[Federal Register: August 12, 2003 (Volume 68, Number 155)]
[Notices]
[Page 47930-47945]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12au03-62]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States and New Jersey, Plaintiffs; v. Waste Management,
Inc., and Allied Waste Industries, Inc., Defendants; Proposed Final
Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Hold Separate Stipulation and Order, and Competitive Impact Statement
have been filed with the United States District Court for the District
of Columbia in United States of America et al. v. Waste Management,
Inc., et al., Civil No. 1:03CV01409(GK).
On June 27, 2003, the United States and the State of New Jersey
filed a Complaint alleging that Waste Management's acquisition of
certain voting securities and waste-hauling and disposal assets of
Allied would lessen competition substantially in the provision of small
container commercial waste collection services in the areas of Pitkin
County, Colorado; Garfield County, Colorado; Augusta, Georgia; Myrtle
Beach, South Carolina; Morris County, New Jersey; and Bergen and
Passaic Counties, New Jersey, and in the provision of municipal solid
waste disposal services in the Bergen and Passaic Counties, New Jersey
and Tulsa and Muskogee, Oklahoma disposal areas, in violation of
Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final
Judgment, filed at the same time as the Complaint, requires, among
other things, that defendant Waste Management (1) divest small
commercial waste collection assets in the areas of Pitkin County,
Colorado; Garfield County, Colorado; Augusta Georgia; Myrtle Beach,
South Carolina; Morris County, New Jersey; and Bergen and Passaic
Counties, New Jersey; (2) alter the contracts it uses with its existing
and new small container commercial waste customers in the areas of
Augusta, Georgia and Myrtle Beach, South Carolina; (3) divest transfer
station facilities serving Bergen and Passaic Counties, New Jersey; and
(4) sell throughput disposal rights at a facility serving Bergen and
Passaic Counties, New Jersey. Copies of the Complaint, the proposed
Final Judgment, and the Competitive Impact Statement are available for
inspection at the U.S. Department of Justice, Antitrust Division, Suite
215 North, 325 7th Street, NW., Washington, DC 20004 (telephone: (202)
514-2692), and at the Clerk's Office of the U.S. Court for the District
of Columbia, 333 Constitution Avenue, NW., Washington, DC 20001.
Public comment is invited within 60 days of the date of this
notice. Such comments and responses thereto will be published in the
Federal Register and filed with the Court. Comments should be directed
to J. Robert Kramer II, Chief, Litigation II Section, Antitrust
Division, U.S. Department of Justice, 1401 H Street, NW., Suite 3000,
Washington, DC 20530 (telephone: (202) 307-0924).
Dorothy B. Fountain,
Deputy Director of Operations.
United States District Court for the District of Columbia
[Case No: 03 1409]
Hold Separate Stipulation and Order
It is hereby stipulated and agreed by and between the undersigned
parties, subject to approval and entry by the Court, that:
I. Definitions
As used in this Hold Separate Stipulation and Order:
A. ``Acquirer'' means the entity or entities to whom Waste
Management divests the Relevant Disposal Assets, Relevant Hauling
Assets, or the Alternative Disposal Asset.
[[Page 47931]]
B. ``Allied'' means Defendant Allied Waste Industries, Inc., a
Delaware corporation with its headquarters in Scottsdale, Arizona, and
its successors and assigns, its subsidiaries, divisions, groups,
affiliates, partnerships, joint ventures, and their directors,
officers, managers, agents, and employees.
C. ``Alternative Disposal Asset'' means, unless otherwise noted,
with respect to each transfer station listed and described herein, all
of Defendants' rights, titles, and interests in any tangible asset,
related to the operation of each transfer station listed, including all
fee simple or ownership rights to offices, garages, related facilities,
capital equipment, trucks and other vehicles, scales, power supply
equipment, and supplies; and all Defendants' rights, titles, and
interests ion any related intangible assets, including all leasehold
interests and renewal rights thereto, permits, customer lists,
contracts, and accounts, or options to purchase any adjoining property.
Alternative Disposal Asset, as used herein, means one of the
following three properties, as selected by Defendant Waste Management
in accordance with the terms provided in Sections IV.I., V.B., and V.C.
of the final Judgment:
1. Park Ridge, New Jersey
Waste Management's Park Ridge Transfer Station, located at 94 Perry
Street, Park Ridge, New Jersey 07656; or
2. Fairview, New Jersey
Allied's Fairview Transfer Station (formerly permitted to BFI
Transfer Systems of New Jersey, Inc.), located at 61 Broad Avenue,
Fairview, New Jersey 07022; or
3. Hillsdale, New Jersey
Waste Management's Hillsdale Transfer Station, located at 131
Patterson Street, Hillsdale, New Jersey 07642.
D. ``Disposal'' means the business of disposing of waste into
approved disposal sites (i.e., landfills, incinerators, and transfer
stations).
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. ``Fully Permitted'' means a renewal of the operating permit,
currently held by Waste Management's Chestnut Ridge Solid Waste
Transfer Station of Chestnut Ridge, New York and scheduled to expire on
November 30, 2003, by the New York State Department of Environmental
Conservation (``NYDEC'') for an additional five (5) years under terms
and conditions comparable to those in the currently held permit; and
further means that all additional zoning, environmental, and other
permits required to operate the facility are valid and lawful. The
renewed permit must be granted by NYDEC prior to expiration of the time
period set forth in Section IV.A. of the Final Judgment, which time
period shall include the sixty (60) day extension.
G. ``Landfill'' means a facility where waste is placed into the
land.
H. ``MSW'' means municipal solid waste, a term of art used to
describe solid putrescible waste generated by households and commercial
establishments such as retail stores, offices, restaurants, warehouses,
and non-manufacturing activities in industrial facilities. MSW does not
include special handling waste (e.g., waste from manufacturing
processes, regulated medical waste, sewage, and sludge), hazardous
waste, or waste generated by construction or demolition sites.
I. ``New Jersey Assets'' means the Relevant Disposal Assets and the
Relevant Hauling Assets located in New Jersey.
J. ``Relevant Disposal Assets'' means, unless otherwise noted, with
respect to each transfer station listed and described herein, all of
Defendants' rights, titles, and interests in any tangible asset related
to each transfer station listed, including all fee simple or ownership
rights to offices, garages, related facilities, capital equipment,
trucks and other vehicles, scales, power supply equipment, and
supplies, and all Defendants' rights, titles, and interests in any
related intangible assets, including all leasehold interests and
renewal rights thereto, permits, customer lists, contracts, and
accounts, or options to purchase any adjoining property.
Relevant Disposal Assets, as used herein, includes the following
transfer stations, or throughput or tolling disposal rights:
1. Garfield, New Jersey
Allied's Garofalo Recycling and Transfer Station (formerly
permitted to Garofalo Brothers, Inc., and Garofalo Recyling and
Transfer Station Co., Inc.), located at 19-35 Atlantic Street,
Garfield, New Jersey 07026.
2. Chestnut Ridge, New York
Waste Management's Fully Permitted Chestnut Ridge Solid Waste
Transfer Station (owned by and permitted to Waste Management's
subsidiary Marangi Bros., Inc.), located at 560 Chestnut Ridge Road,
Chestnut Ridge, New York 10977.
3. North Arlington, New Jersey
Throughout or tolling disposal rights of a maximum of 1,925 tons
per week, for the remainder of Waste Management's current lease and if
the lease is renewed, for the duration of the period in which Waste
Management has contractual rights to operate the facility, not to
exceed the termination date of the Final Judgment. These disposal
rights are exercisable by the Acquirer (or its designee), at the New
Jersey Meadowlands Commission's HMDC Solid Waste Baler Facility (``HMDC
Facility''), located at 100 Baler Boulevard, North Arlington, New
Jersey 07031, under the following terms and conditions:
a. At the Acquirer's option, Waste Management shall set aside and
operate or, allow the Acquirer (or its designee) to operate one (1)
disposal bay and a scale and scale house for the sole use of the
Acquirer (or its designee);
b. Waste Management shall permit the Acquirer (or its designee) to
deliver waste to the HMDC Facility during operating hours from Monday
through Saturday up to the weekly maximum of 1,925 tons. Waste
Management shall have the right to stop accepting waste from any
additional truck owned or operated by the Acquirer (or its designee)
and entering the premises after Waste Management has accepted 350 tons
of waste from the Acquirer (or its designee) on any day the HMDC
Facility is operating;
c. Under the throughput or tolling arrangement, Waste Management
shall permit the Acquirer (or its designee) to deliver waste to the
HMDC Facility for processing and, at the option of the Acquirer (or its
designee), load the processed waste into vehicles designated by the
Acquirer (or its designee) for ultimate disposal; and
d. Waste Management shall operate all HMDC Facility gates, scales,
scale houses, and disposal areas described in the Acquirer's contract
under terms and conditions no less favorable to the Acquirer (or its
designee) than those provided to Waste Management or its customers,
including any municipality.
K. ``Relevant Hauling Assets'' 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, supplies, and if requested by
the purchaser, real property and improvements to real property (i.e.,
buildings and garages). It also includes all intangible assets,
including hauling-
[[Page 47932]]
related customer lists, contracts, leasehold interests, permits and
accounts.
Relevant Hauling Assets, as used herein, includes the assets in the
following locations:
1. Augusta, Georgia
Allied's commercial waste collection routes 903, 904, 916, and 922
that operate out of Allied's Augusta division located at 683 Commerce
Court, Evans, Georgia 30809.
2. Myrtle Beach, South Carolina
Allied's commercial waste collection routes 711, 714, and 715 that
operate out of Allied's Rural Sanitation Services Hauling facility
located at 3512 Highway 501, Myrtle Beach, South Carolina 29579.
3. Pitkin and Garfield Counties, Colorado
Waste Management's waste collection routes 730, 824, 825, 831, 850,
and 853 that operate out of Waste Management's facilities located at
226 North 12th Street, Carbondale, Colorado 81623.
4. Bergen and Passaic Counties, New Jersey
Allied's commercial waste collection routes 700, 705, 706, 401, and
405 that operate out of Allied's VMI Waste Services Hauling facility
located at 75 Broad Avenue, Fairview, New Jersey 07022, except that
Waste Management is not required to divest real property or
improvements to real property (i.e., buildings, garages, or leasehold
rights related thereto).
5. Morris County, New Jersey
Allied's commercial waste collection route 702 that operates out of
Allied's VMI Waste Services Hauling facility located at 75 Broad
Avenue, Fairview, New Jersey 07022, except that Waste Management is not
required to divest real property or improvements to real property
(i.e., buildings, garages, or leasehold rights related thereto).
