81 FR 25420 - United States v. Leucadia National Corporation; Proposed Final Judgment and Competitive Impact Statement
DEPARTMENT OF JUSTICE
Antitrust Division Federal Register Volume 81, Issue 82 (April 28, 2016)
Antitrust Division
Federal Register Volume 81, Issue 82 (April 28, 2016)
| Page Range | 25420-25425 | |
| FR Document | 2016-09915 |
[Federal Register Volume 81, Number 82 (Thursday, April 28, 2016)] [Notices] [Pages 25420-25425] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-09915] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF JUSTICE Antitrust Division United States v. Leucadia National 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. Leucadia National Corporation, Civil Action No. 1:15-cv-01547-RDM. On September 22, 2015, the United States filed a Complaint alleging that Leucadia National Corporation (``Leucadia'') violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a, with respect to its acquisition of voting securities of KCG Holdings, Inc. The proposed Final Judgment, filed at the same time as the Complaint, requires Leucadia to pay a civil penalty of $240,000. Copies of the Complaint, proposed Final Judgment, and Competitive Impact Statement are available for inspection on the Antitrust Division's Web site at http://www.justice.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 Antitrust Division's Web site, filed with the Court, and, under certain circumstances, published in the Federal Register. Comments should be directed to Daniel P. Ducore, Special Attorney, c/o Federal Trade Commission, 600 Pennsylvania Avenue NW., CC-8416, Washington, DC 20580 (telephone: 202-326-2526; email: [email protected]). Patricia A. Brink, Director of Civil Enforcement. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, c/o Department of Justice, Washington, DC 20530, Plaintiff, v. LEUCADIA NATIONAL CORPORATION, 520 Madison Avenue, New York, NY 10022, Defendant. CASE NO.: 1:15-cv-01547 JUDGE: Randolph D. Moss FILED: 09/22/2015 COMPLAINT FOR CIVIL PENALTIES FOR FAILURE TO COMPLY WITH THE PREMERGER REPORTING AND WAITING REQUIREMENTS OF THE HART-SCOTT RODINO ACT The United States of America, Plaintiff, by its attorneys, acting under the direction of the Attorney General of the United States and at the request of the Federal Trade Commission, brings this civil antitrust action to obtain monetary relief in the form of civil penalties against Defendant Leucadia National Corporation (``Leucadia''). Plaintiff alleges as follows: NATURE OF THE ACTION 1. Leucadia violated the notice and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. 18a (``HSR Act'' or ``Act''), with respect to the acquisition of voting securities of KCG Holdings, Inc. (``KCG'') in July 2013. JURISDICTION AND VENUE 2. This Court has jurisdiction over the subject matter of this action pursuant to Section 7A(g) of the Clayton Act, 15 U.S.C. 18a(g), and pursuant to 28 U.S.C. 1331, 1337(a), 1345, and 1355 and over the Defendant by virtue of Defendant's consent, in the Stipulation relating hereto, to the maintenance of this action [[Page 25421]] and entry of the Final Judgment in this District. 3. Venue is properly based in this District by virtue of Defendant's consent, in the Stipulation relating hereto, to the maintenance of this action and entry of the Final Judgment in this District. THE DEFENDANT 4. Defendant Leucadia is a corporation organized under the laws of Delaware with its principal office and place of business at 520 Madison Avenue, New York, NY 10022. Leucadia is engaged in commerce, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. 18a(a)(1). At all times relevant to this complaint, Leucadia had sales or assets in excess of $141.8 million. Leucadia is the ultimate parent entity of Jeffries, LLC (``Jeffries''). OTHER ENTITIES 5. KCG is a corporation organized under the laws of Delaware with its principal place of business at 545 Washington Boulevard, Jersey City, NJ 07310. KCG is engaged in commerce, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. 18a(a)(1). At all times relevant to this complaint, KCG had sale or assets in excess of $14.2 million. 6. Goober Drilling LLC (``Goober'') is a limited liability company organized under the laws of Oklahoma with its principal place of business at 4905 S. Perkins Road, Stillwater, OK 74074. Goober is engaged in commerce, or in activities affecting commerce, within the meaning of Section 1 of the Clayton Act, 15 U.S.C. 12, and Section 7A(a)(1) of the Clayton Act, 15 U.S.C. 18a(a)(1). At all times relevant to this complaint, Goober had sales or assets in excess of $12 million. THE HART-SCOTT-RODINO ACT AND RULES 7. The HSR Act requires certain acquiring persons and certain persons whose voting securities or assets are acquired to file notifications with the federal antitrust agencies and to observe a waiting period before consummating certain acquisitions of voting securities or assets. 15 U.S.C. 18a(a) and (b). These notification and waiting period requirements apply to acquisitions that meet the HSR Act's thresholds, which are adjusted annually. During most of 2013, the HSR Act's reporting and waiting period requirements applied to most transactions that would result in the acquiring person holding more than $70.9 million, and all transactions (regardless of the size of the acquiring or acquired persons) where the acquiring person would hold more than $283.6 million of the acquired person's voting securities and/or assets, except for certain exempted transactions. 8. The HSR Act's notification and waiting period are intended to give the federal antitrust agencies prior notice of, and information about, proposed transactions. The waiting period is also intended to provide the federal antitrust agencies with an opportunity to investigate a proposed transaction and to determine whether to seek an injunction to prevent the consummation of a transaction that may violate the antitrust laws. 9. Pursuant to Section (d)(2) of the HSR Act, 15 U.S.C. 18a(d)(2), rules were promulgated to carry out the purposes of the HSR Act. 16 CFR 801-803 (``HSR Rules''). The HSR Rules, among other things, define terms contained in the HSR Act. 10. Pursuant to section 801.13(a)(1) of the HSR Rules, 16 CFR 801.13(a)(1), ``all voting securities of [an] issuer which will be held by the acquiring person after the consummation of an acquisition''-- including any held before the acquisition--are deemed held ``as a result of'' the acquisition at issue. 11. Pursuant to sections 801.13(a)(2) and 801.10(c)(1) of the HSR Rules, 16 CFR 801.13(a)(2) and. Sec. 801.10(c)(1), the value of publicly traded voting securities already held is the market price, defined to be the lowest closing price within 45 days prior to the subsequent acquisition. 12. Section 802.9 of the HSR Rules, 16 CFR 802.9, provides that acquisitions solely for the purpose of investment are exempt from the notification and waiting period requirement if the acquirer will hold ten percent or less of the issuer's voting securities. 13. Section 802.64 of the HSR Rules, 16 CFR 802.64, provides generally that certain defined institutional investors, including broker-dealers, may acquire up to 15% of the voting securities of an issuer without filing under the HSR Act and observing the waiting period, if the voting securities are acquired solely for the purpose of investment. Section (c)(1) of Rule 802.64 provides, however, that ``no acquisition of voting securities of an institutional investor of the same type as any entity included within the acquiring person shall be exempt under this section.'' 14. Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1), provides that any person, or any officer, director, or partner thereof, who fails to comply with any provision of the HSR Act is liable to the United States for a civil penalty for each day during which such person is in violation. For violations occurring on or after February 10, 2009, the maximum amount of civil penalty is $16,000 per day, pursuant to the Debt Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001(s) (amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461 note), and Federal Trade Commission Rule 1.98, 16 CFR 1.98, 74 FR 857 (Jan. 9, 2009). DEFENDANT'S PRIOR VIOLATION OF THE HSR ACT 15. On August 15, 2007, Leucadia acquired 8% of the non-corporate interests in Goober. At the time of the acquisition, Leucadia already held 42% of the non-corporate interests of Goober. As a result of the August 15 transaction, Leucadia acquired control of Goober as defined in the HSR Rules. The value of the membership interests held by Leucadia after the acquisition was approximately $125 million. 16. Although it was required to do so, Leucadia did not file under the HSR Act prior to acquiring Goober membership interests on August 15, 2007. 17. On October 24, 2008, Leucadia made a corrective filing under the HSR Act for the August 15, 2007, acquisition of Goober non- corporate interests. In a letter accompanying the corrective filing, Leucadia acknowledged that the transaction was reportable under the HSR Act, but asserted that the failure to file and observe the waiting period was inadvertent. 18. On January 7, 2009, the Premerger Notification Office of the Federal Trade Commission sent a letter to Leucadia indicating that it would not recommend a civil penalty action regarding the August 15, 2007 Goober acquisition, but stating that Leucadia ``still must bear responsibility for compliance with the Act. In addition, it is accountable for instituting an effective program to ensure full compliance with the Act's requirements.'' VIOLATION 19. On July 1, 2013, Leucadia, through Jeffries, acquired 16,467,774 shares of KCG voting securities. The KCG voting securities held as a result of the acquisition by Leucadia represented approximately 13.5% of KCG's outstanding voting securities and were valued at approximately $173 million. 20. Prior to acquiring the KCG voting securities, Leucadia sought advice from experienced HSR counsel as to whether the transaction was subject to the HSR reporting requirements. Counsel [[Page 25422]] concluded that the transaction was exempt under Section 802.64 of the HSR Rules because Jeffries was a broker-dealer within the meaning of the HSR Rules, Jeffries was acquiring the voting securities solely for the purpose of investment, and KCG was not a broker-dealer within the meaning of the HSR Rules. 21. KCG was a broker-dealer within the meaning of the HSR Rules and the exemption under Section 802.64 therefore did not apply. Leucadia was required to observe the notification and waiting period requirements of HSR prior to Jeffries acquiring the KCG voting securities. 24. On September 19, 2014, Leucadia made a corrective filing under the HSR Act for the KCG voting securities it had acquired on July 1, 2013. In a letter accompanying the corrective filing, Leucadia acknowledged that the acquisition was reportable under the HSR Act. The HSR waiting period expired on October 20, 2014. 25. Leucadia was in continuous violation of the HSR Act from July 1, 2013, when it acquired the KCG voting securities that resulted in it holding more than ten percent of the outstanding KCG voting securities valued in excess of the HSR Act's $70.9 million size-of-transaction threshold, through October 20, 2014, when the waiting period expired. REQUESTED RELIEF WHEREFORE, Plaintiff requests: 1. That the Court adjudge and decree that Defendant Leucadia's acquisition of KCG voting securities on July 1, 2013, was a violation of the HSR Act, 15 U.S.C. 18a; and that Defendant Leucadia was in violation of the HSR Act each day from July 1, 2013, through October 20, 2014. 2. That the Court order Defendant Leucadia to pay to the United States an appropriate civil penalty as provided by the HSR Act. 15 U.S.C. 18a(g)(1), the Debt Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001(s) (amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461 note), and Federal Trade Commission Rule 1.98, 16 CFR 1.98, 74 FR 857 (Jan. 9, 2009). 3. That the Court order such other and further relief as the Court may deem just and proper. 4. That the Court award the Plaintiff its costs of this suit. Dated: September 22, 2015 FOR THE PLAINTIFF UNITED STATES OF AMERICA: ----------------------------------------------------------------------- /s/ William J. Baer DC Bar No. 324723 Assistant Attorney General Department of Justice Antitrust Division Washington, DC 20530 ----------------------------------------------------------------------- /s/ Daniel P. Ducore DC Bar No. 933721 Special Attorney ----------------------------------------------------------------------- /s/ Roberta S. Baruch DC Bar No. 269266 Special Attorney ----------------------------------------------------------------------- /s/ Kenneth A. Libby Special Attorney ----------------------------------------------------------------------- /s/ Jennifer Lee Special Attorney Federal Trade Commission Washington, DC 20580 (202) 326-2694 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, Plaintiff, v. LEUCADIA NATIONAL CORPORATION, Defendant. CASE NO.: 1:15-cv-01547 JUDGE: Randolph D. Moss FILED: 04/20/2016 COMPETITIVE IMPACT STATEMENT The United States, pursuant to the Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b)-(h), files this Competitive Impact Statement to set forth the information necessary to enable the Court and the public to evaluate the proposed Final Judgment that would terminate this civil antitrust proceeding. I. NATURE AND PURPOSE OF THIS PROCEEDING On September 22, 2015, the United States filed a Complaint against Defendant Leucadia National Corporation (``Leucadia''), related to Leucadia's acquisition of voting securities of KCG Holdings, Inc. (``KCG'') in 2013. The Complaint alleges that Leucadia violated Section 7A of the Clayton Act, 15 U.S.C. 18a, commonly known as the Hart-Scott- Rodino Antitrust Improvements Act of 1976 (the ``HSR Act''). The HSR Act states that ``no person shall acquire, directly or indirectly, any voting securities of any person'' exceeding certain thresholds until that person has filed pre-acquisition notification and report forms with the Department of Justice and the Federal Trade Commission (collectively, the ``federal antitrust agencies'' or ``agencies'') and the post-filing waiting period has expired.