United States v. Allied Waste Industries, Inc. and Browning Ferris Industries, Inc., Civ. No. 99 CV 01962; Proposed Final Judgment and Competitive Impact Statement
Federal RegisterAug 6, 1999
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DEPARTMENT OF JUSTICE
Antitrust Division
[Case No. 1: 99CVO1962]
United States v. Allied Waste Industries, Inc. and Browning
Ferris Industries, Inc., Civ. No. 99 CV 01962; Proposed Final Judgment
and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Hold Separate Stipulation and Order, and Competitive Impact Statement
have been filed with the United States District Court for the District
of Columbia, Washington, DC, in United States v. Allied Waste
Industries, Inc. and Browning-Ferris Industries, Inc., Civ. No. 99 CV
01962.
On July 20, 1999, the United States filed a Complaint, which
alleged that Allied's proposed acquisition of Browning-Ferris
Industries, Inc. (``BFI'') would violate section 7 of the Clayton Act,
15 U.S.C. 18, by substantially lessening competition in waste
collection and/or disposal in 18 markets around the country, including
Akron/Canton, OH; Atlanta, GA; Boston, MA; Charlotte, NC; Chicago, IL;
Dallas, TX; Davenport, IA; Denver, CO; Detroit, MI; Evansville, IN;
Joplin/Lamar, MO; Kalamazoo/Battle Creek, MI; Moline, IL; Oakland, CA;
Oklahoma City, OK; Rock Falls/Dixon, IL; Rockford, IL; and Springfield,
MO. The proposed Final Judgment, filed on July 20, 1999, requires
Allied and BFI to divest commercial waste collection and/or municipal
solid waste disposal operations in each of the geographic areas alleged
in the Complaint.
Public comment is invited within the statutory 60-day comment
period. Such comments and responses thereto will be published in the
Federal Register and filed with the Court. Comments should be directed
to J. Robert Kramer II, Chief, Litigation II Section, Antitrust
Division, U.S. Department of Justice, 1401 H Street, NW, Suite 3000,
Washington, DC 20530 [telephone: (202) 307-0924].
Constance K. Robinson,
Director of Operations & Merger Enforcement.
JUDGE: Ricardo M. Urbina; DECK TYPE: Antitrust; DATE STAMP: 7/20/
1999
Hold Separate Stipulation and Order
It is hereby stipulated and agreed by and between the undersigned
parties, subject to approval and entry by the Court, that:
[[Page 42963]]
I
Definitions
As used in this Hold Separate Stipulation and Order:
A. Allied means defendant Allied Waste Industries, Inc., a Delaware
corporation with its headquarters in Scottsdale, Arizona, and includes
its successors and assigns, and its subsidiaries, divisions, groups,
affiliates, directors, officers, managers, agents, and employees.
B. BFI means defendant Browning-Ferris Industries, Inc., a Delaware
corporation with its headquarters in Houston, Texas, and includes it
successors and assigns, and its subsidiaries, divisions, groups,
affiliates, directors, officers, managers, agents, and employees.
C. Relevant Disposal Assets means, unless otherwise noted, with
respect to each landfill, incinerator, or transfer station listed and
described herein, all of defendants' rights, titles and interests in
any tangible assets, including all fee and leasehold and renewal rights
in the listed landfill, incinerator or transfer station; the garage and
related facilities; offices; any related assets including capital
equipment, trucks and other vehicles, scales, power supply equipment,
interests, permits, and supplies; and all of defendants' rights, titles
and interests in any intangible assets, including any customer lists,
contracts, and accounts, or options to purchase any adjoining property.
Relevant Disposal Assets, as used herein, includes each of the
following properties:
1. Incinerator and Landfills
a. Boston, MA
BFI's American Refuel SEMASS waste-to-energy incinerator facility,
located at 141 Cranberry Highway (Route 28), Rochester, MA 02576.
b. Chicago, IL
BFI's Zion Landfill, located at 701 Green Bay Road, Zion, IL 60099,
BFI's Orchard Hills Landfill, located at 8290 Highway 251, Davis
Junction, IL 60120; and BFI's Spoon Ridge Landfill, located at Route 1
and Highway 97, Fairview, IL 61432.
c. Denver, CO
Allied's Denver Regional Landfill, located at 1141 Weld County Road
#6, Erie, CO.
d. Detroit, MI
BFI's Arbor Hills Landfill, located at 10690 West Six Mile Road,
Northville, MI 48167.
e. Evansville, IN
Allied's Blackfoot Landfill, located at 2726 East State Road,
Winslow, IN 47598.
f. Joplin/Lamar/Springfield, MO
Allied's option to purchase the proposed Southwest Regional
Landfill, located at Missouri State Highway M, Township 30N, Range 32
West, Section 34, in Jasper County, MO, which option Allied must
exercise or extend such that it will not expire any sooner than 12
months following the entry of the proposed Final Judgment:
g. Moline, IL
BFI's Quad Cities Landfill, located at 13606 Knoxville Road, Milan,
IL 61264;
h. Oakland, CA
BFI's, Vasco Road Landfill, located at 4001 North Vasco Road,
Livermore, CA; and
i. Oklahoma City, OK
BFI's Oklahoma Landfill, located at 7600 SW 15th Street, Oklahoma
City, OK 73128.
s. Transfer Stations
a. Akron/Canton, OH
Allied's RC Miller Refuse Transfer Station, located at 1800 19th
Street, Canton, OH;
b. Atlanta, GA
(i) Allied's Southern States Environmental Transfer Station,
located at 129 Werz Industrial Boulevard, Newnan, GA 30263;
(ii) Allied's Fayette County Transfer Station, located at 211 First
Manassas Mile Road, Fayetteville, GA 30214; and
(iii) BFI's Marble Mill Road Transfer Station, located at 317
Marble Mill Road, Marietta, GA 30060;
c Boston, MA
BFI's Holliston Transfer Station, located at 115 Washington Street,
Holliston, MA 01746; BFI's Auburn Transfer Station, located at 15
Hardscrabble Road, Auburn, MA 01501; and BFI's Braintree Transfer
Station, located at 257 Ivory Street, Braintree, MA 02184;
d. Charlotte, NC
Allied's Charlotte Transfer Station, located at 3130 I-85 Service
Road North, Charlotte, NC 28206;
e. Chicago, IL
BFI's Melrose Park 73300 Transfer Station, located at 4700 W. Lake
Street, Melrose Park, IL 60160; BFI's Rolling Meadows Transfer Station,
located at 3851 Berdnick Street, Rolling Meadows, IL 60008; BFI's
DuKane Transfer Station, located at 3 N 261 West Powis Road, West
Chicago, IL 60185; BFI's Northbrook-Brooks Transfer Station, located at
2750 Shermer Road, Northbrook, IL 60062; and BFI's Active/Evanston
Transfer Station, located at 1712 Church Street, Evanston, IL 60201;
f. Denver CO
Allied's Summit Waste Jordan Road Transfer Station, located at 7120
S. Jordan Road, Denver, CO;
g. Detroit, MI
BFI's SDMA Transfer Station, located at 28315 Grosbeck Highway,
Roseville, MI 48066; and BFI's Schaefer Road Transfer Station, located
at 3051 Schaefer Road, Dearborn, MI 48126;
h. Evansville, IN
Allied's Koester Transfer Station, located at 12800 Warrick-County
Line Road, Evansville, IL 47711;
i. Kalamazoo/Battle Creek, MI
BFI's Kalamazoo Transfer Station, located at 28002 Cork Street,
Kalamazoo, MI 49001; and
j. Springfield, MO
Allied's Tates Transfer Station, located at Route 2, Box 69,
Verona, MO 65769.
D. Relevant Hauling Assets, unless otherwise noted, means with
respect to each commercial waste collection route or other hauling
asset described herein, all tangible assets, including capital
equipment, trucks and other vehicles, containers, interests, permits,
supplies, real property and improvements to real property (i.e.,
buildings and garages); and it includes all intangible assets,
including hauling-related customer lists, contracts, leasehold
interests, and accounts.
Relevant Hauling Assets, as used herein, includes the assets in the
following locations:
i. Akron, OH
Allied's front-end and rear-end loader truck small container
commercial routes (hereinafter, ``commercial routes'') that serve the
cities of Akron and Canton and Summit, Stark and Portage counties,
Ohio;
2. Boston, MA
Allied's commercial routes and any commercial routes acquired by
BFI from Allied or any other person since January 1, 1999 that serve
the City of Boston and Bristol, Essex, Middlesex, Norfolk, Suffolk, and
Worcester counties, MA;
[[Page 42964]]
3. Charlotte, NC
BFI's commercial routes that serve the City of Charlotte and
Mecklenburg County, NC;
4. Chicago, IL
BFI's commercial routes that serve the City of Chicago and Cook,
DuPage, Will, Kane, McHenry, and Lake counties, IL;
5. Dallas, TX
BFI's commercial routes that serve any nonfranchised or ``open
competition'' areas of the City of Dallas and Dallas County, TX;
6. Davenport, IA/Moline, IL
BFI's commercial routes that serve the cities of Davenport and
Bettendorf, IA; Moline, East Moline, and Rock Island, IL; and Rock
Island County, IL and Scott County, IA;
7. Denver, CO
Allied's commercial routes that serve the City of Denver, and
Denver, Arapahoe, Adams, Douglas and Jefferson counties, CO;
8. Detroit, MI
BFI's commercial routes that serve the City of Detroit, Wayne,
Oakland and Macomb counties, MI;
9. Evansville, IN
Allied's commercial routes that serve the City of Evansville, IN
and Vanderburgh County, IN, including all of its commercial routes that
operate out of Allied's Evansville and Huntingburg garage facilities:
10. Kalamazoo/Battle Creek, MI
BFI's commercial routes that serve the cities of Kalamazoo and
Battle Creek and Kalamazoo and Calhoun counties, MI;
11. Oklahoma City, OK
BFI's commercial routes that serve Oklahoma City and Oklahoma
County, OK;
12. Rock Falls/Dixon, IL
BFI's commercial routes that serve the cities of Rock Falls and
Dixon and Lee and Whiteside counties, IL;
13. Rockford, IL
Allied's commercial routes that serve the City of Rockford and Ogle
and Winnebago counties, IL; and
14. Springfield, MO
Allied's commercial routes that serve the City of Springfield and
Greene and Christian counties, MO.
E. Hauling means the collection of waste from customers and the
shipment of the collected waste to disposal sites. Hauling, as used
herein, does not include collection of roll-off containers
F. Waste means municipal solid waste.
G. Disposal means the business of disposing of waste into approved
disposal sites.
