United States, States of Ohio, Arizona, California, Colorado, Florida, Maryland, Michigan, New York, Texas, Washington and Wisconsin and Commonwealths of Kentucky and Pennsylvania v. USA Waste Services, Inc., Dome Merger Subsidiary, and Waste Management, Inc.

DEPARTMENT OF JUSTICE

Antitrust Division

[Civil No. 1:98 CV 1616 (AA)]

United States, States of Ohio, Arizona, California, Colorado,

Florida, Maryland, Michigan, New York, Texas, Washington and Wisconsin

and Commonwealths of Kentucky and Pennsylvania v. USA Waste Services,

Inc., Dome Merger Subsidiary, and Waste Management, Inc.

Response to Public Comments on Antitrust Consent Decree

Notice is hereby given pursuant to the Antitrust Procedures and

Penalties Act, 15 U.S.C. 16(b)-(h), that on September 14, 1999, the

United States filed its responses to public comments on the proposed

Final Judgment in United States, et al. v. USA Waste Services, Inc., et

al., Civil No. 1:98 CV 1616 (AA) (N.D. Ohio, filed July 16, 1998), with

the United States District Court in Cleveland, Ohio.

On July 16, 1998, the United States and 13 states filed a civil

antitrust complaint, which alleges that USA Waste Services proposed

acquisition of Waste Management would violate Section 7 of the Clayton

Act, 15 U.S.C. 18, by substantially lessening competition in waste

collection and/or disposal services, or both, in a number of markets

around the country, including Baltimore, MD; Akron/Canton, Cleveland

and Columbus, OH; Denver, CO; New York, NY; Los Angeles, CA; Detroit,

Flint and Northern Michigan; Miami; FL; Houston, TX; Louisville, KY;

Milwaukee, WI; Philadelphia, Pittsburgh, and Allentown, PA; Tucson, AR;

Portland, OR; and Gainesville, FL.

The proposed Final Judgment, filed on July 16, 1998, requires USA

Waste and Waste Management to divest commercial waste collection and/or

municipal solid waste disposal operations in each of the geographic

areas alleged in the Complaint. A modified version of the proposed

Judgment (``Modified Final Judgment''), filed on September 14, 1999,

would eliminate the defendants' contingent obligation to divest one New

York City transfer station (the Brooklyn Transfer Station, located on

Scott Avenue).

Public comment on the proposed Judgment was invited within the

statutory 60-day comment period. The public comments and the United

States' responses thereto are hereby published in the Federal Register

and have been filed with the Court. Copies of the Complaint Hold

Separate Stipulation and Order, proposed Final Judgment, Competitive

Impact Statement, and the United States' Certificate of Compliance with

Provisions of the Antitrust Procedures and Penalties Act (to which the

public comments and the United States' responses are attached),

proposed Modified Final Judgment, and the Memorandum of the United

States in Support of Entry of the Proposed Modified Final Judgment are

available for inspection in Room 215 of the Antitrust Division,

Department of Justice, 325 7th Street, NW, Washington, DC 20530

(telephone: 202-514-2481), and at the Office of the Clerk of the United

States District Court for the Northern District of Ohio, Eastern

Division, 201 Superior Avenue, Cleveland, OH 44114.

Copies of any of these materials may be obtained upon request and

payment of a copying fee.

Constance K. Robinson,]

Director of Operations & Merger Enforcement Antitrust Division.

Memorandum of the United States in Support of Entry of the Proposed

Modified Final Judgment

I. Introduction

A. The Procedural Background

On July 16, 1998, the United States, and the states of Ohio,

Arizona, California, Colorado, Florida, Maryland, Michigan, New York,

Texas, Washington, and Wisconsin, and the commonwealths of Kentucky and

Pennsylvania filed a civil antitrust complaint, which alleged that USA

Waste Services, Inc.'s (``USA Waste's'') acquisition of Waste

Management, Inc. would violate Section 7 of the Clayton Act, 15 U.S.C.

18. The Complaint alleged that in 19 geographic areas around the

country, the defendants were two of the most significant competitors in

commercial waste collection, or disposal of municipal solid waste

(i.e., operation of landfills, transfer stations and incinerators), or

both services, and that the elimination of competition as a result of

the merger could lead to higher prices or reduced services for

purchasers of waste collection or disposal services.

At the time the Complaint was filed, the parties submitted a

proposal Final Judgment that would require the defendants to divest

assets sufficient to preserve the competition that otherwise would be

lost in each of the markets in which an antitrust violation had been

alleged. The parties also filed--and the Court (per Chief Judge Matia)

entered--a Hold Separate Stipulation and Order, allowing the defendants

to complete their merger transaction, provided that they keep the

assets required to be divested separate from their own business

operations and adhere to the terms of the proposed Final Judgment

pending the United States' compliance with the notice and comment

provisions of the Antitrust Penalties and Procedures Act, 15 U.S.C.

16(b)-(h) (the ``APA'').\1\

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\1\ Nothing in the Hold Separate Order, however, prevents the

defendants from promptly selling the assets required to be divested

to an acceptable purchaser, and in this instance, the defendants

chose to do so prior to APPA compliance. In a series of transaction

beginning in September 1998 and ending in February 1999, the

defendants divested all of the assets available for sale under the

decree (except the Baltimore disposal assets) to Republic Services,

Inc. (``Republic'') for approximately $500 million. In October 1998,

the defendants sold the Baltimore disposal assets to Browning-Ferris

Industries, Inc. (``BFT'') for roughly $60 million over a ten-year

time period.

The United States, after consultation with the relevant states,

concluded that Republic and BFI were both acceptable purchasers

under the terms of the proposed Judgment. The defendants informed

the Court of the pending sales of these assets before consummation.

(See Letter from James R. Weiss, counsel for defendants USA Waste

and Waste Management, to Honorable Ann Aldrich, United States

District Judge, dated October 30, 1998).

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B. The Pending Motion To Enter the Proposed Modified Final Judgment

Today, the United States has filed a Certificate of Compliance with

Provisions of the Antitrust Procedures

[[Page 53693]]

and Penalties Act, certifying that it has notified the public of the

terms of the proposed settlement and fully responded to the public

comments that were received. The parties also have submitted, and moved

the Court to enter, a slightly modified version of the Final Judgment

that was originally proposed. A copy of the proposed Modified Final

Judgment is attached hereto as Exhibit A.

The modification affects only a single waste transfer station in a

single market, New York City, NY.\2\ As originally conceived, the

proposed Final Judgment contained a contingent divestiture, requiring

the defendants to sell the Brooklyn (or ``Scott Avenue'') Transfer

Station, a 1,000 ton/day waste disposal facility located in Brooklyn,

NY, if the proposed Nekboh Transfer Station, previously sold by the

defendants, has not been licensed or permitted within a year after

entry of the proposed Final Judgment. See Final Judgment,

Secs. II(C)(2)(i) and IV(B). The Modified Final Judgment would

eliminate the contingent divestiture of the Scott Avenue Transfer

Station (i.e., remove Secs. II(C)(2)(i) and IV(B) from the decree) and

substitute instead an immediate divestiture of either of two other New

York transfer stations, Gesuale (500 ton/day) or Vacarro (400 ton/

day).\3\

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\2\ To put the proposed modification in perspective, the

proposed Final Judgment orders the defendants to divest ownership

rights in twelve waste transfer stations (including four in New York

City) and disposal rights in as many as five other transfer

stations. In addition, the defendants were ordered to divest

disposal or ownership rights in as many as 18 different landfills.

\3\ The defendants' commitment to sell either the Gesuale or

Vacarro transfer stations and the government's agreement to join the

defendants in moving for the entry of the proposed Modified Final

Judgment, were key elements of a consent decree, filed in December

1998 in federal district court in Brooklyn, NY, and entered in May

1999 in settlement of an antitrust suit brought by the United

States, the State of New York, and others against the defendants'

acquisition of a major New York City waste industry rival, Eastern

Environmental Services, Inc. See Final Judgment in United States,

States of New York and Florida, and Commonwealth of Pennsylvania v.

Waste Management, Inc., Eastern Environmental Services, Inc., et.

al, Civil No. 98-7168 (E.D.N.Y., entered May 25, 1999) (the ``Waste/

Eastern'' case), attached hereto as Exhibit B. The federal district

court in Brooklyn (J. Block), following public notice, comment, and

government response, entered the Waste/Eastern Final Judgment on May

25, 1999, concluding that an exchange of the contingent divestiture

of the Scott Avenue Transfer Station in Brooklyn, NY, for an

immediate divestiture of the Scott Avenue Transfer Station in

Brooklyn, NY, for an immediate divestiture of one of the two smaller

New York transfer stations would be ``in the public interest.'' See

the Waste/Eastern Judgment, Secs. II(D)(2)(c), IV(A)(2), IV(L), and

XIII, Ex. B at 5, 7-8, 12 and 22 (emphasis supplied).

Although this Court must decide for itself whether the Modified

Final Judgment submitted for entry in this case would be in the

public interest, the judgment of the federal district court in

Brooklyn, NY with respect to competitive issues concerning New York

City waste transfer stations has some bearing on that issue.

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C. Reasons Why Entry of the Proposed Modification Would Be in the

Public Interest

As explained below, the United States strongly believes that entry

of the proposed Modified Final Judgment would be in the public

interest. The major reasons for including this transfer station in the

proposed decree are no longer valid. Divestiture of the Scott Avenue

Transfer Station is not necessary to ensure the defendants' continued

cooperation in licensing the Nekboh site since the purchaser of the

Nikboh permit application has the financial resources and economic

incentive to pursue on its own licensing of that transfer station.

Further, divestiture of the Scott Avenue Transfer Station is not

necessary to promote competition in the disposal of the New York City's

commercial waste because that transfer station is incapable of

effectively competing for such waste, having entered into a long term

contract to dispose of the city's residential waste.

Finally, the United States agreed to join the defendants in a

motion to eliminate the Scott Avenue Transfer Station from the pending

Final Judgment in response to the defendant's twin commitments to

divest either of two smaller, but more capable waste disposal

facilities in New York City (Gesuale or Vacarro), and two large New

York City waste transfer stations subsequently acquired by the

defendants from Eastern Environmental Services, Inc. (PJ's and Atlantic

Waste).

In our view, each of these reasons provides an independent basis

for concluding that entry of the proposed Modified Final Judgment would

be in the public interest, and taken together, they appear dispositive

of that issue. (The State of New York, the only state plaintiff whose

interests are directly affected by the proposed modification, has

authorized us to state that it concurs in the motion to enter the

proposed Modified Final Judgment and believes the modification to be in

the public interest.) \4\

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\4\ The other twelve government plaintiffs also concur and urge

the Court to enter the proposed Modified Final Judgment.

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II. Statement of the Case

A. The Complaint, Proposed Final Judgment and Competitive Impact

Statement

Although the Complaint in this case alleges that the defendants'

combination would eliminate competition in a number of waste collection

and disposal markets around the country, the critical issues here

relate to competition in the disposal of New York City waste. In that

market, the Complaint alleged, defendant USA Waste's acquisition of

defendant Waste Management's transfer stations in Brooklyn and Bronx,

NY, would substantially lessen competition in the disposal of the

city's commercial waste.\5\ The Final Judgment sought to remedy this

problem by requiring the defendants to divest Waste Management's only

waste disposal asset in the Bronx--the SPM Transfer Station [Final

Judgment, Secs. II (C)(2)(i)(1) and IV]--and to divest USA Waste's only

disposal assets in Brooklyn, the All City Transfer Station [id,

Sec. II(C)(2)(i)(3) and IV] and an application for a permit to

construct and operate a waste transfer station at 2 North 5th Street, a

site known as the proposed Nekboh Transfer Station [id.,

Sec. II(C)(2)(i)(2) and IV(B)]. The proposed Judgment further provided

that if the divested Nekboh site was not permitted within one year

after entry of the Final Judgment, then the defendants must sell a

fourth waste transfer station in New York, the Brooklyn (or ``Scott

Avenue'') Transfer Station, located at 458 Scott Avenue [id., Sec. II

(c)(2)(i)(4) and IV].

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\5\ Commercial waste is municipal solid waste generated by

commercial establishments such as restaurants or department stores,

private office and apartment buildings. ``Residential waste,'' on

the other hand, is municipal solid waste produced by single family

households and state and municipal agencies. In New York, commercial

waste must be collected and disposed of by private firms.

Residential waste is collected and disposed of by the city, which,

until recently, maintained its own network of disposal facilities.

New York, however, has recently begun contracting with private firms

for disposal of the city's residential waste since the city landfill

must be closed by 2001.

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The defendants' divestiture of the proposed Scott Avenue Transfer

Station was seen as a way both to ensure the defendant's continued

cooperation and assistance in permitting the proposed Nekboh Transfer

Station and to promote competition in disposal of New York City's

commercial waste if, for some reason, that transfer station was not

permitted and built within the prescribed time period.

In August 1998, however, the defendants agreed to divest the Nekboh

permit to Republic, one of the nation's largest waste collection and

disposal firms, which has over $2 billion in total assets. And in early

September 1998, the City of New York awarded the Scott Avenue Transfer

Station a three to five-year contract for the disposal of the city's

residential waste. With the bulk of the facility's available capacity

committed under a long-term municipal contract for disposal of

residential

[[Page 53694]]

waste, if the defendants were to divest the Scott Avenue Transfer

Station, the new owner could not complete effectively in the processing

and disposal of New York City's private commercial waste, the relevant

market the government alleged would be adversely affected by the

defendants' combination.

B. The Defendants' Acquisition of Eastern Environmental Services, Inc.

and the Parties' Resolution of the Competitive Issues Concerning the

New York City Waste Disposal Market

In early fall 1998, the defendants \6\ agreed to acquire Eastern

Environmental Services, Inc. (``Eastern''), a major competitive rival

in the disposal of New York City's residential and commercial waste.

This agreement precipitated another government antitrust suit, filed in

federal district court in Brooklyn, NY, in which the United States and

the State of New York alleged that the transaction, if consummated,

would substantially reduce competition in waste disposal services in

New York.\7\ The parties agreed to settle the Waste/Eastern case in

late December 1998 and, inter alia, to resolve all of the outstanding

issues relating to the defendants' acquisition of competitors in the

New York market.

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\6\ After the defendants USA Waste Services, Waste Management

and Dome Merger Subsidiary merged, they named the new firm ``Waste

Management, Inc.''

\7\ The complaint also alleged the merger would create

competitive problems in collection and disposal markets in

Pennsylvania and Florida, and those states were co-plaintiffs in

that lawsuit.

