[Federal Register Volume 64, Number 234 (Tuesday, December 7, 1999)]
[Notices]
[Pages 68377-68387]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31626]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States of America v. Fiat S.p.A., Fiat Acquisition
Corporation, New Holland N.V., New Holland North America, Inc., and
Case Corporation; Proposed Final judgment and Competitive Impact
Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sections 16 (b) through (h), that a Complaint,
Hold Separate Stipulation and Order, and a proposed Final Judgment were
filed with the United States District Court for the District of
Columbia in United States of America v. Fiat S.p.A., Fiat Acquisition
Corporation, New Holland N.V., New Holland North America, Inc., and
Case Corporation, Civil No. 1:99CV02927JR on November 4, 1999. On
November 19, 1999, the United States filed a Competitive Impact
Statement. The Complaint alleged that the proposed acquisition of
certain assets of Case Corporation (``Case'') by Fiat S.p.A. would
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, in the
markets for two-wheel-drive and four-wheel-drive agricultural tractors,
large square balers, small square balers and self-propelled windrowers.
The proposed Final Judgment, filed at the same time as the Complaint,
requires New Holland and Case, among other things, to do the following:
(1) Sell New Holland's Versatile line of our-wheel-drive tractors; (2)
sell New Holland's Genesis line of large two-wheel-drive agriculture
tractors; and (3) sell Case's interest in Hay & Forage Industries
(``HFI''), a joint venture that sells hay tools. The proposed Final
judgment requires that the purchaser of the divested assets continue to
operate them in the manufacture and distribution of four-wheel-drive,
large two-wheel-drive tractors and hay tools. The Competitive Impact
Statement describes the Complaint, the proposed Final judgment, the
industry, and the remedies available to private litigants who may have
been injured by the alleged violation. Copies of the Complaint, Hold
Separate Stipulation and Order, proposed Final judgment, and
Competitive Impact Statement are available for inspection in Room 215
of the U.S. Department of Justice, Antitrust Division, 325 7th Street,
NW, Washington, DC, and at the office of the Clerk of the United States
District Court for the District of Columbia, Washington, DC. Copies of
any of these materials may be obtained upon request and payment of a
copying fee.
Public comment is invited within 60 days of the date of this
notice. Such comments, and response thereto, will be published in the
Federal Register and filed with the Court. Comments should be directed
to J. Robert Kramer II, Chief, Litigation III Section, Antitrust
Division, United States Department of Justice, 1401 H Street, NW, Suite
3000, Washington, DC 20530 (telephone: 202-307-0924).
Constance K. Robinson,
Director of Operations.
Hold Separate Stipulation and order
It is hereby stipulated by and between the undersigned parties, by
their respective attorneys that:
I. Definitions
As used in this Hold Separate Stipulation and Order:
A. ``Fiat'' means defendant Fiat S.p.A., an Italian corporation
with its headquarters in Turin, Italy, its successors and assigns, and
its subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures, directors, officers, managers, agents, and employees.
B. ``Case'' means Case Corporation, a Delaware corporation with its
headquarters in Racine, Wisconsin, its successors and assigns, and its
subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures, directors, officers, managers, agents, and employees.
C. ``HFI'' means Hay and Forage Industries, the hay and forage
equipment manufacturing joint venture between Case and AGCO Corporation
(``AGCO'') whose plant is located in Hesston, Kansas.
D. ``Hold Separate Assets'' means the assets required to be
divested under the proposed Final Judgment, as defined in
[[Page 68378]]
Section II.J of the proposed Final Judgment.
II. Objectives
The proposed Final Judgment filed in this case is meant to ensure
Fiat's prompt divestiture of certain assets to remedy the effects that
the United States alleges would otherwise result from Fiat's proposed
acquisition of Case. This Hold Separate Stipulation and Order ensures
that, prior to such divestitures, the Hold Separate Assets be
maintained and operated as independent, economically viable, ongoing
business concerns in the manufacture and sale of tractors and hay and
forage equipment until the required divestitures are complete.
III. Jurisdiction and Venue
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.
IV. Compliance With and Entry of Final Judgment
A. The parties stipulate that a Final Judgment in the form attached
hereto 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 Procedures 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.
B. 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 Hold Separate Stipulation and Order by the
parties, comply with all the terms and provisions of the proposed Final
Judgment as though the same were in full force and effect as an Order
of the Court.
C. This Hold Separate Stipulation and Order 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.
D. In the event the United States has withdrawn its consent, as
provided in Paragraph IV.A above, or if the proposed Final Judgment is
not entered pursuant to this Hold Separate Stipulation and Order, or if
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 continuing compliance with the terms and provisions of the
proposed Final Judgment, then the parties are released from all further
obligations under this Hold Separate Stipulation and Order, and the
making of this Hold Separate Stipulation and Order shall be without
prejudice to any party in this or any other proceeding.
E. Defendants represent that the divestiture ordered in the
proposed Final Judgment can and will be made, and that defendants will
later raise no claim of hardship or difficulty as grounds for asking
the Court to modify any of the divestiture provisions contained
therein.
V. Hold Separate Provisions
Until the divestitures required by the proposed Final Judgment bave
been accomplished:
A. Fiat shall preserve, maintain, and operate the Hold Separate
Assets as viable competitive businesses, with management and direction
of research, development, production, sales, and operations of such
assets held entirely separate, distinct and apart from those of Fiat.
Fiat shall not coordinate with the management of the Hold Separate
Assets in its production, marketing or sale of any products with that
of any of the Hold Separate Assets that Fiat will own as a result of
the acquisition of Case. Within fifteen (15) days of the entering of
this Hold Separate Stipulation and Order, Fiat will inform the United
States of the steps taken to comply with this provision.
B. Fiat shall not influence or attempt to influence any operational
or financial decision of HFI and shall not obtain, directly or
indirectly, any information, except information that is clearly
necessary for Fiat to comply with federal, state or local laws and
regulations or financial information that has been made available to
potential purchasers. Fiat or Case Corporation shall cause the Case-
appointed members of the HFI Management Committee to resign and shall
assign to AGCO Case's right to appoint members of the HFI Management
Committee pending the divestiture. If AGCO agrees that the current
Case-appointed HFI General Manager continues in his position, Fiat and
Case will ensure that he complies with the firewall specified in
Section V.D. In the event that the current Case-appointed HFI General
Manager resigns his position as HFI General Manager, Fiat or Case shall
assign to AGGO Case's right to appoint the HFI General Manager. In
addition, Fiat or Case shall immediately vest all unvested pension and
other equity rights of the current Case-appointed HFI General Manager
and provide that employee all benefits the employee would be entitled
to if terminated without cause. Within ten (10) working days of the
entering of this Hold Separate Stipulation and Order by the Court, Fiat
will inform the United States of the steps to comply with this
provision.
