UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
STATE OF FLORIDA by and through its
Attorney General Robert A. Butterworth, and
STATE OF MARYLAND by and through
its Attorney General J. Joseph Curran, Jr.,
Case Number: 1:94CV02588
Judge: Charles R. Richey
UNITED STATES' PROPOSED FINDINGS THAT ENTRY
OF THE FINAL JUDGMENT IS IN THE PUBLIC INTEREST
I. Relevant Markets
- The relevant product market is small containerized hauling service.
Small containerized hauling service is the collection of solid waste
from customers using metal containers ranging in size from 1 to 10
cubic yards. These containers are generally collected by a hauling
company using a frontend load vehicle. These vehicles lift the containers
over the front of the truck by means of a hydraulic hoist and empty
them into the storage section of the vehicle, where it is compacted
and taken to a disposal site.
- Neither residential service nor roll-off service are practical substitutes
for small containerized hauling service. Residential service is the
collection of waste from residential customers, typically households,
in plastic bags or trash cans at curbside. It would be impractical
and costly for small containerized hauling service customers to bag
and carry trash for hand pickup. Roll-off customers deposit their
waste in very large containers (usually 20 to 40 cubic yards) that
are loaded on a truck and carried individually to a disposal site.
Roll-off service is much too costly and takes up too much space for
most small containerized hauling service customers.
- Solid waste hauling service is generally provided in very localized
areas. Route density (a large number of customers close together)
is necessary for small containerized hauling firms to be profitable.
Furthermore, it is not economically efficient for heavy trash hauling
equipment to serve major metropolitan areas from a distant base. The
relevant geographic markets in this case are: (1) greater metropolitan
Baltimore, MD; (2) Broward County, FL; (3) Chester County, PA; (4)
Clay County, FL; (5) Duval County, FL; (6) Polk County, FL; (7) the
Southern Eastern Shore of Maryland; (8) Sussex County, Delaware, and
(9) the Western Maryland market (Frederick and Washington Counties,
II. Competitive Harm
- Browning-Ferris Industries, Inc. ("BFI") and Attwoods plc ("Attwoods")
both offered small containerized hauling service in the relevant markets.
BFI and Attwoods competed on price, quality of service and otherwise.
- The acquisition of Attwoods by BFI would eliminate competition between
BFI and Attwoods in the relevant markets.
- Concentration would substantially increase in the relevant markets
following the acquisition. The acquisition would increase the Herfindahl-Hirschman
Index ("HHI"), a measure of market concentration, by the following
amounts in the relevant markets: (1) Baltimore market, by about 1350,
to about 3300; (2) Broward County, FL, by about 260 to 2870; (3) Chester
County, PA, by about 1500 to about 3750; (4) Clay County, FL by about
1200 to about 4000; (6) Polk County, FL by about 1190 to about 4020;
(7) the Southern Eastern Shore of Maryland by about 1450 to about
3650; (8) Sussex County, Delaware by about 1010 to about 2970; and
(9) Western Maryland by about 1725 to about 3950.
- The elimination of one of a small number of significant competitors,
such as would occur in the relevant markets as a result of the acquisition,
significantly increases the likelihood that consumers in these markets
are likely to face higher prices or poorer quality service.
III. Barriers to Entry
- A new entrant cannot constrain the prices of larger incumbents until
it achieves minimum efficient scale and operating efficiencies comparable
to incumbent firms.
- In small containerized hauling service, achieving comparable operating
efficiencies requires achieving route density comparable to existing
- A substantial barrier to entry is the use of long-term contracts
coupled with selective pricing practices by incumbent firms to deter
new entrants into small containerized hauling service.
IV. Jurisdiction and Interstate Commerce
- As the parties have stipulated, this Court has jurisdiction over
the subject matter and over each of the parties hereto, and venue
in this action is proper in the District of Columbia. December 1,
1994 Stipulation ¶ 1.
- BFI is engaged in interstate commerce and in activities affecting
V. The Proposed Relief is in the Public Interest
- The plaintiffs have sought and BFI has agreed to the divestiture
of BFI's assets, as described in the proposed Final Judgment, in Duval
and Clay counties, Florida; Chester County, Pennsylvania; the Southern
Eastern Shore, Maryland market; Sussex County, Delaware; and the Western
- The plaintiffs have sought and BFI has agreed to the modification,
as contained in Appendices A and B of the proposed Final Judgment,
of BFI's small container solid waste hauling contracts to its customers
in the Baltimore, Maryland market and the following neighboring counties:
Carroll County, Howard County, Harford County, Calvert County, Prince
George's County and Montgomery County; and also in Polk and Broward
- The BFI assets must be divested in such a way as to satisfy plaintiff
United States (after consultation with the states of Florida and Maryland)
that the operations can and will be operated by the purchaser or purchasers
as viable, ongoing businesses that can compete effectively in the
- The divestiture of the BFI assets will ensure that Attwoods', as
a competitor in small containerized hauling service, will be replaced
by a viable entity that can provide the same service and will eliminate
the substantial lessening of competition that would take place if
BFI were allowed to purchase the named Attwoods' assets.
- In the Baltimore market and in the Broward County, FL and Polk County,
FL markets, modification of BFI's existing contracts is sufficient
to preserve competition. The modifications of BFI's contracts, as
provided in the proposed Final Judgment, involve substantially shortening
the term of the contracts BFI uses and substantially reducing the
amount of liquidated damages.
- Contract modifications are sufficient to preserve competition in
the Baltimore market because concentration will not be as great as
in other markets and because of the number of existing competitors,
the density of commercial establishments and the number of haulers
that could, absent long-term contracts, enter the market. The modifications
to the BFI contracts will allow new entrants to more easily win enough
customers to build efficient routes. Haulers that are already serving
the Baltimore area or that are nearby will be able more easily to
expand their current routes or build new routes with these contract
- Contract modifications in Broward County, FL adequately address
the competitive concerns in that market given the number and relative
size of other competitors and the fact that the merged firm would
have a market share of only 23 percent, among other factors.
- Contract modifications in Polk County, FL, identical to those in
Broward County, FL will adequately address the competitive concerns
given the limited amount of small containerized business open to private
haulers, and the fact that there are at least one or two strong haulers
that could easily and quickly enter with these less restrictive contracts
if prices for small containerized hauling service in Polk County were
Based on all of the above, the statements in the Competitive Impact
Statement, and in the Comments on the Proposed Final Judgment and the
United States' Responses to the Comments, the Court finds that the proposed
Final Judgment is in the public interest and hereby enters it.
Dated: March 30, 1995
CHARLES R. RICHEY
U.S. DISTRICT COURT JUDGE
CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing letter and UNITED STATES'
PROPOSED FINDINGS THAT ENTRY OF THE FINAL JUDGMENT IS IN THE PUBLIC
INTEREST have been served upon Browning-Ferris Industries, Inc. by hand
delivery, the Office of the Attorney General of the State of Florida
by fax, and the Office of the Attorney General of the State of Maryland
by hand delivery, this 30th day of March 1995.
Browning-Ferris Industries, Inc.:
c/o Martha J. Talley
D.C. Bar No. 246330
1775 Pennsylvania Ave., N.W.
Washington, DC 20006
State of Maryland
Office of the Attorney General
200 St. Paul Place
Baltimore, Maryland 21202
State of Florida Office of the Attorney General
Department of Legal Affairs
Tallahassee, Florida 32399-1050
Fax No.: (904) 488-9134
Nancy H. McMillen
U.S. Department of Justice
1401 H Street, N.W.
Washington, DC 20530