an operator's base of operations.
Firms with operations concentrated in a distant area cannot effectively
compete against firms whose routes and customers are locally based. It
is economically impractical for a small container commercial waste
collection firm to service areas from a distant base, which requires
that the FEL truck travel long distances just to arrive at its route.
Local waste collection firms have significant cost advantages over
other more-distant firms, and can profitably increase their charges to
local customers without losing significant sales to firms outside the
area. Waste collection firms, therefore, generally operate from garages
and related facilities within each of the local areas they serve.
18. In each of the following areas a small container commercial
waste collection firm could profitably increase prices to local
customers without losing significant sales to more distant competitors:
Springdale, Arkansas Area; Van Buren/Fort Smith, Arkansas Area; and
Topeka, Kansas Area. Accordingly, each of these areas is a section of
the country, or relevant geographic market, for the purposes of
analyzing the competitive effects of the acquisition under Section 7 of
the Clayton Act, 15 U.S.C. 18.
C. Anticompetitive Effects of the Proposed Acquisition
19. Defendants WMI and DDI directly compete in small container
commercial waste collection service in each of the relevant geographic
markets defined in paragraph 18. The acquisition of DDI by WMI would
remove a significant competitor in small container commercial waste
collection in these already highly concentrated and difficult-to-enter
markets.
20. In the Springdale, Arkansas Area, the market for small
container commercial waste collection services is highly concentrated
and would become substantially more concentrated as a result of the
proposed transaction. By the parties own estimates, WMI has
approximately 48% of the market and DDI has approximately 18% of the
market. The remaining 36% is split between only two other competitors.
Thus, in the Springdale, Arkansas Area, the proposed acquisition would
reduce from four to three the number of competitors in the collection
of small container commercial waste.
21. In the Van Buren/Fort Smith, Arkansas Area, the market for
small container commercial waste collection services is highly
concentrated and would become substantially more concentrated as a
result of the proposed transaction. By the defendants' own estimates,
WMI has approximately 33% of the market and DDI has approximately 33%
of the market. The remaining 34% belongs to a third competitor. Thus,
in the Van Buren/Fort Smith, Arkansas Area, the proposed acquisition
would reduce from three to two the number of competitors in the
collection of small container commercial waste.
22. In addition, in both the Springdale, Arkansas Area and the Van
Buren/Fort Smith, Arkansas Area, DDI is often the low-price leader, and
customers in these areas frequently switch between the existing
competitors in order to take advantage of lower prices. In both of
these areas, WMI and DDI are also among the few small container
commercial waste firms that can reliably service larger accounts.
23. In the Topeka, Kansas Area, the market for small container
commercial waste collection services is highly concentrated and would
become substantially more concentrated as a result of the proposed
transaction. By the defendants' own estimates, WMI has approximately
35% of the market and DDI has approximately 32% of the market. The
remaining 33% belongs to a third competitor. Thus, in the Topeka,
Kansas Area, the proposed acquisition would reduce from three to two
the number of competitors in the collection of small container
commercial waste. And for many of the larger small container commercial
waste customers in the Topeka, Kansas Area, WMI and DDI are currently
the only two options. These customers would be left with only one
option as a result of the acquisition.
24. In each of these markets, the resulting significant increase in
concentration, loss of competition, and absence of any reasonable
prospect of significant new entry likely will result in higher prices
and lower quality service for the collection of small container
commercial waste.
D. Entry Into Small Container Commercial Waste Collection
25. Significant new entry into small container commercial waste
collection is difficult and time-consuming, including in the
Springdale, Arkansas Area; the Van Buren/Fort Smith, Arkansas Area; and
the Topeka, Kansas Area.
26. In order to obtain a comparable operating efficiency, a new
firm must achieve route densities similar to those of firms already
competing in the market. However, the incumbent's ability to engage in
price discrimination and to enter into long-term contracts with
collection customers is often effective in preventing new entrants from
winning a large enough base of customers to achieve efficient routes in
sufficient time to constrain the post-acquisition firm from
significantly raising prices.
27. Incumbent firms also frequently use three- to five-year
contracts, which may automatically renew or contain large liquidated
damages provisions for contract termination. Such contracts make it
more difficult for a customer to switch to a new firm in order to
obtain lower prices for its collection service.
