United States v. Clarence L. Werner; Proposed Final Judgment and Competitive Impact Statement, 478-484 [2021-28538]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 87, Number 3 (Wednesday, January 5, 2022)]
[Notices]
[Pages 478-484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-28538]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Clarence L. Werner; 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. Clarence L. Werner, Civil Action 1:21-cv-03332. On 
December 22, 2021, the United States filed a Complaint alleging that 
Clarence L. Werner violated the premerger notification and waiting 
period requirements of the Hart-Scott-Rodino Antitrust Improvements Act 
of 1976, 15 U.S.C. 18a, in connection with the acquisition of voting 
securities of Werner Enterprises Inc. The proposed Final Judgment, 
filed at the same time as the Complaint, requires Clarence L. Werner to 
pay a civil penalty of $486,900.
    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 in English should be directed to 
Maribeth Petrizzi, Special Attorney, United States, c/o Federal Trade 
Commission, 600 Pennsylvania Avenue NW, CC-8416, Washington, DC 20580 
or by email to [email protected].

Suzanne Morris,
Chief, Premerger and Division Statistics, Antitrust Division.

United States District Court for the District of Columbia

    United States of America, c/o Department of Justice, Washington, 
DC 20530, Plaintiff, v. Clarence L. Werner, c/o Werner Enterprises, 
Inc., 14507 Frontier Road, Omaha, NE 68138, Defendant.

Civil Action No. 1:21-cv-03332

Judge: James E. Boasberg

[[Page 479]]

Complaint for Civil Penalties for Failure To Comply With the Premerger 
Reporting and Waiting Requirements of the Hart-Scott Rodino Act

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

I. Nature of the Action

    1. Werner violated the notice and waiting period requirements of 
Section 7A of the Clayton Act, (15 U.S.C. 18a, commonly known as the 
Hart-Scott-Rodino Antitrust Improvements Act of 1976 ``HSR Act'' or 
``Act''), with respect to the acquisition of voting securities of 
Werner Enterprises, Inc. (``Werner Inc.'') from May 2007 through 
February 2020.

II. Jurisdiction and Venue

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

III. The Defendant

    4. Defendant Werner is a natural person with his principal office 
and place of business at 14507 Frontier Road, Omaha, NE 68138. Werner 
is the founder of Werner Inc. and during the relevant period 
alternatively served as the Chairman, Chairman Emeritus, and Executive 
Chairman of its Board of Directors. Werner is engaged in commerce, or 
in activities affecting commerce, within the meaning of Section 1 of 
the Clayton Act, 15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 
15 U.S.C. 18a(a)(1). At all times relevant to this complaint, Werner 
had sales or assets that met the operative threshold.

IV. Other Entity

    5. Werner Inc. is a corporation organized under the laws of 
Nebraska with its principal place of business at 14507 Frontier Road, 
Omaha, NE 63138. Werner Inc. is engaged in commerce, or in activities 
affecting commerce, within the meaning of Section 1 of the Clayton Act, 
15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. 
18a(a)(1). At all times relevant to this complaint, Werner Inc. had 
sales or assets that met the operative threshold.