\1\ The purpose of the notification and waiting period is to allow the agencies an opportunity to conduct an antitrust review of proposed transactions before they are consummated. --------------------------------------------------------------------------- \1\ 15 U.S.C. 18a(a). --------------------------------------------------------------------------- The Complaint alleges that Leucadia, via an entity it controls, acquired voting securities of KCG in excess of the statutory threshold ($70.9 million at the time of acquisition) without making the required pre-acquisition filings with the agencies and without observing the waiting period, and that Leucadia and KCG each met the statutory size of person threshold at the time of the acquisition (Leucadaia and KCG had sales or assets in excess of $141.8 million and $14.2 million, respectively). The Complaint further alleges that Leucadia previously violated the HSR Act's notification requirements when it acquired shares in Goober Drilling LLC (``Goober'') in 2007. On August 15, 2007, Leucadia acquired 8% of the non-corporate interests in Goober which, when combined with its then existing interest in Goober, gave Leucadia control of Goober as defined in the HSR Rules. Although it was required to do so, Leucadia did not file under the HSR Act prior to acquiring Goober membership interests on August 15th. On October 24, 2008, Leucadia made a corrective filing under the HSR Act for the August 15, 2007, acquisition of Goober non-corporate interests. In a letter accompanying the corrective filing, Leucadia acknowledged that the transaction was reportable under the HSR Act, but asserted that the failure to file and observe the waiting period was inadvertent. On January 7, 2009, the Premerger Notification Office of the Federal Trade Commission sent a letter to Leucadia indicating that it would not recommend a civil penalty action regarding the 2007 Goober acquisition, but stated that Leucadia would be ``accountable for instituting an effective program to ensure full compliance with the [HSR] Act's requirements.'' \2\ --------------------------------------------------------------------------- \2\ Complaint, ] 18. --------------------------------------------------------------------------- At the same time the Complaint was filed, the United States also filed a Stipulation and proposed Final Judgment that eliminates the need for a trial in this case. The proposed Final Judgment is designed to deter Leucadia's HSR Act violations. Under the proposed Final Judgment, Leucadia must pay a civil penalty in the amount of $240,000. The United States and the Defendant have stipulated that the proposed Final Judgment may be entered after compliance with the APPA, unless the [[Page 25423]] United States first withdraws its consent. Entry of the proposed Final Judgment would terminate this case, except that the Court would retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final Judgment and punish violations thereof. Entry of this judgment would not constitute evidence against, or an admission by, any party with respect to any issue of fact or law involved in the case and is conditioned upon the Court's finding that entry is in the public interest. II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATIONS OF THE ANTITRUST LAWS A. Leucadia and the Acquisitions of KCG Voting Securities Leucadia is a holding company with a market capitalization of approximately $8 billion. Through its subsidiaries, it engages in mining and drilling services, telecommunications, healthcare services, manufacturing, banking and lending, real estate, and winery businesses. Currently, Leucadia's largest holding is Jeffries Group, a global investment bank that provides clients with capital markets and financial advisory services, including institutional brokerage. KCG is a global financial services firm engaging in market making, high-frequency trading, electronic execution, and institutional sales and trade. On July 1, 2013, Leucadia, through Jeffries, acquired 16,467,774 shares of KCG voting securities. Leucadia's voting securities represented approximately 13.5% of KCG's outstanding voting securities and were valued at approximately $173 million. This exceeded the HSR Act's $70.9 million size-of-transaction threshold then in effect. Prior to acquiring the Leucadia voting securities, Leucadia sought advice from experienced HSR counsel as to whether the transaction was subject to the HSR reporting requirements. Counsel concluded that the transaction was exempt under Section 802.64 of the HSR Rules because Jeffries was a broker-dealer within the meaning of the HSR Rules, Jeffries was acquiring the voting securities solely for the purpose of investment, and KCG was not a broker-dealer within the meaning of the HSR Rules. KCG was, however, a broker-dealer within the meaning of the HSR Rules and the exemption under Section 802.64 therefore did not apply. Leucadia was required to observe the notification and waiting period requirements of HSR prior to Jeffries acquiring the KCG voting securities. After discovering the missed filing, Leucadia promptly made a corrective filing on September 19, 2014. The waiting period expired on October 20, 2014. B. Leucadia's Violation of HSR As alleged in the Complaint, Leucadia acquired in excess of the $70.9 million in voting securities of KCG without complying with the pre-acquisition notification and waiting period requirements of the HSR Act. Leucadia's failure to comply undermined the statutory scheme and the purpose of the HSR Act. Leucadia's September 19, 2014, corrective filing included a letter acknowledging that the acquisitions were reportable under the HSR Act. III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT The proposed Final Judgment imposes a $240,000 civil penalty designed to deter this Defendant and others from violating the HSR Act. The United States adjusted the penalty downward from the maximum because the violation was unintentional, the Defendant promptly self- reported the violation after discovery, and the Defendant is willing to resolve the matter by consent decree and avoid prolonged investigation and litigation. The penalty also reflects Defendant's previous violation of the HSR Act, as well as Defendant's good faith efforts to comply with HSR by seeking advice from counsel prior to the acquisition. The United States expects this penalty to deter Leucadia and others from violating the HSR Act. The relief will have a beneficial effect on competition because the agencies will be properly notified of acquisitions, in accordance with the law. At the same time, the penalty will not have any adverse effect on competition. IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS There is no private antitrust action for HSR Act violations; therefore, entry of the proposed Final Judgment will neither impair nor assist the bringing of any private antitrust action. V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT The United States and Defendant have stipulated that the proposed Final Judgment may be entered by this Court after compliance with the provision of the APPA, provided that the United States has not withdrawn its consent. The APPA conditions entry of the decree upon this 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, which remains free to withdraw its consent to the proposed Final Judgment at any time prior to entry. The comments and the response of the United States will be filed with the Court. 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: Daniel P. Ducore, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue NW., CC- 8416, Washington, DC 20580, Email: [email protected]. The proposed Final Judgment provides that this Court retains jurisdiction over this action, and the parties may apply to this Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment. VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT As an alternative to the proposed Final Judgment, the United States considered pursuing a full trial on the merits against the Defendant. The United States is satisfied, however, that the proposed relief is an appropriate remedy in this matter. Given the facts of this case, including the Defendant's self-reporting of the violation and willingness to settle quickly, the United States is satisfied that the proposed civil penalty is sufficient to address the violation alleged in the Complaint and to deter violations by similarly situated entities in the future, without the time, expense, and uncertainty of a full trial on the merits. VII. STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL JUDGMENT The APPA requires that remedies contained in proposed consent judgments in antitrust cases brought by the United States be subject to a sixty [[Page 25424]] (60) 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. 