C. Fiat shall take all steps necessary to ensure that the Hold
Separate Assets will be maintained and operated as ongoing,
economically viable and active competitors in the development,
production and sale of tractors and hay and foraging equipment, that
the management of the Hold Separate Assets will not be influenced by
Fiat, and that the books, records, competitively sensitive sales,
marketing and pricing information, and decision-making associated with
the Hold Separate Assets including the performance and decision-making
functions regarding internal research and development, sales and
pricing, will be kept separate and apart from the business of Fiat.
Fiat's influence over the Hold Separate Assets shall be limited to that
necessary to carry out Fiat's obligations under this Hold Separate
Stipulation and Order and the proposed Final Judgment.
D. Defendants shall construct and maintain in place a firewall that
prevents any information about the Hold Separate Assets, including but
not limited to information about AGCO's and defendants' requirements,
purchases, or future requirements for tractors and for hay and foraging
equipment manufactured by HFI, from flowing to any employee of
defendants not involved in the operation of the Hold Separate Assets.
To implement this provision, defendants shall identify those employees
involved in the operation of the Hold Separate Assets, and all
employees not so identified shall be prohibited from receiving any
information from or about the Hold Separate Assets, including but not
limited to defendants' and AGCO's requirements, purchases, or future
requirements for tractors and for hay and foraging equipment from HFI.
All identified employees who receive any such information shall be
prohibited from passing on such information to employees not so
identified.
E. Fiat shall, within ten (10) business days of the filing of the
Complaint, submit to the Department of Justice a document setting forth
in detail the procedures to effect compliance with
[[Page 68379]]
Paragraph D. The Department of Justice shall have the sole discretion
to approve the compliance plan and shall notify defendants within three
(3) business days whether it approves of or rejects the compliance
plan. In the event that the compliance plan is rejected, the reasons
for the rejection shall be provided to defendants and defendants shall
be given the opportunity to submit, within two (2) business days of
receiving the notice of rejection, a revised compliance plan. If the
parties cannot agree on a compliance plan within an additional three
(3) business days, a plan will be devised by the Department of Justice
and implemented by defendants.
F. Fiat shall provide and maintain sufficient working capital to
maintain the Hold Separate Assets as viable, ongoing operations,
consistent with current business plans.
G. Fiat shall provide and maintain sufficient lines and sources of
credit to maintain the Hold Separate Assets as viable, ongoing
operations, consistent with current business plans.
H. Fiat shall use all reasonable efforts to maintain and increase
the sales of the Hold Separate Assets, including funding at previously
approved levels for 1999 for internal research and development, sales,
marketing, and support for the Hold Separate Assets.
I. Fiat shall not sell, lease, assign, transfer or otherwise
dispose of, or pledge as collateral for loans, assets that may be
required to be divested pursuant to the proposed Final Judgment.
J. Except in the ordinary course of business or as is otherwise
consistent with this Hold Separate Stipulation and Order, defendants
shall not transfer or terminate, or alter, to the detriment of any
employee, any current employment or salary agreements for any employee
who, on the date of entry of this Hold Separate Stipulation and Order,
works for Case or Fiat and whose primary responsibility relates to the
Hold Separate Assets.
K. Within ten (10) days of the filing of this Hold Separate
Stipulation and Order, defendants shall appoint one or more persons
from current management, acceptable to the United States in its sole
discretion, who shall have complete managerial responsibility for the
Hold Separate Assets, subject to the provisions of this Hold Separate
Stipulation and Order and the proposed Final Judgment, until such time
as this Hold Separate Stipulation and Order is terminated. In the event
that such manager(s) is unable to perform his or her duties, Fiat shall
appoint from the current management of the Hold Separate Assets,
subject to the approval of the United States in its sole discretion, a
replacement within ten (10) working days. Should Fiat fail to initially
appoint a manager acceptable to the United States, or fail to appoint
any replacement required within ten (10) working days, the United
States shall appoint the manager.
L. Fiat shall take no action that would interfere with the ability
of any trustee appointed pursuant to the proposed Final Judgment to
complete the divestiture pursuant to the proposed Final Judgment to a
suitable purchaser.
M. This Hold Separate Order and Stipulation shall remain in effect
until the divestitures required by the Final Judgment are complete, or
until further Order of the Court.
Dated: November 4, 1999.
For Plaintiff United States of America
Joan Farragher, Esquire,
U.S. Department of Justice, Antitrust Division, Litigation II
Section, 1401 H Street, N.W., Suite 3000, Washington, D.C. 20005,
(202) 307-0001.
For Defendants
Steven C. Sunshine, Esq.,
Counsel for Fiat S.p.A., New Holland N.V., New Holland N.A., and
Fiat Acquisition Corp., Sherman & Sterling, 801 Pennsylvania Avenue,
NW., Washington, DC 20004-2604, (202) 508-8022.
Richard J. Favretto, Esq.,
Counsel for Case Corporation, Mayer, Brown & Platt, 1909 K Street,
NW., Washington, DC 20006, (202) 263-3000.
So Ordered:
Dated:
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United States District Judge
Final Judgment
Whereas, plaintiff, the United States of America (``United
States''), and defendants Fiat S.p.A., Fiat Acquisition Corporation,
New Holland N.V., New Holland North America, Inc., and Case
Corporation, by their respective attorneys, having consented to the
entry of this Final Judgment without trial or adjudication of any issue
of fact or law herein, and without this Final Judgment constituting any
evidence against or an admission by any party with respect to any issue
of law or fact herein;
And whereas, defendants have agreed to be bound by the provisions
of this Final Judgment pending its approval by the Court;
And whereas, the essence of this Final Judgment is the prompt and
certain divestiture of the identified assets to assure that competition
is not substantially lessened;
And whereas, plaintiff requires defendants to make a certain
divestiture for the purpose of remedying the loss of competition
alleged in the Complaint;
And whereas, defendants have represented to the plaintiff that the
divestiture ordered herein can and will be made and that defendants
will later raise no claims of hardship or difficulty as grounds for
asking the Court to modify any of the divestiture provisions contained
below;
Now, therefore, before the taking of any testimony, and without
trial or adjudication of any issue of fact or law herein, and upon
consent of the parties hereto, it is hereby ordered, adjudged, and
decreed as follows:
I. Jurisdiction
This Court has jurisdiction over each of the parties hereto and
over the subject matter of 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. ``Fiat'' means defendant Fiat S.p.A., an Italian corporation
with its headquarters in Turin, Italy, its successors and assigns, and
its subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures, directors, officers, managers, agents, and employees.
