United States v. CRH plc, et al.: Proposed Final Judgment and Competitive Impact Statement, 30956-30974 [2018-14192]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 83, Number 127 (Monday, July 2, 2018)]
[Notices]
[Pages 30956-30974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14192]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. CRH plc, et al.: Proposed Final Judgment and 
Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a 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. CRH plc, et al., Civil Action No. 1:18-

[[Page 30957]]

cv-1473. On June 22, 2018, the United States filed a Complaint alleging 
that the proposed acquisition of the assets of Pounding Mill Quarry 
Corporation (``Pounding Mill'') by CRH plc and CRH Americas Materials, 
Inc. (collectively, ``CRH'') would violate Section 7 of the Clayton 
Act, 15 U.S.C. 18. The proposed Final Judgment, filed at the same time 
as the Complaint, requires that CRH divest the Pounding Mill quarry 
located in Rocky Gap, Virginia and related assets.
    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 Maribeth Petrizzi, 
Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, 
Department of Justice, 450 Fifth Street NW, Suite 8700, Washington, DC 
20530 (telephone: (202) 307-0924).

Patricia A. Brink,
Director of Civil Enforcement.

United States District Court for the District of Columbia

    United States of America, United States Department of Justice, 
Antitrust Division, 450 Fifth Street NW, Suite 8700, Washington, 
D.C. 20530, Plaintiff, v. CRH PLC, Belgard Castle, Dublin, Ireland 
22, CRH Americas Materials, Inc., 900 Ashwood Parkway, Suite 600, 
Atlanta, Georgia 30338, and Pounding Mill Quarry Corporation, 171 
Saint Clair Crossing, Bluefield, Virginia 24605, Defandants.

No. 18-cv-1473
Judge Dabney L. Friedrich

COMPLAINT

    The United States of America (``United States''), acting under the 
direction of the Attorney General of the United States, brings this 
civil antitrust action against defendants CRH plc (``CRH''), CRH 
Americas Materials, Inc. (``CRH Americas''), and Pounding Mill Quarry 
Corporation (``Pounding Mill'') to enjoin CRH Americas' proposed 
acquisition of Pounding Mill's assets. If defendants are permitted to 
consummate this acquisition, it would substantially lessen competition 
for the supply of aggregate and asphalt concrete in southern West 
Virginia. The United States alleges as follows:

I. INTRODUCTION

    1. CRH Americas' acquisition of Pounding Mill's aggregate quarries 
would secure CRH Americas' control over the supply of materials 
necessary to build and maintain roads and bridges in southern West 
Virginia. Aggregate and asphalt concrete are the primary materials used 
to build, pave, and repair roads. Aggregate is an essential input in 
asphalt concrete, which is used to pave roads, and is also needed for 
other parts of road construction, such as the base layer of rock that 
provides a foundation for paved roads. CRH Americas currently supplies 
both aggregate and asphalt concrete in southern West Virginia and 
already holds significant shares in each market.
    2. The proposed acquisition would result in CRH Americas owning 
nearly all of the aggregate quarries that supply southern West 
Virginia. CRH Americas and Pounding Mill are the primary suppliers of 
aggregate for West Virginia Department of Transportation (``WVDOT'') 
projects in that area, together supplying well over 80 percent of the 
aggregate purchased directly by WVDOT or purchased by contractors for 
use in WVDOT projects. The proposed acquisition would eliminate the 
head-to-head competition between CRH Americas and Pounding Mill. As a 
result, prices for aggregate used for road construction would likely 
increase significantly if the acquisition is consummated.
    3. CRH Americas' acquisition of Pounding Mill's quarries also would 
strengthen the virtual monopoly CRH Americas currently holds over the 
supply of asphalt concrete in southern West Virginia. In that market, 
CRH Americas competes with only one small new entrant, which has a 
small market share, but is poised to grow. That firm currently procures 
aggregate from Pounding Mill which, unlike CRH Americas, has no 
presence in the asphalt-concrete market. There are no alternative 
aggregate suppliers to which that asphalt-concrete competitor can 
economically turn. The merger would give CRH Americas the means and 
incentive to disadvantage or exclude its asphalt-concrete competitor by 
denying it access to aggregate, reliable delivery, and competitive 
prices. Without access to a reliable source of aggregate, any future 
asphalt-concrete suppliers would be barred from entering the southern 
West Virginia market.
    4. The state of West Virginia spends hundreds of millions of 
dollars on new construction and road maintenance projects each year. 
With approximately 36,000 miles of state-maintained roads, West 
Virginia boasts the sixth largest state-maintained road system in the 
United States. Without competing suppliers for the necessary inputs for 
road construction and other infrastructure projects, the state of West 
Virginia and federal and state taxpayers would pay the price for CRH 
Americas' control over these important markets. In light of these 
market conditions, CRH Americas' acquisition of Pounding Mill's 
quarries would cause significant anticompetitive effects in the markets 
for aggregate and asphalt concrete used for WVDOT road projects in 
southern West Virginia. Therefore, the proposed acquisition violates 
Section 7 of the Clayton Act, 15 U.S.C. Sec.  18, and should be 
enjoined.

II. DEFENDANTS AND THE PROPOSED TRANSACTION

    5. Defendant CRH, a corporation headquartered in Ireland, is a 
global supplier of building materials. In the United States, CRH, 
through its vast network of subsidiaries, is a leader in the supply of 
aggregate, asphalt concrete, and ready mix concrete, among numerous 
other things, conducting business in 44 states, and employing 18,500 
people at close to 1,200 operating locations across the country. In 
2015, CRH had global sales of approximately $26 billion, with sales in 
the United States of approximately $14 billion.
    6. Defendant CRH Americas is incorporated in Delaware. CRH 
Americas' principal place of business is in Atlanta, Georgia, and the 
headquarters of its Mid-Atlantic Division is in Dunbar, West Virginia. 
CRH Americas is a subsidiary (through its parent CRH Americas, Inc.) of 
CRH plc. CRH Americas is one of the largest suppliers of aggregate, 
asphalt concrete, ready mix concrete, and construction and paving 
services in the United States. CRH Americas has a large network of 
subsidiaries in the United States that operate in different localities. 
For example, West Virginia Paving, Inc. is a subsidiary of CRH 
Americas. West Virginia Paving, Inc. is a highway grading and paving 
contractor throughout West Virginia.
    7. Defendant Pounding Mill is a Delaware corporation headquartered 
in Bluefield, Virginia. Pounding Mill owns and operates four quarries--
three in Virginia and one in West Virginia--from which it supplies 
aggregate. In 2015,

[[Page 30958]]

Pounding Mill had sales of approximately $44 million.
    8. In June of 2014, CRH Americas and Pounding Mill signed a letter 
of intent pursuant to which CRH Americas agreed to purchase Pounding 
Mill. The primary assets to be acquired are Pounding Mill's four 
quarries, including the real property associated with those quarries, 
and the equipment used to operate the quarries. The parties entered 
into a purchase agreement in March 2018.

III. JURISDICTION AND VENUE

    9. The United States brings this action pursuant to Section 15 of 
the Clayton Act, 15 U.S.C. Sec.  25, to prevent and restrain defendants 
from violating Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.
    10. Defendants produce and sell aggregate, asphalt concrete, paving 
services, and other products in the flow of interstate commerce. 
Defendants' activity in the sale of aggregate and other products 
substantially affects interstate commerce. The Court has subject matter 
jurisdiction over this action pursuant to Section 15 of the Clayton 
Act, 15 U.S.C. Sec.  25, and 28 U.S.C. Sec. Sec.  1331, 1337(a), and 
1345.
    11. Defendants have consented to personal jurisdiction and venue in 
the District of Columbia. Venue, therefore, is proper under Section 12 
of the Clayton Act, 15 U.S.C. Sec.  22 and 28 U.S.C. Sec.  1391(c).

IV. RELEVANT MARKETS

A. Relevant Product Markets

1. WVDOT Aggregate

    12. Aggregate is particulate material that primarily includes 
crushed stone, sand, and gravel. It is produced at mines, quarries, and 
gravel pits and is used for a variety of construction projects. 
Aggregate generally can be categorized based on size into fine 
aggregate and coarse aggregate. Within the categories of fine and 
coarse aggregate, aggregate is further identified based on the size of 
the aggregate and the type of rock that it is. Aggregate can also 
differ based on hardness, durability, and polish value, among other 
characteristics.
    13. The various sizes and types of aggregate are distinct and often 
used for different purposes. For example, the aggregate that is used as 
a road base may be different than the aggregate that is mixed into 
asphalt concrete.
    14. Aggregate is an essential component of road construction 
projects, such as building or repairing roads. Aggregate is used in 
road projects as a base that is laid and compacted under the asphalt 
concrete. Aggregate also is an essential ingredient in asphalt 
concrete, which is used for paving roads and other areas. There are no 
substitutes for aggregate in these types of road construction projects 
because no other material can be used for the same purpose.
    15. To evaluate the proposed acquisition's effects on the market 
for aggregate, it is appropriate to include all sizes and kinds of 
aggregate because, with limited exceptions, each size and type of 
aggregate is offered under similar competitive conditions in the 
relevant geographic market. Thus, the grouping of the various sizes and 
types of aggregate makes evaluating competitive effects more efficient 
without undermining the reliability of the analysis. One exception to 
this aggregation is ``friction- course'' aggregate, which is a 
specialized variety used exclusively to create the anti-skid surface 
layer of roads. Pounding Mill does not have the ability to manufacture 
friction- coarse aggregate and the competitive conditions for that 
product are not similar to the remaining aggregate market.
    16. Because different types, sizes, and qualities of aggregate are 
needed depending on the intended use, the end-use customer establishes 
the exact specifications that the aggregate must meet for each 
application. These specifications are designed by the project engineers 
to ensure the safety and longevity of road construction projects.
    17. WVDOT purchases significant quantities of aggregate for its 
road construction projects, which include building, repairing, and 
maintaining roads and bridges in West Virginia. For these projects, 
aggregate is needed as an input into the asphalt concrete that is used 
to pave the roads. Aggregate is also necessary for other parts of the 
road or bridge, such as road base. WVDOT also purchases significant 
quantities of aggregate for its maintenance yards. These maintenance 
yards are used to store the aggregate purchased directly by WVDOT for 
use on the projects WVDOT completes itself, instead of through a 
contractor, such as fixing a pothole or repaving a small area of a 
road.
    18. For each road project, WVDOT provides the precise 
specifications for the aggregate used for asphalt concrete and road 
base, among other things. For example, particular types of aggregate 
are used to strengthen the asphalt and ensure that the road remains 
stable. WVDOT specifications are designed to ensure that the roads and 
bridges are built safely and withstand heavy usage over time. WVDOT 
tests the aggregate used in its projects to ensure that it meets 
specifications. The use of aggregate that does not meet WVDOT 
specifications could compromise the safety of roads or bridges, or 
cause the need for repairs sooner than would otherwise be required. 
Therefore, aggregate that does not meet WVDOT specifications cannot be 
used.
    19. A small but significant increase in the price of aggregate that 
meets WVDOT specifications (hereinafter ``WVDOT aggregate'') would not 
cause WVDOT to substitute other types of materials in sufficient 
quantities, or to utilize aggregate that does not meet its 
specifications, with sufficient frequency so as to make such a price 
increase unprofitable. Accordingly, WVDOT aggregate is a line of 
commerce and a relevant product market within the meaning of Section 7 
of the Clayton Act.