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. 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 (D.C. 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, U.S. Airways Group, Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (noting the court has broad discretion of the adequacy of the relief at issue); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. Dist. LEXIS 84787, 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) (quoting 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 U.S. Airways, 38 F. Supp. 3d at 75 (noting that a court should not reject the proposed remedies because it believes others are preferable); 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'''). --------------------------------------------------------------------------- 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 U.S. Airways, 38 F. Supp. 3d at 76 (noting that room must be made for the government to grant concessions in the negotiation process for settlements (citing Microsoft, 56 F.3d at 1461)); 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 U.S. Airways, 38 F. Supp. 3d at 75 (noting that the court must simply determine whether there is a factual foundation for the government's decisions such that its conclusions regarding the proposed settlements are reasonable); 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 [[Page 25425]] 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); see also U.S. Airways, 38 F. Supp. 3d at 76 (indicating that a court is not required to hold an evidentiary hearing or to permit intervenors as part of its review under the Tunney Act). 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 Sen. 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 by precedent and the nature of Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11.\5\ A court can make its public interest determination based on the competitive impact statement and response to public comments alone. U.S. Airways, 38 F. Supp. 3d at 76. --------------------------------------------------------------------------- \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., No. 73-CV-681-W-1, 1977-1 Trade Cas. (CCH) ] 61,508, at 71,980, *22 (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, 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. Date: April 20, 2016 Respectfully Submitted, __/s/ Kenneth A. Libby Kenneth A. Libby Special Attorney IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA, c/o Department of Justice, Washington, D.C. 20530, Plaintiff, v. LEUCADIA NATIONAL CORPORATION, 520 Madison Avenue, New York, NY 10022, Defendant. CASE NO.: 1:15-cv-01547 JUDGE: Randolph D. Moss FILED: 09/22/2015 FINAL JUDGMENT Plaintiff, the United States of America, having commenced this action by filing its Complaint herein for violation of Section 7A of the Clayton Act, 15 U.S.C. 18a, commonly known as the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and Plaintiff and Defendant Leucadia National Corporation, by their respective attorneys, having consented to the entry of this Final Judgment without trial or adjudication of any issue of fact or law herein, and without this Final Judgment constituting any evidence against or an admission by the Defendant with respect to any such issue: Now, therefore, before the taking of any testimony and without trial or adjudication of any issue of fact or law herein, and upon the consent of the parties hereto, it is hereby Ordered, Adjudged, and Decreed as follows: I. The Court has jurisdiction of the subject matter of this action and of the Plaintiff and the Defendant. The Complaint states a claim upon which relief can be granted against the Defendant under Section 7A of the Clayton Act, 15 U.S.C. 18a. II. Judgment is hereby entered in this matter in favor of Plaintiff United States of America and against Defendant, and, pursuant to Section 7A(g)(1) of the Clayton Act, 15 U.S.C. 18a(g)(1), the Debt Collection Improvement Act of 1996, Pub. L. 104-134 31001(s) (amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. 2461), and Federal Trade Commission Rule 1.98, 16 CFR 1.98, 61 FR 54549 (Oct. 21, 1996), and 74 FR 857 (Jan. 9, 2009), Defendant Leucadia National Corporation is hereby ordered to pay a civil penalty in the amount of two hundred forty thousand dollars ($240,000). Payment of the civil penalty ordered hereby shall be made by wire transfer of funds or cashier's check. If the payment is made by wire transfer, Defendant shall contact Janie Ingalls of the Antitrust Division's Antitrust Documents Group at (202) 514-2481 for instructions before making the transfer. If the payment is made by cashier's check, the check shall be made payable to the United States Department of Justice and delivered to: Janie Ingalls, United States Department of Justice, Antitrust Division, Antitrust Documents Group, 450 5th Street NW., Suite 1024, Washington, DC 20530. Defendant shall pay the full amount of the civil penalty within thirty (30) days of entry of this Final Judgment. In the event of a default or delay in payment, interest at the rate of eighteen (18) percent per annum shall accrue thereon from the date of the default or delay to the date of payment. III. Each party shall bear its own costs of this action. IV. Entry of this Final Judgment is in the public interest. Dated: _____ ----------------------------------------------------------------------- United States District Judge [FR Doc. 2016-09915 Filed 4-27-16; 8:45 am] BILLING CODE 4410-11-P
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ONRR-designated areas May 2013 Jun 2013 Jul 2013 Aug 2013
Turtle Mountain Reservation ........................................................................... 5.05 4.97 4.24 4.14
ONRR-designated areas Sep 2013 Oct 2013 Nov 2013 Dec 2013
Blackfeet Reservation ...................................................................................... 3.13 2.81 2.99 2.34
Fort Belknap .................................................................................................... 4.77 4.75 4.89 5.10
Fort Berthold .................................................................................................... 4.24 4.09 4.37 4.83
Fort Peck Reservation ..................................................................................... 4.70 4.31 3.52 3.10
Navajo Allotted Leases in the Navajo Reservation ......................................... 4.14 3.96 3.80 4.24
Turtle Mountain Reservation ........................................................................... 4.49 4.06 4.00 3.63
For information on how to report DEPARTMENT OF JUSTICE Commission, 600 Pennsylvania Avenue
additional royalties due to major portion NW., CC–8416, Washington, DC 20580
prices, please refer to our Dear Payor Antitrust Division (telephone: 202–326–2526; email:
letter dated December 1, 1999, on the dducore@ftc.gov).