B. ``Fiat Acquisition'' means Fiat Acquisition Corporation, a
subsidiary of Fiat, and its successors and assigns, its subsidiaries,
divisions, groups, affiliates, partnerships, joint ventures, directors,
officers, managers, agents, and employees.
C. ``New Holland N.V.'' means defendant New Holland N.V., a
Netherlands corporation, its successors and assigns, and its
subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures, directors, officers, managers, agents, and employees.
D. ``New Holland'' means defendant New Holland North America, Inc.,
a subsidiary of New Holland N.V. and a Delaware corporation, with its
headquarters in New Holland, Pennsylvania, its successors and assigns,
its subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures, directors, officers, managers, agents, and employees.
E. ``Case'' means Case Corporation, a Delaware Corporation with its
headquarters in Racine, Wisconsin, its successors and assigns, and its
subsidiaries, divisions, groups, affiliates, partnerships, joint
ventures, directors, officers, managers, agents, and employees.
F. ``HFI'' means Hay and Forage Industries, the hay and forage
[[Page 68380]]
equipment manufacturing joint venture between Case and Hesston
Corporation, which has a plant located in Hesston, Kansas.
G. ``Hay and Forage Assets'' means Case's ownership interest in
HFI.
H. ``2WD Assets'' means New Holland's Genesis line of two-wheel-
drive (``2WD'') tractors, including:
(1) All tangible assets that comprise the 2WD Assets business in
North America, including research and development activities; all
manufacturing equipment, tooling and fixed assets, personal property,
inventory, office furniture, materials, supplies, and other tangible
property and all other assets used exclusively in connection with the
2WD Assets; all licenses, permits and authorizations issued by any
governmental organization for the 2WD Assets; all contracts, teaming
arrangements, agreements, leases, commitments and understandings
relating to the 2WD Assets, including supply agreements; all lists and
credit records of ultimate customers; repair and tractor performance
records and all other records relating to the 2WD Assets; and the sale
of the New Holland Winnipeg, Manitoba, Canada plant;
(2) Any and all intangible assets used in the development,
production, servicing and sale of 2WD Assets, including, but not
limited to: (a) the Genesis brand name and all other intellectual
property rights used exclusively in connection with the 2WD Assets; (b)
with respect to all other intellectual property rights used in
connection with both the 2WD Assets and other nondivested New Holland
assets, a transferable, paid-up license, exclusive in the 2WD Assets
field of use; (c) all existing licenses and sublicenses relating
exclusively to the 2WD Assets; and (d) a transferable, paid-up
sublicense, exclusive in the 2WD Assets field of use, to all other
existing licenses and sublicenses relating to the 2WD Assets.
Intellectual property rights comprise, but are not limited to, patents,
licenses and sublicenses, technical information, computer software and
related documentation, know-how, trade secrets, drawings, blueprints,
designs, design protocols, specifications for materials and substances,
quality assurance and control procedures, design tools and simulation
capability, manuals, and all research data concerning historic and
current research and development relating to the 2WD Assets.
I. ``4WD Assets'' means New Holland's Versatile line of four-wheel-
drive (``4WD'') tractors and its tracked tractor line that is in
development, including:
(1) All tangible assets that comprise the 4WD Assets business in
North America, including research and development activities; all
manufacturing equipment, tooling and fixed assets, personal property,
inventory, office furniture, materials, supplies, and other tangible
property and all other assets used exclusively in connection with the
4WD Assets; all licenses, permits and authorizations issued by any
governmental organization for the 4WD Assets; all contracts, teaming
arrangements, agreements, leases, commitments and understandings
relating to the 4WD Assets, including supply agreements; all ultimate
customer lists and credit records; and all other records relating to
the 4WD Assets; and a sale of the New Holland Winnipeg, Manitoba,
Canada plant;
(2) Any and all intangible assets used in connection with the 4WD
Assets, including, but not limited to: (a) the Versatile brand name and
all other intellectual property rights used exclusively in connection
with the 4WD Assets; (b) with respect to all other intellectual
property rights used in connection with both the 4WD Assets and other
nondivested New Holland assets, a transferable, paid-up license,
exclusive in the 4WD Assets field of use; (c) all existing licenses and
sublicenses relating exclusively to the 4WD Assets; and (d) a
transferable, paid-up sublicense, exclusive in the 4WD Assets field of
use, to all other existing licenses and sublicenses relating to the 4WD
Assets. Intellectual property rights comprise, but are not limited to,
patents, licenses and sublicenses, technical information, computer
software and related documentation, know-how, trade secrets, drawings,
blueprints, designs, design protocols, specifications for materials and
substances, quality assurance and control procedures, design tools and
simulation capability, manuals, and all research data concerning
historic and current research and development relating to the 4WD
Assets.
J. ``Divested Assets'' means ``Hay and Forage Assets,'' 2WD
Assets'' and ``4WD Assets.'' The sale of each of the Divested Assets
shall include the purchaser's right to reasonable access to the
technical, service, production and administrative employees of the
defendants for a period not to exceed 12 months from the date of
purchase.
III. Applicability
A. The provisions of this Final Judgment apply to the defendants,
as defined above, and all other persons in active concert or
participation with any of them who shall have received actual notice of
this Final Judgment by personal service or otherwise.
B. Defendants shall require, as a condition of the sale of all or
substantially all of their assets of lesser business units that include
the Divested Assets, that the purchaser or purchasers agree to be bound
by the provisions of this Final Judgment.
IV. Divestitures
A. Defendants are hereby ordered and directed, in accordance with
the terms of this Final Judgment, within one hundred and fifty (150)
calendar days after the filing of the Complaint in this matter, or
within five (5) days after notice of entry of this Final Judgment,
whichever is later, to sell the Divested Assets as viable, ongoing
businesses to a purchaser or purchasers acceptable to the United States
in its sole discretion.
B. Defendants shall use their best efforts to accomplish said
divestiture as expeditiously as possible. The United States, in its
sole discretion, may extend the time period for any divestiture for an
additional period of time not to exceed thirty (30) calendar days.
C. In accomplishing the divestitures ordered by this Final
Judgment, defendants shall make known promptly, by usual and customary
means, the availability of the Divested Assets. Defendants shall inform
any person making an inquiry regarding a possible purchase that the
sale is being made pursuant to this Final Judgment and provide such
person with a copy of this Final Judgment. Defendants shall also offer
to furnish to all prospective purchasers, subject to customary
confidentiality assurances, all information regarding the Divested
Assets customarily provided in a due diligence process, except such
information subject to attorney-client privilege or attorney work-
product privilege. Defendants shall make such information available to
the United States at the same time that such information is made
available to any other person.
D. Defendants shall permit prospective purchasers of the Divested
Assets to have reasonable access to personnel and to make inspection of
the Divested Assets; access to any and all zoning, building, and other
permit documents and information; and access to any and all financial,
operational, or other documents and information as is
[[Page 68381]]
customarily provided as part of a due diligence process.