2. WVDOT Asphalt Concrete

    20. Asphalt concrete is a composite material that is used to 
surface roads, parking lots, and airport tarmacs, among other things. 
Asphalt concrete consists of aggregate combined with liquid asphalt and 
other materials. After it is mixed, the asphalt concrete is laid in 
several layers and compacted. Asphalt concrete has unique performance 
characteristics compared to other building materials, such as ready mix 
concrete. For example, asphalt concrete is the desired material used to 
build roadways because it has optimal surface durability and friction, 
resulting in low tire wear, high breaking efficiency, and low roadway 
noise. Other products generally cannot be used as economically to build 
and maintain roadways and therefore are not adequate substitutes. Ready 
mix concrete in particular is significantly more expensive for paving 
roadways than asphalt concrete and takes significantly longer to set, 
delaying the use of the road. Only in limited circumstances can ready 
mix concrete be used to build new roads. In addition, ready mix 
concrete cannot be used for repairing asphalt-concrete roads.
    21. WVDOT purchases significant quantities of asphalt concrete for 
road construction and maintenance projects within the State of West 
Virginia. For each road project, WVDOT provides the precise 
specifications for the asphalt concrete. WVDOT specifications are 
designed to ensure that the roads are built safely and withstand heavy 
usage over time. WVDOT tests the asphalt concrete used in its projects 
to ensure that it meets WVDOT specifications. Using asphalt concrete 
that does not meet WVDOT specifications could

[[Page 30959]]

compromise the safety of the road or cause the need for repairs sooner 
than would otherwise be required. Therefore, asphalt concrete that does 
not meet WVDOT specifications cannot be used.
    22. A small but significant increase in the price of asphalt 
concrete that meets WVDOT specifications (hereinafter ``WVDOT asphalt 
concrete'') would not cause WVDOT to substitute other materials in 
sufficient quantities, or to utilize asphalt concrete that does not 
meet its specifications, with sufficient frequency so as to make such a 
price increase unprofitable. Accordingly, WVDOT asphalt concrete is a 
line of commerce and a relevant product market within the meaning of 
Section 7 of the Clayton Act.

B. Geographic Markets

1. WVDOT Aggregate

    23. Aggregate is a relatively low-cost product that is bulky and 
heavy, with high transportation costs. The geographic area an aggregate 
supplier can profitably serve is primarily determined by: (1) the 
distance from the quarry to the job site where the aggregate is used; 
and (2) the relative distance between the supplier's competitor's 
quarry and the job site compared to its own. Suppliers know the 
importance of transportation costs to a customer's selection of an 
aggregate supplier and also know the locations of all their 
competitors. An aggregate supplier can often charge a lower/more 
competitive price than its competitor if its quarry is closer to the 
customer's location than its competitor's quarry.
    24. CRH Americas owns and operates aggregate quarries located in 
Beckley and Lewisburg, West Virginia. Those quarries sell WVDOT 
aggregate to customers with plant locations or job sites in the 
following four counties in West Virginia: Wyoming, Raleigh, Mercer, and 
Summers (these four counties are hereinafter referred to as ``Southern 
West Virginia''). Customers with plant locations or job sites within 
Southern West Virginia may also economically procure WVDOT aggregate 
from Pounding Mill's quarries located in Princeton, West Virginia and 
Rocky Gap, Virginia, and from another smaller third-party quarry 
located in Lewisburg, West Virginia. For many customer locations in 
Southern West Virginia, quarries owned by CRH Americas and Pounding 
Mill are the two closest options and can quote different prices based 
on the location of a customer in relation to each supplier's quarries.
    25. Figure 1 below shows the locations of CRH Americas' and 
Pounding Mill's aggregate quarries in and near Southern West Virginia.
[GRAPHIC] [TIFF OMITTED] TN02JY18.000

    26. A small but significant post-acquisition increase in the price 
of WVDOT aggregate to customers with plants or job sites in Southern 
West Virginia would not cause those customers to substitute another 
product or procure aggregate from suppliers other than CRH Americas, 
Pounding Mill, and the third competitor in sufficient quantities so as 
to make such a price increase unprofitable. Accordingly, Southern West 
Virginia is a relevant geographic market for WVDOT aggregate within the 
meaning of Section 7 of the Clayton Act.

2. WVDOT Asphalt Concrete

    27. As with aggregate, the geographic area an asphalt-concrete 
plant can profitably serve is primarily determined by the location of 
its plant in relation to the job site and the relative location of 
competing suppliers. Asphalt-concrete suppliers typically deliver 
asphalt concrete to a job site.
    28. Distance from the plant to the job site is important for two 
reasons-- temperature and transportation costs. First, asphalt concrete 
must be maintained at a certain temperature range before it is poured. 
If the temperature drops below that required by the asphalt-concrete 
specifications, it cannot be used. The temperature of asphalt concrete 
drops as it travels from

[[Page 30960]]

the plant and drops faster in colder weather than in warmer weather. As 
a result, the distance between an asphalt-concrete plant and the 
project site determines whether a plant can service a particular 
geographic area. Second, asphalt concrete is heavy and as a result 
transporting it is expensive. Therefore, the distance between the site 
where the asphalt concrete is poured and the asphalt-concrete plant 
drives the transportation costs and has a considerable impact on the 
area a supplier can profitably serve.
    29. A further factor that determines the area a supplier can 
profitably serve is the location of its plant in relation to the 
location of competing plants. Suppliers know the importance of 
transportation costs to a customer's selection of a supplier and also 
generally know how far each competing supplier can deliver asphalt 
concrete. An asphalt-concrete supplier often can charge a lower/more 
competitive price than its competitor if its plant is closer to the 
customer's location than its competitor's plant.
    30. CRH Americas has an advantage with respect to transportation 
costs because it owns several asphalt-concrete plants in Southern West 
Virginia. CRH Americas owns and operates three of the four asphalt-
concrete plants that supply WVDOT asphalt concrete and serve customers 
in Southern West Virginia. Customers with job sites in Southern West 
Virginia may also economically procure WVDOT asphalt concrete from CRH 
Americas' sole asphalt-concrete competitor, which operates one asphalt-
concrete plant in Mercer County. Pounding Mill does not own any 
asphalt- concrete plants, though it is currently supplying CRH 
Americas' competitor in the production of asphalt concrete with the 
aggregate it needs to compete. Thus, the four asphalt-concrete plants 
that serve Southern West Virginia procure aggregate from CRH Americas 
and Pounding Mill.
    31. Figure 2 below shows the locations of the four asphalt-concrete 
plants in Southern West Virginia and the location of the aggregate 
quarries that supply those plants.
[GRAPHIC] [TIFF OMITTED] TN02JY18.001

    32. A small but significant post-acquisition increase in the price 
of WVDOT asphalt concrete to customers with job sites in Southern West 
Virginia would not cause those customers to substitute another product 
or procure WVDOT asphalt concrete from suppliers other than CRH 
Americas or its rival in sufficient quantities so as to make such a 
price increase unprofitable. Accordingly, Southern West Virginia 
constitutes a relevant geographic market for WVDOT asphalt concrete 
within the meaning of Section 7 of the Clayton Act.

V. ANTICOMPETITIVE EFFECTS OF CRH AMERICAS' ACQUISITION OF POUNDING 
MILL

A. Anticompetitive Effects in the Market for WVDOT Aggregate

    33. If CRH Americas acquired Pounding Mill, competition would be 
substantially lessened for the supply of WVDOT aggregate in Southern 
West Virginia. This market is already highly concentrated and would 
become significantly more concentrated as a result of CRH Americas' 
acquisition of Pounding Mill's quarries.
    34. For all WVDOT aggregate supplied in Southern West Virginia, 
including aggregate supplied to WVDOT through contractors for road 
projects and aggregate purchased directly by WVDOT for its maintenance 
yards, CRH Americas and Pounding Mill's combined market share is well 
over 80 percent. Moreover, the companies' combined share is even 
higher--over 90 percent--for the aggregate supplied by contractors for 
use in road projects.
    35. Acquisitions that reduce the number of competitors in already 
concentrated markets are more likely to substantially lessen 
competition. Concentration can be measured in various ways, including 
by market shares and by the widely-used Herfindahl-Hirschman Index 
(``HHI'').