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The defendants agreed to divest the two New York waste transfer

stations that they would acquire from Eastern, PJ's and Atlantic Waste

Disposal. Waste/Eastern a Final Judgment, Sec. Sec. II(D)(2)(1) and

(b), IV(A)(1), Ex. B at 5, 7-8. They also agreed to divest either of

two smaller waste transfer stations, Gesuale or Vacarro, both located

in New York, NY.\8\ Id. Secs. II(D)(2)(c) and IV(A)(2). Because the

United States and the State of New York concluded that circumstances

had changed and that an immediate divestiture of a transfer station

with capacity for disposal of commercial waste was competitively better

than a contingent divestiture of Scott Avenue Transfer Station, which

no longer had such capacity, they agreed to move for entry of a

Modified Final Judgment that would eliminate the requirement that the

defendants divest the Scott Avenue Transfer Station if the Nekboh site

is not permitted within the prescribed one-year time period. Id.

Sec. IV(L), Ex. B at 12.

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\8\ The defendants later opted to divest the Vacarro Transfer

Station.

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In essence, the United States and the State of New York agreed to a

swap, trading a future divestiture of the capacity-constrained Scott

Avenue Transfer Station for an immediate divestiture of either one of

two small New York transfer stations, both with capacity available for

processing commercial waste, and the two waste transfer stations, PJ's

and Atlantic Waste, that the defendants had agreed to acquire from

Eastern.

The parties filed the proposed Waste/Eastern Judgment on December

31, 1998. Following public notice and response to public comments,\9\

the federal district court in Brooklyn entered the Final Judgment in

the Waste/Eastern case on May 25, 1999, after concluding that that

decree, including the provision requiring the United States and the

State of New York to join the defendants in a joint motion to modify

the Final Judgment in this case, would be ``in the public interest.''

Waste/Eastern Final Judgment, Sec. XIII, Ex. B at 22.

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\9\ In accordance with the APPA, the United States published

notice of the Waste/Eastern Judgment in the New York Times and the

Washington Post, newspapers of general circulation in New York, NY

and Washington, DC. The United States also published a copy of the

complaint, proposed judgment and competitive impact statement in the

Federal Register on February 26, 1999 (64 Fed. Reg. 9527), and

published its responses to the public comments on the Waste/Eastern

decree on June 11, 1999 (64 FR 31638).

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III. Argument

A. Entry of the Modified Final Judgment Would Be in the Public Interest

At this stage of the proceedings, after the United States has

certified its compliance with the public notice and response to comment

requirements of the APPA, the Court must determine whether entry of the

proposed Modified Final Judgment ``is in the public interest.'' 15

U.S.C. 16(e). As noted in our Competitive Impact Statement, 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.'' \10\ Rather,

\10\ 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 government's

competitive impact statement and response to comments filed pursuant

to the APPA. Although the APPA authorizes the use of additional

procedures, 15 U.S.C. Sec. 16(f), those procedures are

discretionary. A court need not invoke any of them unless it

believes that the comments have raised significant issues and that

further proceedings would aid the court in resolving those issues.

See H.R. 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). And ``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 omittted).'' \11\

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\11\ 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., 406 F.

Supp. 713, 716 (D. Mass. 1975); United States v. Alcan Aluminum,

Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985).

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B. The Public Comments on the Proposed Final Judgment Were Unpersuasive

``[T]his is not a case wherein objectors speak with one voice,''

United States v. Natl. Broadcasting Co., 449 F. Supp. 1127, 1144 (C.D.

Cal. 1978) (distinguishing United States v. Gillette Co., 406 F. Supp.

713, 716 (D. Mass. 1975), where the court confronted ``unified

opposition'' to a proposed consent decree). Rather, in this case, the

13 public comments submitted on the proposed Final Judgment expressed a

wide variety of views, which the United States carefully considered and

addressed, but which ultimately failed to persuade the United States to

withdraw its consent to entry of the proposed Judgment. (See

Certificate of Compliance, Ex. 3-15.)

In its responses to the public comments, the United States

carefully explained why requiring the defendants to make extensive

divestitures (id., Ex. 7-9, 12-15) or imposing more onerous

restrictions on the defendants' business operations post-merger (id.,

Ex. 1, 10) were unwarranted under the circumstances.\12\ In our view,

the proposed Final Judgment, without these additional requirements,

falls well ``within the range of acceptability'' and the broad

``reaches of the public

[[Page 53695]]

interest.'' United States v. AT&T, 552 F. Supp. at 150.

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\12\ The only comments related to the contingent divestiture of

the Scott Avenue transfer Station were from individuals who favored

converting the proposed site for the Nekboh transfer Station into an

open space or a public park (see Certificate of Compliance, Ex. 4-

6), comments which do not implicate the proposed modification.

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C. Removing the Contingent Divestiture of the Scott Avenue Transfer

Station From the Proposed Judgment Would Be in the Public Interest

This case, however, is somewhat atypical because the Modified Final

Judgment that the parties now urge the Court to enter differs somewhat

from the Final Judgment that they originally proposed.\13\ The United

States strongly believes that the difference--removal of the Scott

Avenue Transfer Station from the modified decree--is a minor change

that would make the Modified Final Judgment more effective and

procompetitive than the earlier decree the parties proposed.

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\13\ There is no requirement that the government must republish

the settlement or resolicit public comment simply because it

proposes that the Court enter a modified version of the final

judgment originally proposed. The reported cases interpreting the

APPA strongly suggest that republication is unnecessary. In United

States v. Nat'l. Broadcasting Co., 449 F. Supp. 1127 (C.D. Cal.

1978), modified, 1993-2 Trade Case. (CCH) para. 70,418 (C.D. Cal.

1993), the government amended a proposed consent decree after

comments were received, then submitted the amended proposed judgment

for approval by the court. The court said that ``the requirements of

the APPA concerning publication and consideration of public comments

have been satisfied'' (id. at 1129), and subsequently approved the

decree. Id. at 1145. See also Massachusetts Sch. of Law v. United

States, 118 F.3d 776, 778 (D.C. Cir. 1997) (relating the district

court's decision to enter a consent judgment after several

modifications had been made following the end of the public comment

period). In United States v. American Tel. & Tel. Co., 552 F. Supp.

131, 225 (D.D.C. 1982) (``AT&T''), aff'd sub nom. Maryland v. United

States, 460 U.S. 1001 (1983), Judge Greene approved a proposed

consent decree after the comment period had expired, also on the

condition that the decree be amended to add a new section. In none

of the cases did the court require republication of the amended

proposed consent decree before entry. Rather, by eventually entering

the consent judgments, the court in each case implicitly concluded

that the requirements of the APPA were satisfied by the initial

publication, comment, and response. See, e.g., Nat'l. Broadcasting

Co., 449 F. Supp. at 1129.

In any event, to the extent notice and opportunity to comment is

necessary, it was provided when the United States complied with the

APPA before entry of the Final Judgment in the Waste/Eastern case.

The competitive impact statement filed in that case discussed the

substitution of the Gesuale and Vacarro transfer stations for the

Scott Avenue Transfer Station. 64 Fed. Reg. 9538. The Judgment in

that case was published in The New York Times, prior to its entry,

and thus provided ample notice and opportunity to comment to those

persons affected most directly by the waste disposal relief in the

New York City market. See the Certificate of Compliance in the

Waste/Eastern case, 64 FR 31638, 31639 (July 11, 1999).

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First, the defendants' divestiture of the Scott Avenue Transfer

Station is not necessary to ensure that the Nekboh Transfer Station is

permitted. As noted above, the defendants subsequently sold the permit

application for the Nekboh site to Republic, now the nation's third

largest waste collection and disposal firm. With over $2 billion in

annual revenues, Republic certainly possesses the management skill,

financial wherewithal and economic incentive to pursue on its own a

permit for the proposed Nekboh Transfer Station. In addition, the

proposed Modified Final Judgment requires the defendants to cooperate

and enjoins them from interfering in any way with Republic's efforts to

obtain a permit for the Nekboh site. Modified Final Judgment,

Secs. IV(H) and VIII (B) and (C), Ex. A at 20, 28. Thus, forcing a

divestiture of the Scott Avenue Transfer Station would not advance the

timing on the permitting and opening of the Nekboh site.

Moreover, a divestiture of the defendants' Scott Avenue Transfer

Station would not promote competition in the disposal of New York

City's private commercial waste because as a consequence of a long-term

municipal contract, virtually all of that transfer station's capacity

is committed to processing the city's residential waste.

In short, the compromise the parties reached in the Waste/Eastern

case--returning the Scott Avenue Transfer Station for three transfer

stations that would resolve the competitive problems created by the

defendants' series of acquisitions of rivals in the New York City

market for disposal of commercial waste--not only avoided an expensive

and resource-intensive trial on the merits in that case, but also

obtained immediate relief, not merely a contingent remedy, that would

be more effective than that contained in the proposed Final Judgment in

this case. In these circumstances, the United States strongly believes

that entry of the proposed Modified Final Judgment in this case is

squarely in the public interest.

IV. Conclusion

For the foregoing reasons, and for the reasons set forth in the

United States' Certificate of Compliance with Provisions of the

Antitrust Procedures and Penalties Act, the United States respectfully

requests that this Court enter the proposed Modified Final Judgment.

Dated: September 13, 1999.

Respectfully submitted,

Anthony E. Harris, Illinois Bar No. 1133713,

U.S. Department of Justice, Antitrust Division, Litigation II, 1401 H

Street, NW, Suite 3000, Washington, DC 20530, (202) 307-6583.

Modified Final Judgment

Whereas, plaintiffs, the United States of America, the State of

Ohio, the State of Arizona, the State of California, the State of

Colorado, the State of Florida, the Commonwealth of Kentucky, the State

of Maryland, the State of Michigan, the State of New York, the

Commonwealth of Pennsylvania, the State of Texas, the State of

Washington, and the State of Wisconsin, and defendants USA Waste

Services, Inc. (``USA Waste'') and Waste Management, Inc. (``WMI''), 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, plaintiffs require 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 plaintiffs 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 divestiture provisions contained

below;

Now, therefore, before the taking of any testimony, and without

trial or adjudication of any issue of fact or law herein, and upon

consent of the parties hereto, it is hereby Ordered, adjudged, and

decreed as follows:

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. USA Waste means defendant USA Waste Services, Inc., a Delaware

corporation with its headquarters in Houston, Texas, and includes its

successors and assigns, and its subsidiaries (including Dome Merger

[[Page 53696]]

Subsidiary), divisions, groups, affiliates, directors, officers,

managers, agents, and employees.

B. WMI means defendant Waste Management, Inc., a Delaware

corporation with its headquarters in Oak Brook, Illinois, and includes

its successors and assigns, and its subsidiaries, divisions, groups,

affiliates, directors, officers, managers, agent, and employees.

C. Relevant Disposal Assets means, unless otherwise noted, with

respect to each landfill or transfer station listed and described

herein, all tangible assets, including all fee and leasehold and

renewal rights in the listed landfill or transfer station; the garage

and related facilities; offices; landfill- or transfer station-related

assets including capital equipment, trucks and other vehicles, scales,

power supply equipment, interests, permits, and supplies; and all

intangible assets of the listed landfill or transfer station, including

landfill- or transfer station-related 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 and Airspace Disposal Rights

a. Akron/Canton, OH

WMI's Countywide R&D Landfill, located at 3619 Gracemont Street,

SW, East Sparta, OH 44626, and known as the Countywide Landfill;

b. Columbus, OH

USA Waste's Pine Grove Landfill, located at 5131 Drinkle Road, SW,

Amanda, OH 43102;

c. Denver, CO

USA Waste's Front Range Landfill, located at 1830 County Road 5,

Erie, CO 80516-8005; and at purchaser's option, a two-year waste supply

agreement that would require defendants to dispose of a minimum of 150

tons/day of waste at the Front Range Landfill, at disposal fees to be

negotiated between purchaser and defendants;

d. Detroit, MI

USA Waste's Carleton Farms Landfill, located at 28800 Clark Road,

New Boston, MI, subject to two conditions, viz, USA Waste's obligations

to (1) dispose of ash from the Greater Detroit Resource Recovery

Center's incinerator at a separate monofill cell on this site pursuant

to an existing contract, and (2) dispose of waste from the Greater

Detroit Resource Recovery Center's bypass transfer station at this

landfill, until defendants transfer such obligation to another

landfill, which they shall use their best efforts to accomplish

expeditiously;

e. Flint, MI

USA Waste's Brent Run Landfill, located at Vienna Road, Montrose

Township, Genesee County, MI;

f. Houston, TX

(1) USA Waste's Brazoria County Landfill, located at 10310 FM-523,

Angleton, TX 77515; and

(2) Airspace disposal rights at WMI's Security Landfill, located at

19248 Highway 105E, Cleveland, TX, or WMI's Atascocita Landfill,

located at 2020 Atascocita Road, Humble, TX, or both, pursuant to which

defendants will sell to one or more purchasers rights to dispose of at

least 3.0 million tons of waste, over a ten-year period, under the

following minimum terms and conditions:

(a) The purchaser (or all purchasers combined), or their

designee(s), may dispose of up to 360,000 tons of waste/year, or a

maximum of 1,200 tons of waste/day, at either, or both of, WMI's

Security or Atascocita landfills. If more than one person purchases the

airspace disposal rights, the minimum annual and daily disposal rates

for each purchaser shall be specified in its purchase agreement, and

the total of all purchasers' maximum disposal amounts shall be no less

than 360,000 tons/year and 1,200 tons/day;

(b) For each purchaser of airspace rights (or their designee),

defendants must commit to operate the Atascocita Landfill and Security

Landfill gates, scale houses, and disposal areas under terms and

conditions no less favorable than those provided to defendants' own

vehicles or to the vehicles of any municipality in the metropolitan

Houston area, except as to price and credit terms;

(c) At the end of the first five years of the agreement, the

purchaser or purchasers will have been considered to have used a

minimum of 1.4 million tons of airspace and can have no more than 1.6

million tons left to use under the purchase agreements. If there is

more than one purchaser of the airspace, the minimum amounts used

during the first five years shall be specified in their purchase

agreements, but the total amount shall be no more than 1.4 million

tons; and

(d) At the end of the first seven years of the agreement, the

purchaser (or purchasers) will have been considered to have used a

minimum of 2.0 million tons of airspace and can have no more than 1.0

million tons left to use under the purchase agreements. If there is

more than one purchaser of the airspace, the minimum amount used during

the first five years shall be specified in their purchase agreements,

but the total amount shall be no more than 2.0 million tons;

g. Los Angeles, CA

USA Waste's Chiquita Canyon Landfill, located at 29201 Henry Mayo

Drive, Valencia, CA 91355;

h. Louisville, KY

USA Waste's Valley View Landfill, located at 9120 Sulphur Road,

Sulphur, KY 40070;

i. Miami, FL

Airspace disposal rights at USA Waste's Okeechobee Landfill,

controlled by a subsidiary of USA Waste, and located at 10800 NE 128th

Avenue, Okeechobee, FL 34972, pursuant to which defendants will sell a

total of 4.3 million tons of airspace, over a 20-year time period, to

one or more purchasers, under the following minimum terms and

conditions:

(1) The right to dispose of a maximum of 1.8 million tons of South

Florida Waste, over a 20-year time period, as follows:

(a) The purchaser (or purchasers) must commit to dispose of no more

than 600 tons/day, of South Florida Waste;

(b) The total amount of airspace used in each year may not exceed

150,000 tons; and

(2) Three options for additional airspace at Okeechobee Landfill,

exercisable at the sole discretion of the purchaser of the airspace

disposal rights, as follows:

(a) First Option: The right to dispose of an additional 1.0 million

tons of South Florida Waste at the Okeechobee Landfill, for the

remaining term of the agreement, as follows:

(i) The amount of airspace used each weekday must be at least 500

tons, but not more than 800 tons (including tonnage disposed of under

prior air space commitments); and

(ii) the amount of airspace used in the year the option is

exercised, and in each succeeding year over the term of the agreement,

may not exceed 225,000 tons (including tonnage disposed of under prior

air space commitments);

(b) Second Option: Exercisable at any time after the second

anniversary of the agreement, and after exercise of the first option,

the right to dispose of an additional 1.0 million tons of South Florida

Waste at the Okeechobee Landfill, for the remaining term of the

agreement, as follows:

(i) The amount of airspace used each weekday must be at least 600

tons, but

[[Page 53697]]

not more than 1,000 tons/day (including tonnage disposed of under prior

air space commitments); and

(ii) The amount of airspace used in the year Option Two is

exercised and in each succeeding year of the life of the rights may not

exceed 300,000 tons (including tonnage disposed of under prior air

space commitments); and

(c) Third Option: Exercisable any time after the fifth anniversary

of the agreement, and after exercise of the second option, the right to

dispose of an additional 500,000 tons of South Florida Waste, for the

remaining term of the agreement, as follows:

(i) The amount of airspace used must be at least 600 tons/weekday,

but may not exceed 1,100 tons/weekday (including tonnage disposed of

under prior air space commitments);

(ii) The amount of airspace used in the year the third option is

exercised, and in each succeeding year of the life of the rights may

not exceed 300,000 tons/year (including tonnage disposed of under prior

air space commitments); provided, that in any event,

(d) The Okeechobee Landfill Rights shall expire when the purchaser

has used the maximum tonnages available under the rights and any

exercised options, or twenty years from the date of purchase of the

rights, whichever is sooner; and

(e) For each purchaser of airspace rights (or its designee),

defendants must commit to operate the Okeechobee 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 Florida, except as to price and credit

terms;

j. Milwaukee, WI

USA Waste's Kestrel Hawk Landfill, located at 1989 Oakes Road,

Racine, WI 53406; and WMI's Mallard Ridge Landfill, located at W. 8470

State Road 11, Delavan, WI 53115;

k. New York, NY/Philadelphia, PA

WMI's Modern Landfill & Recycling, located at 4400 Mt. Piscah Road,

York, PA 17402, and known as the Modern Landfill;

l. Northeast Michigan

USA Waste's Whitefeather Landfill, located at 2401 Whitefeather

Road, Pinconning, MI; and Elk Run Sanitary Landfill, located at 20676

Five Mile Highway, Onaway, MI;

m. Pittsburgh, PA

WMI's Green Ridge Landfill, located at 717 East Huntingdon Landfill

Road, Scottdale, PA 15683, and variously known as the Green Ridge

Landfill, the Y&S Landfill, or the Greenridge Reclamation Landfill;

n. Portland, OR

USA Waste's North WASCO Landfill, located at 2550 Steele Road, the

Dalles, OR 97058; and

2. Transfer Stations, Disposal Rights and Throughput Agreements

a. Akron/Canton, OH

Throughput disposal rights of a maximum of 400 tons/day of waste,

for a ten-year time period, at WMI's Akron Central Transfer Station,

located at 389 Fountain Street, Akron, OH, under the following terms

and conditions:

(1) The purchaser (or its designee) can deliver waste to the Akron

Central Transfer Station for processing and, at the purchaser's option,

load the processed waste into the purchaser's (or its designee's)

vehicles for disposal;

(2) For each purchaser of such disposal rights (or its designee),

defendants must commit to operate the listed Akron Central Transfer

Station's 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 Ohio, except as to

price and credit terms;

b. Baltimore, MD

Disposal rights of at least 600 tons of waste/day, pursuant to

which defendants will sell to one or more purchasers rights to dispose,

for a five-year time period, under the following terms and conditions:

(1) The purchaser(s) or its designee(s) may dispose of waste at any

one or any combination of the following facilities, as specified in its

purchase agreement: Southwest Resource Recovery Facility (known as

Baltimore RESCO or BRESCO), located at 1801 Annapolis Road, Baltimore,

MD 21230; Baltimore County Resource Recovery Facility, located at 10320

York Road, Cockeysville, MD; Western Acceptance Facility, located at

3310 Transway Road, Baltimore, MD; or Annapolis Junction Transfer

Station, located at 8077 Brock Bridge Road, Jessup, MD 20794. If more

than one person purchases the disposal rights, the minimum daily

disposal rates, and the total of all purchasers' maximum disposal

amounts at all facilities specified shall be no less than 600 tons/day;

(2) For each purchaser of disposal rights (or its designee),

defendants must commit to operate the listed Baltimore, MD area

facilities' gates, scale houses, and disposal areas under terms and

conditions no less favorable than those provided to defendants' own

vehicles or to the vehicles of any municipality in Maryland, except as

to price and credit terms;

c. Cleveland, OH

At purchaser's option, either USA Waste's Newburgh Heights Transfer

Station, located at 3227 Harvard Road, Newburgh Heights, OH 44105 (and

known as the Harvard Road Transfer Station); or all of WMI's right,

title and interest in the Strongsville Transfer Station, located at

16099 Foltz Industrial Parkway, Strongsville, OH; provided, however,

that the City of Strongsville, owner of the transfer station, approves

such sale or assignment. Defendants will exercise their best efforts to

secure the assignment to the purchaser of all their rights, title and

their interests in the Strongsville Transfer Station, and in the event

the purchaser selects Strongsville, defendants will not reacquire any

right, title or interest in the Strongsville transfer station. If the

contract is not assigned, defendants will enter into a disposal rights

agreement with the purchaser (or purchasers), which will provide, in

effect, that the purchaser(s) will enjoy all disposal rights and

privileges now enjoyed by defendants at the Strongsville Transfer

Station, and that defendants will operate the facility's gate, scale

house, and disposal areas under terms and conditions no less favorable

than those provided to defendant's own vehicles or to the vehicles of

any municipality in Ohio, except as to price and credit terms;

d. Columbus, OH

WMI's Reynolds Road Transfer Station, located at 805 Reynolds

Avenue, Columbus, OH 43201;

e. Detroit, MI

WMI's Detroit Transfer Station, located at 12002 Mack Avenue,

Detroit, MI 48215;

f. Houston, TX

USA Waste's Hardy Road Transfer Station, located at 18784 East

Hardy, Houston, TX;

g. Louisville, KY

USA Waste's Poplar Level Road Transfer Station, located at 4446

Poplar Level Road, Louisville, KY;

h. Miami, FL

All USA Waste's right, title, and interest in the Reuters Transfer

Station Rights, as conveyed to Chambers Waste Systems of Florida, a

subsidiary of USA Waste, pursuant to the Final Judgment in United

States v. Reuter Recycling of

[[Page 53698]]

Florida, Inc., 1996-1 Trade Cas. (CCH) para. 71,353 (D.D.C. 1996), a

copy of which is attached as Exhibit A;

i. New York, NY

(1) WMI's SPM Transfer Station, located at 912 East 132nd Street,

Bronx, NY 10452, and all rights and interests, legal or otherwise, that

WMI now enjoys, has had or made use of out of the SPM Transfer Station,

to deliver waste by truck to rail siding at the Oak Point Rail Yard in

the Bronx, NY, and at the Harlem River Yards facility, located at St.

Ann's and Lincoln Avenues at 132nd Street, Bronx, NY 10454;

(2) All right, title, and interest in USA Waste's pending

application to construct and operate a waste transfer station located

at 2 North 5th Street, Brooklyn, NY 11211, and known as the Nekboh

Transfer Station; and

(3) USA Waste's All City Transfer Station, located at 246-252

Plymouth Street, Brooklyn, NY 11202;

j. Philadelphia, PA

USA Waste's Girard Point Transfer Station, located at 3600 South

26th Street, Philadelphia, PA 19145; and USA Waste's Quick Way Inc.

Municipal Waste Transfer Station, located at SE Corner, Bath and

Orthodox Streets, Philadelphia, PA 19137, subject to the conditions

that (1) the existing City of Philadelphia waste contract is

transferred to a WMI transfer station, which defendants must use their

best efforts to accomplish, and (2) until such transfer is effect3ed,

USA Waste will be granted throughput capacity at the Quick Way Transfer

Station to handle this contract.

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 [except real property and improvements to real property (i.e.,

buildings)]; and it includes all intangible assets, including hauling-

related customer lists, contracts, and accounts.

Relevant Hauling Assets, as used herein, includes the assets in the

following locations:

1. Akron, OH

USA Waste's and American Waste Corporation's front-end loader truck

(``FEL'') commercial routes that serve the City of Akron and Summit

County, Ohio;

2. Allentown, PA

WMI's FEL commercial routes that serve the cities of Allentown and

Northampton and Lehigh County, PA;

3. Cleveland, OH

WMI's FEL commercial routes that serve the City of Cleveland and

Cuyahoga County, Ohio (not including the northwest quadrant);

4. Columbus, OH

WMI's FEL commercial routes that serve Franklin County, Ohio;

5. Denver, CO

USA Waste's FEL commercial routes that serve the City of Denver,

and Denver and Arapahoe County, CO;

6. Detroit, MI

WMI's FEL commercial routes that serve the City of Detroit and

Wayne County, MI;

7. Houston, TX

WMI's FEL commercial routes that serve the City of Houston, the

Dickinson area, and Harris County, TX;

8. Louisville, KY

USA Waste's FEL commercial routes that serve the City of Louisville

and Jefferson County, KY;

9. Pittsburgh, PA

WMI's FEL commercial routes that serve Allegheny County and

Westmoreland County, PA, and the garage facility (real estate and

improvements) located at the Y&S Landfill;

10. Portland, OR

WMI's FEL commercial routes that serve the City of Portland, OR;

11. Tucson, AZ

USA's Waste's FEL commercial routes that serve the City of Tucson

and Pima County, AZ; and

12. Gainesville, FL

WMI's FEL commercial routes that serve Alachua County, FL.

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. Relevant Area means the county in which the Relevant Hauling

Assets or Relevant Disposal Assets are located and any adjacent city or

county, except with respect to the Modern Landfill [see Section

II(C)(1)(k)], for which the Relevant Area means Philadelphia, PA, and

New York, NY.

I. Relevant State means the state in which the Relevant Disposal

Assets or Relevant Hauling Assets are located, provided however, that

state is a party to this Final Judgment. With respect to the Modern

Landfill [see Section II(C)(1)(k)], the Relevant State means the

Commonwealth of Pennsylvania and the State of New York. With respect to

section VII, the Relevant State means each state in which the disposal

or hauling assets to be acquired are located, provided that state is a

party to this Final Judgment.

J. South Florida Waste means waste collected, or delivered directly

from a transfer station located, in Broward, Dade or Monroe County, FL.

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 of

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 its assets, or of a lesser

business unit that includes defendants' hauling or disposal businesses

in any Relevant Area, that the acquiring party or parties agree to be

bound by the provisions of this Final Judgment.

IV

Divestitures

A. 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,

after consultation with the Relevant State.

B. Defendants shall use their best efforts to accomplish the

divestitures ordered by this Final Judgment as expediously and timely

as possible. The United States, in its sole discretion, after

consultation with the Relevant State, may extend the time period for

any

[[Page 53699]]

divestiture on 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 bona

fide 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 plaintiffs 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 USA Waste (or former WMI) 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 to other documents and information customarily provided as part of a

due diligence process.

F. With the exception of the facilities described in Sections

II(C)(2) (e), (h) and (i)(2), defendants shall warrant to each

purchaser of Relevant Disposal Assets or Relevant Hauling Assets that

each asset will be operational of the date 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, after consultation with the Relevant

State, 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, after consultation with the Relevant

State, 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 State's sole satisfaction, after

consultation with the Relevant State, that: (1) the purchaser(s) has

the capability and intent of competing effectively in the waste

disposal or hauling business in the Relevant Area; (2) the purchaser(s)

has the managerial, operational, and financial capability to compete

effectively in the waste disposal or hauling business in the Relevant

Area; and (3) none of the terms of any 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 the

Relevant Area.

J. A purchaser of any Relevant Disposal Asses or Relevant Hauling

Assets under this Final Judgment must demonstrate to the satisfaction

of the United States, after consultation with the Relevant State, that

the purchaser will comply with any and all applicable federal, state

and local environmental and licensing laws.

K. Defendants may enter into an agreement, after review and

approval of the United States, in its sole discretion, after

consultation with the Relevant State, with a purchaser or purchasers of

the Chiquita Canyon, Brazoria or Carleton Farms landfills (See Sections

II (C)(1)(g), and (d)) for disposal of commercially acceptable waste

collected or transferred from defendants' own route operations.

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 Court shall appoint, on application of

the United States, a trustee selected by the United States, to effect

the divestiture of each Relevant Disposal Asset or Relevant Hauling

Asset not sold.

B. After the appointment of a trustee becomes effective, only the

trustee shall have the right to sell the Relevant Disposal Assets or

Relevant Hauling Assets described in Sections II(C) and (D) of this

Final Judgment. The trustee shall have the power and authority to

accomplish any and all divestitures at the best price then obtainable

upon a reasonable effort by the trustee, subject to the provisions of

Sections IV, VI, and IX of this Judgment, and shall have such other

powers as the Court shall deem appropriate. Subject to Section V(C) of

this 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. To assist in the sale of the Brent

Run Landfill, described in Section II II(C)(1)(e) of this Judgment, the

trustee also shall have the power and authority to commit defendants to

supply waste from defendants' routes in the Relevant Area to that

landfill for up to a five-year time period at the best disposal price

then obtainable upon reasonable effort by 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, in its sole discretion, after consultation with the

Relevant State, and shall have such other powers as this Court shall

deem appropriate. Defendants shall not object to a sale by the trustee

on any ground other than the trustee's malfeasance. Any such objections

by defendants must be conveyed in writing to the United States and the

Relevant State and the trustee within ten (10) calendar days after the

trustee has provided the notice required under Section VI of this Final

Judgment.

