United States v. Waste Industries USA, Inc.; Proposed Final Judgment and Competitive Impact Statement, 48590-48603 [05-16232]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 70, Number 159 (Thursday, August 18, 2005)]
[Notices]
[Pages 48590-48603]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-16232]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Waste Industries USA, Inc.; 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 Complaint, proposed Final 
Judgment, Stipulation, and Competitive Impact Statement were filed with 
the United States District Court for the Eastern District of Virginia 
in United States v. Waste Industries USA, Inc., Civ. Action No. 
2:05CV468. On August 8, 2005, the United States filed a Complaint, 
which sought to compel Waste Industries USA, Inc., to divest certain 
small container

[[Page 48591]]

commercial hauling assets in the Norfolk, Virginia area acquired from 
Allied Waste Industries, Inc., and to enjoin Waste Industries from 
continuing certain anticompetitive contracting practices. The Complaint 
alleges that Waste Industries' acquisition of these assets from Allied 
has substantially lessened competition in the market for small 
container commercial hauling services in the Norfolk, Virginia area, in 
violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. 18. 
The proposed Final Judgment, also filed on August 8, 2005, requires the 
defendant to divest contracts and accounts on selected Waste Industries 
small container commercial hauling routes in the Norfolk, Virginia 
area, and to alter its existing or future small container commercial 
waste hauling contracts in that area. A Competitive Impact Statement 
filed by the United States describes the Complaint, the proposed Final 
Judgment, and the remedies available to private litigants who may have 
been injured by the alleged violation.
    Copies of the Complaint, proposed Final Judgment, Stipulation, and 
Competitive Impact Statement are available for inspection at the U.S. 
Department of Justice, Antitrust Division, 325 Seventh Street, NW., 
Suite 215, Washington, DC 20530 (telephone: 202-514-2481), on the 
Internet at https://www.usdoj.gov/atr, and at the Clerk's Office of the 
United States District Court for the Eastern District of Virginia 
(Norfolk Division). Copies of these materials may be obtained upon 
request and payment of a copying fee.
    Public comment is invited within the statutory 60-day comment 
period. Such comments and responses thereto will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, 
U.S. Department of Justice, 1401 H Street, NW., Suite 3000, Washington, 
DC 20530 (telephone: 202-307-0924).

Dorothy B. Fountain,
Deputy Director of Operations, Antitrust Division.

United States District Court for the Eastern District of Virginia--
Norfolk Division

United States of America, Department of Justice, Antitrust Division, 
1401 H Street, NW., Suite 3000, Washington, DC 20530, v. Waste 
Industries USA, Inc., 3301 Benson Drive, Suite 601, Raleigh, NC 27609, 
Defendant,

Civil No. 2:05cv468 Filed:

Complaint

    Plaintiff United States of America, acting under the direction of 
the Attorney General of the United States, brings this civil antitrust 
action to obtain equitable and other appropriate relief against 
defendant Waste Industries USA, Inc., (``Waste Industries''), including 
compelling Waste Industries to divest certain waste hauling assets and 
enjoining Waste Industries from continuing certain anticompetititve 
contracting practices. The United States complains and alleges as 
follows:

I. Nature of Action

    1. On August 1, 2003, Waste Industries purchased from Allied Waste 
Industries, Inc., (``Allied'') certain waste-hauling assets. Waste 
Industries and Allied were two of only a few providers of waste 
collection services in the independent cities of Norfolk, Chesapeake, 
Virginia Beach, Portsmouth, Suffolk, and Franklin, Virginia and the 
country of Southampton, Virginia (hereinafter the ``Southside''). The 
transaction has lessened substantially competition in Southside small 
container commercial waste collection services.
    2. This action seeks to undo the anticompetitive effects of the 
acquisition of Allied's waste hauling assets by Waste Industries. The 
divestitures and contracting practice relief sought herein will restore 
the benefits of the competition that was lost as a result of the 
transaction.

II. Jurisdiction and Venue

    3. This action is filed by the United States of America under 
Section 15 of the Clayton Act, 15 U.S.C. 25, to prevent and restrain 
the violation by Waste Industries of Section 7 of the Clayton Act, 15 
U.S.C. 18.
    4. Waste Industries is located in and transacts business in the 
Eastern District of Virginia, and Waste Industries submits to the 
personal jurisdiction of the Eastern District of Virginia in this 
proceeding. 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).
    5. Waste Industries collects municipal solid waste from 
residential, commercial, and industrial customers, and owns and 
operates landfills, which process and dispose of municipal solid waste. 
In its waste collection and waste disposal businesses, Waste Industries 
makes sales and purchases in interstate commerce, ships waste in the 
flow of interstate commerce, and engages in activities substantially 
affecting interstate commerce. The Court has jurisdiction over this 
action and over Waste Industries pursuant to 15 U.S.C. 22 and 28 U.S.C. 
1331 and 1337.

