United States v. Caledonia Investments plc; Proposed Final Judgment and Competitive Impact Statement, 56697-56703 [2016-19988]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 81, Number 162 (Monday, August 22, 2016)]
[Notices]
[Pages 56697-56703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19988]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Caledonia Investments plc; Proposed Final 
Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16(b)-(h), that a proposed Final 
Judgment, Stipulation, and Competitive Impact Statement have been filed 
with the United States District Court for the District of Columbia in 
United States of America v. Caledonia Investments plc, Civil Action No. 
1:16-cv-01620 (CRC). On August 10, 2016, the United States filed a 
Complaint alleging that Caledonia Investments plc violated the 
premerger notification and waiting period requirements of the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. Sec.  18a, 
with respect to its acquisition of voting securities of Bristow Group, 
Inc. The proposed Final Judgment, filed at the same time as the 
Complaint, requires Caledonia Investments plc to pay a civil penalty of 
$480,000.
    Copies of the Complaint, proposed Final Judgment, and Competitive 
Impact Statement are available for inspection on the Antitrust 
Division's website at https://www.justice.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 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the Antitrust Division's website, 
filed with the Court, and, under certain circumstances, published in 
the Federal Register. Comments should be directed to Daniel P. Ducore, 
Special Attorney, c/o Federal Trade Commission, 600 Pennsylvania Avenue 
NW., CC-8416, Washington, DC 20580 (telephone: 202-326-2526; e-mail: 
dducore@ftc.gov).

Patricia A. Brink,
Director of Civil Enforcement.

In the United States District Court for the District of Columbia

    United States of America, c/o Department of Justice, Washington, 
DC 20530, Plaintiff, v. Caledonia Investments PLC, Cayzer House, 30 
Buckingham Gate, London, UK SW1E6NN, Defendant.
Case No.: 1:16-cv-01620
Judge: Christopher R. Cooper
Filed: 08/10/2016

COMPLAINT FOR CIVIL PENALTIES FOR FAILURE TO COMPLY WITH THE PREMERGER 
REPORTING AND WAITING REQUIREMENTS OF THE HART-SCOTT RODINO ACT

    The United States of America, Plaintiff, by its attorneys, acting 
under the direction of the Attorney General of the United States and at 
the request of the Federal Trade Commission, brings this civil 
antitrust action to obtain monetary relief in the form of civil 
penalties against Defendant Caledonia Investments plc (``Caledonia''). 
Plaintiff alleges as follows:

NATURE OF THE ACTION

    1. Caledonia violated the notice and waiting period requirements of 
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 
Sec.  18a (``HSR Act'' or ``Act''), with respect to the acquisition of 
voting securities of Bristow Group, Inc. (``Bristow'') in February 
2014.

JURISDICTION AND VENUE

    2. This Court has jurisdiction over the subject matter of this 
action pursuant to

[[Page 56698]]

Section 7A(g) of the Clayton Act, 15 U.S.C. Sec.  18a(g), and pursuant 
to 28 U.S.C. Sec. Sec.  1331, 1337(a), 1345, and 1355 and over the 
Defendant by virtue of Defendant's consent, in the Stipulation relating 
hereto, to the maintenance of this action and entry of the Final 
Judgment in this District.
    3. Venue is properly based in this District by virtue of 
Defendant's consent, in the Stipulation relating hereto, to the 
maintenance of this action and entry of the Final Judgment in this 
District.

THE DEFENDANT

    4. Defendant Caledonia is a public limited company organized under 
the laws of the United Kingdom with its principal office and place of 
business at Cayzer House, 30 Buckingham Gate, London, UK SW1E6NN. 
Caledonia is engaged in commerce, or in activities affecting commerce, 
within the meaning of Section 1 of the Clayton Act, 15 U.S.C. Sec.  12, 
and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. Sec.  18a(a)(1). At 
all times relevant to this complaint, Caledonia had sales or assets in 
excess of $141.8 million.

OTHER ENTITIES

    5. Bristow is a corporation organized under the laws of Delaware 
with its principal place of business at 2103 City West Boulevard, 
Houston, TX 77042. Bristow is engaged in commerce, or in activities 
affecting commerce, within the meaning of Section 1 of the Clayton Act, 
15 U.S.C. Sec.  12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. 
Sec.  18a(a)(1). At all times relevant to this complaint, Bristow had 
sales or assets in excess of $14.2 million. Bristow was formerly named 
Offshore Logistics, Inc. (``Offshore Logistics'').