L. ``Small container commercial waste collection service'' means
the business of collecting MSW from commercial and industrial accounts,
usually in ``dumpsters'' (i.e., a small container with one (1) to ten
(10) cubic yards of storage capacity), and transporting or ``hauling''
such waste to a disposal site by use of a front- or rear-end loader
truck. Typical commercial waste collection customers include office and
apartment buildings and retail establishments (i.e., stores and
restaurants).
M. ``Waste Management'' means Defendant Waste Management, Inc., a
Delaware corporation with its headquarters in Houston, Texas, and
includes its successors and assigns, and its subsidiaries, divisions,
groups, affiliates, partnerships, joint ventures, and their directors,
officers, managers, agents, and employees.
II. Objectives
The Final Judgment filed in this case is meant to ensure
Defendants' prompt divestiture of the Relevant Disposal Assets and
Relevant Hauling Assets for the purpose of establishing viable
competitors in the municipal solid waste (``MSW'') disposal business
and the small container commercial waste collection business, to remedy
the effects that the United States alleges would otherwise result from
the acquisition of Allied's assets by Waste Management. This Hold
Separate Stipulation and Order ensures, prior to such divestitures,
that the Relevant Disposal Assets and Relevant Hauling Assets remain
independent, economically viable, and ongoing business concerns that
will remain independent and uninfluenced by Waste Management or Allied,
and that competition is maintained during the pendency of the ordered
divestitures.
III. Jurisdiction and Venue
The Court has jurisdiction over the subject matter of this action
and over each of the parties hereto, and venue of this action is proper
in the United States District Court for the District of Columbia.
IV. Compliance With and Entry of Final Judgment
A. The parties stipulate that a Final Judgment in the form attached
hereto as Exhibit A may be filed with and entered by the Court, upon
the motion of any party or upon the Court's own motion, at any time
after compliance with the requirements of the Antitrust Procedures and
Penalties Act (15 U.S.C. 16), and without further notice to any party
or other proceedings, provided that the United States has now withdrawn
its consent, which it may do at any time before the entry of the
proposed Final Judgment by serving notice thereof on Defendants and by
filing that notice with the Court.
B. Defendants shall abide by and comply with the provisions of the
proposed Final Judgment, pending the Judgment's entry by the Court, or
until expiration of time for all appeals of any Court ruling declining
entry of the proposed Final Judgment, and shall, from the date of the
signing of this Stipulation by the parties, comply with all the terms
and provisions of the proposed Final Judgment as though the same were
in full force and effect as an order of the Court.
C. Defendants shall not consummate the transactions sought to be
enjoined by the Complaint herein before the Court has signed this Hold
Separate Stipulation and Order.
D. This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
E. In the event that (1) the United States has withdrawn its
consent, as provided in Section IV. A. above, or (2) the proposed Final
Judgment is not entered pursuant to this Stipulation; the time has
expired for all appeals of any Court ruling declining entry of the
proposed Final Judgment; and the Court has not otherwise ordered
continued compliance with the terms and provisions of the proposed
Final Judgment, then the parties are released from all further
obligations under this Stipulation, and the making of this Stipulation
shall be without prejudice to any party in this or any other
proceeding.
F. Defendants represent that the divestitures ordered in the
proposed Final Judgment can and will be made, and that Defendants will
later raise no claim of mistake, hardship or difficulty of compliance
as grounds for asking the Court to modify any of the provisions
contained therein.
V. Hold Separate Provisions
Until the divestitures required by the Final Judgment have been
accomplished:
A. Waste Management shall preserve, maintain, and continue to
operate the Relevant Hauling Assets and Relevant Disposal Assets as
independent, ongoing, economically viable competitive businesses with
management, sales and operations held entirely separate, distinct and
apart from those of Waste Management's other operations. Waste
Management shall not coordinate the marketing of, or sales by, any
Relevant Disposal Asset or Relevant Hauling Asset with its other
operations. Within twenty (20) days after the filing of the Hold
Separate Stipulation and Order, Defendants will inform the United
States of the steps Waste Management has taken to comply with this Hold
Separate Stipulation and Order.
B. Waste Management shall take all steps necessary to ensure that
(1) the Relevant Disposal Assets and Relevant Hauling Assets will be
maintained and operated as independent, ongoing, economically viable
and advice
[[Page 47933]]
competitors in the MSW disposal business and the small container
commercial waste collection business; (2) the management of the
Relevant Disposal Assets and Relevant Hauling Assets will not be
influenced by Waste Management; and (3) the books, records,
competitively sensitive sales, marketing and pricing information, and
decision-making concerning the Relevant Disposal Assets and the
Relevant Hauling Assets will be kept separate and apart from Waste
Management's other operations. Waste Management's influence over the
Relevant Disposal Assets and Relevant Hauling Assets shall be limited
to that necessary to carry out its obligations under this Hold Separate
Stipulation and Order and the proposed Final Judgment.
C. Defendants shall use all reasonable efforts to maintain and
increase the sales and revenues of the Relevant Disposal Assets and
Relevant Hauling Assets, and shall maintain at 2002 levels, or at
previously approved levels for 2003, whichever are higher, all
promotional, advertising, sales, technical assistance, marketing and
merchandising support for the Relevant Disposal Assets and Relevant
Hauling Assets.
D. Defendants shall provide sufficient working capital and lines
and sources of credit to continue to maintain the Relevant Hauling
Assets and Relevant Disposal Assets as economically viable and
competitive ongoing businesses consistent with the requirements of
Sections V. A. and B.
E. Defendants shall take all steps necessary to ensure that the
Relevant Hauling Assets and Relevant Disposal Assets are fully
maintained in operable condition at no less than their current capacity
and sales, and shall maintain and adhere to normal repair and
maintenance schedules for the Relevant Hauling Assets and Relevant
Disposal Assets.
F. Defendants shall not, except as part of a divestiture approved
by the United States in accordance with the terms of the proposed Final
Judgment, remove, sell, lease, assign, transfer, pledge or otherwise
dispose of any of the Relevant Hauling Assets or Relevant Disposal
Assets.
G. Defendants shall maintain, in accordance with sound accounting
principles, separate, accurate and complete financial ledgers, books
and records that report on a periodic basis, such as the last business
day of every month, consistent with past practices, the assets,
liabilities, expenses, revenues and income of the Relevant Hauling
Assets and Relevant Disposal Assets.
H. Except in the ordinary course of business or as is otherwise
consistent with this Hold Separate Stipulation and Order, Defendants
shall not hire, transfer, terminate, or otherwise alter the salary
agreements for any Waste Management or Allied employee who, on the date
of Defendants' signing of this Hold Separate Stipulation and Order,
either: (1) Works with a Relevant Hauling Asset or a Relevant Disposal
Asset, or (2) is a member of management referenced in Section V.J. of
this Hold Separate Stipulation and Order.
I. Defendants shall take no action that would jeopardize, delay, or
impede the sale of the Relevant Disposal Assets or Relevant Hauling
Assets.
J. Until such time as the Relevant Hauling Assets and Relevant
Disposal Assets are divested pursuant to the terms of the Final
Judgment, the Relevant Hauling Assets and Relevant Disposal Assets
owned by Waste Management shall be managed by Chuck Wilcox, its Senior
Vice President. Mr. Wilcox shall have complete managerial
responsibility for the Relevant Hauling Assets and Relevant Disposal
Assets owned by Waste Management, subject to the provisions of this
Order and the proposed Final Judgment. In the event that Mr. Wilcox is
unable to perform his duties, Waste Management shall appoint, subject
to the approval of the United States, a replacement within ten (10)
working days. Should Waste Management fail to appoint a replacement
acceptable to the United States within ten (10) working days, the
United States shall appoint a replacement.
K. Defendants shall take no action that would interfere with the
ability of any trustee appointed pursuant to the Final Judgment to
complete the divestitures pursuant to the Final Judgment to an Acquirer
acceptable to the United States.
L. This Hold Separate Stipulation and Order shall remain in effect
until consummation of the divestitures contemplated by the proposal
Final Judgment or until further order of the Court.
For Plaintiff, United States of America.
Michael K. Hammaker,
DC Bar No. 233684, U.S. Department of Justice, Antitrust Division,
1401 H Street, NW., Suite 3000, Washington, DC 20530, (202) 307-
0938.
For Plaintiff, State of New Jersey.
Peter C. Harvey,
Attorney General of New Jersey.
By:
Andrew L. Rossner,
Assistant Attorney General--Deputy Director, New Jersey Division of
Criminal Justice, P.O. Box 085, Trenton, New Jersey 08625-0085,
(609) 984-0028.
Basil L. Merenda,
Deputy Attorney General, New Jersey Division of Criminal Justice,
Antitrust and Procurement Fraud Bureau, P.O. Box 085, Trenton, New
Jersey 08625-0085, (609) 292-7497.
For Defendant, Waste Management, Inc.
James R. Weiss,
Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW.,
Suite 500, Washington, DC 20006, (202) 628-1700.
For Defendant, Allied Waste Industries, Inc.
Tom D. Smith, Jones Day,
51 Louisiana Avenue, NW., Washington, DC 20001-2113, (202) 879-3971.
Dated: June 26, 2003.
Order
It is so ordered on this ------ day of ------, 2003.
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United States District Judge
United States District Court for the District of Columbia
Final Judgment
Whereas, Plaintiffs, the United States of America (``United
States'') and the State of New Jersey (``New Jersey''), filed their
Complaint on June 27, 2003, and Plaintiffs and Defendants, Waste
Management, Inc. (``Waste Management'') and Allied Waste Industries,
Inc. (``Allied''), by their respective attorneys, have consented to the
entry of this Final Judgment without trial or adjudication of any issue
of fact or law, and without this Final Judgment constituting any
evidence against or admission by any part regarding any issue of law or
fact;
And Whereas, Defendants agree to be bound by the provisions of this
Final Judgment pending its approval by the Court;
And Whereas, the essence of this Final Judgment is the prompt and
certain divestiture of the Relevant Hauling Assets and Relevant
Disposal Assets by Defendant Waste Management to assure that
competition is not substantially lessened;
And Whereas, the United States requires Defendant Waste Management
to amend certain provisions of waste hauling contracts and the United
States and New Jersey require Defendant Waste Management to make
certain divestitures in order to remedy the loss of competition alleged
in the Complaint;
And Whereas, Defendants have represented to Plaintiffs that the
divestitures required below 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 divestitures or other injunctive
provisions contained below;
[[Page 47934]]
And Whereas, Defendant Waste Management shall be enjoined from
acquiring the Relevant Tulsa and Muskogee Disposal Assets, except as
provided in this Final Judgment;
And Whereas, with respect to the New Jersey voting securities and
assets to be acquired by Waste Management from Allied pursuant to the
stock and asset purchase agreements between them dated January 29,
2003, as amended, this Final Judgment resolves all claims of the State
of New Jersey arising under federal and state antitrust laws, including
N.J. Stat. Ann. Sec. 56:9-1 et seq.;
Now, therefore, before any testimony is taken, and without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ordered, adjudged, and decreed:
I. Jurisdiction
This Court has jurisdiction over the subject matter of and each of
the parties to this action. The Complaint states a claim upon which
relief may be granted against Defendants under Section 7 of the Clayton
Act, as amended, 15 U.S.C. 18.