28. By making it more difficult for new firms to obtain customers,
these practices increase the cost and time required by an entrant to
form an efficient route, reducing the likelihood that an entrant
ultimately will be successful.
V. Violations Alleged
29. The proposed acquisition likely would lessen competition
substantially for small container commercial waste collection services
in the Springdale, Arkansas Area; the Van Buren/Fort Smith, Arkansas
Area; and the Topeka, Kansas Area, in violation of Section 7 of the
Clayton Act, 15 U.S.C. 18.
30. Unless enjoined, the proposed acquisition likely would have the
following anticompetitive effects relating to small container
commercial waste collection services in the Springdale, Arkansas Area;
the Van Buren/Fort Smith, Arkansas Area; and the Topeka, Kansas Area,
among others:
[[Page 15813]]
(a) Actual and potential competition between WMI and DDI would be
eliminated;
(b) competition generally would be substantially lessened; and
(c) prices would increase and the quality of service would
decrease.
VI. Requested Relief
31. Plaintiff requests that this Court:
(a) adjudge and decree that WMI's acquisition of DDI would be
unlawful and violate Section 7 of the Clayton Act, 15 U.S.C. 18;
(b) permanently enjoin and restrain defendants and all persons
acting on their behalf from consummating the proposed acquisition of
DDI by WMI, or from entering into or carrying out any other contract,
agreement, plan or understanding, the effect of which would be to
combine WMI with DDI;
(c) award the United States the cost for this action; and
(d) award the United States such other and further relief as the
Court deems just and proper.
FOR PLAINTIFF UNITED STATES OF AMERICA:
___/s/___
WILLIAM J. BAER (DC BAR #324723),
Assistant Attorney General for Antitrust.
___/s/___
RENATA B. HESSE (DC BAR #466107),
Deputy Assistant Attorney General.
___/s/___
PATRICIA A. BRINK,
Director of Civil Enforcement.
___/s/___
JAMES J. TIERNEY (DC Bar # 434610),
Chief, NETWORKS AND TECHNOLOGY SECTION.
___/s/___
AARON D. HOAG Dated: March 13, 2015,
Assistant Chief, NETWORKS AND TECHNOLOGY SECTION.
___/s/___
IAN D. HOFFMAN
DANIELLE G. HAUCK
ANURAG MAHESHWARY (DC BAR #490535)
Dated: March 13, 2015.
United States District Court for the District of Columbia
United States of America,
Plaintiff,
v.
Waste Management, Inc.
and
Deffenbaugh Disposal, Inc.,
Defendants.
Civil Action No.: 1:15-cv-00366
Description: Antitrust
Date Stamp: 3/13/2015
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 Final Judgment submitted for entry in
this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
Pursuant to an Agreement and Plan of Merger dated September 17,
2014, Waste Management, Inc. (``WMI'') proposes to acquire all of the
outstanding shares of common stock of Deffenbaugh Disposal, Inc.
(``DDI'') in a transaction valued at approximately $405 million.
The United States filed a civil antitrust Complaint on March 13,
2015, seeking to enjoin the proposed acquisition. The Complaint alleges
that the proposed acquisition likely would substantially lessen
competition for small container commercial waste collection service in
the area of Topeka, Kansas, and in two areas in Northwestern Arkansas--
Van Buren/Fort Smith, and Springdale--in violation of Section 7 of the
Clayton Act. This loss of competition would result in consumers paying
higher prices and receiving inferior services for small container
commercial waste collection service in those areas.
At the same time the Complaint was filed, the United States also
filed a Hold Separate Stipulation and Order and proposed Final
Judgment, which are designed to eliminate the anticompetitive effects
of the acquisition. Under the proposed Final Judgment, which is
explained more fully below, defendants are required to divest specified
small container commercial waste collection assets. Under the terms of
the Hold Separate Stipulation and Order, WMI and DDI are required to
take certain steps to ensure that the assets to be divested will be
preserved and held separate from other assets and businesses.
The United States and the defendants have stipulated that the
proposed Final Judgment may be entered after compliance with the APPA.
