United States v. Browning-Ferris, Inc.; Proposed Final Judgment and Competitive Impact Statement
Federal RegisterMar 5, 1996
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Browning-Ferris, 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 Consent
Judgment, Stipulation, and Competitive Impact Statement have been filed
with the United States District Court for the District of Columbia in
the above-captioned case.
[[Page 8644]]
On February 15, 1996, the United States filed a civil antitrust
Complaint to prevent and restrain Browning-Ferris Industries, Inc.
(``BFI''), Browning-Ferris Industries of Iowa, Inc. (``BFII''), and
Browning-Ferris Industries of Tennessee, Inc. (``BFIT'') from
maintaining and enhancing their market power by using contracts that
have restrictive and anticompetitive effects, in violation of Section 2
of the Sherman Act, 156 U.S.C. 2.
The Complaint alleges that: (1) Defendant BFIT has market power in
small containerized hauling service in the Memphis, TN market and
Defendant BFII has market power in small containerized hauling service
in the Dubuque, IA market; (2) Defendants, acting with specific intent,
used and enforced contracts containing restrictive provisions to
exclude and constrain competition and to maintain and enhance their
market power in small containerized hauling service in those markets;
(3) in the context of their large market shares and market power, and
Dubuque markets has had anticompetitive and exclusionary effects by
significantly increasing barriers to entry facing new entrants and
barriers to expansion faced by small incumbents; (4) Defendants' market
power is maintained and enhanced by their use and enforcement of those
contracts; and, (5) as a result, there is a dangerous probability that
Defendants will achieve monopoly power in the Memphis and Dubuque
markets.
The proposed Final Judgment would require that in dealing with
small-container customers in the Memphis and Dubuque markets,
Defendants only enter into contract containing significantly less
restrictive terms than the contracts they now use in those markets.
Specifically, the Defendants will be prohibited from using any contract
with small-container customers in the Memphis and Dubuque markets that:
(1) Has an initial term longer than two years (unless a longer term
is requested by the customer and other conditions are met);
(2) Has any renewal term longer than one year;
(3) Requires the customer give notice of termination more than 30
days prior to the end of a term;
(4) Requires the customer to pay liquidated damages over 3 times
the greater of its prior monthly charge or its average monthly charge
during the first year of the initial term of the customer's contract,
or over 2 times the greater of its prior monthly charge or its average
monthly charge thereafter;
(5) Is not labeled ``Contract for Solid Waste Services'' and is not
easily readable; or
(6) Requires a customer to give BFI the right or opportunity to
provide hauling services for all solid wastes and recyclables, unless
the customer affirmatively indicates that is its desire.
The proposed Consent Final Judgment also requires that the
Defendants notify customers in the two relevant markets of these
changes and prohibits the Defendants from enforcing terms in existing
contracts that are inconsistent with the settlement in those markets.
Furthermore, Defendants would be prohibited from enforcing provisions
in existing contracts that are inconsistent with the Final Judgment.
Public comment is invited within the statutory 60-day period. Such
comments will be published in the Federal Register and filed with the
Court. Comments should be addressed to Anthony V. Nanni, Chief,
Litigation I Section, U.S. Department of Justice, Antitrust Division,
1401 H St., NW., Suite 4000, Washington, DC 20530. (phone 202/307-
6576).
Rebecca P. Dick,
Deputy Director of Operations.
United States District Court for the District of Columbia
In the matter of United States of America, Plaintiff, v.
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries
of Tennessee, Inc., and Browning-Ferris Industries, Inc.,
Defendants.
[Civil Action No.: 1-96-V00297]
Filed: February 15, 1996.
Stipulation
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto for the purposes of this
proceeding. Defendant Browning-Ferris Industries, Inc. transacts
business and is found within the district. Defendants Browning-Ferris
Industries of Tennessee, Inc. and Browning-Ferris Industries of Iowa,
Inc. consent to personal jurisdiction in this proceeding. Defendants
waive any objections as to venue and stipulate that venue for this
action is proper in the District of Columbia;
2. The parties consent 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 Procedures and Penalties Act (15
U.S.C. 16 (b)-(h)), 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 the Defendants and by filing that
notice with the Court; and
3. Defendants agree to be bound by the provisions of the proposed
Final Judgment pending its approval by the Court. If the Plaintiff
withdraws its consent or if the proposed Final Judgment is not entered
pursuant to this Stipulation, this Stipulation shall be of no effect
whatsoever, and the making of this Stipulation shall be without
prejudice to any party in this or in any other proceeding.
Dated this 15th day of February, 1996.
Respectfully submitted,
For the plaintiff the United States of America:
Anne K. Bingaman,
Assistant Attorney General, Antitrust Division, U.S. Department of
Justice.
Lawrence R. Fullerton,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director of Operations.
Anthony V. Nanni,
Chief, Litigation I Section.
Willie L. Hudgins, Jr.,
DC Bar #37127.
Nancy H. McMillen.
Peter H. Goldberg,
DC Bar #055608.
Evangelina Almirantearena,
Attorneys, U.S. Department of Justice, Antitrust Division, City Center
Building, Suite 4000, 1401 H Street, NW., Washington, DC 20530, 202/
307-5777.
For Defendants Browning-Ferri Industries of Iowa, Inc.,
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris
Industries, Inc.:
David Foster,
Esquire, DC Bar #358247, Fulbright & Jaworski L.L.P., 801 Pennsylvania
Ave., NW, Market Square, Washington, DC 20004-2604, 202/662-0200.
Richard N. Carrell,
Esquire, Fulbright & Jaworski L.L.P., 1301 McKinney, Suite 5100,
Houston, Texas 77010-3095, 713/651-5151.
Rufus Wallingford,
Esquire, Senior Vice President & General Counsel, Browning-Ferris
Industries, Inc., 757 N. Eldridge at Memorial Drive, Houston, Texas
77079, 713/870-8100.
Lee J. Keller,
Esquire, Senior Attorney, Browning-Ferris Industries, Inc., 757 N.
Eldridge at memorial Drive, Houston, Texas 77079, 713/870-8100.
Attorneys for Defendants.
[[Page 8645]]
United States District Court for the District of Columbia
In the matter of United States of America, Plaintiff, v.
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries
of Tennessee, Inc., and Browning-Ferris Industries, Inc.,
Defendants.
[Civil Action No.: 1-96-V00297]
Filed: Feb. 15, 1996.
Final Judgment
Whereas Plaintiff, United States of America, having filed its
Complaint in this action on February 15, 1996, and Plaintiff and
Defendants, by their respective attorneys, having 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 or admission by any party with respect to any issue of fact or
law;
Now, therefore, before any testimony is taken, and without trial or
adjudication of any issue of fact or law, 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 the persons of the Defendants, Browning-Ferris Industries, Inc.,
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris
Industries of Iowa, Inc. The Complaint states a claim upon which relief
may be granted against the Defendants under Section 2 of the Sherman
Act, 15 U.S.C. 2.