II
Objectives
The Final Judgment filed in this case is meant to ensure
defendants' prompt divestitures of the Relevant Disposal Assets and the
Relevant Hauling Assets for the purpose of establishing viable
competitors in the waste disposal business or the commercial waste
hauling business, or both, to remedy the effects that the United States
alleges would otherwise result from Allied's acquisition of BFI. This
Hold Separate Stipulation and Order ensures, prior to such
divestitures, that the Relevant Disposal Assets and the Relevant
Hauling Assets are independent, economically viable, and with the
exception of assets listed in Sections I (C)(1)(f) and (2)(b)(iii),
ongoing business concerns that will remain independent and uninfluenced
by Allied (or BFI); and that competition is maintained during the
pendency of the ordered divestitures.
III
Jurisdiction and Venue
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 District of Columbia.
IV
Compliance With and Entry of Final Judgment
A. The parties stipulate that a Final Judgment in the form attached
hereto as Exhibit A may be filed with 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), and without further notice to any party
or other proceedings, provided that the United States 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.
B. Defendants shall abide by and comply with the provisions of the
proposed Final Judgment, pending the Judgment's entry by the Court, or
until expiration of time for all appeals of any Court ruling declining
entry of the proposed Final Judgment, 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 the same were
in full force and effect as an order of the Court.
C. Defendants shall not consummate the transaction sought to be
enjoined by the Complaint herein before the Court has signed this Hold
Separate Stipulation and Order.
D. This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
E. In the event (1) the United States has withdrawn its consent, as
provided in Section IV(A) above, or (2) the proposed Final Judgment is
not entered pursuant to this Stipulation, the time has expired for all
appeals of any Court ruling declining entry of the proposed Final
Judgment, and the Court has not otherwise ordered continued compliance
with the terms and provisions of the proposed Final Judgment, 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.
F. Defendants represent that the divestitures ordered in the
proposed Final Judgment can and will be made, and that defendants will
later raise no claim of mistake, hardship or difficulty of compliance
as grounds for asking the Court to modify any of the provisions
contained therein.
V
Hold Separate Provisions
Until the divestitures required by the Final Judgment have been
accomplished:
A. Defendants shall preserve, maintain, and with the exception of
assets listed in Sections I(C)(1)(f) and (2)(b)(iii), operate the
Relevant Disposal Assets and the Relevant Hauling Assets as independent
competitive businesses, with management, sales and operations of such
assets held entirely separate, distinct and apart from those of
defendants' other operations. Defendants shall not coordinate the
marketing of, or negotiation or sales by, any Relevant Disposal Asset
and Relevant Hauling Asset with defendants' other operations. Within
twenty (20) days after the filing of the Hold Separate Stipulation and
Order, or thirty (30) days after the entry of this
[[Page 42965]]
Order, whichever is later, defendants will inform the United States of
the steps defendants have taken to comply with this Hold Separate
Stipulation and Order.
B. Defendants shall take all steps necessary to ensure that (1) the
Relevant Disposal Assets and the Relevant Hauling Assets will be
maintained and, with the exception of the assets listed in Sections
I(C)(1)(f) and (2)(b)(iii), operated as independent, ongoing,
economically viable and active competitors in the waste disposal
business or commercial waste hauling business, or both; (2) management
of the Relevant Disposal Assets and the Relevant Hauling Assets will
not be influenced by Allied (or BFI); and (3) the books, records,
competitively sensitive sales, marketing and pricing information, and
decision-making concerning the Relevant Disposal Assets and the
Relevant Hauling Assets will be kept separate and apart from
defendants' other operations. Defendants' influence over the Relevant
Disposal Assets and Relevant Hauling Assets shall be limited to that
necessary to carry out defendants' obligations under this Hold Separate
Stipulation and Order and the proposed Final Judgment.
C. Defendants shall use all reasonable efforts to maintain and
increase the sales and revenues of the Relevant Disposal Assets, with
the exception of assets listed in Sections I(C)(1)(f) and (2)(b)(iii),
and the Relevant Hauling Assets, and shall maintain at 1998 or at
previously approved levels, whichever are higher, all promotional,
advertising, sales, technical assistance, marketing and merchandising
support for the Relevant Disposal Assets and Relevant Hauling Assets.
D. Defendants shall provide sufficient working capital to maintain
the Relevant Disposal Assets, with the exception of the assets listed
in Sections I(C)(1)(f) and (2)(b)(iii), and the Relevant Hauling Assets
as economically viable, and competitive ongoing businesses.
E. Defendants shall take all steps necessary to ensure that the
Relevant Disposal Assets, with the exception of assets listed in
Sections I(C)(1)(f) and (2)(b)(iii), and the Relevant Hauling Assets
are fully maintained in operable condition at no lower than their
current capacity or sales, and shall maintain and adhere to normal
repair and maintenance schedules for the Relevant Disposal Assets and
the Relevant Hauling Assets.
F. Defendants shall not, except as part of a divestiture approved
by the United States in accordance with the terms of the proposed Final
Judgment, remove, sell, lease, assign, transfer, pledge or otherwise
dispose of any of the Relevant Disposal Assets or Relevant Hauling
Assets.
G. Defendants shall maintain, in accordance with sound accounting
principles, separate, accurate and complete financial ledgers, books
and records that report on a periodic basis, such as the last business
day of every month, consistent with past practices, the assets,
liabilities, expenses, revenues and income of the Relevant Disposal
Assets and Relevant Hauling Assets.
H. Except in the ordinary course of business or as is otherwise
consistent with this Hold Separate Stipulation and Order, defendants
shall not hire, transfer, terminate, or otherwise alter the salary
agreements for any Allied or BFI employee who, on the date of
defendants' signing of this Hold Separate Stipulation and Order,
either: (1) works at a Relevant Disposal Asset or Relevant Hauling
Asset, or (2) is a member of management referenced in Section V(I) of
this Hold Separate Stipulation and Order.
I. Until such time as the Relevant Disposal Assets and Relevant
Hauling Assets are divested pursuant to the terms of the Final
Judgment, the Relevant Disposal Assets and Relevant Hauling Assets of
Allied and BFI shall be managed by Richard J. Wojahn. Mr. Wojahn shall
have complete managerial responsibility for the Relevant Disposal
Assets and Relevant Hauling Assets of Allied and BFI, subject to the
provisions of this Order and the proposed Final Judgment. In the event
that Mr. Wojahn is unable to perform his duties, defendants shall
appoint, subject to the approval of the United States, a replacement
within ten (10) working days. Should defendants fail to appoint a
replacement acceptable to the United States within ten (10) working
days, the United States shall appoint a replacement.
J. Defendants shall take no action that would interfere with the
ability of any trustee appointed pursuant to the Final Judgment to
complete the divestitures pursuant to the Final Judgment to purchasers
acceptable to the United States.
K. This Hold Separate Stipulation and Order shall remain in effect
until consummation of the divestitures contemplated by the proposed
Final Judgment or until further order of the Court.
Dated: July 19, 1999.
For Plaintiff United States of America
6Anthony E. Harris, Esquire,
U.S. Department of Justice, Antitrust Division, Litigation II Section,
1401 H Street, NW, Suite 3000, Washington, DC 20005, (202) 307-6583.
For Defendant Allied Waste Industries, Inc.
Tom D. Smith, Esquire,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113, (202) 879-3971.
For Defendant Browning-Ferris Industries, Inc.
David M. Foster, Esquire,
Fulbright & Jaworski L.L.P., 801 Pennsylvania Avenue, NW, Washington,
DC 20004-2615, (202) 662-4517.
Order
It Is So Ordered by the Court, this ____ day of ____________
----------------------------------------------------------------------
United States District Judge
Final Judgment
Whereas, plaintiff, the United States of America, having filed its
Complaint in this action on July 20, 1999, and plaintiff and
defendants, Allied Waste Services, Inc. (``Allied'') and Browning-
Ferris Industries, Inc. (``BFT''), by their respective attorneys,
having consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law herein, and without this Final
Judgment constituting any evidence against or an admission by any party
with respect to any issue of law or fact herein;
And whereas, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is the prompt and
certain divestiture of the Relevant Disposal Assets and Relevant
Hauling Assets to assure that competition is not substantially
lessened;
And whereas, the United States requires defendants to make certain
divestitures for the purpose of establishing one or more viable
competitors in the waste disposal business, the commercial waste
hauling business, or both, in the specified areas;
And whereas, defendants have represented to the United States that
the divestitures ordered herein can and will be made and that
defendants will later raise no claims of hardship or difficulty as
grounds for asking the Court to modify any of the injunctive provisions
contained below;
Now, Therefore, before the taking of any testimony, and without
trial or adjudication or any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby Ordered, Adjudged, and
Decreed as follows:
[[Page 42966]]
I
Jurisdiction
This Court has jurisdiction over each of the parties hereto and
over the subject matter of this action. The Complaint states a claim
upon which relief may be granted against defendants, as hereinafter
defined, under section 7 of the Clayton Act, as amended, 15 U.S.C. 18.
II
Definitions
As used in this Final Judgment:
A. Allied means defendant Allied Waste Industries, Inc., a Delaware
corporation with its headquarters in Scottsdale, Arizona, and includes
its successors and assigns, and its subsidiaries, divisions, groups,
affiliates, directors, officers, managers, agents, and employees.
B. BFI means defendant Browning-Ferris Industries, Inc., a Delaware
corporation with its headquarters in Houston, Texas, and includes its
successors and assigns, and its subsidiaries, divisions, groups,
affiliates, directors, officers, managers, agents, and employees.
C. Relevant Disposal Assets means, unless otherwise noted, with
respect to each landfill, incinerator, or transfer station listed and
described herein, all of defendants' rights, titles and interests in
any tangible assets, including all fee and leasehold and renewal rights
in the listed landfill, incinerator or transfer station; the garage and
related facilities; offices; all related assets including capital
equipment, trucks and other vehicles, scales, power supply equipment,
interests, permits, and supplies; and all of defendants' rights, titles
and interests in any intangible assets, including all customer lists,
contracts, and accounts, or options to purchase any adjoining property.