III. Waste Industries and the Transaction

    6. Waste Industries is a North Carolina corporation with its 
principal office in Raleigh, North Carolina. It is engaged in providing 
waste collection and disposal services throughout the Southeastern 
United States. In 2004, Waste Industries reported total revenues of 
approximately $291 million.
    7. Effective August 1, 2003, Waste Industries and Allied completed 
a purchase and sale of assets in Charlotte, North Carolina; Sumter, 
South Carolina; Mobile, Alabama; Biloxi, Mississippi; Clarksville, 
Tennessee; and the Southside. No premerger notification was required 
under Section 7A of the Clayton Act, 15 U.S.C. 18a(c).

IV. Trade and Commerce

A. The Relevant Service Market: Small Container Commercial Waste 
Collection
    8. Municipal solid waste (``MSW'') is solid putrescible waste 
generated by households and commercial establishments such as retail 
stores, offices, restaurants, warehouses, and nonmanufacturing 
activities in industrial facilities. MSW does not include special 
handling waste (e.g., waste from manufacturing processes, regulated 
medical waste, sewage, and sludge), hazardous waste, or waste generated 
by construction or demolition sites.
    9. Waste collection firms, or ``haulers,'' collect MSW from 
residential, commercial and industrial establishments and transport the 
waste to a disposal site, such as a transfer station, sanitary 
landfill, or incinerator, for processing and disposal. Private waste 
haulers typically contract directly with individual customers for the 
collection of waste generated by

[[Page 48592]]

commercial accounts. MSW generated by residential customers, on the 
other hand, is often collected by either local governments or by 
private haulers pursuant to contracts bid by, or franchises granted by, 
municipal authorities.
    10. Small container commercial waste collection service is the 
business of collecting MSW from commercial and industrial accounts, 
usually in ``dumpsters'' (i.e., a small container with one to ten cubic 
yards of storage capacity), and transporting or ``hauling'' such waste 
to a disposal site by use of a front- or rear-end loader truck. Typical 
commercial waste collection customers include office and apartment 
buildings and retail establishments (e.g., stores and restaurants).
    11. Small container commercial waste collection differs in many 
important respects from the collection of residential or other types of 
waste. An individual commercial customer typically generates 
substantially more MSW than a residential customer. To handle this high 
volume of MSW efficiently, haulers provide commercial customers with 
small dumpsters for storing the waste. Haulers organize their 
commercial accounts into routes and collect and transport the MSW 
generated by these accounts in vehicles uniquely well suited for small 
container waste collection, primarily front-end loader (``FEL'') 
trucks. Less frequently, haulers may use more maneuverable, but less 
efficient, rear-end loader (``REL'') trucks, especially in those areas 
in which a collection route includes narrow alleyways or streets. FEL 
trucks are unable to navigate narrow passageways easily and cannot 
efficiently collect waste located in them.
    12. On a typical small container commercial waste collection route, 
an operator drives a FEL vehicle to the customer's container, engages a 
mechanism that grasps and lifts the container over the front of the 
truck, and empties the container into the vehicle's storage section, 
where the waste is compacted and stored. The operator continues along 
the route, collecting MSW from each of the commercial accounts, until 
the vehicle is full. The operator then drives the FEL truck to a 
disposal facility, such as a transfer station, landfill, or 
incinerator, and empties the contents of the vehicle. Often, the 
operator returns to the route and repeats the process.
    13. In contrast to a commercial collection route, a residential 
waste collection route is significantly more labor intensive. The 
customer's MSW is stored in much smaller containers (e.g., garbage bags 
or trash cans) and instead of FEL trucks, waste collection firms 
routinely use REL or side-load trucks, manned by larger crews (usually, 
two- or three-person teams). On residential routes, the crews generally 
hand-load the customer's MSW, typically by tossing garbage bags and 
emptying trash cans into the vehicle's storage section. Because of the 
differences in collection processes, residential customers and 
commercial customers usually are organized into separate routes. For a 
variety of reason, other types of collection activities, such as roll-
off containers (typically used for construction debris) and collection 
of liquid or hazardous waste, are rarely combined with commercial waste 
collection activities. This separation of routes is due to differences 
in the hauling equipment required, the volume of waste collected, 
health and safety concerns, and the ultimate disposal option used.
    14. The differences in the types and volume of MSW collected and in 
the equipment used in collection distinguish small container commercial 
waste collection from all other types of waste collection activities. 
These differences mean that small container commercial waste collection 
firms can profitably increase their charges for small container 
commercial waste collection services without losing significant sales 
or revenues to firms engaged in the provision of other types of waste 
collection services. Thus, small container commercial waste collection 
service is a line of commerce, or relevant service, for purpose of 
analyzing the effects of the acquisition under Section 7 of the Clayton 
Act.
B. The Relevant Geographic Market: The Southside
    15. Small container commercial waste collection service is 
generally provided in highly localized areas because, to operate 
efficiently and profitably, a hauler must have sufficient density in 
its commercial waste collection operations (i.e., a large number of 
commercial accounts that are reasonably close together). In addition, a 
FEL or REL vehicle cannot be efficiently driven long distances without 
collecting significant amounts of MSW, which makes it economically 
impractical for a small container commercial waste collection firm to 
serve metropolitan areas from a distant base. Haulers, therefore, 
generally establish garages and related facilities within each major 
local area served.
    16. Local small container commercial waste collection firms on the 
Southside can profitably increase charges to local customers without 
losing significant sales to more distant competitors. The Southside is 
the relevant geographic market, for purposes of analyzing the effects 
of the acquisition under Section 7 of the Clayton Act.
C. Reduction in Competition As a Consequence of the Acquisition
    17. Allied and Waste Industries directly competed in small 
container commercial waste collection service on the Southside. In this 
market, Allied and Waste Industries each accounted for a substantial 
share of total revenues from commercial waste collection services.
    18. On the Southside, the acquisition reduced from four to three 
the number of significant firms competing in the collection of small 
container commercial waste. Because of the acquisition, Waste 
Industries now controls about 43%--and the two largest firms about 
82%--of the small container commercial waste hauling market. The total 
Southside market generates annual revenues of about $25 million.
D. Entry into Small Container Commercial Waste Collection of MSW
    19. Significant new entry into small container commercial waste 
collection service is difficult and time consuming on the Southside. A 
new entrant into small container commercial waste collection service 
cannot provide a significant competitive constraint on the prices 
charged by market incumbents until it achieves minimum efficient scale 
and operating efficiencies comparable to existing firms. In order to 
obtain comparable operating efficiency, a new firm must achieve route 
density comparable to existing firms. However, the incumbents' use of 
price discrimination and long-term contracts prevents new entrants from 
winning a large enough base of customers to achieve efficient routes in 
sufficient time to constrain the post-acquisition firm from 
significantly raising prices after the transaction. Differences in the 
service provided by an incumbent hauler to customers permit the 
incumbent to meet competition easily from new entrants by pricing its 
services lower to any customer that wants to switch to the new entrant. 
An incumbent's use of long-term contracts, which contain large 
liquidated damage provisions for contract termination and automatically 
renew, make it more difficult for the customer to switch to a new 
hauler and obtain lower prices. Long-term contracts increase the cost 
and time required by an entrant to form an efficient route, reducing 
the likelihood that the entrant will be successful.