II. Definitions
As used in this Final Judgment:
(A) ``Memphis market'' means the counties of Shelby, TN; Fayette,
TN; Crittenden, AK; DeSoto, MS; Marshall, MS; Tate, MS; and Tunica, MS.
(B) ``Dubuque market'' means the counties of Dubuque and Jackson,
IA.
(C) ``Solid waste hauling'' means the collection and transportation
to a disposal site of trash and garbage (but not construction and
demolition debris; medical waste; hazardous waste; organic waste; or
special waste, such as contaminated soil, or sludge; or recyclable
materials) from residential, commercial and industrial customers. Solid
waste hauling includes hand pick-up, containerized pick-up, and roll-
off service.
(D) ``Defendants'' means defendant Browning-Ferris Industries,
Inc., a Delaware corporation with its headquarters in Houston, Texas,
defendant Browning-Ferris Industries of Tennessee, Inc., a Tennessee
corporation with offices in Memphis, TN, and defendant Browning-Ferris
Industries of Iowa, Inc., an Iowa corporation with offices in Des
Moines, IA, and includes their officers, directors, managers, agents,
employees, successors, assigns, parents and subsidiaries.
(E) ``Small Container'' means a 1 to 10 cubic yard container.
(F) ``Small Containerized Solid Waste Hauling Service'' means
providing solid waste hauling service to customers by providing the
customer with a Small Container that is picked up mechanically using a
frontload, rearload, or sideload truck, and expressly excludes hand
pick-up service, and service using stationary compactors.
(G) ``Customer'' means a Small Containerized Solid Waste Hauling
Service customer.
III. Applicability
This Final Judgment applies to Defendants and to their officers,
directors, managers, agents, and employees, successors, assigns,
parents and subsidiaries, and to all other persons in active concert or
participation with any of them who shall have received actual notice of
this Final Judgment by personal service or otherwise. Nothing contained
in 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 Conduct
Defendants are enjoined and restrained as follows:
(A) Except as set forth in paragraph IV (B) and (G), Defendants
shall not enter into any contract with a Customer for a service
location in the Memphis or Dubuque markets that:
(1) Has an initial term longer than two (2) years;
(2) Has any renewal term longer than one (1) year;
(3) Requires that the Customer give Defendants notice of
termination more than thirty (3) days prior to the end of any initial
term or renewal term;
(4) Requires that the Customer pay liquidated damages in excess of
three times the greater of its prior monthly charge or its average
monthly charge over the most recent six months during the first year it
is a Customer of Defendants;
(5) Requires that the Customer pay liquidated damages in excess of
two times the greater of its prior monthly charge or its average
monthly charge over the most recent six months after the Customer has
been a Customer of Defendants for a continuous period in excess of one
(1) year;
(6) Is not easily readable (e.g., formatting and type-face) and is
not labeled, in large letters, CONTRACT FOR SOLID WASTE SERVICES; or
(7) Requires a Customer to give Defendants the right or opportunity
to provide hauling service for recyclable or more than one type of
solid waste hauling service for a Customer unless the Customer
affirmatively indicates its desire for all such services on the front
of the contract.
(B) Notwithstanding the provisions of paragraph IV(A) of this Final
Judgment. Defendants may enter into a contract with a Customer for a
service location in the Memphis or Dubuque markets with an initial term
in excess of two years provided that:
(1) Defendants have not implemented any organized, management--
authorized sales or marketing plan designed, through pricing or other
incentives, to induce Customers to use other than the form contracts
Defendants are required herein to offer generally to Customers;
(2) The Customer has the right to terminate the contract after 2
years by giving notice to Defendants thirty (30) days or more prior to
the end of that 2 year period; and,
(3) The contract otherwise complies with the provisions of
paragraph IV(A)(2)-(7).
(C) From the date of filing of an executed Stipulation in the form
attached hereto as Exhibit A, Defendants shall offer to new Customers
with service locations in the Memphis and Dubuque markets only
contracts that conform to the requirements of paragraphs IV(A) or (B)
of this Final Judgment, except as provided in IV(G).
(D) Except as provided in IV(G), Defendants shall send to all
existing Customers with service locations in the Memphis and Dubuque
markets with contracts having an initial term longer than 2 years and
which otherwise do not conform with paragraph IV(B) a notice in the
form attached hereto as Exhibit B (for Memphis customers) and as
Exhibit C (for Dubuque customers) in accordance with the following
schedule:
(1) Defendants shall send notices to Customers with service
locations in the Memphis market within ninety (90) days following entry
of this Final Judgment; and
(2) Defendants shall send notices to Customers with service
locations in the Dubuque market within thirty (30) days following the
entry of this Final Judgment.
(E) Except as provided in IV(G), for each Customer with a contract
having
[[Page 8646]]
an initial term longer than 2 years and which otherwise does not
conform to paragraph IV(B) that enters a renewal term 120 days after
entry of this Final Judgment, Defendants shall send a reminder to that
Customer in the form attached hereto as Exhibit D ninety (90) days or
more prior to the effective date of the renewal term. This reminder may
be sent to the customer as part of a monthly bill, but if it is, it
must be displayed on a separate page and in large print.
(F) Upon entry of this Final Judgment, Defendants may enforce
existing contract provisions only to an extent consistent with this
Final Judgment. (For example, if an existing service agreement provides
for six months' liquidated damages, Defendants may only seek three
months' worth of such damages, consistent with IV(A)(4)).
(G) Notwithstanding the provisions of this Final Judgment,
Defendants may enter into contracts with municipal or governmental
entities that are not in compliance with paragraphs IV(A)-(F) provided
that those contracts are awarded to Defendants on the basis of a formal
request for bids or a formal request for proposals issued by the
Customer.
(H) Notwithstanding the provisions of this Final Judgment,
Defendants shall not be required to do business with any Customer.
V. Reporting
(A) To determine or secure compliance with this Final Judgment,
duly authorized representatives of the Plaintiff shall, upon written
request of the Assistant Attorney General in charge of the Antitrust
Division, on reasonable notice given to Defendants at this principal
offices, subject to any lawful privilege, be promised:
(1) Access during normal office hours to inspect and copy all
books, ledgers, accounts, correspondence, memoranda and other documents
and records in the possession, custody, or control of Defendants, which
may have counsel present, relating to any matters contained in this
Final Judgment.
(2) Subject to the reasonable convenience of Defendants and without
restraint or interference from them, to interview officers, employees,
or agents of Defendants, who may have counsel present, regarding any
matters contained in this Final Judgment.
