United States of America v. Signature Flight Support Corporation and Hawker Beechcraft Services, Inc.; Proposed Final Judgment and Competitive Impact Statement, 41118-41126 [E8-16254]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 73, Number 138 (Thursday, July 17, 2008)]
[Notices]
[Pages 41118-41126]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16254]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States of America v. Signature Flight Support Corporation 
and Hawker Beechcraft Services, Inc.; Proposed Final Judgment and 
Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 5 U.S.C. 16(b)-(h), that a proposed Final Judgment, Hold 
Separate and Preservation of Assets Stipulation and Order, and 
Competitive Impact Statement have been filed with the United States 
District Court for the District of Columbia in United States of America 
v. Signature Flight Support Corporation and Hawker Beechcraft Services, 
Inc., Civil Action No. 1:08-cv-01164-RWR.
    On July 3, 2008, the United States filed a Complaint alleging that 
the proposed acquisition by Signature Flight Support Corporation 
(``Signature'') of the fixed base operations (``FB'') of Hawker 
Beechcraft Services, Inc. (``Hawker Beechcraft'') at the Indianapolis 
International Airport (``IND'') would violate Section 7 of the Clayton 
Act, 15 U.S.C. 18. The Complaint alleges that the acquisition would 
combine the only providers of FBO services at IND, resulting in higher 
prices and reduced services. The proposed Final Judgment requires the 
parties to divest either Signature's or Hawker Beechcraft's FBO assets 
at IND.
    Copies of the Complaint, proposed Final Judgment, Hold Separate and 
Preservation of Assets Stipulation and Order, and Competitive Impact 
Statement are available for inspection at the Department of Justice, 
Antitrust Division, Antitrust Documents Group, Room 1010, 450 5th 
Street, NW., Washington, DC 20530 (telephone: 202-514-2481), on the 
Department of Justice's Web site at https://www.usdoj.gov/atr, and at 
the Office of the Clerk of the United States District Court for the 
District of Columbia. Copies of these materials may be obtained from 
the Antitrust Division upon request and payment of the copying fee set 
by Department of Justice regulations.
    Public comment is invited within sixty (60) days of the date of 
this notice. Such comments, and responses thereto, will be published in 
the Federal Register and filed with the Court. Comments should be 
directed to Donna N. Kooperstein, Chief, Transportation, Energy & 
Agriculture Section, Antitrust Division, Department of Justice, Suite 
4100, 450 5th Street, NW., Washington, DC 20530 (telephone: 202-307-
6410).

Patricia A. Brink,
Deputy Director of Operations, Antitrust Division.

United States District Court for the District of Columbia

United States of America, U.S. Department of Justice, Antitrust 
Division, 450 Fifth Street, NW., Suite 4100, Washington, DC 20530, 
Plaintiff, v. Signature Flight Support Corporation, Signature Plaza, 
201 South Orange Avenue, Suite 1100, Orlando, Florida 32801, and Hawker 
Beechcraft Services, Inc., 10511 East Central, Wichita, Kansas 67206, 
Defendants

Civil Action No.:

Filed:

Case: 1:08-cv-01164.

Assigned To: Roberts, Richard W.

Assign. Date: 7/3/2008.

Description: Antitrust.

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, brings this civil antitrust 
action to enjoin the proposed acquisition by Signature Flight Support 
Corporation (``Signature'') of fixed base operations of Hawker 
Beechcraft Services, Inc. (``Hawker Beechcraft'') and to obtain

[[Page 41119]]

equitable and other relief. The United States alleges as follows:

I. Nature of the Action

    1. On February 21, 2008, Signature and Hawker Beechcraft signed a 
definitive agreement for Signature to acquire Hawker Beechcraft's 
United States' fixed base operations (``FBO'') for $128.5 million. FBOs 
provide flight support services--including fueling, hangar rentals, 
office space rentals, and other services--to general aviation 
customers. Signature is the largest fixed base operator in the world 
and operates FBOs at more than forty-five around the country. Hawker 
Beechcraft operates FBOs at seven airports in the United States. Both 
Signature and Hawker Beechcraft operate FBOs at the Indianapolis 
International Airport (``IND'').
    2. Signature and Hawker Beechcraft are the only two FBOs operating 
at IND Airport. They compete directly on price and quality of FBO 
services to general aviation customers. The acquisition would eliminate 
this competition, creating an FBO monopoly at IND. The acquisition 
would give Signature the ability to raise prices and lower the quality 
services at IND for general aviation customers. Unless the transaction 
is enjoined, the proposed acquisition is likely to lessen competition 
substantially in the market for FBO services at IND in violation of 
Section 7 of the Clayton Act, 15 U.S.C. 18.

II. Jurisdiction and Venue

    3. The United States brings this action under Section 15 of the 
Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain 
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
    4. The defendants are engaged in interstate commerce and in 
activities substantially affecting interstate commerce. Signature and 
Hawker Beechcraft provide FBO services to aircraft landing throughout 
the United States. This Court has subject matter jurisdiction over this 
action and jurisdiction over the parties pursuant to 15 U.S.C. 22 and 
25, and 28 U.S.C. 1331, 1337(a), and 1345.
    5. Venue is proper in this district as Signature and Hawker 
Beechcraft have consented to venue and personal jurisdiction in this 
judicial district.