[[Page 48593]]

E. Harm to Competition
    20. The acquisition by Waste Industries of Allied's Southside 
assets has removed a significant competitor in an already highly 
concentrated and difficult-to-enter Southside small container 
commercial waste collection market. In the Southside market, the 
resulting substantial increase in concentration, loss of competition, 
and absence of reasonable prospect of significant new entry, has denied 
small container commercial waste customers the benefits of 
competition--lower prices and better service.

V. Violation Alleged

    21. On or about August 1, 2003, Waste Industries acquired Allied's 
Southside small container commercial waste collection assets. The 
effect of this acquisition has been to substantially lessen competition 
in interstate trade and commerce in violation of Section 7 of the 
Clayton Act.
    22. The transaction has had the following effects, among others:
    a. Competition generally in small container commercial waste 
collection service in the Southside market has been lessened 
substantially;
    b. Actual and potential competition between Allied and Waste 
Industries in small container commercial waste collection service was 
eliminated on the Southside; and
    c. Small container commercial waste customers in the Southside 
market have been denied the benefits of competition, including 
competition based on price and service.

VI. Requested Relief

    The United States requests that this Court:
    1. Adjudge and decree the acquisition of Allied's Southside small 
container commercial waste assets by defendant Waste Industries to 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18;
    2. Compel Waste Industries to divest waste hauling assets 
sufficient to restore the competition that was lost as a result of the 
transaction;
    3. Enjoin Waste Industries from continuing certain anticompetitive 
contracting practices;
    4. Award the United States the cost of this action; and
    5. Award the United States such other and further relief as the 
case requires and the Court deems proper.

 Respectfully submitted,

August 8, 2005.

For Plaintiff United States

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Thomas O. Barnett,
Acting Attorney General.

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Dorothy B. Fountain,
Deputy Director of Operations.

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Maribeth Petrizzi,
Chief, Litigation II Section,
James J. Tierney,
Assistant Chief, Litigation II Section.

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Leslie D. Peritz.

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Lowell Stern,
VA Bar No. 33460.

Michael K. Hammaker,
Janet A. Nash,
Kerrie Freeborn,
U.S. Department of Justice, Antitrust Division, Litigation II 
Section, 1401 H Street, NW., Suite 3000, Washington, DC 20530. 
leslie.peritz@usdoj.gov. (202) 307-0924.