THE HART-SCOTT-RODINO ACT AND RULES

    6. The HSR Act requires certain acquiring persons and certain 
persons whose voting securities or assets are acquired to file 
notifications with the federal antitrust agencies and to observe a 
waiting period before consummating certain acquisitions of voting 
securities or assets. 15 U.S.C. Sec.  18a(a) and (b). These 
notification and waiting period requirements apply to acquisitions that 
meet the HSR Act's thresholds, which are adjusted annually. During the 
period of 2014 pertinent to this complaint, the HSR Act's reporting and 
waiting period requirements applied to most transactions that would 
result in the acquiring person holding more than $50 million, as 
adjusted (at the time $70.9 million), if certain sales and asset 
thresholds were met, and all transactions (regardless of the size of 
the acquiring or acquired persons) where the acquiring person would 
hold more than $200 million, as adjusted (at the time $283.6 million), 
of the acquired person's voting securities and/or assets, except for 
certain exempted transactions.
    7. The HSR Act's notification and waiting period are intended to 
give the federal antitrust agencies prior notice of, and information 
about, proposed transactions. The waiting period is also intended to 
provide the federal antitrust agencies with an opportunity to 
investigate a proposed transaction and to obtain effective preliminary 
relief to prevent the consummation of a transaction that may violate 
the antitrust laws.
    8. Pursuant to Section (d)(2) of the HSR Act, 15 U.S.C. Sec.  
18a(d)(2), rules were promulgated to carry out the purposes of the HSR 
Act. 16 C.F.R. Sec. Sec.  801-803 (``HSR Rules''). The HSR Rules, among 
other things, define terms contained in the HSR Act.
    9. Pursuant to section 801.13(a)(1) of the HSR Rules, 16 C.F.R. 
Sec.  801.13(a)(1), ``all voting securities of [an] issuer which will 
be held by the acquiring person after the consummation of an 
acquisition''--including any held before the acquisition--are deemed 
held ``as a result of'' the acquisition at issue.
    10. Pursuant to sections 801.13(a)(2) and 801.10(c)(1) of the HSR 
Rules, 16 C.F.R. Sec.  801.13(a)(2) and. Sec.  801.10(c)(1), the value 
of publicly traded voting securities already held is the market price, 
defined to be the lowest closing price within 45 days prior to the 
subsequent acquisition.
    11. Section 802.9 of the HSR Rules, 16 C.F.R. Sec.  802.9, provides 
that acquisitions solely for the purpose of investment are exempt from 
the notification and waiting period requirements if the acquirer will 
hold ten percent or less of the issuer's voting securities.
    12. Section 801.1(i)(1) of the HSR Rules, 16 C.F.R. Sec.  
801.1(i)(1), defines the term ``solely for the purpose of investment'' 
as follows:

    Voting securities are held or acquired ``solely for the purpose 
of investment'' if the person holding or acquiring such voting 
securities has no intention of participating in the formulation, 
determination, or direction of the basic business decisions of the 
issuer.

    13. Section 802.21(a) of the HSR Rules, 16 C.F.R. Sec.  802.21(a), 
provides generally that a person who files and observes the waiting 
period before crossing a filing threshold may, within five years of the 
expiration of the waiting period, acquire additional voting securities 
of the issuer that do not cross a higher threshold, so long as the 
person does not acquire control of the issuer. For example, a person 
who files and observes the waiting period before crossing the $50 
million threshold, as adjusted, may, assuming the person does not 
acquire control, acquire additional voting securities of the issuer up 
to the next threshold, which is $100 million, as adjusted. The 
acquiring person must file again, however, before it can cross the next 
higher threshold, $500 million, as adjusted, or before the person 
acquires control of the issuer.
    14. Section 7A(g)(1) of the Clayton Act, 15 U.S.C. Sec.  18a(g)(1), 
provides that any person, or any officer, director, or partner thereof, 
who fails to comply with any provision of the HSR Act is liable to the 
United States for a maximum civil penalty of $10,000 for each day 
during which such person is in violation. Pursuant to the Debt 
Collection Improvement Act of 1996, Pub. L. 104-134, Sec.  31001(s) 
(amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 
28 U.S.C. Sec.  2461 note), and Federal Trade Commission Rule 1.98, 16 
C.F.R. Sec.  1.98, 74 Fed. Reg. 857 (Jan. 9, 2009), the maximum amount 
of civil penalty was increased to $16,000 per day. Pursuant to the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015, Pub. L. 114-74, Sec.  701 (further amending the Federal Civil 
Penalties Inflation Adjustment Act of 1990), and Federal Trade 
Commission Rule 1.98, 16 C.F.R. Sec.  1.98, 81 Fed. Reg. 42,476 (June 
30, 2016), the maximum amount of civil penalty was increased to $40,000 
per day.