Relevant Disposal Assets, as used herein, includes each of the
following properties:
1. Landfills, Incinerators, and Airspace Disposal Rights
a. Boston, MA
(1) BFI's American Refuel SEMASS waste-to-energy incinerator
facility, located at 141 Cranberry Highway (Route 28), Rochester, MA
02576;
(2) Airspace disposal rights at BFI's Fall River Landfill, located
at 1080 Airport Road, Fall River, MA 02720, pursuant to which SEMASS
may dispose of up to the maximum amount of ash and ``bypass'' waste, as
now defined in the operating permit (or any modifications, amendments
or extensions thereto) of Fall River Landfill, for a period of time up
to the closure or attainment of permitted capacity of the landfill,
provided however, that defendants must commit to operate BFI's Fall
River Landfill, and its gate, scale house, and disposal area under
terms and conditions no less favorable than those provided to
defendants' own vehicles or to the vehicles of any municipality in
Massachusetts, except as to price and credit terms; and
(3) Airspace disposal rights at Ogden Martin Systems Massburn
incinerator, located at 100 Recovery Way, Haverhill, MA 01830, pursuant
to which a purchaser or purchasers may dispose as much as 1,150 tons/
day of waste, for a ten-year period of time.
b. Charlotte, NC
Allied's Lee County Landfill, located at 1301 Sumter Highway,
Bishopville, SC 29010, the sale of which will be required only if the
United States, in its sole discretion, concludes, pursuant to Sections
IV or V of the Judgment, that the purchaser of Allied's Charlotte
Transfer Station [see Section II(C)(2)(d) below] is unacceptable.
c. Chicago, IL
BFI's Zion Landfill, located at 701 Green Bay Road, Zion, IL 60099;
BFI's Orchard Hills Landfill, located at 8290 Highway 251, Davis
Junction, IL 60120; and BFI's Spoon Ridge Landfill, located at Route 1
and Highway 97, Fairview, IL, 61432.
d. Denver, CO
Allied's Denver Regional Landfill, located at 1141 Weld County Road
6, Erie, CO;
e. Detroit, MI
BFI's Arbor Hills Landfill, located at 10690 West Six Mile Road,
Northville, MI 48167;
f. Evansville, IN
Allied's Blackfoot Landfill, located at 2726 East State Road, Winslow,
IN 47598;
g. Joplin/Lamar/Springfield, MO
(1) Allied's option to purchase the proposed Southwest Regional
Landfill, located at Missouri State Highway M, Townsend 30N, Range 32
West, Section 34, in Jasper County, MO, which option Allied must
exercise or extend so that it will not expire any sooner than 12 months
following the entry of this Final Judgment; and
(2) Airspace disposal rights at Allied's Wheatland Regional
Landfill, located at Columbus, KS, pursuant to which a purchaser or
purchasers can dispose up to 700 tons/day of waste, for a period of
time up to three months after the opening of Southwest Regional
Landfill, provided, however, that for each purchaser of airspace rights
(or its designee), defendants must commit to operate Allied's Wheatland
Regional Landfill, and its gate, scale house, and disposal area under
terms and conditions no less favorable than those provided to
defendants' own vehicles or to the vehicles of any municipality in
Missouri, except as to price and credit terms;
h. Kalamazoo/Battle Creek, MI
Airspace disposal rights at Allied's Ottawa Farms Landfill, located
at 15550 68th Street, Coopersville, MI 49404, or BFI's C&C Landfill,
located at 14800 P Drive North, Marshall, MI 49068, pursuant to which a
purchaser may dispose up to 450 tons/day of waste for up to a ten-year
period of time, the sale of which will be required only if the United
States, in its sole discretion, concludes, pursuant to Sections IV or V
of the Judgment, that the purchaser of Allied's Kalamazoo Transfer
Station [see Section II(C)(2)(i) below] is unacceptable; and provided,
however, that for each purchaser of airspace rights (or its designee),
defendants must commit to operate Allied's Ottawa Farms landfill or
BFI's C&C Landfill, and its gate, scale house, and disposal area under
terms and conditions no less favorable than those provided to
defendants' own vehicles or to the vehicles of any municipality in
Michigan, except as to price and credit terms;
i. Moline, IL
BFI's Quad Cities Landfill, located at 13606 Knoxville Road, Milan,
IL 61264;
j. Oakland, CA
BFI's Vasco Road Landfill, located at 4001 North Vasco Road,
Livermore, CA; and
k. Oklahoma City, OK
BFI's Oklahoma Landfill, Located at 7600 SW 15th Street, Oklahoma
City, OK 73128.
2. Transfer Stations
a. Akron/Canton, OH
Allied's RC Miller Refuse Transfer Station, located at 180 19th
Street, Canton, OH;
Relevant Hauling Assets, as used herein, includes the assets in the
following locations:
[[Page 42967]]
1. Akron, OH
Allied's front-end and rear-end loader truck small container routes
(hereinafter, ``commercial routes'') that serve the cities of Akron and
Canton and Summit, Stark and Portage counties, Ohio;
2. Boston, MA
Allied's commercial routes and any commercial routes acquired by
BFI from Allied or any other person since January 1, 1999 that serve
the City of Boston and Bristol, Essex, Middlesex, Norfolk, Suffolk, and
Worcester counties, MA;
3. Charlotte, NC
BFI's commercial routes that serve the City of Charlotte and
Mecklenburg County, NC;
4. Chicago, IL
BFI's commercial routes that serve the City of Chicago and Cook,
DuPage, Will, Kane, McHenry, and Lake counties, IL;
5. Dallas, TX
BFI's commercial routes that serve any nonfranchised or open
competition areas of the City of Dallas and Dallas County, TX;
6. Davenport, IA and Moline, IL
BFI's commercial routes that serve the cities of Davenport and
Bettendorf, IA; Moline, East Moline, and Rock Island, IL; and Rock
Island County, IL and Scott County, IA;
b. Atlanta, GA
Allied's Southern States Environmental Transfer Station, located at
129 Werz Industrial Boulevard, Newnan, GA 30263; Allied's Fayette
County Transfer Station, located at 211 First Manassas Mile Road,
Fayettevile, FA 30214; and BFI's Marble Mill Road Transfer Station,
located at 317 Marble Mill Road, Marietta, GA 30060;
c. Boston, MA
BFI's Holliston Transfer Station, located at 115 Washington Street,
Holliston, MA 01746; BFI's Auburn Transfer Station, located at 15
Hardscrabble Road, Auburn, MA 01501; and BFI's Braintree Transfer
Station, located at 257 Ivory Street, Braintee, MA 02184;
d. Charlotte, NC
Allied's Charlotte Transfer Station, located at 3130 I-85 Service
Road North, Charlotte, NC 28206;
e. Chicago, IL
BFI's Melrose Park 73300 Transfer Station, located at 4700 W. Lake
Street, Melrose Park, IL 60160; BFI's Rolling Meadows Transfer Station,
located at 3851 Berdnick Street, Rolling Meadows, IL 60008; BFI's
DuKane Transfer Station, located at 3 N 261 West Powis Road, West
Chicago, IL 60185; BFI's Northbrook-Brooks Transfer Station, located at
2750 Shermer Road, Northbrook, IL 60062; and BFI's Active/Evanston
Transfer Station, located at 1712 Church Street, Evanston, IL 60201;
f. Denver, CO
Allied's Summit Waste Jordan Road Transfer Station, located at 7120
S. Jordan Road, Denver, CO;
g. Detroit, MI
BFI's SDMA Transfer Station, located at 28315 Grosbeck Highway,
Roseville, MI 48066; and BFI's Schaefer Road Transfer Station, located
at 3051 Schaefer Road, Dearborn, MI 48126;
h. Evansville, IN
Allied's Koester Transfer Station, located at 12800 Warrick-County
Line Road, Evansville, IN 47711;
i. Kalamazoo/Battle Creek, MI
BFI's Kalamazoo Transfer Station, located at 28002 Cork Street,
Kalamazoo, MI 49001; and
j. Springfield, MO
Allied's Tates Transfer Station, located at Route 2, Box 69,
Verona, MO 65769.
D. Relevant Hauling Assets, unless otherwise noted, means with
respect to each commercial waste collection route or other hauling
asset described herein, all tangible assets, including capital
equipment, trucks and other vehicles, containers, interests, permits,
supplies; and if requested by the purchaser, real property and
improvements to real property (i.e., buildings and garages). It also
includes all intangible assets, including hauling/related customer
lists, contracts, leasehold interests, and accounts.
7. Denver, CO
Allied's commercial routes that serve the City of Denver and
Denver, Arapahoe, Adams, Douglas and Jefferson counties, CO;
8. Detroit, MI
BFI's commercial routes that serve the City of Detroit, Wayne,
Oakland and Macomb counties, MI;
9. Evansville, IN
Allied's commercial routes that serve the City of Evansville, IN
and Vanderburgh County, IN, including all of its commercial routes that
operate out of Allied's Evansville and Huntingburg garage facilities;
10. Kalamazoo/Battle Creek, MI
BFI's commercial routes that serve the cities of Kalamazoo and
Battle Creek and Kalamazoo and Calhoun counties, MI;
11. Oklahoma City, OK
BFI's commercial routes that serve Oklahoma City and Oklahoma
County, OK;
12. Rock Falls/Dixon, IL
Allied's commercial routes that serve the cities of Rock Falls and
Dixon and Lee and Whiteside counties, IL;
13. Rockford, IL
Allied's commercial routes that serve the City of Rockford, IL, and
Ogle and Winnebago counties, IL; and
14. Springfield, MO
Allied's commercial routes that serve the City of Springfield and
Greene and Christian counties, MO.
E. Hauling means the collection of waste from customers and the
shipment of the collected waste to disposal sites. Hauling, as used
herein, does not include collection of roll-off containers.
F. Waste means municipal solid waste.
G. Disposal means the business of disposing of waste into approved
disposal sites.
H. Collection of small container solid waste means collection of
waste from customers by inter alia, providing a customer with a one to
ten cubic yard container, which is picked up mechanically using a
front- or rear-end loader truck. The term excludes hand pick-up
collection service, and service using a compactor attached to, or part
of, a container.
III
Applicability
A. The provisions of this Final Judgment apply to defendants, their
successors and assigns, subsidiaries, directors, officers, managers,
agents, and employees, and 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.
B. Defendants shall require, as a condition of the sale or other
disposition of all or substantially all of their assets, or of a lesser
business unit that includes defendants' Relevant Hauling and Relevant
Disposal Assets, that the acquiring party or parties agree to be bound
by the provisions of this Final Judgment.
[[Page 42968]]
IV
Divestitures
A. In the event that Allied acquires BFI, defendants are hereby
ordered and directed, in accordance with the terms of this Final
Judgment, within one hundred and twenty (120) calendar days after the
filing of the Complaint in this matter, or five (5) days after notice
of the entry of this Final Judgment by the Court, whichever is later,
to sell all Relevant Disposal Assets and Relevant Hauling Assets as
viable, ongoing businesses to a purchaser or purchasers acceptable to
the United States, in its sole discretion.
B. Defendants shall use their best efforts to accomplish the
divestitures ordered by this Final Judgment as expeditiously and timely
as possible. The United States, in its sole discretion, may extend the
time period for any divestiture and additional period of time, not to
exceed sixty (60) calendar days.
C. In accomplishing the divestitures ordered by this Final
Judgment, defendants promptly shall make known, by usual and customary
means, the availability of the Relevant Disposal Assets and the
Relevant Hauling Assets. Defendants shall inform any person making an
inquiry regarding a possible purchase that the sale is being made
pursuant to this Final Judgment and provide such person with a copy of
this Final Judgment. Defendants shall also offer to furnish to all
prospective purchasers, subject to customary confidentiality
assurances, all information regarding the Relevant Disposal Assets and
Relevant Hauling Assets customarily provided in a due diligence process
except such information subject to attorney-client privilege or
attorney work-product privilege. Defendants shall make available such
information to the United States at the same time that such information
is made available to any other person.