C. The trustee shall serve at the cost and expense of defendants,

on such terms and conditions as the Court may prescribe, and shall

account for all monies derived from the sale of each Relevant Disposal

Asset or Relevant Hauling Asset sold by the trustee and all

[[Page 53700]]

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 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 and terms of the

divestiture and the speed with which it is accomplished.

D. Defendants shall use their best efforts to assist the trustee in

accomplishing the required divestitures, including best efforts to

effect all necessary regulatory approvals. 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 of the businesses to be divested, and

defendants shall develop financial or other information relevant to the

businesses to be divested customarily provided in a due diligence

process as the trustee may reasonably request, subject to customary

confidentiality assurances. Defendants shall permit bona fide

prospective purchasers of each Relevant Disposal Asset or Relevant

Hauling Asset to have reasonable access to personnel and to make such

inspection of physical facilities and any and all financial,

operational or other documents and other information as may be relevant

to the divestitures required by this Final Judgment.

E. After its appointment, the trustee shall file monthly 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

month, made an offer to acquire, expressed an interest in acquiring,

entered into negotiations to acquire, or was contacted or made an

inquiry about acquiring, any interest in the 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. If the trustee has not accomplished such divestitures within six

(6) months 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; 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. The trustee shall at the same time furnish such

report to the parties, who shall each have the right to be heard and to

make additional recommendations consistent with the purpose of the

trust. The Court shall enter thereafter 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 and the Relevant State 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 and the Relevant State of such notice,

the United States, in its sole discretion, after consultation with the

Relevant State, 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

fifteen (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 and the Relevant State have been provided the additional

information requested from defendants, the proposed purchaser, and any

third party, whichever is later], the United States, after consultation

with the Relevant State, 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(B) 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(B), a divestiture proposed under Section V shall not be

consummated unless approved by the Court.

VII

Notice of Future Acquisitions

A. Defendants shall provide each Relevant State with 30 days'

written notice (which period may be shortened by permission of the

Relevant State) before acquiring, directly or indirectly, any interest

in any business, assets (other than in the ordinary course of

business), capital stock, or voting securities of any person that, at

any time during the twelve (12) months immediately preceding such

acquisition, was engaged in waste disposal or small containerized solid

waste hauling in any area listed in Section VII(B), where that person's

annual revenues from waste disposal or small containerized solid waste

hauling in the area were in excess of $500,000 annually, or its total

revenues were in excess of $1,000,000 annually.

B. The notice provisions set forth in Section VII(A) above apply

whenever defendants seek to acquire any interest in any business,

assets (other than in the ordinary course of business), capital stock,

or voting securities of any person that was engaged in waste disposal

or small containerized solid waste hauling in any of the following

areas:

[[Page 53701]]

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

Area for which defendants must provide

Relevant State relevant state notice of future

acquisitions

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

Arizona...................... Pima Co. (hauling and disposal).

California................... Los Angeles and Riverside (hauling and

disposal); Ventura and Orange Co.

(disposal only).

Colorado..................... Boulder and Denver Co. (hauling and

disposal).

Florida...................... Brevard, Alachua, Marion, Orange,

Osceola, Seminole, Lee, Charlotte,

Sarastoa, Putnam, Volusia and Flagler

Co. (hauling and disposal).

Kentucky..................... Jefferson and Oldham Co. (hauling and

disposal).

Maryland..................... Baltimore City, Baltimore, Anne Arundel,

Harford, Carroll, Howard, Montgomery,

and Prince George's Co. (hauling and

disposal).

Michigan..................... Wayne, Macomb, and Oakland Co. (hauling

and disposal); Genessee, Shiawassee,

Saginaw, Bay, Midland, Wexford, Manistee

and Montgomery Co. (disposal only).

New York..................... New York, Bronx, Kings, Queens, and

Richmond Co. (disposal only).

Ohio......................... Ashtabula, Cuyahoga, Delaware, Fairfield,

Franklin, Geauga, Lake, Licking, Lorain,

Lucas, Mahoning, Medina, Pickaway,

Portage, Stark, Summit, Trumbull, and

Wood Co. (hauling and disposal);

Carroll, Columbiana, Coshocton, Holmes,

Knox, Madison, Tuscarawas, Union and

Wayne Co. (disposal only).

Pennsylvania................. Allegheny, Westmoreland, Washington,

Beaver, Butler, Lehigh, Northampton,

Dauphin, Cumberland, and Perry Co.

(hauling and disposal).

Texas........................ Brazoria, Chambers, Ft. Bend, Galveston,

Harris, Liberty, Montgomery, Walker and

Waller Co. (hauling and disposal).

Washington................... Cowlitz and Clark Co. (hauling and

disposal).

Wisconsin.................... Milwaukee, Waukesha, Racine, Washington,

Kenosha, Ozaukee, Walworth, Jefferson

and Dane Co. (disposal only).

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

C. For purposes of this Section VII, the term ``small containerized

solid waste hauling'' means the provision of solid waste hauling

service to commercial customers by providing the customer with a one to

ten cubic yard container, which is picked up mechanically using a

frontload, rearload or sideload truck, and excludes hand pick-up

service, and service using a compacter attached to or part of a

container.

VIII

Defendants' Additional Obligations

Defendants are hereby ordered and directed to, in accordance with

the terms of this Final Judgment:

A. Offer to extend, for an additional ten-year time period, the

Solid Waste Service Agreement, dated August 8, 1996, by and between the

Northeast Maryland Waste Disposal Authority and USA Waste's subsidiary,

Garnet of Maryland, Inc. (attached hereto as Exhibit B), for the

disposal of Anne Arundel County, MD and Howard County, MD waste at the

Annapolis Junction Transfer Station;

B. Use their best efforts, prior to its divestiture, to obtain any

and all licenses and permits to open and operate USA Waste's Nekboh

Transfer Station, described in Section II(C)(2)(i)(2); and for a five-

year period following such divestiture, to cooperate and assist the

purchaser in obtaining any and all licenses or permits required to

operate Nekboh Transfer Station and to refrain from opposing any

application by the purchaser to obtain a license or permit to expand

the Nekboh Transfer Station;

C. For a one-year period following entry of this Final Judgment,

refrain from opposing any application by any person for a permit or

license to operate any waste transfer station in any borough of the

City of New York, NY;

D. For a five-year period following entry of this Final Judgment,

refrain from opposing any application by any person to obtain a license

or permit to expand the remaining capacity or the average daily

capacity of the Emerald Park Landfill, Glacier Ridge Landfill, or

Valley Meadows Landfill, in the Greater Milwaukee, WI area;

E. 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 and the Relevant State;

F. Refrain from conditioning the sale of any landfill pursuant to

this Final Judgment on any understanding, agreement or commitment,

written or understood, that the purchaser (or purchasers) will agree to

sell airspace or otherwise permit defendants to dispose of waste in

that landfill; provided, however, that USA Waste's Carleton Farms

Landfill may be divested subject to USA Waste's obligation to dispose

of ash from the Greater Detroit Resource Recovery Center's incinerator

at a separate monofill cell on the Carleton Farms Landfill site;

G. Refrain from taking any action to enforce any agreement or

understanding that would prohibit any person from competing in Alachua

or Marion County, FL; provided, however, that this provision shall not

apply to a current or former employee of defendants (other than any

employee who may be responsible in any way for route operations subject

to divestiture under Sections II(D)(12), IV and V of this Judgment);

and

H. Provide access to the gate, scale house and disposal area of the

WMI Tucson transfer station, located at 5200 West Ina, Tucson, AZ,

under terms and conditions no less favorable than those provided to

defendants' own vehicles or to the vehicles of any county or

municipality in Arizona.

IX

Affidavits

A. Within twenty (20) calendar days of the filing of the Final

Judgment in this matter and every thirty (30) calendar days thereafter

until the divesture has been competed whether pursuant to Section IV or

Section V of this Final Judgment, defendants shall deliver to

plaintiffs 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 such

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

required 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 obligation by the

[[Page 53702]]

United States, after consultation with the Relevant State, 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 Complaint

in this matter, defendants shall deliver to plaintiffs 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 plaintiffs 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 jeopardized 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, upon written request of the Attorney General or of the

Assistant Attorney General in charge of the Antitrust Division, or upon

written request of duly authorized representatives of the Attorney

General's Office of any other plaintiff, 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, or upon

the written request of the Attorney General's Office of any other

plaintiff, defendants shall submit such written reports, under oath if

request, 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 in Sections VII or X or this Final Judgment shall be divulged

by a representative of the plaintiffs to any person other than a duly

authorized representative of the Executive Branch of the United States,

or the Attorney General's Office of any other plaintiff, except in the

course of legal proceedings to which the United States or any other

plaintiff 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 plaintiffs, 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 plaintiffs 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 ______, 1998.

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

United States District Judge

United States's Certificate Of Compliance With Provisions of the

Antitrust Procedures and Penalties Act

The United States of America hereby certifies that it has complied

with the provisions of the Antitrust Procedures and Penalties Act

(``APPA''), 15 U.S.C. 16(b)-(h), and states:

1. The Complaint in this case, the proposed Final Judgment

(``Judgment''), and the Hold Separate Stipulation and Order (``Hold

Separate Order'') were filed on July 16, 1998. The United States's

Competitive Impact Statement was filed on July 23, 1998.

2. Pursuant to 15 U.S.C. 16(b), the Judgment, Hold Separate Order,

and Competitive Impact Statement were published in the Federal Register

on September 24, 1998 (63 Fed. Reg. 51125). A copy of that Federal

Register notice is attached as Exhibit 1.

3. Pursuant to 15 U.S.C. 16(d), the United States furnished copies

of the Complaint, Hold Separate Order, proposed Judgment and

Competitive Impact Statement to anyone requesting them.

4. Pursuant to 15 U.S.C. 16(c), a summary of the terms of the

proposed Judgment and the Competitive Impact Statement were published

in The Cleveland Plain Dealer, a newspaper of

[[Page 53703]]

general circulation in Cleveland, OH, and in The Washington Post, a

newspaper of general circulation in the District of Columbia. Copies of

the certificates of publication from The Cleveland Plain Dealer and The

Washington Post appear in Exhibit 2.

5. On January 21, 1999, the defendants--USA Waste Services, Inc.;

Dome Merger Subsidiary; and Waste Management, Inc.--filed with the

Court a joint statement describing their communications with employees

of the United States Department of Justice concerning the proposed

Judgment, as required by 15 U.S.C. 16(g).

6. During the 60-day comment period after publication of notice in

the Federal Register, The Cleveland Plain Dealer and The Washington

Post, the United States received a total of 13 written comments on the

proposed settlement. The comments were from:

(a) Recycle Worlds Consulting Corp., Madison, WI (Ex. 3);

(b) Honorable Joseph R. Lenthol, New York State Assemblyman for the

50th District, Brooklyn, NY (Ex. 4);

(c) Sierra Club of New York City Group, New York, NY (Ex. 5);

(d) Neighbors Against Garbage, Brooklyn, NY (Ex. 6);

(e) Red Hook Civic Association, Brooklyn, NY (Ex. 7);

(f) Rose Institute of State and Local Government, Claremont College,

Claremont, CA (Ex. 8);

(g) Gold Fields Mining Corporation, Los Angeles, CA (Ex. 9);

(h) Coastal Waste Management, Sacramento, CA (Ex. 10);

(i) York County Solid Waste and Refuse Authority, York, PA (Ex. 11);

(j) Calvert Trash Systems, Inc., Owings, MD (Ex. 12);

(k) LaPlata Recycling Center and Depository, Bayfield, CO (Ex. 13);

(l) Conrad S. Magnuson, Kingston, NH (Ex. 14); and

(m) Three Rivers Disposal Company, Bozeman, MT (Ex. 15).

7. The United States evaluated and responded to each of the

comments it received. The comments did not convince the United States

that it should withdraw its consent to the proposed settlement.

However, for the reasons set forth in its Memorandum in Support of

Entry of the Modified Final Judgment, the United States was persuaded

to move for a minor modification of the proposed Judgment, which would

eliminate the defendants' obligation to divest the Scott Avenue

Transfer Station in Brooklyn, NY, and substitute a divestiture of one

of two smaller transfer stations, Vaccarro or Gesuale, also in New York

City.

Copies of the comments and the United States's responses appear in

Exhibits 3-15; they are summarized below.

A. General Comment on the Divestiture Relief in the Proposed Judgment

Recycle Worlds, a private waste industry consultant, urged the

United States not to approve any asset divestiture under the proposed

Judgment to one of the major integrated waste collection and disposal

firms, such as Republic Services, Inc.; Allied Waste Industries, Inc.;

or Browning-Ferris Industries, Inc. (Ex. 3). In Recycle Worlds's view,

these firms may be more inclined to cooperate with the defendants in

raising prices in some markets in order to avoid potential price wars

with the defendants elsewhere.

In response, we noted that the United States could not

categorically conclude that selling the consent decree assets to a

large national waste collection and disposal firm, such as Republic,

would be less competitive than a sale to municipal agency or small

independent firm, or that large waste companies are more prone to

collude, when given the opportunity, than small independent firms.

Also, large waste collection and disposal companies may enjoy some

competitive advantages, such as better access to capital and more

extensive experience, that would make them in some respects more

formidable competitors than small independent firms.

In a series of transactions beginning in September 1998 and ending

in early 1999, the United States approved Republic as a purchaser of

all of the waste collection and disposal assets ordered divested under

the Judgment, except the Baltimore area disposal assets, which the

United States approved for sale to BFI in October 1999.

B. Comments on the New York City Divestiture Relief

The United States received four comments on provisions of the

proposed Final Judgment that relate to the divestiture relief in the

New York City area. Three commentators--New York State Assemblyman

Joseph Lenthol (Ex. 4), the Sierra Club of New York City Group (Ex. 5),

and Neighbors Against Garbage (Ex. 6)--expressed considerable concern

that by ordering the defendants to divest the application for a permit

to construct and open the proposed Nekboh Transfer Station in Brooklyn,

NY, the Final Judgment would ensure that the new owner would continue

the attempt to open a transfer station on that site, despite strong

community opposition. The commentators suggested that the United

States's move to amend the proposed Judgment in such a way as to end

the effort to develop the Nekboh site as a waste transfer station

(e.g., requiring the defendants to sell the Nekboh site to a government

agency for development as a public park).

In response, we pointed out that the aesthetic and environmental

concerns that have fueled community opposition to the proposed Nekboh

Transfer Station are unrelated to the competitive concerns that

precipitated the governments' antitrust suit. Issues concerning whether

a waste transfer station should be constructed on the Nekboh site ought

to be presented to, and resolved by, the state and local regulatory

officials responsible for issuing the site's operating permit.