V. The Hart-Scott-Rodino Act and Rules

    6. The HSR Act requires certain acquiring persons and certain 
persons whose voting securities or assets are acquired to file 
notifications with the Department of Justice and the Federal Trade 
Commission (collectively, the ``federal antitrust agencies'') and to 
observe a waiting period before consummating certain acquisitions of 
voting securities or assets. 15 U.S.C. 18a(a) and (b). These 
notification and waiting period requirements apply to acquisitions that 
meet the HSR Act's size of transaction and size of person thresholds, 
which have been adjusted annually since 2004. The size of transaction 
threshold is met for transactions valued over $50 million, as adjusted 
($94 million in 2020). In addition, there is a separate filing 
requirement for transactions in which the acquirer will hold voting 
securities in excess of $100 million, as adjusted ($188 million in 
2020), and for transactions in which the acquirer will hold voting 
securities in excess of $500 million, as adjusted ($940.1 million in 
2020). With respect to the size of person thresholds, the HSR Act 
requires one person involved in the transaction to have sales or assets 
in excess of $10 million, as adjusted ($18.8 million in 2020), and the 
other person to have sales or assets in excess of $100 million, as 
adjusted ($188 million in 2020).
    7. The HSR Act's notification and waiting period requirements are 
intended to give the federal antitrust agencies prior notice of, and 
information about, proposed transactions. The waiting period is also 
intended to provide the federal antitrust agencies with the opportunity 
to investigate a proposed transaction and to determine whether to seek 
an injunction to prevent the consummation of a transaction that may 
violate the antitrust laws.
    8. Pursuant to Section (d)(2) of the HSR Act, 15 U.S.C. 18a(d)(2), 
rules were promulgated to carry out the purposes of the HSR Act. 16 CFR 
801-03 (``HSR Rules''). The HSR Rules, among other things, define terms 
contained in the HSR Act.
    9. Pursuant to Section 801.13(a)(1) of the HSR Rules, 16 CFR 
801.13(a)(1), ``all voting securities of [an] issuer which will be held 
by the acquiring person after the consummation of an acquisition''--
including any held before the acquisition--are deemed held ``as a 
result of'' the acquisition at issue.
    10. Pursuant to Sections 801.13(a)(2) and 801.10(c)(1) of the HSR 
Rules, 16 CFR 801.13(a)(2) and Sec.  801.10(c)(1), the value of voting 
securities already held is the market price, defined to be the lowest 
closing price within 45 days prior to the subsequent acquisition.
    11. Section 802.21 of the HSR Rules, 16 CFR 802.21, provides that, 
once a person has filed under the HSR Act and the waiting period has 
expired, that person can acquire additional voting securities of the 
same issuer without filing a new notification for five years from the 
expiration of the waiting period, so long as the value of the person's 
holdings do not exceed a threshold higher than was indicated in the 
filing (``802.21 exemption'').
    12. Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1), 
provides that any person, or any officer, director, or partner thereof, 
who fails to comply with any provision of the HSR Act is liable to the 
United States for a civil penalty for each day during which such person 
is in violation. Pursuant to the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015, Public Law 114-74, 701 
(further amending the Federal Civil Penalties Inflation Adjustment Act 
of 1990), the dollar amounts of civil penalties listed in Federal Trade 
Commission Rule 1.98, 16 CFR 1.98, are adjusted annually for inflation; 
the maximum amount of civil penalty in effect at the time of Werner's 
corrective filing was $43,280 per day. 85 FR 2014 (January 14, 2020).

VI. Defendant's Violation of the HSR Act

    13. On May 14, 2007, Werner exercised options to acquire 475,000 
Werner Inc. voting securities, which resulted in his aggregated 
holdings of Werner Inc. voting securities exceeding the $100 million 
threshold, as adjusted, which in May 2007, was $119.6 million. Although 
required to do so, Werner did not file under the HSR Act or observe the 
HSR Act's waiting period prior to completing the May 14, 2007, 
transaction.
    14. Werner continued to acquire Werner Inc. voting securities 
through open market purchases, the exercise of options, and otherwise.
    15. Werner acquired 320,100 voting securities on November 18, 2009, 
8,500 voting securities on November 24, 2009, 59,406 voting securities 
on November 27, 2009, and 32,094 voting securities on November 30, 
2009. All of these acquisitions were made on the open market. Open 
market acquisitions require an acquirer to affirmatively and

[[Page 480]]