Entry of the proposed Final Judgment would terminate this action,
except that the Court would retain jurisdiction to construe, modify, or
enforce the provisions of the Final Judgment and to punish violations
thereof.
II. Description of the Events Giving Rise to the Alleged Violations
A. The Defendants
WMI is a Delaware corporation with its headquarters in Houston,
Texas. WMI provides collection, transfer, recycling, and disposal
services throughout the United States. In 2014, WMI had estimated total
revenue of $14 billion.
DDI is a Delaware corporation, with its headquarters in Kansas
City, Kansas. DDI offers collection, transfer, recycling, and disposal
services in Kansas, Missouri, Arkansas, Nebraska, and Iowa. In 2013 DDI
had estimated total revenue of approximately $180 million.
B. The Competitive Effects of the Transaction on Small Container
Commercial Waste Collection in Topeka, Kansas, and Van Buren/Fort Smith
and Springdale, Arkansas
Municipal solid waste (``MSW) is solid, putrescible waste generated
by households and commercial establishments. Waste collection firms, or
haulers, contract to collect MSW from residential and commercial
customers and transport the waste to private and public MSW disposal
facilities (e.g., transfer stations and landfills), which, for a fee,
process and legally dispose of the waste. Small container commercial
waste collection is one component of MSW collection, which also
includes residential and other waste collection. WMI and DDI compete in
the collection of small container commercial waste.
Small container commercial waste collection service is the
collection of MSW from commercial businesses (e.g., office and
apartment buildings) and retail establishments (e.g., stores and
restaurants) for shipment to, and disposal at, an approved disposal
facility. Because of the type and volume of waste generated by
commercial accounts and the frequency of service required, haulers
organize commercial accounts into routes, and generally use specialized
equipment to store, collect, and transport MSW from these accounts to
approved MSW disposal sites. This equipment (e.g., one to ten-cubic-
yard containers for MSW storage, and front-end load vehicles commonly
used for collection and transportation of MSW) is uniquely well-suited
for providing small container commercial waste collection service.
Providers of other types of waste collection services (e.g.,
residential and roll-off services) are not good substitutes for small
container commercial waste collection firms. In these types of waste
collection efforts, firms use different waste storage equipment (e.g.,
garbage cans or semi-
[[Page 15814]]
stationary roll-off containers) and different vehicles (e.g., rear-
load, side-load, or roll-off trucks), which, for a variety of reasons,
cannot be conveniently or efficiently used to store, collect, or
transport MSW generated by commercial accounts and, hence, are rarely
used on small container commercial waste collection routes. In the
event of a small but significant increase in price for small container
commercial waste collection services, customers would not switch to any
other alternative. Thus, the Complaint alleges that the provision of
small container commercial waste collection services constitutes a line
of commerce, or relevant service, for purposes of analyzing the effects
of the transaction.
The Complaint alleges that the provision of small container
commercial waste collection service takes place in compact, highly-
localized geographic markets. It is expensive to transport MSW long
distances between collection customers or to disposal sites. To
minimize transportation costs and maximize the scale, density, and
efficiency of their MSW collection operations, small container
commercial waste collection firms concentrate their customers and
collection routes in small areas. Firms with operations concentrated in
a distant area cannot effectively compete against firms whose routes
and customers are locally based. Distance may significantly limit a
remote firm's ability to provide commercial waste collection service as
frequently or conveniently as that offered by local firms with nearby
routes. Also, local small container commercial waste firms have
significant cost advantages over other firms, and can profitably
increase their charges to local small container commercial waste
collection customers without losing significant sales to firms outside
the area.
Applying this analysis, the Complaint alleges that in the Topeka,
Kansas Area, the Van Buren/Fort Smith, Arkansas Area, and the
Springdale, Arkansas Area, a local small container commercial waste
collection monopolist could profitably increase charges to local
customers without losing significant sales to more distant competitors.
Accordingly, the Topeka Area, and the Van Buren/Fort Smith and
Springdale Areas of Northwest Arkansas, are sections of the country or
relevant geographic markets for the purpose of assessing the
competitive effects of a combination of WMI and DDI in the provision of
small container commercial waste collection services.