[[Page 30961]]

Under the Horizontal Merger Guidelines, post- acquisition HHIs above 
2,500 and changes in HHI above 200 trigger a presumption that a 
proposed acquisition is likely to enhance market power and 
substantially lessen competition in a defined market.
    36. Premerger, the HHI for aggregate supplied for WVDOT road 
projects is approximately 4,350. The post-acquisition HHI is 
approximately 8,500, with an increase of over 4,000. For WVDOT 
aggregate purchased by WVDOT for its maintenance yards, the premerger 
HHI is approximately 3,800. Post-acquisition, the HHI is approximately 
6,700, with an increase of nearly 3,000. Given the extraordinarily high 
pre- and post- acquisition concentration levels in the relevant markets 
described above, CRH Americas' proposed acquisition of Pounding Mill 
presumptively violates Section 7 of the Clayton Act.
    37. CRH Americas and Pounding Mill compete vigorously in the market 
for WVDOT aggregate in Southern West Virginia. For many customers and 
job sites in that area, they are the first- and second-best sources of 
supply for aggregate in terms of price, quality, and reliability of 
delivery.
    38. Only one other company, located in Lewisberg, West Virginia, is 
able to supply WVDOT aggregate in Southern West Virginia in any 
meaningful quantity. But while this competitor supplies WVDOT aggregate 
to maintenance yards, it has not bid on many road projects, leaving 
only CRH Americas and Pounding Mill to compete for many of those large 
projects.
    39. While a few other small suppliers provide limited quantities of 
WVDOT aggregate for maintenance yards in Southern West Virginia, they 
are unable to provide the large quantity of aggregate needed on road 
projects and do not supply the types or quality of aggregate needed for 
the asphalt concrete and road base. For example, the quarries located 
to the south and west of Pounding Mill's quarries are too far from 
Southern West Virginia to effectively compete in the relevant market 
and, as a result, have a small share in that market and almost no 
influence on price.
    40. The proposed acquisition would substantially increase the 
likelihood that CRH Americas would unilaterally increase the price of 
WVDOT aggregate to customers in Southern West Virginia. Without the 
constraint of competition between CRH Americas and Pounding Mill, the 
combined firm would have a greater ability to exercise market power by 
raising prices to customers for whom CRH Americas and Pounding Mill 
were the two best sources of WVDOT aggregate.
    41. Therefore, the proposed acquisition would substantially lessen 
competition in the market for WVDOT aggregate in Southern West 
Virginia. This is likely to lead to higher prices for the ultimate 
consumers of such aggregate, in violation of Section 7 of the Clayton 
Act.

B. Anticompetitive Effects in the Market for WVDOT Asphalt Concrete

    42. CRH Americas' acquisition of Pounding Mill would substantially 
lessen competition in the market for WVDOT asphalt concrete in Southern 
West Virginia. CRH Americas has historically dominated this market. 
Pounding Mill does not compete directly with CRH Americas in the 
asphalt-concrete market, but it is a supplier of aggregate to CRH 
Americas' only competitor. That competitor, a recent entrant, has begun 
making inroads in the WVDOT asphalt-concrete market, and eroding CRH 
Americas' dominant position. By building its asphalt-concrete plant 
close to Pounding Mill's quarry in Mercer County, this entrant 
attempted to ensure that it would have a reliable, nearby source of 
aggregate, which allowed it to charge competitive prices. Pounding Mill 
is uniquely positioned to provide asphalt-concrete producers such as 
this entrant with competitively-priced aggregate, because it is not 
itself vertically integrated, and so has no incentive to raise the 
costs or otherwise disadvantage other asphalt- concrete producers.
    43. If the proposed acquisition were consummated, this entrant 
could no longer be assured an economical source of WVDOT aggregate. 
Post-merger, CRH Americas would have the ability and incentive to use 
its ownership of Pounding Mill's quarries to disadvantage its rival by 
either withholding WVDOT aggregate or supplying it at less favorable 
terms than Pounding Mill currently provides.
    44. Any post-merger conduct by CRH Americas that cuts off the 
supply of WVDOT aggregate or raises the cost of that input, would 
weaken its asphalt-concrete rival's ability to compete on price. If CRH 
Americas' rival cannot win WVDOT contracts, it may find it impossible 
to stay in business, thereby ensuring CRH Americas' control over the 
entire market for WVDOT asphalt concrete in Southern West Virginia.
    45. Post-acquisition, CRH Americas would have the incentive and 
ability to raise the price or sacrifice sales of WVDOT aggregate in 
order to maintain its dominance in the asphalt-concrete market. Such a 
strategy would be attractive in part because the sale of asphalt 
concrete is significantly more profitable than the sale of aggregate. 
Therefore, if CRH Americas were able to gain additional asphalt-
concrete sales by raising the price of aggregate to its rival, 
foreclosing supply, or delaying deliveries, the additional asphalt-
concrete sales would be considerably more profitable to CRH Americas 
than any lost aggregate sales.
    46. By raising the costs of its sole competitor in the provision of 
WVDOT asphalt concrete, CRH Americas likely would gain the ability to 
unilaterally raise the price of WVDOT asphalt concrete in Southern West 
Virginia.
    47. Therefore, the acquisition of Pounding Mill's quarries would 
give CRH Americas the incentive and ability to either eliminate or 
raise the costs of its sole asphalt- concrete competitor. As a result, 
the acquisition would substantially lessen competition in the market 
for WVDOT asphalt concrete in Southern West Virginia in violation of 
Section 7 of the Clayton Act.

VI. ENTRY WILL NOT CONSTRAIN CRH AMERICAS' MARKET POWER IN THE RELEVANT 
MARKETS

    48. Entry into the market for WVDOT aggregate in Southern West 
Virginia is unlikely to be timely, likely, and sufficient to constrain 
CRH Americas' market power post-merger given the substantial time and 
cost required to open a quarry. Entry is likely to take two years or 
more. First, securing the proper site for a quarry is difficult and 
time-consuming. There are few sites on which to locate coarse aggregate 
operations in or near Southern West Virginia. Finding land with the 
correct rock composition requires extensive investigation and testing 
of candidate sites, as well as the negotiation of necessary land 
transfers, leases, and/or easements. Further, the location of a quarry 
close to likely job sites is extremely important due to the high cost 
of transporting aggregate. Once a location is chosen, obtaining the 
necessary permits is difficult and time- consuming. Attempts to open a 
new quarry often face fierce public opposition, which can prevent a 
quarry from opening or make opening it much more time-consuming and 
costly. Finally, even after a site is acquired and permitted, the owner 
must spend significant time and resources to prepare the land and 
purchase and install the necessary equipment.
    49. Moreover, once a quarry is operating, a supplier must 
demonstrate that its aggregate meets WVDOT specifications. WVDOT 
qualification

[[Page 30962]]

requires testing. Until the aggregate can meet these specifications, it 
cannot be used to supply WVDOT road construction projects.
    50. Entry into the market for WVDOT asphalt concrete in Southern 
West Virginia also is unlikely to be timely, likely, and sufficient to 
constrain CRH Americas' post-merger market power. Potential entrants in 
WVDOT asphalt concrete must have access to WVDOT aggregate. Only CRH 
Americas and one other competitor would be available to supply WVDOT 
aggregate in Southern West Virginia and, for many locations in Southern 
West Virginia, the remaining competitor would not be an economical 
alternative.
    51. Post-acquisition, CRH Americas would have the incentive and 
opportunity to foreclose its competitors' access to WVDOT aggregate or 
disadvantage its rivals by either withholding WVDOT aggregate or 
supplying it on less favorable terms. Lack of access to a reliable, 
independent supply of aggregate would deter or prevent timely or 
sufficient entry into the asphalt-concrete market in Southern West 
Virginia.
    52. In addition, an entrant into the asphalt-concrete market would 
have to purchase appropriate land close to an aggregate quarry, build a 
plant, procure the necessary land-use and environmental permits, and 
obtain WVDOT approval of each asphalt-concrete mix made, among other 
things. These actions involve significant costs and often lengthy time 
periods.

VII. THE ACQUISITION VIOLATES SECTION 7 OF THE CLAYTON ACT

    53. If allowed to proceed, CRH Americas' proposed acquisition of 
Pounding Mill is likely to substantially lessen competition in the 
markets for WVDOT aggregate in Southern West Virginia and WVDOT asphalt 
concrete in Southern West Virginia in violation of Section 7 of the 
Clayton Act, 15 U.S.C. Sec.  18.
    54. Unless enjoined, the proposed acquisition likely would have the 
following anticompetitive effects, among others:
    (a) actual and potential competition between CRH Americas and 
Pounding Mill in the market for WVDOT aggregate in Southern West 
Virginia would be eliminated;
    (b) the sole remaining competitor for WVDOT asphalt concrete would 
lose its aggregate supplier or be forced to pay significantly higher 
prices for aggregate, substantially reducing price competition in the 
market for WVDOT asphalt concrete;
    (c) prices for WVDOT aggregate in Southern West Virginia likely 
would increase and customer service likely would decrease; and
    (d) prices for WVDOT asphalt concrete in Southern West Virginia 
likely would increase and customer service likely would decrease.

VIII. REQUESTED RELIEF

    55. The United States requests that this Court:
    (a) adjudge and decree that CRH Americas' acquisition of Pounding 
Mill's assets would be unlawful and violate Section 7 of the Clayton 
Act, 15 U.S.C. Sec.  18;
    (b) preliminarily and permanently enjoin and restrain defendants 
and all persons acting on their behalf from consummating the proposed 
acquisition of Pounding Mill or its assets by CRH Americas, or from 
entering into or carrying out any other contract, agreement, plan, or 
understanding, the effect of which would be to combine CRH Americas 
with Pounding Mill;
    (c) award the United States its costs for this action; and
    (d) award the United States such other and further relief as the 
Court deems just and proper.

Dated: June 22, 2018
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA:

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Makan Delrahim (D.C. Bar #457795),
Assistant Attorney General for Antitrust.

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Maribeth Petrizzi (D.C. Bar #435204),
Chief, Defense, Industrials, and Aerospace Section.

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Andrew C. Finch (D.C. Bar #494992),
Principal Deputy Assistant Attorney General.

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Stephanie A. Fleming,
Assistant Chief, Defense, Industrials, and Aerospace Section.

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Bernard A. Nigro, Jr. (D.C. Bar #412357),
Deputy Assistant Attorney General.

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Patricia A. Brink,
Director of Civil Enforcement.

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Christine A. Hill (D.C. Bar #461048),
Daniel Monahan,
Angela Ting,

Attorneys.

United States Department of Justice, Antitrust Division, Defense, 
Industrials, and Aerospace Section, 450 Fifth Street, N.W., Suite 8700, 
Washington, D.C. 20530, (202) 305-2738, [email protected].

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

    United States of America, Plaintiff, v. CRH PLC, CRH Americas 
Materials, Inc., and Pounding Mill Quarry Corporation, Defendants.

No. 18-cv-1473
Judge Dabney L. Friedrich

PROPOSED FINAL JUDGMENT

    WHEREAS, Plaintiff, United States of America, filed its Complaint 
on June 22, 2018, the United States and defendants, CRH plc, CRH 
Americas Materials, Inc., and Pounding Mill Quarry Corporation, by 
their respective attorneys, have consented to the entry of this Final 
Judgment without trial or adjudication of any issue of fact or law, and 
without this Final Judgment constituting any evidence against or 
admission by any party regarding any issue of fact or law;
    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 the prompt and 
certain divestiture of certain rights or assets by 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 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 defendants under Section 7 of the Clayton 
Act, 15 U.S.C. Sec.  18, as amended.