actively decide to acquire voting securities; in particular for very 
large open market acquisitions, it is not excusable negligence to be 
unaware of HSR Act legal requirements.
    16. On November 20, 2012, Werner exercised options to acquire 
100,000 Werner Inc. voting securities, which resulted in his aggregated 
holdings of Werner Inc. voting securities again exceeding the $100 
million threshold, as adjusted, which in November 2012, was $136.4 
million. Although required to do so, Werner did not file under the HSR 
Act or observe the HSR Act's waiting period prior to completing the 
November 20, 2012 transaction. Thereafter, Werner continued to acquire 
Werner Inc. voting securities.
    17. On February 7, 2019, Werner received 3,738 Werner Inc. voting 
securities with the vesting of a tranche of restricted stock, which 
resulted in his aggregated holdings of Werner Inc. voting securities 
again exceeding the $100 million threshold, as adjusted, which in 
February 2019, was $168.8 million. Although required to do so, Werner 
did not file under the HSR Act or observe the HSR Act's waiting period 
prior to completing the February 7, 2019 transaction.
    18. On January 17, 2020, Werner's counsel contacted the Premerger 
Notification Office (``PNO'') of the Federal Trade Commission to inform 
PNO staff that counsel was analyzing a situation that counsel 
anticipated would likely entail multiple post-consummation filings. As 
of that date, Werner, through his counsel, was aware that he had 
violated the HSR Act.
    19. Thereafter, Werner made additional acquisitions of Werner Inc. 
voting securities on February 7 and 11, 2020, through the vesting of 
restricted stock awards. Werner did not file an HSR notification prior 
to either of these acquisitions.
    20. On March 4, 2020, Werner made corrective filings under the HSR 
Act for the acquisitions he made on May 14, 2007, November 20, 2012, 
and February 7, 2019. Each of these transactions resulted in Werner's 
aggregated holdings of Werner Inc. voting securities exceeding the $100 
million threshold, as adjusted. Had Werner filed under the HSR Act for 
these three acquisitions on a timely basis, all his other acquisitions 
of Werner Inc. voting securities during the relevant period would have 
been exempt pursuant to the 802.21 exemption.
    21. Werner was in continuous violation of the HSR Act from May 14, 
2007, when he acquired the Werner Inc. voting securities valued in 
excess of the HSR Act's $100 million filing threshold, as adjusted, 
through April 3, 2020, when the waiting period expired on his 
corrective filings.

VIII. Requested Relief

    Wherefore, the United States requests:
    a. That the Court adjudge and decree that Defendant's acquisitions 
of Werner Inc. voting securities from May 14, 2007, through February 
11, 2020, were violations of the HSR Act, 15 U.S.C. 18a; and that 
Defendant was in violation of the HSR Act each day from May 14, 2007, 
through April 3, 2020;
    b. that the Court order Defendant to pay to the United States an 
appropriate civil penalty as provided by the Section 7A(g)(1) of the 
Clayton Act, 15 U.S.C. 18a(g)(1), the Debt Collection Improvement Act 
of 1996, Public Law 104 134 Sec.  31001(s) (amending the Federal Civil 
Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461), and the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015, Public Law 114-74, 701 (further amending the Federal Civil 
Penalties Inflation Adjustment Act of 1990), and Federal Trade 
Commission Rule 1.98, 16 CFR 1.98, 85 FR 2014 (January 14, 2020);
    c. that the Court order such other and further relief as the Court 
may deem just and proper; and
    d. that the Court award the United States its costs of this suit.

Dated:
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FOR THE PLAINTIFF UNITED STATES OF AMERICA:
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Jonathan S. Kanter,

Assistant Attorney General, Department of Justice, Antitrust 
Division, Washington, DC 20530.
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Maribeth Petrizzi,

D.C. Bar No. 435204, Special Attorney.
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Kenneth A. Libby,

Special Attorney.
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Kelly Horne,

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

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Clarence L. Werner, 
Defendant.

Civil Action No. 1:21-cv-03332

Judge: James E. Boasberg

[Proposed] Final Judgment

    Whereas, the United States of America filed its Complaint on 
December 22, 2021, alleging that Defendant Clarence L. Werner violated 
Section 7A of the Clayton Act (15 U.S.C. 18a, commonly known as the 
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the ``HSR 
Act''));
    and whereas the United States and Defendant, have consented to the 
entry of this Final Judgment without the taking of testimony, 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;
    Now, therefore, it is ordered, adjudged, and decreed:

I. Jurisdiction

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

II. Civil Penalty

    Judgment is hereby entered in this matter in favor of the United 
States and against Defendant, and, pursuant to Section 7A(g)(1) of the 
Clayton Act, 15 U.S.C. 18a(g)(1), the Debt Collection Improvement Act 
of 1996, Public Law 104-134 Sec.  31001(s) (amending the Federal Civil 
Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461), the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015, Public Law 114-74 Sec.  701 (further amending the Federal Civil 
Penalties Inflation Adjustment Act of 1990), and Federal Trade 
Commission Rule 1.98, 16 CFR 1.98, 86 FR 2541 (January 13, 2021), 
Defendant is hereby ordered to pay a civil penalty in the amount of 
four hundred eighty-six thousand nine hundred dollars ($486,900). 
Payment of the civil penalty ordered hereby must be made by wire 
transfer of funds or cashier's check. If the payment is to be made by 
wire transfer, prior to making the transfer, Defendant will contact the 
Budget and Fiscal Section of the Antitrust Division's Executive Office 
at [email protected] for instructions. If the payment 
is made by cashier's check, the check must be made payable to the 
United States Department of Justice and delivered to: Chief, Budget & 
Fiscal Section, Executive Office, Antitrust Division, United States 
Department of Justice, Liberty Square Building, 450 5th Street NW, Room 
3016, Washington, DC 20530.
    Defendant must pay the full amount of the civil penalty within 
thirty (30) days of entry of this Final Judgment. In the event of a 
default or delay in payment, interest at the rate of eighteen percent 
(18%) per annum will accrue

[[Page 481]]

thereon from the date of the default or delay to the date of payment.

III. Costs

    Each party will bear its own costs of this action, except as 
otherwise provided in Paragraph IV.C.

IV. Enforcement of Final Judgment

    A. The United States retains and reserves all rights to enforce the 
provisions of this Final Judgment, including the right to seek an order 
of contempt from the Court. Defendant agrees that in a civil contempt 
action, a motion to show cause, or a similar action brought by the 
United States regarding an alleged violation of this Final Judgment, 
the United States may establish a violation of this Final Judgment and 
the appropriateness of a remedy therefor by a preponderance of the 
evidence, and Defendant waives any argument that a different standard 
of proof should apply.
    B. Defendant agrees that he may be held in contempt of, and that 
the Court may enforce, any provision of this Final Judgment that is 
stated specifically and in reasonable detail, whether or not it is 
clear and unambiguous on its face. The terms of this Final Judgment 
should not be construed against either party as the drafter.
    C. In connection with a successful effort by the United States to 
enforce this Final Judgment against Defendant, whether litigated or 
resolved before litigation, Defendant agrees to reimburse the United 
States for the fees and expenses of its attorneys, as well as all other 
costs including experts' fees, incurred in connection with that 
enforcement effort, including in the investigation of the potential 
violation.

V. Expiration of Final Judgment

    This Final Judgment will expire upon payment in full by the 
Defendant of the civil penalty required by Section II of this Final 
Judgment.

VI. Public Interest Determination

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

Dated:-----------------------------------------------------------------
[Court approval subject to the procedures of the Antitrust Procedures 
and Penalties Act, 15 U.S.C. 16]
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United States District Judge

United States District Court for the District of Columbia

    United States of America, Plaintiff, v. Clarence L. Werner, 
Defendant.

Civil Action No. 1:21-cv-03332

Judge: James E. Boasberg

Competitive Impact Statement

    The United States of America (``United States''), under Section 
2(b) of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) 
(``APPA'' or ``Tunney Act''), 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

