Pilot Corporation, Propeller Corp., and Flying J Inc.; Analysis of Proposed Agreement Containing Consent Orders to Aid Public Comment, 39017-39020 [2010-16433]
Download as PDF
Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Notices
must be received not later than July 21,
2010.
A. Federal Reserve Bank of San
Francisco (Kenneth Binning, Vice
President, Applications and
Enforcement) 101 Market Street, San
Francisco, California 94105–1579:
1. Yvonne LeMaitre, co–trustee of the
Bolton Family Trust, Woodland,
California; to retain voting shares of
Merchants Holding Company, and
thereby indirectly retain voting shares of
Merchants National Bank of
Sacramento, both of Sacramento,
California.
Board of Governors of the Federal Reserve
System, July 1, 2010.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 2010–16437 Filed 7–6–10; 8:45 am]
BILLING CODE 6210–01–S
FEDERAL RESERVE SYSTEM
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Formations of, Acquisitions by, and
Mergers of Bank Holding Companies
The companies listed in this notice
have applied to the Board for approval,
pursuant to the Bank Holding Company
Act of 1956 (12 U.S.C. 1841 et seq.)
(BHC Act), Regulation Y (12 CFR Part
225), and all other applicable statutes
and regulations to become a bank
holding company and/or to acquire the
assets or the ownership of, control of, or
the power to vote shares of a bank or
bank holding company and all of the
banks and nonbanking companies
owned by the bank holding company,
including the companies listed below.
The applications listed below, as well
as other related filings required by the
Board, are available for immediate
inspection at the Federal Reserve Bank
indicated. The applications also will be
available for inspection at the offices of
the Board of Governors. Interested
persons may express their views in
writing on the standards enumerated in
the BHC Act (12 U.S.C. 1842(c)). If the
proposal also involves the acquisition of
a nonbanking company, the review also
includes whether the acquisition of the
nonbanking company complies with the
standards in section 4 of the BHC Act
(12 U.S.C. 1843). Unless otherwise
noted, nonbanking activities will be
conducted throughout the United States.
Additional information on all bank
holding companies may be obtained
from the National Information Center
website at www.ffiec.gov/nic/.
Unless otherwise noted, comments
regarding each of these applications
must be received at the Reserve Bank
indicated or the offices of the Board of
Governors not later than July 30, 2010.
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A. Federal Reserve Bank of Boston
(Richard Walker, Community Affairs
Officer) P.O. Box 55882, Boston,
Massachusetts 02106–2204:
1. First City Fund Corporation and
First Community Bancorp, Inc., both of
New Haven, Connecticut; to become
bank holding companies by acquiring
100 percent of the voting shares of Start
Community Bank, New Haven,
Connecticut (formerly known as First
Community Bank of New Haven, New
Haven, Connecticut).
B. Federal Reserve Bank of
Richmond (A. Linwood Gill, III, Vice
President) 701 East Byrd Street,
Richmond, Virginia 23261–4528:
1. First American Financial
Management Company, Salisbury,
North Carolina; to become a bank
holding company by acquiring 51
percent of the voting shares of
Community Bank of Rowan, Salisbury,
North Carolina.
2. First National Financial Group,
Inc., Shelby, North Carolina; to become
a bank holding company by acquiring
100 percent of the voting shares of The
First National Bank of Shelby, Shelby,
North Carolina.
Board of Governors of the Federal Reserve
System, July 1, 2010.
Robert deV. Frierson,
Deputy Secretary of the Board.
[FR Doc. 2010–16436 Filed 7–6–10; 8:45 am]
BILLING CODE 6210–01–S
FEDERAL TRADE COMMISSION
[File No. 091 0125]
Pilot Corporation, Propeller Corp., and
Flying J Inc.; Analysis of Proposed
Agreement Containing Consent Orders
to Aid Public Comment
Federal Trade Commission.
Proposed Consent Agreement.
AGENCY:
ACTION:
SUMMARY: The consent agreement in this
matter settles alleged violations of
federal law prohibiting unfair or
deceptive acts or practices or unfair
methods of competition. The attached
Analysis to Aid Public Comment
describes both the allegations in the
draft complaint and the terms of the
consent order — embodied in the
consent agreement — that would settle
these allegations.
DATES: Comments must be received on
or before July 30, 2010.
ADDRESSES: Interested parties are
invited to submit written comments
electronically or in paper form.
Comments should refer to ‘‘Pilot-Flying
J, File No. 091 0125’’ to facilitate the
organization of comments. Please note
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that your comment — including your
name and your state — will be placed
on the public record of this proceeding,
including on the publicly accessible
FTC website, at (https://www.ftc.gov/os/
publiccomments.shtm).