United States District Court for the Eastern District of Virginia--
Norfolk Division

United States of America, Plaintiff, v. Waste Industries USA, Inc., 
Defendant

Final Judgment

    Whereas, the plaintiff United States of America, having filed its 
Complaint in this action on August 8, 2005 and the plaintiff and the 
defendant Waste Industries USA, 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 an admission by any party 
with respect to any issue of law or fact;
    And Whereas, the defendant agrees to be bound by the provisions of 
this Final Judgment pending its approval by the Court;
    And Whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of the Relevant Hauling Assets by the defendant to 
ensure that competition is substantially restored;
    And Whereas, the United States requires the defendant to amend 
certain provisions of its waste hauling contracts and to make certain 
divestitures in order to remedy the loss of competition alleged in the 
Complaint;
    And Whereas, the defendant has represented to the United States 
that the divestiture required below can and will be made and that the 
defendant will late raise no claims of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture or other 
injunctive provisions contained below;
    Now, Therefore, before the taking of any testimony, and 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 each of the parties and over the 
subject matter of this action. The Complaint states a claim upon which 
relief may be granted against the defendant under Section 7 of the 
Clayton Act, as amended, 15 U.S.C. Sec.  18.

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer''means the entity to whom the defendant divests the 
Relevant Hauling Assets.
    B. ``Hauling'' means the collection of waste from customers and the 
shipment of the collected waste to disposal sites. Hauling does not 
include collection of roll-off containers.
    C. ``MSW''means municipal solid waste, a term of art used to 
describe solid putrescible waste generated by household and commercial 
establishment such as retail stores, offices, restaurants, warehouses, 
and nonmanufacturing activities in industrial facilities. MSW does not 
include special handling waste (e.g., waste from manufacturing 
processes, regulated medical waste, sewage, and sludge), hazardous 
waste, or waste generated by construction or demolition sites.
    D. ``Relevant Hauling Assets'' means $780,000 in annual Southside 
small container commercial waste collection revenue comprised of 
customers from Waste Industries' waste collection routes 22 and 914 
that operate in Norfolk and Virginia Beach, respectively, and all 
intangible assets and records related to such customers, including 
contracts, hauling-related customer lists, account files, and credit 
records. (The divested customers from Routes 22 and 914 are identified 
in Exhibit A to this Final Judgment.) If the defendant Acquirer 
mutually agree, Acquirer may: (1) Purchase any other hauling-related 
assets used in connection with providing service to the customers 
identified in Exhibit A, including trucks and other vehicles, 
containers, materials, and supplies; and (2) negotiate with, and make 
offers of employment to, personnel involved in the operation and 
management of the Relevant Hauling Assets.
    E. ``Small container commercial waste collection services'' means 
the business of collecting MSW from commercial and industrial accounts, 
usually in ``dumpsters'' (i.e., a small container with one to ten cubic 
yards of storage capacity), and transporting or hauling

[[Page 48594]]

such waste to a disposal site by use of a front-or rear-end loader 
truck. Typical commercial waste collection customers include office and 
apartment buildings and retail establishments (e.g., stores and 
restaurants).
    F. ``Southside'' means the independent cities of Norfolk, 
Chesapeake, Virginia Beach, Portsmouth, Suffolk and Franklin, Virginia, 
and the county of Southampton, Virginia.
    G. ``Waste Industries'' means the defendant Waste Industries USA, 
Inc., a North Carolina corporation with its headquarters in Raleigh, 
North Carolina, and includes its successors and assigns, and its 
subsidiaries, division, groups, affiliates, partnerships, joint 
ventures, and their directors, officers, managers, agents, and 
employees.

III. Applicability

    A. This Final Judgment applies to Waste Industries, as defined 
above, and all other persons in active concert or participation with 
Waste Industries who receive actual notice of this Final Judgment by 
personal service or otherwise.
    B. The defendant shall require, as a condition of the sale or other 
disposition of all or substantially all of its assets, that the 
purchaser agree to be bound by the provisions of this Final Judgment.

