[Federal Register Volume 63, Number 148 (Monday, August 3, 1998)]
[Notices]
[Pages 41292-41296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-20578]
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DEPARTMENT OF JUSTICE
Antitrust Division
Proposed Final Judgment and Competitive Impact Statement; United
States v. City of Stilwell, OK, et al.
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 Eastern District of Oklahoma in
United States v. City of Stilwell, Oklahoma, et al., CIV 96-196B. The
proposed Final Judgment is subject to approval by the Court after the
expiration of the statutory sixty-day public comment period and
compliance with the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b)-(h).
On April 25, 1996, the United States filed a civil antitrust
complaint under Section 4 of the Sherman Act, as amended, 15 U.S.C. 4,
alleging that defendants City of Stilwell, Oklahoma and the Stilwell
Area Development Authority adopted and enforced a policy by which
defendants, the sole suppliers of public water and sewer services to
customers within Stilwell city limits, refused to provide water or
sewer services to those unless they agreed to purchase electric service
from the City's Utility Department. The complaint alleged that this
``all-or-none'' utility policy violated Sections 1 and 2 of the Sherman
Act, 15 U.S.C. 1 and 2, and sought a judgment by the Court declaring
the defendants' policy to be an unlawful restraint of trade. The
complaint also sought an order by the Court to enjoin the defendants
from requiring any consumer of electricity to purchase retail electric
service from the City as a condition of receiving water and sewer
service, or otherwise discriminating against any customer that
purchases or may purchase electric service elsewhere.
The United States and defendants have stipulated that the proposed
Final Judgment may be entered after compliance with the APPA, unless
the United States withdraws its consent. The Court's entry of the
proposed Final Judgment will terminate this civil action against the
defendants, except that the Court will retain jurisdiction over the
matter for possible further proceedings to construe, modify, terminate
or enforce the judgment, or to punish violations of any of its
provisions.
The proposed Final Judgment contains three principal forms of
relief. First, the defendants are enjoined from requiring any consumer
of electricity to
[[Page 41293]]
purchase retail electric service from the defendants as a condition of
receiving water or sewer service from the defendants. Second,
defendants are required to include a disclaimer on any application for
water or sewer service or other written materials distributed by
defendants to prospective applicants for water and sewer that states
that defendants do not require any applicants to purchase electric
service from them as a condition of receiving water or sewer service.
Third, the proposed Final Judgment requires defendants to implement an
antitrust compliance program directed toward avoiding a repetition of
their anticompetitive behavior.
Public comment is invited within the sixty days of the publication
of this notice. All comments, and responses thereto, will be published
in the Federal Register and filed with the Court. Written comments
should be directed to Roger W. Fones, Chief, Transportation, Energy and
Agriculture Section, Antitrust Division, 325 Seventh Street, N.W.,
Suite 500, Washington, D.C. 20530 (telephone: (202) 307-6351). Copies
of the Complaint, Stipulation, proposed Final Judgment and Competitive
Impact Statement are available for inspection in Room 215 of the U.S.
Department of Justice, Antitrust Division, 325 Seventh Street, N.W.,
Washington, D.C. 20530 (telephone: (202) 514-2481) and at the office of
the Clerk of the United States District Court for the Eastern District
of Oklahoma, United States Courthouse, 5th and Okmulgee Streets,
Muskogee, Oklahoma 74401.
Copies of any of these materials may be obtained upon request and
payment of a copying fee.
Constance K. Robinson,
Acting Director of Civil Non-Merger Enforcement Antitrust Division.
United States of America, Plaintiff, v. City of Stilwell,
Oklahoma, et al., Defendants.
[Case No. CIV 96-196B]
Stipulation and Order
It is hereby stipulated by and between the undersigned parties, by
their respective attorneys, as follows:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the United States District Court for the Eastern District of
Oklahoma.
2. The parties stipulated that a Final Judgment in the form hereto
attached may be filed and entered by the Court, upon the motion of any
party or upon the Court's own motion, at any time after compliance with
the requirements of the Antitrust Procedure and Penalties Act (15
U.S.C. 16), and without further notice to any party or other
proceedings, provided that plaintiff has not withdrawn its consent,
which it may do at any time before the entry of the proposed Final
Judgment by serving notice thereof on defendants and by filing that
notice with the Court.
3. Each defendant shall abide by and comply with the provisions of
the proposed Final Judgment pending entry of the Final Judgment by the
Court and shall, from the date of the signing of this Stipulation by
the parties, comply with all the terms and provisions of the proposed
Final Judgment as though they were in full force and effect as an order
of the Court.
4. In the event that plaintiff withdraws its consent, as provided
in paragraph 2 above, then the parties are released from all further
obligations under this Stipulation, and the making of this Stipulation
shall be without prejudice to any party in this or any other
proceeding.