D. Defendants shall not interfere with any negotiations by any
purchaser to employ any Allied (or former BFI) employee who works at,
or whose primary responsibility concerns, any disposal or hauling
business that is part of the Relevant Disposal Assets or Relevant
Hauling Assets.
E. Defendants shall permit prospective purchasers of the Relevant
Disposal Assets or Relevant Hauling Assets to have access to personnel
and to any and all environmental, zoning, and other permit documents
and information, and to make inspection of the Relevant Disposal Assets
and Relevant Hauling Assets and of any and all financial, operational,
or other documents and information customarily provided as part of a
due diligence process.
F. With the exception of the facilities described in Section
II(C)(1)(g), defendants shall warrant to each purchaser of Relevant
Disposal Assets or Relevant Hauling Assets that each asset will be
operational on the date of sale.
G. Defendants shall not take any action, direct or indirect, that
will impede in any way the operation of the Relevant Disposal Assets or
Relevant Hauling Assets.
H. Defendants shall warrant to each purchaser of Relevant Disposal
Assets or Relevant Hauling Assets that there are no material defects in
the environmental, zoning, or other permits pertaining to the operation
of each asset, and that defendants will not undertake, directly or
indirectly, following the divestiture of each asset, any challenges to
the environmental, zoning, or other permits or applications for permits
or licenses pertaining to the operation of the asset.
I. Unless the United States otherwise consents in writing, the
divestitures pursuant to Section IV, or by trustee appointed pursuant
to Section V of this Judgment, shall include all Relevant Disposal
Assets and Relevant Hauling Assets and be accomplished by selling or
otherwise conveying each asset to a purchaser in such a way as to
satisfy the United States, in its sole discretion, that the Relevant
Disposal Assets or Relevant Hauling Assets can and will be used by the
purchaser as part of a viable, ongoing business or businesses engaged
in waste disposal or hauling. The divestitures, whether pursuant to
Section IV or Section V of this Final Judgment, shall be made to a
purchaser (or purchasers) for whom it is demonstrated to the United
States's sole satisfaction that: (1) The purchaser(s) has the
capability and intent of competing effectively in the waste disposal or
hauling business in each relevant area; (2) the purchaser(s) has the
managerial, operational, and financial capability to compete
effectively in the waste disposal or hauling business in each relevant
area; and (3) none of the terms of agreement between the purchaser and
defendants gives any defendant the ability unreasonably to raise the
purchaser's costs, lower the purchaser's efficiency, or otherwise
interfere in the ability of the purchaser to compete effectively in
each relevant area.
V
Appointment of Trustee
A. In the event that defendants have not sold the Relevant Disposal
Assets or Relevant Hauling Assets within the time specified in Section
IV of this Final Judgment, the divestiture of each Relevant Disposal
Asset or Relevant Hauling Asset not sold shall be accomplished by a
trustee to be selected by the Uinted States, as its sole discretion.
Defendants shall not object to the selection of the trustess on any
grounds other than irremediable conflict of interest. Defendants must
make any such objection within five (5) business days after the United
States notifies defendants of the trustee selection.
B. After the United States's selection of the trustee, only the
trustee shall have the right to divest the unsold Relevant Disposal
Assets or Relevant Hauling Assets. The trustee shall have the power and
authority to accomplish any and all divestitures at the best price then
obtainable upon all reasonable efforts of the trustee, subject to the
provisions of Sections IV and VI of this Final Judgment, and shall have
such other powers as the Court shall deem appropriate. The trustee
shall divest the unsold Relevant Disposal Assets or Relevant Hauling
Assets in the manner that is most conducive to creating, preserving and
maintaining competition between Allied and BFI in the markets for the
collection and disposal of municipal solid waste described in the
Complaint. Subject to Section V(C) of this Final Judgment, the trustee
shall have the power and authority to hire at the cost and expense of
defendants any investment bankers, attorneys, or other agents
reasonably necessary in the judgment of the trustee to assist in the
divestitures, and such professionals and agents shall be accountable
solely to the trustee. The trustee shall have the power and authority
to accomplish the divestitures at the earliest possible time to a
purchaser or purchasers acceptable to the United States, and shall have
such other powers as this Court shall deem appropriate.
C. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the United States approves, and shall
account for all monies derived from the sale of each asset sold by the
trustee and all costs and expenses so incurred. After approval by the
Court of the trustee's accounting, including fees for its services and
those of any professionals and agents retained by the trustee, all
remaining money shall be paid to defendants and the trust shall then be
terminated. The compensation of such
[[Page 42969]]
trustee and of any professionals and agents retained by the trustee
shall be reasonable in light of the value of the divested business and
based on a fee arrangement providing the trustee with an incentive
based on the price obtained and the speed with which divestiture is
accomplished.
D. Defendants shall take no action to interfere with or impede the
trustee's accomplishment of the divestiture of the Relevant Disposal
Assets or Relevant Hauling Assets, and shall assist the trustee in
accomplishing the required divestitures. The trustee and any
consultants, accountants, attorneys, and other persons retained by the
trustee shall have full and complete access to the personnel, books,
records, and facilities for the Relevant Disposal Assets or Relevant
Hauling Assets, and to defendants' overall businesses as is reasonably
necessary to effectuate the divestiture. Defendants shall provide
financial or other information relevant to the Relevant Disposal Assets
or Relevant Hauling Assets customarily provided in a due diligence
process as the trustee may reasonably request, subject to customary
confidentiality assurances. Subject to customary confidentiality
assurances, defendants shall permit prospective acquirers of any
Relevant Disposal Assets or Relevant Hauling Assets to have reasonable
access to the information provided to the trustee and to management
personnel for the Relevant Disposal Assets or Relevant Hauling Assets,
and to make inspection of any physical facilities for the Relevant
Disposal Assets or Relevant Hauling Assets.
E. After the trustee's appointment, the trustee shall confer
regularly with designated representatives of the parties and shall file
biweekly reports with the parties and the Court setting forth the
trustee's efforts to accomplish the divestitures ordered under this
Final Judgment; provided, however, that to the extent such reports
contain information that the trustee deems confidential, such reports
shall not be filed in the public docket of the Court. Such reports
shall include the name, address and telephone number of each person
who, during the preceding period, made an offer to acquire, expressed
an interest in acquiring, entered into negotiations to acquire, or was
contacted or made an inquiry about acquiring, any interest in the
business to be divested, and shall describe in detail each contact with
any such person during that period. The trustee shall maintain full
records of all efforts made to sell the businesses to be divested.
F. The United States may object to a proposed divestiture by the
trustee in the manner prescribed in Section VI of this Final Judgment.
Defendants shall not object to a divestiture by the trustee on any
grounds other than the trustee's malfeasance. Any such objections by
defendants shall be made in the manner prescribed in Section VI of this
Final Judgment.
G. If the trustee has not accomplished such divestitures within one
hundred and twenty (120) days after its appointment, the trustee
thereupon shall file promptly with the Court a report setting forth (1)
the trustee's efforts to accomplish the required divestitures, (2) the
reasons, in the trustee's judgment, why the required divestitures have
not been accomplished, and (3) the trustee's recommendations for
completing the required divestiture; provided, however, that to the
extent such reports contain information that the trustee deems
confidential, such reports shall not be filed in the public docket of
the Court. No less than three (3) days prior to filing such report with
the Court, the trustee shall furnish a copy of such report to the
parties. Upon the filing of such report with the Court, each party
shall have the right to be heard and to make additional recommendations
consistent with the purpose of the trust. The Court shall thereafter
enter such orders as it shall deem appropriate in order to carry out
the purpose of the trust which may, if necessary, include extending the
trust and the term of the trustee's appointment by a period requested
by the United States.
VI
Notice of Proposed Divestitures
Within two (2) business days following execution of a definitive
agreement, contingent upon compliance with the terms of this Final
Judgment, to effect, in whole or in part, any proposed divestiture
pursuant to Sections IV or V of this Final Judgment, defendants or the
trustee, whichever is then responsible for effecting the divestiture,
shall notify the United States of the proposed divestiture. If the
trustee is responsible, it shall similarly notify defendants. The
notice shall set forth the details of the proposed transaction and list
the name, address, and telephone number of each person not previously
identified who offered to, or expressed an interest in or a desire to,
acquire any ownership interest in the business to be divested that is
the subject of the binding contract, together with full details of
same. Within fifteen (15) calendar days of receipt by the United States
of such notice, the United States, in its sole discretion, may request
from defendants, the proposed purchaser, or any other third party
additional information concerning the proposed divestiture and the
proposed purchaser. Defendants and the trustee shall furnish any
additional information requested from them within (15) calendar days of
the receipt of the request, unless the parties shall otherwise agree.
Within thirty (30) calendar days after receipt of the notice [or within
twenty (20) calendar days after the United States has been provided the
additional information requested from defendants, the proposed
purchaser, and any third party, whichever is later], the United States
shall provide written notice to defendants and the trustee, if there is
one, stating whether or not it objects to the proposed divestiture. If
the United States provides written notice to defendants (and the
trustee, if applicable) that it does not object, then the divestiture
may be consummated, subject only to defendants' limited right to object
to the sale under Section V(F) of this Final Judgment. Upon objection
by the United States, a divestiture proposed under Section IV or
Section V of this Final Judgment shall not be consummated. Upon
objection by defendants under the provision in Section V(F), a
divestiture proposed under Section V shall not be consummated unless
approved by the Court.
VII
Ban on Future Acquisitions
A. Without prior written approval of the United States, defendants
shall not acquire, directly or indirectly, any interest in any
business, assets, capital stock, or voting securities of any person
that, at any time during the twelve (12) months immediately preceding
such acquisition, as engaged in waste disposal or collection of small
container waste in any area listed in Section VII(B), where the
person's annual revenues from waste disposal or collection of small
container waste in the area were in excess of $1,000,000 in the 12
month period immediately preceding the proposed acquisition, or the
sale price of the assets would be in excess of $1,000,000.
B. Unless otherwise noted, the injunctive provisions in Section VII
(A) above apply whenever defendants seek to acquire any interest in any
business, assets, capital stock, or voting securities of any person
that was engaged in the disposal of waste from, or the collection
[[Page 42970]]
of small container solid waste in, any of the following areas:
Areas for Which Injunctive Provision Applies
------------------------------------------------------------------------
City Counties
------------------------------------------------------------------------
Atlanta, GA.................. Clayton, Cobb, DeKalb, Douglas, Fayette,
Fulton, Gwinett, Henry, Newton,
Paulding, Rockdale, Spalding, and Walton
counties, GA (disposal only).