Because comments will be made
public, they should not include any
sensitive personal information, such as
an individual’s Social Security Number;
date of birth; driver’s license number or
other state identification number, or
foreign country equivalent; passport
number; financial account number; or
credit or debit card number. Comments
also should not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, comments should not include
any ‘‘[t]rade secret or any commercial or
financial information which is obtained
from any person and which is privileged
or confidential. . . .,’’ as provided in
Section 6(f) of the FTC Act, 15 U.S.C.
46(f), and Commission Rule 4.10(a)(2),
16 CFR 4.10(a)(2). Comments containing
material for which confidential
treatment is requested must be filed in
paper form, must be clearly labeled
‘‘Confidential,’’ and must comply with
FTC Rule 4.9(c), 16 CFR 4.9(c).1
Because paper mail addressed to the
FTC is subject to delay due to
heightened security screening, please
consider submitting your comments in
electronic form. Comments filed in
electronic form should be submitted by
using the following weblink: (https://
public.commentworks.com/ftc/pilotflyingj) and following the instructions
on the web-based form. To ensure that
the Commission considers an electronic
comment, you must file it on the webbased form at the weblink: (https://
public.commentworks.com/ftc/pilotflyingj). If this Notice appears at (https://
www.regulations.gov/search/index.jsp),
you may also file an electronic comment
through that website. The Commission
will consider all comments that
regulations.gov forwards to it. You may
also visit the FTC website at (https://
www.ftc.gov/) to read the Notice and the
news release describing it.
A comment filed in paper form
should include the ‘‘Pilot-Flying J, File
No. 091 0125’’ reference both in the text
and on the envelope, and should be
mailed or delivered to the following
1 The comment must be accompanied by an
explicit request for confidential treatment,
including the factual and legal basis for the request,
and must identify the specific portions of the
comment to be withheld from the public record.
The request will be granted or denied by the
Commission’s General Counsel, consistent with
applicable law and the public interest. See FTC
Rule 4.9(c), 16 CFR 4.9(c).
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Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Notices
address: Federal Trade Commission,
Office of the Secretary, Room H-135
(Annex D), 600 Pennsylvania Avenue,
NW, Washington, DC 20580. The FTC is
requesting that any comment filed in
paper form be sent by courier or
overnight service, if possible, because
U.S. postal mail in the Washington area
and at the Commission is subject to
delay due to heightened security
precautions.
The Federal Trade Commission Act
(‘‘FTC Act’’) and other laws the
Commission administers permit the
collection of public comments to
consider and use in this proceeding as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives,
whether filed in paper or electronic
form. Comments received will be
available to the public on the FTC
website, to the extent practicable, at
(https://www.ftc.gov/os/
publiccomments.shtm). As a matter of
discretion, the Commission makes every
effort to remove home contact
information for individuals from the
public comments it receives before
placing those comments on the FTC
website. More information, including
routine uses permitted by the Privacy
Act, may be found in the FTC’s privacy
policy, at (https://www.ftc.gov/ftc/
privacy.shtm).
FOR FURTHER INFORMATION CONTACT:
Mary N. Lehner (202-326-3744), Bureau
of Competition, 600 Pennsylvania
Avenue, NW, Washington, D.C. 20580.
SUPPLEMENTARY INFORMATION: Pursuant
to section 6(f) of the Federal Trade
Commission Act, 38 Stat. 721, 15 U.S.C.
46(f), and § 2.34 the Commission Rules
of Practice, 16 CFR 2.34, notice is
hereby given that the above-captioned
consent agreement containing a consent
order to cease and desist, having been
filed with and accepted, subject to final
approval, by the Commission, has been
placed on the public record for a period
of thirty (30) days. The following
Analysis to Aid Public Comment
describes the terms of the consent
agreement, and the allegations in the
complaint. An electronic copy of the
full text of the consent agreement
package can be obtained from the FTC
Home Page (for June 30, 2010), on the
World Wide Web, at (https://
www.ftc.gov/os/actions.shtm). A paper
copy can be obtained from the FTC
Public Reference Room, Room 130-H,
600 Pennsylvania Avenue, NW,
Washington, D.C. 20580, either in
person or by calling (202) 326-2222.
Public comments are invited, and may
be filed with the Commission in either
paper or electronic form. All comments
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15:28 Jul 06, 2010
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should be filed as prescribed in the
section above, and must be
received on or before the date specified
in the DATES section.
ADDRESSES
Analysis of Agreement Containing
Consent Order to Aid Public Comment
The Federal Trade Commission has
accepted for public comment, subject to
final approval, an Agreement
Containing Consent Orders (‘‘Consent
Agreement’’) from Pilot Corporation and
Propeller Corp. (collectively, ‘‘Pilot’’),
and Flying J Inc. (Pilot and Flying J Inc.,
collectively, ‘‘Respondents’’). Pursuant
to agreements dated December 18, 2009,
Pilot intends to acquire the interests and
assets of Flying J Inc.’s travel center and
related businesses for approximately
$1.8 billion (the ‘‘acquisition’’). The
Commission’s Complaint alleges that
the acquisition, if consummated, would
violate Section 7 of the Clayton Act, as
amended, 15 U.S.C. § 18, and Section 5
of the Federal Trade Commission Act, as
amended, 15 U.S.C. § 45, by removing
actual, direct, and substantial
competition between Pilot and Flying J
and increasing the likelihood that Pilot
will exercise market power unilaterally.