ONRR Web site at http://www.onrr.gov/ United States v. Leucadia National
Corporation; Proposed Final Judgment Patricia A. Brink,
ReportPay/PDFDocs/991201.pdf.
and Competitive Impact Statement Director of Civil Enforcement.
Dated: April 6, 2016.
Gregory J. Gould, Notice is hereby given pursuant to the IN THE UNITED STATES DISTRICT
Director, Office of Natural Resources Antitrust Procedures and Penalties Act, COURT FOR THE DISTRICT OF
Revenue. 15 U.S.C. 16(b)–(h), that a proposed COLUMBIA
[FR Doc. 2016–09905 Filed 4–27–16; 8:45 am] Final Judgment, Stipulation, and UNITED STATES OF AMERICA, c/o
BILLING CODE 4335–30–P Competitive Impact Statement have Department of Justice, Washington, DC
been filed with the United States 20530, Plaintiff, v. LEUCADIA NATIONAL
District Court for the District of CORPORATION, 520 Madison Avenue, New
DEPARTMENT OF THE INTERIOR Columbia in United States of America v. York, NY 10022, Defendant.
Leucadia National Corporation, Civil CASE NO.: 1:15–cv–01547 JUDGE: Randolph
Office of Natural Resources Revenue Action No. 1:15–cv–01547–RDM. On D. Moss FILED: 09/22/2015
[Docket No. ONRR–2016–0001; DS63610000 September 22, 2015, the United States COMPLAINT FOR CIVIL PENALTIES
DR2000000.CH7000 167D0102R2] filed a Complaint alleging that Leucadia FOR FAILURE TO COMPLY WITH THE
National Corporation (‘‘Leucadia’’) PREMERGER REPORTING AND
Temporary Physical Address Change violated the premerger notification and WAITING REQUIREMENTS OF THE
for General Ledger Team waiting period requirements of the Hart- HART-SCOTT RODINO ACT
AGENCY: Office of Natural Resources Scott-Rodino Antitrust Improvements
Act of 1976, 15 U.S.C. 18a, with respect The United States of America,
Revenue, Interior. Plaintiff, by its attorneys, acting under
to its acquisition of voting securities of
ACTION: Notice. the direction of the Attorney General of
KCG Holdings, Inc. The proposed Final
Judgment, filed at the same time as the the United States and at the request of
SUMMARY: ONRR is temporarily the Federal Trade Commission, brings
changing its physical address for courier Complaint, requires Leucadia to pay a
civil penalty of $240,000. this civil antitrust action to obtain
services and personal deliveries. monetary relief in the form of civil
DATES: Effective April 13, 2016. Copies of the Complaint, proposed
penalties against Defendant Leucadia
FOR FURTHER INFORMATION CONTACT: Final Judgment, and Competitive Impact
National Corporation (‘‘Leucadia’’).
Darrel Redford, Supervisory Statement are available for inspection
Plaintiff alleges as follows:
Accountant, at (303) 231–3085, or email on the Antitrust Division’s Web site at
at Darrel.Redford@onrr.gov http://www.justice.gov/atr and at the NATURE OF THE ACTION
Office of the Clerk of the United States 1. Leucadia violated the notice and
SUPPLEMENTARY INFORMATION: Effective
District Court for the District of waiting period requirements of the Hart-
April 13, 2016, all courier services and
Columbia. Copies of these materials may Scott-Rodino Antitrust Improvements
personal deliveries should be made to
be obtained from the Antitrust Division Act of 1976, 15 U.S.C. 18a (‘‘HSR Act’’
ONRR at the Denver Federal Center,
upon request and payment of the or ‘‘Act’’), with respect to the
Building 53, entrance E–20. Visitor
copying fee set by Department of Justice acquisition of voting securities of KCG
parking is available near entrance E–20,
regulations. Holdings, Inc. (‘‘KCG’’) in July 2013.
with a phone to request entry. Call
Armando Salazar at (303) 231–3585 or Public comment is invited within 60
days of the date of this notice. Such JURISDICTION AND VENUE
Janet Giron at (303) 231–3088 to gain
comments, including the name of the 2. This Court has jurisdiction over the
mstockstill on DSK3G9T082PROD with NOTICES
entrance.
submitter, and responses thereto, will be subject matter of this action pursuant to
Dated: April 12, 2016. posted on the Antitrust Division’s Web Section 7A(g) of the Clayton Act, 15
Gregory J. Gould, site, filed with the Court, and, under U.S.C. 18a(g), and pursuant to 28 U.S.C.
