United States v. Standard Parking Corporation, KSPC Holdings, Inc. and Central Parking Corporation; Proposed Final Judgment and Competitive Impact Statement |
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United States Department of Justice, Antitrust Division
October 3, 2012
[Federal Register Volume 77, Number 192 (Wednesday, October 3, 2012)]
[Notices]
[Pages 60461-60475]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-24336]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Standard Parking Corporation, KSPC Holdings,
Inc. and Central Parking Corporation; Proposed Final Judgment and
Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation, and Competitive Impact Statement have been filed with the
United States District Court for the District of Columbia in United
States of America v. Standard Parking Corporation, et al., Civil Action
No. 1:12-cv-01598-RJL. On September 26, 2012, the United States filed a
Complaint alleging that the proposed acquisition by Standard Parking
Corporation of the parking business of KCPC Holdings, Inc., including
its wholly owned subsidiary Central Parking Corporation, would violate
Section 7 of the Clayton Act, 15 U.S.C. Sec. 18. The proposed Final
Judgment, filed at the same time as the Complaint, requires Standard
Parking Corporation, KCPC Holdings, Inc. and Central Parking
Corporation to divest certain parking facilities in Atlanta, Georgia;
Baltimore, Maryland; Bellevue, Washington; Boston, Massachusetts;
Bronx, New York City, New York; Charlotte, North Carolina; Chicago,
Illinois; Cleveland, Ohio; Columbus, Ohio; Dallas, Texas; Denver,
Colorado; Fort Meyers, Florida; Fort Worth, Texas; Hoboken, New Jersey;
Houston, Texas; Kansas City, Missouri; Los Angeles, California; Miami,
Florida; Milwaukee, Wisconsin; Minneapolis, Minnesota; Nashville,
Tennessee; Newark, New Jersey; New Orleans, Louisiana; Philadelphia,
Pennsylvania; Phoenix, Arizona; Rego Park, New York City, New York;
Richmond, Virginia; Sacramento, California; and Tampa, Florida.
Copies of the Complaint, proposed Final Judgment and Competitive
Impact Statement are available for inspection at the Department of
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth
Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-2481),
on the Department of Justice's Web site at http://www.usdoj.gov/atr,
and at the Office of the Clerk of the United States District Court for
the District of Columbia. Copies of these materials may be obtained
from the Antitrust Division upon request and payment of the copying fee
set by Department of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the U.S. Department of Justice,
Antitrust Division's internet Web site, filed with the Court and, under
certain circumstances, published in the Federal Register. Comments
should be directed to Scott A. Scheele, Chief, Telecommunications and
Media Section, Antitrust Division, Department of Justice, Washington,
DC 20530, (telephone: 202-514-5621).
Patricia A. Brink,
Director of Civil Enforcement.
[[Page 60462]]
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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UNITED STATES OF AMERICA )
United States Department of Justice )
Antitrust Division )
450 Fifth Street NW., Suite 7000 )
Washington, DC 20530, )
)
Plaintiff )
) Case no. 1:12-cv-01598
v. )
)
STANDARD PARKING CORPORATION )
900 N. Michigan Avenue, Suite 1600 )
Chicago, Illinois 60611-1542 )
)
KCPC HOLDINGS, INC. )
c/o Kohlberg & Company )
111 Radio Circle )
Mt. Kisco, New York 10549 )
)
and )
)
CENTRAL PARKING CORPORATION )
2401 21st Avenue South, Suite 200 )
Nashville, Tennessee 37212, )
)
Defendants )
)
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COMPLAINT
The United States of America (``United States''), acting under
the direction of the Attorney General of the United States, brings
this civil antitrust action against Defendants Standard Parking
Corporation (``Standard''), and KCPC Holdings, Inc., including its
wholly owned subsidiary, Central Parking Corporation (together,
``Central''), to enjoin Standard's proposed acquisition of Central.
The United States alleges as follows:
I. NATURE OF THE ACTION
1. Pursuant to an Agreement and Plan of Merger dated February
28, 2012, Standard proposes to acquire all the shares of Central
from affiliates of Kohlberg & Co. LLC, Lubert-Adler Partners LP and
Versa Capital Management LLC, who will in turn acquire minority
interests in Standard with board representation. The transaction is
valued at approximately $345-348 million in total, including cash,
about 6.1 million shares of Standard's common stock, and assumption
of Central's debt.
2. The merger will combine the two largest nationwide operators
of off-street parking facilities in the United States, in terms of
parking facilities, spaces, and parking revenues, effectively
doubling the size of Standard. Together, Standard and Central will
operate about 4,400 parking facilities, with over 2.2 million
parking spaces, and more than $1.5 billion in combined total
revenues. In many of the markets where Standard and Central now
compete, market concentration would increase substantially, and the
merged entity would have a dominant share.
3. Standard and Central are direct and substantial head-to-head
competitors in providing off-street parking services to motorists,
the consumers of such parking services, visiting the central
business districts (``CBDs'') of various cities in the United
States. In many of the cities where both Standard and Central
operate, one of the two firms is the largest or among the largest
operators of off-street parking services, and the other firm
operates nearby parking facilities that constitute attractive
competitive alternatives for consumers.
4. Head-to-head competition between Standard and Central has
benefitted consumers through lower prices and better services. The
proposed merger threatens to end the substantial competition between
Standard and Central in those areas where they operate competing
parking facilities that are attractive alternatives for consumers,
in violation of Section 7 of the Clayton Act.
II. THE DEFENDANTS
5. Standard Parking Corporation, which is publicly held, is
incorporated in Delaware and headquartered in Chicago, Illinois. It
is one of the two largest operators of off-street parking facilities
in the United States, with parking operations in 41 states and the
District of Columbia. Standard operates approximately 2,200 parking
facilities containing over 1.2 million parking spaces in hundreds of
cities. More than 90% of its facilities and spaces are located in
the United States, with some in Canada. Its portfolio includes
leased and managed parking facilities, with about 90% of its
facilities under management contracts. Standard's total reported
revenues for 2011 were over $729 million, including more than $321
million from leases and management contracts, and more than $408
million from reimbursement of management contract expenses. Standard
has grown in large part through several earlier mergers with other
parking management companies, though none were as large as Central.
6. Central Parking Corporation, which is privately held, is
incorporated in Tennessee and headquartered in Nashville, Tennessee.
Central Parking Corporation is a wholly owned subsidiary of KCPC
Holdings, Inc., which is incorporated in Delaware and located at the
address of its largest owner, Kohlberg & Company, in Mt. Kisco, New
York. Central is the other of the two largest operators of off-
street parking facilities in the United States, with parking
operations in 38 states and the District of Columbia and Puerto
Rico. Central operates more than 2,200 parking facilities and
approximately 1 million parking spaces. Its portfolio includes
owned, leased and managed parking facilities, with most of its
facilities under management contracts though many facilities are
also leased. Central's total revenues for 2011 were in excess of
$800 million.
III. JURISDICTION AND VENUE
7. The United States brings this action under Section 15 of the
Clayton Act, as amended, 15 U.S.C. Sec. 25, to prevent and restrain
Defendants from violating Section 7 of the Clayton Act, 15 U.S.C.
Sec. 18.
8. In states where Defendants operate parking facilities, they
serve motorists that cross state lines; provide centralized
management services across state lines from their respective
headquarters; and purchase substantial quantities of equipment,
services and supplies in the flow of interstate commerce. The
operation of off-street parking services by Standard and Central is
thus an activity that substantially affects and is in the flow of
interstate trade and commerce. Accordingly, this Court has
jurisdiction over the subject matter of this action pursuant to
Section 15 of the Clayton Act, 15 U.S.C. Sec. 25, and 28 U.S.C.
Sec. Sec. 1331, 1337(a) and 1345.
9. Defendants have consented to venue and personal jurisdiction
in this judicial district.
[[Page 60463]]
Venue is therefore proper in this District under Section 12 of the
Clayton Act, 15 U.S.C. Sec. 22, and 28 U.S.C. Sec. 1391(c).
IV. RELEVANT PRODUCT AND GEOGRAPHIC MARKETS
10. The relevant product market in which to assess the likely
competitive effects of the proposed merger is the provision of off-
street parking services.
11. Consumers drive their vehicles to the CBDs of cities for
work, business, shopping or entertainment. Off-street parking
facilities are usually where they park their vehicles while they are
in the city. These parking facilities include open lots, free-
standing garages, or parking garages located within commercial or
residential buildings.
12. Standard and Central, as operators of parking facilities,
each offer consumers off-street parking services at facilities that
the operator owns, leases, or manages. When an operator owns a
parking facility, it is the proprietor of the business and sets the
conditions of operation, including prices. When an operator leases a
parking facility from the property owner, it pays the owner a set
lease amount or sharing revenues with the owner, has substantial or
complete control over pricing and other conditions of operation, and
keeps all or a substantial share of the revenues. When an operator
manages a parking facility for the owner of that facility, the
operator commonly conducts competitive rate analyses of the parking
prices in the area near the facility and recommends prices and other
operating practices to the owner. In addition, the operator of a
managed parking facility is not only compensated with a set
management fee and reimbursement of a large part of its expenses in
operating the facility, but also often receives a share of revenues
or profits, giving the manager an incentive to operate the facility
so as to maximize revenues and profits. Often, in such managed
parking facilities, the incentives of the operator are the same or
similar to those of the owner to maximize profits, especially as to
non-tenant monthly customers, or transient (daily, hourly and event
parking) customers.
13. Off-street parking services are commonly offered to
consumers on the basis of monthly, daily, hourly, and less-than-
hourly prices. In addition, such services are frequently offered to
consumers at special prices for certain events in the area, or for
lower demand times, including ``early-bird,'' evening, and overnight
prices.