E. Defendants shall not interfere with any negotiations by any
purchaser or purchasers to employ any Defendants' employee who works at
the Divested Assets, or whose principal responsibility concerns the
Divested Assets.
F. Defendants shall not take any action, direct or indirect, that
would impede in any way the operation of any business connected with
the assets to be divested, or take any action, direct or indirect, that
would impede the divestiture of any asset for two years after the
divestiture.
G. Defendants shall not take any action, direct or indirect, that
would prevent or discourage in any way any dealer from distributing the
Divested Assets for two years after the divestiture. Nothing in this
provision, however, shall prevent the defendants from promoting and
selling in the ordinary course of business products that compete with
the Divested Assets.
H. Unless the United States otherwise consents in writing, the
divestitures pursuant to section IV of this Final Judgment, or by a
trustee appointed pursuant to section V, shall include all the Divested
Assets operated in place pursuant to the Hold Separate Stipulation and
Order. Such divestiture shall be accomplished by selling or otherwise
conveying the Divested Assets to a purchaser or purchasers in such a
way as to satisfy the United States, in its sole discretion, that the
Divested Assets can and will be used by the purchaser as part of a
viable, ongoing business, engaged in the manufacture and distribution
of: 2WD tractors, 4 WD tractors, and/or hay and forage equipment. Each
divestiture, whether pursuant to section IV or section V of this Final
Judgment, shall be made to a purchaser that has satisfied the United
States in its sole discretion, that it: (1) Has the capability and
intent of competing effectively in the development, production and sale
of the divested asset; (2) has the managerial, operational, and
financial capability to compete effectively in the manufacture of the
divested asset; and (3) is not hindered by the terms of any agreement
between the purchaser and defendants which gives defendants the ability
unreasonably to raise the purchaser's costs, to lower the purchaser's
efficiency, or otherwise to interfere with the ability of the purchaser
to compete.
I. In connection with any divestiture of 4WD Assets and/or 2WD
Assets pursuant to section IV of this Final Judgment, or by a trustee
appointed pursuant to section V, not accompanied by the sale of the
Winnipeg plant, the defendant shall offer the purchaser a short-term,
transitional agreement, not to exceed two years in length, to
manufacturer and deliver to the purchaser in a timely manner, the
purchaser's requirements for Genesis and/or Versatile series tractors
and parts, on such terms and conditions as are reasonably designed to
enable the purchaser(s) to compete with defendants in the sale of 4WD
and 2WD tractors, and are acceptable to the United States in its sole
discretion.
J. Under each divestiture pursuant to Section IV of this final
Judgment, or by a trustee appointed pursuant to Section V, defendants
retain the right to negotiate a transitional supply agreement to
manufacture and deliver to defendants in a timely manner defendants'
requirements for Genesis and Versatile tractors and hay and forage
equipment. Such agreements shall not include the use of the Versatile
or Genesis trade names and shall not last for a term longer than, for
2WD or 4WD tractors, 24 months from the filing of the Hold Separate
Stipulation and Order in this case, and for hay tools and forage
equipment, 18 months from the filing of the Hold Separate Stipulation
and Order in this case. Transfer pricing shall be based on auditable
cost data and such agreements shall include terms and conditions
reasonably designed to enable the defendants to compete with
purchaser(s) in the sale of 4WD tractors, 2WD tractors and hay tools
and forage equipment. The terms and conditions of any such agreements
must be acceptable to the United States in its sole discretion. Such
agreements may only be amended with the prior approval of the United
States in its sole discretion.
V. Appointment of Trustee
A. In the event that defendants have not divested the Divested
Assets within the time specified in Section IV of this Final Judgment,
the Court shall appoint, on application of the United States, a trustee
selected by the United States, to affect the divestitures of the
Divested Assets.
B. After the appointment of a trustee becomes effective, only the
trustee shall have the right to sell the Divested Assets. The trustee
shall have the power and authority to accomplish the divestitures at
the best price then obtainable upon a reasonable effort by the trustee,
subject to the provisions of Sections IV and V of this Final Judgment,
and shall have such other powers as the Court shall deem appropriate.
Subject to Section V.C. of this Final Judgment, the trustee shall have
the power and authority to hire at the cost and expense of defendants
any investments bankers, attorneys, or other agents reasonably
necessary in the judgment of the trustee to assist in the divestitures,
and such professionals and agents shall be accountable solely to the
trustee. The trustee shall have the power and authority to accomplish
the divestitures at the earliest possible time to a purchaser or
purchasers acceptable to the United States, in its sole discretion, and
shall have such other powers as this Court shall deem appropriate.
Defendants shall not object to a sale by the trustee on any ground
other than the trustee's malfeasance. Any such objections by defendants
must be conveyed in writing to the United States and the trustee within
ten (10) calendar days after the trustee has provided the notice
required under Section VI of this Final Judgment.
C. The trustee shall serve at the cost and expense of defendants,
on such terms and conditions as the Court may prescribe and the trustee
shall account for all monies derived from the sale of the Divested
Assets sold and all costs and expenses so incurred. After approval by
the Court of the trustee's accounting, including fees for its services
and those of any professionals and agents retained by the trustee, all
remaining money shall be paid to defendants and the trust shall then be
terminated. The compensation of the trustee and of any professionals
and agents retained by the trustee shall be reasonable in light of the
value of the divested Assets and based on a fee arrangement providing
the trustee with an incentive based on the price and terms of the
divestitures and the speed with which they are accomplished.
D. Defendants shall use their best efforts to assist the trustee in
accomplishing the required divestitures, including their best efforts
to effect all necessary regulatory or other approvals. The trustee and
any consultants, accountants, attorneys, and other persons retained by
the trustee shall have full and complete access to the personnel,
books, records, and facilities of the businesses to be divested, and
defendants shall develop financial or other information relevant to the
Divested Assets customarily provided in a due diligence process as the
trustee may reasonably request, subject to customary confidentiality
assurances. Defendants shall permit prospective purchasers or the
Divested Assets to have reasonable access to personnel and to make such
inspection of physical facilities and any and all financial,
operational or other documents and other information as may be relevant
to
[[Page 68382]]
the divestitures required by their Final Judgment.
E. After its appointment, the trustee shall file monthly reports
with the parties and the Court setting forth the trustee's efforts to
accomplish the divestitures ordered under the Final Judgment; provided,
however, that to the extent such reports contain information that the
trustee deems confidential, such reports shall not be filed in the
public docket of the Court. Such reports shall include the name,
address and telephone number of each person who, during the preceding
month, made an offer to acquire, expressed an interest in acquiring,
entered into negotiations to acquire, or was contacted or made an
inquiry about acquiring, any interest in the Divested Assets, and shall
describe in detail each contact with any such person during that
period. The trustee shall maintain full records of all efforts made to
sell the Divested Assets.
