[Federal Register: November 7, 2002 (Volume 67, Number 216)]
[Notices]
[Page 67864-67869]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07no02-59]
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DEPARTMENT OF JUSTICE
Antitrust Division
[Civil Case No. 02-1768]
Proposed Final Judgment and Competitive Impact Statement; United
States v. Archer-Daniels-Midland Company and Minnesota Corn Processors,
LLC
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16(b)-(h), that a proposed Final
Judgment, Stipulation and Order, and Competitive Impact Statement have
been filed with the United States District Court for the District of
Columbia in United States v. Archer-Daniels-Midland Company and
Minnesota Corn Processors, LLC, Civil Case No. 1:02 CV 01768 (JDB). The
proposed Final Judgment is subject to approval by the Court after the
expiration of the statutory 60-day public comment period and compliance
with the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h).
On September 6, 2002, the United States filed a Complaint alleging
that the proposed acquisition by Archer-Daniels-Midland Company of
Minnesota Corn Processors, LLC would violate section 7 of the Clayton
Act, 15 U.S.C. 18, by substantially lessening competition in the
manufacture and sale of corn syrup and high fructose corn syrup
(``HFCS'') in the United States and Canada. ADM and MCP are two of the
largest corn wet millers in the United States, competing against only
four other firms in the manufacture and sale of corn syrup and HFCS.
MCP sells these products through an exclusive sales joint venture that
it formed in December 2000 with another corn wet miller, Corn Products
International, Inc. To preserve competition, the proposed Final
Judgment requires the defendants to dissolve the joint venture that MCP
formed with CPI by December 31, 2002, thus allowing CPI to compete
independently. A Competitive Impact Statement, filed by the United
States, describes the Complaint, the proposed Final Judgment, and
remedies available to private litigants. Copies of the Complaint, the
proposed Final
[[Page 67865]]
Judgment, Stipulation and Order, and Competitive Impact Statement are
available for inspection at the U.S. Department of Justice, Antitrust
Division, Suite 215 North, 325 7th Street, NW., Washington, DC 20530
(telephone: 202/514-2692), and at the Clerk's Office of the U.S. Court
for the District of Columbia, 333 Constitution Avenue, NW., Washington,
DC 20001.
Public comment is invited within 60-days of the date of the notice.
Such comments and responses thereto will be published in the Federal
Register and filed with the Court. Comments may be filed with the
Department of Justice in either paper or electronic form. Comments
filed in paper form should be directed to Roger W. Fones, Chief,
Transportation, Energy, and Agriculture Section, Antitrust Division,
U.S. Department of Justice, 325 7th Street, NW., Suite 500, Washington,
DC 20530 (facsimile 202/307-2784). Comments filed in electronic form
should be submitted to the following e-mail address: ADM-
MCP.atr@usdoj.gov.
Constance K. Robinson,
Director of Operations, Antitrust Division.
Stipulation and Order
It is hereby stipulated by and between the undersigned parties,
subject to approval and entry by the Court, that:
1. The Court has jurisdiction over the subject matter of this
action and over each of the parties hereto, and venue of this action is
proper in the United States District Court for the District of
Columbia.
2. The parties stipulate that a Final Judgment in the form hereto
attached may be filed with and entered by the Court, upon the motion of
any party or upon the Court's own motion, at any time after compliance
with the requirements of the Antitrust Procedure and Penalties Act (15
U.S.C. 16), and without further notice to any party or other
proceedings, provided that the United States has not withdrawn its
consent, which it may do at any time before the entry of the proposed
Final Judgment by serving notice thereof on defendants and by filing
that notice with the Court.
3. Defendants shall abide by and comply with the provisions of the
proposed Final Judgment pending entry of the Final Judgment by the
Court, or until expiration of time for all appeals of any Court ruling
declining entry of the proposed Final Judgment, and shall, from the
date of the signing of this Stipulation by the parties, comply with all
the terms and provisions of the proposed Final Judgment as though they
were in full force and effect as an order of the Court.
4. This Stipulation shall apply with equal force and effect to any
amended proposed Final Judgment agreed upon in writing by the parties
and submitted to the Court.
5. If the United States has withdrawn its consent, as provided in
paragraph 2 above, or if the proposed Final Judgment is not entered
pursuant to this Stipulation, the time has expired for all appeals of
any Court ruling declining entry of the proposed Final Judgment, and
the Court has not otherwise ordered continued compliance with the terms
and provisions of the proposed Final Judgment, then the parties are
released from all further obligations under this Stipulation, and the
making of this Stipulation shall be without prejudice to any party in
this or any other proceeding.