14. On-street parking is generally not a practical substitute
for off-street parking services. Off-street parking services provide
many advantages over on-street parking. Off-street parking services
can allow consumers to select a level of service (such as using a
valet parking service instead of just self-parking), a feature not
available with on-street parking. Off-street parking facilities
often provide consumers with relative certainty about availability
of suitable parking and the location and time that it will be
available, especially for consumers who purchase monthly contracts.
Off-street parking also offers consumers greater security for their
vehicles, and in the case of a garage, the vehicles are sheltered
from the elements, a feature not available with on-street parking.
In addition, consumers usually can leave vehicles in an off-street
parking facility as long as desired without the need to move them or
``feed the meter,'' thereby eliminating the risk that the vehicles
will receive parking tickets. On-street parking in CBDs is
frequently only short-term parking, limited to a few hours and
unavailable in certain locations at particular times of day, such as
``rush hour,'' when more traffic lanes in CBDs need to be open.
Finally, in most CBDs on-street parking is available only in small
quantities compared with off-street parking.
15. For all these reasons, the prospect that motorists would
switch to on-street parking is unlikely to affect significantly
pricing decisions of managers of off-street parking facilities.
16. Consumers who decide to drive to the CBD rather than take
public transportation do so for a variety of reasons, and public
transportation is not a practical substitute for off-street parking.
Thus, the possibility of traveling to a CBD by public transportation
is not likely to be a significant constraint on pricing decisions of
managers of off-street parking facilities, even where adequate
public transportation is available in a city.
17. Competition among off-street parking facilities occurs in
CBDs and smaller areas within the CBDs of cities across the United
States. Defendants' managers make pricing decisions and
recommendations to owners for each facility based on market
conditions within a few blocks of that facility.
18. For convenience, motorists park near their destination,
typically within a few blocks, since they need to walk the remainder
of the way to their destination.
19. Consumers faced with a small but significant and
nontransitory increase in off-street parking prices near their
destinations would not turn to more distant parking facilities, on-
street parking, or public transportation in sufficient numbers to
render the price increase unprofitable. Therefore, the provision of
off-street parking services is a relevant product market, and a line
of commerce within the meaning of Section 7 of the Clayton Act. In
addition, the relevant geographic markets within which to assess the
likely anticompetitive effects of the proposed merger are no larger
than CBDs of cities, and commonly consist of considerably smaller
areas of CBDs that encompass those off-street parking facilities
within a few blocks of a destination for consumers. These areas are
``sections of the country'' within the meaning of Section 7 of the
Clayton Act.
20. The relevant geographic markets for off-street parking
services, where Standard and Central both operate parking facilities
close enough to be attractive competitive alternatives to customers,
are contained within areas of the CBDs in the following 29 cities or
parts of cities in the United States: (1) Atlanta, GA; (2)
Baltimore, MD; (3) Bellevue, WA; (4) Boston, MA; (5) New York City
(Bronx), NY; (6) Charlotte, NC; (7) Chicago, IL; (8) Cleveland, OH;
(9) Columbus, OH; (10) Dallas, TX; (11) Denver, CO; (12) Fort Myers,
FL; (13) Fort Worth, TX; (14) Hoboken, NJ; (15) Houston, TX; (16)
Kansas City, MO; (17) Los Angeles, CA; (18) Miami, FL; (19)
Milwaukee, WI; (20) Minneapolis, MN; (21) Nashville, TN; (22) New
Orleans, LA; (23) Newark, NJ; (24) Philadelphia, PA; (25) Phoenix,
AZ; (26) New York City (Rego Park), NY; (27) Richmond, VA; (28)
Sacramento, CA; and (29) Tampa, FL.
V. UNLAWFUL COMPETITIVE EFFECTS
21. Standard and Central are direct and substantial competitors
in offering off-street parking services to consumers. Standard and
Central compete on the prices charged to consumers and on the terms
and conditions and other services offered to consumers, including
hours of operation, the mixture of parking options offered (e.g.,
monthly contracts, ``early-bird'' or evening specials), cleanliness
and security of facilities, and the skill, efficiency and courtesy
of staff.
22. Standard and Central establish, either unilaterally or in
cooperation with the owners of the parking facilities, parking
prices and terms and conditions of services in order to attract
consumers to the facilities they operate and to maximize the
profitability of their various parking facilities. Generally, prices
and services are established on a location-by-location basis. In
recommending and determining prices and services, Standard and
Central take into consideration a variety of factors, including the
prices charged by nearby competing firms and other local market
conditions, including the demand for off-street parking and the
availability of other off-street parking locations.
23. In the relevant geographic markets for off-street parking
services, the proposed merger threatens substantial and serious harm
to consumers. On its own or in cooperation with the owners of the
parking facilities Standard operates, Standard could profitably
unilaterally raise prices to consumers, or reduce the quantity or
quality of services offered.
24. In some of the relevant geographic markets, there are no
other competing parking facilities that would be attractive
competitive alternatives to consumers using the facilities operated
by either Central or Standard, so that the merger would give rise to
a monopoly. In other relevant geographic markets, there are other
competitors present, but the number of the other facilities and
their capacities are insufficient to preclude the exercise of market
power by a merged Standard and Central. In all of the geographic
markets identified, the merger of Standard and Central would result
in at least a moderately concentrated market and in the great
majority of cases a highly concentrated market, as measured by the
Herfindahl-Hirschman Index (``HHI''), which is defined and explained
in Appendix A to this Complaint, leaving one firm operating at least
35%, and often much more than that, of the total parking capacity.
In all of the relevant geographic markets, the merger of Standard
and Central would also result in a significant increase in
concentration in the market following the merger, reflected by an
increase in the HHI of at least 200 points, and, in the great
majority of cases, by several hundred or even more than 1000 points.
[[Page 60464]]
VI. DIFFICULTY OF ENTRY
25. Creation of new parking facilities and spaces in CBDs is
largely a by-product of other decisions, such as whether to build or
tear down a building, which are not directly related to the demand
for, or changes in the price of, parking services. The creation of a
significant number of new parking spaces in a CBD would not be
timely, likely, or sufficient to prevent anticompetitive effects
from the merger of Standard and Central in each of the affected
markets. Other operators of parking facilities can enter only to the
extent that capacity is available, and in the parking industry
leases and management contracts typically run for periods of several
years and are usually awarded to the incumbent operator by the
owners when they come up for renewal. There can be no expectation
that existing leases or management contracts currently held by
Standard and Central would be transferred to new operators in a
manner that would be timely, likely or sufficient to prevent
anticompetitive effects from the merger in the affected markets.
VII. VIOLATIONS ALLEGED
26. The proposed merger between Standard and Central is likely
substantially to lessen competition in interstate trade and
commerce, in violation of Section 7 of the Clayton Act, 15 U.S.C.
Sec. 18.
27. The effect of the proposed merger, if consummated, may be
the substantial lessening of competition in the relevant product and
geographic markets by, among other things:
a. eliminating Central as an effective independent competitor of
Standard in the sale of off-street parking services;
b. eliminating or reducing substantial competition between
Standard and Central for the sale of off-street parking services;
and
c. providing Standard with the ability to exercise market power
by raising prices or reducing the quality of services offered for
off-street parking services.
VIII. REQUESTED RELIEF
28. The United States respectfully requests that this Court: (a)
adjudge and decree that the merger of Standard and Central would be
unlawful and violate Section 7 of the Clayton Act; (b) preliminarily
and permanently enjoin and restrain Defendants and all other persons
acting on their behalf from consummating the proposed merger of
Standard and Central as expressed in their merger agreement dated on
or about February 28, 2012, or from entering into or carrying out
any other contract, agreement, understanding or plan, the effect of
which would be to combine the businesses or assets of Standard and
Central; (c) award the United States its costs for this action; and
(d) award the United States such other and further relief as the
Court deems just and proper.
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA:
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/s/
Joseph F. Wayland
Acting Assistant Attorney General
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/s/
Renata B. Hesse (D.C. Bar No. 466107)
Deputy Assistant Attorney General
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/s/
Carl Willner (D.C. Bar No. 412841)*
Michael J. Hirrel (D.C. Bar No. 940353)
Alvin H. Chu
Trial Attorneys
United States Department of Justice
Antitrust Division
Telecommunications and Media Enforcement Section
450 Fifth Street NW., Suite 7000
Washington, DC 20530
Phone: (202) 514-5813
Facsimile: (202) 514-6381
Email: carl.willner@usdoj.gov
*Attorney of Record
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/s/
Patricia A. Brink
Director of Civil Enforcement
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/s/
Scott A. Scheele (D.C. Bar No. 429061)
Chief, Telecommunications and Media Enforcement Section
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/s/
Lawrence M. Frankel (D.C. Bar No. 441532)
Assistant Chief, Telecommunications and Media
Enforcement Section
Dated: September 26, 2012
APPENDIX A
Herfindahl-Hirschman Index
The term ``HHI'' means the Herfindahl-Hirschman Index, a
commonly accepted measure of market concentration. The HHI is
calculated by squaring the market share of each firm competing in
the market and then summing the resulting numbers. For example, for
a market consisting of four firms with shares of 30, 30, 20, and 20
percent, the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600). The HHI
takes into account the relative size distribution of the firms in a
market. It approaches zero when a market is occupied by a large
number of firms of relatively equal size and reaches its maximum of
10,000 points when a market is controlled by a single firm. The HHI
increases both as the number of firms in the market decreases and as
the disparity in size between those firms increases.
Markets in which the HHI is between 1,500 and 2,500 points are
considered to be moderately concentrated, and markets in which the
HHI is in excess of 2,500 points are considered to be highly
concentrated. See Horizontal Merger Guidelines Sec. 5.3 (issued by
the U.S. Department of Justice and the Federal Trade Commission on
Aug. 19, 2010). Transactions that increase the HHI by more than 200
points in highly concentrated markets will be presumed to be likely
to enhance market power. Id. Mergers resulting in highly
concentrated markets that involve an increase in the HHI of between
100 points and 200 points potentially raise significant competitive
concerns and often warrant scrutiny. Id.