F. If the trustee has not accomplished such divestitures within six
(6) months after its appointment, the trustee thereupon shall file
promptly with the Court a report setting forth: (1) The trustee's
efforts to accomplish the required divestitures; (2) the reasons, in
the trustee's judgment, why the required divestitures have not been
accomplished; and (3) the trustee's recommendations; provided, however,
that to the extent such reports contain information that the trustee or
the defendants deem confidential, such reports shall not be filed in
the public docket of the Court. The trustee shall at the same time
furnish such report to the parties, who shall each have the right to be
heard and to make additional recommendations consistent with the
purpose of the trust. The Court shall enter thereafter such orders as
it shall deem appropriate in order to carry out the purpose of the
trust, which may, if necessary, include extending the trust and the
term of the trustee's appointment by a period requested by the United
States.
VI. Notice of Proposed Divestitures
A. Within two (2) business days following execution of a definitive
agreement, contingent upon compliance with the terms of this Final
Judgment, to effect, in whole or in part, any proposed divestiture
pursuant to Section IV or V of this Final Judgment, defendants or the
trustee, whichever is then responsible for effecting the divestiture,
shall notify the United States of the proposed divestiture. If the
trustee is responsible, it shall similarly notify defendants. The
notice shall set forth the details of the proposed transaction and
shall list the name, address, and telephone number of each person not
previously identified who offered to, or expressed an interest in or a
desire to, acquire any ownership interest in the businesses to be
divested that is the subject of the binding contract, together with
full details of same. Within fifteen (15) calendar days of receipt by
the United States of such notice, the United States, in its sole
discretion, may request from defendants, the proposed purchaser, or any
other third party additional information concerning the proposed
divestiture and the proposed purchaser. Defendants and the trustee
shall furnish any additional information requested from them within
fifteen (15) calendar days of the receipt of the request, unless the
parties shall otherwise agree. Within thirty (30) calendar days after
receipt of the notice or within twenty (20) calendar days after the
United States has been provided the additional information requested
from defendants, the proposed purchaser, and any third party, whichever
is later, the United States shall provide written notice to defendants
and the trustee, if there is one, stating whether or not it objects to
the proposed divestiture. If the United States provides written notice
to defendants and the trustee, if there is one, that it does not
object, then the divestiture may be consummated, subject only to
defendants' limited right to object to the sale under Section V.B of
this Final Judgment. Absent written notice that the United States does
not object to the proposed purchaser or upon objection by the United
States, a divestiture proposed under Section IV or V shall not be
consummated. Upon objection by defendants under the provision in
Section V.B, a divestiture proposed under Section V shall not be
consummated unless approved by the Court.
B. Purchasers of the 2WD Assets and 4WD Assets must be defined
simultaneously by the defendants, or by the applicable trustee, in
order that the proposed divestitures may be reviewed jointly by the
United States.
VII. Affidavits
A. Within twenty (20) calendar days of the filing of the Complaint
in this matter and every thirty (30) calendar days thereafter until the
divestitures have been completed pursuant to Section IV or V of this
Final Judgment, defendants shall deliver to the United States an
affidavit as to the fact and manner of compliance with Section IV or V
of this Final Judgment. Each such affidavit shall include, inter alia,
the name, address, and telephone number of each person who, at any time
after the period covered by the last such report, made an offer to
acquire, expressed an interest in acquiring, entered into negotiations
to acquire, or was contacted or made an inquiry about acquiring, any
interest in the Divested Assets, and shall describe in detail each
contact with any such person during that period. Each such affidavit
shall also include a description of the efforts that defendants have
taken to solicit buyers for the Divested Assets, and to provide
required information to prospective purchasers, including the
limitations, if any, on such information. Assuming the information set
forth in the affidavit is true and complete, any objection by the
United States to information provided by defendants, including
limitations on information, shall be made within fourteen (14) days of
receipt of such affidavit.
B. Within twenty (20) calendar days of the filing of the Complaint
in this matter, defendants shall deliver to the United States an
affidavit which describes in detail all actions defendants have taken
and all steps defendants have implemented on an ongoing basis to
preserve the Divested Assets pursuant to Section VIII of this Final
Judgment and the Hold Separate Stipulation and Order entered by the
Court. The affidavit also shall describe, but not be limited to,
defendants' efforts to maintain and operate the Divested Assets as an
active competitor, maintain the management, staffing, research and
development activities, sales, marketing and pricing of the Divested
Asset, and maintain the Divested Assets in operable condition at
current capacity configurations. Defendants shall deliver to the United
States an affidavit describing any changes to the efforts and actions
outlined in defendants' earlier affidavit(s) filed pursuant to this
Section within fifteen (15) calendar days after the change is
implemented.
C. Until one year after the divestiture has been completed,
defendants shall preserve all records of all efforts made to preserve
the Divested Assets and to effect the divestitures.
VIII. Hold Separate Order
Until the divestiture required by the Final Judgment has been
accomplished, defendants shall take all steps necessary to comply with
the Hold Separate Stipulation and Order entered by this Court.
Defendants shall take no action that would jeopardize the divestiture
of the Divested Assets.
IX. Financing
Defendants are ordered and directed not to finance all or any part
of any
[[Page 68383]]
acquisition by any person made pursuant to Sections IV or V of this
Final Judgment.
X. Compliance Inspection
For 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.
A. Duly authorized representatives of the United States Department
of Justice, upon written request of the Attorney General or the
Assistant Attorney General in charge of the Antitrust Division, and on
reasonable notice to defendants made to their principal offices, shall
be permitted:
(1) Access during office hours of defendants to inspect and copy
all books, ledgers, accounts, correspondence, memoranda, and other
records and documents in the possession or under the control of
defendants, who may have counsel present, relating to any matter
contained in this Final Judgment and the Hold Separate Stipulation and
Order; and
(2) Subject to the reasonable convenience of defendants and without
restraint or interference from them, to interview, either informally or
on the record, their officers, employees, and agents, who may have
counsel present, regarding any such matters.
B. Upon the written request of the Attorney General or of the
Assistant Attorney General in charge of the Antitrust Division, made to
defendants at their principal offices, defendants shall submit such
written reports, under oath if requested, with respect to any matter
contained in this Final Judgment and the Hold Separate Stipulation and
Order.
C. No information or documents obtained by the means provided in
Sections V, VI, VII or X of this Final Judgment shall be divulged by a
representative of the United States to any person other than a duly
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), of 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 as 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 ten (10) calendar days' notice to defendants prior to divulging
such material in any legal proceeding (other than a grand jury
proceeding) to which defendants are not a party.