A fourth commentator Red Hook Civic Association (Ex. 7), wanted to

know why the United States did not seek divestiture of defendant USA

Waste's massive proposed Erie Basin Transfer Station, also in Brooklyn,

NY. We noted that Erie Basin, if it is constructed, would primarily

handle the city's residential waste, a market unrelated to the disposal

of commercial waste market in which the United States alleged that the

defendants' merger would substantially eliminate competition.

C. Comments on the California Divestiture Relief

The United States received three comments on those provisions of

the Final Judgment relating to the divestiture relief in the California

market. Two commentators--the Rose Institute of State and Local

Government, Claremont College, CA (Ex. 8), and Gold Fields Mining

Corporation (Ex. 9)--submitted very lengthy papers that questioned our

definition of the relevant geographic market for the disposal of

commercial waste from the City of Los Angeles. As these commentators

see it, the geographic market should be expanded to include public and

private landfills located up to 170 miles east of Los Angeles. This

expanded market would include a massive new landfill, Mesquite

Regional, partly-owned by the defendants. And they would order the

defendants to divest that landfill in order to alleviate the

competitive concerns that they believe the combination would raise in

the expanded geographic market.

The United States noted, in its response, that it made good

economic sense to exclude the remote Mesquite Regional Landfill from

the competitive analysis since it is relatively

[[Page 53704]]

inaccessible to commercial waste haulers from the Los Angeles area.

Given this landfill's 170 mile distance from Los Angeles, it would be

very expensive for haulers to ship and dispose of commercial waste

collected in Los Angeles at Mesquite Regional. Private landfills

located much closer to Los Angeles could profitably raise disposal

prices without fear of losing significant revenues to this distant

landfill. Since Mesquite Regional is not in the relevant market, the

defendants should not be required to divest it in order to obtain

effective relief.

A third commentator, Coastal Waste Management (Ex. 10), questioned

the United States' decision not to allege in its Complaint or seek

relief in the proposed judgment relating to commercial waste hauling in

the Sacramento, CA market. We noted, in response, that based on the

evidence available to us at the time, injunctive relief was not

warranted in the Sacramento hauling market. Coastal, however, remains

free to pursue such a remedy by filing a private antitrust action.

D. Comments on the Divestiture Relief in Other Areas

The York County Solid Waste and Refuse Authority of York County,

PA, was very concerned that the ordered divestiture of Waste

Management's Modern Landfill would adversely affect its contract to

deliver waste to the Authority's incinerator and dispose of ash and

noncombustible waste from the incinerator (Ex. 11). Since the proposed

Judgment orders that the landfill be divested ``subject to'' such

existing contractual commitments, the sale should not affect these

local disposal agreements.

Finally, four commentators--Calvert Waste Systems (Ex. 12), LaPlata

Recycling (Ex. 13), Conrad Magnuson (Ex. 14), and Three Rivers Disposal

(Ex. 15)--complained that the United States should have sought

injunctive relief with respect to several markets not alleged in the

governments' complaint, viz., the eastern shore of Maryland; Bayfield,

CO; Kingston, NH; and Bozeman, MT.

In our response, we noted that the United States did not seek

divestiture relief as to these markets because it was not convinced,

based on information available to it at the time, that the merger would

create serious competitive problems warranting the imposition of this

remedy. Private parties, such as the commentators, certainly remain

free to pursue such relief against the defendants by filing a private

antitrust suit.

8. Pursuant to 15 U.S.C. 16 (b)-(h), the United States has arranged

to publish in the Federal Register by September 27, 1999, a copy of the

comments and the United States's responses.

9. With these steps having been taken, the parties have fulfilled

their obligations under the APPA. Pursuant to the Hold Separate Order

that the Court entered on July 16, 1998, the Court may now enter the

proposed Judgment, if it determines that the entry of the Judgment is

in the public interest. For the reasons set forth in the Competitive

Impact Statement, its responses to the public comments, and in its

Memorandum in Support of Entry of the Proposed Modified Final Judgment,

the United States--and all of the other parties--strongly believe that

the proposed decree, as amended, is in the public interest and that the

Court therefore promptly should enter it.

Dated: September 13, 1999.

Respectfully submitted.

Anthony E. Harris, Illinois Bar No. 1133713,

U.S. Department of Justice, Antitrust Division, Litigation II, 1401 H

Street, NW, Suite 3000, Washington, DC 20530, (202) 307-6583.

Note: Exhibits 1 and 2 were unable to be published in the

Federal Register. A copy can be obtained from the U.S. Department of

Justice, Documents Office, 325 7th St., Room 215, Washington, DC or

(202) 514-2481.

Exhibit 3

U.S. Department of Justice Antitrust Division

August 27, 1999.

Mr. Peter Anderson,

Recycle Worlds Consulting Corp., 4513 Vernon Blvd., Suite 15,

Madison, Wisconsin 53705-4964.

Re: Comment on Proposed Final Judgment in United States, State of

Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et

al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

Dear Mr. Anderson: This letter responds to your written comment

on the proposed Final Judgment in the above case. The Complaint in

this case charged, among other things, that USA Waste's acquisition

of Waste Management would substantially lessen competition in the

disposal of municipal solid waste in 16 markets throughout the

country. The proposed Judgment, now pending in federal district

court in Cleveland, Ohio, would settle the case by, inter alia,

requiring that the defendants divest waste disposal facilities that

serve each of the disposal markets alleged in the Complaint. In a

series of transactions in August and December 1998, and in January

and February 1999, the United States approved, under the terms of

the Judgment, a sale to Republic Services, Inc. (``Republic'') of

all assets that had been ordered divested (except the Baltimore area

disposal assets). The United States subsequently approved a sale to

Browning Ferris Industries, Inc. (``BFI'') of the Baltimore area

disposal assets.

In your letter, you questioned whether Republic or any other

major waste collection and disposal firm should be allowed to

acquire the assets ordered divested under the proposed decree. As

you see it, a sale to a large national or regional firm is

undesirable because such firms would cooperate with the defendants

and other market participants in raising prices to customers after a

divestiture. Competition would be better served if the waste

collection and disposal assets under the decree were sold to a

municipal agency or a small independent firm, entities which, you

contend, would have a greater incentive to vigorously compete

against the defendants' waste collection and disposal operations.

The United States, however, does not have any evidence that

would lead it categorically to conclude that selling the assets

under the Judgment to a large national waste collection and disposal

firm, such as Republic, would be a less competitive alternative than

a sale to municipal agency or small independent firm, or that large

waste companies are more prone to collude, when given the

opportunity, than small independent firms. Also, it is possible that

large waste collection and disposal companies enjoy some competitive

advantages, such as better access to capital and more extensive

experience, that would make them in some respects more formidable

competitors than small independent firms. Thus, United States did

not object to Republic's purchase of most of the waste collection

and disposal assets that the defendants divested under the proposed

Judgment. And since BFI did not compete in the disposal of waste in

the Baltimore market, the United States saw no reason to prevent

BFI's acquisition of the transfer station disposal capacity divested

by the defendants under the proposed Judgment.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. Sec. 16(d), a copy of your

comments and this response will be published in the Federal Register

and filed with the Court.

Sincerely yours,

J. Robert Kramer, II,

Chief, Litigation II Section.

Note: Letter dated 11/27/98 from Peter Anderson of Recycle

Worlds Consulting with attachments was unable to be published in the

Federal Register. A copy can be obtained from the U.S. Department of

Justice, Documents office, 325 7th St., Room 215, Washington, DC or

(202) 514-2481.

Exhibit 4

U.S. Department of Justice Antitrust Division

August 27, 1999.

The Honorable Joseph R. Lenthol, Assemblyman 50th District, Kings

County, New York

State of New York Assembly, 619 Lorimer Street, Brooklyn, NY 11211.

Re: Comment on Proposed Final Judgment in United Statesv. State of

Ohio et al. v. USA Waste Services, Inc., Waste Management, Inc., et

al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

[[Page 53705]]

Dear Assemblyman Lenthol: This letter responds to your written

comment on the proposed Final Judgment in United States USA Waste

Services, Inc., now pending in federal district court in Cleveland,

Ohio. The Complaint in that case charged, among other things, that

USA Waste's acquisition of Waste Management would substantially

lessen competition in the disposal of New York City's commercial

waste. The proposed final Judgment would settle the case by, inter

alia, requiring the defendants to divest (a) the Waste Management's

SPM Transfer Station in the Bronx, NY; (b) USA Waste's All City

Waste Transfer Station in Brooklyn, NY; and (c) USA Waste's proposed

Nekboh Transfer Station in Brooklyn, NY. See Judgment,

Secs. II(C)(2) (i)(1)-(3), IV(A). To ensure USA Waste's continued

cooperation with the purchaser in its efforts to permit and

construct a transfer station on the Nekboh site, the proposed

Judgment further provides that, if the Nekboh Transfer Station is

not permitted within one year after entry of the decree, USA Waste

must, in addition, divest Waste Management's Scott Avenue Transfer

Station, also in Brooklyn, NY. Judgment, Secs. II(C)(2)(i)(4) and

IV(B).

Your letter raises two issues related to the divestiture of the

Nekboh and Scott Avenue transfer stations. First, you point out that

the proposed Nekboh facility, though much larger than the Scott

Avenue station, is still in the permitting stage and may never

obtain a permit to open and operate. For that reason, you urged that

we amend the consent decree to require an immediate divestiture of

the already-permitted Scott Avenue transfer station. Second, you

note that in any event, the proposed Nekboh facility would be

adjacent to the Eastern District Terminal, ``a beautiful 20 acre

parcel of waterfront property'' recently placed on an open-spaces

list. You suggested that the public interest would be better served

if the Decree contained a prohibition on the use of the Nekboh site

as a waste transfer station.

A. The Contingent Divestiture of the Scott Avenue Transfer Station

After considering your comments, and arguments advanced by the

defendants and others, the United States (and its New York co-

plaintiff, the State of New York) concluded that the divestiture

provisions in the proposed Judgment concerning the defendants' Scott

Avenue Transfer Station should indeed be modified. The United States

and the State of New York agreed to join the defendants in moving

the Court to enter a modified Final Judgment that would replace the

current contingent divestiture of the Scott Avenue Transfer Station

with a requirement that the defendants immediately divest either of

two smaller transfer stations, Gesuale or Vacarro, both in New York

City. That obligation was imposed by a recent consent decree,

entered in federal district court in Brooklyn, NY, that settled

another merger case involving a proposed acquisition by Waste

Management of other transfer stations in the New York market, United

States, States of New York and Pennsylvania, and Commonwealth of

Florida v. Waste Management, Inc., Eastern Environmental Services,

Inc., et al, Civil No. 98-7168 (E.D.N.Y., entered May 25, 1999) (the

``Waste/Eastern case''). The United States agreed to move to modify

the proposed Judgment for basically two reasons.

First, divestiture of the Scott Avenue Transfer Station was

primarily an inducement to defendants to ensure that they continue

their efforts to get the Nekboh site permitted. However, the Nekboh

Transfer Station permit application was divested to a major waste

industry firm, Republic, which is fully capable of vigorously

pursuing the permitting process. In August 1998, defendants sold the

proposed Nekboh Transfer Station (and virtually all of the other

assets under the decree) to Republic Services, Inc. With over $2

billion in annual revenues, Republic is the nation's third largest

waste collection and disposal firm. Republic has the financial

resources and economic incentive to continue pursuing a permit for

the proposed Nekboh Transfer Station without defendants' assistance.

In addition, permanent injunctions in the proposed Judgment prohibit

the defendants from interfering in any way with Republic's efforts

to obtain a permit for that site. Thus, the contingent divestiture

of Scott Avenue is unnecessary to ensure that the defendants

cooperate in the permitting process.

Second, by permitting the defendants to retain the Scott Avenue

Transfer Station, in return for divestiture of the smaller Gesuale

or Vaccarro sites, the United States and the State of New York were

able to obtain a favorable settlement of the subsequent Waste/

Eastern merger case. In September 1998, USA Waste agreed to acquire

Eastern Environmental Services, Inc. (``Eastern''), another major

competitor in the disposal of New York City's commercial waste. In

November 1998, the United States, the State of New York and other

states filed an antitrust suit that sought to block that

acquisition. To resolve the governments' competitive concerns in

that litigation, the defendants agreed to divest two large Brooklyn,

NY transfer stations acquired from Eastern (Atlantic and PJ's) in

return for the governments' agreement to join the defendants in this

case in a motion to modify the proposed Final Judgment to substitute

an immediate divestiture of the Gesuale or Vaccaro transfer station

for a contingent divestiture of the Scott Avenue Transfer Station.

(See Waste/Eastern Final Judgment, Secs. II (D)(2)(a)-(c), IV(A)(2)

and (L), filed in federal district court in Brooklyn, NY on December

31, 1998, and entered on May 25, 1999, after the United States had

responded to all public comments submitted during the 60-day public

comment period.)

In light of the divestiture of the Nekboh proposal to Republic,

a well-financed industry giant, the United States does not believe

that the contingent divestiture of the Scott Avenue transfer station

was necessary to alleviate any competitive concerns arising from USA

Waste's acquisition of Waste Management. And by agreeing to join

Waste Management in seeking to remove that requirement from the Ohio

consent decree, the United States and the State of New York were

able to void a trial on the merits of defendants' acquisition of

Eastern.

B. Prohibiting the Construction of a Waste Transfer Station on the

Nekboh Site

Finally you suggest that we modify the decree to prohibit the

construction of a waste transfer station on the Nekboh site. We

strongly believe that promptly permitting and operation of the

Nekboh transfer station is necessary to provide an important

competitive check on USA Waste in the disposal of New York City's

commercial waste. Nothing in the proposed decree, however, would

preclude New York state and city officials from deciding not to

grant a permit to operate a waste transfer facility on the Nekboh

site. Whether the transfer station receives an operating permit

depends on any number of factors, including a considered assessment

of the environmental impact of the facility. Whether a waste

transfer facility on the Nekboh site will have detrimental effects

is an issue that is best left to the regulatory agency to review and

ultimately resolve.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16, a copy of your comment

and this response will be published in the Federal Register and

filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

The Assembly, State of New York; Albany

August 7, 1998.

Honorable Janet Reno, Attorney General of the United States,

Department of Justice, 950 Pennsylvania Avenue, NW, Room 4400,

Washington, DC 20530-0001

Dear Attorney General Reno: I write in regard to the recently

announced agreement between the United States Justice Department and

the New York State Attorney General's Office, with USA Waste and

Waste Management, relative to the proposed merger of these two

corporations. Unfortunately, I find this settlement to be

problematic. I believe, however, that these problems can be resolved

if the following concerns are addressed.