Director, Office of Natural Resources certain circumstances, published in the 1331, 1337(a), 1345, and 1355 and over
Revenue. Federal Register. Comments should be the Defendant by virtue of Defendant’s
[FR Doc. 2016–09906 Filed 4–27–16; 8:45 am] directed to Daniel P. Ducore, Special consent, in the Stipulation relating
BILLING CODE 4335–30–P Attorney, c/o Federal Trade hereto, to the maintenance of this action
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![Federal Register / Vol. 81, No. 82 / Thursday, April 28, 2016 / Notices 25421
and entry of the Final Judgment in this the acquiring person holding more than with any provision of the HSR Act is
District. $70.9 million, and all transactions liable to the United States for a civil
3. Venue is properly based in this (regardless of the size of the acquiring penalty for each day during which such
District by virtue of Defendant’s or acquired persons) where the person is in violation. For violations
consent, in the Stipulation relating acquiring person would hold more than occurring on or after February 10, 2009,
hereto, to the maintenance of this action $283.6 million of the acquired person’s the maximum amount of civil penalty is
and entry of the Final Judgment in this voting securities and/or assets, except $16,000 per day, pursuant to the Debt
District. for certain exempted transactions. Collection Improvement Act of 1996,
8. The HSR Act’s notification and Pub. L. 104–134, § 31001(s) (amending
THE DEFENDANT
waiting period are intended to give the the Federal Civil Penalties Inflation
4. Defendant Leucadia is a federal antitrust agencies prior notice of, Adjustment Act of 1990, 28 U.S.C. 2461
corporation organized under the laws of and information about, proposed note), and Federal Trade Commission
Delaware with its principal office and transactions. The waiting period is also Rule 1.98, 16 CFR 1.98, 74 FR 857 (Jan.
place of business at 520 Madison intended to provide the federal antitrust 9, 2009).
Avenue, New York, NY 10022. Leucadia agencies with an opportunity to
is engaged in commerce, or in activities investigate a proposed transaction and DEFENDANT’S PRIOR VIOLATION OF
affecting commerce, within the meaning to determine whether to seek an THE HSR ACT
of Section 1 of the Clayton Act, 15 injunction to prevent the consummation 15. On August 15, 2007, Leucadia
U.S.C. 12, and Section 7A(a)(1) of the of a transaction that may violate the acquired 8% of the non-corporate
Clayton Act, 15 U.S.C. 18a(a)(1). At all antitrust laws. interests in Goober. At the time of the
times relevant to this complaint, 9. Pursuant to Section (d)(2) of the acquisition, Leucadia already held 42%
Leucadia had sales or assets in excess of HSR Act, 15 U.S.C. 18a(d)(2), rules were of the non-corporate interests of Goober.
$141.8 million. Leucadia is the ultimate promulgated to carry out the purposes As a result of the August 15 transaction,
parent entity of Jeffries, LLC (‘‘Jeffries’’). of the HSR Act. 16 CFR 801–803 (‘‘HSR Leucadia acquired control of Goober as
Rules’’). defined in the HSR Rules. The value of
OTHER ENTITIES The HSR Rules, among other things, the membership interests held by
5. KCG is a corporation organized define terms contained in the HSR Act. Leucadia after the acquisition was
under the laws of Delaware with its 10. Pursuant to section 801.13(a)(1) of approximately $125 million.
principal place of business at 545 the HSR Rules, 16 CFR 801.13(a)(1), ‘‘all 16. Although it was required to do so,
Washington Boulevard, Jersey City, NJ voting securities of [an] issuer which Leucadia did not file under the HSR Act
07310. KCG is engaged in commerce, or will be held by the acquiring person prior to acquiring Goober membership
in activities affecting commerce, within after the consummation of an interests on August 15, 2007.
the meaning of Section 1 of the Clayton acquisition’’—including any held before 17. On October 24, 2008, Leucadia
Act, 15 U.S.C. 12, and Section 7A(a)(1) the acquisition—are deemed held ‘‘as a made a corrective filing under the HSR
of the Clayton Act, 15 U.S.C. 18a(a)(1). result of’’ the acquisition at issue. Act for the August 15, 2007, acquisition
At all times relevant to this complaint, 11. Pursuant to sections 801.13(a)(2) of Goober non-corporate interests. In a
KCG had sale or assets in excess of and 801.10(c)(1) of the HSR Rules, 16 letter accompanying the corrective
$14.2 million. CFR 801.13(a)(2) and. § 801.10(c)(1), the filing, Leucadia acknowledged that the
6. Goober Drilling LLC (‘‘Goober’’) is value of publicly traded voting transaction was reportable under the
a limited liability company organized securities already held is the market HSR Act, but asserted that the failure to
under the laws of Oklahoma with its price, defined to be the lowest closing file and observe the waiting period was
principal place of business at 4905 S. price within 45 days prior to the inadvertent.
Perkins Road, Stillwater, OK 74074. subsequent acquisition. 18. On January 7, 2009, the Premerger
Goober is engaged in commerce, or in 12. Section 802.9 of the HSR Rules, 16 Notification Office of the Federal Trade
activities affecting commerce, within CFR 802.9, provides that acquisitions Commission sent a letter to Leucadia
the meaning of Section 1 of the Clayton solely for the purpose of investment are indicating that it would not recommend
Act, 15 U.S.C. 12, and Section 7A(a)(1) exempt from the notification and a civil penalty action regarding the
of the Clayton Act, 15 U.S.C. 18a(a)(1). waiting period requirement if the August 15, 2007 Goober acquisition, but
At all times relevant to this complaint, acquirer will hold ten percent or less of stating that Leucadia ‘‘still must bear
Goober had sales or assets in excess of the issuer’s voting securities. responsibility for compliance with the
$12 million. 13. Section 802.64 of the HSR Rules, Act. In addition, it is accountable for
16 CFR 802.64, provides generally that instituting an effective program to
THE HART-SCOTT-RODINO ACT AND certain defined institutional investors,
RULES ensure full compliance with the Act’s
including broker-dealers, may acquire requirements.’’