    On December 22, 2022, the United States filed a Complaint against 
Defendant Clarence L. Werner (``Werner'' or ``Defendant''), relating to 
Werner's acquisitions of voting securities of Werner Enterprises, Inc. 
(``Werner Inc.'') from May 2007 through February 2020. The Complaint 
alleges that Werner violated Section 7A of the Clayton Act, 15 U.S.C. 
18a, commonly known as the Hart-Scott-Rodino Antitrust Improvements Act 
of 1976 (the ``HSR Act''). The HSR Act requires certain acquiring 
persons and certain persons whose voting securities or assets are 
acquired to file notifications with the Department of Justice and the 
Federal Trade Commission (collectively, the ``federal antitrust 
agencies'') and to observe a waiting period before consummating certain 
acquisitions of voting securities or assets. 15 U.S.C. 18a (a) and (b).
    These notification and waiting period requirements apply to 
acquisitions that meet the HSR Act's size of transaction and size of 
person thresholds, which have been adjusted annually since 2004. The 
size of transaction threshold is met for transactions valued over $50 
million, as adjusted ($94 million in 2020). In addition, there is a 
separate filing requirement for transactions in which the acquirer will 
hold voting securities in excess of $100 million, as adjusted ($188 
million in 2020), and for transactions in which the acquirer will hold 
voting securities in excess of $500 million, as adjusted ($940.1 
million in 2020).
    With respect to the size of person thresholds, the HSR Act requires 
one person involved in the transaction to have sales or assets in 
excess of $10 million, as adjusted ($18.8 million in 2020), and the 
other person to have sales or assets in excess of $100 million, as 
adjusted ($188 million in 2020). A key purpose of the notification and 
waiting period requirements is to protect consumers and competition 
from potentially anticompetitive transactions by providing the federal 
antitrust agencies an opportunity to conduct an antitrust review of 
proposed transactions before they are consummated.
    An exemption from HSR Act filings may apply under certain 
circumstances. Section 802.21 of the HSR Rules, 16 CFR 802.21, provides 
that, once a person has filed under the HSR Act and the waiting period 
has expired, that person can acquire additional voting securities of 
the same issuer without filing a new notification for five years from 
the expiration of the waiting period, so long as the value of the 
person's holdings do not exceed a threshold higher than was indicated 
in the filing (``802.21 exemption'').
    The Complaint alleges that Werner acquired voting securities of 
Werner Inc. without filing the required pre-acquisition HSR Act 
notifications with the federal antitrust agencies and without observing 
the waiting period. Werner's acquisitions of Werner Inc. voting 
securities exceeded the $100-million statutory threshold, as adjusted, 
and Werner and Werner Inc. met the then-applicable adjusted statutory 
size of person thresholds. Moreover, none of Werner's acquisitions were 
exempt from HSR Act notification and waiting period requirements under 
the 802.21 exemption because he had not previously filed the requisite 
pre-acquisition HSR Act notifications.
    At the same time the Complaint was filed in the present action, the 
United States also filed a Stipulation and Order and proposed Final 
Judgment that resolve the allegations made in the Complaint. The 
proposed Final Judgment is designed to address the violation alleged in 
the Complaint and penalize Werner's HSR Act violations. Under the 
proposed Final Judgment, Werner must pay a civil penalty to the United 
States in the amount of $486,900.
    The United States and Werner have stipulated that the proposed 
Final Judgment may be entered after compliance with the APPA, unless 
the United States first withdraws its consent. Entry of the proposed 
Final Judgment will terminate this action, except that the Court will 
retain jurisdiction to construe, modify, or enforce the provisions of 
the proposed Final Judgment and punish violations thereof.

[[Page 482]]