The proposed Consent Agreement
would resolve the competitive concerns
from the acquisition by requiring the
divestiture of 26 travel centers to Love’s
Travel Stops and Country Stores. The
divestiture will make Love’s a stronger
competitor and replace competition
weakened by the acquisition.
The proposed Consent Agreement has
been placed on the public record for
thirty (30) days to solicit comments
from interested persons. Comments
received during this period will become
part of the public record. After thirty
(30) days, the Commission will review
the proposed Consent Agreement again
and the comments received, and decide
whether it should withdraw from the
Consent Agreement or make it final.
The sole purpose of this analysis is to
facilitate public comment on the
Consent Agreement. The analysis does
not constitute an official interpretation
of the Consent Agreement or the
proposed Decision and Order (‘‘Order’’),
nor does the analysis modify their terms
in any way.
I. Respondents and Other Relevant
Entities
A. Pilot and Propeller
Pilot Travel Centers LLC is the largest
travel center operator in the United
States. Pilot Travel Centers LLC is a
privately held, for-profit limited liability
company and is controlled equally by
Pilot Corporation and Propeller Corp.
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Respondent Pilot Corporation holds
52.5 percent of the non-corporate
interests of Pilot Travel Centers LLC and
a right to 50 percent representation on
Pilot Travel Centers LLC’s Board of
Managers. Pilot Corporation is a
privately held, for-profit corporation.
Respondent Propeller Corp. holds
47.5 percent of the non-corporate
interests of Pilot Travel Centers LLC and
a right to 50 percent representation on
Pilot Travel Centers LLC’s Board of
Managers. Propeller Corp. is a for-profit
corporation, privately held in its
entirety by five stockholders managed
by CVC European Equity V Limited and
three stockholders managed by CVC
European Equity Tandem Fund Limited.
B. Flying J
Respondent Flying J Inc., a privately
held, for-profit corporation, is a fully
integrated oil company with operations
throughout the United States and
Canada. Flying J Inc. owns and operates,
among other things, travel center,
trucking, fuel card, and related
businesses. Flying J Inc., its whollyowned subsidiary, and wholly-owned
subsidiaries of ConocoPhillips jointly
control the CFJ Entities.
The CFJ Entities own Flying J-branded
travel centers operated by Flying J Inc.
in 36 U.S. states. It is jointly controlled
by Flying J Inc., its wholly-owned
subsidiary, and wholly-owned
subsidiaries of ConocoPhillips. The CFJ
Entities consist of: (1) CFJ Properties, a
general partnership that is 50% owned
by wholly-owned subsidiaries of
ConocoPhillips and 50% owned by a
wholly-owned subsidiary of Flying J
Inc.; (2) CFJ I Management Inc., CFJ II
Management Inc., and CFJ III
Management Inc. (‘‘CFJ Management
Companies’’), each of which is 50%
owned by a wholly-owned subsidiary of
ConocoPhillips and 50% owned by
Flying J Inc.; and (3) CFJ Plaza Company
I LLC, CFJ Plaza Company II LLC, and
CFJ Plaza Company III LLC, each of
which is 49.5% owned by a whollyowned subsidiary of ConocoPhillips,
49.5% owned by Flying J Inc., and 1%
owned by its corresponding CFJ
Management Company.
II. The Proposed Complaint
Pilot’s acquisition of Flying J presents
substantial antitrust concerns in the
market for over-the-road sale of diesel to
long-haul fleets by national travel center
operators in the contiguous United
States. Travel centers provide locations
for long-haul trucks to fuel and serve as
the long-haul driver’s home away from
home, offering amenities including
parking for tractor-trailers, truck service
centers, truck washes, certified
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Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Notices
automated truck scales, fast food
restaurants, shower facilities, internet
access, and financial services for
drivers. Four travel center operators –
Pilot, Flying J, TravelCenters of America
(‘‘TA’’), and Love’s (collectively,
‘‘national travel center operators’’) –
have the scale and scope to compete for
any substantial portion of long-haul
over-the-road diesel business although
not all the major travel center operators
are able to compete for all customers.
Pilot and Flying J are the first and
second choices for a number of longhaul fleets.
The acquisition may substantially
lessen competition in the relevant
market by, among other things: (a)
eliminating actual, direct, and
substantial competition between Pilot
and Flying J; and (b) increasing the
likelihood that Pilot will exercise
market power unilaterally.
De novo entry or fringe expansion
into the relevant market is unlikely to
deter or counteract the likely
anticompetitive effects. Entry is difficult
and time-consuming and potential
entrants would face substantial barriers.