7. The HSR Act requires certain up to 15% of the voting securities of an
acquiring persons and certain persons issuer without filing under the HSR Act VIOLATION
whose voting securities or assets are and observing the waiting period, if the 19. On July 1, 2013, Leucadia, through
acquired to file notifications with the voting securities are acquired solely for Jeffries, acquired 16,467,774 shares of
federal antitrust agencies and to observe the purpose of investment. Section (c)(1) KCG voting securities. The KCG voting
a waiting period before consummating of Rule 802.64 provides, however, that securities held as a result of the
certain acquisitions of voting securities ‘‘no acquisition of voting securities of an acquisition by Leucadia represented
or assets. 15 U.S.C. 18a(a) and (b). These institutional investor of the same type as approximately 13.5% of KCG’s
mstockstill on DSK3G9T082PROD with NOTICES
notification and waiting period any entity included within the acquiring outstanding voting securities and were
requirements apply to acquisitions that person shall be exempt under this valued at approximately $173 million.
meet the HSR Act’s thresholds, which section.’’ 20. Prior to acquiring the KCG voting
are adjusted annually. During most of 14. Section 7A(g)(1) of the Clayton securities, Leucadia sought advice from
2013, the HSR Act’s reporting and Act, 15 U.S.C. 18a(g)(1), provides that experienced HSR counsel as to whether
waiting period requirements applied to any person, or any officer, director, or the transaction was subject to the HSR
most transactions that would result in partner thereof, who fails to comply reporting requirements. Counsel
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![25422 Federal Register / Vol. 81, No. 82 / Thursday, April 28, 2016 / Notices
concluded that the transaction was William J. Baer period has expired.1 The purpose of the
exempt under Section 802.64 of the HSR DC Bar No. 324723 notification and waiting period is to
Rules because Jeffries was a broker- Assistant Attorney General allow the agencies an opportunity to
dealer within the meaning of the HSR Department of Justice conduct an antitrust review of proposed
Antitrust Division
Rules, Jeffries was acquiring the voting Washington, DC 20530
transactions before they are
securities solely for the purpose of lllllllllllllllllllll consummated.
investment, and KCG was not a broker- /s/ The Complaint alleges that Leucadia,
dealer within the meaning of the HSR Daniel P. Ducore via an entity it controls, acquired voting
Rules. DC Bar No. 933721 securities of KCG in excess of the
21. KCG was a broker-dealer within Special Attorney statutory threshold ($70.9 million at the
the meaning of the HSR Rules and the lllllllllllllllllllll time of acquisition) without making the
exemption under Section 802.64 /s/ required pre-acquisition filings with the
therefore did not apply. Leucadia was Roberta S. Baruch agencies and without observing the
DC Bar No. 269266 waiting period, and that Leucadia and
required to observe the notification and Special Attorney
waiting period requirements of HSR KCG each met the statutory size of
lllllllllllllllllllll
prior to Jeffries acquiring the KCG /s/
person threshold at the time of the
voting securities. Kenneth A. Libby acquisition (Leucadaia and KCG had
24. On September 19, 2014, Leucadia Special Attorney sales or assets in excess of $141.8
made a corrective filing under the HSR lllllllllllllllllllll million and $14.2 million, respectively).
Act for the KCG voting securities it had /s/ The Complaint further alleges that
acquired on July 1, 2013. In a letter Jennifer Lee Leucadia previously violated the HSR
accompanying the corrective filing, Special Attorney Act’s notification requirements when it
Leucadia acknowledged that the Federal Trade Commission acquired shares in Goober Drilling LLC
acquisition was reportable under the Washington, DC 20580 (‘‘Goober’’) in 2007. On August 15,
(202) 326–2694 2007, Leucadia acquired 8% of the non-
HSR Act. The HSR waiting period
expired on October 20, 2014. UNITED STATES DISTRICT COURT corporate interests in Goober which,
25. Leucadia was in continuous FOR THE DISTRICT OF COLUMBIA when combined with its then existing
violation of the HSR Act from July 1, interest in Goober, gave Leucadia
UNITED STATES OF AMERICA, Plaintiff, control of Goober as defined in the HSR
2013, when it acquired the KCG voting v. LEUCADIA NATIONAL CORPORATION,
securities that resulted in it holding Rules. Although it was required to do
Defendant. so, Leucadia did not file under the HSR
more than ten percent of the CASE NO.: 1:15–cv–01547 JUDGE: Randolph
outstanding KCG voting securities Act prior to acquiring Goober
D. Moss
FILED: 04/20/2016 membership interests on August 15th.
valued in excess of the HSR Act’s $70.9
On October 24, 2008, Leucadia made a
million size-of-transaction threshold, COMPETITIVE IMPACT STATEMENT corrective filing under the HSR Act for
through October 20, 2014, when the
The United States, pursuant to the the August 15, 2007, acquisition of
waiting period expired.
Antitrust Procedures and Penalties Act Goober non-corporate interests. In a
REQUESTED RELIEF letter accompanying the corrective
(‘‘APPA’’), 15 U.S.C. 16(b)–(h), files this
WHEREFORE, Plaintiff requests: Competitive Impact Statement to set filing, Leucadia acknowledged that the
1. That the Court adjudge and decree forth the information necessary to transaction was reportable under the
that Defendant Leucadia’s acquisition of enable the Court and the public to HSR Act, but asserted that the failure to
KCG voting securities on July 1, 2013, evaluate the proposed Final Judgment file and observe the waiting period was
was a violation of the HSR Act, 15 that would terminate this civil antitrust inadvertent. On January 7, 2009, the
U.S.C. 18a; and that Defendant Leucadia proceeding. Premerger Notification Office of the
was in violation of the HSR Act each Federal Trade Commission sent a letter
day from July 1, 2013, through October I. NATURE AND PURPOSE OF THIS to Leucadia indicating that it would not
20, 2014. PROCEEDING recommend a civil penalty action
2. That the Court order Defendant regarding the 2007 Goober acquisition,
On September 22, 2015, the United
Leucadia to pay to the United States an but stated that Leucadia would be
States filed a Complaint against
appropriate civil penalty as provided by ‘‘accountable for instituting an effective
Defendant Leucadia National
the HSR Act. 15 U.S.C. 18a(g)(1), the program to ensure full compliance with
Corporation (‘‘Leucadia’’), related to
Debt Collection Improvement Act of the [HSR] Act’s requirements.’’ 2
Leucadia’s acquisition of voting At the same time the Complaint was
1996, Pub. L. 104–134, § 31001(s) securities of KCG Holdings, Inc. filed, the United States also filed a
(amending the Federal Civil Penalties
(‘‘KCG’’) in 2013. The Complaint alleges Stipulation and proposed Final
Inflation Adjustment Act of 1990, 28
that Leucadia violated Section 7A of the Judgment that eliminates the need for a
U.S.C. 2461 note), and Federal Trade
Clayton Act, 15 U.S.C. 18a, commonly trial in this case. The proposed Final
Commission Rule 1.98, 16 CFR 1.98, 74
known as the Hart-Scott-Rodino Judgment is designed to deter
FR 857 (Jan. 9, 2009). Antitrust Improvements Act of 1976 (the Leucadia’s HSR Act violations. Under
3. That the Court order such other and
‘‘HSR Act’’). The HSR Act states that the proposed Final Judgment, Leucadia
further relief as the Court may deem just
‘‘no person shall acquire, directly or must pay a civil penalty in the amount
and proper. indirectly, any voting securities of any
mstockstill on DSK3G9T082PROD with NOTICES
of $240,000.