III. Defendants and the Proposed Transaction

    6. Signature is a wholly owned subsidiary of BBA Aviation PLC, a 
supplier of aviation machinery, support, and repair. Signature is a 
Delaware corporation with its principal place of business in Orlando, 
Florida. Signature owns and operates more than sixty FBO facilities in 
the United States, including its FBO operation at IND.
    7. Hawker Beechcraft is a Kansas corporation with its principal 
place of business in Wichita, Kansas. Hawker Beechcraft owns and 
operates seven FBO facilities in the United States, including its FBO 
operation at the IND Airport.
    8. On February 21, 2008, Signature and Hawker Beechcraft executed a 
Sale of Line Service Business Asset Purchase Agreement under which 
Signature will acquire all of Hawker Beechcraft's FBO assets for 
approximately $128.5 million.

IV. Trade and Commerce

The Relevant Market

    9. FBO services include the sale of jet aviation fuel (``Jet A 
fuel'') and aviation gasoline (``avgas''), as well as related support 
services, to general aviation customers. FBOs usually do not charge 
separately for services such as conference rooms, pilot lounges, flight 
planning, and transportation. Instead, they recover the cost of these 
ancillary services in the price that they charge for fuel. FBOs charge 
separately for hangar and office rentals, aircraft storage, tie-down 
and ground services, deicing, and catering.
    10. The largest source of revenue for an FBO is fuel sales. FBOs 
sell Jet A fuel for jet aircraft, turboprops and helicopters, and avgas 
for smaller, piston-operated planes. At IND, Signature and Hawker 
Beechcraft sold approximately $17 million of fuel in 2007, and obtained 
additional revenues of approximately $3 million for other FBO-related 
services.
    11. General aviation customers cannot obtain fuel, hangar, ramp and 
related services at IND except through the FBOs authorized to sell such 
products and services by the local airport authority, leaving general 
aviation customers landing at IND no alternatives to the Signature and 
Hawker Beechcraft FBOs for these services. Obtaining FBO services at 
another airport would not provide an economically practical alternative 
for general aviation customers who currently use IND. A small but 
significant post-acquisition increase in the prices for fuel, hangar 
space, and other FBO services would not cause general aviation 
customers to switch to other airports in sufficient quantities to make 
such a price increase unprofitable.
    12. Thus, the provision of FBO services to general aviation 
customers is a relevant product market and IND is a relevant geographic 
market (i.e., a line of commerce and a section of the country) under 
Section 7 of the Clayton Act, 15 U.S.C. 18.

Anticompetitive Effects

    13. The market for FBO services at IND is highly concentrated, with 
only two providers--Signature and Hawker Beechcraft. If Signature 
acquires the Hawker Beechcraft FBO facility, it will have a monopoly in 
the market for FBO services at IND. Currently, based on fuel sales, 
Signature has 46 percent of the IND FBO market, and Hawker Beechcraft 
has 54 percent.
    14. Competition between Signature's and Hawker Beechcraft's FBO 
facilities currently limits the ability of each to raise prices for FBO 
services. The proposed acquisition would eliminate the competitive 
constraint each imposes upon the other. This would to lead to a 
monopoly, resulting in higher prices for FBO services, as well as lower 
quality of service, at IND in violation of Section 7 of the Clayton 
Act.
    15. Successful entry into the provision of FBO services at IND 
would not be timely, likely, or sufficient to deter the anticompetitive 
effects resulting from this transaction. Timely entry sufficient to 
replace the market impact of Hawker Beechcraft would be difficult for 
several reasons. The entrant would need to get the approval of the 
airport authority, obtain permits, and construct facilities, all of 
which require extensive lead time to complete. Successful entry would 
be unlikely to occur in response to a small but significant and non-
transitory post-merger price increase.

V. Violation Alleged

    16. The United States hereby incorporates paragraphs 1 through 15.
    17. Unless restrained, Signature's proposed acquisition of Hawker 
Beechcraft's FBO facility at IND is likely to tend to create a monopoly 
in the market for FBO services at IND in violation of Section 7 of the 
Clayton Act, 15 U.S.C. 18, in the following ways:
    a. Actual and potential competition between Signature and Hawker 
Beechcraft in the market for FBO services at IND will be eliminated;
    b. Competition in the provision of FBO services at IND will be 
eliminated; and
    c. Prices for FBO services to general aviation customers at IND 
will likely increase and quality of service will likely decrease.