Boston, MA................... Bristol, Essex, Middlesex, Norfolk,
Suffolk, and Worcester counties, MA
Charlotte, NC................ Mecklenburg County, NC
Chicago, IL.................. Will, Kane, Cook, DuPage, Lake and
McHenry counties, IL
Davenport, IA and Moline, IL. Rock Island County, IL and Scott County,
IA
Evansville, IN............... Vanderburgh County, IN
Kalamazoo/Battle Creek, MI... Kalamazoo and Calhoun counties, MI
Joplin/Lamar, MO............. Jasper and Newton counties, MO
Springfield, MO.............. Greene and Christian counties, MO
------------------------------------------------------------------------
VIII
Defendants' Additional Obligations
Defendants are hereby ordered and directed to, in accordance with
the terms of this Final Judgment:
A. Refrain from reacquiring any interest in any Relevant Disposal
Assets or Relevant Hauling Assets divested pursuant to the terms of
this Final Judgment, without prior written notice to, and written
consent of, the United States;
B. Refrain from conditioning the sale of any landfill pursuant to
this Final Judgment on any understanding, agreement or commitment,
written or understood, that the purchase (or purchasers) will agree to
sell airspace or otherwise permit defendants to dispose of waste in
that landfill; and
C. Within sixty (60) days after entry of the Final Judgment,
jointly move with the United States to modify each of the Final
Judgments in United States v. Allied Waste Industries, Inc., 7 Trade
Reg. Rep. (CCH) para.50,860 (D.D.C., filed and pending April 8, 1999);
United States v. Browning-Ferris Industries, Inc., 1996-2 Trade Cas.
(CCH) para.71,456 (D.D.C. 1996); and United States v. Browning-Ferris
Industries, Inc., 1995-2 Trade Cas. (CCH) para.71,079 (D.D.C. 1995)
(the ``consent decrees''), to provide that, for the period of time and
in the geographic areas specified in the consent decrees, defendants
and any person acquired by defendants will neither offer nor enforce
any provision of any current or future contract for the collection of
small container solid waste, the terms of which do not conform to the
injunctive provisions of the consent decrees.
IX
Affidavits
A. Within twenty (20) calendar days of the filing of the Hold
Separate Stipulation and Order in this matter and every twenty (20)
calendar days thereafter until the divestiture has been completed,
whether pursuant to Section IV or Section V of this Final Judgment,
defendants shall deliver to the United States an affidavit as to the
fact and manner of compliance with Sections IV or V of this Final
Judgment. Each such affidavit shall include, inter alia, the name,
address, and telephone number of each person who, at any time after the
period covered by the last report, made an offer to acquire, expressed
an interest in acquiring, entered into negotiations to acquire, or was
contacted or made an inquiry about acquiring, any interest in the
businesses to be divested, and shall describe in detail each contact
with any such person during that period. Each such affidavit shall also
include a description of the efforts that defendants have taken to
solicit a buyer for any and all Relevant Disposal Assets and Relevant
Hauling Assets and to provide requiring information to prospective
purchasers, including the limitations, if any, on such information.
Assuming the information set forth in the affidavit is true and
complete, any objection by the United States to information provided by
defendants, including limitations on information, shall be made within
fourteen (14) days of receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Hold
Separate Stipulation and Order in this matter, defendants shall deliver
to the United States an affidavit which describes in detail all actions
defendants have taken and all steps defendants have implemented on an
on-going basis to preserve the Relevant Disposal Assets and Relevant
Hauling Assets pursuant to Section X of this Final Judgment and the
Hold Separate Stipulation and Order entered by the Court. The affidavit
also shall describe, but not be limited to, defendants' efforts to
maintain and operate each Relevant Disposal Asset and Relevant Hauling
Asset as a viable active competitor; to maintain separate management,
staffing, sales, marketing and pricing of each asset; and to maintain
each asset in operable condition at current capacity configurations.
Defendants shall deliver to the United States an affidavit describing
any changes to the efforts and actions outlined in defendants' earlier
affidavit(s) filed pursuant to this Section within fifteen (15)
calendar days after any such change has been implemented.
C. For a one-year period following the completion of each
divestiture, defendants shall preserve all records of any and all
efforts made to preserve the Relevant Disposal Assets and Relevant
Hauling Assets that were divested and to effect the ordered
divestitures.
X
Hold Separate Order
Until the divestitures required by the Final Judgment have been
accomplished, defendants shall take all steps necessary to comply with
the Hold Separate Stipulation and Order entered by this Court.
Defendants shall take no action that would jeopardize the sale of any
Relevant Disposal Asset or Relevant Hauling Asset.
XI
Financing
Defendants are ordered and directed not to finance all or any part
of any acquisition by any person made pursuant to Sections IV or V of
this Final Judgment.
XII
Compliance Inspection
For purposes of determining or securing compliance with the Final
Judgment and subject to any legally recognized privilege, from time to
time.
A. Duly authorized representatives of the United States Department
of Justice,
[[Page 42971]]
upon written request of the Attorney General or of the Assistant
Attorney General in charge of the Antitrust Division, and on reasonable
notice to defendants made to their principal offices, shall be
permitted:
1. Access during office hours of defendants to inspect and copy all
books, ledgers, accounts, correspondence, memoranda, and other records
and documents in the possession or under the control of defendants, who
may have counsel present, relating to the matters contained in this
Final Judgment and the Hold Separate Stipulation and Order; and
2. Subject to the reasonable convenience of defendants and without
restraint or interference from them, to interview, either informally or
on the record, their officers, employees, and agents, who may have
counsel present, regarding any such matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division,
defendants shall submit such written reports, under oath if requested,
with respect to any matter contained in the Final Judgment and the Hold
Separate Stipulation and Order.
C. No information or documents obtained by the means provided in
Sections IV, VI or XII of this Final Judgment shall be divulged by a
representative of the United States 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 by
defendants to the United States, defendants represent and identify in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(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 (10) calendar days
notice shall be given by the United States to defendants prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding) to which defendants are not a party.
XIII
Retention of Jurisdiction
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 such further orders and directions as may be necessary or
appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XIV
Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XV
Public Interest
Entry of this Final Judgment is in the public interest.
Dated ____________________, 1999.
----------------------------------------------------------------------
United States District Judge
Certificate of Service
I, Anthony E. Harris, hereby certify that on July 20, 1999, I
caused a copies of the foregoing Complaint, Hold Separate Stipulation
and Order, proposed Final Judgment, and United State's Explanation of
Consent Decree Procedures to be served on each defendants by hand-
delivery and by mailing copies of the pleadings first-class, postage
prepaid, to a duly authorized legal representative, as follows:
Counsel for Defendant Allied Waste Industries, Inc.
Tom D. Smith, Esquire,
Jones, Day Reavis, & Pogue, 51, Louisiana Avenue, NW, Washington, DC
20001-2113.
Counsel for Defendant Browning-Ferris Industries, Inc.
David M. Foster, Esquire,
Fulbright & Jaworski, L.L.P., 801 Pennsylvania Avenue, NW, Washington,
DC 20004-2615.
Anthony E. Harris, Esquire,
Illinois Bar #1133713, Department of Justice, Anitrust Division, 1401 H
Street, NW, Suite 3000, Washington, DC 20530.
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files
this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On July 20, 1999, the United States filed a civil antitrust suit
that alleges that the proposed acquisition by Allied Waste Industries,
Inc. (``Allied'') of Browning-Ferris Industries, Inc. (``BFI'') would
violate Section 7 of the Clayton Act, 15 U.S.C. 18. The Complaint
alleges that in many markets throughout the United States, Allied and
BFI are two of the most significant competitors in small container
commercial waste collection, disposal of municipal solid waste
(``MSW'') (i.e., the operation of landfills, transfer stations or
incinerators), or both services.
The Complaint alleges that a combination of Allied and BFI would
substantially lessen competition in the disposal of municipal solid
waste in thirteen highly concentrated markets: Akron/Canton, Ohio;
Atlanta, Georgia; Boston, Massachusetts; Charlotte, North Carolina;
Chicago, Illinois; Denver, Colorado; Detroit, Michigan; Evansville,
Indiana; Joplin/Lamar and Springfield, Illinois; Kalamazoo/Battle
Creek, Michigan; Moline, Illinois; Oakland, California; and Oklahoma
City, Oklahoma.
The Complaint alleges that the merger also would substantially
lessen competition in the provision of small container commercial waste
collection services in fourteen highly concentrated, relevant
geographic markets: Akron/Canton, Ohio; Boston, Massachusetts;
Charlotte, North Carolina; Chicago, Illinois; Dallas, Texas; Davenport,
Iowa/Moline, Illinois; Denver, Colorado; Detroit, Michigan; Evansville,
Indiana; Kalamazoo/Battle Creek, Michigan; Oklahoma City, Oklahoma;
Rock Falls/Dixon, Illinois; Rockford, Illinois; and Springfield,
Missouri.
According to the Complaint, the loss of competition would likely
result in consumers paying higher prices and receiving fewer or lesser
quality services for the collection and disposal of waste. The prayer
for relief in the Complaint seeks: (1) A judgment that the proposed
acquisition would violate Section 7 of the Clayton Act and (2) a
permanent injunction that would prevent Allied from acquiring control
of or otherwise combining its assets with those owned by BFI.
At the time the Complaint was filed, the United States also filed a
proposed settlement that would permit Allied to complete its
acquisition of BFI, provided divestitures of certain waste collection
and disposal assets are accomplished in such a way as to preserve
competition in the affected markets. This settlement consists of a
[[Page 42972]]
proposal Final Judgment, a Hold Separate Stipulation and Order, and a
letter that outlines a standard on which the United States and the
defendants have agreed to decide whether waste collection routes that
partially serve a given geographic area, or which contain a mix of
residential and small container waste collection customers or franchise
or nonfranchised business, should be divested pursuant to the terms of
the proposed Final Judgment.\1\
---------------------------------------------------------------------------
\1\ A copy of this correspondence appears in Appendix B.
According to the proposed Final Judgment [Secs. II(D)(1)-(14), IV
and V], defendants must divest small container commercial waste
collection routes that serve customers in certain geographic areas.
Since some small container commercial waste collection routes may
serve only part of an area defined in the proposed Final Judgment,
or may contain a mix of small container commercial and other types
of customers (e.g., in Dallas, Texas franchised customers), the
United States and the defendants agreed to apply a de minimis
standard in determining whether a route may be subject to
divestiture under the Judgment. The parties agreed that defendants
must divest the entire waste collection route if, in its most recent
year of operation, the route obtained 10 percent or more of its
revenues from the provision of small container commercial waste
collection services (and in the case of Dallas, Texas, such services
from nonfranchised commercial customers), or 10 percent or more of
such revenues are generated by customers located in a geographic
area specified in the Judgment.
Applying this standard to the Boston area, for example, the
proposed Final Judgment would require defendants to divest any
Allied route (or any route that BFI acquired from Allied or any
other person after January 1, 1999), if the route obtained 10
percent or more of its revenues from commercial waste collection
customers who have business locations in the City of Boston, or
Bristol, Essex, Middlesex, Norfolk, Suffolk, or Worcester counties,
MA.