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III. The Proposed Consent Agreement
The proposed Consent Agreement is
intended to remedy the acquisition’s
alleged anticompetitive effects by,
among other things, requiring the
divestiture of travel center assets to
Love’s. Love’s is a growing national
travel center operator that is currently
concentrated in the South. It is the
smallest of the four national travel
center operators and some long-haul
fleets do not encounter Love’s on the
routes they travel, especially in the
Midwest and the Eastern portion of the
United States.
Respondents have reached an
agreement to sell to Love’s 26 specific
travel center sites, the majority of which
are located in the Midwest or the
Eastern portion of the United States.
These sites, along with Love’s aggressive
and independent expansion plan, will
enhance Love’s market position as a
national travel center operator, allowing
it to compete for more long-haul overthe-road diesel business. Love’s
possesses the existing infrastructure,
resources, and capability to acquire the
divested sites and operate them within
Love’s existing network. The divestiture
will allow Love’s to replace competition
lost because of the acquisition of Flying
J by Pilot. In particular, Love’s will now
be able to compete for those customers
who viewed Pilot and Flying J as their
first and second choices and who did
not encounter Love’s on their routes
prior to the divestiture.
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15:28 Jul 06, 2010
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The Order contains provisions
designed to ensure the successful
implementation and remedial intent of
the proposed Consent Agreement. Some
of these provisions are highlighted
below.
A. Access to and Use of the TCH Fuel
Card System
The Order requires Respondents to
provide access to and use of the TCH
LLC (‘‘TCH’’) Fuel Card System upon
request from Love’s. Paragraph II.C. of
the Order provides that at Love’s option,
and upon reasonable notice,
Respondents shall provide nondiscriminatory access to and use of the
TCH Fuel Card System for a period of
up to three years pursuant to a TCH
Merchant Agreement. If Love’s elects to
use the TCH Fuel Card System,
Respondents shall institute a firewall
protocol whereby: (a) Respondents’
employees affiliated with the TCH Fuel
Card System are prohibited from
providing TCH Customer Confidential
Business Information to either the TCH
Executive Board or to a Respondent; and
(b) Pilot shall appoint an internal
compliance officer who will be
responsible for assuring that the firewall
protocols are met.
B. Continued Operation of Restaurants
The Order also provides for the
continuity of operation at Wendy’s
restaurants affiliated with the sites
acquired by Love’s. Paragraph II.E. of
the Order provides that, for a period of
one year, Pilot shall manage and operate
the Wendy’s Restaurants affiliated with
those sites.
To assure the efficient transfer and
continuity of operation of the divested
travel centers, the Order requires
Respondents to provide assistance for,
and information regarding, employees of
those travel centers. Paragraphs II.F. and
II.G. of the Order require Respondents to
provide, for a period no longer than six
months, assistance for, and employment
and salary information regarding,
knowledgeable employees of
Respondents in the transfer of the travel
centers from Respondents to Love’s.
Paragraphs II.H. and II.I. of the Order
provide that, for a period of one year,
Respondents shall not interfere with the
hiring or employing of employees by
Love’s relating to the divested sites, and
shall remove any impediments within
the control of Respondents that may
deter these employees from accepting
employment with Love’s. Paragraph II.J.
of the Order prohibits Respondents from
directly or indirectly soliciting,
inducing, or attempting to solicit or
induce any employees of the divested
travel centers who have accepted offers
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39019
of employment with Love’s to terminate
that employment.
C. Transfer of Confidential Businesses
Information and Maintenance of
Economic Viability
To further assure the efficient transfer
and economic viability of the acquired
travel centers, Paragraphs II.K. and II.L.
of the Order require Respondents to
provide all Confidential Business
Information relating to the Travel
Centers Businesses and to maintain the
full economic viability and
marketability of such assets until
Respondents complete the divestiture
required by the Order.
D. Compliance and Notification
Requirements
Paragraph III. of the Order allows the
Commission to appoint an Interim
Monitor to assure that Respondents
expeditiously comply with their
obligations and perform all of their
responsibilities as required by the
Order.
To assure that Respondents fully
comply with the obligations of the
Order, Paragraph IV. of the Order allows
the Commission to appoint a Divestiture
Trustee to assign, grant, license, divest,
transfer, deliver, or otherwise convey
the travel centers.
Paragraph V. of the Order provides
that each Remedial Agreement related to
the divested sites shall be incorporated
by reference into the Order and that
Respondents shall not modify or amend
the terms of any Remedial Agreement
without prior approval of the
Commission.
Paragraphs VI.A. and VI.B. of the
Order require official notification of the
date on which the acquisition occurs
and subsequent periodic reports until
the Commission is satisfied that the
divestiture has been completed in a
timely manner and in good faith.
Paragraph VI.C. of the Order requires
annual written reports of compliance,
upon the Commission’s request, until
the Order terminates in ten years.