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' means Salem Stone or another entity to which 
defendants divest the Divestiture Assets.

[[Page 30963]]

    B. ``CRH'' means defendant CRH plc, an Irish public limited company 
with its headquarters in Dublin, Ireland, its successors and assigns, 
and its subsidiaries, divisions, groups, affiliates, partnerships and 
joint ventures, and their directors, officers, managers, agents, and 
employees.
    C. ``CRH Americas'' means defendant CRH Americas Materials, Inc., a 
Delaware corporation with its principal place of business in Atlanta, 
Georgia, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and their 
directors, officers, managers, agents, and employees.
    D. ``Pounding Mill'' means defendant Pounding Mill Quarry 
Corporation, a Virginia corporation with its headquarters in Bluefield, 
Virginia, its successors and assigns, and its subsidiaries, divisions, 
groups, affiliates, partnerships and joint ventures, and their 
directors, officers, managers, agents, and employees.
    E. ``Salem Stone'' means Salem Stone Corporation, a Virginia 
corporation with its headquarters in Dublin, Virginia, its successors 
and assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, and their directors, officers, 
managers, agents, and employees.
    F. ``Closing'' means the closing of the transaction between CRH 
Americas and Pounding Mill pursuant to which CRH Americas acquires the 
assets of Pounding Mill.
    G. ``Divestiture Assets'' means all assets associated with or 
utilized by Pounding Mill's Rocky Gap quarry, including, but not 
limited to:
    1. All real property, including:
    (a) All real property that is subject to the deed of record dated 
December 14, 1991, and registered in Bland County, Virginia in Deed 
Book 134, Page 138, less and except the right of way of the Norfolk and 
Western Railway as described in the deed recorded in Deed Book 20, Page 
586; and those properties described in deeds recorded in Deed Book 21, 
Page 77; Deed Book 31, Page 478; Deed Book 32, Page 388; and Deed Book 
53, Page 220;
    (b) All real property that is subject to the deed of record dated 
July 8, 1989, and registered in Bland County, Virginia in Deed Book 99, 
Page 626, except the property described in the deed recorded in Deed 
Book 34, Page 295; and
    (c) All real property that is subject to the deed of record dated 
February 8, 2017, and registered in Bland County, Virginia under 
Instrument Number 170000077, except those properties described in deeds 
recorded in Deed Book 53, Page 334; Deed Book 53, Page 360; Deed Book 
57, Page 138; Deed Book 59, Page 96; Deed Book 59, Page 98; Deed Book 
61, Page 397; Deed Book 62, Page 171; Deed Book 60, Page 653; and Deed 
Book 62, Page 168.
    2. All tangible assets that have been primarily used at or in 
connection with the Rocky Gap quarry at any time since July 31, 2016, 
including, but not limited to: all equipment, vehicles, and buildings; 
tooling and fixed assets, personal property, inventory, office 
furniture, materials, and supplies; geologic maps, core drillings, and 
core samples; aggregate reserve testing information, results, and 
analyses; research and development activities; licenses, permits, and 
authorizations issued by any governmental organization; all contracts, 
teaming arrangements, agreements, leases, commitments, certifications, 
and understandings, including, but not limited to, all contracts that 
have been fulfilled in part or in whole with aggregate produced at the 
Rocky Gap quarry; customer lists, accounts, and credit records; repair 
and performance records, records relating to testing or approvals by 
the West Virginia Department of Transportation or Virginia Department 
of Transportation, and all other records;
    3. All intangible assets that have been primarily used at or in 
connection with the Rocky Gap quarry at any time since July 31, 2016, 
including, but not limited to, all patents, licenses, sublicenses, 
intellectual property, copyrights, trademarks, trade names, service 
marks, service names, technical information, computer software and 
related documentation, know-how, trade secrets, drawings, blueprints, 
designs, design protocols, specifications for materials, specifications 
for parts and devices, safety procedures, research data concerning 
historic and current research and development, quality assurance and 
control procedures, design tools and simulation capability, and manuals 
and technical information defendants provide to their own employees, 
customers, suppliers, agents, or licensees.

III. APPLICABILITY

    A. This Final Judgment applies to CRH, CRH Americas, and Pounding 
Mill, 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 and 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. DIVESTITURE

    A. CRH and CRH Americas are ordered and directed, within ten (10) 
business days after the Court signs the Hold Separate Stipulation and 
Order in this matter 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. Defendants agree to use their best efforts to 
divest the Divestiture Assets as expeditiously as possible.
    B. In accomplishing the divestiture ordered by this Final Judgment, 
defendants shall offer to furnish to the Acquirer, subject to customary 
confidentiality assurances, all information and documents relating to 
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. 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. At the option of the Acquirer, defendants shall provide the 
Acquirer and the United States information relating to the personnel 
involved in the production and sale of aggregate and asphalt concrete 
at defendants' locations in: (1) the following counties in West 
Virginia: Boone, Clay, Fayette, Greenbrier, Logan, McDowell, Mercer, 
Mingo, Monroe, Nicholas, Raleigh, Summers, and Wyoming; and (2) the 
following counties in Virginia: Bland, Buchanan, Giles, Russell, and 
Tazewell, to enable the Acquirer to make offers of employment. 
Defendants shall not interfere with any negotiations by the Acquirer to 
employ any employee of CRH, CRH Americas, or Pounding Mill at any of 
the defendants' operations located in the counties listed in this 
paragraph. Defendants shall waive all non-compete agreements for any 
employee who elects employment with the Acquirer.
    D. Prior to Closing Pounding Mill shall, and after Closing CRH and 
CRH Americas shall, permit prospective Acquirers of the Divestiture 
Assets to

[[Page 30964]]

have reasonable access to personnel and to make inspections of the 
physical facilities of the Rocky Gap quarry; access to any and all 
environmental, zoning, and other permit documents and information; 
access to any aggregate reserve estimates and geological studies; and 
access to any and all financial, operational, or other documents and 
information customarily provided as part of a due diligence process.
    E. Pounding Mill shall ensure that each asset is operational on the 
date of Closing and that there are no material defects in the 
environmental, zoning, or other permits pertaining to the operation of 
each asset as of the date of Closing.
    F. CRH and CRH Americas shall warrant to the Acquirer that each 
asset will be operational on the date of sale of the Divestiture Assets 
and that there are no material defects in the environmental, zoning, or 
other permits pertaining to the operation of each asset on the date of 
sale of the Divestiture Assets.
    G. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    H. Defendants shall not undertake, directly or indirectly, any 
challenges to the environmental, zoning, or other permits relating to 
the operation of the Divestiture Assets.
    I. Unless the United States otherwise consents in writing, the 
divestiture, whether pursuant to Section IV or V of this Final 
Judgment, shall include the entire Divestiture Assets, and 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 involved in the 
production and sale of aggregate. The divestiture, whether pursuant to 
Section IV or V of this Final Judgment,

    (1) shall be made to an Acquirer that, in the United States' 
sole judgment, has the intent and capability (including the 
necessary managerial, operational, technical and financial 
capability) of competing effectively in the production and sale of 
aggregate; 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 
the Acquirer and CRH give CRH 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.

    J. Within ten (10) calendar days of the date of sale of the 
Divestiture Assets to the Acquirer, CRH shall provide a notification of 
the divestiture to all customers that purchased: (1) 500 tons or more 
of aggregate per project from CRH Americas' Alta quarry, CRH Americas' 
Beckley quarry, or any Pounding Mill quarry since January 1, 2016; or 
(2) 2,000 tons of aggregate or more per project from CRH Americas' Alta 
quarry, CRH Americas' Beckley quarry, or any Pounding Mill quarry since 
January 1, 2014. The notification must be in a form approved by the 
United States, in its sole discretion, and shall state that the 
Divestiture Assets are now owned by the Acquirer, are not affiliated 
with CRH, CRH Americas, or Pounding Mill, and shall include with such 
notice a copy of this proposed Final Judgment. CRH shall provide the 
United States with a copy of its draft notice no fewer than five (5) 
calendar days before it is sent to customers.

V. APPOINTMENT OF DIVESTITURE TRUSTEE

    A. If CRH and CRH Americas have not divested the Divestiture Assets 
within the time period specified in Paragraph IV(A), they shall notify 
the United States of that fact in writing. Upon application of the 
United States, the Court shall appoint a Divestiture 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 Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the Divestiture Assets. The Divestiture 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 Divestiture 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 Paragraph V(D) of this Final Judgment, the Divestiture Trustee may 
hire at the cost and expense of CRH and CRH Americas any investment 
bankers, attorneys, or other agents, who shall be solely accountable to 
the Divestiture Trustee, reasonably necessary in the Divestiture 
Trustee's judgment to assist in the divestiture. Any such investment 
bankers, attorneys, or other agents shall serve on such terms and 
conditions as the United States approves including confidentiality 
requirements and conflict of interest certifications.
    C. Defendants shall not object to a sale by the Divestiture Trustee 
on any ground other than the Divestiture Trustee's malfeasance. Any 
such objections by defendants must be conveyed in writing to the United 
States and the Divestiture Trustee within ten (10) calendar days after 
the Divestiture Trustee has provided the notice required under Section 
VI.
    D. The Divestiture Trustee shall serve at the cost and expense of 
CRH and CRH Americas pursuant to a written agreement, on such terms and 
conditions as the United States approves including confidentiality 
requirements and conflict of interest certifications. The Divestiture 
Trustee shall account for all monies derived from the sale of the 
assets sold by the Divestiture Trustee and all costs and expenses so 
incurred. After approval by the Court of the Divestiture Trustee's 
accounting, including fees for its services yet unpaid and those of any 
professionals and agents retained by the Divestiture Trustee, all 
remaining money shall be paid to CRH and CRH Americas and the trust 
shall then be terminated. The compensation of the Divestiture Trustee 
and any professionals and agents retained by the Divestiture Trustee 
shall be reasonable in light of the value of the Divestiture Assets and 
based on a fee arrangement providing the Divestiture 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. If the 
Divestiture Trustee and CRH and CRH Americas are unable to reach 
agreement on the Divestiture Trustee's or any agents' or consultants' 
compensation or other terms and conditions of engagement within 
fourteen (14) calendar days of appointment of the Divestiture Trustee, 
the United States may, in its sole discretion, take appropriate action, 
including making a recommendation to the Court. The Divestiture Trustee 
shall, within three (3) business days of hiring any other professionals 
or agents, provide written notice of such hiring and the rate of 
compensation to CRH, CRH Americas, and the United States.
    E. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestiture. The 
Divestiture Trustee and any consultants, accountants, attorneys, and 
other agents retained by the Divestiture Trustee shall have full and 
complete access to the personnel, books, records, and facilities of the 
business to be divested, and defendants shall develop financial and 
other information relevant to such business as the Divestiture Trustee 
may reasonably request, subject to reasonable protection for trade 
secret or other confidential research, development, or commercial 
information or any applicable privileges. Defendants shall take no 
action to interfere with or to impede the