6. Defendants represent that the required actions set forth in
Sections IV and V of the proposed Final Judgment can and will be made,
and that the defendants will later raise no claims of hardship, or
difficulty of compliance as grounds for asking the Court to modify any
of the provisions contained therein.
Respectfully submitted,
For Plaintiff, United States of America:
Michael P. Haronis,
Pennsylvania State Bar #17994, Attorney, Antitrust Division, U.S.
Department of Justice, 325 Seventh St., NW., Suite 500, Washington,
DC 20530. Telephone: (202) 307-6357. Facsimile: (202) 307-2784.
Dated: September 6, 2002.
For Defendant,
Archer-Daniels-Midland Company:
David James Smith,
State of Illinois Bar No. 3128392, Vice President, Secretary &
General Counsel, 4666 Faries Parkway, Decatur, IL 62526. Telephone:
(217) 424-6183. Facsimile: (217) 424-6196.
For Defendant, Minnesota Corn Processors, LLC:
Joseph Bennett,
State of Minnesota Bar No. 0289991, Secretary and General Counsel,
Minnesota Corn Processors, LLC, 901 North Highway 59, Marshall, MN
52658. Telephone: (507) 537-2674. Facsimile: (507) 537-2641.
Order
It is so ordered, this -- day of ------, 2002.
--------------
United States District Court Judge.
Final Judgment
Whereas plaintiff, United States of America, having filed its
Complaint herein, plaintiff and defendants, Archer-Daniels-Midland
Company (``ADM'') and Minnesota Corn Processors, LLC (``MCP''), 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 of law;
And whereas, the defendants agree to be bound by the provisions of
this Final Judgment pending its approval by the Court;
And whereas, prompt and certain dissolution of CornProductsMCP
Sweeteners LLC (``CPMCP'') is the essence of this agreement;
And whereas, the United States requires defendants to effect the
dissolution of CPMCP for the purpose of remedying the loss of
competition alleged in the Complaint;
And whereas, defendants have represented to the United States that
they will effect the dissolution of CPMCP as provided in this Final
Judgment and that defedants will later raise no claim of hardship or
difficulty as grounds for asking the Court to modify any of the
provisions on dissolution 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, as amended, 15 U.S.C. 18.
II. Definitions
As used in this Final Judgment:
A. ``ADM'' means defendant Archer-Daniels-Midland Company, a
corporation organized and existing under the laws of the state of
Delaware, with its principal offices in Decatur, Illinois, its
successors and assigns, and its parents, subsidiaries, divisions,
groups, and their officers, managers, agents, and employees.
B. ``CPI'' means Corn Products International, Inc., a corporation
organized and existing under the laws of the state of Delaware, with
its principal offices in Bedford Park, Illinois, its successors and
assigns, and its parents, subsidiaries, divisions, groups, and their
officers, managers, agents, and employees.
C. ``CPMCP'' means CornProductsMCP Sweeteners LLC, a joint venture
between CPI and MCP, which serves as the exclusive sales and
distribution outlet in the United States, Canada, and Mexico for CPI
and MCP in designated product categories, including
[[Page 67866]]
corn syrup and high fructose corn syrup.
D. ``MCP'' means defendant Minnesota Corn Processors, LLC, a
limited liability company organized and existing under the laws of the
state of Colorado, with its principal offices in Marshall, Minnesota,
its successors and assigns, and it parents, subsidiaries, divisions,
groups, and their officers, managers, agent, and employees.
E. ``Transaction'' means ADM's proposed acquisition of MCP.
III. Applicability
This Final Judgment applies to ADM and MCP, 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.
IV. Dissolution of CPMCP
A. The defendants are hereby ordered and directed to effect the
dissolution of CPMCP on or prior to December 31, 2002. Defendants are
further ordered and directed to provide to the General Counsel of CPI
in its Westchester, Illinois offices written notice of their election
to dissolve CPMCP prior to or simultaneously with the closing of the
Transaction.
B. On the same day that the defendants provide written notice to
CPI's General Counsel, as required pursuant to Section IV(A) of this
Final Judgment, the defendants shall in writing relieve CPI, effective
immediately, of any and all obligations to defendants or CPMCP to the
full extent necessary to permit CPI to conduct independent operations
in competition with defendants and CPMCP.
