Public Comment and Response on Proposed Final Judgment United States v. Eastern Mushroom Marketing Cooperative, Inc., 39336-39338 [05-13354]
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Federal Register / Vol. 70, No. 129 / Thursday, July 7, 2005 / Notices
Natural Resources Division, Department
of Justice, Washington, DC 20530, and
should refer to United States v. Morton
Int’l, Inc., Civil Action No. 05–3088
(DMC), D.J. Ref. 90–5–2–1–07513.
The proposed consent decree may be
examined at the Office of the United
States Attorney, District of New Jersey,
970 Broad Street, Newark, New Jersey
07102. During the public comment
period, the proposed consent decree
may also be examined on the following
Department of Justice Web site, https://
www.usdoj.gov/enrd/open.html. A copy
of the proposed consent decree may also
be obtained by mail from the Consent
Decree Library, P.O. Box 7611, U.S.
Department of Justice, Washington, DC
20044–7611 or by faxing or e-mailing a
request to Tonia Fleetwood
(tonia.fleetwood@usdoj.gov), fax no.
(202) 514–0097, phone confirmation
number (202) 514–1547. If requesting a
copy of the proposed consent decree,
please so note and enclose a check in
the amount of $5.75 (25 cents per page
reproduction cost) payable to the U.S.
Treasury.
Ronald Gluck,
Assistant Chief, Environmental Enforcement
Section, Environmental and Natural
Resources Division.
[FR Doc. 05–13386 Filed 7–6–05; 8:45 am]
BILLING CODE 4410–15–M
DEPARTMENT OF JUSTICE
Antitrust Division
[Civil No.: 04–CV–5829]
Public Comment and Response on
Proposed Final Judgment United
States v. Eastern Mushroom Marketing
Cooperative, Inc.
Pursuant to the Antitrust Procedures
and Penalties Act, 15 U.S.C. 16(b)–(h),
the United States of America hereby
publishes below the comment received
on the proposed Final Judgment in
United States v. Eastern Mushroom
Marketing Cooperative, Inc., Civil
Action No.: 04–CV–5829 (TNO), which
was filed in the Untied States District
Court for the Eastern District of
Pennsylvania, together with the United
States’s response to the comment.
Copies of the comment and response
are available for inspection at the U.S.
Department of Justice, Antitrust
Division, 325 7th Street, NW., Room
200, Washington, DC 20530, (telephone:
(202) 514–2481), and at the Office of the
Clerk of the United States District Court
for the Eastern District of Pennsylvania,
601 Market Street, Room 2609,
Philadelphia, Pennsylvania 19106–
VerDate jul<14>2003
19:31 Jul 06, 2005
Jkt 205001
1797. Copies of any of these materials
may be obtained upon request and
payment of a copying fee.
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust
Division.
1/5/05
Roger W. Fones,
Chief, Transportation, Energy & Agriculture
Section, U.S. Department of Justice,
Antitrust Division, 325 7th Street, NW.,
Suite 500, Washington DC 20530
Dear Mr. Fones: This letter is in response
to the investigation of the Eastern Mushroom
Marketing Cooperative (EMMC). These
grower packers have pulled the wool over the
eyes of the customers, consumers, and the
Department of Justice. This group has forced
many members to be in the EMMC or they
would not do business with them. In the
community each company would sell fresh
mushrooms to each other to fill daily needs.
If you were not a member a great deal of
pressure was put on these people. From not
selling to overcharging and even trying to
limit the picking containers they could pick
in. Any one that tried to start to sell fresh
mushrooms in the new period of the EMMC
were shut down in other means within the
industry. This has not been an ethical
business plan.
As far as the growing houses (Farms) what
the U.S. Government has come up with is a
token. These growing houses have been
pillaged stripped to no value to any one new
that wants to purchase as a growing facility.
The grower farmers are very smart and only
will give information to the government that
it wants them to know. No fault of the
government which would have no way of
knowing anything about the growing
facilities.
First this group purchased the growing
farms. Threatened anyone that competed for
the facilities. The Group would go into the
marketing area and give out low quotes on
fresh mushrooms even when they were
raising the pricing in the home markets.
