[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Notices]
[Pages 21006-21017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9106]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States and State of New York v. Stericycle, Inc., et al.;
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 and
Competitive Impact Statement have been filed with the United States
District Court for the District of Columbia in United States of America
and State of New York v. Stericycle, Inc., et al., Civil Action No.
1:11-cv-00689. On April 8, 2011, the United States and the attorney
general for the State of New York filed a Complaint alleging that the
proposed acquisition by Stericycle, Inc. of Healthcare Waste Solutions
(``HWS'') would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The
proposed Final Judgment, filed the same time as the Complaint, requires
Stericycle and HWS to divest HWS's Bronx, New York transfer station,
which is used in the provision of infectious waste treatment services
for customers in the New York City metropolitan area.
Copies of the Complaint, proposed Final Judgment, and Competitive
Impact Statement are available for inspection at the Department of
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth
Street, NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at http://www.usdoj.gov/atr, and at the Office of the Clerk of the United States District Court
for the District of Columbia. Copies of these materials may be obtained
from the Antitrust Division upon request and payment of a copying fee
set by Department of Justice regulations.
[[Page 21007]]
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 Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division,
U.S. Department of Justice, 450 Fifth Street, NW., Suite 8700,
Washington, DC 20530 (telephone: 202-307-0924).
Patricia A. Brink,
Director of Civil Enforcement.
United States District Court for the District of Columbia
United States of America, Department of Justice, Antitrust
Division, 450 Fifth Street, NW., Suite 8700, Washington, DC 20530,
and State of New York, Office of the Attorney General, Antitrust
Bureau, 120 Broadway, New York, New York 10271, Plaintiffs, v.
Stericycle, Inc., 28161 North Keith Drive, Lake Forest, Illinois
60045, SAMW Acquisition Corporation, 28161 North Keith Drive, Lake
Forest, Illinois 60045, and Healthcare Waste Solutions, Inc., 4357
Ferguson Drive, Suite 100, Cincinnati, Ohio 45245, Defendants.
Case No.: 1:11-cv-00689
Assigned To: Howell, Beryl A.
Assign. Date: 4/8/2011
Description: Antitrust
Complaint
Plaintiffs, the United States of America (``United States''),
acting under the direction of the Attorney General of the United
States, and the State of New York, acting under the direction of its
Attorney General, bring this civil antitrust action against defendants,
Stericycle, Inc., SAMW Acquisition Corporation, and Healthcare Waste
Services, Inc. (``HWS''), to enjoin Stericycle's proposed acquisition
of HWS and to obtain other equitable relief. Plaintiffs complain and
allege as follows:
I. Nature of the Action
1. Pursuant to an agreement and plan of merger dated September 24,
2010, Stericycle intends to acquire all of HWS, except for an
incinerator in Matthews, North Carolina, for $245 million. Defendants
Stericycle and HWS currently compete in the treatment of infectious
waste.
2. The United States and the State of New York bring this action to
prevent the proposed acquisition because it would substantially lessen
competition in the provision of infectious waste treatment services in
the New York City Metropolitan Area, in violation of Section 7 of the
Clayton Act, 15 U.S.C. 18.
II. Jurisdiction and Venue
3. The United States brings this action under Section 15 of the
Clayton Act, as amended, 15 U.S.C. 4 and 25, to prevent and restrain
defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
The State of New York brings this action under Section 16 of the
Clayton Act, 15 U.S.C. 26, to prevent and restrain defendants from
violating Section 7 of the Clayton Act, 15 U.S.C. 18. The State of New
York, by and through its Attorney General, brings this action on behalf
of the citizens, general welfare, and economy of the State of New York.
4. Defendants treat infectious waste in the flow of interstate
commerce. Defendants' activities in treating infectious waste
substantially affect interstate commerce. The Court has jurisdiction
over this action and over the parties pursuant to 15 U.S.C. 22 and 28
U.S.C. 1331 and 1337.
5. Defendants have consented to venue and personal jurisdiction in
this District. Venue is therefore proper in this District under Section
12 of the Clayton Act, 15 U.S.C. 22 and 28 U.S.C. 1391(c).
III. The Defendants
6. Defendant Stericycle, Inc. is a Delaware corporation with its
principal place of business in Lake Forest, Illinois. Stericycle, a
multi-national company, is the largest provider of infectious waste
treatment services in the United States, with operations in all 50
states, including 54 treatment facilities. In 2009, Stericycle had U.S.
revenues of $913 million. SAMW Acquisition Corporation is a corporation
formed by Stericycle to facilitate its acquisition of HWS. Stericycle
and SAMW hereinafter are collectively referred to as ``Stericycle''.
7. Defendant Healthcare Waste Solutions (``HWS'') is a Delaware
corporation with its principal place of business in Cincinnati, Ohio.
HWS is the second-largest provider of infectious waste treatment
services in the United States, with operations in 15 states that
include six treatment facilities. In 2009, HWS had total revenue of
about $31 million.
IV. Trade and Commerce
A. Background
8. Regulated medical waste is waste generated in the diagnosis,
treatment, or immunization of human beings or animals. There are
generally three types of regulated medical waste: (1) Infectious waste;
(2) pathological waste; and (3) trace chemotherapy waste. Infectious
waste is waste that has come into contact with bodily fluids and
``sharps'' waste, such as syringes and scalpels. Pathological waste is
anatomical parts, and trace chemotherapy waste is small amounts of
chemical compounds used to treat cancer patients and the equipment used
to administer the compounds. Infectious waste comprises approximately
90 percent of the regulated medical waste generated in the United
States.
9. State and federal governments heavily regulate the treatment of
regulated medical waste. They prescribe how each type of regulated
medical waste must be stored, collected, and treated. Providers of
infectious waste treatment services are required to be licensed by
various state and federal regulatory agencies before they can offer
such services.
10. Regulated medical waste must be stored separately from other
types of waste, and each type of regulated medical waste must be stored
separately from the other types in specially marked and sealed
containers.
11. State-approved treatment facilities must be used to render
infectious waste non-infectious. Failure to use state-approved
treatment facilities subjects both the generator of the infectious
waste and the infectious waste treatment service provider to criminal
prosecution, fines, damage actions, and potentially high clean-up
costs.