V. Participation by the Defendants in the Operation of CPMCP Prior to
the Effective Date of Dissolution
From the date the defendants provide CPI's General Counsel written
notice of their election to dissolve CPMCP until the effective date of
the dissolution of CPMCP, defendants shall refrain from selling,
marketing, or pricing any products in cooperation or coordination with
CPMCP or CPI and shall compete independently of CPMCP and CPI. Nothing
in this Final Judgment affects or alters any obligations of defendants
to facilitate or ensure that CPMCP completes the performance of any
existing contracts or commitments to its customers.
VI. Affidavits
Twenty (20) calendar days from the date of the filing of this Final
Judgment, and every thirty (30) calendar days thereafter until the
final accounting after dissolution of CPMCP has been completed under
this Final Judgment, the defendants shall deliver to the United States
an affidavit as to the fact and manner of compliance with Sections IV
and V of this Final Judgment. Assuming that the information set forth
in the affidavit is true and complete, any objection by the United
States to the information provided by the defendants, including
limitations on the information, shall be made within fourteen (14)
calendar days of receipt of such affidavit. Unit one year after the
defendants have completed the final accounting, the defendants shall
maintain full records of the dissolution of CPMCP.
VII. Compliance Inspection
A. For the purposes of determining or securing compliance with this
Final Judgment, or of determining whether the Final Judgment should be
modified or vacated, and subject to any legally recognized privilege,
from time to time duly authorized representatives of the United States
Department of Justice, including consultants and other persons retained
by the United States, shall, upon written request of a duly 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 plaintiff's option, to require defendants to provide copies of, all
books, ledgers, accounts, records 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 a duly authorized representative of
the Assistant Attorney General in charge of the Antitrust Division,
defendants shall submit written reports, 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)(7) 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)(7) 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).
VIII. 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.
IX. Public Interest Determination
Entry of this Final Judgment is in the public interest.
X. Expiration of Final Judgment
Unless this Court grants an extension, this Final Judgment shall
expire ten years from the date of its entry.
Date:----------
--------------
United States District Court Judge
Case Number: 1:02CV02768.
Judge: John D. Bates.
Deck Type: Antitrust.
Competitive Impact Statement
Pursuant to Section 5(b) of the Clayton Act, as amended by Section
2 of the Antitrust Procedures and Penalties Act (codified at 15 U.S.C.
16(b)-(h) (``Tunney Act'')), the United States files this Competitive
Impact Statement relating to the Proposed Judgment submitted for entry
in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On September 6, 2002, the United States of American filed a civil
antitrust Complaint alleging that the proposed acquisition by Archer-
Daniels-Midland Company (``ADM'') of Minnesota Corn Processors, LLC
(``MCP'') would violate Section 7 of the Clayton Act. 15 U.S.C.
[[Page 67867]]
18. The Complaint alleges that ADM and MCP are two of the largest corn
wet millers in the United States and compete in the manufacture and
sale of corn syrup and high fructose corn syrup (``HFCS'') in the
United States and Canada. The Complaint further alleges that through
its acquisition of MCP, ADM will eliminate this competition and
increase concentration in the already highly concentrated corn syrup
and HFCS markets, making anticompetitive coordination among the few
remaining competitors more likely. The request for relief in the
Complaint seeks: (1) A judgment that the proposed acquisition would
violate Section 7 of the Clayton Act; (2) a permanent injunction
preventing consummation of the merger agreement; (3) an award of costs
to the plaintiff; and (4) such other relief as the Court may deem just
and proper.
When the Complaint was filed, the United States also filed a
proposed Final Judgment that would permit ADM's acquisition of MCP, but
would preserve competition by requiring, inter alia, the defendants to
dissolve the marketing and sales joint venture that MCP formed with
another corn wet miller, Corn Products International (``CPI'').\1\ The
defendants are required to provide written notice to CPI of their
election to dissolve the joint venture no later than consummation of
ADM's acquisition of MCP and to complete the dissolution of the joint
venture no later than December 31, 2002. On the same day the defendants
give written notice to CPI, the proposed Final Judgment also provides
that the defendants are prohibited from selling, marketing, or pricing
any products in cooperation or coordination with the joint venture or
CPI, and they must notify CPI that it is relieved of all obligations
under the joint venture that would prevent it from competing fully with
the defendants. The proposed Final Judgment does not affect or alter
any obligations of ADM and MCP to perform existing contracts or
commitments to its customers.
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\1\ The defendants entered into a Stipulation (filed
contemporaneously with the Final Judgment) in which they agreed to
be bound by the proposed Final Judgment pending final determination
of this matter by the Court.