II. Definitions
As used in this Final Judgment:
A. ``Acquirer'' means the entity or entities to whom Waste
Management divests the Relevant Disposal Assets, Relevant Hauling
Assets, or the Alternative Disposal Asset.
B. ``Allied'' means Defendant Allied Waste Industries, Inc., a
Delaware corporation with its headquarters in Scottsdale, Arizona, and
its successors and assigns, its subsidiaries, divisions, groups,
affiliates, partnerships, joint ventures, and their directors,
officers, managers, agents, and employees.
C. ``Alternative Disposal Asset'' means, unless otherwise noted,
with respect to each transfer station listed and described herein, all
of Defendants' rights, titles, and interests in any tangible asset,
related to the operation of each transfer station listed, including all
fee simple or ownership rights to offices, garages, related facilities,
capital equipment, trucks and other vehicles, scales, power supply
equipment, and supplies; and all Defendants' rights, titles, and
interests in any related intangible assets, including all leasehold
interests and renewal rights thereto, permits, customer lists,
contracts, and accounts, or options to purchase any adjoining property.
Alternative Disposal Asset, as used herein, means one of the
following three properties, as selected by Defendant Waste Management
in accordance with the terms provided in Sections IV.I., V.B., and V.C.
of the Final Judgment:
1. Park Ridge, New Jersey
Waste Management's Park Ridge Transfer Station, located at 94 Perry
Street, Park Ridge, New Jersey 07656; or
2. Fairview, New Jersey
Allied's Fairview Transfer Station (formerly permitted to BFI
Transfer Systems of New Jersey, Inc.), located at 61 Broad Avenue,
Fairview, New Jersey 07022; or
3. Hillsdale, New Jersey
Waste Management's Hillsdale Transfer Station, located at 131
Patterson Street, Hillsdale, New Jersey 07642.
D. ``Disposal'' means the business of disposing of waste into
approved disposal sites (i.e., landfills, incinerators, and transfer
stations).
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. ``Fully Permitted'' means a renewal of the operating permit,
currently held by Waste Management's Chestnut Ridge Solid Waste
Transfer Station of Chestnut Ridge, New York and scheduled to expire on
November 30, 2003, by the New York State Department of Environmental
Conservation (``NYDEC'') for an additional five (5) years under terms
and conditions comparable to those in the currently held permit; and
further means that all additional zoning, environmental, and other
permits required to operate the facility are valid and lawful. The
renewed permit must be granted by NYDEC prior to expiration of the time
period set forth in Section IV.A. of the Final Judgment, which time
period shall include the sixty (60) day extension.
G. ``Landfill'' means a facility where waste is placed into the
land.
H. ``MSW'' means municipal solid waste, a term of art used to
describe solid putrescible waste generated by households and commercial
establishments such as retail stores, offices, restaurants, warehouses,
and non-manufacturing activities in industrial facilities. MSW does not
include special handling waste (e.g., waste from manufacturing
processes, regulated medical waste, sewage, and sludge), hazardous
waste, or waste generated by construction or demolition sites.
I. ``New Jersey Assets'' means the Relevant Disposal Assets and the
Relevant Hauling Assets located in New Jersey.
J. ``Relevant Disposal Assets'' means, unless otherwise noted, with
respect to each transfer station listed and described herein, all of
Defendants' rights, titles, and interests in any tangible asset related
to each transfer station listed, including all fee simple or ownership
rights to offices, garages, related facilities, capital equipment,
trucks and other vehicles, scales, power supply equipment, and
supplies; and all Defendants' rights, titles, and interests in any
related intangible assets, including all leasehold interests and
renewal rights thereto, permits, customer lists, contracts, and
accounts, or options to purchase any adjoining property.
Relevant Disposal Assets, as used herein, includes the following
transfer stations, or throughput or tolling disposal rights:
1. Garfield, New Jersey
Allied's Garofalo Recycling and Transfer Station (formerly
permitted to Garofalo Brothers, Inc., and Garofalo Recycling and
Transfer Station Co., Inc.), located at 19-35 Atlantic Street,
Garfield, New Jersey 07026.
2. Chestnut Ridge, New York
Waste Management's Fully Permitted Chestnut Ridge Solid Waste
Transfer Station (owned by and permitted to Waste Management's
subsidiary Marangi Bros., Ind.), located at 560 Chestnut Ridge Road,
Chestnut Ridge, New York 10977.
3. North Arlington, New Jersey
Throughout or tolling disposal rights of a maximum of 1,925 tons
per week, for the remainder of Waste Management's current lease and if
the lease is renewed, for the duration of the period in which Waste
Management has contractural rights to operate the facility, not to
exceed the termination date of this Final Judgment. These disposal
rights are exercisable by the Acquirer (or its designee), at the New
Jersey Meadowlands Commission's HMDC Solid Waste Baler Facility (``HMDC
Facility''), located at 100 Baler Boulevard, North Arlington, New
Jersey 07031, under the following terms and conditions:
a. At the Acquirer's option, Waste Management shall set aside and
operate or, allow the Acquirer (or its designee) to operate one (1)
disposal bay and a scale and scale house for the sole use of the
Acquirer (or its designee);
b. Waste Management shall permit the Acquirer (or its designee) to
deliver waste to the HMDC Facility during
[[Page 47935]]
operating hours from Monday through Saturday up to the weekly maximum
of 1,925 tons. Waste Management shall have the right to stop accepting
waste from any additional truck owned or operated by the Acquirer (or
its designee) and entering the premises after Waste Management has
accepted 350 tons of waste from the Acquirer (or its designee) on any
day the HMDC Facility is operating;
c. Under the throughput or tolling arrangement, Waste Management
shall permit the Acquirer (or its designee) to deliver waste to the
HMDC Facility for processing and, at the option of the Acquirer (or its
designee), load the processed waste into vehicles designated by the
Acquirer (or its designee) for ultimate disposal; and
d. Waste Management shall operate all HMDC Facility gates, scales,
scale houses, and disposal areas described in the Acquirer's contract
under terms and conditions no less favorable to the Acquirer (or its
designee) than those provided to Waste Management or its customers,
including any municipality.
K. ``Relevant Hauling Assets'' 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, supplies, and if requested by
the purchaser, real property and improvements to real property (i.e.,
buildings and garages). It also includes all intangible assets,
including hauling-related customer lists, contracts, leasehold
interests, permits and accounts.
Relevant Hauling Assets, as used herein, includes the assets in the
following locations:
1. Augusta, Georgia
Allied's commercial waste collection routes 903, 904, 916, and 922
that operate out of Allied's Augusta division located at 683 Commerce
Court, Evans, Georgia 30809.
2. Myrtle Beach, South Carolina
Allied's commercial waste collection routes 711, 714, and 715 that
operate out of Allied's Rural Sanitation Services Hauling facility
located at 3512 Highway 501, Myrtle Beach, South Carolina 29579.
3. Pitkin and Garfield Counties, Colorado
Waste Management's waste collection routes 730, 824, 825, 831, 850,
851, and 853 that operate out of Waste Management's facility located at
226 North 12th Street, Carbondale, Colorado 81623.
4. Bergen and Passaic Counties, New Jersey
Allied's commercial waste collection routes 700, 705, 706, 401, and
405 tht operate out of Allied's VMI Waste Services Hauling facility
located at 75 Broad Avenue, Fairview, New Jersey 07022, except that
Waste Management is not required to divest real property or
improvements to real property (i.e., buildings, garages, or leasehold
rights related thereto).
5. Morris County, New Jersey
Allied's commercial waste collection route 702 that operates out of
Allied's VMI Waste Services Hauling facility located at 75 Broad
Avenue, Fairview, New Jersey 07022, except that Waste Management is not
required to divest real property or improvements to real property
(i.e., buildings, garages, or leasehold rights related thereto).
L. ``Relevant Tulsa and Muskogee Disposal Assets'' means Allied's
Porter Landfill (also referred to as 51B Landfill), located at Route 2,
Box 120, Porter, Oklahoma 74454, or any other landfill owned by Allied
or any third party located within twenty-five (25) miles from the
center of either the city of Tulsa or the city of Muskogee, Oklahoma.
M. ``Small container commercial waste collection service'' means
the business of collecting MSW from commercial and industrial accounts,
usually in ``dumpsters'' (i.e., a small container with one (1) to ten
(10) cubic yards of storage capacity), and transporting or ``hauling''
such waste to a disposal site by use of a front- or rear-end loader
truck. Typical commerical waste collection customers include office and
apartment buildings and retail establishments (e.g., stores and
restaurants).
N. ``Waste Management'' means Defendant Waste Management, Inc., a
Delaware corporation with its headquarters in Houston, Texas, and
includes its successors and assigns, and its subsidaries, divisions,
groups, affiliates, partnerships, joint ventures, and their directors,
officers, managers, agents, and employees.
III. Applicability
A. This Final Judgment applies to Waste Management and Allied, as
defined above, and all other persons in active concert or participation
with any of them who receive actual notice of this Final Judgment by
personal service or otherwise.
B. Defendants shall require, as a condition of the sale or other
disposition of all or substantially all of their assets, or of lesser
business units that include Defendants' Relevant Disposal Assets,
Relevant Hauling Assets, or the Alternative Disposal Asset, that the
Acquirer agree to be bound by the provisions of the Final Judgment.
IV. Divestitures
A. Defendant Waste Management is ordered and directed, within
ninety (90) 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 divest the Relevant
Disposal Assets and Relevant Hauling Assets, except for the New Jersey
Assets, in a manner consistent with this Final Judgment to an Acquirer
acceptable to the United States in its sole discretion.
The United States, in its sole discretion, may agree to an
extension of this time period of up to sixty (60) calendar days, and
shall notify the Court in such circumstances. Defendants agree to use
their best efforts to divest the Relevant Disposal Assets and Relevant
Hauling Assets as expeditiously as possible.