Second when they acquired these growing
farms they would go in and strip the houses
of anything useful to grow mushrooms and
just leave the walls. This was a guarantee no
one would start these back up. This is the
insurance police on top of the restriction.
Growing of mushrooms is a specialized
process. Not just planting in field. Must be
air conditioned and very sanitary. Compost
facilities with specialized equipment. Not
something that is easy. This is why pulling
the restrictions mean absolutely nothing. The
damage is done when they take all the
special equipment out.
Currently this group is trying to purchase
the Money’s farms that are shutting down but
waiting for them to close. The plan is to
purchase these farms and pillage so they will
never be able to grow mushrooms again. This
is a way to get what they want and insult the
U.S. Government. Think about it. Many
businesses have suffered and many
consumers have overpaid for mushrooms.
They have created a false market. If this was
not true how can people purchase for
millions and sit on them if they are not
PO 00000
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Fmt 4703
Sfmt 4703
taking an unfair advantage of the market
place.
JUST SIT BACK AND ASK THE
QUESTION OF HOW AND WHY THESE
PEOPLE ARE DOING THIS. PURE GREED
Judge: Thomas N. O’Neill, Jr.
Response of the United States to Public
Comments on the Proposed Final
Judgment
Pursuant to the Antitrust Procedures
and Penalties Act, 15 U.S.C. 16(b)
(‘‘Tunney Act’’), the United States of
America hereby files comments received
from a member of the public concerning
the proposed Final Judgment in this
civil antitrust action and the Response
of the United States to those comments.
The United States continues to believe
that the proposed Final Judgment will
provide an effective and appropriate
remedy for the antitrust violations
alleged in the Complaint. The United
States will move the Court for entry of
the proposed Final Judgment after the
public comment and Response have
been published in the Federal Register,
pursuant to 15 U.S.C. 16(d).
I. Factual Background
A. The Defendant, the Eastern
Mushroom Marketing Cooperative
(‘‘EMMC’’).
The EMMC was incorporated in the
Commonwealth of Pennsylvania on
December 21, 2000, and began
operations in January 2001. At the time
the Complaint was filed in this case, the
EMMC had 15 members with a single
staff person, an executive director. The
EMMC is made up of entities that grow,
buy, package, and ship Agaricus and
specialty mushrooms to retail and food
service outlets across the United States.
The EMMC members each grow some of
their own product, but they also buy
mushrooms from each other and from
nonmembers. Shortly after it began
operations, the EMMC adopted
minimum prices at which its members
could sell their mushrooms to
customers in various geographic regions
throughout the United States. The
minimum prices, with periodic
adjustments, were published regularly
among members.
According to the United States
Department of Agriculture, 844 million
pounds of mushrooms were produced
nationwide during the 2001–2002
growing season with an approximate
value of $908 million. The EMMC
members’ estimated collective share of
that national market was 60%, with
their share estimated to be higher in the
East region.
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Federal Register / Vol. 70, No. 129 / Thursday, July 7, 2005 / Notices
B. The EMMC’s Real Estate Transactions
Shortly after instituting minimum
price increases in all regions, the EMMC
began acquiring mushroom farms.
Between May of 2001 and March of
2002, the EMMC acquired one
mushroom farm in Hillsboro, Texas, one
farm in Dublin, Georgia, and three in
Pennsylvania. These five farms had the
capacity to grow fresh mushrooms in
competition with EMMC members’
farms even though none of the farms
was in operation at the time of its
respective purchase. Except for the
Texas farm, the EMMC sold these
properties almost immediately after
purchasing them and filed deed
restrictions at the time of resale which
effectively prohibited in perpetuity the
conduct of any business related to the
mushroom industry.
In addition to the aforesaid purchases
and resales, the EMMC entered into
lease option agreements for two more
mushroom farms, one in Ohio and the
other in Pennsylvania, in 2002. The
EMMC never actually entered into
leases for these properties, but the
agreements gave it the right to file deed
restrictions prohibiting the production
of mushrooms on the properties for ten
years, and the EMMC exercised that
right.
The combined production capacity of
the seven farms that were purchased/
lease-optioned by the EMMC totaled
approximately 42–44 million pounds of
mushrooms annually.