12. Autoclave sterilization is the most common treatment for
infectious waste. An autoclave uses steam sterilization combined with
pressure to render infectious waste non-infectious. Autoclave
sterilization is not approved for pathological or trace chemotherapy
waste, which instead must be incinerated in a specially licensed
medical waste incinerator.
13. Infectious waste is typically collected from generator sites
(e.g., hospitals and physician offices) on daily route trucks and then
transported to treatment facilities. Route trucks are vans and, more
typically, 16- to 24-foot straight trucks. A daily route truck
typically travels a route within a 75- to 100-mile radius of its
garage.
14. Obtaining approval for an infectious waste treatment facility
in and around large urban areas, such as New York City, is difficult.
Only one such commercial facility operates in the New York City
Metropolitan area. Transporting large volumes of infectious waste to
distant treatment facilities using daily route trucks is not cost-
effective. Therefore, service providers serve such areas by using local
transfer stations.
15. Once the daily route truck has delivered the infectious waste
to a local
[[Page 21008]]
transfer station, the collection function is completed. At a transfer
station, containers of infectious waste are unloaded from the daily
route trucks and loaded onto tractor trailers for efficient shipment to
more distant treatment facilities.
16. The size of the market for the provision of infectious waste
treatment services is largely influenced by transportation costs
because such costs represent a large share of the total cost of
providing treatment services.
17. Defendants Stericycle and HWS own and operate numerous
autoclave facilities for the treatment of infectious waste.
Stericycle's and HWS's closest facilities to New York City are located
in Sheridan and Oneonta, New York; Woonsocket, Rhode Island; and
Morgantown and Marcus Hook, Pennsylvania. The closest of these is about
180 miles from New York City. It is not cost-effective to transport
large volumes of infectious waste to these distant facilities using
daily route trucks.
18. Stericycle and HWS operate local transfer stations in and
around New York City and compete to provide infectious waste treatment
services by serving customers through these local transfer stations.
19. In and around New York City, Stericycle owns and operates local
transfer stations in the Bronx, Staten Island, West Babylon, and
Farmingdale, New York. Stericycle also owns local transfer stations in
Piscataway and Bloomfield, New Jersey. HWS owns and operates a local
transfer station in the Bronx, New York.
20. In the New York City Metropolitan Area, encompassing the City
of New York, and the counties of Westchester, Rockland, Nassau, and
Suffolk in New York, the counties of Hudson, Bergen, Passaic, Essex,
Union, and Middlesex in New Jersey, and the county of Fairfield in
Connecticut, apart from one small competitor, no other infectious waste
treatment service provider has a local transfer station located within
approximately 100 miles of Stericycle's or HWS's local transfer
stations.
B. Relevant Market
21. The provision of infectious waste treatment services to
customers in the New York City Metropolitan Area is a line of commerce
and relevant price discrimination service market within the meaning of
Section 7 of the Clayton Act.
22. Infectious waste treatment differs from treatment for other
types of waste, including other types of regulated medical waste. There
are no legal alternatives to treating infectious waste other than using
an approved treatment technology, such as autoclave sterilization.
23. Defendants provide infectious waste treatment services to New
York City Metropolitan Area customers using local transfer stations.
Other infectious waste treatment service providers that operate
treatment facilities more than 100 miles from the New York City
Metropolitan Area cannot cost-effectively compete to provide infectious
waste treatment services without a local transfer station located in
the New York City Metropolitan Area.
24. A small but significant increase in the price of infectious
waste treatment services would not cause New York City Metropolitan
Area customers to move sufficient volumes of infectious waste to
another type of treatment service or to switch to an infectious waste
treatment service provider that does not operate a local transfer
station in sufficient numbers so as to make such a price increase
unprofitable. Therefore, the relevant market is the provision of
infectious waste treatment services to customers in the New York
Metropolitan Area.
C. Anticompetitive Effect of the Acquisition
25. In the New York City Metropolitan Area, the acquisition would
remove a significant competitor in the treatment of infectious waste in
an already highly concentrated market. The proposed acquisition would
reduce from three to two the number of competitors with local transfer
stations, and Stericycle and HWS would have approximately 90 percent of
the infectious waste treatment market in the New York City Metropolitan
Area. The third competitor is a small firm that opened an autoclave
treatment facility in Mount Vernon, New York in 2010; it is unlikely to
replace the competition lost as a result of the merger. The substantial
increase in concentration and loss of competition likely will result in
higher prices for infectious waste treatment services.
26. Vigorous price competition between Stericycle and HWS in the
provision of infectious waste treatment services has benefited
customers in the New York City Metropolitan Area.
27. The proposed acquisition will eliminate the competition between
Stericycle and HWS; reduce the number of providers of infectious waste
treatment services with local transfer stations from three to two; and
enable Stericycle to raise prices and lower quality of service for
customers in the New York City Metropolitan Area, in violation of
Section 7 of the Clayton Act.
D. Entry Into the Treatment of Infectious Waste
28. Successful entry into the provision of infectious waste
treatment services for customers in the New York City Metropolitan Area
is unlikely without first obtaining a local transfer station from which
waste can be transferred to more distant treatment facilities.
29. A prospective provider of infectious waste treatment services
faces substantial barriers to site and build a transfer station.
Obtaining the state and local permits and approvals necessary to site a
medical waste transfer station would require a substantial investment
in time and money, without any guarantee that the permits and approvals
would ultimately be granted. In recent years, several infectious waste
treatment service providers have attempted without success to obtain
the necessary permits to site a local transfer station within New York
City.
30. Entry into the provision of infectious waste treatment services
to customers in the New York City Metropolitan Area would not be
timely, likely, or sufficient to counter anticompetitive price
increases or diminished quality of service that Stericycle could impose
after the proposed acquisition.
V. Violation Alleged
31. Stericycle's proposed acquisition of HWS's infectious waste
treatment assets in the New York City Metropolitan Area likely will
substantially lessen competition and tend to create a monopoly in
interstate trade and commerce in violation of Section 7 of the Clayton
Act, 15 U.S.C. 18.