Paragraph VII. of the Order requires
Respondents to give the Commission
prior notice of certain events that might
affect compliance obligations arising
from the Order.
E. Additional Provisions
Paragraph VIII. of the Order provides
that the Commission shall, with proper
notice, have access to documents and
personnel at the offices of Respondents
for the purpose of determining or
securing compliance with the Order.
Paragraph IX. of the Order provides
that the Order shall terminate after ten
years.
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Federal Register / Vol. 75, No. 129 / Wednesday, July 7, 2010 / Notices
IV. Order to Maintain Assets
The Commission also has issued an
Order to Maintain Assets in this
proceeding. The purpose of the Order to
Maintain Assets is: (a) to maintain the
full economic viability, marketability
and competitiveness of the travel
centers through their full transfer and
delivery to Love’s; (b) to minimize any
risk of loss of competitive potential for
the travel centers; (c) to prevent the
destruction, removal, wasting,
deterioration, or impairment of any of
the travel centers, except for ordinary
wear and tear; and (d) to prevent
disclosure of any Confidential Business
Information related to the travel centers
to any person except Love’s or persons
specifically authorized by Love’s to
receive such information. The
Commission may appoint an Interim
Monitor to assure that Respondents
expeditiously comply with all of their
obligations and perform all of their
responsibilities as required by the Order
to Maintain Assets.
By direction of the Commission,
Commissioner Brill not participating.
Donald S. Clark
Secretary.
[FR Doc. 2010–16433 Filed 7–6–10; 8:45 am]
BILLING CODE 6750–01–S
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Administration for Children and
Families
Proposed Information Collection
Activity; Comment Request
Title: Subsidized and Transitional
Employment Demonstration and
Evaluation Project (STEDEP).
OMB No.: New Collection.
Billing Accounting Code (BAC):
418409 (CAN G996121).
Description: The Administration for
Children and Families (ACF) is
proposing an information collection
activity as part of the Subsidized and
Transitional Employment
Demonstration and Evaluation Project.
The proposed information collection
consists of semi-structured interviews
with key respondents involved with
subsidized and transitional employment
programs. Through this information
collection and other study activities,
ACF seeks to identify the types of
strategies that should be tested within
the context of current TANF policies
and requirements as well as recent
efforts under the American Recovery
and Reinvestment Act (ARRA).
Respondents: Experts and
stakeholders such as researchers, policy
experts, coordinators (e.g. state-level
coordinators), subsidized and
transitional employment program
directors and staffs.
ANNUAL BURDEN ESTIMATES
Number of
respondents
Instrument
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Discussion Guide for Use with Researchers, Policy Experts, and Statelevel Coordinators ......................................................................................
Discussion Guide for use with Program Directors ........................................
Discussion Guide for Use with Program Staff ...............................................
Estimated Total Annual Burden
Hours: 213.
In compliance with the requirements
of Section 3506(c)(2)(A) of the
Paperwork Reduction Act of 1995, the
Administration for Children and
Families is soliciting public comment
on the specific aspects of the
information collection described above.
Copies of the proposed collection of
information can be obtained and
comments may be forwarded by writing
to the Administration for Children and
Families, Office of Planning, Research
and Evaluation, 370 L’Enfant
Promenade, SW., Washington, DC
20447, Attn: OPRE Reports Clearance
Officer. E-mail address:
OPREinfocollection@acf.hhs.gov. All
requests should be identified by the title
of the information collection.
The Department specifically requests
comments on: (a) Whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information shall have
practical utility; (b) the accuracy of the
agency’s estimate of the burden of the
proposed collection of information; (c)
the quality, utility, and clarity of the
information to be collected; and (d)
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15:28 Jul 06, 2010
Jkt 220001
Number of
responses per
respondent
50
25
50
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Consideration will be given to
comments and suggestions submitted
within 60 days of this publication.
Steven Hanmer,
OPRE Reports Clearance Officer.
[FR Doc. 2010–16332 Filed 7–6–10; 8:45 am]
BILLING CODE 4184–01–M
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Health Resources and Services
Administration
Agency Information Collection
Activities; Proposals, Submissions,
and Approvals: Practitioner Data Bank
for Adverse Information on Physicians
and Other Health Care Practitioners
Periodically, the Health Resources
and Services Administration (HRSA)
publishes abstracts of information
collection requests under review by the
Office of Management and Budget
(OMB), in compliance with the
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Fmt 4703
Sfmt 4703
1
1
1
Average
burden hours
per response
1
2.5
2
Total
burden hours
50
63
100
Paperwork Reduction Act of 1995 (44
U.S.C. Chapter 35). To request a copy of
the clearance requests submitted to
OMB for review, e-mail
paperwork@hrsa.gov or call the HRSA
Reports Clearance Office on (301) 443–
1129.