IV. Divestiture

    A. The defendant is hereby ordered and directed, within ninety (90) 
calendar days after the filing of the Complaint in this matter, or five 
(5) days after notice of the entry of this Final Judgment by the Court, 
whichever is later, to divest the Relevant Hauling Assets in a manner 
consistent with this Final Judgment to an Acquirer acceptable to the 
United States in its sole discretion. The United States, in its sole 
discretion, may agree to an extension of this time period of up to 
thirty (30) calendar days, and shall notify the Court in such 
circumstances. The defendant agrees to use its best efforts to divest 
the Relevant Hauling Assets as expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
the defendant promptly shall make known, by usual and customary means, 
the availability of the Relevant Hauling Assets. The defendant shall 
inform any person making inquiry regarding a possible purchase of the 
Relevant Hauling Assets that they are being divested pursuant to this 
Final Judgment and provide that person a copy of this Final Judgment. 
The defendant shall offer to furnish to each prospective Acquirer, 
subject to customary confidentiality assurances, all information and 
documents relating to the Relevant Hauling Assets customarily provided 
in a due diligence process except such information or documents subject 
to the attorney-client or work-product privileges. The defendant shall 
make available such information to the United States at the same time 
that such information is made available to any other person.
    C. The defendant shall permit each prospective Acquirer of the 
Relevant Hauling Assets to have reasonable access to personnel and 
access to any and all financial, operational, or other documents and 
information customarily provided as part of a due diligence process. If 
agreed to by the defendant and the prospective Acquirer, the defendant 
shall provide information relating to the personnel involved in the 
operation and management of the Relevant Hauling Assets to enable the 
Acquirer to make offers of employment. The defendant will not interfere 
with any negotiations by the Acquirer to employ any defendant employee.
    D. The defendant shall warrant to the Acquirer of the Relevant 
Hauling Assets that each asset will be operational on the date of sale.
    E. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by trustee appointed pursuant to 
Section V of this Final Judgment, shall include the entire Relevant 
Hauling Assets, and shall be accomplished in such a way as to satisfy 
the United States, in its sole discretion, that the Relevant Hauling 
Assets can and will be used by the Acquirer as part of a viable, 
ongoing MSW hauling business. Divestiture of the Relevant Hauling 
Assets may be made to an Acquirer, provided that it is demonstrated to 
the sole satisfaction of the United States that the Relevant Hauling 
Assets will remain viable and the divestiture of such assets will 
remedy the competitive harm alleged in the Complaint. The divestiture, 
whether pursuant to Section IV or Section V of this Final Judgment:
    1. Shall be made to an Acquirer that, in the United States' sole 
judgment, has the intent and capability, including managerial, 
operational, and financial capability, to compete effectively in the 
waste hauling business; and
    2. Shall be accomplished so as to satisfy the United States, in its 
sole discretion, that none of the terms of any agreement between an 
Acquirer and Waste Industries gives Waste Industries 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 the defendant has not divested the Relevant Hauling Assets 
within the time period specified in Section IV.A, the defendant shall 
notify the United States of that fact in writing. Upon application of 
the United States, in its sole discretion, the Court shall appoint a 
trustee selected by the United States and approved by the Court to 
effect the divestiture of the Relevant Hauling Assets.
    B. After the appointment of the trustee becomes effective, only the 
trustee shall have the right to sell the Relevant Hauling Assets. the 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer acceptable to the United States, in its sole 
discretion, 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 other 
powers as this Court deems appropriate. Subject to Section V.D of this 
Final Judgment, the trustee may have at the cost and expense of the 
defendant 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. The defendant shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by the 
defendant must be conveyed in writing in 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 the 
defendant, on such terms and conditions as the United States approves, 
and shall account for all monies derived from the sale of the Relevant 
Hauling Assets sold by the trustee and all costs and expenses so 
incurred. After approval by the Court of the trustee's accounting, 
including fees for its services and those of any professionals and 
agents retained by the trustee, all remaining money shall be paid to 
the defendant and the trust shall then be terminated. The compensation 
of the trustee and any professionals and agents retained by the trustee 
shall be reasonable in light of the value of the Relevant Hauling 
Assets and based on a fee arrangement providing the trustee with an 
incentive based on the price and terms of the divestiture and the speed 
with which it is accomplished, but timeliness is paramount.

[[Page 48595]]

    E. The defendant shall use its best efforts to assist the trustee 
in accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the business to be divested, and the 
defendant shall develop financial and other information relevant to 
such business as the trustee may reasonably request, subject to 
customary confidentiality protection for trade secret or other 
confidential research, development, or commercial information. The 
defendant 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 Court settling forth the trustee's 
efforts to accomplish the divestiture ordered under this Final 
Judgment. To the extent that such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the proceeding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Relevant Hauling Assets, 
and shall describe in detail each contact with any such person. The 
trustee shall maintain full records of all efforts made to divest the 
Relevant Hauling Assets.
    G. If the trustee has not accomplished such divestiture within six 
(6) months after its appointment, the trustee shall promptly file with 
the Court a report setting forth (1) the trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the trustee's 
judgment, why the required divestiture has not been accomplished, and 
(3) the trustee's recommendations. To the extent that such reports 
contain information that the trustee deems confidential, such reports 
shall not be filed in the public docket of the Court. The trustee shall 
at the same time furnish such report to the United States who shall 
have the right to make additional recommendations consistent with the 
purpose of the trust. The Court thereafter shall enter such orders as 
it shall deem appropriate to carry out the purpose of the Final 
Judgment, which may, if necessary, including 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, the defendant or the trustee, whichever is then 
responsible for effecting the divestiture required herein, shall notify 
the United States of any proposed divestiture required by Section IV or 
V of this Final Judgment. If the trustee is responsible, it shall 
similarly notify the defendant. The notice shall set forth the details 
of the proposed divestiture and list the name, address, and telephone 
number of each person not previously identified who offered or 
expressed an interest in or desire to acquire any ownership interest in 
the Relevant Hauling Assets, together with full details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States, in its sole discretion, may 
request from the defendant, the proposed Acquirer, any other third 
part, or the trustee, if applicable, additional information concerning 
the proposed divestiture, the proposed Acquirer, and any other 
potential Acquirer. The defendant and the trustee shall furnish any 
additional information requested within fifteen (15) calendar days of 
the receipt of the request, unless the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the Unites States has been 
provided the additional information requested from the defendant, the 
proposed Acquirer, any third party, or the trustee, whichever is later, 
the United States, in its sole discretion, shall provide written notice 
to the defendant and the trustee, if there is one, stating whether or 
not it objects to the proposed divestiture. If the United States 
provides written notice that it does not object, the divestiture may be 
consummated, subject only to the defendant's limited right to object to 
the sale under Section 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 the 
defendant under Section V.C, a divestiture proposed under Section V 
shall not be consummated unless approved by the Court.