VI. Request for Relief

    18. The United States requests that:

[[Page 41120]]

    a. Signature's proposed acquisition of Hawker Beechcraft's FBO 
facility at IND be adjudged and decreed to be unlawful and in violation 
of Section 7 of the Clayton Act, 15 U.S.C. 18;
    b. Defendants and all persons acting on their behalf be 
preliminarily and permanently enjoined and restrained from consummating 
the proposed transaction or from entering into or carrying out any 
contract, agreement, plan, or understanding, the effect of which would 
be to combine Signature's and Hawker Beechcraft's FBO operations at 
IND;
    c. The United States be awarded its costs for this action; and d. 
the United States receive such other and further relief as the Court 
deems just and proper.
    Respectfully submitted,

/s/ James J. O'Connell, Jr.
James J. O'Connell, Jr.
Acting Assistant Attorney General, DC Bar #464109
/s/ Patricia A. Brink
Patricia A. Brink
Deputy Director, Office of Operations
/s/ Donna N. Kooperstein
Donna N. Kooperstein
Chief, Transportation, Energy & Agriculture Section
/s/ William H. Stallings
William H. Stallings
Assistant Chief, Transportation, Energy & Agriculture Section
/s/ Angela L. Hughes
Angela L. Hughes
DC Bar #303420

 Michelle Livingston
DC Bar #461268
Trial Attorneys, U.S. Department of Justice, Transportation, Energy 
& Antitrust Division, Transportation, Energy & Agriculture Section, 
450 Fifth Street, NW, Room 4100, Washington, DC 20530, Telephone: 
(202) 307-6410, Facsimile: (202) 307-2784.
    Dated: July 3, 2008.

United States District Court for the District Of Columbia

United States of America, Plaintiff v. Signature Flight Support 
Corporation and Hawker Beechcraft Services, Inc., Defendants

Civil Action No.: I :08-cv-O1164.

Description: Antitrust.

Judge: Roberts, Richard W.

Date Stamp: 7/3/08.

Proposed Final Judgment

    Whereas, plaintiff, the United States of America (``United 
States''), filed its complaint on July ------, 2008, the United States 
and defendants, Signature Flight Support Corporation (``Signature'') 
and Hawker Beechcraft Services, Inc. (``Hawker Beechcraft''), by their 
attorneys, have consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law, and without this 
Final Judgment constituting any evidence against or admission by any 
party regarding any issue of law or fact;
    And whereas, defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    And whereas, the essence of this Final Judgment is prompt and 
certain divestiture of certain assets by the defendants to assure that 
competition is not substantially lessened;
    And whereas, the United States requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, defendants have represented to the United States that 
the divestitures required below can and will be made, and that 
defendants will later raise no claim of hardship or difficulty as 
grounds for asking the Court to modify any of the divestiture 
provisions contained below;
    Now, therefore, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is hereby ordered, adjudged, and decreed:

I. Jurisdiction

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against the defendants under Section 7 of the 
Clayton Act, as amended (15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' means the entity to whom defendants divest the 
Divestiture Assets.
    B. ``Signature'' means defendant Signature Flight Support 
Corporation, a Delaware corporation with its headquarters in Orlando, 
Florida, its successors and assigns, and its parents, subsidiaries, 
divisions, groups, affiliates, partnerships, and joint ventures, and 
their directors, officers, managers, agents, and employees.
    C. ``Hawker Beechcraft'' means defendant Hawker Beechcraft 
Services, Inc., a Kansas corporation headquartered in Wichita, Kansas, 
its successors and assigns, and its parents, subsidiaries, divisions, 
groups, affiliates, partnerships, and joint ventures, and their 
directors, officers, managers, agents, and employees.
    D. ``IND'' means Indianapolis International Airport, located in the 
Indianapolis, Indiana metropolitan area.
    E. ``IND FBO Services'' means any or all services related to 
providing fixed base operator services to general aviation customers at 
IND, including, but not limited to, selling fuel, leasing hangar, ramp, 
and office space, providing flight support services, providing access 
to terminal facilities, or arranging for ancillary services such as 
rental cars or hotels.
    F. ``FBO Facility'' means any and all tangible and intangible 
assets that comprise the business of providing IND FBO Services, 
including, but not limited to, all personal property, inventory, office 
furniture, materials, supplies, terminal space, hangars, ramps, general 
aviation fuel tank farms for jet aviation fuel and aviation gas, and 
related fueling equipment, and other tangible property and all assets 
used in connection with the business of providing IND FBO Services; all 
licenses, permits, registrations, and authorizations issued by any 
governmental organization relating to the business of providing IND FBO 
Services subject to licensor's approval or consent; all contracts, 
teaming arrangements, agreements, leases, commitments, certifications, 
and understandings relating to the business of providing IND FBO 
Services, including supply agreements; all customer lists, contracts, 
accounts, and credit records; all other records relating to the 
business of providing IND FBO Services, all intangible assets used in 
the development, production, servicing, and sale of IND FBO Services, 
including, but not limited to, all licenses and sublicenses, technical 
information, computer software and related documentation, know-how, 
drawings, blueprints, designs, design protocols, specifications for 
materials, specifications for parts and devices, and safety procedures 
for the handling of materials and substances.
    G. ``Divestiture Assets'' means either of the following:
    1. All rights, titles and interests, including all fee, leasehold 
and real property rights, in Hawker Beechcraft's existing and future 
FBO Facilities at IND that Signature acquires in the Proposed 
Transaction; or
    2. All rights, titles and interests, including all fee, leasehold 
and real property rights, that Signature possesses in its FBO Facility 
at IND.
    H. ``Proposed Transaction'' means Signature's proposed acquisition 
of certain assets from Hawker Beechcraft pursuant to the Sale of Line 
Service Business By Hawker Beechcraft Services, Inc. to Signature 
Flight Support Corporation Asset Purchase Agreement Dated February 21, 
2008 that

[[Page 41121]]

is the subject of the Hart-Scott-Rodino Premerger Notification Filing 
2008-0879.