There are significant entry barriers to small container commercial
waste collection. A new entrant must achieve a minimum efficient scale
and operating efficiencies comparable to those of existing firms in
order to provide a significant competitive constraint on the prices
charged by market incumbents. In order to obtain comparable operating
efficiencies, a new firm must achieve route density similar to existing
firms. However, an incumbent's ability to price discriminate and to
enter into long-term contracts with existing small container commercial
waste customers can leave too few customers available to the entrant to
create an efficient route in a sufficiently confined geographic area.
An incumbent firm can selectively and temporarily charge an unbeatably
low price to specified customers targeted by new entrants. Because of
these factors, a new entrant may find it difficult to compete by
offering its services at pre-entry price levels comparable to the
incumbent and may find an increase in the cost and time required to
form an efficient route, thereby limiting a new entrant's ability to
build an efficient route and reducing the likelihood that the entrant
will ultimately succeed.
The need for route density and the ability of existing firms to
price discriminate raise significant barriers to entry by new firms,
which likely will be forced to compete at lower than pre-entry price
levels. Based on the prior experience of the Department of Justice,
Antitrust Division, such barriers have made entry and expansion
difficult by new or smaller-sized competitors in small container
commercial waste collection markets.
In the Topeka, Kansas and the Van Buren/Fort Smith, Arkansas Areas,
the proposed acquisition would reduce from three to two the number of
significant competitors in the collection of small container commercial
waste. Moreover, in Topeka, for many of the largest small container
commercial waste customers WMI and DDI are currently the only two
options. These customers would be left with only one option as a result
of the acquisition.
In the Springdale, Arkansas Area, the proposed acquisition would
reduce the number of competitors in the collection of small container
commercial waste from four to three. Moreover, in both areas in
Arkansas, DDI is often the low-price leader, and customers in these
areas frequently switch between existing competitors in order to take
advantage of lower prices. In addition, in both of the areas in
Arkansas, WMI and DDI are among the few small container commercial
waste firms that can reliably service larger accounts.
In all three markets, according to the defendants' estimates, after
the acquisition the combined WMI-DDI entity would service between 64
and 67% of each market.
The complaint alleges that the combination of WMI and DDI in those
areas would remove a significant competitor for small container
commercial waste service. In each of these markets, the resulting
increase in concentration, loss of competition, and absence of any
reasonable prospect of new entry by smaller competitors likely will
result in higher prices and reduced quality of small container
commercial waste service.
III. Explanation of the Proposed Final Judgment
The divestiture requirements of the proposed Final Judgment will
eliminate the anticompetitive effects of the acquisition in small
container commercial waste collection service in the Topeka, Kansas
Area, the Van Buren/Fort Smith, Arkansas Area, and the Springdale,
Arkansas Area. The proposed Final Judgment will remove small container
commercial waste collection assets from the merged firm's control and
place them in the hands of one or more independent firms that are
capable of preserving the competition that otherwise would have been
lost as a result of the acquisition.
The proposed Final Judgment requires defendants, within ninety days
after the filing of the Complaint, or five days after notice of the
entry of the Final Judgment by the Court, whichever is later, to
divest: Small container commercial waste collection assets (routes,
trucks, containers, garages and offices, leasehold rights, permits, and
intangible assets such as customer lists and contracts) in the Topeka,
Kansas Area, the Van Buren/Fort Smith, Arkansas Area, and the
Springdale, Arkansas Area. To eliminate the anticompetitive effects of
the acquisition in the market for small container commercial waste in
the Topeka Area, defendants must divest DDI's small container
commercial waste routes T501, T502, T503, and T504, and, at the
acquirer's option, DDI's Topeka small container commercial waste
collection facility. In the Van Buren/Fort Smith Area, defendants must
divest DDI's small container commercial waste routes V501 and V502,
and, at the acquirer's option, assign or offer to sublease DDI's Van
Buren small container commercial waste collection facility. In the
Springdale Area, defendants must divest DDI's small container
commercial waste routes B501, B502, B503, B504, and B505, and, at the
acquirer's option, must lease to the acquirer for up to 10 years
(length at the election of the acquirer)
[[Page 15815]]
DDI's Bethel Heights small container commercial waste collection
facility, or WMI's Springdale small container commercial waste
collection facility.