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
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)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) Case no. 1:12-cv-01598
)
STANDARD PARKING CORPORATION, )
KCPC HOLDINGS, INC., and )
CENTRAL PARKING CORPORATION, )
)
Defendants. )
)
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COMPETITIVE IMPACT STATEMENT
Plaintiff United States of America (``United States''), pursuant
to Section 2(b) of the Antitrust Procedures and Penalties Act
(``APPA'' or ``Tunney Act''), 15 U.S.C. Sec. 16(b)-(h), files this
Competitive Impact Statement relating to the proposed Final Judgment
submitted for entry in this civil antitrust proceeding.
I. NATURE AND PURPOSE OF THE PROCEEDING
Defendants Standard Parking Corporation (``Standard'') and KCPC
Holdings, Inc. entered into an agreement on February 28,
[[Page 60465]]
2012, by which Standard will acquire KCPC Holdings, Inc. and its
wholly owned subsidiary, Defendant Central Parking Corporation
(together ``Central''), for approximately $345 million. This
transaction will combine the two largest nationwide operators of
off-street parking facilities, who compete in providing parking
services in numerous cities throughout the United States. The United
States filed a civil antitrust Complaint on September 26, 2012,
seeking to enjoin the proposed acquisition. The Complaint alleges
that the likely effect of this acquisition would be to lessen
competition substantially for off-street parking services in various
local geographic markets in 29 specified cities, or parts of cities,
throughout the United States, in violation of Section 7 of the
Clayton Act, 15 U.S.C. Sec. 18. This loss of competition likely
would result in higher prices and lower quality of services for off-
street parking in the affected local geographic markets.
At the same time the Complaint was filed, the United States also
filed an Asset Preservation Stipulation and Order (``Stipulation'')
and proposed Final Judgment, which are designed to eliminate the
anticompetitive effects of the acquisition. Under the proposed Final
Judgment, which is explained more fully below, Defendants will be
required within a specified time to divest their interests in at
least 107 identified parking facilities in the affected local
geographic markets, including the parking facility leases or
management contracts (``parking facility agreements'') under which
they operate those parking facilities on behalf of the owners. Under
the terms of the Stipulation, Standard and Central will ensure that
each of the parking facilities to be divested continues to be
operated as a competitively and economically viable ongoing business
concern during the pendency of the ordered divestiture.
The United States and Defendants have stipulated that the
proposed Final Judgment may be entered after compliance with the
APPA. Entry of the proposed Final Judgment would terminate this
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.
II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION
A. The Defendants and the Proposed Transaction
Standard and Central are the two largest nationwide operators of
off-street parking facilities in the United States. Together,
Standard and Central will operate about 4,400 parking facilities
with over 2.2 million parking spaces and more than $1.5 billion in
combined total revenues.
Standard, a publicly held Delaware corporation with its
headquarters in Chicago, Illinois, has parking operations in 41
states and the District of Columbia. Standard operates approximately
2,200 parking facilities containing over 1.2 million parking spaces
in hundreds of cities. Standard's portfolio includes both leased and
managed parking facilities, with about 90% of its facilities under
management contracts. Standard's total reported revenues for 2011
were more than $729 million.
Central Parking Corporation, a privately held Tennessee
corporation with its headquarters in Nashville, Tennessee, is a
wholly owned subsidiary of KCPC Holdings, Inc., a Delaware
corporation with its principal place of business in Mt. Kisco, New
York. Central has parking operations in 38 states along with the
District of Columbia and Puerto Rico, and operates more than 2,200
parking facilities and approximately 1 million parking spaces.
Central's portfolio includes owned, leased and managed parking
facilities, with most of its facilities under management contracts
though many facilities are also leased. Central's total revenues for
2011 were in excess of $800 million.
Pursuant to an Agreement and Plan of Merger dated February 28,
2012, Standard will acquire KCPC Holdings, Inc. and its wholly owned
subsidiary, Central Parking Corporation, from the owners of Central.
The transaction is valued at approximately $345-348 million in
total, including cash compensation, about 6.1 million shares of
common stock amounting to a 28% interest in Standard, and assumption
by Standard of Central's debt.
The proposed transaction, as initially agreed to by Defendants,
would substantially lessen competition in local geographic markets
in 29 cities, or parts of cities, throughout the United States where
Standard and Central are close competitors, as stated in the
Complaint.
B. The Competitive Effects of the Transaction on Off-Street Parking
Services
Standard and Central are both in the business of providing off-
street parking services to consumers in hundreds of cities
throughout the United States. Defendants act principally as
operators of parking facilities owned by others, entering into
leases or management contracts with the owners or agents of the
owners to operate the facilities (though Central still has a few
owned facilities). Standard and Central supply employees and
equipment, as well as back-office support from their regional and
headquarters management.
Standard and Central, as operators of parking facilities, are
direct and substantial head-to-head competitors in providing off-
street parking services. The consumers of off-street parking
services are motorists visiting the central business districts
(CBDs) of numerous cities, or parts of cities, throughout the United
States. In many of the geographic markets where Standard and Central
now compete, one of the two firms is the largest or among the
largest operators of off-street parking services, and the other firm
operates nearby parking facilities that constitute attractive
competitive alternatives for consumers. Therefore, as a result of
the merger of Standard and Central, in many of the markets where
these firms now compete, market concentration would increase
substantially, and the merged entity would have a dominant share.
Head-to-head competition between Standard and Central has benefitted
consumers through lower prices and better services, and the proposed
merger threatens to end this substantial competition in areas where
both firms operate competing parking facilities that are attractive
alternatives for consumers.
As alleged in the Complaint, the relevant product market is the
provision of off-street parking services. When consumers drive their
vehicles to CBDs of cities, or parts of cities, whether for work,
business, shopping or entertainment, they primarily park their
vehicles in off-street parking facilities. These parking facilities
can be open lots, free-standing garages, or parking garages located
within commercial or residential buildings. Off-street parking
services are commonly offered to consumers with varying price
structures, for monthly, daily, hourly, or less-than-hourly parking.
In addition, special prices can be offered for certain events in the
area, such as sports games, concerts or theatre productions, or for
lower demand times, such as ``early- bird,'' evening and overnight
prices.
On-street parking is generally not a practical substitute for
off-street parking services. Off-street and on-street parking are
distinct services, with off-street parking services providing many
advantages over on-street parking. Off-street parking services can
allow customers to select a level of service (e.g., using a valet
parking service instead of just self-parking), a feature not
available with on-street parking. In addition, off-street parking
services provide consumers with relative certainty about
availability of suitable parking, particularly for customers who
purchase monthly off-street parking contracts. Off-street parking
offers greater security, and, with garages, shelter from the
elements. On-street parking is limited and is also frequently only
short-term parking, which may be unavailable in certain locations or
at particular times of day. With off-street parking, customers
usually do not need to ``feed the meter,'' nor do they need to move
their vehicles periodically to comply with traffic restrictions and
avoid parking tickets. For all these reasons, as alleged in the
Complaint, the prospect that motorists would switch to on-street
parking is unlikely to affect significantly the pricing decisions of
managers of off-street parking facilities.
Likewise, the possibility of consumers traveling to a CBD by
public transportation, even where adequate public transportation is
available, is not an alternative that is likely to be a significant
constraint on pricing decisions at off-street parking facilities.
Consumers decide to drive to a CBD rather than take public
transportation for a variety of reasons, including the need to have
a car available, and the inconvenience of using public
transportation to reach their homes, workplaces or other
destinations.
There are a variety of arrangements by which Central and
Standard, as well as other operators of parking facilities, obtain
the rights to offer parking services in those facilities, including
direct ownership, leases, and management contracts with the owners
of the facilities. An operator that owns a parking facility is the
proprietor of the business and sets the conditions of operation,
including prices. Direct ownership by these operators is now rare,
though still used occasionally by Central.
Leasing is used by both Central and Standard, with Central using
it more
[[Page 60466]]
frequently. An operator that leases a parking facility from the
property owner pays the owner a set lease amount or shares some of
the parking revenues with the owner, and retains substantial or
complete control over pricing and other conditions of operation. The
lessee operating the facility generally assumes the risk that the
facility will be unprofitable and is responsible for the costs of
operation.
Management contracts are now the most common form under which
parking facilities are operated by both Standard and Central, and
especially so for Standard. When an operator manages a parking
facility for the owner, the operator is commonly compensated with a
set management fee and reimbursement of a large part of its expenses
in operating the facility, avoiding the risk of loss that a lessee
faces. In addition, the operator often receives a share of revenues
or profits as specified in the management contract, providing a
financial incentive to the manager to operate the facility so as to
maximize revenues and profits.
In managed parking facilities, the incentives of the operator
are often the same as or similar to those of the owner: to maximize
profits, especially as to non-tenant monthly customers or transient
(daily, hourly and event parking) customers, who do not have a
special relationship with the owner of the building in which the
facility is located. An operator such as Standard or Central
managing a parking facility for an owner commonly conducts
competitive rate analyses of the parking market in the area near the
facility and recommends conditions of business operation, including
prices, to the owner. Even if owners are not obliged to accept such
recommendations, they often do, relying on the expertise of the
operator to help them maximize their revenues and profits from the
facility. For all these reasons, parking facilities managed by
either Standard or Central, as well as ones leased or owned by
Standard or Central, have been considered as part of the competitive
analysis in evaluating the impact of this merger.