The United States investigated the
likelihood that the several land
acquisitions and related transactions by
the EMMC were entered into with the
sole intent of removing productive
capacity from the market to avoid
competition from nonmembers in
violation of Section 1 of the Sherman
Act (15 U.S.C. 1) as part of a conspiracy
to restrain trade in the East mushroom
market. Upon the completion of the
investigation, the United States
concluded that the EMMC had violated
Section 1 of the Sherman Act.
In or about November 2004, and
before the filing of the Complaint in this
case, the United States and the EMMC
reached an agreement whereby the
EMMC agreed to consent to the
proposed Final Judgment filed with the
Complaint in this case. Pursuant to that
Final Judgment, the EMMC agreed to
file all papers necessary to eliminate all
deed restrictions previously filed on the
properties in which it held an
ownership or leasehold interest and
agreed that, in the future, it would
neither file nor seek to enforce any
similar deed restrictions on any other
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19:31 Jul 06, 2005
Jkt 205001
properties in which it held an
ownership or leasehold interest.
C. Complaint
On December 16, 2004, the United
States filed a Complaint alleging that the
real estate transactions entered into by
the EMMC were intended to restrict,
forestall and exclude competition from
nonmember farmers in violation of
Section 1 of the Sherman Act. The
Complaint further alleged that the
acreage and facilities available to
produce mushrooms for American
consumers were artificially reduced and
consumers were deprived of the benefits
of competition.
D. The Proposed Settlement
At the time the United States filed its
Complaint, it also filed a proposed Final
Judgment, a Competitive Impact
Statement (‘‘CIS’’), and a Stipulation
signed by counsel for the parties. The
proposed Final Judgment is designed to
eliminate the anticompetitive effects of
the EMMC’s real estate transactions by
removing the existing deed restrictions
on properties in which the EMMC has
an ownership or leasehold interest and
preventing the filing of any similar deed
restrictions in the future.
E. Compliance with the Tunney Act
To date, the United States and the
EMMC have complied with the
provisions of the Tunney Act as follows:
1. The Complaint, proposed Final
Judgment, CIS and Stipulation were all
filed on December 16, 2004.
2. The EMMC filed the statement
required by 15 U.S.C. 16(g) on May 11,
2005.
3. A summary of the terms of the
proposed Final Judgment and CIS was
published in the Washington Post, a
newspaper of general circulation in the
District of Columbia, for seven days
during the period February 5, 2005
through February 11, 2005.
4. A summary of the terms of the
proposed Final Judgment and CIS was
published in the Philadelphia Inquirer,
a newspaper of general circulation in
the region surrounding Philadelphia,
Pennsylvania, for seven days during the
period February 27, 2005 through March
5, 2005.
5. The Complaint, CIS, and proposed
Final Judgment were published in the
Federal Register on February 10, 2005,
70 FR 7120 (2005) The United States
also posted the Complaint, proposed
Final Judgment and the CIS on its Web
site, https://www.usdoj.gov/atr/cases/
f206900/206919.
6. The sixty-day comment period
specified in 15 U.S.C. 16(b) expired on
May 5, 2005.
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39337
7. The United States received one
comment from an anonymous member
of the public which is attached hereto
as Appendix A. The United States
hereby files this Response pursuant to
15 U.S.C. 16(b).
The United States will move this
Court for entry of the proposed Final
Judgment after the comment and the
Response are published in the Federal
Register.
II. Legal Standard Governing the
Court’s Public Interest Determination
Upon the publication of the public
comment and this Response, the United
States will have fully complied with the
Tunney Act and will move for entry of
the proposed Final Judgment as being
‘‘in the public interest.’’ 15 U.S.C. 16(e),
as amended. In making the ‘‘public
interest’’ determination, the Court
should apply a deferential standard and
should withhold its approval only
under very limited conditions. See, e.g.,
Mass. Sch. of Law at Andover, Inc. v.
United States, 118 F.3d 776, 783 (D.C.
Cir. 1997). Specifically, the Court
should review the proposed Final
Judgment in light of the violations
charged in the complaint. Id. (quoting
United States v. Microsoft Corp. 56 F.3d
1448, 1462 (D.C. Cir. 1995)).
It is not proper during a Tunney Act
review to ‘‘reach beyond the complaint
to evaluate claims that the government
did not make and to inquire as to why
they were not made.’’ Microsoft 56 F.3d
at 1459; see also United States v.