---------------------------------------------------------------------------
The proposed Final Judgment orders Allied and BFI to divest
commercial waste collection routes in each of the relevant areas in
which the Complaint alleges the merger would substantially reduce
competition in the provision of small container commercial waste
collection services. In addition, the proposed Final Judgment orders
Allied and BFI to divest an incinerator, landfills, transfer stations,
or disposal rights in such facilities in each of the relevant markets
in which the merger would substantially reduce competition in the
disposal of municipal solid waste. (A summary of the commercial waste
collection and waste disposal assets that defendants must divest
pursuant to the Judgment appears below in Appendix A.) Allied and BFI
must complete their divestitures of the waste collection and disposal
assets within 120 days after July 20, 1999, or five days after entry of
the proposed Final Judgment, whichever is later.
The Hold Separate Stipulation and Order (``Hold Separate Order'')
and the proposal Final Judgment ensure that until the divestitures
mandated by the Judgment are accomplished, the currently operating
collection and disposal assets that are to be divested will be
maintained and operated as saleable, economically viable, ongoing
concerns, with competitively sensitive business information and
decision-making divorced from that of the combined company. Allied and
BFI, subject to the United States' approval, will appoint a person to
manage the operations to be divested and ensure defendants' compliance
with the requirements of the proposed Final Judgment and Hold Separate
Order.
The parties have stipulated that the proposed Final Judgment may be
entered after compliance with the APPA. Entry of the proposed Judgment
would terminate this action, except that the Court would retain
jurisdiction to construe, modify or enforce the provisions of the
proposed Judgment and to punish violations thereof.
II. Description of the Events Giving Rise to the Violations Alleged
in the Complaint
A. The Defendants and the Proposed Transaction
Allied is the third largest waste collection and disposal firm in
the United States. Based in Scottsdale, Arizona, it provides waste
collection and disposal services in over 20 states. In 1998, Allied's
total operating revenues were in excess of $1.6 billion.
BFI, based in Houston, Texas, is the nation's second largest waste
collection and disposal firm. It provides waste collection and disposal
services throughout the country, often in direct competition with
Allied. During its 1998 fiscal year, BFI had total domestic operating
revenues of over $4.7 billion.
In March 1999, Allied announced its agreement to acquire BFI in a
stock transaction worth nearly $9.4 billion. This transaction, which
would combine two major waste industry competitors and substantially
increase concentration in a number of already highly concentrated,
difficult-to-enter waste markets, precipitated the United States's
antitrust suit.
B. The Competitive Effects of the Transaction
Waste collection firms, or ``haulers,'' contract to collect
municipal solid waste (``MSW'') from residential and commercial
customers; they transport the waste to private and public disposal
facilities (e.g., transfer stations, incinerators and landfills),
which, for a fee, process and legally dispose of waste. Allied and BFI
compete in operating waste collection routes and waste disposal
facilities.
1. The Effects of the Transaction on Competition in the Markets for
Small Container Commercial Waste Collection Services
Small container commercial waste collection service is the
collection of MSW from commercial businesses such as office and
apartment buildings and retail establishments (e.g., stores and
restaurants) for shipment to, and disposal at, an approved disposal
facility. Because of the type and volume of waste generated by
commercial accounts and the frequency of service required, haulers
organize commercial accounts into special routes, and use specialized
equipment to store, collect and transport waste from these accounts to
approved disposal sites. This equipment--one to ten cubic yard
containers for waste storage, plus front-end (and sometimes, rear-end)
loader vehicles for collection and transportation--is uniquely well
suited to the provision of small container commercial waste collection
service. Providers of other types of waste collection services (e.g.,
residential and roll-off services) are not good substitutes for small
container commercial waste collection firms. In their waste collection
efforts, other firms use different waste storage equipment (e.g.,
garbage cans or semi-stationary roll-off containers) and different
vehicles (e.g., side-load trucks), which, for a variety of reasons,
cannot be conveniently or efficiently used to store, collect or
transport waste generated by commercial accounts, and hence, are rarely
used on small container commercial waste collection routes. For
purposes of antitrust analysis, the provision of small container
commercial waste collection services constitutes a line of commerce, or
relevant service, for analyzing the effects of the merger.
The Complaint alleges that the provision of small container
commercial waste collection services takes place in compact, highly
localized geographic markets. It is expensive to ship waste long
distances in either collection or disposal operations. To minimmize
transportation costs and maximize the scale, density, and efficiency of
their waste collection operations, small container commercial waste
collection firms concentrate their customers and collection routes in
small areas. Firms with operations concentrated in a distant area
cannot easily compete against firms whose routes and customers are
locally based. Sheer distance may significantly limit a distant firm's
ability to provide
[[Page 42973]]
commercial waste collection service as frequently or conveniently as
that offered by local firms with nearby routes. Also, local commercial
waste collection firms have significant cost advantages over other
firms, and can profitably increase their charges to local commercial
customers without losing significant sales to firms outside the area.
Applying that analysis, the Complaint alleges that fourteen areas--
Akron/Canton, Ohio; Boston, Massachusetts; Charlotte, North Carolina;
Chicago, Illinois; Dallas, Texas; Davenport, Iowa/Moline, Illinois;
Denver, Colorado; Detroit, Michigan; Evansville, Indiana; Kalamazoo/
Battle Creek, Michigan; Oklahoma city, Oklahoma; Rock Falls/Dixon,
Illinois; Rockford, Illinois; and Springfield, Missouri--constitute
sections of the country, or relevant geographic markets, for the
purpose of assessing the competitive effects of a combination of Allied
and BFI in the provision of small container commercial waste collection
services. In each of these markets, Allied and BFI are two of the
largest competitors, and the combined firm would command from 25
percent to 85 percent or more of total market revenues. These fourteen
small container commercial waste collection markets generate from $2.5
million to over $200 million in annual revenues.
New entry into these markets would be difficult, time consuming,
and is unlikely to be sufficient to constrain any post-merger price
increase. Many customers of commercial waste collection firms have
entered into ``evergreen'' contacts, tying them to a market incumbent
for indefinitely long periods of time. In competing for uncommitted
customers, market incumbents can price discriminate, i.e., selectively
(and temporarily) charge unbeatably low prices to customers targeted by
entrants, a tactic that would strongly discourage a would-be competitor
from competing for such accounts, which, if won, may be very
unprofitable to serve. Taken together, the prevalence of long term
contracts and the ability of market incumbents to price discriminate
substantially increases any would-be new entrant's costs and time
necessary for it to build its customer base and obtain efficient scale
and route density to become an effective competitor in the market.
The Compliant alleges that a combination of Allied and BFI would
likely lead to an increase in prices charged to consumers of commercial
waste, collection services. The acquisition would diminish competition
by enabling the few remaining competitors to engage more easily,
frequently, and effectively in coordinated pricing interaction that
harms consumers. This is especially troublesome in markets where entry
has not proved an effective deterrent to the exercise of market power.
2. The Effects of the Transaction on Competition in Other Markets for
Disposal of Municipal Solid Waste
A number of federal, state and local safety, environmental, zoning
and permit laws and regulations dictate critical aspects of storage,
handling, transportation, processing and disposal of MSW. MSW can only
be sent for disposal to a transfer station, sanitary landfill, or
incinerator permitted to accept MSW. Anyone who attempts to dispose of
MSW in a facility that has not been approved for disposal of such
waste, risks severe civil and criminal penalties. Firms that compete in
the disposal of MSW can profitably increase their charges to haulers
for disposal of MSW without losing significant sales to other firms.
For these reasons, there are no good substitutes for disposing of MSW.
Disposal of MSW tends to occur in highly localized markets.\2\
Disposal costs are a significant component of waste collection
services, often comprising 40 percent or more of overall operating
costs. it is expensive to transport waste significant distances for
disposal. Consequently, waste collection firms strongly prefer to send
waste to local disposal sites. Sending a vehicle to dump waste at a
remote landfill increases both the actual and opportunity costs of a
hauler's collection service. Natural and man-made obstacles (e.g.,
mountains and traffic congestion), sheer distance and relative
isolation from population centers (and collection operations) all
substantially limit the ability of a remote disposal site to compete
for MSW from closer, more accessible sites. Thus, waste collection
firms will pay a premium to dispose of waste at more convenient and
accessible sites. Operators of such disposal facilities can--and do--
price discrimination, i.e., charge higher prices to customers who have
fewer local options for waste disposal.
---------------------------------------------------------------------------
\2\ Though disposal of municipal solid waste is primarily a
local activity, in some densely populated urban area there are few,
if any, local landfills or incinerators available for final disposal
of waste. In these areas, transfer stations are the principal
disposal option. A transfer station collects, processes and
temporarily stores waste for later bulk shipment by truck, rail or
barge to a more distant disposal site, typically a sanitary
landfill, for final disposal. In such markets, local transfer
stations compete for municipal solid waste for processing and
temporary storage, and sanitary landfills may compete in a broader
regional market for permanent disposal of area waste.
In this case, in several relevant areas (e.g., Akron/Canton,
Atlanta, Charlotte, Chicago, Kalamazoo/Battle Creek, and
Springfield), distant landfills may compete with local disposal
facilities (incinerators or landfills) through the use of transfer
stations. Regional landfills also compete for permanent disposal of
waste from these areas. In some areas, however, the proposed Final
Judgment requires defendants to divest transfer stations because
such divestitures may aid in the competitive viability of a
companion landfill, the divestiture of which, the United States
believes, is essential for effective relief.
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For these reasons, the Complaint alleges that, for purposes of
antitrust analysis, thirteen areas--Akron/Canton, Ohio; Atlanta,
Georgia; Boston, Massachusetts; Charlotte, North Carolina; Chicago,
Illinois; Denver, Colorado; Detroit, Michigan; Evansville, Indiana;
Joplin/Lamar/Springfield, Missouri; Kalamazoo/Battle Creek, Michigan;
Moline, Illinois; Oakland, California; and Oklahoma City, Oklahoma--are
relevant geographic markets for disposal of municipal solid waste. In
each of these markets, Allied and BFI are two of only a few significant
competitors. Their combination would command from 30 percent to well
over 90 percent of disposal capacity for municipal solid waste in
highly concentrated markets that each generate revenues of from $5
million to over $250 million annually.
Entry into disposal of municipal solid waste is difficult.
Government permitting laws and regulations make obtaining a permit to
construct or expand a disposal site an expensive and time-consuming
risk. Significant new entry into these markets is unlikely to occur in
any reasonable period of time, and hence, is not likely to prevent
exercise of market power after the acquisition.
In each listed market, Allied's acquisition of BFI would remove a
significant competitor in disposal of municipal solid waste. With the
elimination of BFI, market incumbents will no longer compete as
aggressively since they will not have to worry about losing business to
BFI. The resulting substantial increase in concentration, loss of
competition, and absence of reasonable prospect of significant new
entry or expansion by market incumbents likely to ensure that consumers
will pay substantially higher prices for disposal of MSW, collection of
small container commercial waste, or both, following the acquisition.