The following request has been
submitted to the Office of Management
and Budget for review under the
Paperwork Reduction Act of 1995:
Proposed Project: National
Practitioner Data Bank for Adverse
Information on Physicians and Other
Health Care Practitioners—45 CFR Part
60 Regulations and Forms (OMB No.
0915–0126)—Extension.
The National Practitioner Data Bank
(NPDB) was established through Title IV
of Public Law (Pub. L.) 99–660, the
Health Care Quality Improvement Act of
1986, as amended. Final regulations
governing the NPDB are codified at 45
CFR part 60. Responsibility for NPDB
implementation and operation resides
in the Bureau of Health Professions,
Health Resources and Services
Administration, Department of Health
and Human Services (HHS). The NPDB
began operation on September 1, 1990.
The intent of Title IV of Public Law
99–660 is to improve the quality of
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Agencies
[Federal Register Volume 75, Number 129 (Wednesday, July 7, 2010)]
[Notices]
[Pages 39017-39020]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-16433]
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FEDERAL TRADE COMMISSION
[File No. 091 0125]
Pilot Corporation, Propeller Corp., and Flying J Inc.; Analysis
of Proposed Agreement Containing Consent Orders to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed Consent Agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint and the terms of the consent order -- embodied in the consent
agreement -- that would settle these allegations.
DATES: Comments must be received on or before July 30, 2010.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Pilot-
Flying J, File No. 091 0125'' to facilitate the organization of
comments. Please note that your comment -- including your name and your
state -- will be placed on the public record of this proceeding,
including on the publicly accessible FTC website, at (https://www.ftc.gov/os/publiccomments.shtm).
Because comments will be made public, they should not include any
sensitive personal information, such as an individual's Social Security
Number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained from any person
and which is privileged or confidential. . . .,'' as provided in
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule
4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which
confidential treatment is requested must be filed in paper form, must
be clearly labeled ``Confidential,'' and must comply with FTC Rule
4.9(c), 16 CFR 4.9(c).\1\
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR
4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted by using the following weblink: (https://public.commentworks.com/ftc/pilot-flyingj) and following the
instructions on the web-based form. To ensure that the Commission
considers an electronic comment, you must file it on the web-based form
at the weblink: (https://public.commentworks.com/ftc/pilot-flyingj). If
this Notice appears at (https://www.regulations.gov/search/index.jsp),
you may also file an electronic comment through that website. The
Commission will consider all comments that regulations.gov forwards to
it. You may also visit the FTC website at (https://www.ftc.gov/) to read
the Notice and the news release describing it.
A comment filed in paper form should include the ``Pilot-Flying J,
File No. 091 0125'' reference both in the text and on the envelope, and
should be mailed or delivered to the following
[[Page 39018]]
address: Federal Trade Commission, Office of the Secretary, Room H-135
(Annex D), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC
is requesting that any comment filed in paper form be sent by courier
or overnight service, if possible, because U.S. postal mail in the
Washington area and at the Commission is subject to delay due to
heightened security precautions.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC website, to the extent practicable,
at (https://www.ftc.gov/os/publiccomments.shtm). As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC website. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at (https://www.ftc.gov/ftc/privacy.shtm).
FOR FURTHER INFORMATION CONTACT: Mary N. Lehner (202-326-3744), Bureau
of Competition, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 the
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that
the above-captioned consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of thirty (30) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for June 30, 2010), on the World Wide Web, at (https://www.ftc.gov/os/actions.shtm). A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW, Washington,
D.C. 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order to Aid Public Comment
The Federal Trade Commission has accepted for public comment,
subject to final approval, an Agreement Containing Consent Orders
(``Consent Agreement'') from Pilot Corporation and Propeller Corp.
(collectively, ``Pilot''), and Flying J Inc. (Pilot and Flying J Inc.,
collectively, ``Respondents''). Pursuant to agreements dated December
18, 2009, Pilot intends to acquire the interests and assets of Flying J
Inc.'s travel center and related businesses for approximately $1.8
billion (the ``acquisition''). The Commission's Complaint alleges that
the acquisition, if consummated, would violate Section 7 of the Clayton
Act, as amended, 15 U.S.C. Sec. 18, and Section 5 of the Federal Trade
Commission Act, as amended, 15 U.S.C. Sec. 45, by removing actual,
direct, and substantial competition between Pilot and Flying J and
increasing the likelihood that Pilot will exercise market power
unilaterally. The proposed Consent Agreement would resolve the
competitive concerns from the acquisition by requiring the divestiture
of 26 travel centers to Love's Travel Stops and Country Stores. The
divestiture will make Love's a stronger competitor and replace
competition weakened by the acquisition.
The proposed Consent Agreement has been placed on the public record
for thirty (30) days to solicit comments from interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will review the proposed
Consent Agreement again and the comments received, and decide whether
it should withdraw from the Consent Agreement or make it final.