[[Page 30965]]

Divestiture Trustee's accomplishment of the divestiture.
    F. After its appointment, the Divestiture Trustee shall file 
monthly reports with the United States and, as appropriate, the Court 
setting forth the Divestiture Trustee's efforts to accomplish the 
divestiture ordered under this Final Judgment. To the extent such 
reports contain information that the Divestiture 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 Divestiture Trustee shall maintain 
full records of all efforts made to divest the Divestiture Assets.
    G. If the Divestiture Trustee has not accomplished the divestiture 
ordered under this Final Judgment within six months after its 
appointment, the Divestiture Trustee shall promptly file with the Court 
a report setting forth: (1) the Divestiture Trustee's efforts to 
accomplish the required divestiture; (2) the reasons, in the 
Divestiture Trustee's judgment, why the required divestiture has not 
been accomplished, and (3) the Divestiture Trustee's recommendations. 
To the extent such report contains information that the Divestiture 
Trustee deems confidential, such report shall not be filed in the 
public docket of the Court. The Divestiture Trustee shall at the same 
time furnish such report to the United States which shall have the 
right to make additional recommendations consistent with the purpose of 
the trust. The Court thereafter shall enter such orders as it shall 
deem appropriate to carry out the purpose of the Final Judgment, which 
may, if necessary, include extending the trust and the term of the 
Divestiture Trustee's appointment by a period requested by the United 
States.
    H. If the United States determines that the Divestiture Trustee has 
ceased to act or failed to act diligently or in a reasonably cost-
effective manner, it may recommend the Court appoint a substitute 
Divestiture Trustee.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. Within two (2) business days following execution of a definitive 
divestiture agreement, CRH and CRH Americas or the Divestiture Trustee, 
whichever is then responsible for effecting the divestiture required 
herein, shall notify the United States of any proposed divestiture 
required by Section IV or V of this Final Judgment. If the Divestiture 
Trustee is responsible, it 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 or expressed an interest in or desire to acquire 
any ownership interest in the Divestiture Assets, together with full 
details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such notice, the United States may request from defendants, 
the proposed Acquirer, any other third party, or the Divestiture 
Trustee, if applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer, and any other potential Acquirer. 
Defendants and the Divestiture 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 Divestiture Trustee, 
whichever is later, the United States shall provide written notice to 
CRH and CRH Americas and the Divestiture 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 defendants' limited 
right to object to the sale under Paragraph V(C) of this Final 
Judgment. Absent written notice that the United States does not object 
to the proposed Acquirer or upon objection by the United States, a 
divestiture proposed under Section IV or V shall not be consummated. 
Upon objection by defendants under Paragraph 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, CRH and CRH Americas shall take all steps necessary to 
comply with the Hold Separate Stipulation and Order entered by this 
Court. Prior to the Closing, Pounding Mill 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 signed by each 
defendant's Chief Financial Officer and General Counsel, which shall 
describe the fact and manner of defendants' 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) calendar 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 Acquirers, 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 defendants, including limitation on 
information, shall be made within fourteen (14) calendar 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 in reasonable detail all actions defendants 
have taken and all steps defendants have implemented on an ongoing 
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 such 
divestiture has been completed.

[[Page 30966]]

X. COMPLIANCE INSPECTION

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of any related orders such as any Hold Separate 
Stipulation and Order, 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, 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 to 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' notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XI. NOTIFICATION

    Unless such transaction is otherwise subject to the reporting and 
waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. Sec.  18a (the ``HSR 
Act''), CRH and CRH Americas, without providing advance notification to 
the United States Department of Justice, Antitrust Division, shall not 
directly or indirectly acquire any assets of or any interest, including 
any financial, security, loan, equity or management interest, in any 
businesses involved in the production and/or sale of aggregate and/or 
asphalt concrete in the counties listed in Paragraph IV(C) during the 
term of this Final Judgment.
    Such notification shall be provided to the United States Department 
of Justice, Antitrust Division in the same format as, and per the 
instructions relating to the Notification and Report Form set forth in 
the Appendix to Part 803 of Title 16 of the Code of Federal Regulations 
as amended, except that the information requested in Items 5 through 8 
of the instructions must be provided only for aggregate and/or asphalt 
concrete. Notification shall be provided at least thirty (30) calendar 
days prior to acquiring any such interest, and shall include, beyond 
what may be required by the applicable instructions, the names of the 
principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the proposed transaction. If within the 30-day period after 
notification, representatives of the United States Department of 
Justice, Antitrust Division make a written request for additional 
information, defendants shall not consummate the proposed transaction 
or agreement until thirty calendar days after submitting all such 
additional information. Early termination of the waiting periods in 
this paragraph may be requested and, where appropriate, granted in the 
same manner as is applicable under the requirements and provisions of 
the HSR Act and rules promulgated thereunder. This Section shall be 
broadly construed and any ambiguity or uncertainty regarding the filing 
of notice under this Section shall be resolved in favor of filing 
notice.

XII. NO REACQUISITION

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

XIII. RETENTION OF JURISDICTION

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIV. ENFORCEMENT OF FINAL JUDGMENT

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including its right to seek an order 
of contempt from this Court. Defendants agree that in any civil 
contempt action, any motion to show cause, or any similar action 
brought by the United States regarding an alleged violation of this 
Final Judgment, the United States may establish a violation of the 
decree and the appropriateness of any remedy therefor by a 
preponderance of the evidence, and they waive any argument that a 
different standard of proof should apply.
    B. The Final Judgment should be interpreted to give full effect to 
the procompetitive purposes of the antitrust laws and to restore all 
competition harmed by the challenged conduct. Defendants agree that 
they may be held in contempt of, and that the Court may enforce, any 
provision of this Final Judgment that, as interpreted by the Court in 
light of these procompetitive principles and applying ordinary tools of 
interpretation, is stated specifically and in reasonable detail, 
whether or not it is clear and unambiguous on its face. In any such 
interpretation, the terms of this Final Judgment should not be 
construed against either party as the drafter.
    C. In any enforcement proceeding in which the Court finds that 
defendants have violated this Final Judgment, the United States may 
apply to the Court for a one- time extension of this Final Judgment, 
together with such other relief as may be appropriate. In connection 
with any successful effort by the United States to enforce this Final 
Judgement against a defendant, whether litigated or resolved prior to 
litigation, that defendant agrees to reimburse the United States for 
any attorneys' fees, experts' fees, and costs incurred in connection 
with that enforcement effort,

[[Page 30967]]

including the investigation of the potential violation.

XV. EXPIRATION OF FINAL JUDGMENT

    Unless this Court grants an extension, this Final Judgment shall 
expire ten years from the date of its entry, except that after five (5) 
years from the date of its entry, this Final Judgment may be terminated 
upon notice by the United States to the Court and defendants that the 
divestiture has been completed and that the continuation of the Final 
Judgment no longer is necessary or in the public interest.

XVI. 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. Sec.  16, including making copies available to 
the public of this Final Judgment, the Competitive Impact Statement, 
and any comments thereon and the United States' 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.

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

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

United States District Judge

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. CRH PLC, CRH Americas 
Material, Inc., and Pounding Mill Quarry Corporation, Defendants.

No. 18-cv-01473
Judge Dabney L. Friedrich

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. Sec.  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

    Defendants CRH plc (``CRH''), CRH Americas Materials, Inc. (``CRH 
Americas''), and Pounding Mill Quarry Corporation (``Pounding Mill'') 
entered into a purchase agreement, dated March 26, 2018, pursuant to 
which CRH Americas would acquire the assets of Pounding Mill, including 
four of Pounding Mill's aggregate quarries located in West Virginia and 
Virginia. The United States filed a civil antitrust Complaint on June 
22, 2018, seeking to enjoin the proposed acquisition. The Complaint 
alleges that the likely effect of this acquisition would be to lessen 
competition substantially in the markets for aggregate and asphalt 
concrete that are used in West Virginia Department of Transportation 
(``WVDOT'') road projects in southern West Virginia. This loss of 
competition likely would result in increased prices and decreased 
service in these markets. Therefore, the Complaint alleges that the 
proposed acquisition violates Section 7 of the Clayton Act, 15 U.S.C. 
Sec.  18, and should be enjoined.
    CRH Americas' acquisition of Pounding Mill's aggregate quarries 
would secure CRH Americas' control over the materials necessary to 
build and maintain roads and bridges in southern West Virginia. CRH 
Americas supplies aggregate and asphalt concrete in this area and holds 
significant shares in each market. The proposed acquisition would 
result in CRH Americas owning nearly all of the aggregate quarries that 
supply southern West Virginia and would eliminate the head to head 
competition between CRH Americas and Pounding Mill for the supply of 
aggregate. As a result, prices for aggregate likely would increase 
significantly if the acquisition was consummated. The acquisition also 
would strengthen the virtual monopoly CRH Americas holds over the 
supply of asphalt concrete in southern West Virginia. In that market, 
CRH Americas competes with only one small new entrant that procures 
aggregate from Pounding Mill. There are no alternative aggregate 
suppliers to which that competitor can economically turn. The merger 
would give CRH Americas the means and incentive to disadvantage or 
exclude its competitor by denying it access to aggregate, reliable 
delivery, and competitive prices.
    Along with the Complaint, the United States filed a Hold Separate 
Stipulation and Order (``Hold Separate'') and proposed Final Judgment, 
which are designed to eliminate the anticompetitive effects of the 
acquisition. Under the proposed Final Judgment, explained more fully 
below, CRH Americas is required to divest Pounding Mill's Rocky Gap 
quarry located in Rocky Gap, Virginia (hereinafter, ``Rocky Gap'' or 
the ``Rocky Gap Quarry'') and related assets to Salem Stone Corporation 
(``Salem''). Under the terms of the Hold Separate, CRH Americas will 
take certain steps to ensure that Rocky Gap is operated as a 
competitively independent, economically viable, and ongoing business 
concern that will remain independent and uninfluenced by the 
consummation of the acquisition, and that competition is maintained 
during the pendency of the ordered divestiture.
    The United States and 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. Defendants and the Proposed Transaction