XI. Retention of Jurisdiction
Jurisdiction is retained by this Court for the purpose of enabling
any of the parties to this Final Judgment to apply to this Court at any
time for such further orders and directions as may be necessary or
appropriate for the construction or carrying out of this Final
Judgment, for the modification of any of the provisions hereof, for the
enforcement of compliance herewith, and for the punishment of any
violations hereof.
XII. Termination
Unless this Court grants an extension, this Final Judgment will
expire upon the tenth anniversary of the date of its entry.
XIII. Public Interest
Entry of this Final Judgment is in the public interest.
Dated------------------------------------------------------------------
----------------------------------------------------------------------
United States District Judge
Competitive Impact Statement
The United States, pursuant to Section 2(b) of the Antitrust
Procedures and Penalties Act (``APPA''), 14 U.S.C. 16(b)-(h), files
this Competitive Impact Statement relating to the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
1. Nature and Purpose of the Proceeding
On November 4, 1999, the United States filed a civil antitrust
Complaint alleging that the proposed acquisition of Cases Corporation
(``Case'') by Fiat S.p.A. (``Fiat''), and Fiat subsidiaries, Fiat
Acquisition Corporation (``Fiat Acquisition''), New Holland, N.V., and
North Holland North America, Inc. (``New Holland''), would violate
Section 7 of the Clayton Act, as amended, 15 U.S.C. 18. the Complaint
alleges that the acquisition likely would substantially reduce
competition in the manufacture and sale of four-wheel-drive (``4WD'')
tractors and large two-wheel-drive (``2WD'') tractors, and in the
manufacture and sale of small square balers, large square balers, and
self-propelled windrowers (collectively ``hay and forage equipment''),
in the United States and Canada. The Compliant seeks: (1) A judgment
that the proposed acquisition would violate Section 7 of the Clayton
Act; (2) injunctive relief preventing consummation of the proposed
acquisition; (3) an award of costs to the plaintiff; and (4) such other
relief as the Court may deem just and proper.
When it filed the Complaint, the United States also filed a Hold
Separate Stipulation and Order and a proposed Final Judgment, which
would settle the lawsuit. The proposed Final Judgment permits Fiat and
its subsidiaries to acquire Case, but requires divestitures that will
preserve competition in the five relevant product markets alleged in
the Complaint. The proposed Final Judgment orders defendants to divest
New Holland's Genesis line of 4WD tractors; New Holland's Versatile
line of 2WD tractors and its line of tracked tractors that is currently
in development; and Case's ownership interest in Hay and Forage
Industries (``HFI''), a joint venture that makes hay and forage
equipment.
Defendants must accomplish the divestitures within one hundred and
fifty (150) calendar days after the filing of the Compliant, or five
(5) days after notice of the entry of the proposed Final Judgment by
the Court, whichever is later, to purchasers acceptable to the United
States. If the defendants do not do so within the time specified in the
proposed Final Judgment, a trustee appointed by the Court would be
empowered for an additional six months to sell those assets. If the
trustee is unable to do so in that time, the Court could enter such
orders as it might deem appropriate to carry out the purpose of the
Final Judgment, which may, if necessary, include extending the trust
and the trustee's appointment by a period requested by the United
States.
In addition, under the terms of the Hold Separate Stipulation and
Order, defendants must hold specified assets separate and apart from
their other businesses until the required divestitures have been
accomplished. Until the required divestitures are accomplished,
defendants must preserve and maintain the specified assets to be
divested as saleable and economically viable ongoing concerns.
The parties have stipulated that the proposed Final Judgment may be
entered after compliance with the APPA. Entry of the proposed Final
Judgment would terminate the action, except that the Court would retain
jurisdiction to construe, modify, or enforce the provisions of the
proposed Final Judgment and to punish violations thereof.
[[Page 68384]]
II. Description of the Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
Fiat is an Italian corporation with its corporate headquarters and
principal place of business in Turin, Italy. Fiat is an international
automotive, construction and agricultural equipment company that
manufactures cars, trucks, construction equipment, tractors, and hay
and forage equipment. Fiat reported revenues of $56.6 billion in 1998.
Among Fiat's subsidiaries are New Holland N.V., New Holland, and
Fiat Acquisition. New Holland N.V. produces construction equipment,
tractors, hay and forage equipment, and other agricultural equipment;
it is the third largest supplier of agricultural equipment in the
United States and Canada. New Holland manufactures 4WD agricultural
tractors, large 2WD agricultural tractors and hay and forage equipment.
Case is a Delaware corporation with its headquarters and principal
place of business in Racine, Wisconsin. Case manufactures 4WD tractors
and large 2WD agricultural tractors. Case also owns 50 percent of HFI,
a joint venture which produces hay and forage equipment. HFI sells the
equipment it manufactures to Case and its joint venture partner for
distribution and sale under each company's respective trade names. In
1998, Case reported revenues of $6.1 billion.
On or about May 15, 1999, Fiat entered into an Agreement and Plan
of Merger (``Agreement'') to acquire Case for approximately $4.3
billion. Under the Agreement, Fiat Acquisition and Case will merge,
with Case being the surviving entity. New Holland N.V. will
subsequently acquire all the issued and outstanding shares of the
surviving entity. This transaction, which would eliminate head-to-head
competition between Case and New Holland and increase concentration in
already highly concentrated markets for tractors and hay and forage
equipment precipitated the government's suit.
B. The Markets
1. Tractors. Agricultural tractors are used primarily on farms for
a variety of applications, including pulling implements to till soil
and to plant and cultivate crops. Agricultural tractors are produced in
a range of horsepower (``hp'') and may be either wheeled or tracked. In
general, as the size and weight of the implement increases, the
horsepower of the tractor required to pull it increases as well. 4WD
tractors are high horsepower (205 hp to 425 hp) tractors used mostly
for heavy-duty farm applications, including tilling, cultivating, and
pulling large implements. Large 2WD tractors are lower horsepower
tractors that are typically used to pull medium-sized implements for
farm applications that do not require the heavy-duty performance of a
4WD tractor.
2. Hay and Forage Equipment. A self-propelled windrower cuts hay,
breaks it up for faster drying and lays it on the ground in long
columns called windows that the hay can dry quickly. Balers collect hay
after it has dried in the field, compact it into square bales, tie the
bales together with twine, and eject them onto the ground for
subsequent collection or transportation. A small square balers produces
a bale of hay with a rectangular face less than two square feet in
size; a large square baler generally produces an eight-foot long bale
of hay with a rectangular face that is more than four square feet in
size.