VII. Financing

    The defendant shall not finance all or any part of any purchase 
made pursuant to Section IV or V of this Judgment.

VIII. Preservation of Relevant Hauling Assets

    A. Until the divestiture required by this Final Judgment has been 
accomplished, the defendant shall: (1) Preserve and maintain the value 
and goodwill of the Relevant Hauling Assets; (2) operate the Relevant 
Hauling Assets in the ordinary course of business, including reasonable 
efforts to maintain and increase sales and revenues; and (3) take no 
action that would jeopardize, delay, or impede the sale of the Relevant 
Hauling Assets.
    B. The divested customers on Routes 22 and 914 identified in 
Exhibit A collectively generate approximately $65,000 in monthly small 
container commercial waste collection revenue ($780,000 annual 
revenue), as of May 2005. If, prior to divestiture, any customer 
identified in Exhibit A let their contracts expire, terminate their 
contracts, or reduce small container commercial waste collection 
services such that small container commercial waste collection revenue 
to be divested declines by five (5) percent or more, the defendant 
shall divest additional small container commercial waste collection 
customers to replace these revenues up to $780,000. The defendant shall 
provide monthly customer reports that update Exhibit A and identify any 
lost customers, customer price increases or service changes, and 
overall revenue changes. Any change in the Relevant Hauling Assets must 
be reviewed by and approved by the United States. All revenue 
calculations under Section VIII.B of this Final Judgment shall be based 
on monthly revenues for May 2005.

IX. 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, the defendant 
shall deliver to the United States an affidavit as to the fact and 
manner of its compliance with Section IV or V of this Final Judgment. 
Each such affidavit shall include the name, address, and telephone 
number of each person who, during the preceding thirty (30) days, made 
an offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in the Relevant Hauling Assets, 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 the defendant has taken to solicit buyers for the Relevant 
Hauling

[[Page 48596]]

Assets, and to provide required information to each prospective 
Acquirer, including the limitations, if any, on such information. 
Assuming the information set forth in the affidavit is true and 
complete, any objection by the United States to information provide by 
the defendant, including limitations on information, shall be made 
within fourteen (14) days of receipt of such affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, the defendant shall deliver to the United States an 
affidavit that describes in reasonable detail all actions the defendant 
has taken and all steps the defendant has implemented on an ongoing 
basis to comply with Section VIII of this Final Judgment. The defendant 
shall deliver to the United States an affidavit describing any changes 
to the efforts and actions outlined in the defendant's earlier 
affidavits filed pursuant to this section within fifteen (15) calendar 
days after the change is implemented.
    C. The defendant shall keep all records of all efforts made to 
preserve the Relevant Hauling Assets and to divest the Relevant Hauling 
Assets until one year after such divestiture has been completed.

X. 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 duly authorized representatives of the United States 
Department of Justice, including consultants and other persons retained 
by the United States, shall, upon written request of a duly authorized 
representative of the Assistant Attorney General in charge of the 
Antitrust Division, and on reasonable notice to the defendant and 
counsel of record, be permitted:
    1. access during the defendant's office hours to inspect and copy, 
or at the United States' option, to require the defendant to provide 
copies of all books, ledgers, accounts, records, and documents in the 
possession or control of the defendant, relating to any matters 
contained in this Final Judgment; and
    2. to interview, either informally or on the record, the 
defendant's 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 the defendant.
    B. Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of the Antitrust Division, the 
defendant shall submit such 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, 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 the 
defendant to the United States, the defendant represents and identifies 
in writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and the defendant marks each pertinent page 
of such material, ``Subject to claim of protection under Rule 26(c)(7) 
of the Federal Rules of Civil Procedure,'' then the United States shall 
give the defendant ten (10) calendar days notice prior to divulging 
such material in any legal proceeding (other than a grand jury 
proceeding).

XI. No Reacquisition

    The defendant may not reacquire all or substantially all of the 
Relevant Hauling Assets listed in Exhibit A during the term of this 
Final Judgment. Nothing herein shall preclude the defendant from 
competing for the hauling business of any individual customer listed in 
Exhibit A, so long as the defendant's conduct is consistent with a 
commercially reasonable sales agreement negotiated with the Acquirer of 
the Relevant Hauling Assets.