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

    The crux of Werner's violation is that he failed to submit HSR Act 
notifications even though his acquisitions of Werner Inc. voting 
securities satisfied the HSR Act filing requirements and he was not 
eligible to take advantage of the 802.21 exemption. At all times 
relevant to the Complaint, Werner had sales or assets in excess of $10 
million, as adjusted. At all times relevant to the Complaint, Werner 
Inc. had sales or assets in excess of $100 million, as adjusted.
    Werner is the founder of Werner Inc. and during the relevant period 
alternatively served as the Chairman, Chairman Emeritus, and Executive 
Chairman of its Board of Directors. On May 14, 2007, Werner exercised 
options to acquire 475,000 shares of Werner Inc. voting securities, 
which resulted in his aggregated holdings of Werner Inc. voting 
securities exceeding the $100 million threshold, as adjusted, which in 
May 2007 was $119.6 million. Although required to do so, Werner did not 
file under the HSR Act or observe the HSR Act's waiting period prior to 
completing the May 14, 2007, transaction.
    Werner continued to acquire Werner Inc. voting securities, through 
open market purchases, the exercise of options, and otherwise. Werner 
acquired 320,100 voting securities on November 18, 2009, 8,500 voting 
securities on November 24, 2009, 59,406 voting securities on November 
27, 2009, and 32,094 voting securities on November 30, 2009. All of 
these acquisitions were made on the open market. Open market 
acquisitions require an acquirer to affirmatively and actively decide 
to acquire voting securities; in particular for very large open market 
acquisitions, it is not excusable negligence to be unaware of HSR Act 
legal requirements.
    On November 20, 2012, Werner exercised options to acquire 100,000 
Werner Inc. voting securities, which resulted in his aggregated 
holdings of Werner Inc. voting securities again exceeding the $100 
million threshold, as adjusted, which in November 2012 was $136.4 
million. Although required to do so, Werner did not file under the HSR 
Act or observe the HSR Act's waiting period prior to completing the 
November 20, 2012 transaction. Thereafter, Werner continued to acquire 
Werner Inc. voting securities.
    On February 7, 2019, Werner received 3,738 Werner Inc. voting 
securities with the vesting of a tranche of restricted stock, which 
resulted in his aggregated holdings of Werner Inc. voting securities 
again exceeding the $100 million threshold, as adjusted, which in 
February 2019 was $168.8 million. Although required to do so, Werner 
did not file under the HSR Act or observe the HSR Act's waiting period 
prior to completing the February 7, 2019 transaction.
    On January 17, 2020, Werner's counsel contacted the Premerger 
Notification Office (``PNO'') of the Federal Trade Commission to inform 
PNO staff that counsel was analyzing a situation that counsel 
anticipated would likely entail multiple post-consummation filings. As 
of that date, Werner, through his counsel, was aware that he had 
violated the HSR Act. Thereafter, Werner made additional acquisitions 
of Werner Inc. voting securities on February 7 and 11, 2020, through 
the vesting of restricted stock awards. Werner did not file an HSR 
notification prior to either of these acquisitions.
    On March 4, 2020, Werner made corrective filings under the HSR Act 
for the acquisitions he made on May 14, 2007, November 20, 2012, and 
February 7, 2019. Each of these transactions resulted in Werner's 
aggregated holdings of Werner Inc. stock exceeding the $100 million 
threshold, as adjusted. Had Werner filed under the HSR Act for these 
three acquisitions on a timely basis, all his other acquisitions of 
Werner Inc. voting securities during the relevant period would have 
been exempt pursuant to the 802.21 exemption.
    Werner was in continuous violation of the HSR Act from May 14, 
2007, when he acquired the Werner Inc. voting securities valued in 
excess of the HSR Act's $100 million filing threshold, as adjusted, 
through April 3, 2020, when the waiting period expired on his 
corrective filings.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment imposes a $486,900 civil penalty 
designed to address the violation alleged in the Complaint, penalize 
the Defendant, and deter others from violating the HSR Act. The United 
States adjusted the penalty downward from the maximum permitted under 
the HSR Act because the violation was inadvertent and the Defendant is 
willing to resolve the matter by proposed final judgment and thereby 
avoid prolonged investigation and litigation. However, the penalty 
amount reflects that Defendant was serving in a director capacity 
throughout the period he was in violation of the HSR Act. In addition, 
many of these acquisitions were open market acquisitions, such that he 
should have been aware of his obligations under the HSR Act. Open 
market acquisitions require an acquirer to affirmatively and actively 
decide to acquire voting securities; in particular for very large open 
market acquisitions, it is not excusable negligence to be unaware of 
HSR Act legal requirements. Further, Defendant made reportable 
acquisitions even after Defendant, through his counsel, was aware that 
he had violated the HSR Act. The penalty will not have any adverse 
effect on competition; instead, the relief should have a beneficial 
effect on competition because it will deter the Defendant and others 
from failing to properly notify the federal antitrust agencies of 
future acquisitions, in accordance with the law.

IV. Remedies Available to Potential Private Litigants

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

V. Procedures Available for Modification of the Proposed Final Judgment

    The United States and the Defendant have stipulated that the 
proposed Final Judgment may be entered by 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 60 days preceding the 
effective date of the proposed Final Judgment within which any person 
may submit to the United States written comments regarding the proposed 
Final Judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this Competitive Impact Statement in 
the Federal Register or the last date of publication in a newspaper of 
the summary of this Competitive Impact Statement, whichever is later. 
All comments received during this period will be considered by the 
United States, which remains free to withdraw its consent to the 
proposed Final Judgment at any time before the Court's entry of the 
Final Judgment. The comments and the response of the United States will 
be filed with the Court. In addition, the comments and the United 
States' responses will be published in the Federal Register unless the 
Court agrees that the United States instead may publish them on the 
U.S. Department of

[[Page 483]]

Justice, Antitrust Division's internet website. Written comments should 
be submitted in English to: Maribeth Petrizzi, Special Attorney, United 
States, c/o Federal Trade Commission, 600 Pennsylvania Avenue NW, CC-
8416, Washington, DC 20580, Email: [email protected].
    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 the Defendant. The 
United States is satisfied, however, that the proposed relief is an 
appropriate remedy in this matter. Given the facts of this case, 
including the Defendant's self-reporting of the violations and 
willingness to promptly settle this matter, the United States is 
satisfied that the proposed civil penalty is sufficient to address the 
violations alleged in the Complaint and to deter violations by 
similarly situated entities in the future, without the time, expense, 
and uncertainty of a full trial on the merits.