Archer-Daniels-Midland Co., 272 F.
Supp. 2d 1, 6–7 (D.D.C. 2003) (rejecting
argument that court should consider
effects in markets other than those
raised in the complaint); United States
v. Pearson PLC 55 F. Supp. 2d 43, 45
(D.D.C. 1999) (noting that a court should
not ‘‘base its public interest
determination on antitrust concerns in
markets other than those alleged in the
government’s complaint’’). Because
‘‘[t]he 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 the United States might
have but did not pursue. Microsoft, 56
F.3d at 1459–60; see also United States
v. W. Elec. Co., 993 F.2d 1572, 1577
(D.C. Cir. 1993) (noting that a Tunney
Act proceeding does not permit ‘‘de
novo determination of facts and issues’’
because ‘‘[t]he balancing of competing
social and political interests affected by
a proposed antitrust decree must be left,
in the first instance, to the discretion of
E:\FR\FM\07JYN1.SGM
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Federal Register / Vol. 70, No. 129 / Thursday, July 7, 2005 / Notices
the Attorney General’’ (citations
omitted)).
Moreover, the United States is
entitled to ‘‘due respect’’ concerning its
‘‘prediction as to the effect of proposed
remedies, its perception of the market
structure, and its view of the nature of
the case.’’ Archer-Daniels-Midland Co.,
272 F. Supp. 2d at 6 (citing Microsoft,
56 F.3d at 1461).
III. Summary of Public Comment
Although it is unclear whether the
author intended it as a comment in this
proceeding, the United States received
one anonymous letter related to this
case during the relevant 30-day time
period. The letter made a number of
allegations about the conduct of
Defendant EMMC and various
unidentified mushroom grower/packers.
These allegations are not comments on
the proposed Final Judgment and
therefore are not relevant here. In any
event, the United States investigated
each of these or similar allegations and
concluded that they were
unsubstantiated or did not constitute
violations of the Federal antitrust laws.
The letter also commented on the
relief contained in the proposed Final
Judgment, claiming that the EMMC had
sold or removed specialized equipment
from the farms, and questioned the
value of removing the deed restrictions
the EMMC had placed on the properties.
IV. The Response of the United States
to the Comment
In filing this case, the United States
was concerned that the EMMC had
collectively removed 8 percent of the
mushroom production capacity in the
East region of the United States. This
was done primarily by placing deed
restriction on former farms, restrictions
that erected an absolute barrier to new
entry on these farms. By removing these
restrictions, the proposed Final
Judgment assures that new entry can
occur wherever economically justified.
There are a number of factors in
addition to the presence of specialized
equipment that make a farm attractive to
potential mushroom entrants, including
suitable buildings, an available trained
labor force in the area, and existing
zoning approvals. Specialized
equipment, though potentially valuable,
is not unique and can be replaced.
Accordingly, the United States
determined that the crucial element of
relief was the removal of the deed
restrictions. The proposed final
Judgment accomplishes this.
V. Conclusion
The Competitive Impact Statement
and this Response to Comments
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19:31 Jul 06, 2005
Jkt 205001
demonstrate that the proposed Final
Judgment serves the public interest.
Accordingly, after the publication of
this Response in the Federal Register
pursuant to 15 U.S.C. 16(b) and (d), the
United States will move this Court to
enter the Final Judgment.
Respectfully submitted,
C. Alexander Hewes, Tracey D.
Chambers, David McDowell,
Trial Attorneys, United States
Department of Justice, Antitrust
Division, Transportation, Energy &
Agriculture Section, 325 7th Street,
NW., Suite 500, Washington, DC 20530,
Telephone: (202) 305–8519, Facsimile:
(202) 616–2441.
Laura Heiser, Anne Spiegelman,
Trial Attorneys, Antitrust Division,
Philadelphia Field Office.