Though the process of identifying relevant geographic markets
for parking services and the competitors in those markets can be
complex, the underlying principle guiding this process is well
understood in the parking industry. As reflected in the competitive
rate analyses conducted by the parking operators, motorists park
near their destinations, typically within a few blocks of where they
are going. Consumers faced with a small but significant and
nontransitory increase in parking prices for the parking facilities
near their destinations would not turn to more distant parking
facilities in sufficient numbers to render the price increase
unprofitable. Parking managers for Central, Standard, and other
competitors in the industry make their pricing decisions or
recommendations separately for each facility, based on market
conditions within a few blocks of that facility. Therefore, the
relevant geographic markets within which the likely competitive
effects of this merger have been assessed are no larger than the
CBDs of individual cities, or parts of cities, where Standard and
Central both have parking facilities, and commonly consist of
considerably smaller areas of the CBDs that encompass those off-
street parking facilities within a few blocks of a destination for
consumers.
Two methods have been used to identify relevant geographic
markets. In most cases, the geographic market is based on
overlapping pairs of parking facilities, one operated by Central and
one by Standard, that are within close enough walking distance
typically to be considered by customers as alternatives for parking.
The extent of the overlap between the Standard and Central
facilities is the area containing consumer destinations for which
the Standard and Central facilities compete to provide parking. This
analysis then determines which facilities of other competitors would
be considered within close enough walking distance to that overlap
area to be alternatives to the customers for which Standard or
Central compete. In some cases, where there is a single attraction
likely to draw a large part of the parking business in an area, such
as a sports stadium, or where one of the overlapping facilities of
the parties is not open to the general public but the other is and
could serve as a competitive alternative to parkers in the first,
the geographic market includes all other parking facilities within
close enough walking distance of the attraction or restricted
facility that consumers would be likely to consider them as
alternatives.
This process has led to the identification of numerous relevant
geographic markets for off-street parking services within the CBDs
of cities, or parts of cities, where Standard and Central both
operate, each consisting of areas containing several city blocks
around the parking facilities at issue. Within one or multiple such
areas in 29 cities, or parts of cities, and 21 states of the United
States, as listed below, Standard and Central both operate parking
facilities close enough to be attractive competitive alternatives to
customers, and a likelihood of competitive harm arises as a result
of this merger in view of the extent of competition in those
markets:
Atlanta, GA
Baltimore, MD
Bellevue, WA
Boston, MA
New York City (Bronx), NY
Charlotte, NC
Chicago, IL
Cleveland, OH
Columbus, OH
Dallas, TX
Denver, CO
Fort Myers, FL
Fort Worth, TX
Hoboken, NJ
Houston, TX
Kansas City, MO
Los Angeles, CA
Miami, FL (including Coral Gables, FL)
Milwaukee, WI
Minneapolis, MN
Nashville, TN
New Orleans, LA
Newark, NJ
Philadelphia, PA
Phoenix, AZ
New York City (Rego Park), NY
Richmond, VA
Sacramento, CA
Tampa, FL
In the relevant geographic markets, substantial competitive harm
to consumers is likely to result from this merger in off-street
parking services, as alleged in the Complaint. The proposed merger
would substantially increase Standard's market shares in the
relevant geographic markets, and it would place in Standard's hands
substantial control over prices and services available to consumers.
On its own or in cooperation with the owners of parking facilities,
who often have the same or similar incentives to Standard to
maximize profits, Standard could profitably unilaterally raise
prices to consumers, or reduce the quantity or quality of services
offered.
Standard and Central now compete in these relevant geographic
markets in several respects, including the prices charged; hours of
operation; the mixture of parking operations offered, such as
monthly contracts, ``early-bird,'' and evening specials; cleanliness
and security of facilities; and the skill, efficiency and courtesy
of staff. When Standard and Central determine, or recommend to
owners, prices and terms of service, they take into consideration a
variety of factors relevant to competition in the local geographic
market in which a specific facility operates, including local market
conditions such as the demand for off-street parking and the
availability of other off-street parking locations, and the prices
charged by available competing firms in the local geographic market.
Following the merger, in some of the relevant geographic
markets, there would be no other parking facilities that would be
competitive alternatives to Central or Standard facilities, so that
the merger would create a monopoly. More often, in the relevant
geographic markets, some other competitors are present, but the
number of their facilities and the capacities of those facilities
are insufficient to preclude the exercise of market power by a
merged Standard and Central. Control over a large share of available
parking capacity in a local geographic market is likely to give rise
to the ability to exert market power unilaterally over prices and
terms of service for off-street parking in that area.
Market shares in the relevant geographic markets have generally
been assessed based on total capacity of parking facilities in terms
of parking spaces, for both Standard and Central, and for competing
facilities that would be attractive alternatives to their customers.
In all of the local geographic markets identified for off-street
parking services, the merger of Standard and Central would result in
the merged firm having at least 35%, and often much more than that,
of the total parking capacity. In all of these markets, the merger
would result in at least a moderately concentrated market and in the
great majority of cases a highly concentrated market, as measured by
the Herfindahl-Hirschman Index (``HHI'').\1\ In addition, in all
[[Page 60467]]
of the geographic markets identified, the merger of Standard and
Central would also result in a significant increase in concentration
in the market following the merger, reflected by an increase in the
HHI of at least 200 points. Under the Horizontal Merger Guidelines,
the combination of a highly concentrated market and an increase in
concentration of at least 200 points gives rise to a presumption of
competitive harm. Indeed, in the great majority of the relevant
geographic markets, the merger would result in an increase in
concentration of several hundred points, or of even more than 1000
points, as measured by the HHI.
---------------------------------------------------------------------------
\1\ The term ``HHI'' means the Herfindahl[hyphen]Hirschman
Index, a commonly accepted measure of market concentration. The HHI
is calculated by squaring the market share of each firm competing in
the market and then summing the resulting numbers. The agencies
generally consider markets in which the HHI is in excess of 2,500
points to be highly concentrated. See U.S. Department of Justice &
FTC, Horizontal Merger Guidelines Sec. 5.3 (2010). Transactions
that increase the HHI by more than 200 points in highly concentrated
markets are presumed likely to enhance market power under the
Horizontal Merger Guidelines issued by the Department of Justice and
the Federal Trade Commission. See id.
---------------------------------------------------------------------------
Entry of new off-street parking capacity would not be likely,
timely, or sufficient to remedy the competitive harm otherwise
likely to result from this merger, in any of the affected relevant
geographic markets. That is because creation of new parking
facilities and spaces in CBDs is largely a by-product of other
decisions, such as whether to build or tear down a building, that
are not directly related to the demand for, or changes in the price
of, parking services in that area. Given the local character of
competition, the cost of land, the limited availability of
substitutable parking facilities, and the alternative options for
the use of convenient land in the market, new entry of parking
capacity cannot be viewed as a response likely to make a small but
significant and nontransitory price increase unprofitable.
Other operators of parking facilities can enter only to the
extent that capacity is available. Assuming that new capacity has
not been built, new operators could only enter in a way that might
alter Standard's and Central's dominant position in a relevant
market by taking capacity from them. But in the parking industry,
leases and management contracts typically run for periods of several
years, and are usually awarded to the incumbent operators by the
owners when they come up for renewal. Given these practices, it
cannot be expected that existing leases or management contracts
currently held by Standard and Central would be transferred to new
operators in a manner that would be timely, likely or sufficient to
prevent anticompetitive effects from the merger in the affected
markets.
III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT
The divestiture in the proposed Final Judgment will eliminate
the anticompetitive effects of the acquisition in off-street parking
services in the relevant geographic markets in 29 cities, or parts
of cities, by providing for the divestiture of the parking
businesses of Central or Standard in those markets involving 107 or
108 named parking facilities.\2\ Such a divestiture most commonly
will involve the sale of Standard's or Central's interests in the
parking facilities in those markets, including its parking facility
lease or management agreements, to a different operator or
operators, thereby establishing the divested facility as an
economically viable competitor independent of Standard. In some
cases, as provided by Paragraph IV.K of the proposed Final Judgment,
the Defendants may elect to accomplish a divestiture by terminating
Standard's or Central's parking facility agreement for the specified
facility--or letting the agreement expire without renewal at the end
of its natural term--after notice to the affected facilities owners.
This alternative may be particularly relevant in the case of
agreements with a very short remaining term that could be difficult
to sell. In these cases, the owner of the parking facility would
select a new operator for the facility following the divestiture.
---------------------------------------------------------------------------
\2\ The reason why there is not a single number for the total
parking facilities to be divested is that Defendants have the option
in one city, Milwaukee, WI, to accomplish the required divestiture
in the relevant geographic markets through either three parking
facilities currently operated by Standard, or four parking
facilities currently operated by Central. In either form, the
divestiture would be sufficient to remedy competitive harm in those
markets.
---------------------------------------------------------------------------
The proposed Final Judgment requires Defendants, within 90 days
after the filing of the Complaint, or 5 days after notice of the
entry of the Final Judgment by the Court, whichever is later, to
divest, as a viable ongoing parking service business, all of their
interests in each of the Parking Facilities listed in Schedule A to
the proposed Final Judgment. Defendants are required to use their
best efforts to accomplish the divestitures ordered as expeditiously
as possible, and the United States has the sole discretion, under
Paragraph IV.D of the proposed Final Judgment, to extend the time
period for any divestiture, but not for more than 90 additional
days. Such extensions can be granted by the United States on an
individual basis for any facility, but the United States expects it
will take into account both the extent of the efforts Defendants
have made to divest the facility within the original time provided,
and the prospects that they will succeed in doing so within the
additional time that the extension would permit.
``Parking Facilities'' are defined in the proposed Final
Judgment, Paragraph II.E, to mean all of Defendant's interests in
the properties listed in Schedule A, including but not limited to
Parking Facility Agreements (whether leases, management agreements
or otherwise). In turn, ``Parking Facility Agreements'' are defined
in Paragraph II.D of the proposed Final Judgment as all agreements
that are related to the management of off-street parking facilities
as listed in Schedule A, and are between or among the Defendants and
the owners or their agents of the properties listed in Schedule A.