B. Defendants are ordered and directed, within ninety (90) calendar
days after the approval by the New Jersey Department of Environmental
Protection of Waste Management's request to acquire Allied's assets in
New Jersey, to divest the New Jersey Assets in a manner consistent with
this Final Judgment and state law to an Acquirer acceptable to the
United States, in its sole discretion, after consultation with New
Jersey. The United States, in its sole discretion, after consultation
with New Jersey, may agree to an extension of this time period of up to
sixty (60) calendar days, and shall notify the Court in such
circumstances. Defendants agree to use their best efforts to divest the
New Jersey Assets as expeditiously as possible. If the Defendants have
not received approval by the New Jersey Department of Environmental
Protection of Waste Management's request to acquire Allied's assets in
New Jersey within ninety (90) calendar days after the filing of the
Complaint in this matter, plus any extension of time granted by the
United States of up to sixty (60) calendar days, Waste Management shall
not purchase from Allied any of the voting securities or assets located
in New Jersey and identified in the January 29, 2003 purchase
agreements, as amended.
C. In accomplishing the divestitures ordered by this Final
Judgment, Defendant Waste Management promptly shall make known, by
usual and customary means, the availability of the
[[Page 47936]]
Relevant Disposal Assets and Relevant Hauling Assets. Defendants shall
inform any person making inquiry regarding a possible purchase of the
Relevant Disposal Assets or Relevant Hauling Assets that they are being
divested pursuant to this Final Judgment and provide that person with a
copy of this Final Judgment. Defendants shall offer to furnish to all
prospective Acquirers, subject to customary confidentiality assurances,
all information and documents relating to the Relevant Disposal Assets
or Relevant Hauling Assets, whichever is then available for sale,
customarily provided in a due diligence process except such information
or documents subject to the attorney-client or work-product privileges.
Defendants shall make available such information to the United States,
or both the United States and New Jersey as to the New Jersey Assets
and the Alternative Disposal Asset, at the same time that such
information is made available to any other person.
D. Defendants shall provide the United States, or both the United
States and New Jersey as to the New Jersey Assets and the Alternative
Disposal Asset, and each prospective Acquirer of the Relevant Disposal
Assets or Relevant Hauling Assets information relating to the personnel
involved in the operation and management of the Relevant Disposal
Assets or Relevant Hauling Assets to enable the Acquirer to make offers
of employment. Defendants will not interfere with any negotiations by
the Acquirer to employ any Defendant employee whose primary
responsibility is the operation or management of the Relevant Disposal
Assets or Relevant Hauling Assets.
E. Defendants shall permit each prospective Acquirer of the
Relevant Disposal Assets or Relevant Hauling Assets to have reasonable
access to personnel and to make inspections of the physical facilities;
access to any and all environmental, zoning, and other permit documents
and information; and access to any and all financial, operational, or
other documents and information customarily provided as part of a due
diligence process.
F. With the exception of the facility described in Section II.J.2,
Defendant Waste Management shall warrant to the Acquirer of the
Relevant Disposal Assets or Relevant Hauling Assets that each asset
will be operational on the date of sale.
G. Defendants shall not take any action that will impede in any
way, the permitting, operation, or divestiture of the Relevant Disposal
Assets or Relevant Hauling Assets.
H. With the exception of the facility described in Section II.J.2,
Defendants Waste Management shall warrant to the Acquirer of the
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 following the sale
of the Relevant Disposal Assets or Relevant Hauling Assets, Defendants
will not undertake, directly or indirectly, any challenges to the
environmental, zoning, or other permits relating to the operation of
the Relevant Disposal Assets or Relevant Hauling Assets.
I. Defendant Waste Management warrants that there is an existing
NYDEC operating permit for the Chestnut Ridge Solid Waste Transfer
Station, which expires November 30, 2003. Waste Management's failure to
divest the Chestnut Ridge Solid Waste Transfer Station in accordance
with the conditions set forth in this Final Judgment shall result in
the appointment of a trustee and the divestiture of the alternative
Disposal Asset as provided in Sections V.A., V.B., and V.C. Should
Waste Management be required to divest the Alternative Disposal Asset
pursuant to Section V.B., it shall be bound by the same terms and
provide warranties for the Alternative Disposal Asset comparable to
those specified in Sections IV.C. through IV.H.
J. Unless the United States, in its sole discretion, and after
consultation with New Jersey as to the New Jersey Assets and the
Alternative Disposal Asset, otherwise consents in writing, the
divestitures pursuant to Section IV, or by trustee appointed pursuant
to Section V, of the Final Judgment, shall include either the entire
Relevant Hauling Assets and Relevant Disposal Assets, or the entire
Relevant Hauling Assets, the Relevant disposal Assets (excluding the
Chestnut Ridge Solid Waste Transfer Station), and the Alternative
Disposal Asset, and shall be accomplished in such a way as to satisfy
the United States, in its sole discretion, and after consultation with
New Jersey as to the New Jersey Assets and the Alternative Disposal
Asset, that the divested assets will be used by the Acquirer, as part
of a viable, ongoing disposal or hauling business. Divestiture of the
Relevant Disposal Asset, Relevant Hauling Assets and the Alternative
Disposal Asset may be made to an Acquirer, provided that in each
instance it is demonstrated to the sole satisfaction of the United
States, after consultation with New Jersey as to the New Jersey Assets
and the Alternative Disposal Asset, that the Relevant Disposal Assets,
Relevant Hauling Assets and the Alternative Disposal Asset will remain
viable and the divestiture of such assets will remedy the competitive
harm alleged in the Complaint. The divestitures, whether pursuant to
Section IV or Section V of this Final Judgment,
1. Shall be made to an Acquirer that, in the United States' sole
judgment, after consultation with New Jersey as to the New Jersey
Assets and the Alternative Disposal Asset, has the intent and
capability, including managerial, operational, and financial
capability, to compete effectively in the disposal or hauling business;
and
2. Shall be accomplished so as to satisfy the United States, in its
sole discretion, after consultation with New Jersey as the New Jersey
Assets and the Alternative Disposal Asset, that none of the terms of
any agreement between an Acquirer and Defendant Waste Management gives
Defendants the ability unreasonably to raise the Acquirer's costs, to
lower the Acquirer's efficiency, or otherwise to interfere in the
ability of the Acquirer to compete effectively.
V. Appointment of Trustee
A. If Defendant Waste Management has not divested either the
Relevant disposal Assets, or the Relevant Hauling Assets, or both,
within the time period specified in Section IV.A., Defendant Waste
Management shall notify United States, or both the United States and
New Jersey as to the New Jersey Assets and the Alternative Disposal
Asset, of that fact in writing. Upon application of the United States,
in its sole discretion, after consultation with New Jersey as to the
New Jersey Assets and the Alternative Disposal Assets, the Court shall
appoint a trustee selected by the United States and approved by the
Court to effect the divestiture of either the Relevant Disposal Assets,
or the Relevant Hauling Assets, or both.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell either the Relevant Disposal
Assets, or the Relevant Hauling Assets, or both. In the event the
Chestnut Ridge Solid Waste Transfer Station (as defined in Sections
II.F. and II.J.2) cannot be sold prior to the expiration of the time
period provided in Section IV.A., the trustee shall divest the
Alternative Disposal Asset selected by Waste Management from the three
facilities identified in Section II.C. of the Final Judgment. Waste
Management's selection of one of the three alternative facilities must
be communicated to the trustee in writing within three (3) days
following a request from the trustee to make the election.
[[Page 47937]]
C. Notwithstanding the provisions contained in Sections IV.I. and
V.B. of this Final Judgment, if the sole reason for requiring the
divestiture of the Alternative Disposal Asset is that the Chestnut
Ridge Solid Waste Transfer Station is not fully permitted within the
time allowed herein, Waste Management, following the direction of the
United States to divest the Relevant Disposal Assets, shall have sixty
(60) days to do so.
D. Notwithstanding the provisions contained in Section V.B., The
United States may, in its sole discretion, extend the expiration of the
time period provided in Section IV.A. relating to the sale of the
Chestnut Ridge Solid Waste Transfer Station for an additional ninety
(90) days. This extension may occur only if the following conditions
are satisfied as of the expiration of the time period provided in
Section IV.A.:
1. Waste Management has sold the Chestnut Ridge Solid Waste
Transfer Station to an Acquirer acceptable to the United States in its
sole discretion, even though the facility is not yet Fully Permitted;
2. The Chestnut Ridge Solid Waste Transfer Station is being
operated by the Acquirer or by another party, approved by the United
States in its sole discretion, on behalf and for the benefit of the
Acquirer, and
3. The United States, in its sole discretion, is satisfied that the
Chestnut Ridge Solid Waste Transfer Station is likely to be Fully
permitted by the New York Department of Environmental Conservation
within the ninety (90) day extension of time granted under this
Section.
E. The trustee shall have the power and authority to accomplish the
divestiture to an Acquirer acceptable to the United States, in its sole
discretion, after consultation with New Jersey as to the New Jersey
Assets and the Alternative Disposal Asset, at such price and on such
terms as are then obtainable upon reasonable effort by the trustee,
subject to the provisions of Sections IV, V, and VI of this Final
Judgment, and shall have such other powers as this Court deems
appropriate. Subject to Section V.G. of this Final Judgment, the
trustee may hire at the cost and expense of Defendant Waste Management
any investment bankers, attorneys, or other agents, who shall be solely
accountable to the trustee, reasonably necessary in the trustee's
judgment to assist in the divestiture.
F. Defendant Waste Management shall not object to a sale by the
trustee on any ground other than the trustee's malfeasance. Any such
objections by Defendant Waste Management must be conveyed in writing to
the United States, or both the United States and New Jersey as to the
New Jersey Assets and the Alternative Disposal Asset, and the trustee
within ten (10) calendar days after the trustee has provided the notice
required under Section VI.
G. The trustee shall serve at the cost and expense of Defendant
Waste Management, on such terms and conditions as the United States
approves, and shall account for all monies derived from the sale of the
Relevant Disposal Assets, Relevant Hauling Assets, and the Alternative
Disposal Asset sold by the trustee and all costs and expenses so
incurred. After approval by the Court of the trustee's accounting,
including fees for its services and those of any professionals and
agents retained by the trustee, all remaining money shall be paid to
Defendant Waste Management and the trust shall then be terminated. The
compensation of the trustee and any professionals and agents retained
by the trustee shall be reasonable in light of the value of the
Relevant Disposal Assets, Relevant Hauling Assets, and any Alternative
Disposal Asset selected by Waste Management, 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, but timeliness is paramount.
H. Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestiture. 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 business to be divested, and Defendants
shall develop financial and other information relevant to such business
as the trustee may reasonably request, subject to customary
confidentiality protection for trade secret or other confidential
research, development, or commercial information. Defendants shall take
no action to interfere with or to impede the trustee's accomplishment
of the divestiture.
I. After its appointment, the trustee shall file monthly reports
with the United States, or both the United States and New Jersey as to
the New Jersey Assets and the Alternative Disposal Asset, and the Court
setting forth the trustee's efforts to accomplish the divestiture
ordered under this Final Judgment. To the extent that 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
Relevant Disposal Assets, Relevant Hauling Assets, or the Alternative
Disposal Asset, and shall describe in detail each contact with any such
person. The trustee shall maintain full records of all efforts made to
divest the Relevant Disposal Assets, Relevant Hauling Assets, and any
Alternative Disposal Asset.
J. If the trustee has not accomplished such divestiture within six
(6) months after its appointment, the trustee shall promptly file with
the Court a report setting forth (1) the trustee's efforts to
accomplish the required divestiture, (2) the reasons, in the trustee's
judgment, why the required divestiture has not been accomplished, and
(3) the trustee's recommendations. To the extent that 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 United states, or
both the United States and New Jersey as to the New Jersey Assets and
the Alternative Disposal Asset, who shall have the right to make
additional recommendations consistent with the purpose of the trust.
The Court thereafter shall enter such orders as it shall deem
appropriate to carry out the purpose of the Final Judgment, which may,
if necessary, include extending the trust and the term of the trustee's
appointment by a period requested by the United States.
VI. Notice of Proposed Divestiture
A. Within two (2) business days following execution of a definitive
divestiture agreement, Defendant Waste Management or the trustee,
whichever is then responsible for effecting the divestiture required
herein, shall notify the United States, or both the United States and
New Jersey as to the New Jersey Assets and the Alternative Disposal
Assets, of any proposed divestiture required by Section IV or V of this
Final Judgment. If the trustee is responsible, it shall similarly
notify Defendant Waste Management. The notice shall set forth the
details of the proposed divestiture and list the name, address, and
telephone number of each person not previously identified who offered
or expressed an interest in or desire to acquire any ownership interest
in the Relevant Disposal Assets, Relevant Hauling Assets, or the
[[Page 47938]]
Alternative Disposal Asset together with full details of the same.
B. Within fifteen (15) calendar days of receipts by United States,
or both the United States and New Jersey as to the New Jersey Assets
and the Alternative Disposal Assets, of such notice, the United States,
in it sole discretion, after consultation with New Jersey as to the New
Jersey Assets and the Alternative Disposal Assets, may request from
Defendants, the proposed Acquirer or Acquirers, any other third party,
or the trustee, if applicable, additional information concerning the
proposed divestiture, the proposed Acquire, and any other potential
Acquirer. Defendants and the trustee shall furnish any additional
information requested within fifteen (15) calendar days of the receipt
of the request, unless the parties shall otherwise agree.
C. Within thirty (30) calendar days after receipt of the notice or
within twenty (20) calendar days after the United States has been
provided the additional information requested from Defendants, the
proposed Acquirer, any third party, and the trustee, whichever is
later, the United States, in its sole discretion, after consultation
with New Jersey as to the New Jersey Assets and the Alternative
Disposal Asset, 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 that
it does not object, the divestiture may be consummated, subject only to
Defendant Waste Management's limited right to object to the sale under
Section V.F. of this Final Judgment. Absent written notice that the
United States does not object to the proposed Acquirer or upon
objection by the United States, a divestiture proposed under Section IV
or Section V shall not be consummated. Upon objection by Defendant
Waste Management under Section V.F., a divestiture proposed under
Section V shall not be consummated unless approved by the Court.
VII. Financing
Defendants shall not finance all or any part of any purchase made
pursuant to Section IV or V of this Final Judgment.
VIII. Hold Separate
Until the divestitures required by this Final Judgment has been
accomplished, Defendants shall take all steps necessary to comply with
the Hold Separate Stipulation and Order entered by this Court.
Defendants shall take no action that would jeopardize the divestitures
ordered by this Court.
IX. Affidavits
A. Within twenty (2) calendar days of the filing of the Complaint
in this matter, and every thirty (30) calendar days thereafter until
the divestiture has been completed under Section IV or V, Defendants
shall deliver to the United States, or both the United States and New
Jersey as to the New Jersey Assets and the Alternative Disposal Asset,
an affidavit as to the fact and manner of its compliance with Section
IV or V of this Final Judgment. Each such affidavit shall include the
name, address, and telephone number of each person who, during the
preceding thirty (30) days, made an offer to acquire, expressed an
interest in acquiring, entered into negotiations to acquire, or was
contacted or made an inquiry about acquiring, any interest in the
Relevant Disposal Assets, Relevant Hauling Assets, or the Alternative
Disposal Asset, and shall describe in detail each contact with any such
person during that period. Each such affidavit shall also include a
description of the efforts Defendants have taken to solicit buyers for
the Relevant Disposal Assets, Relevant Hauling Assets, or the
Alternative Disposal Asset, and to provide required information to each
prospective Acquirer, including the limitations, if any, on such
information. Assuming the information set forth in the affidavit is
true and complete, any objection by the United States, after
consultation with New Jersey, 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 the United States, or both
the United States and New Jersey as to the New Jersey Assets and the
Alternative Disposal Asset, an affidavit that describes in reasonable
detail all actions Defendants have taken and all steps Defendants have
implemented on an ongoing basis to comply with Section VIII of this
Final Judgment. Defendants shall deliver to the United States, or both
the United States and New Jersey as to the New Jersey Assets and the
Alternative Disposal Asset, an affidavit describing any changes to the
efforts and actions outlined in Defendants' earlier affidavits filed
pursuant to this section within fifteen (15) calendar days after the
change is implemented.
C. Defendants shall keep all records of all efforts made to
preserve the Relevant Disposal Assets, Relevant Hauling Assets, and the
Alternative Disposal Asset, and to divest the Relevant Disposal Assets,
Relevant Hauling Assets, and Alternative Disposal Asset until one year
after such divestiture has been completed.
X. Compliance Inspection
A. For purposes of determining or securing compliance with this
Final Judgment, or of determining whether the Final Judgment should be
modified or vacated, and subject to any legally recognized privilege,
from time to time duly authorized representatives of the United States
Department of Justice, including consultants and other persons retained
by the United States, upon written request of a duly authorized
representative of the Assistant Attorney General in charge of the
Antitrust Division, or upon written request of a duly authorized
representative of the New Jersey Attorney General's Office, and on
reasonable notice to Defendants, be permitted:
1. Access during Defendants' office hours to inspect and copy, or
at the United States' option, to require Defendants to provide copies
of, all books, ledgers, accounts, records and documents in the
possession, custody or control of Defendants, relating to any matters
contained in this Final Judgment; and
2. To interview, either informally or on the record, Defendants'
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendants.
B. Upon the written request of a duly authorized representative of
the assistant Attorney General in charge of the Antitrust Division, or
upon the written request of the New Jersey Attorney General's Office,
Defendants shall submit such written reports, under oath if requested,
relating to any of the matters contained in this Final Judgment as may
be requested.
C. No information or documents obtained by the means provided in
this section shall be divulged by the Plaintiffs to any person other
than an authorized representative of the executive branch of the United
States, or the New Jersey Attorney General's Office, except in the
course of legal proceedings to which the United States or New Jersey 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
[[Page 47939]]
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
Plaintiffs shall give Defendants ten (10) calendar days notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
XI. Relevant Tulsa and Muskogee Disposal Assets
Waste Management shall not directly or indirectly acquire or
propose to acquire any assets of or any interest, including any
financial, security, loan equity or management interest, in the
Relevant Tulsa and Muskogee Disposal Assets without thirty (30) days
advance notification to the Antitrust Division of the United States
Department of Justice of any such acquisition. The obligation to
provide notice under this Section is met by either a written
notification, or if applicable, a premerger notification pursuant to
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
15 U.S.C. 18(a) (the ``HSR Act''). In the event that a proposed
acquisition of Allied's Porter Landfill (also referred to as 51B
Landfill), located at Route 2, Box 120, Porter, Oklahoma 74454 is not
subject to the reporting and waiting period requirements of the HSR
Act, notification under this Section shall be provided to the Antitrust
Division in the same format as, and in accordance with, the
instructions relating to the Notification and Report Form set for in
the appendix to Part 803 of Title 16 of the Code of Federal Regulations
as amended, except that the information requested in items 5 through 9
of the instructions must be provided only about the Tulsa and Muskogee,
Oklahoma area. The notification required by this Section shall include,
beyond what may be required by the applicable instructions, the names
of the principal representatives of the parties to the agreement who
negotiated the agreement, and any management or strategic plans
discussing the proposed transaction. If, within the thirty (30) day
period after notification of a proposed acquisition of a proposed
acquisition of Allied's Porter Landfill, representatives of the
Antitrust Division make a written request for additional information,
Waste Management shall not consummate the proposed transaction or
agreement until thirty (30) days after submitting all such additional
information. Early termination of the waiting periods in this Section
may be requested and, where appropriate, granted. This Section shall be
broadly construed, and any ambiguity or uncertainty regarding the
filing of notice under this Section shall be resolved in favor of
filing notice.
XII. No Reacquisition
Defendant Waste Management may not reacquire any part of the
Relevant Disposal Assets, Relevant Hauling Assets, or the Alternative
Disposal Asset during the term of this Final Judgment, provided that if
Waste Management is required to divest the Alternative Disposal Asset,
Waste Management may reacquire the Chestnut Ridge Solid Waste Transfer
Station.
XIII. Revisions to Contracts
A. Waste Management shall alter the contracts it uses with its
small container commercial waste collection customers in each of the
markets specified below to the form contained in Section XIII.B. below.
B. In each of the markets specified below, Waste Management shall
offer contracts to all new small container commercial waste collection
customers as well as to existing customers that sign new contracts for
small container commercial waste collection service effective on or
after the date that it acquires Allied's assets in accordance with the
following conditions. No contract shall:
1. Have an initial term longer than two (2) years;
2. Have any renewal term longer than one (1) year;
3. Require that the customer give Waste Management notice of
termination more than thirty (30) days prior to the end of any initial
term of renewal term;
4. Require that the customer pay liquidated damages in excess of
three times its average monthly charge during the first year the
customer has had service with Waste Management; and
5. Require that the customer pay liquidated damages in excess of
two (2) times its average monthly charge after the first year the
customer has had service with Waste Management.