[FR Doc. 05–13354 Filed 7–6–05; 8:45 am]
BILLING CODE 4410–11–M
DEPARTMENT OF JUSTICE
Antitrust Division
Notice Pursuant to the National
Cooperative Research and Production
Act of 1993—Microcontaminant
Reduction Venture
Notice is hereby given that, on June 8,
2005, pursuant to Section 6(a) of the
National Cooperative Research and
Production Act of 1993, 15 U.S.C. 4301
et seq. (‘‘the Act’’), Microcontaminant
Reduction Venture (‘‘MRV’’) has filed
written notifications simultaneously
with the Attorney General and the
Federal Trade Commission disclosing
changes in its project status. The
notifications were filed for the purpose
of extending the Act’s provisions
limiting the recovery of antitrust
plaintiffs to actual damages under
specified circumstances. The change in
its project status is: The parties to MRV,
KMG–Bernuth, Inc., Houston, TX and
Vulcan Materials Company,
Birmingham, AL, have extended the
term of the venture from four to five
years.
No other changes have been made in
either the membership or planned
activity of the group research project.
Membership in this group research
project remains open, and MRV intends
to file additional written notification
disclosing all changes in membership.
On June 13, 2001, MRV filed its
original notification pursuant to Section
69(a) of the Act. The Department of
Justice published a notice in the Federal
Register pursuant to Section 6(b) of the
Act on July 19, 2001 (66 FR 37709).
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Fmt 4703
Sfmt 4703
The last notification was filed with
the Department on June 15, 2004. A
notice was published in the Federal
Register pursuant to section 69(b) of the
Act on July 14, 2004 (69 FR 42212).
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust
Division.
[FR Doc. 05–13353 Filed 7–6–05; 8:45 am]
BILLING CODE 4410–11–M
DEPARTMENT OF JUSTICE
Antitrust Division
Notice Pursuant to the National
Cooperative Research and Production
Act of 1993—Mobile Enterprise
Alliance, Inc.
Notice is hereby given that, on June
13, 2005, pursuant to Section 6(a) of the
National Cooperative Research and
Production Act of 1993, 15 U.S.C. 4301
et seq. (‘‘the Act’’), Mobile Enterprise
Alliance, Inc. has filed written
notifications simultaneously with the
Attorney General and the Federal Trade
Commission disclosing changes in its
membership. The notifications were
filed for the purpose of extending the
Act’s provisions limiting the recovery of
antitrust plaintiffs to actual damages
under specified circumstances.
Specifically, Appear Networks,
Stockholm, Sweden has been added as
a party to this venture.
No other changes have been made in
either the membership or planned
activity of the group research project.
Membership in this group research
project remains open, and Mobile
Enterprise Alliance, Inc. intends to file
additional written notification
disclosing all changes in membership.
On June 24, 2004, Mobile Enterprise
Alliance, Inc. filed its original
notification pursuant to section 6(a) of
the Act. The Department of Justice
published a notice in the Federal
Register pursuant to section 6(b) of the
Act on July 23, 2004 (69 FR 44062).
The last notification was filed with
the Department on March 17, 2005. A
notice was published in the Federal
Register pursuant to section 6(b) of the
Act on April 1, 2005 (70 FR 16944).
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust
Division.
[FR Doc. 05–13351 Filed 7–6–05; 8:45 am]
BILLING CODE 4410–11–M
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]]>Agencies
[Federal Register Volume 70, Number 129 (Thursday, July 7, 2005)]
[Notices]
[Pages 39336-39338]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-13354]
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Antitrust Division
[Civil No.: 04-CV-5829]
Public Comment and Response on Proposed Final Judgment United
States v. Eastern Mushroom Marketing Cooperative, Inc.
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b)-(h), the United States of America hereby publishes below the
comment received on the proposed Final Judgment in United States v.
Eastern Mushroom Marketing Cooperative, Inc., Civil Action No.: 04-CV-
5829 (TNO), which was filed in the Untied States District Court for the
Eastern District of Pennsylvania, together with the United States's
response to the comment.
Copies of the comment and response are available for inspection at
the U.S. Department of Justice, Antitrust Division, 325 7th Street,
NW., Room 200, Washington, DC 20530, (telephone: (202) 514-2481), and
at the Office of the Clerk of the United States District Court for the
Eastern District of Pennsylvania, 601 Market Street, Room 2609,
Philadelphia, Pennsylvania 19106-1797. Copies of any of these materials
may be obtained upon request and payment of a copying fee.
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust Division.