    Defendant CRH is headquartered in Ireland and is a global supplier 
of building materials. In the United States, CRH is a leader in the 
supply of aggregate, asphalt concrete, and ready mix concrete, among 
many other things. In 2015, CRH had global sales of approximately $26 
billion and sales in the United States of approximately $14 billion. 
Defendant CRH Americas (through its parent CRH Americas, Inc.) is a 
subsidiary of CRH plc. CRH Americas is incorporated in Delaware and has 
a principal place of business in Atlanta, Georgia. CRH Americas is one 
of the largest suppliers of aggregate, asphalt concrete, ready mix 
concrete, and construction and paving services in the United States.
    Defendant Pounding Mill is incorporated in Delaware and has its 
headquarters in Virginia. Pounding Mill owns and operates four 
aggregate quarries--three in Virginia and one in West Virginia. In 
2015, Pounding Mill had sales of approximately $44 million.
    On March 26, 2018, CRH Americas and Pounding Mill entered into an 
Asset Purchase Agreement. Pursuant to this agreement, CRH Americas will 
acquire all the assets of Pounding Mill, including four quarries 
located in West Virginia and Virginia and the equipment and other 
property used to operate such quarries and run the Pounding Mill 
business. The proposed transaction, as initially agreed to by 
Defendants, would lessen competition substantially as a result of CRH 
Americas' acquisition of Pounding Mill's assets. This acquisition is 
the subject of the Complaint and

[[Page 30968]]

proposed Final Judgment filed by the United States on June 22, 2018.

B. The Competitive Effects of the Transaction for Aggregate and Asphalt 
Concrete Used for WVDOT Projects

1. Relevant Markets Affected by the Proposed Acquisition

a. Product Markets

i. WVDOT Aggregate

    Aggregate is particulate material that primarily includes crushed 
stone, sand, and gravel. It is produced at mines, quarries, and gravel 
pits and is used for a variety of construction projects. Aggregate 
generally can be categorized based on size into fine aggregate and 
coarse aggregate. Within the categories of fine and coarse aggregate, 
aggregate is further identified based on the size of the aggregate and 
the type of rock. Aggregate also can differ based on hardness, 
durability, and polish value, among other characteristics. Further, 
various sizes and types of aggregate are distinct and often used for 
different purposes.
    Aggregate is an essential component of road construction, such as 
building or repairing roads. Aggregate is used in road projects as a 
base that is laid and compacted under the asphalt concrete. Aggregate 
also is an essential ingredient in asphalt concrete, which is used for 
paving roads and other areas. There are no substitutes for aggregate in 
these types of road construction projects because no other materials 
can be used for the same purpose.
    To evaluate the proposed acquisition's effects on the market for 
aggregate, it is appropriate to include all sizes and kinds of 
aggregate because, with limited exceptions, each size and type of 
aggregate is offered under similar competitive conditions in the 
relevant geographic market. Thus, the grouping of the various sizes and 
types of aggregate makes evaluating competitive effects more efficient 
without undermining the reliability of the analysis.\1\
---------------------------------------------------------------------------

    \1\ However, the market for aggregate does not include friction-
coarse aggregate that is used to create the anti-skid surface layer 
of roads. Pounding Mill does not have the ability to manufacture 
friction-coarse aggregate and the competitive conditions for that 
product are not similar to the remaining aggregate market.
---------------------------------------------------------------------------

    Because different types, sizes, and qualities of aggregate are 
needed depending on the intended use, the end-use customer establishes 
the exact specifications that the aggregate must meet for each 
application. These specifications are designed by the project engineers 
to ensure the safety and longevity of road construction projects. WVDOT 
purchases significant quantities of aggregate for its road construction 
projects, which include building, repairing and maintaining roads and 
bridges in West Virginia. WVDOT also purchases significant quantities 
of aggregate for its maintenance yards. These maintenance yards are 
used to store the aggregate purchased directly by WVDOT for use on the 
projects WVDOT completes itself, instead of through a contractor, such 
as fixing a pothole or repaving a small area of a road.
    For each road project, WVDOT provides the precise specifications 
for the aggregate used for asphalt concrete and road base, among other 
things. WVDOT specifications are designed to ensure that the roads and 
bridges are built safely and withstand heavy usage over time. The use 
of aggregate that does not meet WVDOT specifications could compromise 
the safety of the road or bridge, or cause the need for repairs sooner 
than would otherwise be required. Therefore, aggregate that does not 
meet WVDOT specifications cannot be used.
    A small but significant increase in the price of aggregate that 
meets WVDOT specifications (hereinafter ``WVDOT aggregate'') would not 
cause WVDOT to substitute other types of materials in sufficient 
quantities, or to utilize aggregate that does not meet its 
specifications, with sufficient frequency so as to make such a price 
increase unprofitable. Accordingly, WVDOT aggregate is a line of 
commerce and a relevant product market within the meaning of Section 7 
of the Clayton Act.

ii. WVDOT Asphalt Concrete

    Asphalt concrete is a composite material that is used to surface 
roads, parking lots, and airport tarmacs, among other things. Asphalt 
concrete consists of aggregate combined with liquid asphalt and other 
materials. Asphalt concrete has unique performance characteristics 
compared to other building materials, such as ready mix concrete. For 
example, asphalt concrete is the desired material used to build 
roadways because it has optimal surface durability and friction, 
resulting in low tire wear, high breaking efficiency, and low roadway 
noise. Other products generally cannot be used as economically to build 
and maintain roadways and therefore are not adequate substitutes.
    WVDOT purchases significant quantities of asphalt concrete for road 
construction and maintenance projects in West Virginia. For each road 
project, WVDOT provides the precise specifications for the asphalt 
concrete. WVDOT specifications are designed to ensure that the roads 
are built safely and withstand heavy usage over time. Using asphalt 
concrete that does not meet WVDOT specifications could compromise the 
safety of the road or cause the need for repairs sooner than would 
otherwise be required. Therefore, asphalt concrete that does not meet 
WVDOT specifications cannot be used.
    A small but significant increase in the price of asphalt concrete 
that meets WVDOT specifications (hereinafter ``WVDOT asphalt 
concrete'') would not cause WVDOT to substitute other materials in 
sufficient quantities, or to utilize asphalt concrete that does not 
meet its specifications, with sufficient frequency so as to make such a 
price increase unprofitable. Accordingly, WVDOT asphalt concrete is a 
line of commerce and a relevant product market within the meaning of 
Section 7 of the Clayton Act.

b. Geographic Markets

    The relevant geographic markets for both WVDOT aggregate and WVDOT 
asphalt concrete are the following four counties in West Virginia: 
Wyoming, Raleigh, Mercer, and Summers (these four counties are 
hereinafter referred to as ``Southern West Virginia'').

i. WVDOT Aggregate

    Aggregate is a relatively low-cost product that is bulky and heavy, 
with high transportation costs. The geographic area an aggregate 
supplier can profitably serve is primarily determined by: (1) the 
distance from the quarry to the job site where the aggregate is used; 
and (2) the relative distance between the supplier's competitor's 
quarry and the job site compared to its own. Suppliers know the 
importance of transportation costs to a customer's selection of an 
aggregate supplier and also know the locations of all their 
competitors. An aggregate supplier can often charge a lower/more 
competitive price than its competitor if its quarry is closer to the 
customer's location than its competitor's quarry.
    CRH Americas owns and operates aggregate quarries located in 
Beckley and Lewisburg, West Virginia and those quarries sell WVDOT 
aggregate to customers with plant locations or job sites in Southern 
West Virginia. Customers with plant locations or job sites in Southern 
West Virginia may also economically procure WVDOT aggregate from 
Pounding Mill's quarries located in Princeton, West Virginia and Rocky 
Gap, Virginia, and from another smaller third-party quarry located in 
Lewisburg, West Virginia. For many customer locations in Southern West 
Virginia,

[[Page 30969]]

quarries owned by CRH Americas and Pounding Mill are the two closest 
options and can quote different prices based on the location of a 
customer in relation to each supplier's quarries.
    A small but significant post-acquisition increase in the price of 
WVDOT aggregate to customers with plants or job sites in Southern West 
Virginia would not cause those customers to substitute another product 
or procure aggregate from suppliers other than CRH Americas, Pounding 
Mill, and the third competitor in sufficient quantities so as to make 
such a price increase unprofitable. Accordingly, Southern West Virginia 
is a relevant geographic market for WVDOT aggregate within the meaning 
of Section 7 of the Clayton Act.

ii. WVDOT Asphalt Concrete

    As with aggregate, the geographic area an asphalt-concrete plant 
can profitably serve is primarily determined by the location of its 
plant in relation to the job site and the relative location of 
competing suppliers. Asphalt-concrete suppliers typically deliver 
asphalt concrete to a job site. Distance from the plant to the job site 
is important for two reasons--temperature and transportation costs. 
First, asphalt concrete must be maintained at a certain temperature 
range before it is poured. If the temperature drops below that required 
by the asphalt-concrete specifications, it cannot be used. The 
temperature of asphalt concrete drops as it travels from the plant and 
drops faster in colder weather than in warmer weather. As a result, the 
distance between an asphalt- concrete plant and the project site 
determines whether a plant can service a particular geographic area. 
Second, asphalt concrete is heavy and transporting it is expensive. 
Therefore, the distance between the site where the asphalt concrete is 
poured and the asphalt-concrete plant drives transportation costs and 
has a considerable impact on the area a supplier can profitably serve.
    A further factor that determines the area a supplier can profitably 
serve is the location of its plant in relation to competing plants. 
Suppliers know the importance of transportation costs to a customer's 
selection of a supplier and also generally know how far each competing 
supplier can deliver asphalt concrete. An asphalt-concrete supplier 
often will charge a lower/more competitive price than its competitor if 
its plant is closer to the customer's location than its competitor's 
plant.
    CRH Americas has an advantage with respect to transportation costs 
because it owns and operates three of the four asphalt-concrete plants 
that supply WVDOT asphalt concrete and serve customers in Southern West 
Virginia. Customers with job sites in Southern West Virginia may also 
economically procure WVDOT asphalt concrete from CRH's sole asphalt-
concrete competitor, which operates one asphalt-concrete plant in 
Mercer County, West Virginia. Pounding Mill does not own any asphalt-
concrete plants, though it is currently supplying CRH Americas' 
competitor in the asphalt concrete market with the aggregate it needs 
to compete. Thus, the four asphalt-concrete plants that serve Southern 
West Virginia procure aggregate from CRH Americas and Pounding Mill.
    A small but significant post-acquisition increase in the price of 
WVDOT asphalt concrete to customers with job sites in Southern West 
Virginia would not cause those customers to substitute another product 
or procure WVDOT asphalt concrete from suppliers other than CRH 
Americas or its rival in sufficient quantities so as to make such a 
price increase unprofitable. Accordingly, Southern West Virginia 
constitutes a relevant geographic market for WVDOT asphalt concrete 
within the meaning of Section 7 of the Clayton Act.