32. Unless restrained, the transaction will have the following
anticompetitive effects, among others:
A. Actual and potential competition between Stericycle and HWS in
the provision of infectious waste treatment services in the New York
City Metropolitan Area will be eliminated;
b. Competition generally in the provision of infectious waste
treatment services in the New York City Metropolitan Area will be
substantially lessened; and
c. Prices for infectious waste treatment services in the New York
City Metropolitan Area likely will increase, and service likely will be
reduced.
VI. Requested Relief
33. Plaintiffs request:
[[Page 21009]]
a. That Stericycle's proposed acquisition of HWS be adjudged and
decreed to be unlawful and in violation of Section 7 of the Clayton
Act, 15 U.S.C. 18;
b. That defendants and all persons acting on their behalf be
permanently enjoined and restrained from consummating the proposed
acquisition of HWS by Stericycle, or from entering into or carrying out
any contract, agreement, plan, or understanding, the effect of which
would be to merge the voting securities or assets of the defendants;
c. That plaintiffs receive such other and further relief as the
case requires and the Court deems just and proper; and
d. That plaintiffs recover the costs of this action.
Dated: April 8, 2011.
Respectfully submitted,
For Plaintiff United States of America
/s/--------------------------------------------------------------------
Christine A. Varney,
Assistant Attorney General.
/s/--------------------------------------------------------------------
Maribeth Petrizzi,
Chief, Litigation II Section, DC Bar # 435204.
/s/--------------------------------------------------------------------
Dorothy B. Fountain,
Assistant Chief, Litigation II Section.
/s/--------------------------------------------------------------------
Sharis A. Pozen,
Deputy Assistant Attorney General, DC Bar # 439469.
/s/--------------------------------------------------------------------
Katherine B. Forrest,
Deputy Assistant Attorney General.
/s/--------------------------------------------------------------------
Patricia A. Brink,
Director of Civil Enforcement.
/s/--------------------------------------------------------------------
Lowell R. Stern (DC Bar 440387),
Stephen A. Harris,
Blake W. Rushforth,
Milosz K. Gudzowski,
Attorneys, U.S. Department of Justice, Antitrust Division,
Litigation II Section, 450 Fifth Street, NW, Suite 8700, Washington,
DC 20530.
Tel.: (202) 514-3676
Fax: (202) 514-9033
E-mail: [email protected]
For Plaintiff State of New York,
Eric T. Schneiderman,
Attorney General.
By:
/s/--------------------------------------------------------------------
Richard L. Schwartz,
Acting Chief, Antitrust Bureau.
/s/--------------------------------------------------------------------
Richard E. Grimm,
Assistant Attorney General.
/s/--------------------------------------------------------------------
Amy E. McFarlane,
Assistant Attorney General.
Office of the Attorney General,
Antitrust Bureau,
120 Broadway,
New York, New York 10271.
Tel.: (212) 416-8280
Tel.: (212) 416-6195
Fax: (212) 416-6015
E-mail: [email protected]
E-mail: [email protected]
United States District Court for the District of Columbia
United States of America and State of New York, Plaintiffs, v.
Stericycle, Inc., SAMW Acquisition Corporation, and Healthcare Waste
Solutions, Inc., Defendants.
Case No.: 1:11-cv-00689
Assigned To: Howell, Beryl A.
Assign. Date: 4/8/2011
Description: Antitrust
Competitive Impact Statement
Plaintiff United States of America (``United States''), pursuant to
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact
Statement relating to the proposed Final Judgment submitted for entry
in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
Defendant Stericycle, Inc., through SAMW Acquisition Corporation,
and defendant Healthcare Waste Solutions, Inc. (``HWS''), entered into
a merger agreement dated September 24, 2010, pursuant to which
Stericycle would acquire all of HWS, except for an incinerator in
Matthews, North Carolina, for $245 million.
The United States and the State of New York filed a civil antitrust
Complaint on April 8, 2011, seeking to enjoin the proposed acquisition,
alleging that it likely would substantially lessen competition in the
provision of infectious waste treatment services to customers in the
New York City Metropolitan Area, in violation of Section 7 of the
Clayton Act, 15 U.S.C. 18. The loss of competition from the acquisition
likely would result in higher prices and reduced service for these
customers of infectious waste treatment services.
At the same time the Complaint was filed, the United States and the
State of New York also filed a Hold Separate Stipulation and Order and
proposed Final Judgment, which are designed to eliminate the
anticompetitive effects that would result from Stericycle's acquisition
of HWS. Under the proposed Final Judgment, which is explained more
fully below, Stericycle is required to divest HWS's transfer station
located in the Bronx, New York. Under the terms of the Hold Separate
Stipulation and Order, Stericycle and HWS must take certain steps to
ensure that the assets being divested continue to be operated in a
competitively independent and economically viable manner and that
competition for infectious waste treatment services is maintained
during the pendency of the ordered divestiture.
The United States, the State of New York, 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 Final Judgment
and to punish violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants
Stericycle is a Delaware corporation with its principal place of
business in Lake Forest, Illinois. Stericycle, a multi-national
company, is the largest provider of infectious waste treatment services
in the United States, with operations in all 50 states, including 54
treatment facilities. In 2009, Stericycle had U.S. revenues of $913
million. SAMW Acquisition Corporation is a corporation formed by
Stericycle to facilitate its acquisition of HWS.
HWS is a Delaware corporation with its principal place of business
in Cincinnati, Ohio. HWS is the second-largest provider of infectious
waste treatment services in the United States, with operations in 15
states that include six treatment facilities. In 2009, HWS had total
revenues of about $31 million.
B. The Competitive Effect of the Acquisition on Infectious Waste
Treatment Services
1. Background
Regulated medical waste is waste generated in the diagnosis,
treatment, or immunization of human beings or animals. There are
generally three types of regulated medical waste: (1) Infectious waste;
(2) pathological waste; and (3) trace chemotherapy waste. Infectious
waste is waste that has come into contact with bodily fluids and
``sharps'' waste, such as syringes and scalpels. Pathological waste is
anatomical parts, and trace chemotherapy waste is small amounts of
chemical compounds used to treat cancer patients and the equipment used
to administer the compounds. Infectious waste comprises approximately
90 percent of the regulated medical waste generated in the United
States.