Respectfully submitted,
For Plaintiff, United States of America:
John R. Read,
Michele B. Cano,
Michael D. Billiel,
Attorneys, Antitrust Division, U.S. Department of Justice, 325 Seventh
Street, N.W., Washington, D.C. 20004, (202) 307-0468.
For Defendants, City of Stilwell and Stilwell Area Development
Authority:
Lloyd E. Cole, Jr.,
Nason Morton,
Cole Law Office, 120 W. Division Street, Stilwell, OK 74960, (918) 696-
7331.
Order
It is so ordered, this ____ day of ____, 1998.
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United States District Court Judge
United States of America, Plaintiff, v. City of Stilwell,
Oklahoma, et al. Defendants.
Final Judgment
[Case No. CIV 96-196-B]
Plaintiff, United States of America, filed its Complaint on April
25, 1996. Plaintiff and defendants, by their respective attorneys, have
consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law. This Final Judgment shall not
be evidence against or an admission by any party with respect to any
issue of fact or law. Therefore, without trial or adjudication of any
issue of fact or law herein, and upon consent of the parties, it is
hereby Ordered, Adjudged, and Decreed, as follows:
I. Jurisdiction
This Court has jurisdiction of the subject matter of this action
and of each of the parties consenting hereto. Venue is proper in the
Eastern District of Oklahoma. The Complaint states a claim upon which
relief may be granted against the defendants under Sections 1 and 2 of
the Sherman Act, 15 U.S.C. Secs. 1 & 2.
II. Definitions
As used herein:
(A) the term ``defendants'' means the City of Stilwell, Oklahoma
(``City'') and the Stilwell Area Development Authority;
(B) the term ``document'' means all ``writing and recordings'' as
that phrase is defined in Rule 1001(1) of the Federal Rules of
Evidence;
(C) two or more products are ``unbundled'' when available
separately and priced such that the seller's charge for the combination
is no less than the sum of the individual product prices;
(D) the term ``person'' means any natural person, corporation,
firm, company, sole proprietorship, partnership, association,
institution, governmental unit, public trust, or other legal entity.
III. Applicability
(A) This Final Judgment applies to the defendants, jointly and
severally, and to their respective successors, assigns, and to all
other persons in active concert or participation with any of them who
shall have received actual notice of the Final Judgment by personal
service or otherwise.
(B) Nothing herein contained shall suggest that any portion of this
Final Judgment is or has been created for the benefit of any third
party and nothing herein shall be construed to provide any rights to
any third party.
IV. Prohibited and Mandated Conduct
(A) The defendants, and each of them, are enjoined and restrained
from requiring any consumer of electric energy to purchase retail
electric service from a defendant as a condition of receiving water or
sewer service from a defendant.
(B) Any application for water or sewer service or other written
materials distributed by a defendant to prospective applicants for
water or sewer service shall include, in a conspicuous manner, the
following disclaimer:
Although we provide electric service, as well as water and sewer
services, we do not require you to purchase electric service from us
as a condition of receiving water or sewer service and we will not
discriminate against
[[Page 41294]]
you if you do not purchase electric service from us.
(C) The defendants, and each of them, are enjoined and restrained
from denying, withholding, or delaying any service, license or permit,
or otherwise threatening, discriminating or retaliating against any
person that has not agreed to purchase or does not purchase electric
service from a defendant, unless defendants' reason for such conduct is
unrelated to such person's choice of retail electric provider.
V. Limiting Conditions
Nothing in this Final Judgment shall prohibit a defendant from:
(A) Exercising any valid right now or hereafter conferred by State
law to expropriate facilities used by any retail electric supplier to
furnish electric energy within the City's corporate boundaries;
(B) Commencing or prosecuting, in good faith, litigation to
ascertain or protect any right now or hereafter conferred by State law
to restrict the furnishing of electric energy within the City's
corporate boundaries to retail electric suppliers authorized by law to
do so; and
(C) Furnishing any premises with more than one utility service on
an unbundled basis.
VI. Compliance Program
(A) Defendants are ordered to maintain an antitrust compliance
program which shall include the following:
(1) Designating, within 30 days of entry of this Final Judgment, an
Antitrust Compliance Officer with responsibility for accomplishing the
antitrust compliance program and with the purpose of achieving
compliance with this Final Judgment. The Antitrust Compliance Officer
shall, on a continuing basis, supervise the review of the current and
proposed activities of defendants to ensure that they comply with this
Final Judgment.