III. Applicability

    A. This Final Judgment applies to Signature and Hawker Beechcraft, 
as defined above, and all other persons in active concert or 
participation with any of them who receive actual notice of this Final 
Judgment by personal service or otherwise.
    B. If, prior to complying with Section IV or V of this Final 
Judgment, Defendants sell or otherwise dispose of all or substantially 
all of their assets or of lesser business units that include the 
Divestiture Assets, they shall require the purchaser to be bound by the 
provisions of this Final Judgment. Defendants need not obtain such an 
agreement from the acquirer of the assets divested pursuant to this 
Final Judgment.

IV. Divestitures

    A. Defendants are ordered and directed, within ninety (90) calendar 
days after the filing of the Complaint in this matter or after five (5) 
calendar days after notice of entry of this Final Judgment by the 
Court, whichever is later, to divest the Divestiture 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 one or more extensions of this time period, 
not to exceed sixty (60) calendar days in total, and shall notify the 
Court in such circumstances. If pending state or local regulatory 
approval is the only remaining matter precluding a divestiture after 
the 90-day period, the United States will not withhold its agreement to 
an extension of the period. Defendants agree to use their best efforts 
to complete the required divestiture as expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
defendants promptly shall make known, by usual and customary means, the 
availability of the Divestiture Assets. Defendants shall inform any 
person making inquiry regarding a possible purchase of Divestiture 
Assets that they are being divested pursuant to this Final Judgment and 
provide that person with a copy of this Final Judgment. Defendants 
shall offer to furnish to all prospective Acquirers, subject to 
customary confidentiality assurances, all information and documents 
regarding the Divestiture Assets customarily provided in a due 
diligence process, except such information or documents subject to the 
attorney-client privilege or work-product doctrine. The documents 
provided to prospective Acquirers shall include (1) The Land and 
Special Facilities Lease Agreement By and Between Hawker Beechcraft 
Services, Inc. and The Indianapolis Airport Authority dated February 
2008; (2) the Sublease between Hawker Beechcraft Services, Inc. and 
Signature Flight Support Corporation and the Addendum thereto; and (3) 
the agreement entitled Sale of Line Service Business By Hawker 
Beechcraft Services, Inc. to Signature Flight Support Corporation Asset 
Purchase Agreement Dated February 21, 2008 and all attachments and 
exhibits relating to IND. Defendants shall make available such 
information to the United States at the same time that such information 
is made available to any other person.
    C. Defendants shall provide the Acquirer and the United States 
information relating to the personnel involved in the operation, 
management, and sale of the Divestiture Assets to enable the Acquirer 
to make offers of employment. Defendants will not interfere with any 
negotiations by the Acquirer to employ any defendant employee whose 
primary responsibility is the operation, management, and sale of the 
Divestiture Assets.
    D. Defendants shall permit prospective Acquirers of the Divestiture 
Assets to have reasonable access to personnel and to make such 
inspection of the physical facilities of the Divestiture Assets and to 
examine the blueprints and other plans relating to any physical 
facilities of the Divestiture Assets under construction or proposed for 
construction; access to any and all environmental, zoning, and other 
permit documents and information; and access to any and all financial, 
operational, or other documents and information customarily provided as 
part of a due diligence process.
    E. Defendants shall warrant to the Acquirer of the Divestiture 
Assets that each asset will be operational on the date of sale.
    F. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    G. Defendants shall warrant to the Acquirer of the Divestiture 
Assets that there are no material defects in the environmental, zoning, 
or other permits pertaining to the operation of each asset, and that 
following the sale of the Divestiture Assets, defendants will not 
undertake, directly or indirectly, any challenges to the environmental, 
zoning, or other permits relating to the operation of the Divestiture 
Assets.
    H. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by a trustee appointed pursuant 
to Section V, of this Final Judgment, shall be accomplished in such a 
way as to satisfy the United States, in its sole discretion, that the 
Divestiture Assets can and will be used by the Acquirer as part of a 
viable, ongoing business engaged in providing IND FBO Services. The 
divestiture, whether pursuant to Section IV or Section V of this Final 
Judgment: (I) shall be made to an Acquirer that in the United States's 
sole judgment has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the provision of IND FBO Services; 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 defendants gives defendants the ability unreasonably to raise the 
Acquirer's costs, to lower the Acquirer's efficiency, or otherwise to 
interfere in the ability of the Acquirer to compete effectively.