(B) Upon written request of the Assistant Attorney General in
charge of the Antitrust Division, on reasonable notice given to
Defendants at this principal offices, subject to any lawful privilege,
Defendants shall submit such written reports, under oath if requested,
with respect to any matters contained in this Final Judgment.
(C) No information or documents obtained by the means provided by
this Section shall be divulged by the Plaintiff to any person other
than a duly authorized representative of the Executive Branch of the
United States government, except in the course of legal proceedings to
which the United States is a party, 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 Plaintiff, Defendants represent and identify in writing
the material in any such information or document to which a claim or
protection may be asserted under Rule 26(c)(7) 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)(7) of the
Federal Rules of Civil Procedure,'' then ten days notice shall be given
by Plaintiff to Defendants prior to divulging such material in any
legal proceeding (other than a grand jury proceeding) to which
Defendants are not a party.
VI. Further Elements of Judgment
(A) This Final Judgment shall expire on the tenth anniversary of
the date of its entry.
(B) Jurisdiction is retained by this Court over this action and the
parties thereto for the purpose of enabling any of the parties thereto
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 of its provision, to enforce
compliance, and to punish violations of its provisions.
VII. Public Interest
Entry of this Final Judgment is in the public interest.
Entered: ________
UNITED STATES DISTRICT JUDGE
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EXHIBIT A
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Browning-Ferris
Industries of Iowa, Inc., Browning-Ferris Industries of Tennessee,
Inc., and Browning-Ferris Industries, Inc., Defendants.
[Civil Action No.: 1-96-V00297]
Filed: February 15, 1996.
Stipulation
It is stipulated by and between the undersigned parties, by their
respective attorneys, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto for the purposes of this
proceeding. Defendant Browning-Ferris Industries, Inc. transacts
business and is found within the district. Defendants Browning-Ferris
Industries of Tennessee, Inc. and Browning-Ferris Industries of Iowa,
Inc. consent to personal jurisdiction in this proceeding. Defendants
waive any objections as to venue and stipulate that venue for this
action is proper in the District of Columbia;
2. The parties consent 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 Procedures and Penalties Act (15
U.S.C. Sec. 16 (b)-(h)), 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 the Defendants and by
filing that notice with the Court; and
3. Defendants agree to be bound by the provisions of the proposed
Final Judgment pending its approval by the Court. If the Plaintiff
withdraws its consent or if the proposed Final Judgment is not entered
pursuant to this Stipulation, this Stipulation shall be of no effect
whatsoever, and the making of this Stipulation shall be without
prejudice to any party in this or in any other proceeding.
Dated this ______th day of ________, 1996.
Respectfully submitted,
[[Page 8647]]
For the Plaintiff the United States of America.
Anne K. Bingaman,
Assistant Attorney General, Antitrust Division, U.S. Department of
Justice.
Lawrence R. Fullerton,
Deputy Assistant Attorney General.
Rebecca P. Dick,
Deputy Director of Operations.
Anthony V. Nanni,
Chief, Litigation I Section.
Willie L. Hudgins, Jr.,
DD Bar #37127.
Nancy H. McMillen,
Peter H. Goldberg,
DC Bar #055608.
Evangelina Almirantearena,
Attorneys, U.S. Department of Justice, Antitrust Division, City Center
Building, Suite 4000, 1401 H Street, NW., Washington, D.C. 20530, 202/
307-5777.
For defendants Browning-Ferris Industries of Iowa, Inc.,
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris
Industries, Inc.:
David Foster, Esquire,
DC Bar #358247, Fulbright & Jaworski, 801 Pennsylvania Ave., NW.,
Market Square, Washington, D.C. 20004-2604, 202/662-0200.
EXHIBIT B
Notice to Customers
Dear Customer:
BFI is offering a new two year contract to its small
containerized solid waste hauling customers with service locations
in [insert market here]. In most cases, this new contract will have
terms that are more advantageous to customers than their current
contracts. This new contract has the following features:
an initial term of no longer than 2 years (unless you
request a longer term);
a renewal term of 1 year;
at the end of your initial term, you may take no action
and your contract will renew or you may choose not to renew by
giving us notice at any time up to 30 days prior to the end of the
initial term;
if you request a contract with a term longer than 2
years, you can cancel that contract by giving us notice at any time
up to 30 days prior to the end of the first 2 years;
you can choose to terminate the contract at any other
time, but you will be required to pay, as liquidated damages, no
more than 3 times the greater of your prior monthly or average
monthly charge, but if you have been a customer continuously for
more than 1 year, the liquidated damages would be reduced to 2 times
the greater of your prior monthly or average monthly charge;
you will be able to choose on the contract which
specific types of waste hauling services you would like us to
perform.
On or before the termination date of your existing service
contract, BFI will offer you continued service under the new
contract. BUT AS AN EXISTING CUSTOMER, YOU WILL IMMEDIATELY GAIN THE
ADVANTAGES OF THE REVISED CONTRACT SINCE BFI WILL NOT ENFORCE ANY
PROVISION IN YOUR CONTRACT IN ANY MANNER INCONSISTENT WITH ONE OF
THE NEW TERMS OFFERED ABOVE. THERE IS, THEREFORE, NO NEED TO SIGN A
REVISED CONTRACT AT THIS TIME. HOWEVER, IF YOU WOULD LIKE TO ENTER A
NEW CONTRACT IN THE MEANTIME, PLEASE SEND A LETTER TO [insert name
and address] AND WE WILL CONTACT YOU.
Thank you for your attention.
EXHIBIT C
Notice to Customers
Dear Valued Customer:
BFI is offering a new two year contract to all small
containerized solid waste hauling customers with service locations
in the countries of Dubuque and Jackson, IA. We would like to take
this opportunity to offer this contract to you. Of course, if you
prefer, you can continue with your existing contract.
In most cases, this new contract will have terms that are more
advantageous to customers than their current contracts. This new
contract has the following features:
an initial term of no longer than 2 years (unless you
request a longer term);
a renewal term of 1 year;
you can choose not to renew the contract by simply giving
us notice at any time up to 30 days prior to the end of your term;
if you request a contract with a term longer than 2 years,
you can cancel that contract by giving us notice at any time up to
30 days prior to the end of the first 2 years;
you can choose to terminate the contract at any other time,
but you will be required to pay, as liquidated damages, no more than
3 times the greater of your prior monthly or average monthly charge.
If you've been a customer continuously for more than 1 year, the
liquidated damages would be reduced to 2 times the greater of your
prior monthly or average monthly charge;
you will be able to choose on the contract which specific
types of waste hauling services you would like us to perform.
You may obtain a new contract containing these terms by calling
[insert BFI contact and number].
If you prefer, you may continue with your existing contract. If
you retain your existing contract, we will not enforce any terms
that are inconsistent with the new form contract terms.