(2) The Antitrust Compliance Officer shall be responsible for
accomplishing the following activities:
(a) providing copies of this Final Judgment to individuals
currently serving on the governing boards, and to non-clerical
employees of the Stilwell Utility Department and the Stilwell Area
Development Authority, and to each individual hereafter assuming any
such position, and obtaining a written certification from such
individuals that they received, read, understand to the best of their
ability, and agree to abide by this Final Judgment and that they have
been advised that noncompliance with the Final Judgment may result in
conviction for criminal contempt of court; and
(b) briefing annually the governing boards and the non-clerical
employees of the Stilwell Utility Department and the Stilwell Area
Development Authority on this Final Judgment and the antitrust laws.
VII. Certification
(A) Within 75 days after the entry of this Final Judgment, the
defendants shall certify to the plaintiff that they have complied with
Section IV above, designated an Antitrust Compliance Officer, and
distributed the Final Judgment in accordance with Section VI(A) above.
(B) For each year of the term of this Final Judgment, the
defendants shall file with the plaintiff, on or before the anniversary
date of entry of this Final Judgment, a statement as to the fact and
manner of their compliance with the provisions of Section IV and VI
above.
VIII. Plaintiff Access
(A) To determine or secure compliance with this Final Judgment and
for no other purpose, duly authorized representatives of the plaintiff
shall, upon written request of the Assistant Attorney General in charge
of the Antitrust Division, and on reasonable notice to a defendant made
to its principal office, be permitted, subject to any legally
recognized privilege:
(1) Access during such defendant's office hours to inspect and copy
all documents in the possession or under the control of the defendant,
who may have counsel present, relating to any matters contained in this
Final Judgment; and
(2) Subject to the reasonable convenience of such defendant and
without restraint or interference from it, to interview officers,
employees or agents of the defendant, who may have counsel present,
regarding such matters.
(B) Upon the written request of the Assistant Attorney General in
charge of the Antitrust Division made to a defendant's principal
office, such defendant shall submit such written reports, under oath if
requested, relating to any matters contained in this Final Judgment as
may be reasonably requested, subject to any legally recognized
privilege.
(C) No information or documents obtained by the means provided in
Section VIII shall be divulged by the plaintiff to any person other
than a duly 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 to
plaintiff, the defendant represents and identifies in writing the
material in any such information or documents to which a claim of
protection may be asserted under Rule 26(c)(7) of the Federal Rules of
Civil Procedure, and the defendant marks each pertinent page of such
material, ``Subject to claim of protection under Rule 26(c)(7) of the
Federal Rules of Civil Procedure,'' then 10 days notice shall be given
by plaintiff to the defendant prior to divulging such material in any
legal proceeding (other than a grand jury proceeding) to which that
defendant is not a party.
IX. Further Elements of the Final Judgment
(A) This Final Judgment shall expire ten years from the date of
entry.
(B) Jurisdiction is retained by this Court for the purpose of
enabling any of the parties 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
or terminate any or all of its provisions, to enforce compliance, and
to punish violations of its provisions.
(C) Each party shall bear their respective costs and attorneys
fees.
(D) Entry of this Final Judgment is in the public interest.
Dated: ________.
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United States District Judge
United States of America, Plaintiff, v. City of Stilwell,
Oklahoma, et al., Defendants.
[Case No. CIV 96-196 B]
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 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 This Proceeding
On April 25, 1996, the United States filed a Complaint alleging
that the defendants City of Stilwell, Oklahoma (``City'') and Stilwell
Area Development Authority (``ADA'') (collectively ``Defendants'') had
violated the Sections 1 and 2 of the Sherman Act, 15 U.S.C. Secs. 1 and
2. The Complaint challenged a utility policy adopted and implemented by
Defendants, the sole suppliers of public water and sewer services to
[[Page 41295]]
customers within the Stilwell city limits, by which Defendants refused
to extend or connect water or sewer lines to customers unless the
customers also agreed to purchase electric service from the City's
Utility Department. The effect of this policy, commonly referred to as
the ``all-or-none utility policy,'' has been to restrict competition in
the provision of electric services in newly annexed areas of Stilwell.
On July 15, 1998, the United States and Defendants filed a
Stipulation and Order consenting to the entry of a proposed Final
Judgment designed to eliminate the all-or-none utility policy and
prevent Defendants from implementing any similar restriction in the
future. Under the proposed Final Judgment, Defendants would be enjoined
from requiring any consumer of electric energy to purchase retail
electric service from Defendants as a condition of receiving water or
sewer service from Defendants, and would be enjoined from taking
actions to impose any similar restrictions on City residents in the
future. The proposed Final Judgment also requires that any application
for water or sewer service or other written materials distributed by
Defendants to prospective applicants include a disclaimer stating that
customers are not required to purchase City electricity as a condition
of receiving water or sewer service.