Waste Management shall offer such contracts to all other current
small container commercial waste collection service customers in the
respective markets detailed below on or before January 1, 2005:
------------------------------------------------------------------------
Defendant Cities Counties or Areas
------------------------------------------------------------------------
Waste Management............... Myrtle Beach, SC. Georgetown and
Horry Counties,
SC.
Waste Management............... Augusta, GA....... Columbia, Lincoln,
McDuffie,
Richmond, and
Warren Counties,
GA.
------------------------------------------------------------------------
Waste Management agrees that it will not attempt to enforce any
contract term affecting commercial waste collection customers in the
specified areas that conflicts with or is inconsistent with the above
terms, even if those customers choose not to sign a contract with the
new terms.
XIV. Retention of Jurisdiction
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
XV. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall
expire ten (10) years from the date of its entry.
XVI. Public Interest Determination
Entry of this Final Judgment is in the public interest.
Date:------------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16.
-----------------------------------------------------------------------
United States District Judge
United States District Court for the District of Columbia
Case No.: 1:03CV01409]
Judge: Gladys Kessler.
Deck Type: Antitrust.
Competitive Impact Statement
Plaintiff United States of America (``United States''), pursuant to
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA''),
15 U.S.C. 16(b)-(h), files this Competitive Impact Statement relating
to the proposed Final
[[Page 47940]]
Judgment submitted for entry in this civil antitrust proceeding.
Nature and Purpose of the Proceeding
Defendant Waste Management, Inc. (``Waste Management'') and
Defendant Allied Waste Industries, Inc. (``Allied'') entered into stock
and asset purchase agreements on January 29, 2003, pursuant to which
Waste Management would acquire certain voting securities and waste-
hauling and disposal assets of Allied in a number of areas throughout
the United States. The United States and the State of New Jersey (``New
Jersey'') filed a civil antitrust Complaint on June 27, 2003, seeking
to enjoin the proposed acquisition. The Complaint alleges that the
likely effect of this acquisition would be to lessen competition
substantially for waste collection and disposal services in several
markets in violation of Section 7 of the Clayton Act. This loss of
competition would result in consumers paying higher prices and
receiving fewer services for the collection and disposal of waste.
At the same time the Complaint was filed, the United States also
filed a Hold Separate Stipulation and Order and proposed Final
Judgment, which are designed to eliminate the anticompetitive effects
of the acquisition. Under the proposed Final Judgment, which is
explained more fully below, Waste Management is required within 90 days
after the filing of the Complaint, or five (5) days after notice of the
entry of the Final Judgment by the Court, whichever is later, to
divest, as viable business operations, specified waste-hauling and
disposal assets. The proposed Final Judgment also requires Defendants,
within 90 days after approval by the New Jersey Department of
Environmental Protection of Waste Management's request to acquire
assets in New Jersey, to divest, as viable business operations, certain
waste-hauling and disposal assets located in New Jersey and New York.
Under the terms of the Hold Separate Stipulation and Order, Waste
Management is required to take certain steps to ensure that the assets
to be divested will be preserved and held separate from its other
assets and businesses. In addition to the divestitures, the proposed
Final Judgment also requires Waste Management to comply with certain
conditions in its customer contracts in two identified areas.
The United States, New Jersey, and the Defendants have stipulated
that the proposed Final Judgment may be entered after compliance with
the APPA. Entry of the proposed Final Judgment would terminate this
action, except that the Court would retain jurisdiction to construe,
modify, or enforce the provisions of the proposed Final Judgment and to
punish violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
Waste Management, with revenues in 2002 of approximately $11.1
billion, is the nation's largest waste collection and disposal company,
operating throughout the United States. Allied, with 2002 revenues of
approximately $5.5 billion, is the nation's second largest waste
collection and disposal company. The proposed transaction, as initially
agreed to by Defendants on January 29, 2003, would lessen competition
substantially as a result of Waste Management's acquisition of the
following: (1) Hauling assets in Pitkin County, Colorado; (2) hauling
assets in Garfield County, Colorado; (3) hauling assets in Augusta,
Georgia; (4) hauling assets in Myrtle Beach, South Carolina; (5)
hauling assets in Morris County, New Jersey; (6) hauling assets in
Bergen and Passaic Counties, New Jersey; (7) voting securities and
disposal assets serving Bergen and Passaic Counties, New Jersey; and
(8) disposal assets in Tulsa, Oklahoma. This acquisition is the subject
of the Complaint and proposed Final Judgment filed by the United States
and New Jersey on June 27, 2003.
B. The Competitive Effects of the Transaction
Municipal solid waste (``MSW'') is solid, putrescible waste
generated by households and commercial establishments. Waste collection
firms, or haulers, contract to collect MSW from residential and
commercial customers and transport the waste to private and public
disposal facilities (e.g., transfer stations, incinerators, and
landfills), which, for a fee, process and legally dispose of the waste.
Small container commercial waste collection is one component of MSW
collection, which also includes residential and other waste collection.
Allied and Waste Management compete in the collection of small
container commercial waste and the disposal of MSW.
1. The Effects of the Transaction on Competition in Small Container
Commercial Waste Collection Service
a. Small Container Commercial Waste Collection.
Small container commercial waste collection service is the
collection of MSW from commercial businesses such as office and
apartment buildings and retail establishments (e.g., stores and
restaurants) for shipment to, and disposal at, an approved disposal
facility. Because of the type and volume of waste generated by
commercial accounts and the frequency of service required, haulers
organize commercial accounts into special routes, and generally use
specialized equipment to store, collect, and transport waste from these
accounts to approved disposal sites. This equipment (e.g., one- to ten-
cubic-yard containers for waste storage, and front-end load vehicles
commonly used for collection and transportation) is uniquely well
suited for providing small container commercial waste collection
service. Providers of other types of waste collection services (e.g.,
residential and roll-off services) are not good substitutes for small
container commercial waste collection firms. In their waste collection
efforts, these firms use different waste storage equipment (e.g.,
garbage cans or semi-stationary roll-off containers) and different
vehicles (e.g., rear-load, side-load, and roll-off trucks), which, for
a variety of reasons, cannot be conventionally or efficiently used to
store, collect, or transport waste generated by commercial accounts,
and hence, are rarely used on small container commercial waste
collection routes. In the event of a small but significant and
nontransitory increase in price for small container commercial waste
collection services, customers would not switch to any other
alternative. Thus, the Complaint alleges that the provision of small
container commercial waste collection services constitutes a line of
commerce, or relevant service, for purpose of analyzing the effects of
the transaction.
The Complaint alleges that the provision of small container
commercial waste collection service takes place in compact, highly
localized geographic markets. it is expensive to ship waste long
distances in either collection or disposal operations. To minimize
transportation costs and maximize the scale, density, and efficiency of
their waste collection operations, small container commercial waste
collection firms concentrate their customers and collection routes in
small areas. Firms with operations concentrated in a distant area
cannot easily compete against firms whose routes and customers are
locally based. Distance may significantly limit a remote firm's ability
to provide commercial waste collection service as frequently or
conveniently as that offered by local firms with nearby routes. Also,
local
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commercial waste collection firms have significant cost advantages over
other firms, and can profitably increase their charges to local
commercial customers without losing significant sales to firms outside
the area.
Applying this analysis, the Complaint alleges that the areas of
Pitkin County, Colorado; Garfield County, Colorado; Augusta, Georgia;
Myrtle Beach, South Carolina; Morris County, New Jersey; and Bergen and
Passaic Counties, New Jersey constitute sections of the country, or
relevant geographic markets, for the purpose of assessing the
competitive effects of a combination of Allied and Waste Management in
the provision of small container commercial waste collection services.
There are significant entry barriers into small container
commercial waste collection. A new entrant into small container
commercial waste collection services must achieve a minimum efficient
scale and operating efficiencies comparable to those of existing firms
in order to provide a significant competitive constraint on the prices
charged by market incumbents. In order to obtain comparable operating
efficiencies, a new firm must achieve route density similar to existing
firms.
An efficient route usually handles 80 or more customers or
containers each day. Because most customers have their waste collected
once or twice a week, a new entrant must have several hundred customers
in close proximity to construct an efficient route. However, the common
use of price discrimination and long-term contracts by existing
commercial waste collection firms can leave too few customers available
to the entrant in a sufficiently confined geographic area to create an
efficient route. The incumbent firm can selectively and temporarily
charge an unbeatably low price to specified customers targeted by new
entrants. Long-term contracts often run for three to five years and may
automatically renew or contain large liquidated damage provisions for
contract termination. Such terms make it more costly or difficult for a
customer to switch to a new hauler and obtain lower prices for its
collection service. Because of these factors a new entrant may find it
difficult to compete by offering its services at pre-entry price levels
comparable to the incumbent and may find an increase in the cost and
time required to form an efficient route, thereby limiting a new
entrant's ability to build an efficient route and reducing the
likelihood that the entrant will ultimately be successful.
The need for route density, the use of long-term contracts with
restrictive terms, and the ability of existing firms to price
discriminate raise significant barriers to entry by new firms, which
will likely be forced to compete at lower than pre-entry price levels.
Such barriers in the market for small container commercial waste
collection have allowed incumbent firms to raise prices successfully.
b. Anticompetitive Effects in Small Container Commercial Waste
Collection Service Markets.
(1) Pitkin County, Colorado. In Pitkin County, Colorado, Waste
Management's acquisition of Allied's hauling assets would reduce from
two to one the number of significant firms that compete in the
collection of small container commercial waste. After the acquisition,
Waste Management would control over 89 percent of total market
revenues, which exceed $1.8 million annually. There are no other
significant small container commercial waste competitors in this
market.
(2) Garfield County, Colorado. In Garfield County, Colorado, Waste
Management's acquisition of Allied's hauling assets would reduce from
two to one the number of significant firms that compete in the
collection of small container commercial waste. After the acquisition,
Waste Management would control over 93 percent of total market
revenues, which approximate $3.2 million annually. There are no other
significant small container commercial waste competitors in this
market.
(3) Augusta, Georgia Area. Waste Management is acquiring the
hauling assets of Allied in Augusta, Georgia. These assets serve small
container commercial waste collection customers in Columbia, Richmond,
McDuffie, Lincoln, and Warren Counties, Georgia. In the Augusta,
Georgia area, the proposed acquisition would reduce from three to two
the number of significant firms that compete in the collection of small
container commercial waste. After the acquisition, Waste Management
would control over 63 percent of total market revenues, which
approximate $7.5 million annually.
(4) Myrtle Beach, South Carolina Area. Waste Management is
acquiring the hauling assets of Allied in Myrtle Beach, South Carolina.