V. Appointment of Trustee

    A. If defendants have not divested the Divestiture Assets within 
the time period specified in Section IV(A) of this Final Judgment, 
defendants shall notify the United States of that fact in writing. Upon 
application of the United States, the Court shall appoint a trustee 
selected by the United States and approved by the Court to effect the 
divestiture of the Divestiture Assets.
    B. After the appointment of a trustee becomes effective, only that 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer acceptable to the United States at such 
price and on such terms as are then obtainable upon reasonable effort 
by the trustee, subject to the provisions of Sections IV, V, and VI of 
this Final Judgment, and shall have such other powers as this Court 
deems appropriate. Subject to Section V(D) of this Final Judgment, the 
trustee may hire at the cost and expense of defendants any investment 
bankers, attorneys, or other agents, who shall be solely accountable to 
the trustee, reasonably necessary in the judgment of the trustee to 
assist in the divestiture.
    C. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to the United States and the 
trustee within ten (10) calendar days after the trustee has provided 
the notice required under Section VI.
    D. The trustee shall serve at the cost and expense of defendants, 
on such

[[Page 41122]]

terms and conditions as the plaintiff approves, and shall account for 
all monies derived from the sale of the 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 defendants and the trust shall then be terminated. The 
compensation of the trustee and any professionals and agents retained 
by the trustee shall be reasonable in light of the value of the 
Divestiture 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.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the Divestiture Assets, including the 
blueprints and other plans relating to any physical facilities of the 
Divestiture Assets under construction or proposed for construction, and 
defendants shall develop financial or other information relevant to the 
Divestiture Assets as the trustee may reasonably request, subject to 
reasonable protection for trade secrets or other confidential research, 
development, or commercial information. Defendants shall take no action 
to interfere with or to impede the trustee's accomplishment of the 
divestiture.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and the Court setting forth that trustee's 
efforts to accomplish the divestiture ordered under this Final 
Judgment. To the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture 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 
Divestiture Assets.
    G. If the trustee has not accomplished the divestiture ordered 
under this Final Judgment within six (6) months after its appointment, 
the trustee shall file promptly with the Court a report setting forth: 
(1) The trustee's efforts to accomplish the required divestiture, (2) 
the reasons, in the trustee's judgment, why the required divestiture 
has not been accomplished, and (3) the trustee's recommendations. To 
the extent such reports contain information that the trustee deems 
confidential, such reports shall not be filed in the public docket of 
the Court. The trustee shall at the same time furnish such report to 
the United States, who shall have the right to make additional 
recommendations consistent with the purpose of the trust. The Court 
shall enter such orders as it shall deem appropriate to carry out the 
purpose of the Final Judgment, which may, if necessary, include 
extending the trust and the term of the trustee's appointment for a 
period requested by the United States.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, defendants or the trustee, whichever is then 
responsible for effecting the divestiture required herein, shall notify 
the United States of any proposed divestiture required by Section IV or 
V of this Final Judgment. If a trustee is responsible, the trustee 
shall similarly notify defendants. The notice shall set forth the 
details of the proposed divestiture and list the name, address, and 
telephone number of each person not previously identified who offered. 
expressed an interest in or a desire to acquire any ownership interest 
in the Divestiture Assets together with full details of same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendants, 
the proposed Acquirer, any other third party, or the trustee if 
applicable, additional information concerning the proposed divestiture, 
the proposed Acquirer, and any other potential Acquirer. Defendants and 
the trustee shall furnish any additional information requested within 
fifteen (15) calendar days of the receipt of the request, unless the 
parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from defendants, the 
proposed Acquirer, any third party, and the trustee, whichever is 
later, the United States shall provide written notice to defendants and 
the trustee, if there is one, stating whether or not it objects to the 
proposed divestiture. If the United States provides written notice that 
it does not object, the divestiture may be consummated, subject only to 
defendant's limited right to object to the sales 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, the divestiture proposed under Section IV or V shall not be 
consummated. Upon objection by defendants under Section V(C), a 
divestiture proposed under Section V shall not be consummated unless 
approved by the Court.

VII. Financing

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

VIII. Hold Separate

    Until the divestiture required by this Final Judgment has been 
accomplished, defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divestiture 
ordered by this Court.

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, defendants shall 
deliver to the United States an affidavit as to the fact and manner of 
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 Divestiture 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 defendants have taken 
to solicit buyers for the Divestiture Assets and to provide required 
information to prospective purchasers, including the limitations, if 
any, on such information. Assuming the information set forth in the 
affidavit is true and complete, any objection by the United States to 
information provided by the defendants, including limitation on 
information, shall be made within fourteen (14) days of receipt of such 
affidavit.
    B. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, defendants shall deliver to the United States an 
affidavit that describes

[[Page 41123]]

in reasonable detail all actions defendants have taken and all steps 
defendants have implemented on an on going basis to comply with Section 
VIII of this Final Judgment. Defendants shall deliver to the United 
States an affidavit describing any changes to the efforts and actions 
outlined in defendants' earlier affidavits filed pursuant to this 
section within fifteen (15) calendar days after the change is 
implemented.
    C. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after the 
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 authorized representatives of the United States 
Department of Justice Antitrust Division (``DOJ''), including 
consultants and other persons retained by the United States, shall upon 
written request of an authorized representative of the Assistant 
Attorney General in charge of the Antitrust Division, and on reasonable 
notice to defendants be permitted:
    1. Access during defendants' office hours to inspect and copy, or 
at the option of the United States, to require defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of 
defendants relating to any matters contained in this Final Judgment; 
and
    2. To interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
defendants shall submit written reports or response 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 
defendants to the United States, defendants represent and identify in 
writing the material in any such information or documents for which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give defendants ten (10) calendar days prior to divulging 
such material in any legal proceeding (other than a grand jury 
proceeding).