If you have any questions, please call [BFI contact person and
phone number.]
EXHIBIT D
REMINDER: Your contract will automatically renew 90 days from
the date of this notice unless we receive your cancellation within
60 days from the date of this notice.
You may also obtain a new form contract for solid waste hauling
services with some terms more advantageous to you than your current
contract. We will send you a copy on request.
Existing contract terms inconsistent with the new form will not
be enforced against you.
United States District Court for the District of Columbia
In the matter of United States of America, Plaintiff, v.
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries
of Tennessee, Inc., and Browning-Ferris Industries Inc., Defendants.
[Case Number: 1-96-V00297]
JUDGE: Thomas Pennfield Jackson.
DATE STAMP: February 15, 1996.
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 proceeding.
I. Nature and Purpose of the Proceeding
On February 15, 1996, the United States filed a civil antitrust
Complaint to prevent and restrain Browning-Ferris Industries, Inc.
(``BFI''), Browning-Ferris Industries of Iowa, Inc. (``BFII''), and
Browning-Ferris Industries of Tennessee, Inc. (``BFIT'') from using
contracts that have restrictive and anticompetitive effects on small
containerized hauling service markets in Memphis and Dubuque, in
violation of Section 2 of the Sherman Act, 15 U.S.C. 2. As alleged in
the Complaint, Defendants have attempted to monopolize small
containerized hauling service in the Memphis and Dubuque geographic
markets by using and enforcing contracts containing restrictive
provisions to maintain and enhance their existing market power there.
The Complaint alleges that: (1) Defendant BFIT has market power in
small containerized hauling service in the Memphis, TN market and
Defendant BFII has market power in small containerized hauling service
in the Dubuque, IA market; (2) Defendants, acting with specific intent,
used and enforced contracts containing restrictive provisions to
exclude and constrain competition and to maintain and enhance their
market power in small containerized hauling service in those markets;
(3) in the context of their large market shares and market power,
Defendants' use and enforcement of those contracts in the Memphis and
Dubuque markets has had anticompetitive and exclusionary effects by
significantly increasing barriers to entry facing new entrants and
barriers to expansion faced by small incumbents; (4) Defendants' market
power is maintained and enhanced by their use and enforcement of those
contracts; and, (5) as a result, there is a dangerous probability that
Defendants will achieve
[[Page 8648]]
monopoly power in the Memphis and Dubuque markets.
In its Complaint, Plaintiffs seeks, among other relief, a permanent
injunction preventing Defendants from continuing any of the
anticompetitive practices alleged to violate the Sherman Act, and thus
affording fair opportunities for other firms to compete in small
containerized hauling service in the Memphis and Dubuque markets.
The United States and Defendants also have filed a Stipulation by
which the parties consented to the entry of a proposed Final Judgment
designed to eliminate the anticompetitive effects of Defendants'
actions in the Memphis and Dubuque markets. Under the proposed Final
Judgment, as explained more fully below, in dealing with small-
container customers in the Memphis and Dubuque markets, Defendants
would only be permitted to enter into contracts containing
significantly less restrictive terms than the contracts they now use in
those markets. Furthermore, Defendants would be prohibited from
enforcing provisions in existing contracts that are inconsistent with
the Final Judgment.
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 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
Browning-Ferris Industries, Inc. (``BFI''), is the world's second-
largest company engaged in the solid waste hauling and disposal
business, with operations throughout the United States. Browning-Ferris
Industries, Inc. had revenues of approximately $4 billion in its 1994
fiscal year.
Browning-Ferris Industries of Iowa, Inc. (``BFII'') is a subsidiary
of BFI with its principal offices in Des Moines, IA. It is the largest
solid waste hauling and disposal company in the Dubuque, IA market.
BFII had revenues of over $2.6 million in its 1994 fiscal year.
Browning-Ferris Industries of Tennessee, Inc., (``BFIT'') is also a
subsidiary of BFI. It has its principal offices in Memphis, TN. It is
the largest solid waste hauling and disposal company in the Memphis, TN
market. BFIT had revenues over $40.9 million in its 1994 fiscal year.
A. The Solid Waste Hauling Industry
Solid waste hauling involves the collection of paper, food,
construction material and other solid waste from homes, businesses and
industries, and the transporting of that waste to a landfill or other
disposal site. These services may be provided by private haulers
directly to residential, commercial and industrial customers, or
indirectly through municipal contracts and franchises.
Service to commercial customers accounts for a large percentage of
total hauling revenues. Commercial customers include restaurants, large
apartment complexes, retail and wholesale stores, office buildings, and
industrial parks. These customers typically generate a substantially
larger volume of waste than do residential customers. Waste generated
by commercial customers is generally placed in metal containers of one
to ten cubic yards provided by their hauling company. One to ten cubic
yards containers are called ``small containers.'' Small containers are
collected primarily by frontend load vehicles that lift the containers
over the front of the truck by means of a hydraulic hoist and empty
them into the storage section of the vehicle, where the waste is
compacted. Service to commercial customers that use small containers is
called ``small containerized hauling service.''
Solid waste hauling firms also provide service to residential and
industrial (or ``roll-off'') customers. Residential customers,
typically households and small apartment complexes that generate small
amounts of waste, use noncontainerized solid waste hauling service,
normally placing their waste in plastic bags, trash cans, or small
plastic containers at curbside.
Industrial or roll-off customers include factories and construction
sites. These customers either generate noncompactible waste, such as
concrete or building debris, or very large quantities of compactible
waste. They deposit their waste into very large containers (usually 20
to 40 cubic yards) that are loaded onto a roll-off truck and
transported individually to the disposal site where they are emptied
before being returned to the customers' premises. Some customers, like
shopping malls, use large, roll-off containers with compactors. This
type of customer generally generates compactible trash similar to the
waste of commercial customers, but in much greater quantities; it is
more economical for this type of customer to use roll-off service with
a compactor than to use a number of small containers picked up multiple
times a week.
B. Relevant Product Market
The relevant product market is a small containerized hauling
service. There are no practical substitutes for this service. Small
containerized hauling service customers will not generally switch to
noncontainerized service in the event of a price increase, because it
is too impractical and more costly for those customers to bag and carry
their volume of trash to the curb for hand pick-up. Similarly, roll-off
service is much too costly and the container takes up too much space
for most small containerized hauling service customers. Only customers
that generate the largest volumes of compactible solid waste can
economically consider roll-off service, and for customers that do
generate large volumes of waste, roll-off service is usually the only
viable option.
C. Relevant Geographic Markets
The relevant geographic markets are the Memphis market and the
Dubuque market. Small containerized solid waste hauling services are
generally provided in very localized areas. Route density (a large
number of customers that are close together) is necessary for small
containerized solid waste hauling firms to be profitable. In addition,
it is not economically efficient for heavy trash hauling equipment to
travel long distances from customers without collecting significant
amounts of waste. Thus, it is not efficient for a hauler to serve major
metropolitan areas from a distant base. Haulers, therefore, generally
establish garages and related facilities within each major local area
served.