These assets serve small container commercial waste collection
customers in Georgetown and Horry Counties, South Carolina. In this
area, the proposed acquisition would reduce from three to two the
number of significant firms that compete in the collection of small
container commercial waste. After the acquisition, Waste Management
would control over 58 percent of total market revenues, which exceed
$7.4 million annually.
(5) Morris County, New Jersey. In Morris County, New Jersey, Waste
Management's acquisition of Allied's hauling assets would reduce from
four to three the number of significant firms that compete in the
collection of small container commercial waste. After the acquisition,
Waste Management would control over 41 percent of total market
revenues, which exceed $14 million annually.
(6) Bergen and Passaic Counties, New Jersey. Waste Management is
acquiring the hauling assets of Allied that serve Bergen and Passaic
Counties, New Jersey. In Bergen and Passaic Counties, New Jersey, the
proposed acquisition would reduce from four to three the number of
significant firms that compete in the collection of small container
commercial waste. After the acquisition, Waste Management would control
over 47 percent of total market revenues, which exceed $38 million
annually.
The Complaint alleges that a combination of Allied and Waste
Management in these areas would remove a significant competitor in
small container commercial waste collection services. In each of these
markets, the resulting increase in concentration, loss of competition,
and absence of any reasonable prospect of significant new entry or
expansion by market incumbents likely will result in higher prices for
the collection of small container commercial waste.
2. The Effects of the Transaction on Competition in the Disposal of
Municipal Solid Waste
a. Municipal Solid Waste.
A number of federal, state, and local safety, environmental,
zoning, and permit laws and regulations dictate critical aspects of
storage, handling, transportation, processing and disposal of MSW. MSW
can be disposed of lawfully in a transfer station, landfill, or
incinerator permitted to accept MSW. Anyone who attempts to dispose of
MSW in an unlawful manner risks severe civil and criminal penalties. In
some areas, landfills are scarce because of significant population
density and the limited availability of suitable land. Accordingly,
most MSW generated in these areas is burned in an incinerator or
brought to transfer stations where it is compacted and transported to a
more distant permanent disposal site.
Because of the strict laws and regulations that govern the disposal
of MSW, there are no good substitutes for MSW disposal. Firms that
compete in the disposal of MSW can profitably
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increase their charges to haulers of MSW without losing significant
sales to any other firms. Thus, for purposes of antitrust analysis, the
disposal of MSW constitutes a line of commerce, or relevant service,
for purposes of analyzing the transaction.
The disposal of MSW generally occurs in localized markets. The
Complaint alleges that the Bergen and Passaic Counties, New Jersey
disposal area (which includes Bergen and Passaic Counties and areas
within 10 miles of these counties) constitutes a section of the
country, or a relevant geographic market, for purposes of assessing the
competitive efforts of the transaction. Due to the high costs of
transporting MSW and the substantial travel time to other disposal
facilities based on distance, natural barriers, and congested roadways,
virtually all of the MSW generated in Bergen and Passaic Counties, New
Jersey is disposed of in transfer stations in the Bergen and Passaic
Counties, New Jersey disposal area. Firms that compete in the disposal
of MSW in the Bergen and Passaic Counties, New Jersey disposal area can
profitably increase their charges for MSW disposal without losing
significant sales to more distant disposal sites.
The Complaint also alleges that the Tulsa and Muskogee, Oklahoma
area (which includes Muskogee, Rogers, Tulsa, and Wagoner Counties,
Oklahoma) constitutes a section of the country, or a relevant
geographic market, for purposes of assessing the competitive effects of
the transaction. Because of transportation costs and travel time to
more distant facilities, virtually all of the MSW generated in the
Tulsa and Muskogee, Oklahoma area is disposed of in landfills within
roughly 25 miles of Tulsa or Muskogee, Oklahoma. Firms that compete in
the disposal of MSW in the Tulsa and Muskogee, Oklahoma area can
profitably increase their charges for MSW disposal without losing
significant sales to more distant disposal sites.
There are significant barriers to entry in MSW disposal. Obtaining
a permit to construct a new disposal facility or expand an existing one
is a costly and time-consuming process that typically takes many years
to conclude. Local public opposition often increases the time and
uncertainty of successfully permitting a facility. In the Bergen and
Passaic Counties, New Jersey disposal area and the Tulsa and Muskogee,
Oklahoma area, entry by a new MSW disposal facility would be costly and
time-consuming, and unlikely to prevent market incumbents from
significantly raising prices for the disposal of MSW following the
acquisition.
b. Anticompetitive Effects in the Disposal of Municipal Solid
Waste.
(1) Bergen and Passaic Counties, New Jersey Disposal Area. The
proposed acquisition would reduce from four to three the number of
significant competitors for the disposal of MSW in the Bergen and
Passaic Counties, New Jersey disposal area. Defendants Waste Management
and Allied operate five of the nine transfer stations in this market
and collectively control over 55 percent of the available disposal
capacity for Bergen and Passaic Counties. Annual revenue from disposal
of waste in Bergen and Passaic Counties, New Jersey is over $50
million.
(2) Tulsa and Muskogee, Oklahoma Area. In the Tulsa and Muskogee,
Oklahoma area, the acquisition would reduce from three to two the
number of significant firms competing to dispose of MSW. There are
currently four owners of the six landfills that service the Tulsa and
Muskogee, Oklahoma area. Two of the six landfills are expected to close
in the near future, leaving four landfills owned by three companies to
service haulers in the area. After the acquisition, Waste Management
would own three of the four remaining landfills in this area.
The Complaint alleges that a combination of Waste Management and
Allied in the Bergen and Passaic Counties, New Jersey disposal area and
the Tulsa and Muskogee, Oklahoma area would remove a significant
competitor in the market for the disposal of MSW. In each of these
markets, the resulting increase in concentration, loss of competition,
and absence of any reasonable prospect of significant new entry or
expansion by market incumbents likely will result in higher prices for
the disposal of MSW.
III. Explanation of the Proposed Final Judgment
A. Small Container Commercial Waste Collection Service
The divestiture and contract-revision requirements of the proposed
Final Judgment will eliminate the anticompetitive effects of the
acquisition in small container commercial waste collection services in
the markets identified in the Complaint by establishing a new,
independent, and economically viable competitor in each of those
markets and, in some areas, by also reducing the barriers to entry
created by the contracts currently used by Waste Management. the
proposed Final Judgment requires Waste Management, within 90 days after
the filing of the Complaint, or five (5) days after notice of the entry
of the Final Judgment by the Court, whichever is later, to divest, as a
viable ongoing business or businesses, small container commercial waste
collection assets (e.g., routes, trucks, containers, and customer
lists) in the areas of Pitkin County, Colorado; Garfield County,
Colorado; Augusta, Georgia; and Myrtle Beach, South Carolina. On or
before January 1, 2005, the proposed Final Judgment also requires Waste
Management to alter the contracts it uses with it existing and new
small container commercial waste customers in the areas of Myrtle
Beach, South Carolina and Augusta, Georgia. The proposed Final Judgment
further requires Defendants, within 90 days after approval by the New
Jersey Department of Environmental Protection of Waste Management's
request to acquire assets in New Jersey, to divest certain waste-
hauling and disposal assets located in New Jersey and New York. The
assets must be divested in such a way as to satisfy the United States
that the operations can and will be operated by the purchaser or
purchasers as a viable, ongoing business or businesses that can compete
effectively in each relevant market. Defendants must take all
reasonable steps necessary to accomplish the divestitures quickly and
shall cooperate with prospective purchasers.
In the event that Defendants do not accomplish the divestitures
within the periods prescribed in the proposed Final Judgment, the Final
Judgment provides that the Court will appoint a trustee selected by the
United States to effect the divestitures. If a trustee is appointed,
the proposed Final Judgment provides that Waste Management will pay all
costs and expenses of the trustee. The trustee's commission will be
structured so as to provide an incentive for the trustee based on the
price obtained and the speed with which the divestitures are
accomplished. After his or her appointment becomes effective, the
trustee will file monthly reports with the Court, United States, and
New Jersey as appropriate, setting forth his or her efforts to
accomplish the divestitures. At the end of six months, if the
divestitures have not been accomplished, the trustee, United States,
and New Jersey as appropriate, will make recommendations to the Court,
which shall enter such orders as appropriate in order to carry out the
purpose of the trust, including extending the trust or the term of the
trustee's appointment.
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1. Pitkin County, Colorado and Garfield County, Colorado
The divestiture provisions of the proposed Final Judgment will
eliminate the anticompetitive effects of the acquisition in small
container commercial waste collection services in Pitkin County,
Colorado and Garfield County, Colorado. Under the proposed Final
Judgment, Waste Management is required to divest seven routes that
serve small container commercial waste collection customers, among
others, in Pitkin County, Colorado and Garfield County, Colorado to a
new, independent, and economically viable competitor in these areas.
These divestitures include all of Waste Management's existing small
container commercial waste collection routes in the two counties. Many
of Waste Management's small container commercial accounts in Pitkin
County, Colorado and Garfield County, Colorado are not allocated,
however, to a specific route, and their collective sale would not
likely produce an efficient divestiture package. Accordingly, a
majority of the routes that Waste Management must divest serve a
mixture of small container commercial customers and residential
customers. The package of routes to be divested produces annual
revenues roughly equivalent to the $2 million in annual revenues
generated by all of Waste Management's small container commercial
accounts in Pitkin County, Colorado and Garfield County, Colorado.
2. Myrtle Beach, South Carolina Area and Augusta, Georgia Area
In the Myrtle Beach, South Carolina and Augusta, Georgia areas, the
United States determined that competition would be best maintained by
requiring a combination of divestiture and contract relief. The
divestiture relief in the Myrtle Beach, South Carolina and Augusta,
Georgia areas requires Waste Management to divest all but one of
Allied's small container commercial waste collection routes in each
area. The divestitures of these routes to a new, independent, and
economically viable competitor will help to eliminate the
anticompetitive effects of the acquisition in small container
commercial waste collection in the Myrtle Beach, South Carolina and
Augusta, Georgia areas by creating a competitor capable of restoring
competition that otherwise would have been lost.
Because these divestitures alone will not fully eliminate the
anticompetitive effects of the acquisition in each area, they are
augmented by decree provisions that obligate Waste Management to alter
all of its contracts with its small container commercial waste
customers. The new contracts are less restrictive in duration, renewal
terms, and the liquidated damages imposed on a customer who wishes to
switch its service to a new hauler. Contract relief is significant
because it lowers entry barriers and effectively enables smaller
competitors to grow and new competitors to enter. This contract relief
will make it easier for customers to consider competitive alternatives,
easier for existing small haulers to compete and expand in the future,
and more difficult for incumbent haulers to price discriminate
successfully. The contract provisions also make it easier for new
haulers to enter a market, and raise the prospect that the markets will
become less concentrated and more competitive than they were pre-
acquisition by enabling smaller firms to compete for customers under
contract with incumbent hauling firms.