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The United States and the defendants have stipulated that the
proposed Final Judgment may be entered after compliance with the Tunney
Act. Entry of the proposed Final Judgment would terminate the action,
except that the Court would retain jurisdiction to construe, modify, or
enforce provisions of the proposed Final Judgment and to punish
violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
ADM is a Delaware corporation, with its principal offices located
in Decatur, Illinois. ADM is engaged in the processing and sale of
agricultural products, including corn syrup and HFCS, which are among
the products it produces from corn through the wet milling process at
domestic plants in Cedar Rapids Iowa, Clinton, Iowa, and Decatur,
Illinois. Its net sales in 2001 were approximately $20 billion. Its
sales of corn wet milled products in the United States in 2001 exceeded
$1 billion, including HFCS sales of approximately $480 million and corn
syrup sales of approximately $66 million.
MCP is a Colorado limited liability company, with its principal
offices in Marshall, Minnesota. MCP is an agricultural processing and
marketing business that operates corn wet milling facilities in
Marshall, Minnesota and Columbus, Nebraska. MCP's net sales in 2001
were approximately $620 million. MCP's 2001 sales of corn wet milled
products in the United States totaled approximately $402 million, with
HFCS sales of approximately $153 million and corn syrup sales of
approximately $56 million.
MCP sells its corn wet milled products through a joint venture that
it formed in December 2000 with CPI. The joint venture, known as
CornProductsMCP Sweeteners LLC (``CPMCP''), is the exclusive outlet for
MCP's and CPI's corn syrup and HFCS products.
On July 11, 2002, ADM and MCP entered into an agreement under which
ADM would acquire MCP. This transaction, which would increase
concentration in the already highly concentrated corn syrup and HFCS
markets precipitated the government's suit.
B. Corn Syrup and High Fructose Corn Syrup Markets
Corn syrup and HFCS are manufactured by wet mill processing of
corn. In the wet milling process, corn kernels are first soaked in
water, then ground and separated from other components of the kernel,
producing a starch slurry. To manufacture corn syrup and HFCS, the corn
wet millers add enzymes and/or acid that convert the starch slurry to
sugars, such as dextrose and fructose.
Corn syrup is used as a sweetener in the preparation of assorted
food products, including confectionery, baker, and dairy products,
salad dressing, condiments, jams, and jellies, lunch meats, canned
food, and vegetables. Specific applications require different grades of
corn syrup with different sweetening effect. The corn wet millers that
manufacture corn syrup can and do make most or all the various grades
of corn syrup.
There are two grades of HFCS--HFCS 42 and HFCS 55--with the numbers
referring to the percentage of fructose in the product. HFCS 42 is used
as a sweetener in jam, jellies, baked goods, canned food, diary
products, and some beverages. HFCS 55 is used mainly in the soft-drink
industry as a substitute for sugar.
There are no realistic substitutes for corn syrup or HFCS to which
customers could switch in the event of a small, but significant and
non-transitory price increase. Corn syrup in its various grades. HFCS
42, and HFCS 55 are each distinct products without practical
substitutes, differing from all other sweeteners and one another in
their physical characteristics, means of production, many uses, and
pricing. Although sugar is functionally interchangeable with corn
syrup, HFCS 42 and HFCS 55 in many applications, it is significantly
more expensive.
C. Harm to Competition as a Consequence of the Acquisition
The markets in the United States and Canada for corn syrup, HFCS 42
and HFCS 55 are already highly concentrated. ADM competes against only
four other firms in the manufacture and sale of corn syrup, HFCS 42 and
HFSCS 55 in the United States or Canada. In these markets, ADM accounts
for about 10% of all corn syrup manufacturing capacity, 33% of all HFCS
42 manufacturing capacity, and 25% of all HFCS 55 manufacturing
capacity. MCP, in its joint venture with CPI, accounts for more than
20% of all corn syrup manufacturing capacity, more than 15% of all HFCS
42 manufacturing capacity, and more than 15% of all HFCS 55
manufacturing capacity.
If ADM acquires MCP and succeeds to MCP's position in its joint
venture with CPI, the markets in the United States and Canada for corn
syrup, HFCS 42 and HFCS 55 will become substantially more concentrated.
The number of independent competitors will be reduced from five to
four, increasing the likelihood of anticompetitive coordination among
the few remaining corn wet millers that manufacture and sell corn syrup
and HFCS 42 and HFCS 55.