D. Defendants' Attempt to Monopolize
Defendant BFIT has market power in small containerized hauling
service in the Memphis market. BFIT has maintained a very high market
share for over 10 years--consistently in excess of 60 percent.
Defendant BFII has market power in small containerized hauling
service in the Dubuque market. BFII entered that market in 1979. It
maintains a very high market share--in excess of 60 percent.
There are substantial barriers to entry and to expansion into the
small containerized hauling markets in Memphis and in Dubuque. A new
entrant or small incumbent hauler must be able to achieve minimum
efficient scale to be competitive. First, it must be able to generate
enough revenues to cover significant fixed costs and overhead.
[[Page 8649]]
Second, a new entrant or small incumbent hauler must be able to
obtain enough customers to use its trucks efficiently. For example, it
is not efficient to use a truck half a day because the firm doesn't
have enough customers to fill up the truck.
Third, a new entrant or small incumbent hauler needs to obtain
customers that are close together on its routes (called ``route
density''). Having customers close together enables a company to pick
up more waste in less time (and generate more revenues in less time).
The better a firm's route density, the lower its operating costs.
Until a firm overcomes these barriers, the new entrant or small
incumbent will have higher operating costs than Defendants in the
relevant geographic markets, may not operate at a profit, and will be
unable effectively to constrain pricing by Defendants in those markets.
Defendant BFIT in the Memphis market and Defendant BFII in the
Dubuque market have entered into written contracts with the vast
majority of their small containerized hauling customers. Many of these
contracts contain terms that, when taken together in the relevant
markets where Defendants have market power, make it more difficult and
costly for customers to switch to a competitor of Defendants and allows
Defendants to bid to retain customers approached by a competitor.
The contracts enhance and maintain Defendants' market power in the
Memphis and Dubuque markets by significantly raising the cost and time
required by a new entrant or small incumbent firm to build its customer
base and obtain efficient scale and route density. Therefore,
Defendants' use and enforcement of these contracts in the Memphis and
Dubuque markets raise barriers to entry and expansion in those markets.
Those contract terms are:
a. A provision giving Defendants the exclusive right or opportunity
to collect and dispose of all the customers' solid waste and
recyclables;
b. An initial term of three years;
c. A renewal term of three years that automatically renews unless
the customer sends Defendants a written notice of cancellation by
certified mail more than 60 days from the end of the initial or renewal
term; and
d. A term that requires a customer that terminates the contract at
any other time to pay Defendants, as liquidated damages, its most
recent monthly charge times six (if the remaining term is six or more
months) or its most recent monthly charge times the number of months
remaining under the contract (if the remaining term is less than six
months).
The appearance and format of the contracts also enhances
Defendants' ability to use the contracts to maintain their market power
in these markets. The provisions that make it difficult for a customer
to switch to a competing hauler are not obvious to customers in the
relevant markets. The document is not labeled ``Contract'' so its
legally binding nature is not always apparent to the customer. Also,
all the restrictive provisions mentioned above are in small print and
the provision described in (d) is on the back of the document.
Defendants' use and enforcement of the contracts described above in
the Memphis and Dubuque markets have raised the barriers already faced
by new entrants and small existing firms in those markets. Defendants'
use and enforcement of the contracts has reduced the likelihood that
customers will switch to a Defendant's competitor. Given Defendants'
market power, this has made it more difficult for competitors to
achieve efficient scale, obtain sufficient customers to use their
trucks efficiently, and develop sufficient route density to be
profitable and to constrain Defendants' pricing in those markets.
III. Explanation of the Proposed Final Judgment
The proposed Final Judgment will end the unlawful practices
currently used by Defendants to perpetuate and enhance their market
power in the Memphis and Dubuque markets. It requires Defendants to
offer less restrictive contracts to small containerized hauling
customers in the Memphis and Dubuque markets.\1\
\1\ The proposed Final Judgment applies to all contracts entered
into by Defendants with customers for service locations in the
relevant markets except contracts described in Paragraph IV(G).
Contracts awarded to Defendants by municipal or government entities
as a result of a formal request for bids or a formal request for
proposals need not contain the provisions dictated by the proposed
Final Judgment. These contracts were excluded from the decree to
assure that competition for such bids would not be adversely
affected by preventing Defendants from bidding.
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In particular, Paragraphs IV (A) and (B) prohibit Defendants from
entering into contracts containing the type of restrictive terms
described above. Paragraphs IV (C), (D), (E), and (F) are designed to
bring existing contracts into compliance with the proposed Final
Judgment on an expeditious basis.
A. Prohibition of Contract Terms and Formats
The contracts used most frequently by Defendants in the relevant
markets have an initial term of three years and renew automatically and
perpetually for additional three-year terms unless cancelled by the
customer. In these markets, given that the Defendants have market power
and a vast majority of their existing customers are subject to such
contracts, the long initial term and long renewal terms prevent new
entrants and small incumbents, no matter how competitive, from quickly
obtaining enough customers that are close together to be profitable.
Shortening the initial term and the renewal term will allow competitors
to compete for more of the customer base each year and, if they compete
effectively, to obtain efficient scale and route density more quickly.
This, in turn, will enhance competition in the relevant markets and
will help offset Defendants' market power.
Paragraph IV(A)(1) prohibits Defendants from using contracts for
service locations in the Memphis and Dubuque markets that have an
initial term longer than two years, except under certain very limited
circumstances.
A contract with an initial term in excess of two years in the
relevant markets is permitted, under limited circumstances, pursuant to
Paragraph IV(B) of the proposed Final Judgment, but the contracts must
otherwise conform to the Final Judgment. The United States is aware
that some customers, for valid business reasons such as long-term price
assurance, want contracts with an initial term longer than two years.
Paragraph IV(B) is intended to permit customers who want them to have
such contracts, while ensuring that customers who have not made such a
choice do not, nevertheless, find themselves with long contracts. Under
Paragraph IV(B)(1), Defendants may sign a contract of longer than two
years with a customer, but only if the Defendants have not implemented
any organized, management-authorized sales or marketing plan designed,
through pricing or other incentives to induce customers to use other
than the form contracts Defendants are required to offer by the
proposed Final Judgment. Even if the customer signs a contract with an
initial term longer than two years, the customer retains the right to
terminate that contract at the end of the first 2 years without payment
of any liquidated damages, pursuant to Paragraph IV(B)(2). Paragraph
IV(B) was included to give Defendants the ability to contract with
customers who truly want a longer term, for the United States
anticipates that contracts with initial terms longer than two years
will be the exception, not the rule.