It is my understanding that this agreement would require USA

Waste to divest itself of the Nekboh Transfer Station which it is

planning to operate at 2 North 5th Street in Brooklyn, and that this

divestiture would be conditioned upon USA Waste being granted the

necessary operating permits. I cannot understand why, if this

agreement truly seeks to protect the public from monopoly power, USA

Waste would be required to divest itself of a transfer station it

does not yet, and may never have, the authority to operate. Unless

the administrative hearing process is a mere formality, USA Waste

may never obtain the necessary permits. Should that be the case, the

merged company would instead be required to divest itself of USA

Waste's present transfer station located at 485 Scott Avenue in

Brooklyn. Unfortunately, the Scott Avenue transfer station is a much

smaller facility. It only has the capacity to process approximately

1,000 tons per day, while the proposed Nekboh facility has a

capacity in

[[Page 53706]]

excess of 5,000 tons per day. These are hardly comparable

facilities. The only way in which this agreement would truly serve

to protect the public from an unfair monopoly would be for it to

require the unconditional divestiture of both properties.

In addition, it would be an inexcusable waste of resources to

allow USA Waste to proceed with the permitting process (as would be

required by the consent agreement) since it would only be forced to

divest once it has obtained the necessary permits. In order to save

time and money, the process should be stopped now and USA Waste

should be required to divest itself of these sites immediately.

Although it may not fall within the purview of this settlement,

a provision that would prohibit the future use of the Nekboh

property, as well as the adjacent Eastern District Terminal

property, as a transfer station should be added to this agreement.

The Eastern District Terminal is a beautiful 20-acre parcel of

waterfront property which has recently been placed on the

Environmental Bond Act Open Spaces List. This parcel is truly a

treasure in my community and must be protected at all cost. I urge

you to join our effort to save this irreplaceable piece of land.

For the above reasons, I must object to this settlement. I urge

you to revisit this agreement and revise its terms to (1) require

that USA Waste divest itself unconditionally of both the Nekboh and

Scott Avenue properties, and (2) prohibit the future use of the

Nekboh/Eastern District Terminal property as a waste transfer

station. Thank you for your kind consideration of my comments.

Sincerely,

Joseph R. Lentol,

Assemblyman, 50th A.D.

JRL/jl

cc: Vice President Albert Gore

Exhibit 5

U.S. Department of Justice Antitrust Division

August 27, 1999.

Ms. Rosalind Rowen,

Sierra Club New York City Group, c/o 225 East 6th Street--Suite 3H,

New York, New York 10003.

Re: Comment on Proposed Final Judgment in United States, State of

Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et

al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 19998)

Dear Ms. Rowen: Thank you for your letter commenting on the

Final Judgment submitted for entry in the above case. The Complaint

in this case charged, among other things, that USA Waste's

acquisition of Waste Management would substantially lessen

competition in the disposal of New York City's commercial waste. The

proposed Judgment would settle the competitive concerns with respect

to the New York City market by, inter alia, requiring the defendants

to divest (a) the USA Waste's SPM Transfer Station; (b) USA Waste's

All City Transfer Station; and (c) the pending application by USA

Waste for a permit to construct and operate the Nekboh Transfer

Station, also in Brooklyn, NY. See Judgment, Secs. II (C)(2) (i)(1)-

(3) and IV(A). To ensure the defendants' continued cooperation with

the purchaser in its efforts to get the Nekboh site permitted, the

proposed Judgment further provides that if the Nekboh Transfer

Station does not receive an operating permit within one year after

entry of the Judgment, the defendants must divest the Scott Avenue

Transfer Station, also in Brooklyn, NY. See Judgment, Secs. II

(C)(2)(i)(4) and IV(B). In a transaction approved by the United

States in August 1998, under the terms of the decree, the defendants

divested All City Waste Transfer Station and their application for a

permit for the proposed Nekboh site to Republic Services, Inc.,

which previously did not operate any waste disposal sites in the New

York City area.

Your comment relates solely to those portions of the Judgment

that require USA Waste to divest all title and interest in its

application to construct and operate the Nekboh transfer station in

Brooklyn, New York. See Judgment, Secs. II (C)(1)(i)(2) and IV(A)

and (B). As you point out the site of the proposed Nekboh facility

abuts an area that the state of New York recently identified for

potential preservation under its Clean Water/Clean Air Bond Act.

Though Governor Pataki vetoed legislation that would have provided

funds for purchasing the site for development as a park, he

instructed the state Department of Environmental Conservation to

conduct an environmental assessment of the Nekboh site before

issuing an operating permit for a transfer station on that site.

You requested that we modify the Judgment to permit the Nekboh

site to be sold to the state for development as a public park. We

strongly believe that prompt divestiture of the Nekboh permit

application, and speedy permitting, construction and opening of a

transfer situation on the Nekboh site is essential to ensure

vigorous competition in the disposal of New York City's commercial

waste. Developing this site as a public park would frustrate that

goal.

On the other hand, nothing in the proposed Judgment would

preclude the appropriate New York permitting authorities from

lawfully deciding not to issue a permit to operate a waste transfer

facility on the Nekboh site. Whether Republic obtains an operating

permit for a transfer station on the Nekboh site would depend on a

variety of factors, including an assessment of the environmental

impact of a waste transfer station on that site. Your contention

that constructing the Nekboh waste transfer station would preclude

preservation of the site as a public park should be addressed to the

state and local regulatory agencies that review and ultimately

resolve such issues in the ordinary course of the permitting

process.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. section 16(d), a copy of

your comment and this response will be published in the Federal

Register and filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Note: Letter dated 9/14/98 from Rosalind Rowen of Sierra Club

New York City Group was unable to be published in the Federal

Register. A copy can be obtained from the U.S. Department of

Justice, Document Office, 325 7th St., Room 215, Washington, DC

20530 or (202) 514-2481.

Exhibit 6

U.S. Department of Justice Antitrust Division

August 27, 1999.

Douglas H. Ward, Esquire

Ward, Sommers & Moore, L.L.C., Plaza Office Center, 122 South Swan

Street, Albany, NY 12210.

Re: Comment on Proposed Final Judgment in United States, State of

Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et

al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

Dear Mr. Ward: Thank you for your letter commenting on the

proposed Final Judgment submitted for entry in the above case. The

proposed Judgment requires the defendants to divest their interest

in the proposed Nekboh Transfer Station, which, if permitted by

local government regulatory officials, would be constructed in

Brooklyn, NY. Your client, Neighbors Against Garbage, strongly

opposes permitting, construction and operation of a waste transfer

station on the Nekboh site. It proposes, instead, that we modify the

proposed Final Judgment to provide an incentive for using the Nekboh

site not as a waste transfer facility, but as a public park.

We strongly believe that divestiture of the Nekboh permit

application to an acceptable purchaser, and prompt permitting,

construction and opening of a waste transfer station on the Nekboh

site are steps that must be taken in order to provide an important

competitive constraint on defendants' disposal operations in the New

York City area. There is, however, nothing in the proposed Judgment

that precludes the responsible New York state and city agencies from

deciding not to issue a permit to operate a waste transfer station

on the Nekboh site. In fact, whether these regulatory agencies

decide to issue an operating permit for the Nekboh site depends on a

variety of factors, including an assessment of the environmental

impact of such a waste disposal facility. For that reason, your

argument that opening a waste transfer station on the Nekboh site

will have devastating environmental effects should be left to the

appropriate state and local regulatory agencies to review and

ultimately resolve.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this response will be published in the Federal Register

and filed with the Court.

[[Page 53707]]

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

Ward, Sommer & Moore, L.L.C., Counselors at Law

September 14, 1998.

J. Robert Kramer II,

Anti Trust Division, Chief Litigation II Sect., United States

Department of Justice, 1401 H Street N.W., Suite 3000, Washington,

DC 20530.

Re: USA Waste et al. v. USA Waste Services Inc., CV 1:98CV1616

Dear Mr. Kramer: The undersigned represents a group known as

Neighbors Against Garbage. In conjunction with numerous individuals

and public representatives, we have participated in New York State

Administrative proceedings opposing the construction and/or

operation of a waste transfer station in Brooklyn New York known as

the Nekboh Transfer Station (attached as Exhibit A). We write to

oppose approval of the Draft Consent Order which will encourage the

construction and operation of this ill-advised and unnecessary waste

transfer station.

Under the terms of the Draft Consent Order, (DCO at

II(c)(1)(i)(2), IV (A) and (B) and VIII [B] and [C]), it appears

that USA Waste must obtain a license for, and transfer its ownership

in, the Nekboh facility within one year from the entry of Final

Judgment, or sell its Brooklyn Transfer Station, located at 485

Scott Ave. While the terms of the agreement are not entirely clear,

it appears to provide an incentive for Waste Management to obtain

prompt permitting for the proposed Nekboh facility. My client and

the parties to this proceeding have steadfastly opposed any use of

this site as a waste transfer station. Recently, after considerable

public outcry, Governor Pataki and Mayor Guiliani convinced the NYS

Department of Environmental Conservation and the NYC Department of

Sanitation to ``go back to the drawing boards'' and conduct a

thorough environmental review of the proposal. We are hopeful that

this is the first step toward rejecting this unnecessary and ill-

conceived plan. Unfortunately, the Draft Consent Order, in pressing

USA Waste to obtain prompt approval of its application, is contrary

to the directive of the Governor and Mayor and the ever growing

factual record which demonstrates that the plan is a bad idea that

will have devastating, adverse impacts on the environment and the

neighborhood.

We suggest that these objectional provisions of the Draft

Consent Order should be modified. We agree with the divestitive

requirement, however, the Consent Order should allow that the site

could (or should) be used for other purposes such as open space or

recreation. Indeed, the agreement should provide an incentive for

dedicating the site for park type purposes. This approach would

conform this Consent Order to the direction of state and local

efforts and would not undercut the recent progress toward an

acceptable community compatible use for the Nekboh site.

Thank you for your attention to this matter.

Very truly yours,

Douglas H. Ward,

Ward, Sommer & Moore, LLC.

DHW/sak

cc: Cathleen Breen

State of New York--Department of Environmental Conservation

In the Matter of the Application of USA Waste Services of NYC, Inc.

For A Permit to Construct and Operate a Solid Waste Management

Facility

DEC Application No. 26101-00013/00008

Petition for Full Party Status of Hon. Howard Golden, Hon.

Sheldon Silver, Neighbors Against Garbage (``NAG''), Hon. Nydia

Valazquez, Hon. Joseph R. Lentol, Hon. Martin Connor, Hon. Joan

Millman, Hon. Felix Ortiz, Hon. Victor L. Robles, Hon. Kenneth

Fisher, Hon. Angel Rodriguez, Hon. Stephen Di Brienza, Hon. Kathryn

E. Freed, El Puente, de Williamsburg, Inc. (``El Puenta''), Make a

Difference Community Action Program (``MADCAP''), Williamsburg

Around the Bridge Block Association (``WABBA''), Northside Community

Development Council, Inc., The Watchperson Project, The Sierra Club,

United Jewish Council of the East Side, Inc., South Manhattan

Development Corporation, Citizens Action Network, Katherine and Alex

Kudiash, and Phil Smrek.

Attorneys for Petitioners

Frank J. Pannizzo, Esq.,

Counsel to the President of the Borough of Brooklyn, Borough Hall--209

Joralemon Street, Brooklyn, New York 11020, (718) 802-3807.

Ward, Sommer & Moore, Llc,

Plaza Office Center, 122 South Swan Street, Albany, New York 12210,

(518) 472-1776.

Brooklyn Legal Services

Foster Maer, Copoation A, 260 Broadway, Brooklyn, NY 11211, (718) 782-

6195.

New York Lawyers for the Public Interest

Sam Sue, Edward Copeland, of counsel, 30 West 21st St., 9th Floor, New

York, NY 10010, (212) 727-2270.

Finder and Cuomo, Llp

Attorney for Petitioner Citizens Action Network, Matthew A. Cuomo, of

counsel, 600 Third Ave., 27th Floor, New York, New York 10016, (212)

599-2244.

Dated: April 23, 1998.

Exhibit 7

U.S. Department of Justice Antitrust Division

August 27, 1999.

Mr. John McGettrick,

Co-Chairman, The Red Hook Civic Association, 178 Coffey Street,

Brooklyn, New York 11231.

Re: Comment on Proposed Final Judgment in United States, State of

Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et

al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

Dear Mr. McGettrick: Thank you for your letter commenting on the

Final Judgment submitted for entry in the above case. The Complaint

in this case charged, among other things, that USA Waste's

acquisition of Waste Management would substantially lessen

competition in the disposal of New York City's commercial waste. The

proposed Judgment would settle the competitive concerns with respect

to the New York City market by, inter alia, requiring the defendants

to divest: (a) the USA Waste's SPM Transfer Station; (b) USA Waste's

All City Transfer Station; and (c) the pending application by USA

Waste for a permit to construct and operate the Nekboh Transfer

Station, also in Brooklyn, NY. See Judgment, Secs. II (C)(2)(i)(1)-

(3) and IV(A). To ensure the defendants' continued cooperation with

the purchaser in its efforts to get the Nekboh site permitted, the

proposed Judgment further provides that if the Nekboh Transfer

Station does not receive an operating permit within one year after

entry of the Judgment, the defendants must divest the Scott Avenue

Transfer Station, also in Brooklyn, NY. See Judgment,

Secs. II(C)(2)(i)(4) and IV(B).

In a transaction approved by the United States in August 1998,

under the terms of the proposed Judgment, the defendants divested

All City Waste Transfer Station and their application for a permit

for the proposed Nekboh site to Republic Services, Inc., which

previously did not operate any waste disposal sites in the New York

City area.

You have pointed out that although the proposed Final Judgment

orders the defendants to divest a number of waste transfer stations

in Brooklyn and in the Bronx, the Judgment does not order them to

divest their interest in the proposed Erie Basin Marine Transfer

Terminal, a large waste disposal facility that USA Waste had

proposed permitting and constructing in the Red Hook section of

Brooklyn, NY. You asked whether the defendants' retention of this

disposal facility might nullify the effects of the ordered

divestitures, and whether the defendants ought to be forced to

withdraw their proposal to permit and construct the Erie Basin

facility.

As noted above, the Complaint alleged that defendants'

transaction would substantially reduce competition in the disposal

of the city's commercial waste. The proposed Erie Basin site,

however, was designed primarily for handling the city's residential

waste, not its private commercial waste. This waste transfer station

(and others proposed by competitors) would replace disposal capacity

that would be lost when New York City closes its only municipal

landfill, Fresh Kills, in late 2001. Although a portion of the Erie

Basin facility, if permitted, might handle some private commercial

waste, at the moment, whether Erie Basin will be permitted is

somewhat speculative. In any event, we do not see Erie Basin as a

significant competitive factor in the disposal of private commercial

waste, and hence, there was no reason for us to insist that the

defendants divest it to alleviate any competitive concerns regarding

competition in the disposal of New York City's private commercial

waste.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this

[[Page 53708]]

response will be published in the Federal Register and filed with

the Court.