In addition, in the Springdale market, the proposed Final Judgment
requires WMI to enter into a disposal agreement providing the acquirer
with the right to dispose of MSW at its Eco Vista landfill in
Springdale, Arkansas. The disposal agreement must be for a period of no
less than three years from the date of the divestiture, with the
acquirer(s) of the divestiture assets having the option of seven one-
year renewals, under reasonable terms. The disposal agreement shall
also provide the acquirer access to gates, side houses, and disposal
areas under terms and conditions that are no less favorable than
provided to WMI's own vehicles. WMI and the acquirer shall negotiate
the price for disposal rights and access to the Eco Visa landfill
subject to approval of the United States. This provision is intended to
prevent WMI from using its acquisition of DDI and DDI's nearby transfer
station as a means to prevent the acquirer of DDI's divested routes
from establishing itself in the Springdale market due to an inability
to find an economically viable location to dispose of MSW collected in
this market.
The proposed Final Judgment provides that sale of the divestiture
assets may be made to one or more acquirers, so long as the Topeka,
Kansas Area, the Van Buren/Fort Smith, Arkansas Area and the
Springdale, Arkansas Area disposal assets are divested to a single
acquirer for each area. This provision is intended to ensure the
continued operation of an efficient competitor whose participation in
each market will closely replicate the competition existing prior to
the acquisition.
The assets must be divested to purchasers approved by the United
States and in such a way as to satisfy the United States that they can
and will be operated by the purchaser as part of a viable, ongoing
business or businesses that can compete effectively in each relevant
market. Defendants must take all reasonable steps necessary to
accomplish the divestitures quickly and shall cooperate with
prospective purchasers.
In the event that defendants do not accomplish the divestitures
within the period prescribed in the proposed Final Judgment, the
proposed Final Judgment provides that the Court will appoint a trustee
selected by the United States to effect the divestitures. 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 divestitures are
accomplished. After the trustee's appointment becomes effective, the
trustee will file monthly reports with the Court and the United States,
setting forth the trustee's efforts to accomplish the divestitures. At
the end of six months, if the divestitures have not been accomplished,
the trustee and the United States will make recommendations to the
Court, which shall enter such orders as appropriate in order to carry
out the purpose of the trust, including extending the trust or the term
of the trustee's appointment.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.
16(a), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States 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 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 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 Web site, and, under certain circumstances,
published in the Federal Register. Written comments should be submitted
to: James J. Tierney, Chief, Networks and Technology Enforcement
Section, Antitrust Division, United States Department of Justice, 450
Fifth Street, NW., Suite 7700, Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against Defendants. The
United States could have continued the litigation and sought
preliminary and permanent injunctions preventing WMI's acquisition of
DDI. The United States is satisfied, however, that the divestiture of
the assets described in the proposed Final Judgment will preserve
competition for small container commercial waste collection service in
the Topeka, Kansas Area, the Van Buren/Fort Smith, Arkansas Area, and
the Springdale, Arkansas Area. Thus, the proposed Final Judgment would
achieve all or substantially all of the relief the United States would
have obtained through litigation, but avoids the time, expense, and
uncertainty of a full trial on the merits of the Complaint.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
The Clayton Act, as amended by the APPA, requires that proposed
consent judgments in antitrust cases brought by the United States be
subject to a sixty-day comment period, after which the court shall
determine whether entry of the proposed Final Judgment ``is in the
public interest.'' 15 U.S.C. 16(e)(1). In making that determination,
the court, in accordance with the statute as amended in 2004, is
required to consider:
(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive
[[Page 15816]]
considerations bearing upon the adequacy of such judgment that the
court deems necessary to a determination of whether the consent
judgment is in the public interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors,
the court's inquiry is necessarily a limited one as the government is
entitled to ``broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. SBC
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) (assessing public
interest standard under the Tunney Act); United States v, U.S. Airways
Group, Inc., No. 13-cv-1236 (CKK), 2014-1 Trade Cas. (CCH) ] 78, 748,
2014 U.S. Dist. LEXIS 57801, at *7 (D.D.C. Apr. 25, 2014) (noting the
court has broad discretion of the adequacy of the relief at issue);
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 a 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.