1/5/05
Roger W. Fones,
Chief, Transportation, Energy & Agriculture Section, U.S. Department
of Justice, Antitrust Division, 325 7th Street, NW., Suite 500,
Washington DC 20530
Dear Mr. Fones: This letter is in response to the investigation
of the Eastern Mushroom Marketing Cooperative (EMMC). These grower
packers have pulled the wool over the eyes of the customers,
consumers, and the Department of Justice. This group has forced many
members to be in the EMMC or they would not do business with them.
In the community each company would sell fresh mushrooms to each
other to fill daily needs. If you were not a member a great deal of
pressure was put on these people. From not selling to overcharging
and even trying to limit the picking containers they could pick in.
Any one that tried to start to sell fresh mushrooms in the new
period of the EMMC were shut down in other means within the
industry. This has not been an ethical business plan.
As far as the growing houses (Farms) what the U.S. Government
has come up with is a token. These growing houses have been pillaged
stripped to no value to any one new that wants to purchase as a
growing facility. The grower farmers are very smart and only will
give information to the government that it wants them to know. No
fault of the government which would have no way of knowing anything
about the growing facilities.
First this group purchased the growing farms. Threatened anyone
that competed for the facilities. The Group would go into the
marketing area and give out low quotes on fresh mushrooms even when
they were raising the pricing in the home markets.
Second when they acquired these growing farms they would go in
and strip the houses of anything useful to grow mushrooms and just
leave the walls. This was a guarantee no one would start these back
up. This is the insurance police on top of the restriction. Growing
of mushrooms is a specialized process. Not just planting in field.
Must be air conditioned and very sanitary. Compost facilities with
specialized equipment. Not something that is easy. This is why
pulling the restrictions mean absolutely nothing. The damage is done
when they take all the special equipment out.
Currently this group is trying to purchase the Money's farms
that are shutting down but waiting for them to close. The plan is to
purchase these farms and pillage so they will never be able to grow
mushrooms again. This is a way to get what they want and insult the
U.S. Government. Think about it. Many businesses have suffered and
many consumers have overpaid for mushrooms. They have created a
false market. If this was not true how can people purchase for
millions and sit on them if they are not taking an unfair advantage
of the market place.
JUST SIT BACK AND ASK THE QUESTION OF HOW AND WHY THESE PEOPLE
ARE DOING THIS. PURE GREED
Judge: Thomas N. O'Neill, Jr.
Response of the United States to Public Comments on the Proposed Final
Judgment
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b) (``Tunney Act''), the United States of America hereby files
comments received from a member of the public concerning the proposed
Final Judgment in this civil antitrust action and the Response of the
United States to those comments. The United States continues to believe
that the proposed Final Judgment will provide an effective and
appropriate remedy for the antitrust violations alleged in the
Complaint. The United States will move the Court for entry of the
proposed Final Judgment after the public comment and Response have been
published in the Federal Register, pursuant to 15 U.S.C. 16(d).
I. Factual Background
A. The Defendant, the Eastern Mushroom Marketing Cooperative
(``EMMC'').
The EMMC was incorporated in the Commonwealth of Pennsylvania on
December 21, 2000, and began operations in January 2001. At the time
the Complaint was filed in this case, the EMMC had 15 members with a
single staff person, an executive director. The EMMC is made up of
entities that grow, buy, package, and ship Agaricus and specialty
mushrooms to retail and food service outlets across the United States.
The EMMC members each grow some of their own product, but they also buy
mushrooms from each other and from nonmembers. Shortly after it began
operations, the EMMC adopted minimum prices at which its members could
sell their mushrooms to customers in various geographic regions
throughout the United States. The minimum prices, with periodic
adjustments, were published regularly among members.
According to the United States Department of Agriculture, 844
million pounds of mushrooms were produced nationwide during the 2001-
2002 growing season with an approximate value of $908 million. The EMMC
members' estimated collective share of that national market was 60%,
with their share estimated to be higher in the East region.
[[Page 39337]]
B. The EMMC's Real Estate Transactions
Shortly after instituting minimum price increases in all regions,
the EMMC began acquiring mushroom farms. Between May of 2001 and March
of 2002, the EMMC acquired one mushroom farm in Hillsboro, Texas, one
farm in Dublin, Georgia, and three in Pennsylvania. These five farms
had the capacity to grow fresh mushrooms in competition with EMMC
members' farms even though none of the farms was in operation at the
time of its respective purchase. Except for the Texas farm, the EMMC
sold these properties almost immediately after purchasing them and
filed deed restrictions at the time of resale which effectively
prohibited in perpetuity the conduct of any business related to the
mushroom industry.