Sincerely yours,

J. Robert Kramer II,

Chief, Litigation II Section.

The Red Hook Civic Association

October 23, 1998.

J. Robert Kramer II,

Chief, Litigation II Section, U.S. Department of Justice, 1401 H

Street NW, Suite 3000, Washington, D.C. 20530.

Re: Public Comment on U.S. v USA Waste Services, Inc., Civ. No. 1:98

CV 1616 (E.D. Ohio 7/16/98)

Dear Mr. Kramer: We would like to comment regarding the adequacy

of the New York City divestitures required as part of the above

captioned Final Judgment (the ``Settlement''). As you know, the

settlement requires the divestiture of the SPM Transfer Station at

912 East 132nd Street in the Bronx, the 2 North 5th Street waste

transfer station in Brooklyn, the Plymouth Street station in

Brooklyn and the Scott Avenue station in Brooklyn (the ``NYC

Divestitures'').

Waste Management is currently bidding to construct a huge new

marine transfer station. The company has recently submitted a

proposal to the New York Department of Sanitation to construct a

huge new marine transfer station (``MTS'') in the Erie Basin in

Brooklyn that would handle between 5,000 and 10,000 tons per day of

solid waste. We understand that Waste Management and USA Waste

already collectively control a substantial majority of the waste

transfer business in New York City. This MTS project would nullify

the competitive effects of the NYC Divestitures. In order to

preserve competition we believe that Waste Management should be

required to withdraw the MTS proposal as a condition of approval of

the merger contemplated by the merger agreement.

Please comment on whether Waste Management has disclosed the

Erie Basin MTS proposal to the Department of Justice and why Waste

Management should not be required to withdraw the Erie Basin MTS

proposal in order to give effect to the NYC Divestitures. Should you

have any questions with regard to the foregoing please do not

hesitate to call me at (718) 424-4040.

Yours very truly,

John McGettrick,

The Red Hook Civic Association.

cc: Dennis Vacco NYAG

Exhibit 8

U.S. Department of Justice Antitrust Division

August 27, 1999.

Dr. Alan Heslop,

Director, The Rose Institute of State and Local Government,

Claremont McKenna College, Adams Hall, 340 E. Ninth Street,

Claremont, CA 91711-6420.

Re: Comment on Proposed Final Judgment in United States, State of

Ohio, et al. v. USA Waste Services, Inc., Waste Management, Inc., et

al., Civil No. 98-1616 (N.D. Ohio, filed July 16, 1998)

Dear Dr. Heslop: This letter responds to your written comment on

the proposed Final Judgment in the above case, now pending in

federal district court in Cleveland, Ohio. The Complaint in that

case charged, among other things, that USA Waste's acquisition of

Waste Management would substantially lessen competition in the

disposal of commercial waste from portions of the City of Los

Angeles. The proposed Judgment would settle the case by, inter alia,

requiring the defendants to divest Chiquita Canyon Landfill, a large

waste disposal site located about 40 miles northeast of the City of

Los Angeles. In a transaction approved by the United States in

August 1998, under the terms of the decree, the defendants divested

the landfill to Republic Services, Inc., which prior to the sale,

did not operate any landfills in the greater Los Angeles area.

Your letter raises two issues related to the competitive effect

of the proposed acquisition in the Los Angeles area. First, you

question the governments' allegation that the relevant geographic

market for purposes of analyzing the effects of the acquisition is

commercial waste from the City of Los Angeles, an area defined in

the Complaint as those parts of the city east of the San Diego

Freeway, Interstate 405. In your view, the relevant market, at a

minimum, should include a five-county area comprising not only the

City of Los Angeles, but also Los Angeles, Ventura, Orange,

Riverside and San Bernardino counties. You note that if the relevant

geographic market is broadly defined to include these areas, then

the United States should have taken into account competition from--

and sought divestiture of--defendants' newly-permitted Mesquite

Regional Landfill, located nearly 170 miles southeast of the city of

Los Angeles.

In defining the relevant geographic market for the disposal of

Los Angeles' commercial waste, the United States took into account

the extent to which each of the private and public landfills in

Southern California could compete for the city's waste. In its

competitive analysis, the United States excluded some firms from the

relevant geographic market because their landfills were legally

prohibited from accepting any municipal solid waste from the City of

Los Angeles (e.g., most of the Los Angeles County landfills). The

United States excluded other facilities (e.g., Mesquite Regional

Landfill) because of their distance from, and relative

inaccessibility to, the Los Angeles area. As noted above, Mesquite

Regional Landfill is located 170 miles from the city. Rail is the

only practical way to transport waste from Los Angeles to that

landfill. With delivered costs in excess of $45/ton (including

transportation and tipping fees costs), the cost of disposing of

commercial waste from the City of Los Angeles at Mesquite Regional

Landfill would be nearly twice as much as the cost of sending such

waste to close-in LA area landfills, which have average tipping fees

of about $23/ton. The four firms that own or operate close-in

landfills can profitably increase their prices for disposal of Los

Angeles's commercial waste by a small but significant amount,

without losing significant business to distant landfills such as

Mesquite Regional. In these circumstances, it made economic sense to

exclude Mesquite Regional and similarly situated landfills from our

competitive analysis in determining the significance of the

defendants' merger in the disposal of Los Angeles's commercial

waste. See U.S. Department of Justice Horizontal Merger Guidelines

Secs. 1.2-1.3 (1997 ed.)

For similar reasons, it made sense to limit the relevant market

to commercial waste that originates in portions of the City of Los

Angeles located east of the San Diego Freeway, Interstate 405.

Private commercial waste generated in areas of the city west of the

freeway can be legally disposed of in several Los Angeles County

landfills, and in our view, the availability of the Los Angeles

County landfills for the disposal of waste from this section of the

city made it unlikely that the merger would substantially reduce

competition for such waste.

Finally, you may have overlooked the fact that expanding the

relevant geographic market to include the distant Mesquite Regional

Landfill would sweep into the market a number of other similarly-

situated large landfills that are not owned or otherwise controlled

by the four firms that operate close-in Los Angeles landfills.

Including these additional firms in the competitive analysis would

substantially diminish, perhaps even eliminate, any anticompetitive

effect of an acquisition by USA Waste of Waste Management, which

would make it difficult to justify requiring that the defendants

divest any Los Angeles area landfills.

Thank you for bringing your concerns to our attention; we hope

this information will help alleviate them. Pursuant to the Antitrust

Procedures and Penalties Act, 15 U.S.C. 16(d), a copy of your

comment and this response will be published in the Federal Register

and filed with the Court.

Sincerely yours,

J. Robert Kramer II,

Chief Litigation II Section.

Claremont McKenna College

November 23, 1998.

J. Robert Kramer II,

Chief, Litigation II Section, Antitrust Division, United States

Department of Justice, Suite 3000, 1401 H. Street, NW, Washington,

D.C. 20530.

Re: Proposed Final Judgment and Competitive Impact Statement Federal

Register, Volume 63, Pages 51125 et seq.

Dear Mr. Kramer: The Rose Institute of State and Local

Government at Claremont McKenna College (the ``Rose Institute'')

respectfully submits the following comments concerning the subject

Federal Register request for public comment. We note that the

comments and opinions expressed herein do not necessarily reflect

the opinions of the Trustees of Claremont McKenna College or the

Governors of the Rose Institute, but are the findings of the

scholars and researchers who have worked on the comments.

By way of introduction, the Rose Institute is a non-profit

organization founded in 1973 with a goal of building a comprehensive

and unmatched resource of information on the almost 20 million

people and several hundred local governments in southern California.

It is staffed primarily by the faculty and students of Claremont

McKenna

[[Page 53709]]

College and the Claremont Graduate School, members of the Claremont

University System. The institute specializes in public policy

analysis and its researchers are trained in a wide range of

disciplines, including government, finance, computer science

(including GIS) and environmental regulation and law. While the Rose

Institute has been involved in a number of matters of national

interest, its general policy analyses are focused on matters

affecting California and, in particular, the Los Angeles County and

Inland Empire areas of southern California, including the Counties

of San Bernardino, Riverside, and Imperial.

One of the major public policy issues which has been the focus

of long-term and ongoing research within the Rose Institute is that

of solid waste management--particularly concerning the issues of

non-hazardous solid waste generation, recycling, reuse, and

disposal.

Before the economic recession of the early 1990s, the Rose

Institute undertook to play an important role in assisting public

policy-makers as they reviewed and identified issues related to the

development of plans and methodologies necessary to implement a

waste-by-mail disposal system for southern California. The effects

of the recession and the success of state-mandated waste recycling

requirements delayed what had been projected as a critical need for

waste-by-rail disposal options. Nevertheless, over the past several

months, the Rose Institute has undertaken to review again the

viability and necessity of potential waste-by-rail disposal options

for southern California. A report, entitled ``Regional Solid Waste

Management in Southern California for the New Millennium,'' sets

forth our analysis and conclusions concerning this subject matter

and is nearing final publication status. We expect formally to

release the report in the near future. Nevertheless, because of the

significance of this research for the issues raised in the subject

Federal Register Notice, we have attached a draft copy of the

report, noting that it has yet to be finally formatted, bound, etc.,

before formal release. We respectfully request that it be considered

an integral part of the comments that follow.

During our research for the attached report, we necessarily

reviewed the effects of the merger of Waste Management, Inc. and USA

Waste Services, Inc. While it was not the initial intention of our

research effort to address the specifics of that merger in our

region, when the subject Proposed Final Judgment and Competitive

Impact Statement (``Impact Statement'') appeared in the Federal

Register, the Rose Institute as a matter of objective analysis, and

in light of its research and the realities of waste disposal in our

region, concluded that the Department of Justice had seriously mis-

identified the relevant market area for southern California--at

least with respect to ``disposal assets'' as that term is used in

the Impact Statement.

The comments that follow are strictly limited to issues within

the southern California geographical area. Furthermore, we express

no opinion whether the relevant market area has been properly

defined for purposes of ``hauling assets'' as that term is used in

the Impact Statement. Based on our primary research related to

waste-by-rail, our comments are directed only to ``disposal

assets.''

In short, our conclusion is that the Department of Justice has

mis-identified the relevant market area for waste disposal assets in

Los Angeles and southern California in general and, in doing so, has

provided a clear opportunity for the creation of substantial anti-

competitive effects within the region related to solid waste

disposal. Our detailed comments are attached.

We appreciate the opportunity to submit these comments and would

be pleased to discuss them further with officials at the Department

of Justice or before the United States District Court for the

Northern District of Ohio, Eastern Division.

Sincerely,

Alan Heslop,

Director.

Comments of the Rose Institute of State and Local Government at

Claremont McKenna College Regarding the Department of Justice

Proposed Final Judgment and Competitive Impact Statement \1\ 63 FR

51125 et seq.

Summary of comments and Conclusions

The Rose Institute of State and Local Government (``The Rose

Institute'') at Claremont McKenna College respectfully concludes that

the Department of Justice (``DOJ'') has not correctly defined the

``relevant geographic market'' for municipal solid waste (``MSW'')

disposal in Los Angeles, California.\2\ As a result, DOJ's analysis of

the competitive impacts of the USA Waste/WMI merger in the Los Angeles

area and its recommendations regarding the divestiture of ``Relevant

disposal Assets'' \3\ set forth in the proposed Final Judgment and

Competitive Impact Statement are deficient. Our analysis indicates that

the ``relevant geographic market'' should encompass, at a minimum, the

entire County of Los Angeles and not merely a portion of the City of

Los Angeles. So defined, the proposed Final Judgment and Competitive

Impact Statement would necessarily have reached substantially different

conclusions as to the need for further divestiture of ``Relevant

Disposal Assets'' in the Los Angeles market. These conclusions are

based upon the following:

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\1\ The proposed Final Judgment, Hold Separate Stipulation and

Order, and Competitive Impact Statement were prepared in connection

with a civil antitrust lawsuit filed by the United States of America

and eleven (11) states, including California, in an effort to enjoin

the merger of USA Waste Services, Inc. (``USA Waste'') and Waste

Management, Inc. (``WMI'') as a violation of Section 7 of the

Clayton Act, 15 U.S.C. Sec. 18. On July 16, 1998, a Complaint for

Injunctive Relief Case No. 1:98 CV 1616 (the ``Complaint'') and the

proposed competitive Impact Statement were filed in the United

States District Court for the Northern District of Ohio Eastern

Division.

\2\ The Complaint (page 4) defines ``Los Angeles'' as ``that

area of the City of Los Angeles, CA, located east of Interstate 405,

the San Diego Freeway.''

\3\ The term ``Relevant Disposal Assets'' is defined at 63 FR

51130.

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(1) The definition of the Los Angeles market is overly restrictive

and narrow in that:

(a) It is consistent with California state law establishing a

comprehensive disposal site planning and utilization process that has

been implemented by both the City and County of Los Angeles.\4\

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\4\ The California Integrated Waste Management Act of 1989 (AB

939), as amended, California Public Resources Code Secs. 40000 et

seq.

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(b) It is inconsistent with the City of Los Angeles' own MSW

disposal and contracting practices and ignores Los Angeles County's

state-approved integrated waste management plan and the disposal

realities throughout southern California.

(c) The boundaries chosen appear to be arbitrary, artificial, and

without any meaningful or logical relationship to the demographics,

economics, or natural geographical features or boundaries of the City

of Los Angeles.

(d) It fails to recognize the actual commercial MSW disposal and

marketing practices of WMI in the City of Los Angeles market.

(e) It is inconsistent with the definitions of the geographic

markets for all other metropolitan areas in the proposed Final Judgment

and Competitive Impact Statement, and it appears to bear no

relationship to the definition of ``relevant area'' set forth in the

Hold Separate Stipulation and Order.

(2) The definition of the geographic market of Los Angeles is

inconsistent with the DOJ's prior recent review and action taken

regarding similar waste disposal asset transactions between competitors

of USA Waste and WMI in the Los Angeles area.

(3) The proposed Final Judgment and Competitive Impact Statement

appears to ignore the effects of recent acquisitions of disposal assets

in the region by USA Waste prior to its merger with WMI and thereby

compounds the potential anti-competitive effects of the subject merger.

(4) By expanding the Los Angeles market to include the entire

county, the analysis of the competitive effects of the transaction

would necessarily have included additional landfills in southern

California, as well as outside of the state, in which USA Waste and WMI

own, control, or hold an interest.

For the reasons set forth above, the proposed Final Judgment and

[[Page 53710]]

Competitive Impact Statement should be amended to reflect the realities

of waste disposal in the Los Angeles region consistent with the

analysis contained in these comments. Divestiture of additional

``Relevant Disposal Assets'' in the Los Angeles market should be

required, including the El Sobrante Landfill in western Riverside

County and USA Waste's interest in the Mesquite Regional Landfill

waste-by-rail project in Imperial County.