DEFENDANT'S PRIOR VIOLATION OF THE HSR ACT

    15. On December 19, 1996, Caledonia acquired 1,300,000 shares of 
voting securities of Offshore Logistics in a transaction negotiated 
with Offshore Logistics. As a result of that transaction, Caledonia 
held approximately six percent of the voting securities of Offshore 
Logistics, valued at approximately $19.8 million. The transaction gave 
Caledonia the right to appoint two people to the board of Offshore 
Logistics. Shortly after December 19, 1996, Caledonia named two of its 
employees to the board of Offshore Logistics.
    16. At the time of the December 19, 1996, transaction, the relevant 
size of the transaction was $15 million.
    17. Caledonia could not rely on the exemption for acquisitions 
solely for the purpose of investment because it intended to, and did, 
exercise its rights

[[Page 56699]]

to appoint two members to Offshore Logistics' board of directors.
    18. Although it was required to do so, Caledonia did not file under 
the HSR Act prior to acquiring Offshore Logistics voting securities on 
December 19, 1996.
    19. On June 3, 1997, Caledonia made a corrective filing under the 
HSR Act for the December 19, 1996, acquisition of Offshore Logistics 
voting securities. In a letter accompanying the corrective filing, 
Caledonia acknowledged that the transaction was reportable under the 
HSR Act, but asserted that the failure to file and observe the waiting 
period was inadvertent. The United States and the Federal Trade 
Commission did not initiate an enforcement action against Caledonia for 
this violation of the Act.

VIOLATION

    20. On June 5, 2008, Caledonia filed to acquire voting securities 
of Bristow valued in excess of $50 million, as adjusted. The waiting 
period on this filing expired on June 13, 2008.
    21. Pursuant to Section 802.21(a) of the HSR Rules, 16 C.F.R. Sec.  
802.21(a), Caledonia could acquire additional voting securities of 
Bristow without filing under HSR for a period of five years, as long as 
its holdings did not exceed the $100 million threshold, as adjusted 
($141.8 million as of February 3, 2014). That five-year period ended on 
June 13, 2013.
    22. On February 3, 2014, Caledonia acquired 3,650 shares of Bristow 
voting securities as the result of vesting of restricted stock units. 
Because this acquisition occurred later than five years after the 
expiration of the waiting period of the previous filing, the HSR Rules 
required Caledonia to again file a notice prior to crossing the $50 
million threshold, as adjusted ($70.9 million as of February 3, 2014). 
The voting securities that Caledonia held as a result of this 
acquisition from Bristow were valued at approximately $111 million.
    23. Although it was required to do so, Caledonia did not file under 
the HSR Act prior to acquiring Bristow voting securities on February 3, 
2014.
    24. More than a year later, on February 4, 2015, Caledonia made a 
corrective filing under the HSR Act for the Bristow voting securities 
it had acquired on February 3, 2014. The HSR waiting period expired on 
March 6, 2015.
    25. Caledonia was in continuous violation of the HSR Act from 
February 3, 2014, when it acquired the Bristow voting securities that 
resulted in it holding Bristow voting securities valued in excess of 
the HSR Act's $50 million size-of-transaction threshold, as adjusted, 
through March 6, 2015, when the waiting period expired.