2. Anticompetitive Effects in the Market for WVDOT Aggregate

    If CRH Americas acquired Pounding Mill, competition would be 
substantially lessened for the supply of WVDOT aggregate in Southern 
West Virginia. This market is already highly concentrated and would 
become significantly more concentrated as a result of the acquisition. 
For all WVDOT aggregate supplied in Southern West Virginia, including 
aggregate supplied to WVDOT through contractors for road projects and 
aggregate purchased directly by WVDOT for its maintenance yards, CRH 
Americas and Pounding Mill's combined market share is well over 80 
percent. Moreover, the companies' combined share is even higher--over 
90 percent--for the aggregate supplied by contractors for use in road 
projects.
    Acquisitions that reduce the number of competitors in already 
concentrated markets are more likely to substantially lessen 
competition. Concentration can be measured in various ways, including 
by market shares and by the widely-used Herfindahl-Hirschman Index 
(``HHI''). Under the Horizontal Merger Guidelines, post-acquisition 
HHIs above 2,500 and changes in HHI above 200 trigger a presumption 
that a proposed acquisition is likely to enhance market power and 
substantially lessen competition in a defined market. Premerger, the 
HHI for aggregate supplied for WVDOT road projects is approximately 
4,350. The post-acquisition HHI is approximately 8,500, with an 
increase of over 4,000. For WVDOT aggregate purchased by WVDOT for its 
maintenance yards, the premerger HHI is approximately 3,800. Post-
acquisition, the HHI is approximately 6,700, with an increase of nearly 
3,000.
    CRH Americas and Pounding Mill compete vigorously in the market for 
WVDOT aggregate in Southern West Virginia. For many customers and job 
sites in that area, they are the first- and second-best sources of 
supply for aggregate in terms of price, quality, and reliability of 
delivery. Only one other company, located in Lewisburg, West Virginia, 
is able to supply WVDOT aggregate in Southern West Virginia in any 
meaningful quantity. But while this competitor supplies WVDOT aggregate 
to maintenance yards, it has not bid on many road projects, leaving 
only CRH Americas and Pounding Mill to compete for most of those large 
projects. While a few other small suppliers provide limited quantities 
of WVDOT aggregate for maintenance yards in Southern West Virginia, 
they are unable to provide the large quantity of aggregate needed on 
road projects and do not supply the types or quality of aggregate 
needed for the asphalt concrete and road base.
    The proposed acquisition would substantially increase the 
likelihood that CRH Americas would unilaterally increase the price of 
WVDOT aggregate to customers in Southern West Virginia. Without the 
constraint of competition between CRH Americas and Pounding Mill, the 
combined firm would have a greater ability to exercise market power by 
raising prices to customers for whom CRH Americas and Pounding Mill 
were the two best sources of WVDOT aggregate.
    Therefore, the proposed acquisition would substantially lessen 
competition in the market for WVDOT aggregate in Southern West 
Virginia. This is likely to lead to higher prices for the ultimate 
consumers of such aggregate, in violation of Section 7 of the Clayton 
Act.

3. Anticompetitive Effects in the Market for WVDOT Asphalt Concrete

    CRH Americas' acquisition of Pounding Mill would substantially 
lessen competition in the market for WVDOT asphalt concrete in Southern 
West Virginia. CRH Americas has historically dominated this market. 
Pounding Mill does not compete directly with CRH Americas in the 
asphalt-concrete market, but it is a

[[Page 30970]]

supplier of aggregate to CRH Americas' only competitor. That 
competitor, a recent entrant, has recently begun making inroads in the 
WVDOT asphalt-concrete market, and eroding CRH Americas' dominant 
position. By building its asphalt-concrete plant close to Pounding 
Mill's quarry in Mercer County, this entrant attempted to ensure that 
it would have a reliable, nearby source of aggregate, which allowed it 
to charge competitive prices. Pounding Mill is uniquely positioned to 
provide asphalt-concrete producers such as this entrant with 
competitively priced aggregate because it is not itself vertically 
integrated, and so has no incentive to raise the costs or otherwise 
disadvantage other asphalt-concrete producers.
    If the proposed acquisition were consummated, this entrant could no 
longer be assured an economical source of WVDOT aggregate. Post-merger, 
CRH Americas would have the ability and incentive to use its ownership 
of Pounding Mill's quarries to disadvantage its rival by either 
withholding WVDOT aggregate or supplying it at less favorable terms 
than Pounding Mill currently provides.
    Any post-merger conduct by CRH Americas that cuts off the supply of 
WVDOT aggregate or raises the cost of that input would weaken its 
asphalt-concrete rival's ability to compete on price. If CRH Americas' 
rival cannot win WVDOT contracts, it may find it impossible to stay in 
business, thereby ensuring CRH Americas' control over the entire market 
for WVDOT asphalt concrete in Southern West Virginia.
    CRH Americas would have the incentive and ability to raise the 
price or sacrifice sales of WVDOT aggregate in order to maintain its 
dominance in the asphalt-concrete market. Such a strategy would be 
attractive in part because the sale of asphalt concrete is 
significantly more profitable than the sale of aggregate. Therefore, if 
CRH Americas were able to gain additional asphalt-concrete sales by 
raising the price of aggregate to its rival, foreclosing supply, or 
delaying deliveries, the additional asphalt-concrete sales would be 
considerably more profitable to CRH Americas than any lost aggregate 
sales. By raising the costs of its sole competitor in the provision of 
WVDOT asphalt concrete, CRH Americas likely would gain the ability to 
unilaterally raise the price of WVDOT asphalt concrete in Southern West 
Virginia.
    Therefore, CRH Americas' acquisition of Pounding Mill's quarries 
would give CRH Americas both the incentive and ability to either 
eliminate or raise the costs of its sole asphalt-concrete competitor. 
As a result, the acquisition would substantially lessen competition in 
the market for WVDOT asphalt concrete in Southern West Virginia.

4. Entry Will Not Constrain CRH Americas' Market Power

    Entry into the market for WVDOT aggregate in Southern West Virginia 
is unlikely to be timely, likely, and sufficient to constrain CRH 
Americas' market power post-merger given the substantial time and cost 
required to open a quarry.
    First, securing the proper site for an aggregate quarry is 
difficult and time- consuming. There are few sites on which to locate 
coarse aggregate operations in or near Southern West Virginia. Finding 
land with the correct rock composition requires extensive investigation 
and testing of candidate sites, as well as the negotiation of necessary 
land transfers, leases, and/or easements. Further, the location of a 
quarry close to likely job sites is extremely important due to the high 
cost of transporting aggregate.
    Once a location is chosen, obtaining the necessary permits is also 
difficult and time-consuming. Attempts to open a new quarry often face 
fierce public opposition, which can prevent a quarry from opening or 
make opening it much more time-consuming and costly. Finally, even 
after a site is acquired and permitted, the owner must spend 
significant time and resources to prepare the land and purchase and 
install the necessary equipment. Moreover, once a quarry is operating, 
a supplier must demonstrate that its aggregate meets WVDOT 
specifications. WVDOT qualification requires testing. Until the 
aggregate can meet these specifications, it cannot be used to supply 
WVDOT road construction projects.
    Entry into the market for WVDOT asphalt concrete in Southern West 
Virginia also is unlikely to be timely, likely, or sufficient to 
constrain CRH Americas' post-merger market power. Potential entrants in 
WVDOT asphalt concrete must have access to WVDOT aggregate. Only CRH 
Americas and one other competitor would be available to supply WVDOT 
aggregate in Southern West Virginia and, for many locations in Southern 
West Virginia, the remaining competitor will not be an economical 
alternative. Post-merger, CRH Americas would have the incentive and 
opportunity to foreclose its competitors' access to WVDOT aggregate or 
disadvantage its rivals by either withholding WVDOT aggregate or 
supplying it on less favorable terms. Lack of access to a reliable, 
independent supply of aggregate will deter or prevent timely or 
sufficient entry into the asphalt-concrete market in Southern West 
Virginia.
    In addition, an entrant into the asphalt-concrete market would have 
to purchase appropriate land close to an aggregate quarry, build a 
plant, procure the necessary permits, and obtain WVDOT approval of each 
asphalt-concrete mix made, among other things. These actions are 
required before production of asphalt concrete can begin and involve 
significant costs and often lengthy time periods.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

    The divestiture required by the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the markets 
for WVDOT aggregate and WVDOT asphalt concrete by establishing a new, 
independent, and economically viable WVDOT aggregate supplier in 
Southern West Virginia. The divestiture will preserve the current state 
of competition in both the markets for WVDOT aggregate and WVDOT 
asphalt concrete.