C. Harm to Competition as a Result of the Proposed Transaction
The Complaint alleges that the acquisition would eliminate head-to-
head competition between Fiat and Case in markets for 4WD tractors,
large 2WD tractors, small square balers, large square balers, and self-
propelled windrowers in the United States and Canada. The Complaint
also alleges that the acquisition would significantly increase
concentration in these markets. As a result of this increased
concentration and reduced competition, farmers would likely face higher
prices, lower quality, and less innovation in markets for 2WD tractors,
large 2WD tractors, small square balers, and self-propelled windrowers.
Furthermore, entry by new companies would not be timely, likely, or
sufficient to prevent these anticompetitive effects.
III. Explanation of the Proposed Final Judgment
A. The Divestiture Requirements
The provisions of the proposed Final Judgment are designed to
preserve competition in markets for tractors and hay and forage
equipment in the United States and Canada. To preserve competition in
the markets for 4WD and 2WD tractors, Section IV.A of the proposed
Final Judgment orders defendants to divest New Holland's Genesis line
of large 2WD tractors, New Holland's Versatile line of 4WD tractors,
and its line of tracked tractors that is currently in development. To
preserve competition in the markets for small square balers, large
square balers, and self-propelled windrowers, Section IV.A of the
proposed Final Judgment also orders defendants to divest Case's
interest in HFI.
B. Short-Term Supply Agreements for Tractors
New Holland produces in Genesis line of large 2WD tractors and
Versatile line of 4WD tractors at its Winnipeg, Manitoba, Canada plant.
Section IV.A of the proposed Final Judgment requires New Holland to
offer the Winnipeg plant for sale. Should the divestiture of either the
large 2WD or the 4WD lines be unaccompanied by the sale of the Winnipeg
plant, under Section IV.1, the purchaser of the large 2WD or the 4WD
line shall be offered a short-term transitional supply agreement, not
to exceed two years in length, to manufacture and deliver the
purchaser's requirements for Genesis to Versatile series tractors and
parts on terms and conditions designed to enable the purchaser to
compete effectively with defendants in the sale of 4WD and large 2WD
tractors. The terms and conditions of this agreement must be acceptable
to the United States in its sole direction.
Section IV.J of the Final Judgment provides that, under each
divestiture, defendants retain the right to negotiate a transitional
supply agreement under which this purchaser of the divested assets
would manufacture and deliver to defendants in a timely manner
defendants' requirements for 4WD and large 2WD tractors and hay and
forage equipment. Defendants have independent distributors whose
viability may be affected, in the absence of such a supply agreement,
by the unavailability of 4WD and large 2WD tractors and hay and forage
equipment during a limited transition period. A purchaser may also find
it in its best interest to enter into such a transitional supply
agreement to achieve sufficient manufacturing volumes to realize scale
economies. The Final Judgment is permissive on this point and does not
obligate the purchaser of the 2WD line, the 4WD line, or the hay and
forage equipment assets to enter into transitional supply agreements
with the defendants.
Any such supply agreements to the defendants shall not include the
use of the Versatile or Genesis trade names and shall not last for a
term longer than, for 2WD or 4WD tractors, 24 months from the filing of
the Hold Separate Stipulation and Order in this case, and for hay tools
and forage equipment, 18 months from the filing of the Hold Separate
Stipulation and Order in this case. Transfer pricing shall be based on
audible cost data and such agreements
[[Page 68385]]
shall include terms and conditions reasonably designed to enable the
defendants to compete with the purchaser(s) in the sale of 4WD
tractors, 2WD tractors, and hay tools and forage equipment. The terms
and conditions of any such agreements must be acceptable to the United
States in its sole discretion. Such agreements may be amended only with
the prior approval of the United States in its sole discretion.
C. General Divestiture Provisions
Under Section IV.A of the proposed Final Judgment, defendants must
accomplish the required divestitures within one hundred and fifty (150)
calendar days after the filing of the Complaint, or within five (5)
days after notice of the entry of the proposed Final Judgment by the
Court, whichever is later, to a purchaser acceptable to the United
States. Section IV.B of the proposed Final Judgment requires that
defendants shall use their best efforts to accomplish said divestiture
as expeditiously as possible. The United States, in its sole
discretion, may extend the time period for any divestiture for an
additional period of time not to exceed thirty (30) calendar days.
Section IV.H requires that the assets to be divested be used by the
purchaser as part of a viable, ongoing business engaged in the
manufacture and distribution of 2WD tractors, 4WD tractors, and/or hay
and forage equipment.
Until the required divestitures have been accomplished, under
Section VIII, defendants must take certain steps to ensure that all
assets to be divested will be maintained as separate, distinct and
saleable assets. Until such divestitures, the defendants shall continue
to operate the assets as independent, economically viable, ongoing
business concerns in the manufacture and sale of tractors and hay and
forage equipment until the required divestitures are complete.
Under Section IV.C and IV.D of the proposed Final Judgment,
defendants shall make known, by usual and customary means, the
availability of the assets and provide any prospective purchasers with
a copy of the Final Judgment. The defendants are required to offer to
furnish any prospective purchaser, subject to customary confidentiality
assurances, all information regarding the assets customarily provided
in a due diligence process, except such information subject to
attorney-client privilege or attorney work-product privilege.
Defendants must also permit prospective purchasers to have reasonable
access to personnel and to make inspection of physical facilities and
financial, operational, or other documents and information customarily
provided as part of a due diligence process.
Sections IV.E provides that defendants shall not interfere with
negotiations by any purchaser to employ any of defendants' employees
who worked at the divested assets. Sections IV.F and IV.G require that
defendants not impede the operation of any business connected with the
assets to be divested or prevent any dealer from distributing the
divested assets for two years after the divestiture.
D. Trustee Provisions
If defendants fail to divest the assets within the specified
period, Section V.A of the proposed Final Judgment provides that the
Court shall appoint a trustee, selected by the United States, to
accomplish the divestitures. If a trustee is appointed, Section V.C of
the proposed Final Judgment requires the defendants to pay all costs
and expenses of the trustee. After the trustee's appointment becomes
effective, section V.E provides that the trustee will file monthly
reports with the parties and the Court, setting forth the trustee's
efforts to accomplish divestiture. Under Section V.F, at the end of six
months after the trustee's appointment, if the divestitures have not
been accomplished, the trustee must make recommendations to the Court,
which shall enter such orders as appropriate in order to carry out the
purpose of the trust, including extending the trust and the term of the
trustee's appointment.
E. Notification Provisions
Section VI of the proposed Final Judgment assures the United States
an opportunity to review any proposed sale, whether by the defendants
or the trustee, before it occurs. Under this provision, the United
States is entitled to receive complete information regarding any
proposed sale or any prospective purchaser prior to consummation of the
sale. If there is more than one purchaser of New Holland's tractor
lines, they must be simultaneously identified in order that the United
States may jointly review the proposed tractor divestitures. Absent
written notice from the United States that it does not object to a
proposed sale of any of the divestiture assets by the defendants or the
trustee, the proposed divestiture may not be completed. Should
defendants object to a divestiture by the trustee on the basis of the
trustee's malfeasance, that sale shall not be consummated unless
approved by the Court.