XII. Southside Contract Relief

    A. The defendant shall alter the standard contract form (``the 
Standard Contract'') it uses with small container commercial waste 
collection customers in the Southside and the Standard Contract shall 
contain the following terms:
    1. an initial term no longer than two (2) years;
    2. a renewal term no longer than one (1) year;
    3. a notice of termination no9 more than thirty (30) days prior to 
the end of any initial term or renewal term;
    4. liquidated damages of no more than three (3) times the 
contract's average monthly charge during the first year the customer 
has had service with the defendant; and
    5. liquidated damages of no more than two (2) times the contract's 
average monthly charge after the first year the customer has had 
service with the defendant.
    B. Within thirty (30) calendar days of the filing of the Complaint 
in this matter, the defendant, by means of a letter approved by the 
United States, shall inform its existing Southside small container 
commercial waste collection customers about the terms, conditions and 
rights set forth in Sections XII.A and XII.B of this Final Judgment and 
shall offer in writing to the customers the option to enter into the 
Standard Contract. Should an existing customer request the Standard 
Contract, the defendant shall execute the Standard Contract with that 
customer. The defendant shall not initiate negotiations with existing 
customers to modify the Standard Contract; however, upon the request of 
the customer, the defendant may modify the Standard Contract subject to 
the procedures set forth in Section XII.C of this Final Judgment. 
Should an existing customer continue with its current contract, the 
defendant shall not enforce any term or condition that is inconsistent 
with Section XII.A of this Final Judgment. For example, if an existing 
customer contract has a five-year initial term, the defendant may only 
enforce this provision for a two-year period from the date the contract 
was executed.
    C. From the date of filing the Compliant in this action, the 
defendant shall use the Standard Contract with all new customers and 
any existing customer that may request the Standard Contract. The 
defendant may negotiate terms and conditions different from those set 
forth in Section XII.A of this Final Judgment, provided that the 
Standard Contract form is utilized, the customer is notified in writing 
that it can accept the Standard Contract without modification, the 
modification(s) are made in the physical presence of the customer, the 
modification(s) are made in writing on the Standard Contract, and the 
customer initials each modification. If the defendant complies with the 
requirements set forth in this subsection C, this Final Judgment shall 
not prevent the enforcement by either the defendant or customer of any 
such negotiated modifications that are different from those set forth 
in Section XII.A.

[[Page 48597]]

    D. The provisions of Section XII of this Final Judgment will expire 
on August 8, 2010.

XIII. 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.

XIV. Expiration of Final Judgment

    Unless this Court grants an extension or as otherwise noted in 
Section XII.D, this Final Judgment shall expire ten (10) years from the 
date of its entry.

XV. Public Interest Determination

    Entry of this Final Judgment is in the public interest.
-----------------------------------------------------------------------

Date:------------------------------------------------------------------

Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16

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

United States District Judge

                                                    Exhibit A
----------------------------------------------------------------------------------------------------------------
                                                   Customer                                            Customer
                   Route Code                        No.                    Route Code                    No.
----------------------------------------------------------------------------------------------------------------
0022...........................................         136   914...................................         237
0022...........................................         367   914...................................         244
0022...........................................         604   914...................................         375
0022...........................................         763   914...................................         572
0022...........................................         781   914...................................         979
0022...........................................         921   914...................................        1176
0022...........................................        3143   914...................................        1560
0022...........................................        1154   914...................................        1791
0022...........................................        5014   914...................................        2770
0022...........................................        5456   914...................................        5041
0022...........................................       28287   914...................................        6167
0022...........................................      100079   914...................................        6692
0022...........................................      100097   914...................................        9679
0022...........................................      100541   914...................................      100034
0022...........................................      100684   914...................................      100172
0022...........................................      100699   914...................................      100178
0022...........................................      103169   914...................................      100497
0022...........................................      103228   914...................................      101187
0022...........................................      103940   914...................................      101375
0022...........................................      103941   914...................................      101531
0022...........................................      104024   914...................................      102162
0022...........................................      104089   914...................................      102374
0022...........................................         608   914...................................      102458
0022...........................................         545   914...................................      103088
0022...........................................         546   914...................................      103939
0022...........................................         547   914...................................      104579
0022...........................................         550   914...................................      104834
0022...........................................         626   914...................................      100017
0022...........................................        3486   914...................................      104455
0022...........................................      101015   914...................................      104601
0022...........................................        1334   914...................................      104649
0022...........................................        3513   914...................................        4564
0022...........................................      100957   914...................................        5020
0022...........................................      103536   914...................................         199
0022...........................................      104867   914...................................         261
0022...........................................      100045   914...................................         285
0022...........................................      101295   914...................................         316
0022...........................................      101486   914...................................         422
0022...........................................      103102   914...................................         476
0022...........................................      103978   914...................................         693
0022...........................................      103040   914...................................         710
0022...........................................        3102   914...................................         725
0022...........................................      100681   914...................................         774
0022...........................................      102270   914...................................         775
0022...........................................      104583   914...................................         788
0022...........................................      104868   914...................................         811
0022...........................................         246   914...................................         856
0022...........................................         257   914...................................         924
0022...........................................         305   914...................................        1065
0022...........................................         354   914...................................        1070
0022...........................................         368   914...................................        1122
0022...........................................         495   914...................................        1835
0022...........................................         500   914...................................        2995
0022...........................................         515   914...................................        3880
0022...........................................         625   914...................................        3902
0022...........................................         630   914...................................        3952
0022...........................................         638   914...................................        4518
0022...........................................         639   914...................................        4836

[[Page 48598]]