A. The Divestiture Assets

    The proposed Final Judgment requires CRH and CRH Americas to divest 
all assets that are primarily used for or in connection with Pounding 
Mill's Rocky Gap quarry. CRH and CRH Americas must divest all real 
property identified in Paragraph II(G)(1) of the proposed Final 
Judgment upon which the Rocky Gap quarry currently operates, and the 
property adjacent to that quarry.
    In addition, CRH and CRH Americas must divest all tangible assets 
listed in Paragraph II(G)(2) of the proposed Final Judgment that have 
been primarily used to operate the Rocky Gap quarry at any time since 
July 31, 2016. This includes all production equipment that has been 
used at the Rocky Gap quarry since that date. This provision ensures 
that, among other things, any mobile tangible assets, such as vehicles 
or production equipment, used at the Rocky Gap quarry since July 31, 
2016, are divested. Further, CRH and CRH Americas must divest all 
ongoing customer contracts that have been fulfilled by aggregate 
produced at the Rocky Gap quarry, even if the contract does not require 
that the aggregate be produced at the Rocky Gap quarry. This provision 
will ensure that the acquirer of the Divestiture Assets receives all 
ongoing work of the Rocky Gap quarry and prevent CRH Americas from 
fulfilling such work from one of its other quarries post-acquisition, 
including the nearby quarry that it is acquiring from Pounding Mill.

[[Page 30971]]

Defendants also are required to divest all intangible assets that have 
been primarily used by the Rocky Gap quarry at any time since July 31, 
2016. The proposed Final Judgment provides that Pounding Mill cannot 
interfere with the permitting, operation, or divestiture of the 
Divestiture Assets and shall not undertake any challenges to the 
permits relating to the Divestiture Assets.

B. The Acquirer of the Divestiture Assets

    Paragraph IV(I) of the proposed Final Judgment provides that final 
approval of the divestiture, including the identity of the acquirer, is 
left to the sole discretion of the United States to ensure the 
continued independence and viability of the Divestiture Assets in the 
relevant markets. In this matter, Salem has been identified as the 
expected purchaser of the Divestiture Assets. Due to the narrow local 
market at issue and the small number of companies with sufficient 
expertise that operate in or near Southern West Virginia, there are 
only a small number of potential purchasers that could quickly begin 
operating the Rocky Gap quarry. After a thorough examination of Salem, 
its plans for the Divestiture Assets, the proposed sale agreement, and 
consideration of feedback from customers, the United States approved 
Salem as the buyer. Salem is a large, regional producer of construction 
aggregates and owns 15 quarries in Virginia and North Carolina. Salem 
is a strong aggregate competitor in markets near Southern West 
Virginia, and WVDOT has qualified various types of the aggregate that 
Salem produces for use on its road projects. Salem's vast experience 
producing and selling aggregate, its familiarity with WVDOT's approval 
process, and its familiarity with nearby geographic markets should 
ensure that in its hands the Divestiture Assets will provide meaningful 
competition.
    If the sale to Salem does not occur, CRH and CRH Americas may sell 
the divestiture assets to another acquirer, subject to the approval of 
the United States. If CRH Americas does not secure an acceptable 
acquirer and divest the assets during the time period allowed for the 
divestiture, an acquirer will be located by a trustee, subject to the 
approval of the United States.

C. Provisions of the Proposed Final Judgment

    Paragraph IV(A) of the proposed Final Judgment requires that the 
Divestiture Assets be sold to Salem or an approved acquirer within ten 
days after the Court signs the Hold Separate. The entry of the Hold 
Separate was chosen as the date upon which the divestiture period 
begins to run because CRH and CRH Americas cannot consummate the 
acquisition of Pounding Mill's assets until the Court enters the Hold 
Separate, and that acquisition must be consummated before the 
Divestiture Assets are sold. If the Divestiture Assets are not sold 
within ten days of the Court's entry of the Hold Separate, a 
Divestiture Trustee is to be appointed to sell the Divestiture Assets 
to an entity acceptable to the United States.
    Defendants also are required to provide various information 
regarding and access to the Divestiture Assets to potential acquirers 
of those assets. For example, Defendants are required to provide the 
Acquirer information relating to employees to enable the acquirer to 
make offers of employment. The proposed Final Judgment requires 
Defendants to provide information about employees at the Rocky Gap 
quarry, as well as the other three Pounding Mill quarries and several 
CRH Americas aggregate and asphalt- concrete facilities. The scope of 
this area includes the counties within and closest to the relevant 
geographic market alleged in the Complaint. This will ensure that the 
acquirer has a broad pool of potential candidates to choose from. In 
addition, Defendants must provide information regarding employees at 
CRH Americas' asphalt-concrete operations. Asphalt-concrete suppliers 
work closely with aggregate producers and are often knowledgeable about 
some aspects of the others' business. Therefore, asphalt-concrete 
suppliers may also be a source of qualified employees for an aggregate 
producer.
    Further, Paragraph IV(J) of the proposed Final Judgment requires 
CRH and CRH Americas to notify all customers that have purchased 
aggregate from the CRH Americas quarries located in Southern West 
Virginia, and all four Pounding Mill quarries, that the Rocky Gap 
quarry has been sold and is not affiliated with CRH Americas or 
Pounding Mill. The proposed Final Judgment requires such notification 
be provided for customers that historically made aggregate purchases of 
a dollar value typical of WVDOT road construction projects. The more 
recent the customer, the smaller the dollar volume of purchases needed 
to meet the notification cut-off. This notification will ensure that 
customers are informed about the existence of the Rocky Gap quarry as 
an independent source of aggregate.
    Section XI of the proposed Final Judgment requires CRH and CRH 
Americas to notify the Antitrust Division of certain proposed 
acquisitions not otherwise subject to filing under the Hart-Scott 
Rodino Act, 15 U.S.C. 18a (the ``HSR Act''). The requirement applies to 
acquisitions of entities engaged in the production of asphalt concrete 
and/or aggregate in and around the alleged relevant market, as defined 
in Paragraph IV(C) of the proposed Final Judgment.
    The proposed Final Judgment also contains provisions designed to 
promote compliance and make the enforcement of Division consent decrees 
as effective as possible. Paragraph XIV(A) provides that the United 
States retains and reserves all rights to enforce the provisions of the 
proposed Final Judgment, including its rights to seek an order of 
contempt from the Court. Under the terms of this paragraph, Defendants 
have agreed that in any civil contempt action, any motion to show 
cause, or any similar action brought by the United States regarding an 
alleged violation of the Final Judgment, the United States may 
establish the violation and the appropriateness of any remedy by a 
preponderance of the evidence and that Defendants have waived any 
argument that a different standard of proof should apply. This 
provision aligns the standard for compliance obligations with the 
standard of proof that applies to the underlying offense that the 
compliance commitments address.
    Paragraph XIV(B) provides additional clarification regarding the 
interpretation of the provisions of the proposed Final Judgment. The 
proposed Final Judgment was drafted to restore all competition that 
would otherwise be harmed by the merger. Defendants agree that they 
will abide by the proposed Final Judgment, and that they may be held in 
contempt of this Court for failing to comply with any provision of the 
proposed Final Judgment that is stated specifically and in reasonable 
detail, as interpreted in light of this procompetitive purpose.
    Paragraph XIV(C) of the proposed Final Judgment further provides 
that should the Court find in an enforcement proceeding that Defendants 
have violated the Final Judgment, the United States may apply to the 
Court for a one-time extension of the Final Judgment, together with 
such other relief as may be appropriate. In addition, in order to 
compensate American taxpayers for any costs associated with the 
investigation and enforcement of violations of the proposed Final 
Judgment, Paragraph XIV(C) provides that in any successful effort by 
the United States to enforce the Final Judgment against a Defendant, 
whether litigated or resolved prior to litigation, that Defendant 
agrees to

[[Page 30972]]

reimburse the United States for attorneys' fees, experts' fees, or 
costs incurred in connection with any enforcement effort, including the 
investigation of the potential violation.
    Finally, Section XV of the proposed Final Judgment provides that 
the Final Judgment shall expire ten years from the date of its entry, 
except that after five years from the date of its entry, the Final 
Judgment may be terminated upon notice by the United States to the 
Court and Defendants that the divestitures have been completed and that 
the continuation of the Final Judgment is no longer necessary or in the 
public interest.
    The divestiture will remedy the likely anticompetitive effects of 
the acquisition in the markets for WVDOT aggregate and WVDOT asphalt 
concrete by preserving the current state of competition in both 
markets.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. Sec.  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. 
Sec.  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 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 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 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. In addition, 
comments will be posted on the United States Department of Justice, 
Antitrust Division's website and, under certain circumstances, 
published in the Federal Register.
    Written comments should be submitted to:

Maribeth Petrizzi
Chief, Defense, Industrials, and Aerospace Section Antitrust Division
United States Department of Justice
450 Fifth Street, N.W., Suite 8700
Washington, DC 20530

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

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 Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against CRH Americas' acquisition 
of Pounding Mill's quarries. The United States is satisfied, however, 
that the divestiture of assets described in the proposed Final Judgment 
will preserve competition in the markets for WVDOT asphalt concrete and 
WVDOT aggregate in Southern West Virginia. Thus, the proposed Final 
Judgment would achieve all or substantially all of the relief the 
United States would 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. 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.

15 U.S.C. 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) 
(explaining that the ``court's inquiry is limited'' in Tunney Act 
settlements); 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.'').\2\
    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

[[Page 30973]]

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:

    \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. 
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).

[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 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 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 U.S. 
Airways, 38 F. Supp. 3d at 74 (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.
    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 74 (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 (``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'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. Microsoft, 56 
F.3d 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. Sec.  16(e)(2); see also U.S. Airways, 38 F. 
Supp. 3d at 75 (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). 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 
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.\4\ 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 75.
---------------------------------------------------------------------------

    \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., 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 DOCUMENT

    In formulating the proposed Final Judgment, the United States 
considered a report on the geology of the Rocky Gap Quarry site 
entitled ``Rocky Gap Quarry, Rocky Gap, Virginia'' dated March 13, 
2017, authored by John Chermak, PhD, PG, to be a determinative document 
within the meaning of the APPA.

    Dated: June 22, 2018

Respectfully submitted,

FOR PLAINTIFF
UNITED STATES OF AMERICA

/s/--------------------------------------------------------------------

Christine A. Hill (D.C. Bar #461048),

Attorney

United States Department of Justice,
Antitrust Division Defense, Industrials, and Aerospace Section 450 
Fifth Street, N.W., Suite 8700, Washington, D.C. 20530
(202) 305-2738

[[Page 30974]]

[email protected]

[FR Doc. 2018-14192 Filed 6-29-18; 8:45 am]
BILLING CODE 4410-11-P