Waste Management's implementation of the contract relief specified
in the proposed Final Judgment should permit the purchaser of the
divested assets, and other competitors, to maintain efficient routes
and gain customers more easily if Waste Management seeks to raise
prices in these markets. The combined route divestitures and contract
relief sought in the Myrtle Beach, South Carolina area and Augusta,
Georgia area, will ensure that consumers of small container commercial
waste collection services will continue to receive the benefits of
competition.
3. Morris County, New Jersey and Bergen and Passaic Counties, New
Jersey
The proposed Final Judgment requires partial divestitures of the
Allied small container commercial waste collection assets being
acquired by Waste Management in Morris County, New Jersey and in Bergen
and Passaic Counties, New Jersey. The proposed acquisition raised
competitive concerns in these areas based upon the significant post-
acquisition market concentration and Waste Management's post-
acquisition market share. The United States, however, determined that
partial divestitures of Allied's small container commercial waste
collection routes would be acceptable in each area in light of the
other, albeit less substantial, third-party competitors located
therein. In addition, the post-acquisition market concentrations
identified in Morris County, New Jersey and Bergen and Passaic
Counties, New Jersey were lower than those found in other areas
addressed in the proposed Final Judgment. These divestitures will
ensure that consumers of small container commercial waste collection
services in Morris County, New Jersey and Bergen and Passaic Counties,
New Jersey will continue to receive the benefits of competition--lower
prices and better service.
B. Disposal of Municipal Solid Waste in the Bergen and Passaic
Counties, New Jersey Disposal Area and the Tulsa and Muskogee, Oklahoma
Area
1. Bergen and Passaic Counties, New Jersey Disposal Area
Waste Management's proposed acquisition of two Allied transfer
station disposal facilities in Bergen County, New Jersey raised
significant concerns about the availability of sufficient disposal
capacity for haulers of MSW generated in Bergen and Passaic Counties,
New Jersey. To remedy the anticompetitive effects of the proposed
acquisition, the proposed Final Judgment requires Waste Management to
divest the Garofalo Transfer Station in Garfield, New Jersey and the
Chestnut Ridge Solid Waste Transfer Station in Chestnut Ridge, New
York. In addition to the divestitures, the proposed Final Judgment
requires that Waste Management sell throughput disposal rights to a
third party at the New Jersey Meadowlands Commission's HMDC Transfer
Station for the remainder of Waste Management's current lease, and if
the lease is renewed, for the duration of the period in which Waste
Management has contractual rights to operate the facility, not to
exceed the termination date of the proposed Final Judgment.
Collectively, the throughput disposal rights and divestitures provide
haulers of MSW generated in Bergen and Passaic Counties, New Jersey
with a range of options providing at least 1,200 tons per day of
uncommitted MSW disposal capacity. In the event that Waste Management
is unable to divest the Chestnut Ridge Solid Waste Transfer Station by
the date specified in the proposed Final Judgment, it will, in the
alternative, divest one of three Bergen County, New Jersey transfer
stations. The divestiture and throughput disposal provisions of the
proposed Final Judgment will fully eliminate the anticompetitive
effects of the acquisition for MSW disposal services in the Bergen and
Passaic Counties, New Jersey disposal area.
The proposed Final Judgment requires that all divested assets be
acquired by a new, independent, and economically viable competitor. The
proposed relief
[[Page 47944]]
will thereby ensure that users of disposal services in these areas will
continue to receive the benefits of competition.
2. Tulsa and Muskogee, Oklahoma Area
Defendants agreed to exclude from the transaction the proposed sale
of all waste-hauling and disposal assets in the Tulsa and Muskogee,
Oklahoma area in light of concerns expressed by the United States
regarding the increased concentration in MSW disposal that would occur.
The proposed Final Judgment requires Waste Management to provide
written notice to the United States at least 30 days in advance of its
acquisition of any landfill located within 25 miles of the city of
Tulsa, Oklahoma or the city of Muskogee, Oklahoma. If Waste Management
again proposes to acquire the Porter Landfill originally scheduled to
be purchased in this transaction, the notice required from Waste
Management shall also include the additional information specified in
the proposed Final Judgment. The proposed Final Judgment thus maintains
the pre-acquisition structure of MSW disposal competition in the Tulsa
and Muskogee, Oklahoma area, and thereby ensures that users of disposal
services in the area will continue to receive the benefits of
competition.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.
16(a)), the proposed Final Judgment has no prima facie effect in any
subsequent lawsuit that may be brought against the Defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States, New Jersey, and Defendants have stipulated that
the proposed Final Judgment may be entered by the Court after
compliance with the provisions of the APPA, provided that the United
States has not withdrawn its consent. The APPA conditions entry upon
the Court's determination that the proposed Final Judgment is in the
public interest.
The APPA provides a period of at least 60 days preceding the
effective date of the proposed Final Judgment within which any person
may submit the United States written comments regarding the proposed
Final Judgment. Any person who wishes to comment should do so within 60
days of the date of publication of this Competitive Impact Statement in
the Federal Register. The United States will evaluate and respond to
the comments. All comments will be given due consideration by the
Department of Justice, which remains free to withdraw its consent to
the proposed Final Judgment at any time prior to entry. The comments
and the response of the United States will be filed with the Court and
published in the Federal Register.
Written comments should be submitted to:
J. Robert Kramer II, Chief, Litigation II Section, Antitrust
Division, United States Department of Justice, 1401 H Street, NW.,
Suite 3000, Washington, DC. 20530.
The proposed Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
The United States considered, as an alternative to the proposed
Final Judgment, a full trial on the merits against Defendants. The
United States could have continued to litigation and sought preliminary
and permanent injunctions against Waste Management's acquisition of
certain Allied voting securities and assets. The United States is
satisfied, however, that the divestiture of assets and the contract
relief described in the proposed Final Judgment will preserve
competition for small container commercial waste collection services
and MSW disposal in the relevant markets identified by the United
States.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a 60-day comment
period, after which the Court shall determine whether entry of the
proposed Final Judgment ``is in the public interest.'' In making that
determination, the Court may consider:
(1) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment upon the public
generally and individuals alleging specific injury from the
violations set forth in the complaint including consideration of the
public benefit, if any, to be derived from a determination of the
issues at trial.
15 U.S.C. 16(e). As the United States Court of Appeals for the D.C.
Circuit held, this statue permits a court to consider, among other
things, the relationship between the remedy secured and the specific
allegations set forth in the government's complaint, whether the decree
is sufficiently clear, whether enforcement mechanisms are sufficient,
and whether the decree may positively harm third parties. See United
States v. Microsoft, 56 F.3d 1448, 1461-62 (D.C. Cir. 1995).
In conducting this inquiry, ``[t]he court is nowhere compelled to
go to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.'' 119 Cong. Rec. 24,598 (1973)
(statement of Senator Tunney).\1\ Rather,
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\1\ See also United States v. Gillete Co., 406 F. Supp. 713, 716
(D. Mass. 1975) (recognizing it was not the court's duty to settle;
rather, the court must only answer ``whether the settlement achieved
[was] within the reaches of the public interest''). A ``public
interest'' determination can be made properly on the basis of the
Competitive Impact Statement and Response to Comments filed pursuant
to the APPA. Although the APPA authorizes the use of additional
procedures, 15 U.S.C. 16(f), those procedures are discretionary. A
court need not invoke any of them unless it believes that the
comments have raised significant issues and that further proceedings
would aid the court in resolving those issues. See H.R. Rep. No. 93-
1463, 93rd Cong., 2d Sess. 8-9 (1974), reprinted in 1974
U.S.C.C.A.N. 6535, 6538.
[a]bsent 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
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circumstances.
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. May 17, 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988) (citing United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th
[[Page 47945]]
Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62. Case law requires
that
[t]he balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted) \2\
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\2\ Cf. BNS, 858 F.2d at 463 (holding that the court's
``ultimate authority under the (APPA) is limited to approving or
disapproving the consent decree''); Gillette, 406 F. Supp. at 716
(noting that, in this way, the court is constrained to ``look at the
overall picture not hypercritically, nor with a microscope, but with
an artist's reducing glass''). See generally Microsoft, 56 F.3d at
1461 (discussing whether ``the remedies (obtained in the decree are)
so inconsonant with the allegations charged as to fall outside of
the `reaches of the public interest''').
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The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``(A) proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' '' United
States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982)
(citations omitted) (quoting Gillete, 406 F. Supp. at 716), aff'd sub
nom. Maryland v. United States, 460 U.S. 1001 (1983); see also United
States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985)
(approving the consent decree even though the court would have imposed
a greater remedy).
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its Complaint, and does not authorize the Court to
``construct (its) own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by bringing a case in the first
place,'' it follows that ``the court is only authorized to review the
decree itself,'' and not to ``effectively redraft the complaint'' to
inquire into other matters that the United States might have but did
not pursue. Id. at 1459-60.
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: July 22, 2003.
Respectfully submitted,
Michael K. Hammaker,
DC Bar No. 233684, U.S. Department of Justice, Antitrust Division,
Litigation II Section, 1401 H Street, NW., Suite 3000, Washington,
DC 20530, (202) 307-0938.
Certificate of Service
I hereby certify that a copy of the foregoing has been served upon
Waste Management, Inc., Allied Waste Industries, Inc., and the State of
New Jersey by placing a copy of this Competitive Impact Statement in
the U.S. mail, first class and postage prepaid, directed to each of the
above-named parties at the addresses given below, this 22nd day of
July, 2003.
Counsel for Defendant Waste Management, Inc.,
James R. Weiss,
Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW.,
Suite 500, Washington, DC 20006, (202) 628-1700.
Counsel for Defendant Allied Waste Industries, Inc.,
Tom D. Smith,
Jones Day, 51 Louisiana Avenue, NW., Washington, DC 20001-2113,
(202) 879-3971.
Counsel for Plaintiff State of New Jersey,
Andrew L. Rossner,
Assistant Attorney General--Deputy Director, New Jersey Division of
Criminal Justice, P.O. Box 085, Trenton, New Jersey 08625-0085,
(609) 984-0028.
Michael K. Hammaker,
DC Bar No. 233684, U.S. Department of Justice, Antitrust Division,
Litigation II Section, 1401 H Street, NW., Suite 3000, Washington,
DC 20530, (202) 307-0938.
[FR Doc. 03-20521 Filed 8-11-03; 8:45 am]
BILLING CODE 4410-11-M