Defendants must also divest all other tangible and intangible assets
used by them primarily in connection with those properties, such as:
the other contracts (whether with employees, customers or
otherwise); equipment and other property; customer lists, business
accounts and records, and market research data for the individual
Parking Facilities; manuals and instructions provided to employees;
and other physical assets they may have associated with their
operation of the specific properties. This would not include,
however, assets such as centralized systems software, that are
located outside the Parking Facilities and that do not relate
primarily to the properties listed on Schedule A. Thus, Defendants
will be able to retain back-office systems or other assets and
contracts used at the corporate level to support multiple parking
facilities, which they would need to conduct their remaining
operations, and which other purchasers experienced in the operation
of parking facilities could supply for themselves.
The Parking Facility assets must be divested in such a way as to
satisfy the United States in its sole discretion that the operations
can and will be operated by the purchaser as a viable, ongoing
business that can compete effectively in the relevant market. This
means, for example, that the United States retains the right to
preclude Defendants from divesting their interests in a Parking
Facility to a purchaser that in its view would not have the support
systems or other needed centralized capabilities to continue the
effective competitive operation of the facility. Defendants must
take all reasonable steps necessary to accomplish the divestiture
quickly and shall cooperate with prospective purchasers.
Defendants are also obliged, under Paragraph IV.E of the
proposed Final Judgment, to provide information to acquirers
concerning the personnel involved in the operation of any Parking
Facility, so as to make offers of employment, and not to interfere
with negotiations by any acquirer to employ a person currently
employed by a Defendant whose primary responsibility concerns the
parking service business of that Parking Facility. This includes,
for example, removing impediments to the employees accepting such
employment, such as non-compete agreements, which also may not be
enforced with respect to any employee whose responsibilities at a
local or regional level include a Parking Facility and whose
employment terminates within six months of the date after this
merger is completed.
Defendants are required, under Paragraphs IV.B and C of the
proposed Final Judgment, to cooperate with prospective acquirers of
the Parking Facilities, by furnishing them information and documents
about the Parking Facilities as customarily provided in a due
diligence process, and giving them reasonable access to personnel
and other documents and information, and the ability to make
inspection of the Parking Facilities. They are also required not to
take any action that would impede the operation of any parking
business connected with the Parking Facilities, or take any action
that would impede divestiture, under Paragraph IV.G.
In the event that Defendants do not accomplish the divestiture
within the periods prescribed in the proposed Final Judgment, the
Final Judgment provides in Section VI that upon application of the
United States the
[[Page 60468]]
Court will appoint a trustee selected by the United States to effect
the divestiture. The appointment of a trustee can be made
individually for any Parking Facility, so that some facilities, for
example, might be assigned to the trustee even as extensions of time
are granted by the United States for the Defendants to complete the
divestitures of others, and those Parking Facilities might also be
assigned to the trustee later if the Defendants fail to complete the
divestiture within the extended time.
If a trustee is appointed, the proposed Final Judgment provides
that Defendants will pay all costs and expenses of the trustee. The
trustee's commission will be structured so as to provide an
incentive for the trustee based on the price obtained and the speed
with which the divestiture is accomplished. The Defendants will have
no right to object to a divestiture by the trustee on any ground
other than malfeasance.
After his or her appointment becomes effective, the trustee will
file monthly reports with the Court and the United States setting
forth his or her efforts to accomplish the divestiture. At the end
of six months from the time that the trustee has assumed
responsibility for divestiture of any individual Parking Facility,
if the divestiture has not been accomplished, the trustee and the
United States will 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 or the term of the
trustee's appointment.
The proposed Final Judgment also provides a mechanism for
protecting competition in the event that an individual divestiture
cannot be made. The Defendants are required to report to the United
States at 30-day intervals on compliance with the proposed Final
Judgment, including submission of affidavits. Beginning with the
second of these periodic reports, Defendants are required to
identify any instances in which they anticipate that divestitures of
any Parking Facilities cannot be practically accomplished within 30
additional days. This might occur, for example, because the owner of
the facility refuses to grant consent to the transfer to an acquirer
under the terms of the lease or management contract, or because no
prospective purchaser may appear in time. Thus, whenever a Parking
Facility is not divested within 60 days of the filing of the
Complaint, and no definitive agreement for divestiture exists, the
United States has the right under the proposed Final Judgment,
Paragraph IV.N, to require Defendants to propose alternative
divestitures of Parking Facilities sufficient to preserve
competition. The United States has sole discretion whether to accept
a proposed alternative divestiture, and if it refuses to accept the
alternative, the Defendants must continue to propose alternative
divestitures in the relevant market until an acceptable one is
found. If the alternative is accepted, it becomes for all purposes a
Parking Facility in place of the other Parking Facility listed in
Schedule A of the proposed Final Judgment that could not be
divested. This process of identifying alternatives in the absence of
a divestiture agreement does not apply where Defendants will be
divesting a property under Paragraph IV.K by letting the lease or
management contract terminate before the time allowed for
divestiture has elapsed.
Once a Parking Facility is divested, whether this occurs through
transfer to an acquirer acceptable to the United States, or by
termination or non-renewal of the lease or management contract,
Defendants are prohibited by Paragraph IV.I of the proposed Final
Judgment from entering into any agreement to acquire, lease or
operate, or acquiring in any other manner an interest in ownership
or management of, that Parking Facility during the ten-year term of
the proposed Final Judgment. A shorter limitation on reacquisition
of only three years from the divestiture of a Parking Facility is
provided, however, where Defendants reacquire a Parking Facility
directly from the owner of the Parking Facility or the owner's agent
through a process that does not involve a transaction with the
operator of the Parking Facility. This provision serves to ensure
that acquisition of the divested Parking Facilities will be
attractive to new operators, who will have a reasonable time to
establish themselves and demonstrate to owners that they can operate
the facilities effectively before having to compete again against
the former incumbent for the right to operate the property. At the
same time, it gives the Defendants the opportunity within a
reasonable period of time to return to competing for the rights to
operate the divested Parking Facilities from the facility owners in
a normal manner, rather than having to wait for the expiration of
the proposed Final Judgment. This may involve either processes
initiated by the owners of facilities, such as requests for bids, or
requests to compete for the operating rights initiated by
Defendants, provided that a transaction between the operator of the
facility and Defendants is not involved. The period of time during
which reacquisition is prohibited even for direct transactions with
the owner takes into account the normal term of many management
contracts for parking facilities. The broader prohibition on
reacquisition during the term of the decree also safeguards against
any ``sweetheart deals'' where an acquirer or a facility owner takes
control of operation of a Parking Facility merely to satisfy the
divestiture obligation and then returns it to the Defendants, and
thereby ensures that the remedy cannot be circumvented.
The divestiture provisions of the proposed Final Judgment will
eliminate the anticompetitive effects of the acquisition in the
provision of off-street parking services, in the relevant local
geographic markets in the 29 cities, or parts of cities, named in
the Complaint where Defendants compete closely now. This relief is
designed to ensure that the merger does not increase Standard's
market share and control of parking capacity in the relevant local
geographic markets in these cities, or parts of cities, to a level
likely to lead to the exercise of market power. Nothing in the
proposed Final Judgment is intended to limit the United States'
ability to investigate or bring actions, where appropriate, to
challenge other past or future activities of the Defendants.
IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS
Section 4 of the Clayton Act, 15 U.S.C. Sec. 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. Sec. 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 Defendants have stipulated that the
proposed Final Judgment may be entered by the Court after compliance
with the provisions of the APPA, provided that the United States has
not withdrawn its consent. The APPA conditions entry upon the
Court's determination that the proposed Final Judgment is in the
public interest.
The APPA provides a period of at least 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, or the last
date of publication in a newspaper of the summary of this
Competitive Impact Statement, whichever is later. All comments
received during this period will be considered by the United States
Department of Justice, which remains free to withdraw its consent to
the proposed Final Judgment at any time prior to the Court's entry
of judgment. The comments and the response of the United States will
be filed with the Court. In addition, comments will be posted on the
U.S. Department of Justice, Antitrust Division's internet Web site
and, under certain circumstances, published in the Federal Register.
Written comments should be submitted to:
Scott A. Scheele
Chief, Telecommunications and Media Enforcement Section
Antitrust Division
United States Department of Justice
450 Fifth Street, NW., Suite 7000
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 Defendants. The
United States could have continued the
[[Page 60469]]
litigation and sought preliminary and permanent injunctions against
Standard Parking Corporation's acquisition of KCPC Holdings, Inc.
and its wholly owned subsidiary, Central Parking Corporation. The
United States is satisfied, however, that the divestiture of assets
described in the proposed Final Judgment will preserve competition
for the provision of off-street parking services in the relevant
markets identified by the United States. Thus, the proposed Final
Judgment would achieve all or substantially all of the relief the
United States would have obtained through litigation, but avoids the
time, expense, and uncertainty of a full trial on the merits of the
Complaint.
VII. STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL JUDGMENT
The Clayton Act, as amended by 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.'' 15 U.S.C. Sec. 16(e)(1). In making that
determination, the court, in accordance with the statute as amended
in 2004, is required to consider:
(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. Sec. 16(e)(1)(A) & (B). In considering these
statutory factors, the court's inquiry is necessarily a limited one
as the government is entitled to ``broad discretion to settle with
the defendant within the reaches of the public interest.'' United
States v. Microsoft Corp., 56 F.3d 1448, 1461 (DC Cir. 1995); see
generally United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1
(D.D.C. 2007) (assessing public interest standard under the Tunney
Act); United States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ]
76,736, 2009 U.S. Dist. LEXIS 84787, No. 08-1965 (JR), at *3,
(D.D.C. Aug. 11, 2009) (noting that the court's review of a consent
judgment is limited and only inquires ``into whether the
government's determination that the proposed remedies will cure the
antitrust violations alleged in the complaint was reasonable, and
whether the mechanism to enforce the final judgment are clear and
manageable.'').\3\
---------------------------------------------------------------------------
\3\ The 2004 amendments substituted ``shall'' for ``may'' in
directing relevant factors for court to consider and amended the
list of factors to focus on competitive considerations and to
address potentially ambiguous judgment terms. Compare 15 U.S.C.