REQUEST FOR RELIEF

    WHEREFORE, Plaintiff requests:
    a. That the Court adjudge and decree that Defendant Caledonia's 
acquisition of Bristow voting securities on February 3, 2014, was a 
violation of the HSR Act, 15 U.S.C. Sec.  18a; and that Defendant 
Caledonia was in violation of the HSR Act each day from February 3, 
2014, through March 6, 2015.
    b. That the Court order Defendant Caledonia to pay to the United 
States an appropriate civil penalty as provided by the HSR Act. 15 
U.S.C. Sec.  18a(g)(1), the Debt Collection Improvement Act of 1996, 
Pub. L. 104-134, Sec.  31001(s) (amending the Federal Civil Penalties 
Inflation Adjustment Act of 1990, 28 U.S.C. Sec.  2461 note), and 
Federal Trade Commission Rule 1.98, 16 C.F.R. Sec.  1.98, 74 Fed. Reg. 
857 (Jan. 9, 2009), and the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, Pub. L. 114-74, Sec.  701 
(further amending the Federal Civil Penalties Inflation Adjustment Act 
of 1990), and Federal Trade Commission Rule 1.98, 16 C.F.R. 1.98, 81 
Fed. Reg. 42,476 (June 30, 2016).
    c. That the Court order such other and further relief as the Court 
may deem just and proper.
    d. That the Court award the Plaintiff its costs of this suit.

Dated: 08/10/2016

    FOR THE PLAINTIFF UNITED STATES OF AMERICA:
/s/--------------------------------------------------------------------

Renata B. Hesse,
D.C. Bar No. 466107,

Acting Assistant Attorney General, Department of Justice, Antitrust 
Division, Washington, DC 20530.
/s/--------------------------------------------------------------------

Daniel P. Ducore,
D.C. Bar No. 933721,

Special Attorney.
/s/--------------------------------------------------------------------

 Roberta S. Baruch,
D.C. Bar No. 269266,

Special Attorney.
/s/--------------------------------------------------------------------

Kenneth A. Libby,

Special Attorney.
/s/--------------------------------------------------------------------

Jennifer Lee,

Special Attorney.

Federal Trade Commission,
Washington, DC 20580,
(202) 326-2694.

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Caledonia Investments 
PLC, Defendant.
Case No.: 1:16-cv-01620
Judge: Christopher R. Cooper
Filed: 08/10/2016

COMPETITIVE IMPACT STATEMENT

    The United States, pursuant to the Antitrust Procedures and 
Penalties Act (``APPA''), 15 U.S.C. Sec.  16(b)-(h), files this 
Competitive Impact Statement to set forth the information necessary to 
enable the Court and the public to evaluate the proposed Final Judgment 
that would terminate this civil antitrust proceeding.

I. NATURE AND PURPOSE OF THIS PROCEEDING

    On August 10, 2016, the United States filed a Complaint against 
Defendant Caledonia Investments PLC (``Caledonia''), related to 
Caledonia's acquisition of voting securities of Bristow Group, Inc. 
(``Bristow'') in February 2014. The Complaint alleges that Caledonia 
violated Section 7A of the Clayton Act, 15 U.S.C. Sec.  18a, commonly 
known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the 
``HSR Act''). The HSR Act provides that ``no person shall acquire, 
directly or indirectly, any voting securities of any person'' exceeding 
certain thresholds until that person has filed pre-acquisition 
notification and report forms with the Department of Justice and the 
Federal Trade Commission (collectively, the ``federal antitrust 
agencies'' or ``agencies'') and the post-filing waiting period has 
expired. 15 U.S.C. Sec.  18a(a). A key purpose of the notification and 
waiting period is to protect consumers and competition from potentially 
anticompetitive transactions by providing the agencies an opportunity 
to conduct an antitrust review of proposed transactions before they are 
consummated.
    The Complaint alleges that Caledonia acquired voting securities of 
Bristow in excess of the statutory threshold ($70.9 million at the time 
of acquisition) without making the required pre-acquisition HSR filings 
with the agencies and without observing the waiting period, and that 
Caledonia and Bristow each met the statutory size of person threshold 
(Caledonia and Bristow had sales or assets in excess of $141.8 million 
and $14.2 million, respectively, at the time of the acquisition).
    At the same time the Complaint was filed in the present action, the 
United States also filed a Stipulation and proposed Final Judgment that 
eliminates the need for a trial in this case. The proposed Final 
Judgment is designed to deter Caledonia from engaging in future HSR Act 
violations.

[[Page 56700]]

Under the proposed Final Judgment, Caledonia must pay a civil penalty 
to the United States in the amount of $480,000.
    The United States and the Defendant have stipulated that the 
proposed Final Judgment may be entered after compliance with the APPA, 
unless the United States first withdraws its consent. Entry of the 
proposed Final Judgment would terminate this case, except that the 
Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and punish violations 
thereof.