State and federal governments heavily regulate the treatment of
regulated
[[Page 21010]]
medical waste. They prescribe how each type of regulated medical waste
must be stored, collected, and treated. Providers of infectious waste
treatment services are required to be licensed by various state and
federal regulatory agencies before they can offer such services.
Regulated medical waste must be stored separately from other types of
waste, and each type of regulated medical waste must be stored
separately from the other types in specially marked and sealed
containers. State-approved treatment facilities must be used to render
infectious waste non-infectious. Failure to use state-approved
treatment facilities subjects both the generator of the infectious
waste and the infectious waste treatment service provider to criminal
prosecution, fines, damage actions, and potentially high clean-up
costs.
Autoclave sterilization is the most common treatment for infectious
waste. An autoclave uses steam sterilization combined with pressure to
render infectious waste non-infectious. Autoclave sterilization is not
approved for pathological or trace chemotherapy waste, which instead
must be incinerated in a specially licensed medical waste incinerator.
Infectious waste is typically collected from generator sites (e.g.,
hospitals and physician offices) on daily route trucks and then
transported to treatment facilities. Route trucks are vans and, more
typically, 16- to 24-foot straight trucks. A daily route truck
typically travels a route within a 75- to 100-mile radius of its
garage.
Obtaining approval for an infectious waste treatment facility in
and around large urban areas, such as New York City, is difficult. Only
one such commercial facility operates in the New York City Metropolitan
Area. Transporting large volumes of infectious waste to distant
treatment facilities using daily route trucks is not cost-effective.
Therefore, service providers serve such areas by using local transfer
stations. Once the daily route truck has delivered the infectious waste
to a local transfer station, the collection function is completed. At a
transfer station, containers of infectious waste are unloaded from the
daily route trucks and loaded onto tractor trailers for efficient
shipment to more distant treatment facilities.
The size of the market for the provision of infectious waste
treatment services is largely influenced by transportation costs
because such costs represent a large share of the total cost of
providing treatment services. Defendants Stericycle and HWS own and
operate numerous autoclave facilities for the treatment of infectious
waste. Stericycle's and HWS's closest facilities to New York City are
located in Sheridan and Oneonta, New York; Woonsocket, Rhode Island;
and Morgantown and Marcus Hook, Pennsylvania. The closest of these is
about 180 miles from New York City. It is not cost-effective to
transport large volumes of infectious waste to these distant facilities
using daily route trucks.
Stericycle and HWS operate local transfer stations in and around
New York City and compete to provide infectious waste treatment
services by serving customers through these local transfer stations. In
and around New York City, Stericycle owns and operates local transfer
stations in the Bronx, Staten Island, West Babylon, and Farmingdale,
New York. Stericycle also owns local transfer stations in Piscataway
and Bloomfield, New Jersey. HWS owns and operates a local transfer
station in the Bronx, New York.
In the New York City Metropolitan Area, encompassing the City of
New York, and the counties of Westchester, Rockland, Nassau, and
Suffolk in New York, the counties of Hudson, Bergen, Passaic, Essex,
Union, and Middlesex in New Jersey, and the county of Fairfield in
Connecticut, apart from one small competitor, no other infectious waste
treatment service provider has a local transfer station located within
approximately 100 miles of Stericycle's or HWS's local transfer
stations.
2. Relevant Market
The provision of infectious waste treatment services to customers
in the New York City Metropolitan Area is a line of commerce and
relevant price discrimination service market within the meaning of
Section 7 of the Clayton Act. Infectious waste treatment differs from
treatment for other types of waste, including other types of regulated
medical waste. There are no legal alternatives to treating infectious
waste other than using an approved treatment technology, such as
autoclave sterilization.
Defendants provide infectious waste treatment services to New York
City Metropolitan Area customers using local transfer stations. Other
infectious waste treatment service providers that operate treatment
facilities more than 100 miles from the New York City Metropolitan Area
cannot cost-effectively compete to provide infectious waste treatment
services without a local transfer station located in the New York City
Metropolitan Area. A small but significant increase in the price of
infectious waste treatment services would not cause New York City
Metropolitan Area customers to move sufficient volumes of infectious
waste to another type of treatment service, or to switch to an
infectious waste treatment service provider that does not operate a
local transfer station, in sufficient numbers so as to make such a
price increase unprofitable. The relevant market is the provision of
infectious waste treatment services to customers in the New York City
Metropolitan Area.
3. Anticompetitive Effects of the Transaction
In the New York City Metropolitan Area, the acquisition would
remove a significant competitor in the treatment of infectious waste in
an already highly concentrated market. The proposed acquisition would
reduce from three to two the number of competitors with local transfer
stations, and Stericycle and HWS would have approximately 90 percent of
the infectious waste treatment market in the New York City Metropolitan
Area. Vigorous price competition between Stericycle and HWS in the
provision of infectious waste treatment services has benefited
customers in the New York City Metropolitan Area. The third competitor
is a small firm that opened an autoclave treatment facility in Mount
Vernon, New York, in 2010; it is unlikely to replace the competition
lost as a result of the merger.
The proposed acquisition will eliminate the competition between
Stericycle and HWS and enable Stericycle to raise prices and lower
quality of service for customers in the New York City Metropolitan
Area, in violation of Section 7 of the Clayton Act.
4. Entry Into the Treatment of Infectious Waste
Successful entry into the provision of infectious waste treatment
services for customers in the New York City Metropolitan Area is
unlikely without first obtaining a local transfer station from which
waste can be transferred to more distant treatment facilities.
A prospective provider of infectious waste treatment services faces
substantial barriers to site and build a transfer station. Obtaining
the state and local permits and approvals necessary to site an
infectious waste transfer station would require a substantial
investment in time and money, without any guarantee that the permits
and approvals would ultimately be granted. In recent years, several
infectious waste treatment service providers have attempted without
success to obtain the
[[Page 21011]]
necessary permits to site a local transfer station within New York
City.