16(e) (2004) with 15 U.S.C. 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) (citing
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152
F. Supp. 2d 37, 40 (D.D.C. 2001); 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 Microsoft, 56 F.3d at 1461 (noting the need
for courts to be ``deferential to the government's predictions as to
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that
the court should grant due respect to the United States's prediction as
to the effect of proposed remedies, its perception of the market
structure, and its views of the nature of the case).
---------------------------------------------------------------------------
\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, 2014 U.S. Dist. LEXIS 57801, at *8 (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,
2014 U.S. Dist. LEXIS 57801, at *9 (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 recently confirmed in SBC
Communications, courts ``cannot look beyond the complaint in making the
public interest determination unless the complaint is drafted so
narrowly as to make a mockery of judicial power.'' 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. 16(e)(2); see also U.S. Airways, 2014 U.S. Dist.
LEXIS 57801, at *9 (indicating that a court is not required to hold an
evidentiary
[[Page 15817]]
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, 2014 U.S. Dist. LEXIS 57801, at *9.
---------------------------------------------------------------------------
\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: March 13, 2015.
Respectfully submitted,
___/s/___
Ian D. Hoffman,
U.S. Department of Justice, Antitrust Division, Networks and
Technology Enforcement Section, 450 Fifth Street NW., Suite 7644,
Washington, DC 20530, (202) 598-2456, [email protected].
United States District Court for the District of Columbia
United States of America,
Plaintiff,
v.
Waste Management, Inc.
and
Deffenbaugh Disposal, Inc.,
Defendants.
Civil Action No.: 1:15-cv-00366
Description: Antitrust
Date Stamp: 3/13/2015
Proposed Final Judgment
Whereas, Plaintiff, United States of America, filed its Complaint
on March 13, 2015, the United States and defendants, Waste Management,
Inc., and Deffenbaugh Disposal, Inc., 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 the defendants to
assure that competition is not substantially lessened;
And whereas, the United States requires defendants to make certain
divestitures for the purpose of remedying the loss of competition
alleged in the Complaint;
And whereas, defendants have represented to the United States that
the divestitures required below can and will be made and that
defendants will later raise no 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. 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. ``WMI'' means defendant Waste Management, Inc., a Delaware
corporation with its headquarters in Houston, Texas, its successors and
assigns, and its subsidiaries, divisions, groups, affiliates,
partnerships and joint ventures, and their directors, officers,
managers, agents, and employees.
C. ``DDI'' means defendant Deffenbaugh Disposal, Inc., a Delaware
corporation with its headquarters in Kansas City, Kansas, its
successors and assigns, and its subsidiaries, divisions, groups,
affiliates, partnerships and joint ventures, and their directors,
officers, managers, agents, and employees.
D. ``Disposal Agreement'' means an agreement between WMI and the
Acquirer(s) of the Springdale Arkansas Area Divestiture Assets allowing
the Acquirer(s) to dispose of MSW at WMI's Eco Vista Landfill located
at 2210 Waste Management Drive, Springdale, Arkansas.
E. ``Divestiture Assets'' means the small container commercial
waste collection routes and other assets listed below:
1. Springdale, Arkansas Area
a. DDI's small container commercial waste collection routes B501,
B502, B503, B504, and B505;
b. At the election of the Acquirer, a lease of up to 10 years
(length at the election of the Acquirer) to either WMI's small
container commercial waste facility located at 1041 Arbor Acres Rd.,
Springdale Arkansas 72762, or to DDI's small container commercial waste
facility located at 848 Highway 264 E, Bethel Heights, Arkansas 72764;
and
c. At the election of the Acquirer(s), a Disposal Agreement.
2. Van Buren/Fort Smith, Arkansas Area
a. DDI's small container commercial waste collection routes V501
and V502; and
b. At the election of the Acquirer, the assignment or sublease of
DDI's current lease at the small container commercial waste facility
located at 2598 S. 4th St., Van Buren, Arkansas 72956.