[[Page 42974]]
III. Explanation of the Proposed Final Judgment
A. Divestiture Provisions of the Judgment
The divestiture relief described in the proposed Final Judgment
will eliminate the anticompetitive effects of the defendants'
acquisition in the provision of small container commercial waste
collection services in, and the disposal of MSW from, the relevant
markets by establishing new, independent and economically viable
competitors in each affected market. The proposed Final Judgment
requires Allied and BFI, within 120 days after July 20, 1999, or five
days after notice of the entry of this Final Judgment by the Court,
whichever is later, to sell certain commercial waste collection assets
(``Relevant Hauling Assets'') and disposal assets (``Relevant Disposal
Assests'') as viable, ongoing businesses to a purchaser or purchasers
acceptable to the United States, in its sole discretion. The collection
assets to be divested include small container commercial waste
collection routes, trucks, customer lists, and if requested by the
purchaser, garage facilities. The disposal assets to be divested
include an incinerator, landfills, transfer stations, airspace disposal
rights and an incinerator, and certain other assets critical to
successful operation of such facilities (e.g., leasehold and renewal
rights in the particular landfill or transfer station, garages and
offices, trucks and vehicles, scales, permits, and intangible assets
such as landfill or transfer station-related customer lists and
contracts).
If Allied and BFI cannot accomplish the divestitures within the
prescribed period of time, the proposed Final Judgment provides that
the United States may appoint a trustee to complete the divestiture of
each relevant disposal asset or relevant hauling asset not sold. The
proposed Final Judgment generally provides that the assets must be
divested in such a way as to satisfy the United States, in its sole
discretion, that the assets can and will be used by the purchaser as
part of a viable, ongoing business or businesses engaged in waste
collection or disposal that can compete effectively in the relevant
area.\3\ Defendants must take all reasonable steps necessary to
accomplish the divestitures, and shall cooperate with bona fide
prospective purchasers and, if one is appointed, with the trustee.
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\3\ The proposed Final Judgment in this case, like the decree
pending in United States v. USA Waste Services, Inc., No. 98 CV 1616
(N.D. Ohio, filed July 17, 1998), also prohibits defendants from
reacquiring any of the assets divested under the terms of the
decree. See Judgment, Sec. VIII(C). While the injunctive provisions
of antitrust divestiture decrees logically and implicitly proscribe
reacquisition of divested assets, the unique circumstances of this
industry, which is rapidly consolidating and where there have been
instances of the same assets changing hands several times as a
result of such consolidation, dictated that the United States make
this proscription explicit in this case.
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If a trustee is appointed, the proposed Final Judgment provides
that defendants will pay all costs and expenses of the trustee. The
trustee's commission will be structured so as to provide an incentive
for the trustee based on the price obtained and the speed with which
the divestitures are accomplished. After his or her appointment becomes
effective, the trustee will file monthly reports with the parties and
the Court, setting forth the trustee's efforts to accomplish the
divestitures. At the end of six months, if the divestitures have not
been accomplished, the trustee and the parties will make
recommendations to the Court, which shall enter such orders as
appropriate in order to carry out the purpose of the trust, including
extending the trust or the term of the trustee's appointment.
B. Additional Injunctive Relief
1. United State's Prior Approval of Any Subsequent Acqusitions by
Defendants of Commercial Waste Collection and Waste Disposal
Competitors in Certain Highly Concentrated Markets
The Final Judgment, Sec. VII, also requires that for a five-year
period after its entry, defendants must seek and obtain written
approval from the United States beforing acquiring any person engaged
in the provision of small container waste collection service or the
disposal of municipal solid waste in the Atlanta, Boston, Charlotte,
Chicago, Davenport, IA/Moline, IL, Evansville, Kalamazoo/Battle Creek,
Joplin/Lamar, or Springfield areas, where the acquired person had
reported annual revenues of at least $1 million or the purchase price
of the person's assets is at least $1 million. This notice and prior
approval provision will assist the United States in preventing
potentially significant acquisitions by Allied of smaller waste
industry rivals in already highly-concentrated markets in transitions
that otherwise would fall outside the reporting thresholds of the Hart-
Scott-Rodino Act. Allied, BFI and other leading waste industry firms
have already made a number of such acquisitions, which, taken together,
have significantly increased concentration, and substantially reduced
competition, in many local waste markets.
2. Modification of Consent Decrees in Prior Waste Cases Involving the
Defendants
Finally, the Final Judgement, Sec. VIII, requires Allied and BFI to
join the United States in moving to modify the consent decrees in three
earlier cases--United States v. Allied Waste Industries, Inc., 7 Trade
Reg. Rep. (CCH) para. 50,860 (D.D.C., filed and pending April 8, 1999);
United States v. Browing-Ferris Industries, Inc., 1996-2 Trade Cas.
(CCH) para. 71,456 (D.D.C. 1996); and United States v. Browing-Ferris
Industries, Inc., 1995-2 Trade Cas. (CCH) para. 71,079 (D.D.C. 1995).
In essence, the modification would prohibit Allied and BFI, and any
person acquired by them, in the St. Louis, Missouri; Dubuque, Iowa,
Memphis, Tennessee; Baltimore, Maryland and southern Florida areas from
offering or enforcing evergreen clauses in small container commercial
waste collection contracts. The modifications would clarify--and in
some instances, extend--the scope of these consent decrees, and help
eliminate contractual provisions that significantly deter entry, thus
hindering competition in the provision of commercial waste collection
services in these five major markets.
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 defendant.
V. Procedures Available for Modification of the Proposed Final
Judgment
The parties 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 of the decree 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
[[Page 42975]]
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: J. Robert
Kramer II, Chief, Litigation II Section, Antitrust Division, United
States Department of Justice, 1401 H Street, NW, Suite 3000,
Washington, DC 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Judgment.
IV. 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 Allied
and BFI. The United States could have continued the litigation to seek
preliminary and permanent injunctions against Allied's acquisition of
BFI. The United States is satisfied, however, that defendants'
divestiture of the assets described in the Judgment will establish,
preserve and ensure viable competitors in each of the relevant markets
identified by the United States. To this end, the United States is
convinced that the proposed relief, once implemented by the Court, will
prevent Allied's acquisition of BFI from having adverse competitive
effects.
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) (emphasis added).
As the Court of Appeals for the District of Columbia Circuit
recently held, the APPA 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 Corp., 56 F.3d 1448, 1458-62 (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\ Rather,
\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. 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. 93-1463, 93rd Cong. 2d
Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 6535,
6538.
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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. (CCH)
para. 61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel
Corp., 648 F.2d 660, (9th Cir.), cert. denied, 454 U.S. 1083 (1981);
see also Microsoft, 56 F.3d 1448 (D.C. Cir. 1995). Precedent requires
that
The balancing of competing social and political interests
affected by a proposed antitrust consent decree must be left, in the
first instance, to the discretion of the Attorney General. The
court's role in protecting the public interest is one of insuring
that the government has not breached its duty to the public in
consenting to the decree. The court is required to determine not
whether a particular decree is the one that will best serve society,
but whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\5\
---------------------------------------------------------------------------
\5\ United States v. Bechtel Corp., 648 F.2d at 666 (citations
omitted) (emphasis added); see United States v. BNS, Inc., 858 F.2d
at 463; 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).
---------------------------------------------------------------------------
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest' (citations
omitted).'' \6\
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\6\ 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).
---------------------------------------------------------------------------
Moreover, the court's role under the Tunney Act is limited to
reviewing the remedy in relationship to the violations that the United
States has alleged in its complaint, and does not authorize the Court
to ``construct [its] own hypothetical case and then evaluate the decree
against that case,'' Microsoft, 56 F. 3d at 1459. Since ``[t]he court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by bring a case in the first
place,'' it follows that the court ``is only authorized to review the
decree itself,'' and not to ``effectively redraft the complaint'' to
inquire into other matters that the United States might have but did
not pursue. Id.
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: July 26, 1999.
[[Page 42976]]
Respectfully submitted,
Anthony E. Harris,
Illinois Bar #1133713, U.S. Department of Justice, 1401 H Street, NW,
Suite 3000, Washington, DC 20530, (202) 307-6583.
Appendix A--Summary of Waste Disposal and Collection Assets That
Must Be Divested Under the Proposed Final Judgment
I. Waste Disposal Assets
The proposed Final Judgment, Secs. II(C)(1) and (2), IV and V,
requires Allied and BFI to divest certain ``relevant disposal
assets.'' In general, this means, with respect to each incinerator,
landfill or transfer station, defendants must sell, to a purchaser
acceptable to the United States, all of their rights, titles and
interests in any tangible assets, including all fee and leasehold
and renewal rights in the listed incinerator, landfill or transfer
station; the garage and related facilities; offices, and any related
assets including capital equipment, trucks and other vehicles,
scales, power supply equipment, interests, permits, and supplies;
and all of their rights, titles and interests in any intangible
assets, including customer lists, contracts, and accounts, or
options to purchase any adjoining property. The list of disposal
facilities that must be divested includes properties in the
following locations, under the listed terms and conditions:
A. Incinerator, Landfills and Airspace Disposal Rights
1. Boston, MA
(a) BFI's American Refuel SEMASS waste-to-energy incinerator
facility, located at 141 Cranberry Highway (Route 28), Rochester, MA
02576;
(b) Airspace disposal rights at BFI's Fall River Landfill,
located at 1080 Airport Road, Fall River, MA 02720, pursuant to
which SEMASS may dispose of up to the maximum amount of ash and
``bypass'' waste, as now defined in the operating permit (or any
modifications, amendments or extension thereto) of Fall River
Landfill, for a period of time up to the closure or attainment of
permitted capacity of the landfill, provided however, that
defendants must commit to operate BFI's Fall River Landfill, and its
gate, scale house, and disposal area under terms and conditions no
less favorable than those provided to defendants' own vehicles or to
the vehicles of any municipality in Massachusetts, except as to
price and credit terms; and
(c) Airspace disposal rights at Ogden Martin Systems Massburn
incinerator, located at 100 Recovery Way, Haverhill, MA 01830,
pursuant to which a purchaser or purchasers may dispose as much as
1,150 tons/day of waste, for a ten-year period of time.
2. Charlotte, NC
Allied's Lee County Landfill, located at 1301 Sumter Highway,
Bishopville, SC 29010, the sale of which will be required only if
the United States, in its sole discretion, concludes, pursuant to
Section IV or V of the Final Judgment, that the purchaser of
Allied's Charlotte Transfer Station [see Section II(B)(4) below] in
unacceptable.
3. Chicago, IL
BFI's Zion Landfill, located at 701 Green Bay Road, Zion, IL
60099; BFI's Orchard Hills Landfill, located at 8290 Highway 251,
Davis Junction, IL 60120; and BFI's Spoon Ridge Landfill, located at
Route 1 and Highway 97, Fairview, IL, 61432.