Entry into the provision of infectious waste treatment services to
customers in the New York City Metropolitan Area would not be timely,
likely, or sufficient to counter anticompetitive price increases or
diminished quality of service that Stericycle could impose after the
proposed acquisition.
III. Explanation of the Proposed Final Judgment
The terms of the proposed Final Judgment will eliminate the
anticompetitive effects of the acquisition alleged in the Complaint.
Section IV of the proposed Final Judgment requires defendants, within
forty-five (45) 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 HWS's transfer station in the Bronx, New
York, which is used in the provision of infectious waste treatment
services to customers in the New York City Metropolitan Area. The
acquirer of the transfer station, along with associated tangible and
intangible assets, must be acceptable to the United States, in its sole
discretion after consultation with the State of New York. The
divestiture of these assets according to the terms of the proposed
Final Judgment will establish a new, independent, and economically
viable competitor, thereby preserving competition in the provision of
infectious waste treatment services to customers in the New York City
Metropolitan Area.
In the event that defendants do not accomplish the divestiture
within the time prescribed in the proposed Final Judgment, the proposed
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 defendants will
pay all costs and expenses of the trustee. The trustee's commission
will be structured so as to provide an incentive for the trustee based
on the price obtained and the speed with which the divestitures are
accomplished. After his or her appointment becomes effective, the
trustee will file monthly reports with the Court, United States, and
the State of New York 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, the United
States, and the State of New York, 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.
The Final Judgment also requires, in Section VIII, that defendants
provide advance notification of certain future proposed acquisitions
not otherwise subject to the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, 15 U.S.C. 18a. That provision requires 30 days' advance
written notice to the United States and the State of New York before
defendants acquire, directly or indirectly, (1) Interest in any
business engaged in the treatment of infectious waste that serves the
New York City Metropolitan Area; (2) other than in the ordinary course
of business, assets of a person engaged in the treatment of infectious
waste generated in the New York City Metropolitan Area; or (3) capital
stock or voting securities of any person that, at any time during the
twelve (12) months immediately preceding such acquisition, was engaged
in the treatment of infectious waste generated in the New York City
Metropolitan Area, where that person's annual revenues in this area
from the treatment of infectious waste were in excess of $500,000. With
this provision, the United States and the State of New York will have
knowledge in advance of acquisitions that may impact competition in the
provision of infectious waste treatment services in the New York City
Metropolitan Area.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act (15 U.S.C. 15) provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act (15 U.S.C.
16(a)), the proposed Final Judgment has no prima facie effect in any
subsequent private lawsuit that may be brought against the defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States, the State of New York, and the defendants have
stipulated that the proposed Final Judgment may be entered by the Court
after compliance with the provisions of the APPA, provided that the
United States has not withdrawn its consent. The APPA conditions entry
upon the Court's determination that the proposed Final Judgment is in
the public interest.
The APPA provides a period of at least sixty (60) days preceding
the effective date of the proposed Final Judgment within which any
person may submit to the United States written comments regarding the
proposed Final Judgment. Any person who wishes to comment should do so
within sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register, or the last date of
publication in a newspaper of the summary of this Competitive Impact
Statement, whichever is later. All comments received during this period
will be considered by the United States Department of Justice, which
remains free to withdraw its consent to the proposed Final Judgment at
any time prior to the Court's entry of judgment. 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: Maribeth Petrizzi, Chief,
Litigation II Section, Antitrust Division, United States Department of
Justice, 450 Fifth Street, NW., Suite 8700, 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 commenced litigation and sought a judicial
order enjoining the acquisition of HWS by Stericycle. The United States
is satisfied that the divestiture and other relief described in the
proposed Final Judgment will preserve competition in the provision of
infectious waste treatment services for customers in the New York City
Metropolitan Area. The relief contained in the proposed Final Judgment
would achieve all or substantially all of the relief that the United
States would have obtained through litigation, while avoiding the time,
expense, and uncertainty of a full trial on the merits of the
Complaint.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
The Clayton Act, as amended by the APPA, requires that proposed
consent judgments in antitrust cases brought by
[[Page 21012]]
the United States be subject to a sixty-day comment period, after which
the court shall determine whether entry of the proposed Final Judgment
``is in the public interest.'' 15 U.S.C. 16(e)(1). In making that
determination, the court, in accordance with the statute as amended in
2004, is required to consider:
(A) The competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) The impact of entry of such judgment upon competition in the
relevant market or markets, 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)(1)(A) & (B). In considering these statutory factors,
the court's inquiry is necessarily a limited one as the government is
entitled to ``broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (DC Cir. 1995); see generally United States v. SBC
Commc'ns, Inc., 489 F. Supp. 2d 1 (D.DC 2007) (assessing public
interest standard under the Tunney Act); United States v. InBev N.V./
S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. Dist. LEXIS 84787,
No. 08-1965 (JR), at *3, (D.DC Aug. 11, 2009) (noting that the court's
review of a consent judgment is limited and only inquires ``into
whether the government's determination that the proposed remedies will
cure the antitrust violations alleged in the complaint was reasonable,
and whether the mechanisms to enforce the final judgment are clear and
manageable'').
As the United States Court of Appeals for the District of Columbia
has held, under the APPA, a court considers, among other things, the
relationship between the remedy secured and the 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 Microsoft, 56 F.3d at
1458-62. 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 Cir. 1981)); see also Microsoft, 56 F.3d at
1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C.
2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Courts have held
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).\1\ In
determining whether a proposed settlement is in the public interest, a
district court ``must accord deference to the government's predictions
about the efficacy of its remedies, and may not require that the
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F.
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need
for courts to be ``deferential to the government's predictions as to
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.DC 2003) (noting that the
court should grant due respect to the United States' prediction as to
the effect of proposed remedies, its perception of the market
structure, and its views of the nature of the case); United States v.
Republic Serv., Inc., 2010-2 Trade Cas. (CCH) ] 77,097, 2010 U.S. Dist.