Sec. 16(e) (2004), with 15 U.S.C. Sec. 16(e)(1) (2006); see also
SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004
amendments ``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------
As the United States Court of Appeals for the District of
Columbia Circuit has held, under the APPA a court considers, among
other things, the relationship between the remedy secured and the
specific allegations 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 Microsoft, 56 F.3d at 1458-62. 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) (citing United States v. Bechtel Corp., 648 F.2d
660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1460-62;
United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001);
InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Courts have held 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 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.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\4\ In
determining whether a proposed settlement is in the public interest,
a district court ``must accord deference to the government's
predictions about the efficacy of its remedies, and may not require
that the remedies perfectly match the alleged violations.'' SBC
Commc'ns, 489 F. Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461
(noting the need for courts to be ``deferential to the government's
predictions as to the effect of the proposed remedies''); United
States v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C.
2003) (noting that the court should grant due respect to the United
States' prediction as to the effect of proposed remedies, its
perception of the market structure, and its views of the nature of
the case).
---------------------------------------------------------------------------
\4\ Cf. BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [APPA] is limited to approving or
disapproving the consent decree''); United States v. Gillette Co.,
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the
court is constrained to ``look at the overall picture not
hypercritically, nor with a microscope, but with an artist's
reducing glass''). See generally Microsoft, 56 F.3d at 1461
(discussing whether ``the remedies [obtained in the decree are] so
inconsonant with the allegations charged as to fall outside of the
`reaches of the public interest' '').
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Courts have greater flexibility in approving proposed consent
decrees than in crafting their own decrees following a finding of
liability in a litigated matter. ``[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. Am.
Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations
omitted) (quoting United States v. Gillette Co., 406 F. Supp. 713,
716 (D. Mass. 1975)), aff'd sub nom. Maryland v. United States, 460
U.S. 1001 (1983); see also United States v. Alcan Aluminum Ltd., 605
F. Supp. 619, 622 (W.D. Ky. 1985) (approving the consent decree even
though the court would have imposed a greater remedy). To meet this
standard, the United States ``need only provide a factual basis for
concluding that the settlements are reasonably adequate remedies for
the alleged harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17.
Moreover, the court's role under the APPA is limited to
reviewing the remedy in relationship to the violations that the
United States has alleged in its Complaint, and does not authorize
the court to ``construct [its] own hypothetical case and then
evaluate the decree against that case.'' Microsoft, 56 F.3d at 1459;
see also InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public
interest' is not to be measured by comparing the violations alleged
in the complaint against those the court believes could have, or
even should have, been alleged''). Because the ``court's authority
to review the decree depends entirely on the government's exercising
its prosecutorial discretion by bringing a case in the first
place,'' it follows that ``the court is only authorized to review
the decree itself,'' and not to ``effectively redraft the
complaint'' to inquire into other matters that the United States did
not pursue. Microsoft, 56 F.3d at 1459-60. As this Court recently
confirmed in SBC Communications, courts ``cannot look beyond the
complaint in making the public interest determination unless the
complaint is drafted so narrowly as to make a mockery of judicial
power.'' SBC Commc'ns, 489 F. Supp. 2d at 15.
In its 2004 amendments, Congress made clear its intent to
preserve the practical benefits of utilizing consent decrees in
antitrust enforcement, adding the unambiguous instruction that
``[n]othing in this section shall be construed to require the court
to conduct an evidentiary hearing or to require the court to permit
anyone to intervene.'' 15 U.S.C. Sec. 16(e)(2). The language wrote
into the statute what Congress intended when it enacted the Tunney
Act in 1974, as Senator Tunney explained: ``[t]he court is nowhere
compelled to go to trial or to engage in extended proceedings which
might have the effect of vitiating the benefits of prompt and less
costly settlement through the consent decree process.'' 119 Cong.
Rec. 24,598 (1973) (statement of Senator Tunney). Rather, the
procedure for the public interest determination is left to the
discretion of the court, with the recognition that the court's
``scope of review remains sharply proscribed
[[Page 60470]]
by precedent and the nature of Tunney Act proceedings.'' SBC
Commc'ns, 489 F. Supp. 2d at 11.\5\
---------------------------------------------------------------------------
\5\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the
court to make its public interest determination on the basis of the
competitive impact statement and response to comments alone'');
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. 1977) (``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
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6
(1973) (``Where the public interest can be meaningfully evaluated
simply on the basis of briefs and oral arguments, that is the
approach that should be utilized.'').
---------------------------------------------------------------------------
VIII. DETERMINATIVE DOCUMENTS
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: September 26, 2012.
Respectfully submitted,
/s/ Carl Willner.
-----------------------------------------------------------------------
Carl Willner (DC Bar No. 412841)
Michael J. Hirrel (DC Bar No. 940353)
U.S. Department of Justice
Antitrust Division
Telecommunications and Media
Enforcement Section
450 Fifth Street, NW., Suite 7000
Washington, DC 20530
(202) 514-5813.
Email: carl.willner@usdoj.gov
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
------------------------------------------------------------------------
)
UNITED STATES OF AMERICA, )
)
Plaintiff, )
)
v. ) Case no. 1:12-cv-
01598.
)
STANDARD PARKING CORPORATION, )
KCPC HOLDINGS, INC., and )
CENTRAL PARKING CORPORATION, )
)
Defendants. )
)
-------------------------------------
PROPOSED FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its
Complaint on September 26, 2012, the United States and Defendants
Standard Parking Corporation (``Standard'') and KCPC Holdings, Inc.,
and Central Parking Corporation, a wholly owned subsidiary of KCPC
Holdings, Inc. (both together and separately, ``Central''), by their
respective attorneys, having 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
an admission by any party regarding any issue of law or fact;
AND WHEREAS, Defendants agree 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 parking facilities, including agreements
concerning the operation of such facilities, by the Defendants to
ensure that competition is not substantially lessened;
AND WHEREAS, the United States requires Defendants to make
certain divestitures for the purpose of remedying the loss of
competition alleged in the Complaint;
AND WHEREAS, Defendants have represented to the United States
that the divestitures required below 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 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. Sec. 18.
II. DEFINITIONS
As used in this Final Judgment:
A. ``Acquirer'' or ``Acquirers'' mean the entity or entities to
whom the Defendants divest the Parking Facilities, or who succeed to
the Defendants' interests in any Parking Facility Agreement that is
transferred pursuant to this Final Judgment.
B. ``Standard'' means Defendant Standard Parking Corporation, a
Delaware corporation, with its headquarters in Chicago, Illinois,
and includes its successors and assigns, and its subsidiaries,
divisions, groups, affiliates, partnerships, joint ventures,
directors, officers, managers, agents, and employees.
C. ``Central'' means Defendant KCPC Holdings, Inc., a Delaware
corporation, with its headquarters in Mt. Kisco, New York, together
with its wholly owned subsidiary, Defendant Central Parking
Corporation, a Tennessee corporation with its headquarters in
Nashville, Tennessee, and includes their successors and assigns, and
their subsidiaries, divisions, groups, affiliates, partnerships,
joint ventures, directors, officers, managers, agents, and
employees.
D. ``Parking Facility Agreements'' means all agreements, whether
leases, management agreements or otherwise, related to the operation
or management of off-street parking facilities as listed in Schedule
A below, between or among the Defendants and the owners or agents of
the owners of the properties listed in Schedule A.
E. ``Parking Facilities'' means all Defendants' interests in the
properties listed in Schedule A, including the Parking Facility
Agreements for those properties, and all tangible and intangible
assets used by Defendants primarily in connection with those
properties, including, but not limited to: employment, customer or
other contracts; equipment and other property; the customer lists,
business accounts and records, and market research data for the
individual Parking Facilities; manuals and instructions provided to
employees; and other physical assets, associated with the
properties; but not assets, such as centralized systems software,
that are located outside the Parking Facilities and do not relate
primarily to the properties listed on Schedule A.
F. ``Divest'' or ``Divestiture'' means the transfer, sale or
assignment of Parking Facilities.
III. APPLICABILITY
A. This Final Judgment applies to the Defendants 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.
B. If, prior to complying with Section IV, Section V, and
Section VI of this Final Judgment, either Defendant sells all or
substantially all its assets or lesser business units that include
the Parking Facilities, it shall require the purchaser or
purchasers, as a condition of the sale, to be bound by the
provisions of this Final Judgment; however, Defendants need not
obtain such an agreement from an Acquirer of the assets divested
pursuant to this Final Judgment.
[[Page 60471]]
IV. DIVESTITURES
A. Defendants are ordered and directed, within ninety (90)
calendar days after the filing of the Complaint in this matter, or
within five (5) days after notice of entry of the Final Judgment by
the Court, whichever is later, to divest all their interests in the
Parking Facilities in a manner consistent with this Final Judgment
to an Acquirer or Acquirers acceptable to the United States in its
sole discretion. The requirement to divest to an Acquirer or
Acquirers is subject to the qualifications specified in Paragraph
IV.K below.
B. In accomplishing the divestitures ordered by this Final
Judgment, Defendants promptly shall make known, by usual and
customary means, the availability of the Parking Facilities to be
divested. Defendants shall inform any person making an inquiry that
the divestiture 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 Acquirers, subject to
customary confidentiality assurances, all information and documents
in Defendants' possession, custody or control relating to the
Parking Facilities customarily provided in a due diligence process,
except such information or documents subject to attorney-client
privilege or work-product doctrine. Defendants shall make available
such information to the United States at the same time that such
information is made available to any other person.
C. Defendants shall permit prospective Acquirers of the Parking
Facilities to have reasonable access to personnel and to any and all
environmental, zoning, building, and other permit documents and
information, and to make inspection of the Parking Facilities and of
any and all financial, operational, or other documents and
information customarily provided as part of a due diligence process.