[[Page 8650]]
Paragraph IV(A)(2) prohibits Defendants from signing a contract
with a renewal term longer than one year in length, down from the
three-year renewal term used as a standard in the Memphis and Dubuque
markets.
Paragraph IV(A)(3) increases the period of time that a customer may
notify Defendants of its intention not to renew the contract from a
period ending 60 days before the end of any initial or renewal term to
a period ending 30 days before the end of any such term. This allows
the customer to make a decision concerning renewal closer to the end of
the contract term. A customer is more likely to consider whether or not
it wants its existing contract renewed the closer that customer is to
the end of the contract term. Paragraph IV(A)(3) assures that a
customer will be able to choose not to renew its contract up to 30 days
from the end of the contract term. Paragraph IV(A)(3) also eliminates
the requirement that a customer give its nonrenewal notice in writing
and send it to Defendants by certified mail. A telephone call or letter
is sufficient under the proposed Final Judgment. These changes in the
notification provisions make it easier for the customer not to renew
within the terms of the contract. This, in turn, enhances customer
choice and enables small incumbents to compete for more customers.
A liquidated damages provision is intended to allow a seller to
recover otherwise unrecoverable costs where the amount of the damage
resulting from a breach of contract is difficult to determine.
Defendants do incur some unrecoverable costs, including sales costs, in
contracting with customers for small containerized solid waste hauling
services. The contract currently most widely used by Defendants in the
relevant markets contains the following liquidated damages provision
for early termination: the customer must pay six times its most recent
monthly charge unless the contract has a remaining term of less than
six months, in which case the customer pays its most recent monthly
charge times the number of months remaining in its contract term. If
this case went to trial, the United States believes it could prove that
these liquidated damages far surpass the contracting costs the
Defendants incur, and that, in the relevant markets where Defendants
have market power, Defendants have threatened to enforce such
liquidated damages provisions with the effect that customers did not
switch to new entrants and small incumbents when they desired to do so.
In the presence of market power, the threat of enforcing large
liquidated damages provisions can deter sufficient customers from
switching to a competitor and harm competition.
Paragraphs IV(A) (4) and (5) reduce the amount of liquidated
damages Defendants can collect from a customer. The liquidated damages
Defendants may collect from a customer in the relevant markets during
the first year of the initial term of a customer's contract are reduced
to the greater of three times the customer's prior monthly charge or
average monthly charge over the prior six months. A firm that has been
a customer of a Defendant for a continuous period in excess of one year
can be required to pay Defendants no more than two times the greater of
the customer's prior monthly charge or average monthly charge over the
prior six months. The changes made in the liquidated damages provisions
make it less expensive (and therefore more likely) that a customer can
switch to a competing hauler should it choose to do so during the
contract term. Defendants have incurred costs to sign small
containerized solid waste hauling customers to contracts. However, as
customers pay their monthly bills over time, the unrecovered amount of
those costs decreases. That fact is reflected in the proposed Final
Judgment by the reduction of the liquidated damages Defendants may
collect once a firm has been Defendants' customer for more than one
year.
The contracts predominantly used by Defendants in the relevant
markets currently give Defendants the exclusive right to perform all of
a customer's solid waste hauling services and recycling, just because
the customer has signed a contract for small containerized solid waste
hauling service. Those contracts also contain a provision requiring the
customer to give BFI the opportunity to provide the customer's need for
additional services during the contract term.\2\ Paragraph IV(A)(7) of
the proposed Final Judgment prohibits these provisions in the relevant
markets. Instead, it provides that Defendants may perform only those
services a customer selects. Defendants may perform all types of solid
waste hauling services and recycling for a customer, but only if the
customer chooses to have Defendants do so by affirmatively indicating
its desire for such additional services on the front of the
contract.\3\ The United States does not intend this provision to
prohibit Defendants from requiring that it be the exclusive supplier of
any one type of service for which it contracts with a customer. For
example, if a customer contracts with Defendants to perform small
containerized solid waste hauling service at a specific service
location, Defendants may require that it be the exclusive supplier for
that service at the location.
\2\ That provision reads: ``OPPORTUNITY TO PROVIDE ADDITIONAL
SERVICES. BFI values the opportunity to meet all of Customer's
nonhazardous waste collection and disposal needs. Customer will
provide BFI the opportunity to meet those needs and to provide, on a
competitive basis, any additional nonhazardous waste disposal and
collection services during the term of this Agreement.''
\3\ The United States anticipates that the customer should be
able to affirmatively indicate its choice of service types by
checking a box, or writing in the type of service it wants on the
front of the contract, or by some similar mechanism.
---------------------------------------------------------------------------
Paragraph IV(A)(6) of the proposed Final Judgment requires
Defendant to change the appearance and format of its contracts in the
relevant markets. If this case went to trial, evidence from customers
in those markets would show that some of them were not aware they had
signed legally binding documents. Therefore, the proposed Final
Judgment requires that the document be labeled ``CONTRACT FOR SOLID
WASTE SERVICES'' in large letters. Furthermore, evidence from customers
in the relevant markets would show that the contractual provisions that
enable a firm with market power to restrict customers from switching to
a competitor are in small print and not readily noticed by all
customers. The proposed Final Judgment requires that the contracts used
in the relevant markets be easily readable in formatting and type-face.
B. Transition Rules
In the Stipulation consenting to the entry of the proposed Final
Judgment, Defendants agreed to abide by the provisions of the proposed
Final Judgment immediately upon the filing of the Complaint, i.e., as
of February 15, 1996. Among other things, the transition provisions
described herein will require Defendants to abide by the foregoing
limitations and prohibitions when entering into any contracts with new
small containerized hauling customers after February 15, 1996. Certain
additional provisions of the proposed Final Judgment also apply to
existing customer contracts that are inconsistent with the proposed
Final Judgment's requirements for new customer contracts.
Under Paragraph IV(C), Defendants must offer contracts that conform
with Paragraphs IV (A) or (B) of the proposed Final Judgment to all new
customers with service locations in the Memphis and Dubuque markets
beginning today,
[[Page 8651]]
the date of the filing of the executed Stipulation.
Under Paragraph IV(D), within ninety (90) days following entry of
the Final Judgment Defendants must notify existing customers with
service locations in the Memphis market who have an initial term longer
than two years and do not otherwise comply with the proposed Final
Judgment of their right to sign a new contract complying with the
proposed Final Judgment. Defendants must send a similar notice within
thirty (30) days following entry of the Final Judgment for customers
with service locations in the Dubuque market. These notices must also
inform any customers choosing to retain their existing contracts that
no provisions inconsistent with the proposed Final Judgment will be
enforced against them. The Final Judgment provides more time for
Defendants to notify customers in Memphis than in Dubuque because
Defendants have vastly more customers in Memphis than in Dubuque; they
will need a longer time to provide the required notices and answer
consumer inquiries in Memphis than they will need in Dubuque. With
regard to municipal and government entities, Defendants are not
required to notify those entities with nonconforming contracts that
were awarded on the basis of a formal request for bids or a formal
request for proposals issued by the customer.