 
0022...........................................         653   914...................................        5236
0022...........................................         654   914...................................        6010
0022...........................................         667   914...................................        6486
0022...........................................         668   914...................................        6605
0022...........................................         687   914...................................        6956
0022...........................................         691   914...................................        6969
0022...........................................         728   914...................................        7110
0022...........................................         852   914...................................        7924
0022...........................................         863   914...................................        8374
0022...........................................         897   914...................................        9515
0022...........................................         922   914...................................        9551
0022...........................................         966   914...................................        9578
0022...........................................         991   914...................................        9638
0022...........................................        1022   914...................................        9778
0022...........................................        1146   914...................................        9802
0022...........................................        1151   914...................................        9831
0022...........................................        1165   914...................................       14897
0022...........................................        1167   914...................................       26813
0022...........................................        1169   914...................................       27632
0022...........................................        1876   914...................................       27794
0022...........................................        2311   914...................................       28203
0022...........................................        2371   914...................................       28206
0022...........................................        2404   914...................................       28285
0022...........................................        2570   914...................................       28296
0022...........................................        2845   914...................................       28556
0022...........................................        3371   914...................................       28670
0022...........................................        3439   914...................................       28909
0022...........................................        4022   914...................................       28970
0022...........................................        4086   914...................................      100003
0022...........................................        4096   914...................................      100016
0022...........................................        4220   914...................................      100028
0022...........................................        4638   914...................................      100029
0022...........................................        4952   914...................................      100032
0022...........................................        4987   914...................................      100039
0022...........................................        5030   914...................................      100041
0022...........................................        5197   914...................................      100059
0022...........................................        5725   914...................................      100065
0022...........................................        6908   914...................................      100066
0022...........................................        7103   914...................................      100080
0022...........................................        7437   914...................................      100091
0022...........................................        7438   914...................................      100095
0022...........................................        7971   914...................................      100107
0022...........................................        8171   914...................................      100111
0022...........................................       28239   914...................................      100119
0022...........................................       28250   914...................................      100147
0022...........................................       28288   914...................................      100170
0022...........................................       28694   914...................................      100272
0022...........................................      100013   914...................................      100322
0022...........................................      100098   914...................................      100358
0022...........................................      100133   914...................................      100373
0022...........................................      100169   914...................................      100417
0022...........................................      100276   914...................................      100421
0022...........................................      100295   914...................................      100476
0022...........................................      100300   914...................................      100485
0022...........................................      100310   914...................................      100508
0022...........................................      100315   914...................................      100544
0022...........................................      100316   914...................................      100575
0022...........................................      100337   914...................................      100582
0022...........................................      100478   914...................................      100593
0022...........................................      100521   914...................................      100634
0022...........................................      100620   914...................................      100647
0022...........................................      100663   914...................................      100702
0022...........................................      100676   914...................................      100713
0022...........................................      100709   914...................................      100722
0022...........................................      100764   914...................................      100742
0022...........................................      100816   914...................................      100782
0022...........................................      100893   914...................................      100796
0022...........................................      100995   914...................................      100930
0022...........................................      101030   914...................................      100931
0022...........................................      101044   914...................................      100953
0022...........................................      101112   914...................................      100967

[[Page 48599]]

 
0022...........................................      101148   914...................................      100990
0022...........................................      101247   914...................................      100991
0022...........................................      101335   914...................................      101011
0022...........................................      101541   914...................................      101097
0022...........................................      101657   914...................................      101166
0022...........................................      101788   914...................................      101283
0022...........................................      101812   914...................................      101293
0022...........................................      102431   914...................................      101323
0022...........................................      102643   914...................................      101341
0022...........................................      102645   914...................................      101359
0022...........................................      102814   914...................................      101421
0022...........................................      102823   914...................................      101433
0022...........................................      102931   914...................................      101451
0022...........................................      102943   914...................................      101453
0022...........................................      103070   914...................................      101464
0022...........................................      103157   914...................................      101474
0022...........................................      103250   914...................................      101524
0022...........................................      103278   914...................................      101568
0022...........................................      103279   914...................................      101603
0022...........................................      103485   914...................................      101604
0022...........................................      103627   914...................................      101610
0022...........................................      103640   914...................................      101612
0022...........................................      103777   914...................................      102140
0022...........................................      103834   914...................................      102338
0022...........................................      103835   914...................................      102355
0022...........................................      103879   914...................................      102366
0022...........................................      103949   914...................................      102604
0022...........................................      103979   914...................................      102698
0022...........................................      104005   914...................................      102707
0022...........................................      104038   914...................................      102708
0022...........................................      104062   914...................................      102926
0022...........................................      104334   914...................................      102959
0022...........................................      104460   914...................................      102965
0022...........................................      104475   914...................................      102981
0022...........................................      104491   914...................................      103014
0022...........................................      104518   914...................................      103015
0022...........................................      104536   914...................................      103087
0022...........................................      104542   914...................................      103099
0022...........................................      104560   914...................................      103119
0022...........................................      104600   914...................................      103120
0022...........................................      104700   914.....