In addition to the aforesaid purchases and resales, the EMMC
entered into lease option agreements for two more mushroom farms, one
in Ohio and the other in Pennsylvania, in 2002. The EMMC never actually
entered into leases for these properties, but the agreements gave it
the right to file deed restrictions prohibiting the production of
mushrooms on the properties for ten years, and the EMMC exercised that
right.
The combined production capacity of the seven farms that were
purchased/lease-optioned by the EMMC totaled approximately 42-44
million pounds of mushrooms annually.
The United States investigated the likelihood that the several land
acquisitions and related transactions by the EMMC were entered into
with the sole intent of removing productive capacity from the market to
avoid competition from nonmembers in violation of Section 1 of the
Sherman Act (15 U.S.C. 1) as part of a conspiracy to restrain trade in
the East mushroom market. Upon the completion of the investigation, the
United States concluded that the EMMC had violated Section 1 of the
Sherman Act.
In or about November 2004, and before the filing of the Complaint
in this case, the United States and the EMMC reached an agreement
whereby the EMMC agreed to consent to the proposed Final Judgment filed
with the Complaint in this case. Pursuant to that Final Judgment, the
EMMC agreed to file all papers necessary to eliminate all deed
restrictions previously filed on the properties in which it held an
ownership or leasehold interest and agreed that, in the future, it
would neither file nor seek to enforce any similar deed restrictions on
any other properties in which it held an ownership or leasehold
interest.
C. Complaint
On December 16, 2004, the United States filed a Complaint alleging
that the real estate transactions entered into by the EMMC were
intended to restrict, forestall and exclude competition from nonmember
farmers in violation of Section 1 of the Sherman Act. The Complaint
further alleged that the acreage and facilities available to produce
mushrooms for American consumers were artificially reduced and
consumers were deprived of the benefits of competition.
D. The Proposed Settlement
At the time the United States filed its Complaint, it also filed a
proposed Final Judgment, a Competitive Impact Statement (``CIS''), and
a Stipulation signed by counsel for the parties. The proposed Final
Judgment is designed to eliminate the anticompetitive effects of the
EMMC's real estate transactions by removing the existing deed
restrictions on properties in which the EMMC has an ownership or
leasehold interest and preventing the filing of any similar deed
restrictions in the future.
E. Compliance with the Tunney Act
To date, the United States and the EMMC have complied with the
provisions of the Tunney Act as follows:
1. The Complaint, proposed Final Judgment, CIS and Stipulation were
all filed on December 16, 2004.
2. The EMMC filed the statement required by 15 U.S.C. 16(g) on May
11, 2005.
3. A summary of the terms of the proposed Final Judgment and CIS
was published in the Washington Post, a newspaper of general
circulation in the District of Columbia, for seven days during the
period February 5, 2005 through February 11, 2005.
4. A summary of the terms of the proposed Final Judgment and CIS
was published in the Philadelphia Inquirer, a newspaper of general
circulation in the region surrounding Philadelphia, Pennsylvania, for
seven days during the period February 27, 2005 through March 5, 2005.
5. The Complaint, CIS, and proposed Final Judgment were published
in the Federal Register on February 10, 2005, 70 FR 7120 (2005) The
United States also posted the Complaint, proposed Final Judgment and
the CIS on its Web site, https://www.usdoj.gov/atr/cases/f206900/206919.
6. The sixty-day comment period specified in 15 U.S.C. 16(b)
expired on May 5, 2005.
7. The United States received one comment from an anonymous member
of the public which is attached hereto as Appendix A. The United States
hereby files this Response pursuant to 15 U.S.C. 16(b).
The United States will move this Court for entry of the proposed
Final Judgment after the comment and the Response are published in the
Federal Register.
II. Legal Standard Governing the Court's Public Interest Determination
Upon the publication of the public comment and this Response, the
United States will have fully complied with the Tunney Act and will
move for entry of the proposed Final Judgment as being ``in the public
interest.'' 15 U.S.C. 16(e), as amended. In making the ``public
interest'' determination, the Court should apply a deferential standard
and should withhold its approval only under very limited conditions.