Paragraph IV(E) requires Defendants to give an additional notice in
the form of a reminder to any customer subject to a nonconforming
contract that enters a renewal term 120 days or more after the entry to
the proposed Final Judgment. Defendants must send the reminder to each
such customer ninety days or more prior to the effective date of the
renewal term. The reminder informs the customer that it must cancel its
contract by a certain date or the contract will renew. It also reminds
the customer that it may enter into a new contract conforming to the
proposed Final Judgment on request and that terms in the customer's
existing contract that are inconsistent with the new form will not be
enforced against it. Defendants may send this reminder as part of a
monthly bill, as long as it appears on a separate page and in large
print so that it will be noticeable.
Under Paragraph IV(F), Defendants may enforce existing contract
provisions only to the extent consistent with the Final Judgment upon
entry of the Final Judgment by the Court.
Finally, under paragraphs IV (G) and (H), the proposed Final
Judgment makes clear that contracts awarded by municipal or government
entities on the basis of a formal request for bids or proposals issued
by the customer need not comply with Paragraphs IV(A)-(F). Moreover,
nothing in the proposed Final Judgment requires Defendants to do
business with any customer.
Paragraphs IV (C)-(F) further two consistent goals. Opportunities
for competition in small containerized hauling service in the relevant
markets will be fostered by a rapid end to the provisions that
significantly raise entry barriers in the relevant markets. At the same
time, the transition rules avoid creating any unnecessary disruption of
the customers' trash hauling service that might result from voiding all
nonconforming contracts. Existing customers are not required to
terminate or amend their existing contracts with Defendants; the choice
belongs to the customer. However, Defendants may not enforce against
any customer any provision inconsistent with the proposed Final
Judgment.
To ensure that existing customers learn of their rights under the
proposed Final Judgment, Paragraphs IV (D) and (E) require Defendants
to notify customers of their rights under the Final Judgment and remind
them annually of their right to terminate their existing contract or to
sign a new contract form.
C. Enforcement
Section V of the proposed Final Judgment establishes standards and
procedures by which the Department of Justice may obtain access to
documents and information from Defendants related to their compliance
with the proposed Final Judgment.
D. Duration
Section VI of the proposed Final Judgment provides that the Final
Judgment will expire on the tenth year after its entry. Jurisdiction
will be retained by the Court to conduct further proceedings relating
to the Final Judgment, as specified in Section VI.
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 60 days preceding the
effective date of the proposed Final Judgment within which any person
may submit to the United States written comments regarding the proposed
Final Judgment. Any person who wishes to comment should do so within
sixty (60) days of the date of publication of this Competitive Impact
Statement in the Federal Register. 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 response of the United States will be filed with the
Court and published in the Federal Register.
Written comments should be submitted to: Anthony V. Nanni, Chief,
Litigation I Section, Antitrust Division, United States Department of
Justice, 1401 H Street, N.W., Suite 4000, Washington, D.C. 20530. The
proposed Final Judgment provides that the Court retains jurisdiction
over this action, and the parties may apply to the Court for any order
necessary or appropriate for the modification, interpretation, or
enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, litigation against Defendants. The United States could
have brought suit and sought preliminary and permanent injunctions
against the use and enforcement of these contracts by Defendants in the
relevant markets. The United States is satisfied, however, that the
relief outlined in the proposed Final Judgment will eliminate
Defendants' ability to use restrictive and anticompetitive contracts to
maintain and enhance their market power in the relevant markets. The
United States believes that these contracts will no longer inhibit the
ability of a new entrant to compete with the Defendants. The relief
sought will allow new entry
[[Page 8652]]
and expansion by existing firms in those markets.
VII. Standard of Review Under the APPA for Proposed Final Judgment
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.'' In making that
determination, the court may consider--
(1) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment 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). As the D.C. Circuit recently held, this statute
permits a court to consider, among other things, the relationship
between the remedy secured and the specific allegations set forth in
the government's complaint, whether the decree is sufficiently clear,
whether enforcement mechanisms are sufficient, and whether the decree
may positively harm third parties. See United States v. Microsoft, 56
F.3d 1448, 1462 (D.C. Cir. 1995). In conducting this inquiry, ``the
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.''
\4\
\4\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest''
determination can be made properly on the basis of the Competitive
Impact Statement and Response to Comments filed pursuant to the
APPA. Although the APPA authorizes the use of additional procedures,
15 U.S.C. Sec. 16(f), those procedures are discretionary. A court
need not invoke any of them unless it believes that the comments
have raised significant issues and that further proceedings would
aid the court in resolving those issues. See H.R. Rep. 93-1463, 93rd
Cong. 2d Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News
6535, 6538.
---------------------------------------------------------------------------
Rather, 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.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.
61,508, at 71,980 (W.D. Mo. 1977).
The Court's inquiry, under the APPA, is whether the settlement is
``within the reaches of the public interest.'' \5\ The proposed Final
Judgment enjoins the Defendants' continued use of overly restrictive
contract terms and opens local markets to increased competition, thus
effectively furthering the public interest.
\5\ United States v. Bechtel, 648 F.2d 660, 666 (9th Cir.),
cert. denied, 454 U.S. 1083 (1981); see United States v. BNS, Inc.,
858 F.2d 456, 463 (9th Cir. 1988); United States v. National
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); United
States v. Gillette Co., 406 F. Supp. at 716. See also United States
v. American Cyanamid Co., 719 F.2d 558, 565 (2d Cir. 1983), cert.
denied, 465 U.S. 1101 (1984); United States v. American Tel. and Tel
Co., 552 F. Supp. 131, 150 (D.D.C. 1982), aff'd sub nom. Maryland v.
United States, 460 U.S. 1001 (1983) quoting United States v.
Gillette Co., supra, 406 F. Supp. at 716; United States v. Alcan
Aluminum, Ltd., 605 F. Supp. 619, 622 (W.D. Ky 1985).
---------------------------------------------------------------------------
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: February 15, 1996.
Respectfully submitted,
Nancy H. McMillen,
Peter H. Goldberg,
DC Bar #055608,
Evangelina Almirantearena,
Attorneys, Antitrust Division, U.S. Department of Justice, 1401 H.
Street, N.W., Suite 4000, Washington, D.C. 20530, (202) 307-5777.