3. Topeka, Kansas Area
a. DDI's small container commercial waste collection routes T501,
T502, T503, and T504; and
b. At the election of the Acquirer, DDI's small container
commercial waste facility located at 711 NE Highway 24, Topeka, Kansas
66608.
F. ``MSW'' means municipal solid waste, a term of art used to
describe solid putrescible waste generated by households and commercial
establishments. Municipal solid waste does not include special handling
waste (e.g., waste from manufacturing processes, regulated medical
waste, sewage and sludge), hazardous waste, or waste generated by
construction or demolition sites.
G. ``Route'' means a group of customers receiving regularly
scheduled small container commercial waste collection service and all
tangible and intangible assets relating to the route, as of January 28,
2015, (except for de minimis changes, such as customers lost
[[Page 15818]]
and gained in the ordinary course of business), including, but not
limited to, capital equipment, trucks and other vehicles (those
assigned to routes and a pro-rata share of spare vehicles); containers
(at the customer location and a pro-rata share of spares); supplies
(pro-rata share); customer lists, records, and credit records; customer
and other contracts; leasehold interests; permits/licenses (to the
extent transferable), and accounts receivable. The customers for each
route as of January 28, 2015, are on file with the Department of
Justice, Antitrust Division.
H. ``Small container commercial waste collection'' means the
business of collecting MSW from commercial and industrial accounts,
usually in metal bins (i.e., a small container with one to ten cubic
yards of storage capacity), and transporting or ``hauling'' such waste
to a disposal site by use of a front- or rear-end loader truck.
III. Applicability
A. This Final Judgment applies to WMI and DDI, 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 Sections IV and 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 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 Divestiture Assets in a manner
consistent with this Final Judgment to an Acquirer or Acquirers
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 60 calendar days in total, and shall
notify the Court in such circumstances. Defendants agree to use their
best efforts to divest the Divestiture Assets as expeditiously as
possible.
B. At the election of the Acquirer, WMI and the Acquirer of the
Springdale, Arkansas, Area Divesture Assets shall enter into a Disposal
Agreement allowing the Acquirer to dispose of MSW at WMI's Eco Vista
Landfill located at 2210 Waste Management Drive, Springdale, Arkansas.
The Disposal Agreement shall run for a period of no less than 3 years
from the date of the divestiture, with the Acquirer of the Springdale,
Arkansas, Divestiture Assets having the option of seven 1-year
renewals, under terms that are reasonable and nondiscriminatory. The
Disposal Agreement shall require that WMI provide access to the
Acquirer to gates, side houses, and disposal areas under terms and
conditions (except with respect to rates) that are no less favorable
than provided to WMI's own vehicles. WMI shall perform all duties and
comply with all the terms of the Disposal Agreement. Any amendments,
modifications, extensions or early termination of any Disposal
Agreement may only be entered into with the approval of the United
States.
C. In accomplishing the divestiture 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 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 and
management 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 or management 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 the Divestiture Assets; access to any and
all environmental, zoning, and other permit documents and information;
and access to any and all financial, operational, or other documents
and information customarily provided as part of a due diligence
process.
F. Defendants shall warrant to the Acquirer(s) that each 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 there are no
material defects in the environmental, zoning or other permits
pertaining to the operation of each asset, and that following the sale
of the 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
divestiture 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, that the Divestiture
Assets can and will be used by the Acquirer(s) as part of a viable,
ongoing small container commercial waste collection business in each of
the geographic areas identified in Section II.E. Divestiture of the
Divestiture Assets may be made to one or more Acquirers (except that
the Divestiture Assets serving any single geographic area identified in
Section II.E must be sold to the same Acquirer, and) provided that in
each instance it is demonstrated to the sole satisfaction of the United
States that the Divestiture Assets will remain viable and the
divestiture of such assets will remedy the competitive harm alleged in
the Complaint. The divestitures, whether pursuant to Section IV or
Section V of this Final Judgment,
(1) shall be made to an Acquirer(s) that, in the United States'
sole judgment, has the intent and capability (including the
necessary managerial, operational, technical and financial
capability) of competing effectively in the small container
commercial waste business; and
(2) shall be accomplished so as to satisfy the United States, in
its sole discretion, that none of the terms of any agreement between
an Acquirer(s) and defendants give defendants the ability
unreasonably to raise the Acquirer's costs, to lower the Acquirer's
efficiency, or otherwise to interfere in the ability of the
Acquirer(s) to compete effectively.