See, e.g., Mass. Sch. of Law at Andover, Inc. v. United States, 118
F.3d 776, 783 (D.C. Cir. 1997). Specifically, the Court should review
the proposed Final Judgment in light of the violations charged in the
complaint. Id. (quoting United States v. Microsoft Corp. 56 F.3d 1448,
1462 (D.C. Cir. 1995)).
It is not proper during a Tunney Act review to ``reach beyond the
complaint to evaluate claims that the government did not make and to
inquire as to why they were not made.'' Microsoft 56 F.3d at 1459; see
also United States v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6-
7 (D.D.C. 2003) (rejecting argument that court should consider effects
in markets other than those raised in the complaint); United States v.
Pearson PLC 55 F. Supp. 2d 43, 45 (D.D.C. 1999) (noting that a court
should not ``base its public interest determination on antitrust
concerns in markets other than those alleged in the government's
complaint''). Because ``[t]he 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
the United States might have but did not pursue. Microsoft, 56 F.3d at
1459-60; see also United States v. W. Elec. Co., 993 F.2d 1572, 1577
(D.C. Cir. 1993) (noting that a Tunney Act proceeding does not permit
``de novo determination of facts and issues'' because ``[t]he balancing
of competing social and political interests affected by a proposed
antitrust decree must be left, in the first instance, to the discretion
of
[[Page 39338]]
the Attorney General'' (citations omitted)).
Moreover, the United States is entitled to ``due respect''
concerning its ``prediction as to the effect of proposed remedies, its
perception of the market structure, and its view of the nature of the
case.'' Archer-Daniels-Midland Co., 272 F. Supp. 2d at 6 (citing
Microsoft, 56 F.3d at 1461).
III. Summary of Public Comment
Although it is unclear whether the author intended it as a comment
in this proceeding, the United States received one anonymous letter
related to this case during the relevant 30-day time period. The letter
made a number of allegations about the conduct of Defendant EMMC and
various unidentified mushroom grower/packers. These allegations are not
comments on the proposed Final Judgment and therefore are not relevant
here. In any event, the United States investigated each of these or
similar allegations and concluded that they were unsubstantiated or did
not constitute violations of the Federal antitrust laws.
The letter also commented on the relief contained in the proposed
Final Judgment, claiming that the EMMC had sold or removed specialized
equipment from the farms, and questioned the value of removing the deed
restrictions the EMMC had placed on the properties.
IV. The Response of the United States to the Comment
In filing this case, the United States was concerned that the EMMC
had collectively removed 8 percent of the mushroom production capacity
in the East region of the United States. This was done primarily by
placing deed restriction on former farms, restrictions that erected an
absolute barrier to new entry on these farms. By removing these
restrictions, the proposed Final Judgment assures that new entry can
occur wherever economically justified.
There are a number of factors in addition to the presence of
specialized equipment that make a farm attractive to potential mushroom
entrants, including suitable buildings, an available trained labor
force in the area, and existing zoning approvals. Specialized
equipment, though potentially valuable, is not unique and can be
replaced. Accordingly, the United States determined that the crucial
element of relief was the removal of the deed restrictions. The
proposed final Judgment accomplishes this.
V. Conclusion
The Competitive Impact Statement and this Response to Comments
demonstrate that the proposed Final Judgment serves the public
interest. Accordingly, after the publication of this Response in the
Federal Register pursuant to 15 U.S.C. 16(b) and (d), the United States
will move this Court to enter the Final Judgment.
Respectfully submitted,
C. Alexander Hewes, Tracey D. Chambers, David McDowell,
Trial Attorneys, United States Department of Justice, Antitrust
Division, Transportation, Energy & Agriculture Section, 325 7th Street,
NW., Suite 500, Washington, DC 20530, Telephone: (202) 305-8519,
Facsimile: (202) 616-2441.
Laura Heiser, Anne Spiegelman,
Trial Attorneys, Antitrust Division, Philadelphia Field Office.
[FR Doc. 05-13354 Filed 7-6-05; 8:45 am]
BILLING CODE 4410-11-M