II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION OF 
THE ANTITRUST LAWS

A. Caledonia and the 2008 and 2014 Acquisitions of Bristow Voting 
Securities

    Caledonia is a public limited company organized under the laws of 
the United Kingdom and headquartered in London. Caledonia has sales or 
assets in excess of $141.8 million.
    Bristow is a Delaware corporation headquartered in Houston, Texas. 
Bristow provides helicopter services to the offshore energy industry 
and has sales or assets in excess of $14.2 million.
    On June 5, 2008, Caledonia filed an HSR notification in connection 
with its acquisition of Bristow voting securities valued in excess of 
$50 million, as adjusted. The waiting period on this HSR filing expired 
on June 13, 2008. Pursuant to Section 802.21(a) of the HSR Rules, 16 
C.F.R. Sec.  802.21(a), Caledonia could acquire additional voting 
securities of Bristow without making another HSR filing for five years, 
or until June 13, 2013, as long as its holdings of Bristow securities 
did not exceed the $100 million HSR Act threshold, as adjusted.

B. Caledonia's Violation of the HSR Act

    As alleged in the Complaint, on February 3, 2014, after the five-
year window had elapsed, Caledonia acquired 3,650 additional shares of 
Bristow voting securities as the result of the vesting of restricted 
stock units. Following the vesting of these restricted stock units, 
Caledonia's voting securities of Bristow were valued at approximately 
$111 million, an amount in excess of the then-effective HSR Act $70.9 
million size-of-transaction threshold. Accordingly, Caledonia was 
required to make an HSR filing and wait until the expiration of the 
waiting period before consummating the acquisition. Caledonia did not 
do so, however, incorrectly believing that its 2008 HSR filing enabled 
it to acquire additional shares of Bristow without making a new HSR 
filing. Caledonia's failure to comply with the HSR Act denied the 
agencies the opportunity to review Caledonia's acquisition of Bristow 
securities before it was consummated and thereby undermined the 
statutory scheme and the purpose of the HSR Act.
    Caledonia made a corrective filing on February 4, 2015, shortly 
after learning of its obligation to file. Caledonia's February 4, 2015, 
corrective filing included a letter acknowledging that the acquisitions 
were reportable under the HSR Act. The waiting period expired on March 
6, 2015.
    The Complaint further alleges that Caledonia previously violated 
the HSR Act's notification requirements when it acquired shares in 
Offshore Logistics, Inc. (``OLOG'') in 1996, as Bristow was then named. 
On December 19, 1996, Caledonia acquired 1.3 million shares of OLOG 
voting securities through a transaction in which Caledonia also gained 
the right to name two persons to the OLOG board. Caledonia named two of 
its employees to the board of OLOG, and therefore could not rely on the 
HSR Act exemption for acquisitions made solely for the purpose of 
investment. See 15 U.S.C. Sec.  18a(c)(9); 16 C.F.R. Sec.  801.1(i)(1). 
Pursuant to the HSR Act, Caledonia was required to make a pre-
acquisition notification filing prior to its acquisition of OLOG voting 
securities, but it failed to do so. On June 3, 1997, Caledonia made a 
corrective filing for this acquisition. In a letter accompanying the 
corrective filing, Caledonia acknowledged that the acquisition of OLOG 
voting securities was reportable under the HSR Act, but asserted that 
the failure to file and observe the waiting period was inadvertent. 
Caledonia also asserted that it ``will do its utmost to ensure that it 
submits all required filings under the Act in the future.'' The United 
States did not file suit against Caledonia in connection with this 
earlier violation of the HSR Act.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The proposed Final Judgment imposes a $480,000 civil penalty 
designed to deter the Defendant and others from violating the HSR Act. 
The United States adjusted the civil penalty downward from the maximum 
permitted under the HSR Act because the violation was inadvertent, the 
Defendant promptly self-reported the violation after discovery, and the 
Defendant is willing to resolve the matter by consent decree and avoid 
prolonged investigation and litigation. The decision to seek a penalty 
also reflects Defendant's previous violation of the HSR Act. The relief 
will have a beneficial effect on competition because it will help 
ensure that the agencies will be properly notified of future 
acquisitions, in accordance with the law. At the same time, the penalty 
will not have any adverse effect on competition.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    There is no private antitrust action for HSR Act violations; 
therefore, entry of the proposed Final Judgment will neither impair nor 
assist the bringing of any private antitrust action.