LEXIS 70895, No. 08-2076 (RWR), at *160 (D.D.C. July 15, 2010) (finding
that ``[i]n light of the deferential review to which the government's
proposed remedy is accorded, [amicus curiae's] argument that an
alternative remedy may be comparably superior, even if true, is not a
sufficient basis for finding that the proposed final judgment is not in
the public interest.'').
---------------------------------------------------------------------------
\1\ Cf. BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [APPA] is limited to approving or
disapproving the consent decree''); United States v. Gillette Co.,
406 F. Supp. 713, 716 (D. Mass. 1975) (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' '').
---------------------------------------------------------------------------
Courts have greater flexibility in approving proposed consent
decrees than in crafting their own decrees following a finding of
liability in a litigated matter. ``[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. 1982) (citations omitted) (quoting United
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), 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). Therefore, the United States ``need only
provide a factual basis for concluding that the settlements are
reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 489
F. Supp. 2d at 17; Republic Serv., 2010 U.S. Dist. LEXIS 70895, at *158
(entering final judgment ``[b]ecause there is an adequate factual
foundation upon which to conclude that the government's proposed
divestitures will remedy the antitrust violations alleged in the
complaint.'').
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; see also InBev, 2009
U.S. Dist. LEXIS 84787, at *20 (``the `public interest' is not to be
measured by comparing the violations alleged in the complaint against
those the court believes could have, or even should have, been
alleged''). 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 did not pursue. Microsoft, 56 F.3d at 1459-60.
As this Court confirmed in SBC Communications, courts ``cannot look
beyond the complaint in making the public interest determination unless
the complaint is drafted so narrowly as to make a mockery of judicial
power.'' 489 F. Supp. 2d at 15.
In its 2004 amendments to the Tunney Act,\2\ Congress made clear
its
[[Page 21013]]
intent to preserve the practical benefits of utilizing consent decrees
in antitrust enforcement, adding the unambiguous instruction that
``[n]othing in this section shall be construed to require the court to
conduct an evidentiary hearing or to require the court to permit anyone
to intervene.'' 15 U.S.C. 16(e)(2). The language wrote into the statute
what Congress intended when it enacted the Tunney Act in 1974, as
Senator Tunney explained: ``[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). Rather, the procedure for the public interest
determination is left to the discretion of the court, with the
recognition that the court's ``scope of review remains sharply
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC
Commc'ns, 489 F. Supp. 2d at 11.\3\
---------------------------------------------------------------------------
\2\ The 2004 amendments substituted the word ``shall'' for
``may'' when directing the courts to consider the enumerated factors
and amended the list of factors to focus on competitive
considerations and address potentially ambiguous judgment terms.
Compare 15 U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see
also SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004
amendments ``effected minimal changes'' to Tunney Act review).
\3\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17
(D.DC 2000) (noting that the ``Tunney Act expressly allows the court
to make its public interest determination on the basis of the
competitive impact statement and response to comments alone'');
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt
failure of the government to discharge its duty, the Court, in
making its public interest finding, should * * * carefully consider
the explanations of the government in the competitive impact
statement and its responses to comments in order to determine
whether those explanations are reasonable under the
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6
(1973) (``Where the public interest can be meaningfully evaluated
simply on the basis of briefs and oral arguments, that is the
approach that should be utilized.'').
---------------------------------------------------------------------------
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: April 8, 2011.
Respectfully submitted,
/s/--------------------------------------------------------------------
Lowell R. Stern (DC Bar 440487),
U.S. Department of Justice, Antitrust Division, Litigation II
Section, 450 Fifth Street, NW., Suite 8700, Washington, DC 20530.
Tel.: (202) 514-3676,
E-mail: [email protected].
United States District Court for the District of Columbia
United States of America and State of New York, Plaintiffs, v.
Stericycle, Inc., SAMW Acquisition Corp., and Healthcare Waste
Solutions, Inc., Defendants.
Case No.:
Judge:
Deck Type: Antitrust
Date Stamp:
Proposed Final Judgment
Whereas, plaintiffs, the United States of America and the State of
New York, filed their Complaint on April ------, 2011; plaintiffs and
defendants, Stericycle, Inc. and SAMW Acquisition Corp., and Healthcare
Waste Solutions, Inc., 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 party 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 Divestiture Asset to assure that competition
is not substantially lessened;
And Whereas, plaintiffs require defendants to make a divestiture
for the purpose of remedying the loss of competition alleged in the
Complaint;
And whereas, defendants have represented to plaintiffs that the
divestiture required below can and will be made, and that defendants
will later raise no claim of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
below;
Now, therefore, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is hereby 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 the defendants under Section 7 of the
Clayton Act, 15 U.S.C. 18, as amended.
II. Definitions
As used in this Final Judgment:
A. ``Acquirer'' means the entity to which defendants shall divest
the Divestiture Asset.
B. ``Stericycle'' means defendant Stericycle, Inc., a Delaware
corporation with its principal place of business in Lake Forest,
Illinois, and SAMW Acquisition Corp. (a corporation formed to
facilitate the acquisition), and their successors, assigns,
subsidiaries, divisions, groups, affiliates, partnerships, and joint
ventures, and all of their directors, officers, managers, agents, and
employees.
C. ``HWS'' means defendant Healthcare Waste Solutions, Inc., a
Delaware corporation with its principal place of business in
Cincinnati, Ohio, and its successors, assigns, subsidiaries, divisions,
groups, affiliates, partnerships, and joint ventures, and all of their
directors, officers, managers, agents, and employees.
D. ``Infectious Waste'' means regulated medical waste that is
generated in the diagnosis, treatment, or immunization of human beings
or animals and that has come into contact with bodily fluids, and
``sharps'' waste, such as syringes and scalpels.
E. ``Treatment'' means the sterilization of infectious waste at a
state-approved treatment facility, including the use of transfer
stations to facilitate the shipment of infectious waste to other
treatment sites.