The United States 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 the 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
The City of Stilwell is a charter municipality, organized and
existing under the laws of the State of Oklahoma. Its Utility
Department was established by Section 106 of the City's Charter as a
business enterprise to provide electricity within and around the City's
corporate boundaries. The Utility Department is governed by a Utility
Board of five members appointed by the Mayor with the approval of the
City Council and is subject to the Council's oversight.
The Stilwell Area Development Authority (``ADA'') is a public
trust, organized and existing under Oklahoma law, to provide water and
sewer service for compensation within and around the City's corporate
boundaries. It is governed by a Board of Trustees whose membership is
identical to that of the City's Utility Board and which is likewise
subject to the Council's oversight.
Defendants provide water, sewer, and electric service in Stilwell.
Within the pre-1961 boundaries of Stilwell, the City's Utility
Department is the sole provider of electric service. But in areas of
Stilwell annexed since that time, the City competes with Ozarks Rural
Electric Cooperative (``Ozarks'') for sales to new electric service
customers. In both pre-1961 Stilwell and areas subsequently annexed,
Defendants have virtual monopoly on the sale of water and sewer
services.
Beginning as early as 1985, the Defendants adopted an all-or-none
utility policy, refusing water and sewer services to any customer who
did not agree to purchase electric service from the City. The purpose
of the policy was to prevent Ozarks from obtaining new electric
customers in the annexed areas. The Utility Department and ADA
formalized the all-or-none utility policy in 1994, and the Stilwell
City Council subsequently approved the policy.
To enforce its all-or-none policy, the Defendants denied water and
sewer connections, turned off already connected lines, and otherwise
discriminated against those customers in annexed areas who tried to
obtain electric service from Ozarks. Defendants' enforcement of the
policy deprived customers of their right to choose freely among
competing electric service providers on the basis of price and quality
of service and eliminated competition in the provision of electric
service in the annexed areas.
III. Explanation of the Proposed Final Judgment
The provisions of the proposed Final Judgment are designed to
eliminate Defendants' all-or-none utility policy and to prevent future
actions by Defendants to place similar restrictions on electric
consumers. The proposed Final Judgment would enjoin Defendants from
requiring any consumer of electricity to purchase the City's retail
electric service as a condition of receiving water or sewer service
from the City (Section IV(A)). In addition,the proposed Final Judgment
would require defendants to include the following disclaimer in a
conspicuous manner in any application for water or sewer service or in
any other written materials they distribute to prospective applicants
for water or sewer services:
Although we provide electric service, as well as water and sewer
services, we do not require you to purchase electric service from us
as a condition of receiving water or sewer service and we will not
discriminate against you if you do not purchase electric service
from us.
(Section IV(B)). Defendants would also be enjoined from threatening or
discriminating or retaliating against any person because that person
had not agreed to purchase or did not purchase electric service from
Defendants (Section IV(C)).
The proposed Final Judgment would further require Defendants to
establish and maintain an antitrust compliance program (Section VI) and
file an annual certificate of compliance with the United States
(Section VII). It would also provide that the United States may obtain
information from the Defendants concerning possible violations of the
Final Judgment (Section VIII).
The proposed Final Judgment would not prohibit Defendants from
exercising any right under State law to expropriate facilities used by
any retail electric supplier to furnish electricity within the City's
corporate boundaries, or from commencing or prosecuting, in good faith,
litigation to ascertain or protect any right they might have under
State law to restrict the furnishing of electricity within the City's
corporate boundaries to retail electric suppliers authorized by law to
do so (Section V(A) and (B)).
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
[[Page 41296]]
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. The United States will evaluate and respond to
the comments. All comments will be given due consideration by the
Department of Justice, which remains free to withdraw its consent to
the proposed Judgment at any time prior to entry. The comments and the
responses of the United States will be filed with the Court and
published in the Federal Register. Written comments should be submitted
to: Roger W. Fones, Chief, Transportation, Energy & Agriculture
Section, Antitrust Division, United States Department of Justice, 325
Seventh Street, N.W., Suite 500, Washington, D.C. 20004.
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. The Proposed
Final Judgment would expire ten (10) years from the date of its entry.
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. In the
view of the Department of Justice, such a trial would involve
substantial cost to the United States and is not warranted. The
proposed Final Judgment provides relief that fully remedies the alleged
violations of the Sherman Act set forth in the Complaint.
VII. 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.
For Plaintiff United States of America:
Dated: July ______, 1998.
Respectfully submitted,
John R. Read,
Michele B. Cano,
Michael D. Billiel,
Trial Attorneys, U.S. Department of Justice, Antitrust Division, 325
Seventh Street, N.W., Suite 500, Washington, D.C. 20004, 202-307-0468,
202-616-2441 (Facsimile).
[FR Doc. 98-20578 Filed 7-31-98; 8:45 am]
BILLING CODE 4410-11-M