[[Page 67868]]
Entry by a new competitor would not be timely or likely to prevent
this harm to competition. Successful entry into the manufacture and
sale of corn syrup, HFCS 42 and HFCS 55 is difficult time consuming,
and costly. Construction of an efficient corn wet milling facility
likely would take more than two years from the time of site selection
to production of commercial quantities of corn wet milled products.
As the Complaint alleges, the transaction would likely have the
following effects, among others: actual competition between the
defendants in the corn syrup and HFCS markets will be eliminated;
competition generally in the manufacture and sale of corn syrup and
HFCS throughout the United States and Canada will lessen substantially;
the prices for corn syrup and HFCS will increase; and the amounts of
corn syrup and HFCS produced will decrease.
III. Explanation of the Proposed Final Judgment
The provisions of the proposed Final Judgment are designed to
eliminate the anticompetitive effects resulting from ADM's acquisition
of MCP and succession to MCP's interest in the joint venture with CPI
and to preserve competition in the manufacture and sale of corn syrup
and HFCS. The proposed Final Judgment contains three principal forms of
relief. First, it requires the defendants to dissolve the joint venture
by December 31, 2002. This relief is intended to ensure that the
acquisition does not reduce the number of independent competitors in
the corn syrup and HFCS markets in the United States and Canada. Prior
to the acquisition, there were five competitors and with the
dissolution of CPMCP, there will still be five. Second, the proposed
Final Judgment also requires that, prior to or simultaneously with the
closing of ADM's acquisition of MCP, the defendants must provide CPI
written notice of their election to dissolve CPMCP. Upon written notice
of their election to dissolve CPMCP, the defendants are additionally
required to provide CPI written notice that CPI is permitted to conduct
independent operations in competition with the defendants and CPMCP.
This relief is intended to ensure that, prior to accomplishment of the
dissolution of CPMCP, CPI is permitted to independently market and sell
corn syrup and HFCS. Third, the proposed Final Judgment further
requires the defendants to complete independently of CPMCP and CPI. The
proposed final Judgment does not affect or alter any obligations of ADM
and MCP to facilitate or ensure that CPMCP completes the performance of
any existing contracts or commitments to its customers.
Thus, the decree will ensure that there are at least five
independent competitors in the corn syrup and HFCS markets, and will
preserve and encourage ongoing competition between ADM and CPI.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in a federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorney's fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 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 the defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the Tunney Act, provided that the United States
has not withdrawn its consent. The Tunney Act conditions entry upon the
Court's determination that the proposed Final Judgment is in the public
interest.
The Tunney Act 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. The United States will evaluate and respond to
the comments. All comments will be given due consideration by the
Department of Justice, which remains free to withdraw its consent to
the proposed Final Judgment at any time prior to entry. The comments
and the response of the United States will be filed with the Court and
published in the Federal Register. Written comments should be submitted
to: Roger W. Fones, Chief, Transportation, Energy & Agriculture
Section, Antitrust Division, United States Department of Justice, 325
Seventh Street, NW., Suite 500, 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 the defendants. The
United States is satisfied, however, that the dissolution of the joint
venture and other relief contained in the proposed Final Judgment will
preserve competition in the production and sale of corn syrup and HFCS
and that the proposed Final Judgment would achieve all of the relief
that the government would have obtained through litigation, but avoids
the time and expense of trial. The United States is satisfied that the
proposed relief will prevent the acquisition from having
anticompetitive effects in this market. The dissolution of the joint
venture will preserve the existence of five independent competitors,
thus eliminating the likelihood that the acquisition would have
facilitated industry coordination.
VII. Standard of Review Under the Tunney Act for Proposed Final
Judgment
The Tunney Act requires that proposed consent judgments in
antitrust cases brought by the United States be 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.'' In making
that determination, the Court may consider--
(1) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;
(2) the impact of entry of such judgment 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). As the Court of Appeals for the District of Columbia
Circuit has held, the Tunney Act permits the Court to consider, among
other things, the relationship between the remedy secured and the
specific allegations set forth in the government's complaint, whether
the decree is sufficiently clear, whether enforcement mechanisms are
[[Page 67869]]
sufficient, and whether the decree may positively harm third parties.
See United States v. Microsoft, 56 F. 3d 1448 (D.C. Cir. 1995).
In conducting this inquiry, ``the Court is nowhere compelled to go
to trial or to engage in extended proceedings which might have the
effect of vitiating the benefits of prompt and less costly settlement
through the consent decree process.'' \2\ Rather,
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\2\ 119 Cong. Rec. 24598 (1973); see also United States v.