V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT

    The United States and the Defendant have stipulated that the 
proposed Final Judgment may be entered by this Court after compliance 
with the provisions of the APPA, provided that the United States has 
not withdrawn its consent. The APPA conditions entry of the decree upon 
this 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, which remains free to withdraw 
its consent to the proposed Final Judgment at any time prior to entry. 
The comments and the response of the United States will be filed with 
this Court. In addition, comments will be posted on the U.S. Department 
of Justice, Antitrust Division's internet website and, under certain 
circumstances, published in the Federal Register. Written comments 
should be submitted to:

Daniel P. Ducore
Special Attorney, United States
c/o Federal Trade Commission
600 Pennsylvania Avenue, NW
CC-8416
Washington, DC 20580

[[Page 56701]]

Email: dducore@ftc.gov

    The proposed Final Judgment provides that this Court retains 
jurisdiction over this action, and the parties may apply to this Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT

    As an alternative to the proposed Final Judgment, the United States 
considered pursuing a full trial on the merits against the Defendant. 
The United States is satisfied, however, that the proposed relief is an 
appropriate remedy in this matter. Given the facts of this case, 
including the Defendant's immediate self-reporting of the violation and 
willingness to promptly settle this matter, the United States is 
satisfied that the proposed civil penalty is sufficient to address the 
violation alleged in the Complaint and to deter violations by similarly 
situated entities in the future, without the time, expense, and 
uncertainty of a full trial on the merits.

VII. STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL JUDGMENT

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty (60) 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. 
Sec.  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.

Id. Sec.  16(e)(1)(A) & (B). In considering these statutory factors, 
the court's inquiry is necessarily a limited one, as the government is 
entitled to ``broad discretion to settle with the defendant within the 
reaches of the public interest.'' United States v. Microsoft Corp., 56 
F.3d 1448, 1461 (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); United States v, U.S. Airways 
Group, Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (noting the court has 
broad discretion of the adequacy of the relief at issue); United States 
v. InBev N.V./S.A., No. 08-1965 (JR), 2009-2 Trade Cas. (CCH) ] 76,736, 
2009 U.S. Dist. LEXIS 84787, at *3, (D.D.C. Aug. 11, 2009) (noting that 
the court's review of a consent judgment is limited and only inquires 
``into whether the government's determination that the proposed 
remedies will cure the antitrust violations alleged in the complaint 
was reasonable, and whether the mechanism to enforce the final judgment 
are clear and manageable'').\1\
---------------------------------------------------------------------------

    \1\ 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. 
Sec.  16(e) (2004), with 15 U.S.C. Sec.  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).
---------------------------------------------------------------------------

As the United States Court of Appeals for the District of Columbia 
Circuit has held, a court conducting an inquiry under the APPA may 
consider, 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) (quoting United States v. Bechtel Corp., 648 F.2d 660, 
666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62; United 
States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 
2009 U.S. Dist. LEXIS 84787, at *3. Courts have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

    Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\2\ 
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 U.S. Airways, 38 F. Supp. 3d 
at 75 (noting that a court should not reject the proposed remedies 
because it believes others are preferable); 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 government's 
prediction as to the effect of proposed remedies, its perception of the 
market structure, and its views of the nature of the case).
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    \2\ 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' '').
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    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 
U.S. Airways, 38 F. Supp. 3d at 76 (noting that room must be made for 
the government to grant concessions in the negotiation process for 
settlements (citing Microsoft, 56 F.3d at 1461)); 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.

[[Page 56702]]

    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (concluding 
that ``the `public interest' is not to be measured by comparing the 
violations alleged in the complaint against those the court believes 
could have, or even should have, been alleged''). Because the ``court's 
authority to review the decree depends entirely on the government 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that ``the court is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States did not pursue. 
Microsoft, 56 F.3d at 1459-60. As this Court confirmed in SBC 
Communications, courts ``cannot look beyond the complaint in making the 
public interest determination unless the complaint is drafted so 
narrowly as to make a mockery of judicial power.'' 489 F. Supp. 2d at 
15.
    In its 2004 amendments, 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. Sec.  16(e)(2); see also U.S. Airways, 38 F. 
Supp. 3d at 76 (indicating that a court is not required to hold an 
evidentiary hearing or to permit intervenors as part of its review 
under the Tunney Act). This language codified what Congress intended 
when it enacted the Tunney Act in 1974, as the author of this 
legislation, Senator Tunney, explained: ``The 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 Sen. Tunney). Rather, the procedure for the 
public interest determination is left to the discretion of the court, 
with the recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\3\ A court can make its public 
interest determination based on the competitive impact statement and 
response to public comments alone. U.S. Airways, 38 F. Supp. 3d at 76.
---------------------------------------------------------------------------