The sole purpose of this analysis is to facilitate public comment
on the Consent Agreement. The analysis does not constitute an official
interpretation of the Consent Agreement or the proposed Decision and
Order (``Order''), nor does the analysis modify their terms in any way.
I. Respondents and Other Relevant Entities
A. Pilot and Propeller
Pilot Travel Centers LLC is the largest travel center operator in
the United States. Pilot Travel Centers LLC is a privately held, for-
profit limited liability company and is controlled equally by Pilot
Corporation and Propeller Corp.
Respondent Pilot Corporation holds 52.5 percent of the non-
corporate interests of Pilot Travel Centers LLC and a right to 50
percent representation on Pilot Travel Centers LLC's Board of Managers.
Pilot Corporation is a privately held, for-profit corporation.
Respondent Propeller Corp. holds 47.5 percent of the non-corporate
interests of Pilot Travel Centers LLC and a right to 50 percent
representation on Pilot Travel Centers LLC's Board of Managers.
Propeller Corp. is a for-profit corporation, privately held in its
entirety by five stockholders managed by CVC European Equity V Limited
and three stockholders managed by CVC European Equity Tandem Fund
Limited.
B. Flying J
Respondent Flying J Inc., a privately held, for-profit corporation,
is a fully integrated oil company with operations throughout the United
States and Canada. Flying J Inc. owns and operates, among other things,
travel center, trucking, fuel card, and related businesses. Flying J
Inc., its wholly-owned subsidiary, and wholly-owned subsidiaries of
ConocoPhillips jointly control the CFJ Entities.
The CFJ Entities own Flying J-branded travel centers operated by
Flying J Inc. in 36 U.S. states. It is jointly controlled by Flying J
Inc., its wholly-owned subsidiary, and wholly-owned subsidiaries of
ConocoPhillips. The CFJ Entities consist of: (1) CFJ Properties, a
general partnership that is 50% owned by wholly-owned subsidiaries of
ConocoPhillips and 50% owned by a wholly-owned subsidiary of Flying J
Inc.; (2) CFJ I Management Inc., CFJ II Management Inc., and CFJ III
Management Inc. (``CFJ Management Companies''), each of which is 50%
owned by a wholly-owned subsidiary of ConocoPhillips and 50% owned by
Flying J Inc.; and (3) CFJ Plaza Company I LLC, CFJ Plaza Company II
LLC, and CFJ Plaza Company III LLC, each of which is 49.5% owned by a
wholly-owned subsidiary of ConocoPhillips, 49.5% owned by Flying J
Inc., and 1% owned by its corresponding CFJ Management Company.
II. The Proposed Complaint
Pilot's acquisition of Flying J presents substantial antitrust
concerns in the market for over-the-road sale of diesel to long-haul
fleets by national travel center operators in the contiguous United
States. Travel centers provide locations for long-haul trucks to fuel
and serve as the long-haul driver's home away from home, offering
amenities including parking for tractor-trailers, truck service
centers, truck washes, certified
[[Page 39019]]
automated truck scales, fast food restaurants, shower facilities,
internet access, and financial services for drivers. Four travel center
operators - Pilot, Flying J, TravelCenters of America (``TA''), and
Love's (collectively, ``national travel center operators'') - have the
scale and scope to compete for any substantial portion of long-haul
over-the-road diesel business although not all the major travel center
operators are able to compete for all customers. Pilot and Flying J are
the first and second choices for a number of long-haul fleets.
The acquisition may substantially lessen competition in the
relevant market by, among other things: (a) eliminating actual, direct,
and substantial competition between Pilot and Flying J; and (b)
increasing the likelihood that Pilot will exercise market power
unilaterally.
De novo entry or fringe expansion into the relevant market is
unlikely to deter or counteract the likely anticompetitive effects.
Entry is difficult and time-consuming and potential entrants would face
substantial barriers.
III. The Proposed Consent Agreement
The proposed Consent Agreement is intended to remedy the
acquisition's alleged anticompetitive effects by, among other things,
requiring the divestiture of travel center assets to Love's. Love's is
a growing national travel center operator that is currently
concentrated in the South. It is the smallest of the four national
travel center operators and some long-haul fleets do not encounter
Love's on the routes they travel, especially in the Midwest and the
Eastern portion of the United States.
Respondents have reached an agreement to sell to Love's 26 specific
travel center sites, the majority of which are located in the Midwest
or the Eastern portion of the United States. These sites, along with
Love's aggressive and independent expansion plan, will enhance Love's
market position as a national travel center operator, allowing it to
compete for more long-haul over-the-road diesel business. Love's
possesses the existing infrastructure, resources, and capability to
acquire the divested sites and operate them within Love's existing
network. The divestiture will allow Love's to replace competition lost
because of the acquisition of Flying J by Pilot. In particular, Love's
will now be able to compete for those customers who viewed Pilot and
Flying J as their first and second choices and who did not encounter
Love's on their routes prior to the divestiture.