XI. No Reacquisition

    Defendant Signature may not reacquire any part of the Divestiture 
Assets during the term of this Final Judgment.

XII. 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.

XIII. Expiration of Final Judgment

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XIV. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16, including making copies available to the 
public of this Final Judgment, the Competitive Impact Statement, and 
any comments thereon and the United States's responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and response to comments filed with 
the Court, entry of this Final Judgment is in the public interest.
Dated:-----------------------------------------------------------------
    Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.
-----------------------------------------------------------------------
United States District Judge.

United States District Court for the District of Columbia

United States of America, Plaintiff, v. Signature Flight Support 
Corporation and HAWKER BEECHCRAFT SERVICES, INC., Defendants.

Civil Action No.: 1:08-cv-O1164.
Description: Antitrust.
Judge: Roberts, Richard W.
Date Stamped: 7/3/08.

Competitive Impact Statement

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. 16(b)-(h), files this Competitive Impact 
Statement relating to the proposed Final Judgment submitted for entry 
in this civil antitrust proceeding.

I. Nature and Purpose of the Proceeding

    Defendant Signature Flight Support Corporation (``Signature'') and 
Defendant Hawker Beechcraft Services, Inc. (``Hawker Beechcraft'') 
entered into an agreement, dated February 21, 2008, pursuant to which 
Signature would acquire the fixed base operations (FBO) of Hawker 
Beechcraft. The United States filed a civil antitrust complaint on July 
--, 2008, seeking to enjoin the proposed acquisition. The Complaint 
alleges that the effect of this acquisition would be to combine the 
only providers of FBO services at Indianapolis International Airport 
(``IND''), creating a monopoly and violating Section 7 of the Clayton 
Act, 15 U.S.C. 18.
    At the same time the Complaint was filed, the United States also 
filed a Hold Separate and Preservation of Assets Stipulation and Order 
(``Stipulation and Order'') and a proposed Final Judgment, which are 
designed to eliminate the anticompetitive effects of the acquisition. 
Under the proposed Final Judgment, which is explained more fully below, 
the defendants are required to sell either the Signature or Hawker 
Beechcraft FBO assets at IND to a purchaser who has the capability to 
compete effectively in the provision of FBO services to general 
aviation customers at that airport.
    Until the divestiture of either the Signature or Hawker Beechcraft 
FBO assets at IND, the Stipulation and Order requires the defendants to 
take all steps necessary to preserve both companies' FBO assets at IND 
and ensure that Hawker Beechcraft's FBO business operates as an 
independent, ongoing, economically viable, competitive business at IND 
held entirely separate, distinct and apart from Signature's IND FBO 
business. Further, until the

[[Page 41124]]

required divestiture is accomplished, the defendants must take all 
steps necessary to ensure that Hawker Beechcraft's FBO business at IND 
will be maintained and operated as an ongoing, economically viable and 
active line of business; that competition between Signature and Hawker 
Beechcraft in the provision of FBO services at IND is maintained during 
the pendency of the ordered divestiture; and that the defendants 
preserve and maintain their IND FBO assets. The Stipulation and Order 
thus ensures that competition is protected pending completion of the 
required divestitures and that the assets are preserved so that relief 
will be effective.
    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered after compliance with the APPA. 
Entry of the proposed Final Judgment would terminate this action, 
except that the Court would retain jurisdiction to construe, modify, or 
enforce the provisions of the proposed Final Judgment and to punish 
violations thereof.

II. Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Signature is a wholly-owned subsidiary of BBA Aviation PLC, a 
supplier of aviation machinery, support, and repair. Signature is a 
Delaware corporation with its principal place of business in Orlando, 
Florida. Signature is the world's largest FBO operator and operates 
more than forty-five FBO facilities in the United States. Signature's 
2007 revenues from its United States FBO operations were approximately 
$600 million.
    Hawker Beechcraft is a Kansas corporation with its principal place 
of business in Wichita, Kansas. Hawker Beechcraft is a manufacturer of 
business, special-mission, and trainer aircraft, and designs, markets 
and supports aviation products and services for businesses, 
governments, and individuals. The company also operates FBO facilities 
at seven airports in the United States including IND. Hawker 
Beechcraft's 2007 revenues from its FBO operations were approximately 
$73 million.
    By an agreement dated February 21, 2008, Signature proposes to 
acquire Hawker Beechcraft's FBO assets at seven airports in the United 
States for $128.5 million. IND is the only airport at which both 
companies compete in the provision of FBO services.