D. Defendants shall use their best efforts to accomplish the
divestitures ordered by this Final Judgment as expeditiously as
possible. The United States, in its sole discretion, may agree to
one or more extensions of the time period for divestiture outlined
in Paragraph IV.A not to exceed ninety (90) calendar days in total,
and shall inform the Court in such circumstances.
E. Defendants shall provide the Acquirers and the United States
information concerning the personnel involved in the operation of
the Parking Facilities to enable the Acquirer to make offers of
employment. Defendants shall not interfere with any negotiations by
any Acquirer to employ any Standard or Central (or former Standard
or Central) employee whose primary responsibility concerns any
parking services business connected with the Parking Facilities.
Defendants shall remove any impediments that may deter these
employees from accepting such employment, including but not limited
to, non-compete agreements. Defendants will not seek to enforce such
non-compete agreements, nor will they seek to enforce any non-
compete agreements against any employee whose responsibilities at a
local or regional level include any Parking Facility and whose
employment terminates within six (6) months after the date the
transaction between the Defendants is completed.
F. Defendants shall warrant to the Acquirer(s) that each Parking
Facility will be operational on the date of divestiture.
G. Defendants shall not take any action, direct or indirect,
that will impede in any way the operation of the Parking Facilities,
or take any action, direct or indirect, that would impede the
divestiture of any Parking Facility.
H. Defendants shall warrant to Acquirer(s) that they did not
cause during the term of their operation or management of the
Parking Facility any condition that would constitute a material
defect in the environmental, zoning, or other permit pertaining to
the operation of the Parking Facility, and that following the sale
of the Parking Facility, Defendants will not undertake, directly or
indirectly, any challenges to the environmental, zoning, or other
permits relating to the operation of the Parking Facility.
I. Defendants may not enter into any agreement to acquire, lease
or operate, nor may they in any other manner acquire an interest in
ownership or management of, any Parking Facility for the term of
this Final Judgment, except that after three (3) years from the date
that a Parking Facility is divested, nothing in this Final Judgment
would prevent Defendants from acquiring a Parking Facility Agreement
directly from the owner of such Parking Facility or the owner's
agent through a process that does not involve a transaction with the
operator of such Parking Facility.
. J. Unless the United States otherwise consents in writing, and
subject to the qualification specified in Paragraph IV.K, the
divestitures pursuant to Section IV, or by the trustee appointed
pursuant to Section VI, shall include all of the Defendants'
interests in the Parking Facilities, and be accomplished by
divesting the Parking Facilities to an Acquirer or Acquirers in such
a way as to satisfy the United States, in its sole discretion, that
the Parking Facilities can and will be used by Acquirers as viable
ongoing off-street parking services businesses, and the divestitures
will remedy the harm alleged in the Complaint. The divestitures,
whether pursuant to Section IV or Section VI of this Final Judgment,
shall: (1) be made to an Acquirer or Acquirers that, in the United
States' sole judgment, has the intent and capability (including the
necessary managerial, operational, and financial capability) of
competing effectively with the defendants in providing off-street
parking services; and (2) shall be accomplished so as to satisfy the
United States, in its sole discretion, that none of the terms of any
agreement between Acquirers and Defendants gives Defendants the
ability to raise unreasonably the Acquirers' costs, to lower the
Acquirers' efficiency, or otherwise to interfere in the ability of
Acquirers to compete effectively.
K. As an alternative to divestiture to a specific Acquirer or
Acquirers, Defendants may, if contractually permitted to do so,
accomplish divestitures by either: 1) terminating Parking Facility
Agreements; or 2) allowing those Agreements to expire without
renewal. All such divestitures must be preceded by notice to the
affected facilities owners, and/or other persons with whom
Defendants are in contractual relationships to operate the Parking
Facilities, not less than sixty (60) days before the divestiture,
or, if longer, such notice as is required by the applicable Parking
Facility Agreements. With respect to all such divestitures,
Defendants must comply with Paragraphs D, E, F, G, H, and I of
Section IV. Divestitures accomplished under this paragraph must be
completed in the time frame set forth in Paragraph IV.A. In
addition, Defendants must comply with Paragraphs IV.B and IV.C to
the extent that Defendants must make available the specified
documents and information to every prospective successor in
operation of the Parking Facilities if so requested by the owners of
those properties, or by the owner's agents. At the time they give
such notice, Defendants shall provide those owners and agents a copy
of this Final Judgment, and inform them in writing of the applicable
parts of Paragraphs IV.B and IV.C.
L. Within thirty (30) 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 VI of this Final Judgment, Defendants shall deliver to
the United States an affidavit as to the fact and manner of
compliance with Sections IV, V, and VI of this Final Judgment. Each
such affidavit shall describe in detail all efforts to accomplish
the divestitures, including: 1) the name, address, and telephone
number of each person who, during the preceding thirty (30) calendar
days, 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 Parking Facilities; 2)
a description of all communications with any such person during that
period; and 3) a description of all other efforts Defendants have
taken to solicit an Acquirer or Acquirers for any and all Parking
Facilities, and to provide required information to prospective
Acquirers, including the limitations, if any, on such information.
Assuming that 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 provided by
Defendants, shall be made within fourteen (14) days of receipt of
such affidavit.
M. Beginning with the second affidavit delivered to the United
States on the sixtieth day from the filing of the Complaint, and
thereafter in every subsequent affidavit, Defendants shall identify
any Parking Facilities that Defendants anticipate they cannot
practically divest within thirty (30) days of the submission of the
affidavit, and the basis for that belief.
N. For any Parking Facility not divested (and for which no
definitive agreement to divest exists) within sixty (60) days of the
filing of the Complaint, the United States shall have the right to
require the Defendants to propose, within seven (7) days of
receiving notice, alternative divestitures sufficient to
[[Page 60472]]
preserve competition. The United States may in its sole discretion
accept or reject the alternative proposal. If the alternative is
accepted, the alternative divested facility or facilities shall
become a Parking Facility in place of the relevant Schedule A
Parking Facility for all purposes under this Final Judgment, and the
United States shall inform the Court of the change in a written
report. If the proposed alternative is not accepted by the United
States the Defendants must propose within five (5) days other
alternative divestitures until an alternative acceptable to the
United States is identified. The requirements of this paragraph will
not apply to any Parking Facility for which divestitures will be
accomplished under Paragraph IV.K.
O. Defendants shall keep records of all efforts made to preserve
and divest each Parking Facility until one year after all the
divestitures have been completed.
V. NOTICE OF PROPOSED DIVESTITURES
A Within two (2) business days following execution of a
definitive divestiture 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 VI 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 divestiture and 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 management or
leasehold interest in the Parking Facility to be divested, together
with full details of same.
B. Within fifteen (15) calendar days of receipt by the United
States of such notice, the United States may request from
Defendants, the proposed Acquirer or Acquirers, any third party, or
the trustee, additional information concerning the proposed
divestiture and the proposed Acquirer or Acquirers, or any other
potential Acquirer. Defendants and the trustee shall furnish any
additional information requested within fifteen (15) calendar days
of the receipt of the request, unless the parties shall otherwise
agree.
C. 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 Acquirer or Acquirers, any third party, or the trustee,
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 that it does not object, then the
divestiture may be consummated, subject only to Defendants' limited
right to object to the sale under Paragraph VI.C of this Final
Judgment. Absent written notice that the United States does not
object to the proposed divestiture, or upon objection by the United
States, a proposed divestiture under Section IV or Section VI may
not be consummated. Upon objection by Defendants under the provision
in Paragraph VI.C, a divestiture proposed under Section VI shall not
be consummated unless approved by the Court.
VI. APPOINTMENT OF TRUSTEE
A. If Defendants have not divested each of the Parking
Facilities by the time and in the manner specified in Section IV of
this Final Judgment, Defendants shall notify the United States of
that fact in writing at the time the period for the relevant
divestiture expires, identifying the Parking Facility or Facilities
that have not been divested. Upon application of the United States,
the Court shall appoint a trustee selected by the United States and
approved by the Court to effect the divestiture of any such Parking
Facilities, as designated by the United States.
B. After the appointment of a trustee becomes effective, only
the trustee shall have the right to divest the Parking Facilities
for which the divestiture period has expired. The trustee shall have
the power and authority to accomplish any and all divestitures of
Parking Facilities to an Acquirer or Acquirers acceptable to the
United States at such price and on such terms as are then obtainable
upon reasonable effort by the trustee, subject to the provisions of
Sections IV, V, and VI of this Final Judgment, and shall have such
other powers as the Court shall deem appropriate. Subject to
Paragraph VI.C of this Final Judgment, the trustee may hire at the
cost and expense of the Defendants any investment bankers,
attorneys, or other agents reasonably necessary in the judgment of
the trustee to assist in the divestitures or terminations, and such
professionals and agents shall be accountable solely to the trustee.
The trustee shall seek to accomplish the divestitures at the
earliest possible time.
C. Defendants shall not object to a divestiture 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 V of this
Final Judgment.
D. The trustee shall serve at the cost and expense of
Defendants, on such terms and conditions as the United States
approves. The trustee shall account for all monies derived from the
divestiture of each Parking Facility divested by the trustee. The
trustee shall also account for all costs and expenses incurred to
accomplish the divestitures. After approval by the Court of the
trustee's accounting, including any yet unpaid fees for its services
and those of any professionals and agents retained by the trustee,
any money remaining shall be paid to Defendants, or if the trustee's
fees and costs exceed the monies derived from the divestitures the
Defendants shall pay the difference, 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 facility and based on a fee arrangement
providing the trustee with an incentive based on the price and terms
of the divestiture, and the speed with which it is accomplished,
timeliness being paramount.