V. Appointment of Divestiture Trustee
A. If defendants have not divested the Divestiture Assets within
the time period specified in Section IV(A),
[[Page 15819]]
defendants shall notify the United States 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 Divestiture Assets.
B. After the appointment of a Divestiture Trustee becomes
effective, only the Divestiture Trustee shall have the right to sell
the Divestiture Assets. The Divestiture Trustee shall have the power
and authority to accomplish the divestiture to an Acquirer(s)
acceptable to the United States at such price and on such terms as are
then obtainable upon reasonable effort by the 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 Section 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 divestiture. 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 divestiture 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 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 divestiture. The
Divestiture Trustee and any consultants, accountants, attorneys, and
other agents retained by the Divestiture Trustee shall have full and
complete access to the personnel, books, records, and facilities of the
business to be divested, and defendants shall develop financial and
other information relevant to such business as the 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 divestiture.
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
divestiture 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 divestiture
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 divestiture, (2) the reasons, in the
Divestiture Trustee's judgment, why the required divestiture has not
been accomplished, and (3) the Divestiture Trustee's recommendations.
To the extent such reports contains information that the Divestiture
Trustee deems confidential, such reports 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 divestiture required herein,
shall notify the United States of any proposed divestiture required by
Section IV or 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 divestiture and list the name,
address, and telephone number of each person not previously identified
who offered or expressed an interest in or desire to acquire any
ownership interest in the Divestiture Assets, together with full
details of the same.
B. Within fifteen (15) calendar days of receipt by the United
States of such notice, the United States may request from defendants,
the proposed Acquirer(s), any other third party, or the Divestiture
Trustee, if applicable, additional information concerning the proposed
divestiture, 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.
[[Page 15820]]
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 divestiture. If the United
States provides written notice that it does not object, the divestiture
may be consummated, subject only to defendants' limited right to object
to the sale under Section V(C) of this Final Judgment. Absent written
notice that the United States does not object to the proposed
Acquirer(s) or upon objection by the United States, a divestiture
proposed under Section IV or Section V shall not be consummated. Upon
objection by defendants under Section V(C), a divestiture proposed
under Section V shall not be consummated unless approved by the Court.
VII. Financing
Defendants shall not finance all or any part of any purchase made
pursuant to Section IV or V of this Final Judgment.
VIII. Hold Separate
Until the divestiture required by this Final Judgment has been
accomplished, defendants shall take all steps necessary to comply with
the Hold Separate Stipulation and Order entered by this Court.
Defendants shall take no action that would jeopardize the divestiture
ordered by this Court.
IX. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter, and every thirty (30) calendar days thereafter until
the divestiture has been completed under Section IV or V, defendants
shall deliver to the United States an affidavit as to the fact and
manner of its compliance with Section IV or V of this Final Judgment.
Each such affidavit shall include the name, address, and telephone
number of each person who, during the preceding thirty (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 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, defendants shall deliver to the United States an
affidavit that describes in reasonable detail all actions defendants
have taken and all steps defendants have implemented on an ongoing
basis to comply with Section VIII of this Final Judgment. Defendants
shall deliver to the United States an affidavit describing any changes
to the efforts and actions outlined in defendants' earlier affidavits
filed pursuant to this section within fifteen (15) calendar days after
the change is implemented.
C. Defendants shall keep all records of all efforts made to
preserve and divest the Divestiture Assets until one year after such
divestiture has been completed.
X. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment, or of 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, 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. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall
expire ten years from the date of its entry.
XIV. Public Interest Determination
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, including making copies available to the
public of this Final Judgment, the Competitive Impact Statement, and
any comments thereon
[[Page 15821]]
and the United States' responses to comments. Based upon the record
before the Court, which includes the Competitive Impact Statement and
any comments and response to comments filed with the Court, entry of
this Final Judgment is in the public interest.
Date:------------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16
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United States District Judge
[FR Doc. 2015-06810 Filed 3-24-15; 8:45 am]
BILLING CODE P