B. The Competitive Effects of the Transaction on the FBO Services 
Market

1. The Relevant Market
    The Complaint alleges that the proposed transaction would eliminate 
competition in the provision of FBO services at IND in violation of 
Section 7 of the Clayton Act. FBOs are facilities located at airports 
that provide fuel and related support services to general aviation 
customers. General aviation customers include charter, private, and 
corporate aircraft operators, as distinguished from scheduled 
commercial airlines.
    Fuel sales are the largest source of FBO revenues. FBOs usually do 
not charge for services such as conference rooms, pilot lounges, flight 
planning, and transportation. Instead, they recover the cost of these 
services in the price that they charge for fuel. FBOs also derive 
income from hangar and office rentals, aircraft storage, tie-down and 
ground services, deicing, and catering services.
    General aviation customers cannot obtain fuel, hangar, ramp, and 
related services at IND except through an FBO authorized to sell such 
services by the local airport authority, leaving general aviation 
customers departing from or landing at IND no alternatives to Signature 
and Hawker Beechcraft FBOs for these services. Obtaining FBO services 
at other airports in the Indianapolis region would not provide an 
economically practical alternative for these general aviation 
customers. Many general aviation customers select IND over other 
airports in the area for the available hangar space, as well as the 
necessary safety features of a control tower and longer runway length 
and the airport's proximity to downtown Indianapolis. General aviation 
customers at IND would not switch to other airports in the Indianapolis 
region in sufficient numbers to prevent anticompetitive price increases 
for fuel and other FBO services at IND.
2. The Proposed Merger Would Produce Anticompetitive Effects
    Signature and Hawker Beechcraft are the only two competitors in the 
provision of FBO services at IND. Competition between them currently 
limits the ability of each to raise prices for FBO services. The 
proposed acquisition would eliminate the competitive constraint each 
imposes upon the other. This would lead to a monopoly at IND, resulting 
in higher prices for FBO services and lower quality of service in 
violation of Section 7 of the Clayton Act.
    Successful entry would not be timely, likely, or sufficient to 
deter the anticompetitive effects resulting from this transaction. 
Timely entry sufficient to replace the market impact of Hawker 
Beechcraft would be difficult for several reasons. The entrant would 
need to get the approval of the airport authority, obtain permits, and 
construct facilities, all of which require extensive lead time to 
complete. Successful entry would be unlikely to occur in response to a 
small but significant and non-transitory post-merger price increase.

III. Explanation of the Proposed Final Judgment

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the market 
for FBO services provided to general aviation customers at IND by 
establishing a new, independent, and economically viable competitor. 
The proposed Final Judgment requires the Defendants to divest, as a 
viable ongoing business, either the Signature or the Hawker Beechcraft 
FBO assets at IND.
    Hawker Beechcraft currently has a long-term lease with the IND 
airport authority under which it has rights to use several buildings 
and other assets, including fuel storage facilities, to provide both 
FBO and non-FBO maintenance for planes manufactured by the company. 
Signature also operates its FBO business at IND under a long-term lease 
with the airport authority. Under the transaction agreement, Signature 
will obtain rights equivalent to Hawker Beechcraft's rights with 
respect to the FBO assets it uses to provide FBO services at IND. If 
Signature chooses to divest the Hawker Beechcraft FBO assets at IND, 
the acquiring company will acquire all interests and rights that 
Signature will acquire under its agreement with Hawker Beechcraft. This 
not only includes rights to use all buildings that Hawker Beechcraft 
currently uses to provide FBO services at IND, but also includes, when 
Hawker Beechcraft completes construction of a new facility at IND next 
year, the exclusive rights to use all the new buildings Hawker 
Beechcraft will build for the provision of FBO services at IND. Thus, a 
purchaser of either the Hawker Beechcraft Divestiture Assets or the 
Signature Divestiture Assets will have the same ability to compete in 
the IND FBO market as Hawker Beechcraft or Signature had prior to the 
acquisition.
    In antitrust cases involving acquisitions in which the United 
States seeks a divestiture remedy, the United States seeks to require 
completion of the

[[Page 41125]]

divestiture within the shortest period of time reasonable under the 
circumstances. A quick divestiture has the benefits of restoring 
competition lost in the acquisition and reducing the possibility that 
the value of the assets will be diminished. Section IV(A) of the 
proposed Final Judgment requires the defendants to complete the 
divestiture within ninety (90) calendar days after the filing of the 
Complaint in this matter, or five (5) calendar days after notice of the 
entry of this Final Judgment by the Court, whichever is later.\1\
---------------------------------------------------------------------------

    \1\ The proposed Final Judgment also provides that this time 
period may be extended one or more times by the United States in its 
sole discretion for a period not to exceed sixty (60) calendar days, 
and that the Court will receive notice of any such extension. The 
proposed Final Judgment provides that if pending state or local 
regulatory approval is the only remaining matter precluding a 
divestiture after the 90-day period, the United States will not 
withhold its agreement to an extension of the period.
---------------------------------------------------------------------------