F. ``Divestiture Asset'' means HWS's Bronx, New York transfer
station, located at 1281 Viele Avenue, Bronx, New York 10474,
including:
1. Tangible assets at the HWS facility identified in this
Paragraph II(F), including all research and development activities,
equipment, and fixed assets, real property (leased or owned),
equipment, personal property, inventory, office furniture,
materials, supplies, on- or off-site warehouses or storage
facilities; all licenses, permits, and authorizations issued by any
governmental organization relating to the facilities; and all
facility records, but excluding assets used exclusively in the HWS
collection business; and
2. All intangible assets associated with the HWS facility
identified in this Paragraph II(F), including, but not limited to,
all contractual rights, patents, licenses and sublicenses,
intellectual property, technical information, computer software
(including waste monitoring software and management information
systems) and related documentation, know-how, trade secrets,
drawings, blueprints, designs, design protocols, specifications for
materials, specifications for parts and devices, safety procedures
for the handling of materials and substances, quality assurance and
control procedures, design tools and simulation capability, all
manuals and technical information provided to employees, customers,
suppliers, agents or licensees, but excluding assets used
exclusively in the HWS collection business.
G. ``New York City Metropolitan Area'' means the area encompassing
the City of New York, and the counties of Westchester, Rockland,
Nassau, and
[[Page 21014]]
Suffolk in New York, the counties of Hudson, Bergen, Passaic, Essex,
Union, and Middlesex in New Jersey, and the county of Fairfield in
Connecticut.
III. Applicability
A. This Final Judgment applies to Stericycle and HWS, as defined
above, and all other persons in active concert or participation with
either of them, who receive actual notice of this Final Judgment by
personal service or otherwise.
B. If, prior to complying with Sections IV and V of this Final
Judgment, defendants sell or otherwise dispose of all or substantially
all of their assets or of lesser business units that include the
Divestiture Asset, they shall require the purchaser to be bound by the
provisions of this Final Judgment. Defendants need not obtain such an
agreement from the Acquirer of the assets divested pursuant to this
Final Judgment.
IV. Divestiture
A. Defendants are ordered and directed, within forty-five (45)
calendar days after the filing of the Complaint in this matter, or five
(5) calendar days after notice of the entry of this Final Judgment by
the Court, whichever is later, to divest the Divestiture Asset in a
manner consistent with this Final Judgment to an Acquirer acceptable to
the United States in its sole discretion, after consultation with the
State of New York. The United States, in its sole discretion, after
consultation with the State of New York, may agree to one or more
extensions of this time period not to exceed thirty (30) calendar days
in total, and shall notify the Court in such circumstances. Defendants
agree to use their best efforts to divest the Divestiture Asset as
expeditiously as possible.
B. In accomplishing the divestiture ordered by this Final Judgment,
defendants promptly shall make known, by usual and customary means, the
availability of the Divestiture Asset. Defendants shall inform any
person making an inquiry regarding a possible purchase of the
Divestiture Asset that it is 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 Divestiture Asset customarily provided in a due
diligence process except such information or documents subject to the
attorney-client privilege or work-product doctrine. Defendants shall
make available such information to the United States at the same time
that such information is made available to any other person.
C. Defendants shall provide the Acquirer and the United States
information relating to the personnel involved in the operation and
management of the Divestiture Asset to enable the Acquirer to make
offers of employment. Defendants shall not interfere with any
negotiations by the Acquirer to employ or contract with any defendant
employee whose primary responsibility is the operation or management of
the Divestiture Asset.
D. Defendants shall permit prospective Acquirers of the Divestiture
Asset to have reasonable access to personnel and to make inspections of
the physical facility of the Divestiture Asset; 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.
E. Defendants shall warrant to the Acquirer that the Divestiture
Asset will be operational on the date of sale.
F. Defendants shall not take any action that will impede in any way
the permitting, operation or divestiture of the Divestiture Asset.
G. Defendants shall warrant to the Acquirer that there are no
material defects in the environmental, zoning or other permits
pertaining to the operation of the Divestiture Asset, and that
following the sale of the Divestiture Asset, defendants will not
undertake, directly or indirectly, any challenges to the environmental,
zoning, or other permits relating to the operation of the Divestiture
Asset.
H. Unless the United States, after consultation with the State of
New York, otherwise consents in writing, the divestiture pursuant to
Section IV, or by trustee appointed pursuant to Section V, of this
Final Judgment, shall be accomplished in such a way as to satisfy the
United States, in its sole discretion, after consultation with the
State of New York, that the divestiture will achieve the purposes of
this Final Judgment and that the Divestiture Asset can and will be used
by the Acquirer as part of a viable, ongoing business providing
infectious waste treatment services. The divestiture, whether pursuant
to Section IV or Section V of this Final Judgment:
1. Shall be made to the Acquirer that, in the United States's
sole judgment, after consultation with the State of New York, has
the intent and capability (including the necessary managerial,
operational, technical and financial capability) of competing
effectively in the business of providing infectious waste treatment
services; and
2. Shall be accomplished so as to satisfy the United States, in
its sole discretion, after consultation with the State of New York,
that none of the terms of any agreement between the Acquirer and
defendants 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 defendants have not divested the Divestiture Asset within the
time period specified in Section IV, defendants shall notify the United
States of that fact in writing. Upon application of the United States,
the Court shall appoint a trustee selected by the United States and
approved by the Court to effect the sale of the Divestiture Asset.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Divestiture Asset. The trustee
shall have the power and authority to accomplish the divestiture to an
Acquirer acceptable to the United States, after consultation with the
State of New York, 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, Paragraph D, of this Final Judgment, the trustee may hire at
the defendants' cost and expense 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.
C. Defendants shall not object to a sale by the trustee on any
ground other than the trustee's malfeasance. Any such objections by
defendants must be conveyed in writing to the United States and the
trustee within ten (10) calendar days after the trustee has provided
the notice required under Section VI.
D. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the United States approves, and shall
account for all monies derived from the sale of the Divestiture Asset
and all costs and expenses so incurred. After approval by the Court of
the trustee's accounting, including fees for its services and those of
any professionals and agents retained by the trustee, all remaining
money shall be paid to defendants and the trust shall then be
terminated. The compensation of the trustee and any professionals and
agents retained by the trustee shall be reasonable in light of the
value of the Divestiture Asset and based on a fee arrangement providing
the trustee with an incentive based on the price and terms of the
divestiture and
[[Page 21015]]
the speed with which it is accomplished, but timeliness is paramount.