Gillette Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public
interest'' determination can be made properly on the basis of the
Competitive Impact Statement and Response to Comments filed pursuant
to the Tunney Act. Although the Tunney Act authorizes the use of
additional procedures, 15 U.S.C. 16(f), those procedures are
discretionary. A court need not invoke any of them unless it
believes that the comments have raised significant issues and and
that further proceedings would aid the court in resolving those
issues. See H.R. 93-1463, 93d Cong. 2d Sess. 8-9, reprinted i (1974)
U.S.C.C.A.N. 6535, 6538.
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
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circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. ] 61,508
at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988), quoting United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083
(1981); see also Microsoft, 56 F. 3d 1448 (D.C. Cir. 1995). Precedent
requires that
[t]he balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the pubioc 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 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 (citations omitted) (emphasis added).\3\
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\3\ See also United States v. BNS, Inc., 858 F.2d at 463; United
States v. National Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D.
Cal. 1978); Gillette, 406 F. Supp. at 716; United States v. American
Cyanamid Co., 719 F.2d 558, 565 (2d Cir. 1983).
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The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[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. American Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982)
(citations omitted), aff'd sub nom. Maryland v. United States. 460 U.S.
1001 (1983), quoting Gillette, 406 F. Supp. at 716 \4\
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\4\ See also United States v. Alcan Aluminum Ltd., 605 F. Supp.
619, 622 (w.D. Ky. 1985).
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Moreover, the Court's role under the Tunney Act is limited to
reviewing the remedy in relationship to the violations that the United
States has alleged in its complaint, and the Act 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. Since ``[t]he
court's authroity to review the decree depends entirely on the
government's exercising its prosecurtorial 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 might have, but did not, pursue. Id. at 1459-60.
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the Tunney Act that were considered by the United States in
formulating the proposed Final Judgment.
Dated: September 13, 2002.
Respectfully submitted,
For Plaintiff United States of America:
Michael P. Harmonis,
Pennsylvania Bar No. 17994, Antitrust Division, U.S. Department of
Justice, 325 7th Street, NW., Suite 500, Washington, DC 20530,
Telephone: (202) 307-6357. Facsimile: (202) 307-2784.
Certificate of Service
I hereby certify that on this 13th day of September, 2002. I have
caused a copy of the foregoing United State's Competitive Impact
Statement to be served by first class mail, postage prepaid, and by
facsimile on counsel for defendants in this matter:
David James Smith,
Vice President, Secretary & General Counsel, Archer-Daniels-Midland
Company, 4666 Faries Parkway, Decatur, IL 62526. Telephone: (217) 424-
6183. Facsimile: (217) 424-6196. Counsel for Defendant Archer-Danbiels-
Midland.
Joseph Bennett,
Secretary and General Counsel, Minnesota Corn Processors, LLC, 901
North Highway 59, Marshall, MN 56258. Telephone: (507) 537-2674.
Facsimile: (507) 537-2641. Counsel for Defendant Minnesota Corn
Processors, LLC.
Michael P. Harmonis,
Pennsylvania State Bar No. 17994, Attorney, Antitrust Division, U.S.
Department of Justice, 325 Seventh St., NW., Suite 500, Washington, DC
20530. Telephone: (202) 307-6357. Facsimile: (202) 307-2784.
Certificate of Service
I hereby certify that on this 13th day of September, 2002, I have
caused a copy of the foregoing United State's Competitive Impact
Statement to be served by first class mail, postage prepaid, and by
facsimile on counsel for defendants in this matter:
David James Smith,
Vice President, Secretary & General Counsel, Archer-Daniels-Midland
Company, 4666 Faries Parkway, Decatur, IL 62526. Telephone: (217) 424-
6183. Facsimile: (217) 424-6196. Counsel for Defendant Archer-Daniels-
Midland.
Joseph Bennett,
Secretary and General Counsel, Minnesota Corn Processors, LLC, 901
North Highway 59, Marshall, MN 56258. Telephone: (507) 537-2674.
Facsimile: (507) 537-2641. Counsel for Defendant Minnesota Corn
Processors, LLC.
Michael P. Harmonis,
Pennsylvania State Bar No. 17994, Attorney, Antitrust Division, U.S.
Department of Justice, 325 Seventh St., NW., Suite 500, Washington, DC
20530. Telephone: (202) 307-6357. Facsimile: (202) 307-2784.
[FR Doc. 02-28333 Filed 11-6-02; 8:45 am]
BILLING CODE 4410-11-M