    The assets must be divested so as to satisfy the United States, in 
its sole discretion, that the operations can compete effectively in the 
relevant market. Defendants must take all reasonable steps necessary to 
accomplish the divestiture quickly and shall cooperate with prospective 
purchasers.
    In the event that the Defendants do not accomplish the divestiture 
within the period prescribed in the proposed Final Judgment, the Final 
Judgment provides that the Court will appoint a trustee selected by the 
United States to effect the divestiture of either the Signature or 
Hawker Beechcraft Divestiture Assets. If a trustee is appointed, the 
proposed Final Judgment provides that Defendants will pay all costs and 
expenses of the trustee. The trustee's commission will be structured so 
as to provide an incentive for the trustee based on the price obtained 
and the speed with which the divestiture is accomplished. After his or 
her appointment becomes effective, the trustee will file monthly 
reports with the Court and the United States setting forth his or her 
efforts to accomplish the divestiture. At the end of six (6) months, if 
the divestiture has not been accomplished, the trustee and the United 
States will make recommendations to the Court, which shall enter such 
orders as appropriate, in order to carry out the purpose of the trust, 
including extending the trust or the term of the trustee's appointment.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the 
provision of FBO services at IND.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
16(a), the proposed Final Judgment has no prima facie effect in any 
subsequent private lawsuit that may be brought against Defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the defendants have stipulated that the 
proposed Final Judgment may be entered by the Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the proposed Final Judgment is in the public 
interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the United States written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register, or the last date of 
publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the United States Department of Justice, which 
remains free to withdraw its consent to the proposed Final Judgment at 
any time prior to the Court's entry of judgment. The comments and the 
response of the United States will be filed with the Court and 
published in the Federal Register.
    Written comments should be submitted to: Donna N. Kooperstein, 
Chief, Transportation, Energy & Agriculture Section, Antitrust 
Division, 450 5th Street, NW., Suite 4100, Washington, DC 20530.

VI. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
Final Judgment, a full trial on the merits against the defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Signature's acquisition 
of Hawker Beechcraft's FBO assets. The United States is satisfied, 
however, that the divestiture of assets described in the proposed Final 
Judgment will preserve competition for the provision of FBO services at 
IND. Thus, the proposed Final Judgment would achieve all or 
substantially all of the relief the United States could have obtained 
through litigation, but avoids the time, expense, and uncertainty of a 
full trial on the merits of the Complaint.

VII. Standard of Review Under the APPA for the Proposed Final Judgment

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the court, in accordance with the statute as amended in 2004, is 
required to consider:
    (A) The competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    (B) The impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.
    15 U.S.C. 16(e)(l)(A)&(B). In considering these statutory factors, 
the court's inquiry is necessarily a limited one as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. SBC 
Commc'ns, Inc., 489 F.Supp. 2d 1 (D.D.C. 2007) (assessing public 
interest standard under the Tunney Act).\2\
---------------------------------------------------------------------------

    \2\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e)(2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).

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

[[Page 41126]]

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
---------------------------------------------------------------------------
F. Supp. 2d 37, 40 (D.D.C. 2001). Courts have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.
    Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\3\ 
In determining whether a proposed settlement is in the public interest, 
a district court ``must accord deference to the government's 
predictions about the efficacy of its remedies, and may not require 
that the remedies perfectly match the alleged violations.'' SBC 
Commc'ns, 489 F. Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 
(noting the need for courts to be ``deferential to the government's 
predictions as to the effect of the proposed remedies''); United States 
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) 
(noting that the court should grant due respect to the United States' 
prediction as to the effect of proposed remedies, its perception of the 
market structure, and its views of the nature of the case).
---------------------------------------------------------------------------

    \3\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
---------------------------------------------------------------------------

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Because the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. Id. 
at 1459-60. As this Court recently confirmed in SBC Communications, 
courts ``cannot look beyond the complaint in making the public interest 
determination unless the complaint is drafted so narrowly as to make a 
mockery of judicial power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2). The language wrote into the statute 
what Congress intended when it enacted the Tunney Act in 1974, as 
Senator Tunney explained: ``[t]he court is nowhere compelled to go to 
trial or to engage in extended proceedings which might have the effect 
of vitiating the benefits of prompt and less costly settlement through 
the consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement 
of Senator Tunney). Rather, the procedure for the public interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\4\
---------------------------------------------------------------------------

    \4\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should * * * carefully, consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed Final Judgment.

Dated: July 3, 2008.

Respectfully submitted,
--------/s/--------
Angela L. Hughes (DC Bar 30342 10),
Michelle Livingston (DC Bar 461268),
Trial Attorneys

U.S. Department of Justice Antitrust Division Transportation, 
Energy, and Agriculture, 450 5th Street, NW., Suite 4100 Washington, 
DC 20530.
 [FR Doc. E8-16254 Filed 7-16-08; 8:45 am]
BILLING CODE 4410-11-M