Certification of Service
I hereby certify that a copy of the foregoing has been served upon
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries of
Tennessee, Inc., and Browning-Ferris Industries, Inc., by placing a
copy of this Competitive Impact Statement in the U.S. mail, directed to
each of the above-named parties at the addresses given below, this 15th
day of February, 1996.
Rufus Wallingfood,
Esquire, Executive Vice President and General Counsel,
Lee Keller,
Esquire, Senior Litigation Counsel, Browning-Ferris Industries, Inc.,
757 North Eldridge Street, Houston, TX 77079.
David Foster,
Esquire, Fulbright & Jaworski, L.L.P., 801 Pennsylvania Avenue, NW,
Market Square, Washington, D.C. 20004-2604.
Richard N. Carrell,
Esquire, Fulbright & Jaworski, L.L.P., 1301 McKinney, Suite 5100,
Houston, Texas 77010-3095.
Nancy H. McMillen,
Attorney, U.S. Department of Justice, Antitrust Division, 1401 H.
Street, N.W., Suite 4000, Washington, D.C. 20530, (202) 307-5777.
United States District Court for the District of Columbia
In the matter of United States of America, Plaintiff, v.
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries
of Tennessee, Inc., and Browning-Ferris Industries, Inc.,
Defendants.
[Case number: 1-96-V00297]
Judge: Thomas Penfield Jackson
Deck Type: Antitrust.
Date Stamp: Feb. 15, 1996.
Motion of United States to Exclude Case From all Discovery Requirements
and to Follow the Procedures of the Antitrust Procedures and Penalties
Act
The United States of America hereby moves the Court for an order to
exclude this case from all discovery requirements under the Federal
Rules of Civil Procedure given that the disposition of a negotiated
civil antitrust case brought and settled by the United States is
governed by the Antitrust Procedures and Penalties Act, 15 U.S.C. 16
(b)-(h) [hereinafter ``the APPA''].
As set forth below, the parties have consented to the entry of the
proposed Final Judgment without trial or adjudication of any issue of
fact or law, and without the Final Judgment constituting any evidence
against or an admission by any party with respect to any such issue.
Pursuant to the procedures of the APPA, discovery between the parties
is unnecessary and would be contrary to the intentions of the parties.
Therefore, the United States respectfully requests that the Court enter
the attached Order which excludes the case from discovery requirements
of the Federal Rules of Civil Procedure, and states that the
disposition of the case will be consistent with the APPA.
1. On February 15, 1996, the United States filed a Complaint and a
[[Page 8653]]
Stipulation by which the parties agreed to the Court's entry of an
attached proposed Final Judgment following compliance with the APPA.
2. The United States also filed on February 15, 1996, a Competitive
Impact Statement as required by 15 U.S.C. 16(b).
3. The APPA also requires the United States to publish a copy of
the proposed Final Judgment and the Competitive Impact Statement in the
Federal Register. It further requires the publication of summaries of
the terms of the proposed Final Judgment and the Competitive Impact
Statement in at least two newspapers of general circulation. This
notice will inform members of the public that they may submit comments
about the Final Judgment to the United States Department of Justice,
Antitrust Division. 15 U.S.C. 16 (b)-(c).
4. Following such publication in the newspapers and Federal
Register, a sixty-day waiting period will begin. During this time, the
United States will consider, and at the close of that period respond
to, any public comments that it receives. It will publish the comments
and its responses in the Federal Register. 15 U.S.C. 16(d).
5. After the expiration of the sixty-day period, the United States
will file with the Court the comments, the Government's responses, and
a Motion For Entry of the Final Judgment. 15 U.S.C. 16(d).
6. After the filing of the Motion for Entry of the Final Judgment,
the Court may enter the Final Judgment without a hearing, if it finds
that the Final Judgment is in the public interest. 15 U.S.C. 16 (e)-
(f).
7. The parties fully intend to comply with the requirements of the
APPA.
As stated above, the Antitrust Procedures and Penalties Act governs
the disposition of civil antitrust cases brought and settled by the
United States. Discovery between the parties, which have consented to
the proposed settlement filed with the Court, is unnecessary.
Accordingly, the attached Order is justified and should be entered by
the Court.
Respectfully submitted,
Nancy H. McMillen,
Trial Attorney, U.S. Department of Justice, Antitrust Division, 1401 H
Street, NW., Suite 4000, Washington, DC 20530, Tel: (202) 307-5777.
Certificate of Service
I hereby certify that on February 15, 1996, a true and correct copy
of the foregoing has been served on the parties below by placing a copy
of this MOTION OF UNITED STATES TO EXCLUDE CASE FROM ALL DISCOVERY
REQUIREMENTS AND TO FOLLOW THE PROCEDURES OF THE ANTITRUST PROCEDURES
AND PENALTIES ACT in the U.S. Mail, postage prepaid, to the address
given below:
For Defendants Browning-Ferris Industries of Iowa, Inc.,
Browning-Ferris Industries of Tennessee, Inc., and Browning-Ferris
Industries, Inc.:
David Foster, Esquire,
Fulbright & Jaworski, L.L.P., 801 Pennsylvania Ave., N.W., Market
Square, Washington, D.C. 20004-2604.
Rufus Wallingford, Esquire,
Executive Vice President and General Counsel,
Lee Keller, Esquire,
Senior Litigation Counsel, Browning-Ferris Industries, Inc., 757 North
Eldridge Street, Houston, TX 77079.
Richard N. Carrell, Esquire,
Fulbright & Jaworski, L.L.P., 1301 McKinney, Suite 5100, Houston, TX
77010-3095.
Nancy H. McMillen,
Trial Attorney, U.S. Department of Justice, Antitrust Division, 1401 H
Street, N.W., Suite 4000, Washington, D.C. 20530, (202) 307-5777.
United States District Court for the District of Columbia
In the matter of United States of America, Plaintiff, v.
Browning-Ferris Industries of Iowa, Inc., Browning-Ferris Industries
of Tennessee, Inc., and Browning-Ferris Industries, Inc.,
Defendants.
[Civil Action No.: 1-96-V00297]
Filed: Feb. 15, 1996.
Order Excluding Case From All Discovery Requirements and To Follow the
Procedures of the Antitrust Procedures and Penalties Act
Plaintiff, the United States of America, has moved the Court to
exclude this case from all discovery requirements under the Federal
Rules of Civil Procedure given that the disposition of negotiated civil
antitrust consent decrees are governed by the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16 (b)-(h). The Court is of the opinion that
this motion should be granted.
It is therefore ORDERED that this case is excluded from all
discovery requirements under the Federal Rules of Civil Procedure.
It is also therefore ORDERED that the procedures to be followed in
this case shall be consistent with the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16 (b)-(h).
Dated: __________
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UNITED STATES DISTRICT JUDGE.
[FR Doc. 96-5033 Filed 3-4-96; 8:45 am]
BILLING CODE 4410-01-M
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