4. Denver, CO
Allied's Denver Regional Landfill, located at 1141 Weld County
Road #6, Erie, CO.
5. Detroit, MI
BFI's Arbor Hills Landfill, located at 10690 West Six Mile Road,
Northview, MI 481667.
6. Evansville, IN
Allied's Blackfoot Landfill, located at 2726 East State Road,
Winslow, IN 47598;
7. Joplin/Lamar/Springfield, MO
(a) Allied's option to purchase the proposed Southwest Regional
Landfill, located at Missouri state Highway M, township 30N, Range
32 West, Section 34, in Jasper County, MO, which option allied must
exercise or extend so that it will not expire any sooner than 12
months following the entry of the final Judgment; and
(b) Airspace disposal rights at Allied's Wheatland Regional
Landfill, located at Columbus, KS, pursuant to which a purchaser or
purchasers can dispose up to 700 tons/day of waste, for a period of
time up to three months after the opening of southwest Regional
Landfill, provided, however, that for each purchaser of airspace
rights (or its designee), defendants must commit to operate Allied's
Wheatland Regional Landfill, and its gate, scale house, and disposal
area under terms and conditions no less favorable than those
provided to defendants' own vehicles or to the vehicles of any
municipality in Missouri, except as to price and credit terms.
8. Kalamazoo/Battle Creek, MI
Airspace disposal rights at Allied's Ottawa Farms Landfill,
located at 15550 68th Street, Coopersville, MI or BFI's C&C
Landfill, located at 14800 P drive North, Marshall, MI 49068,
pursuant to which a purchaser may dispose up to 450 tons/day of
waste for up to a ten-year period of time, the sale of which will be
required only if the United States, in its sole discretion,
concludes, pursuant to Section IV or V of the Final Judgment, that
the purchaser of Allied's Kalamazoo Transfer Station see Section
(B)(9) below] is unacceptable; and provided, however, that for each
purchaser of airspace rights (or its designee), defendants must
commit to operate Allied's Ottawa Farms Landfill or BFI's C&C
Landfill, and its gate, scale house, and disposal area under terms
and conditions no less favorable than those provided to defendants'
own vehicles or to the vehicles of any municipality in Michigan,
except as to price and credit terms;
9. Moline, IL
BFI's Quad Cities Landfill, located at 13606 Knoxville Road,
Milan, IL 61264;
10. Oakland, CA
BFI's Vasco Road Landfill, located at 4001 North Vasco Road,
Livermore, CA; and
11. Oklahoma City, OK
BFI's Oklahoma Landfill, located at 7600 SW 15th street,
Oklahoma City, OK 73128.
B. Transfer Stations
1. Akron/Canton, OH
Allied's RC Miller Refuse Transfer Station, located at 1800 19th
Street, Canton, OH;
2. Atlanta, GA
Allied's Southern States Environmental Transfer Station, located
at 129 Werz Industrial Boulevard, Newnan, GA 30263; Allied's Fayette
County Transfer Station, located at 211 First Manassas Mile Road,
Fayetteville, GA 30214; and BFI's Marble Mill Road Transfer Station,
located at 317 Marble Mill Road, Marietta, GA 30060.
3. Boston, MA
BFI's Holliston Transfer Station, located at 115 Washington
Street, Holliston, MA 01746; BFI's Auburn Transfer Station, located
at 15 Hardscrabble Road, Auburn, MA 02501; and BFI's Braintree
Transfer Station, located at 257 Ivory Street, Braintree, MA 02184.
4. Charlotte, NC
Allied's Charlotte Transfer Station, located at 3130 I-85
Service Road North, Charlotte, NC 28206.
5. Chicago, IL
BFI's Melrose Park 7330 Transfer Station, located at 4700 W.
Lake Street, Melrose Park, IL 60160; BFI's Rolling Meadows Transfer
Station, located at 3851 Berdnick Street, Rolling Meadows, IL 60008;
BFI's DuKane Transfer Station, located at 3 N 261 West Powis Road,
West Chicago, IL 60185; BFI's Northbrook-Brooks Transfer Station,
located at 2750 Shermer Road, Northbrook, IL 60062; and BFI's
Active/Evanston Transfer Station, located at 1712 Church Street,
Evanston, IL 60201.
6. Denver, CO
Allied's Summit Waste Jordan Road Transfer Station, located at
7120 S. Jordan Road, Denver, CO.
7. Detroit, MI
BFI's SDMA Transfer Station, located at 28315 Grosbeck Highway,
Roseville, MI 48066; and BFI's Schaefer Road Transfer Station,
located at 3051 Schaefer Road, Dearborn, MI 48126.
8. Evansville, IN
Allied's Koester Transfer Station, located at 12800 Warrick-
County Line Road, Evansville, IN 47711.
9. Kalamazoo/Battle Creek, MI
BFI's Kalamazoo Transfer Station, located at 28002 Cork Street,
Kalamazoo, MI 49001; and
10. Springfield, MO
Allied's Tates Transfer Station, located at Route 2, Box 69,
Verona, MO 65769.
II. Commercial Waste Collection Assets
The Final Judgment, Secs. II(D), IV and V, also orders Allied
and BFI to divest certain
[[Page 42977]]
``relevant hauling assets'' that may be used in the small commercial
waste collection business. The assets primarily include routes,
capital equipment trucks and other vehicles, containers, interests,
permits, supplies, customer lists, contracts, accounts, and if
requested by the purchaser of the assets, garages, used to service
customers along the routes in the following locations:
A. Akron, OH
Allied front-end and rear-end loader truck small container
routes (hereinafter, ``commercial routes'') that serve the cities of
Akron and Canton and Summit, Stark and Portage counties, Ohio.
B. Boston, MA
Allied's commercial routes and any commercial routes acquired by
BFI from Allied or any other person since January 1, 1999 that serve
the City of Boston and Bristol, Essex, Middlesex, Norfolk, Suffolk,
and Worcester counties, MA.
C. Charlotte, NC
BFI's commercial routes that serve the City of Charlotte and
Mecklenburg County, NC.
D. Chicago, IL
BFI's commercial routes that serve the City of Chicago and Cook,
DuPage, Will, Kane, McHenry, and Lake counties, IL.
E. Dallas, TX
BFI's commercial routes that serve any nonfranchised or open
competition areas of the City of Dallas and Dallas County, TX.
F. Davenport, IA and Moline, IL
BFI's commercial routes that serve the cities of Davenport and
Bettendorf, IA; Moline, East Moline, and Rock Island, IL; and Rock
Island County, IL and Scott County, IA.
G. Denver, CO
Allied's commercial routes that serve the City of Denver and
Denver, Arapahoe, Adams, Douglas and Jefferson counties, CO.
H. Detroit, MI
BFI's commercial routes that serve the City of Detroit, Wayne,
Oakland and Macomb counties, MI.
I. Evansville, IN
Allied's commercial routes that serve the City of Evansville, IN
and Vanderburgh County, IN, including all of its commercial routes
that operate out of Allied's Evansville and Huntingburg garage
facilities.
J. Kalamazoo/Battle Creek, MI
BFI's commercial routes that serve the cities of Kalamazoo and
Battle Creek and Kalamazoo and Calhoun counties, MI.
K. Oklahoma City, OK
BFI's commercial routes that serve Oklahoma City and Oklahoma
County, OK.
L. Rock Falls/Dixon, IL
Allied's commercial routes that serve the cities of Rock Falls
and Dixon and Lee and Whiteside counties, IL.
M. Rockford, IL
Allied's commercial routes that serve the City of Rockford, IL,
and Ogle and Winnebago counties, IL; and
N. Springfield, MO
Allied's commercial routes that serve the City of Springfield
and Greene and Christian counties, MO.
Appendix B--Agreement Regarding Routes that Partially Serve an Area
in the Judgment or Obtain Revenues From Commercial and Other Types
of Customers
July 19, 1999.
By Facsimile and U.S. Mail
Tom D. Smith, Esquire,
Jones, Day, Reavis & Pogue, 1450 G Street, NW, Washington, DC 20005-
2088.
David M. Foster, Esquire,
Fulbright & Jaworski L.L.P., 801 Pennsylvania Avenue, NW,
Washington, DC 20004-2615.
Re: Proposed Final Judgment in United States v. Allied Waste
Industries, Inc. and Browning-Ferris Industries, Inc.
Dear Messrs. Smith and Foster: I write regarding several issues
not explicitly resolved by language in the proposed Final Judgment.
Section II(D) of the Judgment defines ``Relevant Hauling
Assets'' and does so by reference to whether a defendant's route:
(a) is a front-end loader or rear-end loader small container route;
(b) ``serves'' a city or county listed in the Judgment; and (c)
solely with respect to Dallas, Texas [Judgment, Section II (D)(5)],
serves a nonfranchised or ``open competition'' area.
The United States and the defendants agree that a defendant's
waste collection route is a front-end loader or rear-end loader
small container route, which must be divested pursuant to the terms
of the Final Judgment, if the route, in its most recent year of
operation, generated ten percent or more of its revenues from: (a)
front-end loader and rear-end loader small container commercial
customers; (b) whose businesses are located in a city or county
listed in Section II of the Judgment; or (c) with respect to Section
II(D)(5), whose businesses are located in a nonfranchised or open
competition area of the Dallas area.
Please sign below if this letter accurately sets forth our
agreements with respect to the Final Judgment and you agree that the
terms set forth herein are enforceable pursuant to the terms of the
Final Judgment.
Sincerely yours,
Anthony E. Harris,
Attorney, Litigation II Section.
On Behalf of Allied Waste Industries, Inc.
Tom D. Smith, Esquire,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113
For Browning-Ferris Industries, Inc.
David M. Foster, Esquire,
Fulbright & Jaworski L.L.P., 801 Pennsylvania Avenue, NW, Washington,
DC 20004-2615.
Certificate of Service
I, Anthony E. Harris, hereby certify that on July 26, 1999, I
caused a copy of the foregoing Competitive Impact Statement to be
served on the defendants Allied Waste Industries, Inc. and Browning-
Ferris Industries, Inc. by facsimile and by mailing it first-class,
postage prepaid, to duly authorized legal representatives of those
parties, as follows:
Counsel for Defendant Allied Waste Industries, Inc.
Tom D. Smith, Esquire,
Jones, Day, Reavis & Pogue, 51 Louisiana Avenue, NW, Washington, DC
20001-2113
Counsel for Defendant Browning-Ferris Industries, Inc.
David M. Foster, Esquire,
Fulbright & Jaworski L.L.P., 801 Pennsylvania Avenue, NW, Washington,
DC 20004-2615.
Anthony E. Harris, Esquire,
Illinois Bar # 1133713, U.S. Department of Justice, Antitrust Division,
1401 H Street, NW, Suite 3000, Washington, DC 20530.
[FR Doc. 99-20163 Filed 8-5-99; 8:45 am]
BILLING CODE 4410-11-M
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.