USA v. Repub. Serv. Inc. .

• Decision Date: 15 July 2010
• Docket Number: Civil Action No. 08-2076 (RWR).
• Parties: UNITED STATES of America et al., Plaintiffs, v. REPUBLIC SERVICES, INC. et al., Defendants.
• Court: U.S. District Court — District of Columbia

723 F.Supp.2d 157

UNITED STATES of America et al., Plaintiffs,
v.
REPUBLIC SERVICES, INC. et al., Defendants.

United States District Court,District of Columbia. UNITED STATES of America et al., Plaintiffs,
v.
REPUBLIC SERVICES, INC. et al., Defendants. Civil Action No. 08-2076 (RWR). July 15, 2010.

723 F.Supp.2d 157

Lowell Robert Stern, Stephen Alan Harris, U.S. Department of Justice, Washington, DC, Nicole S. Gordon, Office of Attorney General, San Francisco, CA, C. Terrell Miller, Office of Attorney General, Frankfort, KY, M. Elizabeth Lippitt, Office of Attorney General, Lansing, MI, K.D. Sturgis, North Carolina Department of Justice, Raleigh, NC, Mitchell L. Gentile, Ohio Attorney General's Office Antitrust Section, Columbus, OH, James A. Donahue, III, Office of the Attorney General Antitrust Section, Harrisburg, PA, Kim Van Winkle, Office of the Attorney General, Austin, TX, for Plaintiffs.

Edward B. Schwartz, Shearman & Sterling, LLP, John Roberti, Mayer Brown LLP, David Alan Balto, Washington, DC, for Defendants.

MEMORANDUM OPINIONRICHARD W. ROBERTS, District Judge.

The United States and seven states bring suit against defendants Republic

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Services, Inc. and Allied Waste Industries, Inc., alleging antitrust violations stemming from Republic's acquisition of Allied Waste. The parties have filed a joint motion for entry of final judgment, which would permit the merger to be consummated subject to conditions intended to remedy the violations identified in the complaint. The Center for a Competitive Waste Industry (“CCWI”) has filed an amicus brief, arguing that the proposed final judgment is not in the public interest because the divestiture remedies are inadequate when compared to air-space remedies that would allow independent haulers to dump in the merged firms' landfills. Because there is an adequate factual foundation upon which to conclude that the government's proposed divestitures will remedy the antitrust violations alleged in the complaint, the parties' joint motion will be granted and the proposed final judgment will be entered.

BACKGROUND

Defendants Allied and Republic are the nation's second and third largest waste hauling and disposal companies, respectively. (Compl. ¶¶ 6-7.) They each provide small container commercial waste collection, which entails hauling waste in “dumpsters”-containers with between one and ten cubic yards of storage-from commercial and industrial sites to transfer stations or disposal sites. ( Id. ¶ 10.) They each also dispose of municipal solid waste (“MSW”)-“solid putrescible waste generated by households and commercial establishments”-in landfills or incinerators. ( Id. ¶¶ 16-17.) On January 22, 2008, Republic entered into a stock purchase agreement to acquire Allied. After a detailed investigation of the proposed transaction, in which the government reviewed “documents and information from the merging parties and others and conducted more than 600 interviews with customers, competitors, and other individuals knowledgeable about the industry[,]” the government concluded that the merger would have anticompetitive effects. (Resp. of the U.S. to Public Comments on the Proposed Final J. (“U.S. Resp.”) at 3.) On December 3, 2008, the plaintiffs filed a complaint under § 7 of the Clayton Act, 15 U.S.C. § 18, asserting that the “proposed transaction would substantially lessen competition for small container commercial waste collection service” and for “MSW disposal service” in various geographic markets. ¹ (Compl. ¶ 1.)

The government filed together with its complaint a stipulation and order under which the parties consented to entry of a proposed final judgment aimed at remedying the alleged anticompetitive effects of the merger. The parties' proposed final judgment requires Republic to divest nine landfills, ten transfer stations, and eighty-seven small container hauling routes across the fifteen geographic markets identified in the complaint. (Proposed Final J. at § II(H).) According to the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16, known as the Tunney Act, the government published the proposed final judgment along with a competitive impact

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statement in the Federal Register on December 16, 2008. See 73 Fed. Reg. 76,383 (Dec. 16, 2008). Five comments were received during the sixty-day public comment period, including a detailed comment by CCWI. In its public comment, CCWI argued that the proposed final judgment would “not fully remedy the competitive problems identified in the complaint but rather will permit a three-firm oligopoly to consolidate into an even more concentrated two-firm oligopoly based upon a remedy that is fatally discredited by the very parties involved.” (Comments of CCWI on the Proposed J. (“CCWI Comment”) at 1.) The government responded to the public comments, arguing that many of the competitive concerns raised by CCWI fell outside the face of the government's complaint and that the remedies advanced in the proposed final judgment were both necessary and adequate to remedy the competitive harms that the government had raised in its complaint. (U.S. Resp. at 8-10.) After the parties filed a joint motion for entry of the proposed final judgment, CCWI filed a motion for leave to participate as amicus curiae. CCWI's motion was granted, and it filed an amicus brief arguing that entry of the proposed final judgment would not be in the public interest because the divestiture remedies are inadequate when compared to air-space remedies that would allow independent haulers to dump in the merged firms' landfills.

DISCUSSION

A court reviews a proposed final judgment to determine if it is in the public interest. 15 U.S.C. § 16(e). Under the Tunney Act, which governs the...