Introduction

Attached to these comments in the December 1998 report of The Rose

Institute entitled ``Regional Solid Waste Management in Southern

California for the New Millenium'' (``The Rose Report''). We

respectfully request that The Rose Report be read in its entirety to

provide essential background information for the following specific

comments. The report provides an important factual and historical

review of waste disposal in southern California--especially in the City

and County of Los Angeles, and many of the comments that follow make

specific reference to portions of that report.

By way of summary, The Rose Report shows that, for many years,

issues relating to waste management--in particular that of disposal--

have received regional attention in southern California. Long before

the passage of AB 939, which mandates that waste disposal be addressed

through joint city and county planning efforts, the Los Angeles area

had a regional perspective on waste issues. Examples of the

regionalization of waste management include Los Angeles' reliance upon

disposal of organic wastes in San Bernardino ``pig farms'' well into

the 1950s and the proposed development of large regional waste-to-

energy facilities during the 1970s and 1980s. Regionalization is

currently reflected in the formalized planning process for, and

potential embrace of, regional waste-by-rail projects.

The Rose Report concludes that, despite the successes made in

diverting waste from landfills into recyclable markets pursuant to AB

939, with the closure of three (3) large local landfills in the recent

past,\5\ the need for regional waste disposal capacity is critical--

particularly in view of the extended time required to obtain permits

and develop new or expanded landfill capacity in the southern

California area. More importantly, our conclusions are not unique but

reflect the consensus of other observers of the issue in the region.

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\5\ The Lopez Canyon Landfill in the City of Los Angeles, the

BKK Landfill in the City of West Covina, and the prohibition of

acceptance of MSW at the Azusa landfill in the City of Azusa.

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We believe that, in a very real sense, and in a potentially harmful

manner to consumers and the public interest, DOJ has failed to evaluate

properly both the near and long term anti-competitive effects of the

merger on Los Angeles County, the county with the largest population in

the United States. We further believe that the consequence of the DOJ

analysis, if left unamended, will be to place in one operator--WMI--

overwhelming control of private landfill disposal capacity capable of

serving the City and County of Los Angeles and the entire southern

California area all the way to the eastern border of the State and

south to the border of the United States with Mexico.

Since the late 1980s, the Rose Institute has been a regular

``player'' in the public policy debate over waste management issues for

the southern California region. Our programs have been supported and

attended by most of the major waste management firms operating in

southern California, including WMI, Browning Ferris Industries

(``BFI''), Norcal Waste Systems, Mine Reclamation Corporation, and

others. We have no ``axe to grind'' with any firm, nor are we obviously

``interested'' from a competitive viewpoint. Rather, effective public

policy guides our analyses and interests in this matter and underscore

the obligation we feel to file these comments.

Finally, by way of limitation, the comments that follow are limited

to issues related to the definitions of ``relevant geographic market''

and ``Relevant Disposal Assets'' as they relate to Los Angeles. The

Rose Institute takes no position concerning the ``Relevant Hauling

Assets'' as the term is used in the proposed Hold Separate Stipulation

and Order that is part of the Final Judgment.

Specific Comments

(1) The Definition of Los Angeles Markets Is Overly Restrictive and

Narrow

(a) The Definition of the Los Angeles Market Is Inconsistent With

Applicable California State Law

The California Integrated Waste Management Act (commonly referred

to as AB 939), establishes legal requirements for all California

counties and municipalities to develop and implement a comprehensive

integrated waste management program. Failure of timely compliance with

the mandates of AB 939 can result in civil penalties of up to ten

thousand dollars ($10,000) per day for each day of violation.

Key among the mandated requirements of AB 939 is that each county

must prepare a countywide integrated waste management plan. Part of the

plan includes a Countywide Siting Element that must provide for at

least fifteen (15) years of waste disposal capacity to meet the

county's projected needs. The plan must also include Source Reduction

and Recycling Elements from each of the cities in the county

demonstrating compliance with the statute's waste diversion

mandates.\6\ Each countywide plan is required to be prepared by a

countywide task force made up of representatives of the county and

cities within that county. The role of the task force is to identify

waste management issues of countywide or regional concern, determine

the need for waste facilities that can service more than one

jurisdiction within the county, facilitate the development of multi-

jurisdictional methods for marketing recyclable materials, and resolve

conflicts and inconsistencies between the subject county.\7\ The entire

plan is then submitted to the California Integrated Waste Management

Board in Sacramento for approval. No provision is made within the law

for any city, per se (other than the City and County of San Francisco)

to prepare or implement its own waste disposal siting mechanism. That

mechanism provided for in the Countrywide Siting Element, is, by law,

reserved for the county. However, before submitting the Countywide

Siting Element to the Integrated Waste Management Board, it must first

be approved by a ``majority of the cities within the county, which have

a majority of the population of the incorporated areas of the county.''

\8\

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\6\ The law requires that each county and each city within each

county demonstrate the ability to achieve 25% diversion (recycling)

of generated wastes from landfills by the year 1995 and 50%

diversion by the year 2000.

\7\ California Public Resources Code Sec. 40950.

\8\ California Public Resources Code Sec. 41721.

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No new landfill may be permitted and no existing landfill expanded

within a region covered by an approved Siting Element without first

being identified and included in the approved Siting Element.

In June 1997, the Los Angeles County Solid Waste Management

Committee/Integrated Waste Management Task Force, which included

representatives from the City of Los Angeles, completed its draft of

the Countywide Siting Element. It was subsequently approved in June

1998 by the California Integrated Waste Management Board. While a more

thorough review of a key finding of the

[[Page 53711]]

Siting Element is reserved for discussion below, the unavoidable point

made here is that DJO's definition of the Los Angeles waste market for

purposes of determining ``Relevant Disposal Assets'' is wholly

inconsistent with the basic requirements of state law which addresses

waste disposal issues and practices on a city or countywide basis. Only

the county with the approval of the majority of its cities representing

a majority of the population in that county has the authority to

complete and promulgate a siting plan. Pursuant to law, Los Angeles

County, with Los Angeles City's active involvement and approval, did

precisely that. The geographical extent of that effort is substantially

broader than the Los Angeles market as defined by DOJ.

(b) The Definition of the Los Angeles Market is Inconsistent With the

City Los Angeles' Own Waste Disposal Practices

As reviewed in the Rose Report, the City of Los Angeles has long

relied on disposal of its wastes at locations outside of its

jurisdictional boundaries. As disclosed in the official records from

the waste disposal reporting system maintained by the California

Integrated Waste Management Board, the City of Los Angeles currently

disposes of approximately twenty percent (20%) of its MSW at landfill

facilities outside the City limits. Moreover, official waste disposal

reports indicate that the City of Los Angeles regularly disposes of MSW

in landfills in Orange, Riverside, and Ventura Counties in addition to

landfills in Los Angeles County outside the City limits.\9\ Figure 1

sets forth a map of the region indicating the sites where Los Angeles

City wastes are currently disposed.

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\9\ ``Total Disposal and Export for Jurisdictions Within a

County Region'', November 2, 1998, California Integrated Waste

Management Board.

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USA Waste and WMI landfills that provide MSW disposal services to

the City of Los Angeles include the Azusa Landfill and Lancaster

Landfill in Los Angeles County, the Simi Valley Landfill in Ventura

County, and the El Sobrante Landfill in Riverside County (formerly

owned by Western Waste Industries prior to its 1996 acquisition by USA

Waste). While DOJ's analysis properly identifies the Chiquita Canyon

Landfill (which is located outside of the Los Angeles market as defined

by DOJ) as accepting MSW from the City of Los Angeles, the other USA

Waste/WMI controlled disposal facilities are also important components

in the Los Angeles solid waste management program.

In summary, Los Angeles City's own disposal practices, readily

determined by review of official public records, are at odds with DOJ's

delineation of the geographic market for purposes of identifying

``Relevant Disposal Assets'' to maintain competition in the Los Angeles

marketplace.

(c) The Boundaries of the Los Angeles Market Area Are Arbitrary

Since the DOJ analysis apparently did not consider either the

requirements of state law or the realities of actual disposal practices

for the City of Los Angeles, there may have been some demographic or

other factors relied upon by DOJ in defining the Los Angeles market.

However, nowhere in the Complaint or the proposed final Judgment or

Competitive Impact Statement is there any indication that DOJ relied on

demographic or geographical factors in establishing the market. In any

event, the Rose Institute is not aware of demographic or geographic

features, waste industry practices, or legal constraints that could

logically support a determination by DOJ to confine the relevant market

to an area covering about one-half of the City of Los Angeles.

Specifically, The Rose Institute is quite certain that there are no

``flow control'' legal restrictions in Los Angeles City or county that

could have led the DOJ to restrict the market area to only a portion of

Los Angeles City. Moreover, southern California is renowned for its

``regionalization'' of important social and policy matters such as air

quality control and regulation, mass transportation, water supply and,

as clearly documented in The Rose Report, solid waste disposal.

To illustrate further what we believe to be the illogic of the

limited definition of the relevant area, we set forth in figure 2 a map

of southern California population distribution, prepared employing the

Rose Institute's Geographic Informational systems capabilities. The

population of the Los Angeles market as defined by DOJ is set out

against geographical population distributions in the region on Figure

2. In reviewing the population data, the obvious question is why did

DOJ exclude from its market analysis almost eighty-five percent (85%)

of the region's entire population--much of which is in jurisdictions

that currently accept Los Angeles City's MSW for disposal? Also, why

would DOJ's market analysis only consider a fraction of the total

actual MSW generated by the City? Clearly, when compared to the

geographic market definitions developed for the other metropolitan

areas (discussed more fully below) considered in the Final Judgment and

Competitive Impact Statement, DOJ's analysis of the Los Angeles market

cannot be supported.

(d) The Boundaries of the Los Angeles Market Fail To Recognize the

Actual Commercial Waste Disposal and Marketing Practices of WMI

Substantial amounts of MSW for the entire City of Los Angeles are

disposed at the Bradley West Landfill, owned and operated by WMI and

located within the relevant geographic market. However, the Rose

Institute is not aware of any public information (including MSW

disposal contracts) that either accounts for the generation of MSW in

the area of Los Angeles delineated by DOJ (i.e., east of Interstate 405

in the City of Los Angeles) or distinguishes between MSW generated

``east of the 405'' or ``west of the 405.''

Certainly, given the size and importance of the Los Angeles market,

if such information existed it would be commonly known. Moreover, as

detailed in The Rose Report, the information would be reflected in the

Countywide Siting Element of Los Angeles County (discussed below). The

Siting element specifically recognizes the possibility of using a

number of USA Waste and WMI's landfills located in California, Arizona,

Nevada, and even as far away as Oregon--WMI's Columbia Ridge Landfill.

And, as noted above, the Siting element is, by law, the official

``blueprint'' for waste disposal pians for all 88 cities and the

unincorporated areas in Los Angeles County, including the City of Los

Angeles. Furthermore, even a cursory review of Los Angeles City and

County public records would have revealed numerous and ongoing efforts

of WMI to market these facilities to the City and County. An example is

the 1989-90 proposal by WMI to the Los Angeles county Sanitation

Districts to secure a waste commitment to its RailCycle project in San

Bernardino County and to utilize rail-based transfer station sites in

El Segundo (west of interstate 405) and in the City of Commerce, as

discussed in detail in The Rose Report.

(e) The Definition of Los Angeles Market Is Inconsistent With DOJ's

Analysis of Other Metropolitan Areas

In each and every other city identified in the Complaint (and

unlike the approach taken for Los Angeles), the definition of

``relevant geographic market'' includes not only the entire area and

population of the city, but also the surrounding or adjacent

county(ies). Thus, for example:

[[Page 53712]]

--Baltimore--``means the City and Howard, Baltimore, Carroll, and Anne

Arundel Counties.''

--Cleveland--``means the City of Cleveland and Cuyahoga County.''

--Detroit--``means the City of Detroit and Wayne County.''

--Miami--``means the City of Miami and Broward, Dade, and Monroe

Counties.''

--New York--``means New York, Bronx, Queens, and Richmond Counties.''

--Pittsburgh--``means the City of Pittsburgh and Allegheny and

Westmoreland Counties.''

(Complaint at pages 4 and 5, emphasis supplied.)

The fact of the matter is that Los Angeles is the only municipality

in the Complaint that is restricted to a size smaller than its own

municipal boundaries and which does not also include the county in

which it is, at least in part, situated. The Rose Institute fails

entirely to understand what type of criteria and methodology could have

been utilized by DOJ for treating Los Angeles so differently from every

other metropolitan waste disposal market in the country identified in

the Complaint. Further, we note that a number of the other waste

markets, as defined, have greater populations than the Los Angeles

market, as defined by DOJ, and the market identified for the New York

area has a substantially greater population that approximates the

population of the entire County of Los Angeles. Based upon 1990 cenus

data, the following table sets forth a summary of the populations in

these areas (including the listed counties):

Baltimore.............................................. 1,497,956

Detroit................................................ 1,411,209

Miami.................................................. 3,309,246

New York............................................... 7,703,051

Pittsburgh............................................. 1,708,696

Portion of Los Angeles City Selected by DOJ............ \10\ 2,936,500

Given DOJ's characterization of the New York metropolitan area as the

relevant market area (an area containing many natural potential

barriers to the ``flow'' of MSW to landfills) it would seem that it

should have also characterized the Los Angeles metropolitan areas,

which contains over nine million people in Los Angeles County alone

(current estimate), as the relevant market area. We also note that, in

addition to New York, many of the other jurisdictions also contain some

natural geographical features such as rivers and major waterways (not

present in the Los Angeles area) that might have led an analyst to

conclude that natural barriers exist that affect MSW disposal practices

in the area. In any event, absent some logical explanation from DOJ for

its remarkably different treatment of Los Angeles, one is left only to

speculate over how the conclusions were arrived at.

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\10\ Estimated by use of Geographic Information System

capabilities of the Rose Institute.

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In the context of the dissimilar treatment by DOJ of the Los

Angeles market compared to other metroplitan areas, we also note that

another key issue arises relating to the absence of any analysis of the

growing importance of transfer stations generally in California, and

particularly in the Los Angeles area.

Whole DOJ correctly analyses the potential for enlarging the

geographical reach for disposal market purposes through the use of

transfer stations (Pages 9 and 10 of the Complaint), it does not

consider this factor in the Los Angeles market analysis. As outlined in

The Rose Report, municipalties in the southern California regio

primarily because of the recycling and waste diversion mandates of AB

939, are moving rapidly to the utilization of ``Materials Recovery

Facilit

This text is long and has been trimmed here. Open the source document for the complete record.