E. Defendants shall use their best efforts to assist the trustee
in accomplishing the required divestitures, including best efforts
to effect all necessary regulatory approvals, and the consents of
any owners or other persons whose consent may be needed for transfer
of a Parking Facility Agreement. 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 Parking Facilities to be divested,
and Defendants shall develop financial or other information relevant
to the businesses to be divested customarily provided in a due
diligence process as the trustee may reasonably request, subject to
customary confidentiality assurances. Defendants shall take no
action to interfere with or impede the trustee's accomplishment of
the divestitures.
F. 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 this 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
Parking Facilities to be divested, 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 divest the Parking
Facilities.
G. If the trustee has not accomplished any divestiture with
which it is charged within six months after it has been authorized
to divest the relevant Parking Facility, the trustee thereupon shall
promptly file 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 deems 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 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 Final Judgment which may, if necessary, include
extending the trust and the term of the trustee's appointment by a
period requested by the United States.
VII. ASSET PRESERVATION
A. Until the divestitures required by this Final Judgment have
been accomplished, Defendants shall take all steps necessary to
comply with the Asset Preservation Stipulation and Order entered by
this Court. Defendants shall take no action that would jeopardize
the divestitures ordered by this Court.
[[Page 60473]]
VIII. COMPLIANCE INSPECTION
A. For purposes of determining or securing compliance with the
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 authorized representatives of the
United States Department of Justice Antitrust Division (``Antitrust
Division''), including consultants and other persons retained by the
United States, shall, upon written request of an 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 the option of the United States, to require Defendants to
provide hard copy or electronic copies of, all books, ledgers,
accounts, records, data 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 an authorized representative of
the Assistant Attorney General in charge of the Antitrust Division,
Defendants shall submit such written reports or respond to written
interrogatories, under oath if requested, with respect 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
Paragraphs IV.L or Section VIII of this Final Judgment shall be
divulged by a representative of 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)(1)(G)
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)(1)(G) 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).
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this
Final Judgment to apply to this Court at any time for such further
orders and directions as may be necessary or appropriate to construe
or carry out this Final Judgment, to modify any of its provisions,
to enforce compliance, and to punish violations of its provisions.
X. FINANCING
Defendants shall not finance all or any part of any divestiture
made pursuant to Sections IV or VI of this Final Judgment.
XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire ten (10) years from the date of its entry.
XII. PUBLIC INTEREST
Entry of this Final Judgment is in the public interest. The
parties have complied with the requirements of the Antitrust
Procedures and Penalties Act, 15 U.S.C. Sec. 16, including making
copies available to the public of this Final Judgment, the
Competitive Impact Statement, and any comments thereon and the
United States's responses to comments. Based upon the record before
the Court, which includes the Competitive Impact Statement and any
comments and response to comments filed with the Court, entry of
this Final Judgment is in the public interest.
Dated .----------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16.
United States District Judge
SCHEDULE A
------------------------------------------------------------------------
City Facility
------------------------------------------------------------------------
Atlanta, GA.................. Central Facility CP6 at 3390 Peachtree
Rd. NE
Baltimore, MD................ Standard Facility SP5 at 400-404 Park
Ave.
Bellevue, WA................. Standard Facility SP7 at 600 106th Ave.
NE
Standard Facility SP8 at NE 8th St. &
106th Ave. NE
Boston, MA................... Central Facility CP38 at 377 Commercial
St.
Standard Facility SP2 at 660 Washington
St.
Bronx, NY.................... Central Facility CP4 at 70 East 162nd St.
Charlotte, NC................ Central Facility CP2 at 207 South Church
Central Facility CP5 at East West
University, 501 E. Trade St.
Central Facility CP8 at Gateway Village
Garage, 800 West Trade St.
Central Facility CP17 at 121 West Trade
St.
Chicago, IL.................. Central Facility CP12 at 172 W Madison
St.
Central Facility CP14 at 540 N State St.
Central Facility CP15 at 333 N Dearborn
St.
Central Facility CP27 at 816 N Clark St.
Central Facility CP28 at 938 W North Ave.
Central Facility CP29 at 1547 N Kingsbury
St.
Standard Facility SP13 at 1101 S State
St.
Standard Facility SP22 at 8 E 9th St.
Standard Facility SP73 at 640 W
Washington St.
Standard Facility SP151 at 3134 N Clark
St.
Cleveland, OH................ Central Facility CP1 at 708 St Clair Ave
Central Facility CP4 at 1801 East 12th
St.
Central Facility CP5 at 750 Vincent Ave
Columbus, OH................. Central Facility CP2 at 55 E Long St.
Central Facility CP5 at 21 E State St.
Central Facility CP8 at 45 E Spring St.
Central Facility CP13 at 107 S High St.
Dallas, TX................... Central Facility CP15 at 400 N. Akard St.
Central Facility CP18 at 811-817 Elm St.
Standard Facility SP4 at 300 N Akard St.
Denver, CO................... Central Facility CP4 at 1207 Cherokee St.
Central Facility CP10 at 1131 Lincoln St.
Central Facility CP13 at 1745 Sherman St.
Central Facility CP14 at 1550 Welton St.
Central Facility CP30 at 1735 Stout St.
[[Page 60474]]
Central Facility CP49 at El Jebel, 1750
Sherman St.
Central Facility CP58 at 1530 Cleveland
Pl.
Standard Facility SP14 at 1221 Sherman
St.
Standard Facility SP19 at 1820 California
St.
Standard Facility SP22 at 1515 Arapahoe
St.
Standard Facility SP25 at 1999 Broadway
Standard Facility SP29 at 621 17th St.
Standard Facility SP32 at 1899 Wynkoop
St.
Standard Facility SP33 at 1825 Welton St.
Standard Facility SP36 at 1543 Wazee St.
Standard Facility SP39 at 1999 Broadway
Fort Myers, FL............... Central Facility CP1 at 1530 Heitman St.
Fort Worth, TX............... Central Facility CP4 at 110 W 7th St.
Central Facility CP6 at 910 Houston St.
Central Facility CP7 at 1011 Calhoun St.
Central Facility CP9 at 1123 Calhoun St.
Central Facility CP22 at 315 E 9th St.
Central Facility CP23 at 921 Calhoun St.
Central Facility CP24 at 1105 Calhoun St.
Central Facility CP25 at 1115 Calhoun St.
Central Facility CP26 at 1024 Monroe St.
Hoboken, NJ.................. Central Facility CP7 at 50 Bloomfield St.
Houston, TX.................. Central Facility CP17 at 1001 McKinney
St.
Central Facility CP38 at 1300 Leeland
Ave.
Central Facility CP81 at 1111 Main St.
Standard Facility SP26 at 611 Clay St.
Kansas City, MO.............. Central Facility CP13 at 1100 Main St.
Central Facility CP15 at 117 W 9th St.
Central Facility CP30 at 920 Main St.
Standard Facility SP4 at 2300 Main St.
Standard Facility SP54 at 1221 Charlotte
St.
Standard Facility SP56 at 1600 Baltimore
Ave.
Los Angeles, CA.............. Central Facility CP7 at 707 Wilshire
Blvd.
Central Facility CP22 at 936 Maple Ave.
Central Facility CP27 at 905 Maple Ave.
Central Facility CP33 at 1019 S Broadway
Standard Facility SP5 at 7920 W Sunset
Blvd.
Standard Facility SP12 at 5757 Wilshire
Blvd.
Miami, FL (including Coral Central Facility CP22 at 800 Brickell
Gables, FL). Ave.
Standard Facility SP28 at 2 Alhambra
Plaza
Standard Facility SP30 at 2 Alhambra
Plaza
Milwaukee, WI................ Standard Facility SP6 at 1000 N Water St.
Standard Facility SP7 at 724 N 2nd St.
Standard Facility SP8 at 324 W Highland
Ave. OR
Central Facility C1 at 100 East Garage
Central Facility C9 at 1128 N 6th Street
Central Facility C13 at 1030 N 6th Street
Central Facility C22 at 330 E Kilbourn
Minneapolis, MN.............. Central Facility CP7 at 80 South 8th St.
Central Facility CP11 at 425 Park Ave.
Central Facility CP12 at 400 South 3rd
St.
Central Facility CP15 at 600 Hennepin
Ave.
Central Facility CP18 at 102-120 First
St. North
Nashville, TN................ Standard Facility SP1 at 158 4th Ave. N
New Orleans, LA.............. Central Facility CP2 at 400 Elysian
Fields Ave.
Central Facility CP8 at 1515 Poydras St.
Central Facility CP10 at 1555 Poydras St.
Central Facility CP14 at 222 Loyola Ave.
Central Facility CP16 at 1600 Cleveland
Ave.
Newark, NJ................... Standard Facility SP1 at 42 Mulberry St.
Standard Facility SP2 at 42 Mulberry St.
Philadelphia, PA............. Central Facility CP11 at 1717 Arch St.
Central Facility CP13 at 1616 Sansom St.
Central Facility CP18 at 1815 John F
Kennedy Blvd.
Central Facility CP23 at 1900 John F
Kennedy Blvd.
Phoenix, AR.................. Central Facility CP12 at 3300 N Central
Ave.
Rego Park, NY................ Standard Facility SP4 at Rego Center I &
II, 96-05 Queens Blvd.
Standard Facility SP5 at Rego Center I &
II, 95-05 Queens Blvd.
Richmond, VA................. Central Facility CP4 at 100 E Marshall
St.
Central Facility CP6 at S 4th St & E Main
St.
Central Facility CP9 at N 8th St & E
Marshall St.
Standard Facility SP9 at 1531 E Cary St.
[[Page 60475]]
Sacramento, CA............... Central Facility CP13 at RAS, 3161 L St.
Tampa, FL.................... Central Facility CP13 at Hyatt Regency
Tampa, Two Tampa City Center
Central Facility CP14 at 400 N Ashley Dr.
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[FR Doc. 2012-24336 Filed 10-2-12; 8:45 am]
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