Section VII.A of the proposed Final Judgment provides that within
twenty (20) calendar days of the filing of the Complaint and every
thirty (30) calendar days thereafter until the divestitures have been
completed pursuant to Section IV or V of the Final Judgment, defendants
shall deliver to the United States an affidavit as to the fact and
manner of compliance with Section IV or V of this Final Judgment.
Section VII.B of the proposed Final Judgment provides that within
twenty (20) calendar days of the filing of the Complaint, defendants
shall deliver to the United States an affidavit which describes in
detail all actions defendants have taken and all steps defendants have
implemented on an ongoing basis to preserve the divestiture assets.
F. Compliance Inspection, Retention of Jurisdiction, and Termination
Provisions
Section X requires defendants to make available, upon request, the
business records and the personnel of its businesses. This provision
allows the United States to inspect defendants' facilities and ensure
that they are complying with the requirements of the proposed Final
Judgment. Section XI provides for jurisdiction to be maintained by the
Court. Section XII of the proposed Final Judgment provides that it will
expire on the tenth anniversary of its entry by the Court.
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 federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgment will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.
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 parties have stipulated that the Court may enter the proposed
Final Judgment 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
[[Page 68386]]
proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (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 sixty (60) days of the date of publication of this Competitive
Impact Statement in the Federal Register. The United States will give
all comments due consideration and respond to each of them. The United
States remains free to withdraw its consent to the proposed Final
Judgment at any time prior to entry. The comments and responses will be
filed with the Court and published in the Federal Register. Written
comments should be submitted to; J. Robert Kramer II, Chief, Litigation
II Section, Antitrust Division, United States Department of Justice,
1401 H Street, N.W., Suite 3000, 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
As an alternative to the proposed Final Judgment, the United States
also considered a full trial on the merits against defendants. The
United States is satisfied, however, that the divestitures required by
the proposed Final Judgment will facilitate continued viable
competition in the manufacture and sale of 4WD tractors, large 2WD
tractors, small square balers, large square balers, and self-propelled
windrowers, and will effectively prevent the anticompetitive effects
that would result from the proposed acquisition.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty-day comment
period, after which the Court shall determine whether entry of the
proposed Final Judgment ``is in the public interest.'' 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. Sec. 16(e). As the Court of Appeals for the District of
Columbia Circuit held, the APPA permits a 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
sufficient, and whether the decree may positively harm third parties.
See United States v. Microsoft, 56 F.3d 1448, 1458-62 (D.C. Cir. 1995).
The courts have recognized that the term ```public interest' take[s]
meaning from the purposes of the regulatory legislation.'' NAACP v.
Federal Power Comm'n, 425 U.S. 662, 669 (1976). Since the purposes of
the antitrust laws is to preserve ``free and unfettered competition as
the rule of trade,'' Northern Pacific Railway Co. v. United States, 456
U.S. 1, 4 (1958), the focus of the ``public interest'' inquiry under
the APPA is whether the proposed Final Judgment would serve the public
interest in free and unfettered competition. United States v. American
Cyanamid Co., 719 F.2d 558, 565 (2d Cir. 1983); United States v. Waste
Management, Inc, 1985-2 Trade Cas. para. 66,651, at 63,046 (D.D.C.
1985). 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.''\1\ Rather,
---------------------------------------------------------------------------
\1\ 119 Cong. Rec. 24598 (1973), See 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
APPA. Although the APPA 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 that further proceedings would aid the
court in resolving those issues. See H.R. 93-1463, 93rd Cong. 2d
Sess. 8-9, reprinted in (1974) U.S. Code Cong. & Ad. News 6535,
6538.
[a]bsent a showing of corrupt failure of the government to discharge
its duty, the Court, in making its public interest finding, should *
* * carefully consider the explanations of the government in the
competitive impact statement and its responses to comments in order
to determine whether those explanations are reasonable under the
---------------------------------------------------------------------------
circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. para.
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. 1981)). See also Microsoft, 56 F.3d
1448. Precedent requires that:
the balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.\2\
\2\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis
added); see BNS, Inc., 858 F.2d at 463; United States v. National
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); Gillette
Co., 406 F. Supp. at 716. See also American Cyanamid Co., 719 F.2d
at 565.
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A proposed consent decree is an agreement between the parties which
is reached after exhaustive negotiations and discussions. Parties do
not hastily and thoughtlessly stipulate to a decree because, in doing
so, they
waive their right to the issues involved in the case and thus save
themselves the time, expense, and inevitable risk of litigation.
Naturally, the agreement reached normally embodies a compromise; in
exchange for the saving of cost and the elimination of risk, the
parties each give up something they might have won had they
proceeded with the litigation.
United States v. Armour & Co., 402 U.S. 673, 681 (1971).
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate ever
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a
proposed 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
or acceptability or is `within the reaches of public interest.'' \13\
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\3\ United States v. American Tel. and Tel. Co., 552 F. Supp.
131, 150 (D.D.C. 1982), affd sub nom. Maryland v. United States, 460
U.S. 1001 (1983), quoting Gillette Co., 406 F. Supp. at 716; United
States v. Alcan Aluminum, Ltd, 605 F. Supp. 619, 622 (WD. Ky. 1985).
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[[Page 68387]]
VIII. Determinative Documents
There were no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: November 19, 1999.
Respectfully submitted,
Joan Farragher,
U.S. Department of Justice, Antitrust Division, 1401 H Street, N.W.,
Suite 3000, Washington, DC 20530, Telephone: (202) 307-6355.
Certificate of Service
I hereby certify under penalty of perjury that on this 19th day of
November, 1999, I caused a copy of the Competitive Impact statement to
be served by first class mail, postage prepaid, upon the following:
Steven C. Sunshine, Esq,
Shearman & Sterling, 801 Pennsylvania Avenue, NW., Washington, DC
20004-2604; Counsel for Fiat S.p.A., New Holland N.V., New Holland
North America, Inc., and Fiat Acquisition Corp.
Roy Engler, Esq.,
Mayer, Brown & Platt, 2000 Pennsylvania Avenue, NW, Washington, DC
20006; Counsel for Case Corporation.
Joan Farragher,
Trial Counsel, U.S. Department of Justice, Antitrust Division, 1401 H
Street, NW, Washington, DC 20530; Telephone: (202) 307-6355; Facsimile:
(202) 307-5802.
[FR Doc. 99-31626 Filed 12-6-99; 8:45 am]
BILLING CODE 4410-11-M