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

    Under the Clayton Act and APPA, proposed Final Judgments or 
``consent decrees'' in antitrust cases brought by the United States are 
subject to a 60-day comment period, after which the Court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. 16(e)(1). In making that determination, 
the Court, in accordance with the statute as amended in 2004, is 
required to consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. 16(e)(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); United States v. U.S. Airways Grp., 
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 U.S. Dist. LEXIS 
84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court's review of a 
proposed Final 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'').
    As the U.S. 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 in 
the government's complaint, whether the proposed Final Judgment is 
sufficiently clear, whether its enforcement mechanisms are sufficient, 
and whether it may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62. With respect to the adequacy of the relief secured by 
the proposed Final Judgment, a court may not ``make de novo 
determination of facts and issues.'' United States v. W. Elec. Co., 993 
F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also 
Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F. 
Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F. 
Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at 
*3. Instead, ``[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.'' W. 
Elec. Co., 993 F.2d at 1577 (quotation marks omitted). ``The court 
should bear in mind the flexibility of the public interest inquiry: The 
court's function is not to determine whether the resulting array of 
rights and liabilities is one that will best serve society, but only to 
confirm that the resulting settlement is within the reaches of the 
public interest.'' Microsoft, 56 F.3d at 1460 (quotation marks 
omitted); see also United States v. Deutsche Telekom AG, No. 19-2232 
(TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding 
requirements would ``have enormous practical consequences for the 
government's ability to negotiate future settlements,'' contrary to 
congressional intent. Microsoft, 56 F.3d at 1456. ``The Tunney Act was 
not intended to create a disincentive to the use of the consent 
decree.'' Id.
    The United States' predictions about the efficacy of the remedy are 
to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 
1461 (recognizing courts should give ``due respect to the Justice 
Department's . . . view of the nature of its case''); United States v. 
Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) (``In 
evaluating objections to settlement agreements under the Tunney Act, a 
court must be mindful that [t]he government need not prove that the 
settlements will perfectly remedy the alleged antitrust harms[;] it 
need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' (internal 
citations omitted)); United States v. Republic Servs., Inc., 723 F. 
Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review to 
which the government's proposed remedy is accorded''); United States v. 
Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A 
district court must accord due respect to the government's prediction 
as to the effect of proposed remedies, its perception of the market 
structure, and its view of the nature of the case.''). The ultimate 
question is whether ``the remedies [obtained by the Final Judgment are] 
so inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest.' '' Microsoft, 56 F.3d at 1461 
(quoting W. Elec. Co., 900 F.2d at 309).
    Moreover, the Court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, and does not authorize the Court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he 
`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

[[Page 484]]

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.
    In its 2004 amendments to the APPA, Congress made clear its intent 
to preserve the practical benefits of using judgments proposed by the 
United States in antitrust enforcement, Public Law 108-237 Sec.  221, 
and added the unambiguous instruction that ``[n]othing in this section 
shall be construed to require the court to conduct an evidentiary 
hearing or to require the court to permit anyone to intervene.'' 15 
U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76 
(indicating that a court is not required to hold an evidentiary hearing 
or to permit intervenors as part of its review under the Tunney Act). 
This language explicitly wrote into the statute what Congress intended 
when it first 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). ``A court can make its public interest determination based on 
the competitive impact statement and response to public comments 
alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F. 
Supp. 2d at 17).

VIII. Determinative Documents

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

Date: December 22, 2021.

Respectfully submitted,
-----------------------------------------------------------------------

Kenneth A. Libby,

Special Attorney, U.S. Department of Justice, Antitrust Division, c/
o Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, 
DC 20580, Phone: (202) 326-2694, Email: [email protected].

[FR Doc. 2021-28538 Filed 1-4-22; 8:45 am]
BILLING CODE 6750-01-P