The Order contains provisions designed to ensure the successful
implementation and remedial intent of the proposed Consent Agreement.
Some of these provisions are highlighted below.
A. Access to and Use of the TCH Fuel Card System
The Order requires Respondents to provide access to and use of the
TCH LLC (``TCH'') Fuel Card System upon request from Love's. Paragraph
II.C. of the Order provides that at Love's option, and upon reasonable
notice, Respondents shall provide non-discriminatory access to and use
of the TCH Fuel Card System for a period of up to three years pursuant
to a TCH Merchant Agreement. If Love's elects to use the TCH Fuel Card
System, Respondents shall institute a firewall protocol whereby: (a)
Respondents' employees affiliated with the TCH Fuel Card System are
prohibited from providing TCH Customer Confidential Business
Information to either the TCH Executive Board or to a Respondent; and
(b) Pilot shall appoint an internal compliance officer who will be
responsible for assuring that the firewall protocols are met.
B. Continued Operation of Restaurants
The Order also provides for the continuity of operation at Wendy's
restaurants affiliated with the sites acquired by Love's. Paragraph
II.E. of the Order provides that, for a period of one year, Pilot shall
manage and operate the Wendy's Restaurants affiliated with those sites.
To assure the efficient transfer and continuity of operation of the
divested travel centers, the Order requires Respondents to provide
assistance for, and information regarding, employees of those travel
centers. Paragraphs II.F. and II.G. of the Order require Respondents to
provide, for a period no longer than six months, assistance for, and
employment and salary information regarding, knowledgeable employees of
Respondents in the transfer of the travel centers from Respondents to
Love's. Paragraphs II.H. and II.I. of the Order provide that, for a
period of one year, Respondents shall not interfere with the hiring or
employing of employees by Love's relating to the divested sites, and
shall remove any impediments within the control of Respondents that may
deter these employees from accepting employment with Love's. Paragraph
II.J. of the Order prohibits Respondents from directly or indirectly
soliciting, inducing, or attempting to solicit or induce any employees
of the divested travel centers who have accepted offers of employment
with Love's to terminate that employment.
C. Transfer of Confidential Businesses Information and Maintenance of
Economic Viability
To further assure the efficient transfer and economic viability of
the acquired travel centers, Paragraphs II.K. and II.L. of the Order
require Respondents to provide all Confidential Business Information
relating to the Travel Centers Businesses and to maintain the full
economic viability and marketability of such assets until Respondents
complete the divestiture required by the Order.
D. Compliance and Notification Requirements
Paragraph III. of the Order allows the Commission to appoint an
Interim Monitor to assure that Respondents expeditiously comply with
their obligations and perform all of their responsibilities as required
by the Order.
To assure that Respondents fully comply with the obligations of the
Order, Paragraph IV. of the Order allows the Commission to appoint a
Divestiture Trustee to assign, grant, license, divest, transfer,
deliver, or otherwise convey the travel centers.
Paragraph V. of the Order provides that each Remedial Agreement
related to the divested sites shall be incorporated by reference into
the Order and that Respondents shall not modify or amend the terms of
any Remedial Agreement without prior approval of the Commission.
Paragraphs VI.A. and VI.B. of the Order require official
notification of the date on which the acquisition occurs and subsequent
periodic reports until the Commission is satisfied that the divestiture
has been completed in a timely manner and in good faith. Paragraph
VI.C. of the Order requires annual written reports of compliance, upon
the Commission's request, until the Order terminates in ten years.
Paragraph VII. of the Order requires Respondents to give the
Commission prior notice of certain events that might affect compliance
obligations arising from the Order.
E. Additional Provisions
Paragraph VIII. of the Order provides that the Commission shall,
with proper notice, have access to documents and personnel at the
offices of Respondents for the purpose of determining or securing
compliance with the Order.
Paragraph IX. of the Order provides that the Order shall terminate
after ten years.
[[Page 39020]]
IV. Order to Maintain Assets
The Commission also has issued an Order to Maintain Assets in this
proceeding. The purpose of the Order to Maintain Assets is: (a) to
maintain the full economic viability, marketability and competitiveness
of the travel centers through their full transfer and delivery to
Love's; (b) to minimize any risk of loss of competitive potential for
the travel centers; (c) to prevent the destruction, removal, wasting,
deterioration, or impairment of any of the travel centers, except for
ordinary wear and tear; and (d) to prevent disclosure of any
Confidential Business Information related to the travel centers to any
person except Love's or persons specifically authorized by Love's to
receive such information. The Commission may appoint an Interim Monitor
to assure that Respondents expeditiously comply with all of their
obligations and perform all of their responsibilities as required by
the Order to Maintain Assets.
By direction of the Commission, Commissioner Brill not
participating.
Donald S. Clark
Secretary.
[FR Doc. 2010-16433 Filed 7-6-10; 8:45 am]
BILLING CODE 6750-01-S