E. 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 facility of the Divestiture Asset, and defendants shall
develop financial and other information relevant to the Divestiture
Asset as the trustee may reasonably request, subject to reasonable
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.
F. After its appointment, the trustee shall file monthly reports
with the United States and the State of New York, and the Court setting
forth the trustee's efforts to accomplish the divestiture ordered under
this Final Judgment. To the extent such reports contain information
that the trustee deems confidential, such reports shall not be filed in
the public docket of the Court. Such reports shall include the name,
address, and telephone number of each person who, during the preceding
month, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the Divestiture 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
Divestiture Asset.
G. If the trustee has not accomplished the divestiture ordered
under this Final Judgment 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 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, which 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, defendants or the trustee, whichever is then
responsible for effecting the divestiture required herein, shall notify
the plaintiffs of any proposed divestiture required by Section IV or V
of this Final Judgment. If the trustee is responsible, it shall
similarly notify defendants. 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 Divestiture Asset, together with full details of the same.
B. Within ten (10) calendar days of receipt of such notice by the
plaintiffs, the United States may request from defendants, the proposed
Acquirer, any other third party, or the trustee, if applicable,
additional information concerning the proposed divestiture, the
proposed Acquirer and any other potential Acquirer. Defendants and the
trustee shall furnish any additional information requested within ten
(10) calendar days of the receipt of the request, unless the parties
shall otherwise agree.
C. Within fifteen (15) calendar days after receipt of the notice or
within fifteen (15) 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 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, after consultation with the
State of New York, provides written notice that it does not object, the
divestiture may be consummated, subject only to defendants' limited
right to object to the sale under paragraph V(C) 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 defendants under paragraph V(C), a
divestiture proposed under Section V shall not be consummated unless
approved by the Court.
VII. Notice to Customers
No later than five (5) calendar days following the sale of the
Divestiture Asset, Defendants shall send a Notice, in a form approved
by the United States, in its sole discretion, after consultation with
the State of New York, to all customers located in the New York City
Metropolitan Area that are under contract with HWS and served by the
Divestiture Asset, informing such customers that they have the right to
terminate such contracts for a period of ninety (90) days from the date
of the Notice. Defendants shall certify to the United States that the
Notice was timely sent.
VIII. Notice of Future Acquisitions
A. Unless such transaction is otherwise subject to the reporting
and waiting period requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''),
Stericycle, without providing advance notification to the plaintiffs,
shall not directly or indirectly acquire, any (1) Interest in any
business engaged in the treatment of infectious waste that serves the
New York City Metropolitan Area; (2) other than in the ordinary course
of business assets of a person engaged in the treatment of infectious
waste generated in the New York City Metropolitan Area; or (3) capital
stock or voting securities of any person that, at any time during the
twelve (12) months immediately preceding such acquisition, was engaged
in the treatment of infectious waste generated in the New York City
Metropolitan Area, where that person's annual revenues in this area
from the treatment of infectious waste were in excess of $500,000.
B. Such notification shall be provided to the plaintiffs in the
same format as, and per the instructions relating to the Notification
and Report Form set forth 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 treatment of infectious waste. Notification shall be
provided at least thirty (30) calendar days prior to acquiring any such
interest, and 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 30-day period after notification, representatives of the
United States make a written request for
[[Page 21016]]
additional information, Stericycle shall not consummate the proposed
transaction or agreement until thirty (30) calendar days after
submitting all such additional information. Early termination of the
waiting periods in this paragraph may be requested and, where
appropriate, granted in the same manner as is applicable under the
requirements and provisions of the HSR Act and rules promulgated
thereunder. 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.
IX. Financing
Defendants shall not finance all or any part of any purchase made
pursuant to Section IV or V of this Final Judgment.
X. Hold Separate
Until the divestiture 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 divestiture
ordered by this Court.
XI. Affidavits
A. Within twenty (20) 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 plaintiffs an affidavit as to the fact and manner of
their 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) calendar 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 Divestiture 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 Divestiture Asset, and to provide
required information to prospective Acquirers, 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 the State of New York, to
information provided by defendants, including limitation on
information, shall be made within fourteen (14) calendar days of
receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter, defendants shall deliver to plaintiffs an affidavit
that describes in reasonable detail all actions defendants have taken
and all steps defendants have implemented on an ongoing basis to comply
with Section IX of this Final Judgment. Defendants shall deliver to the
plaintiffs 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 and divest the Divestiture Asset until one year after such
divestiture has been completed.
XII. Compliance Inspection
A. For the 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 authorized representatives of the United States
Department of Justice Antitrust Division, including consultants and
other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to defendants, be permitted:
1. Access during defendants' office hours to inspect and copy,
or at the option of the United States, to require defendants to
provide hard copy or electronic copies of, all books, ledgers,
accounts, records, data, 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 an authorized representative of the
Assistant Attorney General in charge of the Antitrust Division,
defendants shall submit written reports or responses to written
interrogatories, 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 United States to any person other
than an authorized representative of the executive branch of the United
States or the New York Attorney General, except in the course of legal
proceedings to which the United States is a party (including grand jury
proceedings), or for the purpose of securing compliance with this Final
Judgment, or as otherwise required by law.
D. If at the time information or documents are furnished by
defendants to the United States, defendants represent and identify in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(1)(G) 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)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
States shall give defendants ten (10) calendar days notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
XIII. No Reacquisition
During the term of this Final Judgment, defendants may not
reacquire any part of the Divestiture Asset, nor may any defendant
participate in any other transaction that would result in a
combination, merger, or other joining together of any part of the
Divestiture Asset with assets of the divesting company.
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. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16, including making copies available to the
public of this Final Judgment, the Competitive Impact Statement, and
any comments thereon and the United States's responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
Date:------------------------------------------------------------------
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Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16.
United States District Judge.------------------------------------------
[FR Doc. 2011-9106 Filed 4-13-11; 8:45 am]
BILLING CODE 4410-11-P