    \3\ See also 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., No. 73-CV-681-W-1, 1977-1 
Trade Cas. (CCH) ] 61,508, at 71,980, *22 (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, 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.'').
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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.

Date: August 10, 2016 Respectfully Submitted,
/s/--------------------------------------------------------------------

Kenneth A. Libby

Special Attorney.

In The United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Caledonia Investments 
PLC, Defendant.
Case No.: 1:16-cv-01620
Judge: Christopher R. Cooper
Filed: 08/10/2016

FINAL JUDGMENT

    Plaintiff, the United States of America, having commenced this 
action by filing its Complaint herein for violation of Section 7A of 
the Clayton Act, 15 U.S.C. Sec.  18a, commonly known as the 
Hart[dash]Scott[dash]Rodino Antitrust Improvements Act of 1976, and 
Plaintiff and Defendant Caledonia Investments plc, by their respective 
attorneys, having consented to the entry of this Final Judgment without 
trial or adjudication of any issue of fact or law herein, and without 
this Final Judgment constituting any evidence against or an admission 
by the Defendant with respect to any such issue:
    Now, therefore, before the taking of any testimony and without 
trial or adjudication of any issue of fact or law herein, and upon the 
consent of the parties hereto, it is hereby
    Ordered, Adjudged, and Decreed as follows:

I.

    The Court has jurisdiction of the subject matter of this action and 
of the Plaintiff and the Defendant. The Complaint states a claim upon 
which relief can be granted against the Defendant under Section 7A of 
the Clayton Act, 15 U.S.C. Sec.  18a.

II.

    Judgment is hereby entered in this matter in favor of Plaintiff 
United States of America and against Defendant, and, pursuant to 
Section 7A(g)(1) of the Clayton Act, 15 U.S.C. Sec.  18a(g)(1), the 
Debt Collection Improvement Act of 1996, Pub. L. 104[dash]134 Sec.  
31001(s) (amending the Federal Civil Penalties Inflation Adjustment Act 
of 1990, 28 U.S.C. Sec.  2461), and Federal Trade Commission Rule 1.98, 
16 C.F.R. Sec.  1.98, 61 Fed. Reg. 54549 (Oct. 21, 1996), and 74 Fed. 
Reg. 857 (Jan. 9, 2009), and the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, Pub. L. 114-74, Sec.  701 
(further amending the Federal Civil Penalties Inflation Adjustment Act 
of 1990), and Federal Trade Commission Rule 1.98, 16 C.F.R. 1.98, 81 
Fed. Reg. 42,476 (June 30, 2016), Defendant Caledonia Investments plc 
is hereby ordered to pay a civil penalty in the amount of four hundred 
eighty thousand dollars ($480,000). Payment of the civil penalty 
ordered hereby shall be made by wire transfer of funds or cashier's 
check. If the payment is made by wire transfer, Defendant shall contact 
Janie Ingalls of the Antitrust Division's Antitrust Documents Group at 
(202) 514-2481 for instructions before making the transfer. If the 
payment is made by cashier's check, the check shall be made payable to 
the United States Department of Justice and delivered to:

Janie Ingalls
United States Department of Justice
Antitrust Division, Antitrust Documents Group
450 5th Street, NW
Suite 1024
Washington, DC 20530

    Defendant shall pay the full amount of the civil penalty within 
thirty (30) days of entry of this Final Judgment. In the event of a 
default or delay in payment, interest at the rate of eighteen (18) 
percent per annum shall accrue thereon from the date of the default or 
delay to the date of payment.

III.

    Each party shall bear its own costs of this action.

[[Page 56703]]

IV.

    Entry of this Final Judgment is in the public interest.

Dated:-----------------------------------------------------------------
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United States District Judge

[FR Doc. 2016-19988 Filed 8-19-16; 8:45 am]
BILLING CODE P