4. That the Court award the Plaintiff
person’’ exceeding certain thresholds The United States and the Defendant
its costs of this suit. until that person has filed pre- have stipulated that the proposed Final
Dated: September 22, 2015 acquisition notification and report forms Judgment may be entered after
with the Department of Justice and the compliance with the APPA, unless the
FOR THE PLAINTIFF UNITED STATES
OF AMERICA:
Federal Trade Commission (collectively,
lllllllllllllllllllll the ‘‘federal antitrust agencies’’ or 1 15 U.S.C. 18a(a).
/s/ ‘‘agencies’’) and the post-filing waiting 2 Complaint, ¶ 18.
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(60) day comment period, after which specific allegations set forth in the the market structure, and its views of
the court shall determine whether entry government’s complaint, whether the the nature of the case).
of the proposed Final Judgment is ‘‘in decree is sufficiently clear, whether Courts have greater flexibility in
the public interest.’’ 15 U.S.C. 16(e)(1). enforcement mechanisms are sufficient, approving proposed consent decrees
In making that determination, the court, and whether the decree may positively than in crafting their own decrees
in accordance with the statute as harm third parties. See Microsoft, 56 following a finding of liability in a
amended in 2004, is required to F.3d at 1458–62. With respect to the litigated matter. ‘‘[A] proposed decree
consider: adequacy of the relief secured by the must be approved even if it falls short
(A) the competitive impact of such decree, a court may not ‘‘engage in an of the remedy the court would impose
judgment, including termination of alleged unrestricted evaluation of what relief on its own, as long as it falls within the
violations, provisions for enforcement and would best serve the public.’’ United range of acceptability or is ‘within the
modification, duration of relief sought, States v. BNS, Inc., 858 F.2d 456, 462 reaches of public interest.’’’ United
anticipated effects of alternative remedies (9th Cir. 1988) (quoting United States v. States v. Am. Tel. & Tel. Co., 552 F.
actually considered, whether its terms are Supp. 131, 151 (D.D.C. 1982) (citations
ambiguous, and any other competitive Bechtel Corp., 648 F.2d 660, 666 (9th
Cir. 1981)); see also Microsoft, 56 F.3d omitted) (quoting United States v.
considerations bearing upon the adequacy of
such judgment that the court deems at 1460–62; United States v. Alcoa, Inc., Gillette Co., 406 F. Supp. 713, 716 (D.
necessary to a determination of whether the 152 F. Supp. 2d 37, 40 (D.D.C. 2001); Mass. 1975)), aff’d sub nom. Maryland
consent judgment is in the public interest; InBev, 2009 U.S. Dist. LEXIS 84787, at v. United States, 460 U.S. 1001 (1983);
and *3. Courts have held that: see also U.S. Airways, 38 F. Supp. 3d at
(B) the impact of entry of such judgment 76 (noting that room must be made for
upon competition in the relevant market or [t]he balancing of competing social and
the government to grant concessions in
markets, upon the public generally and political interests affected by a proposed
antitrust consent decree must be left, in the the negotiation process for settlements
individuals alleging specific injury from the
first instance, to the discretion of the (citing Microsoft, 56 F.3d at 1461));
violations set forth in the complaint
including consideration of the public benefit, Attorney General. The court’s role in United States v. Alcan Aluminum Ltd.,
if any, to be derived from a determination of protecting the public interest is one of 605 F. Supp. 619, 622 (W.D. Ky. 1985)
the issues at trial. insuring that the government has not (approving the consent decree even
15 U.S.C. 16(e)(1)(A) & (B). In breached its duty to the public in consenting though the court would have imposed a
to the decree. The court is required to greater remedy). To meet this standard,
considering these statutory factors, the
determine not whether a particular decree is the United States ‘‘need only provide a
court’s inquiry is necessarily a limited the one that will best serve society, but
one, as the government is entitled to factual basis for concluding that the
whether the settlement is ‘‘within the reaches
‘‘broad discretion to settle with the settlements are reasonably adequate
of the public interest.’’ More elaborate
defendant within the reaches of the requirements might undermine the remedies for the alleged harms.’’ SBC
public interest.’’ United States v. effectiveness of antitrust enforcement by Commc’ns, 489 F. Supp. 2d at 17.
Microsoft Corp., 56 F.3d 1448, 1461 consent decree. Moreover, the court’s role under the
(D.C. Cir. 1995); see generally United APPA is limited to reviewing the
Bechtel, 648 F.2d at 666 (emphasis remedy in relationship to the violations
States v. SBC Commc’ns, Inc., 489 F. added) (citations omitted).4 In
Supp. 2d 1 (D.D.C. 2007) (assessing that the United States has alleged in its
determining whether a proposed Complaint, and does not authorize the
public interest standard under the settlement is in the public interest, a court to ‘‘construct [its] own
Tunney Act); United States v, U.S. district court ‘‘must accord deference to hypothetical case and then evaluate the
Airways Group, Inc., 38 F. Supp. 3d 69, the government’s predictions about the decree against that case.’’ Microsoft, 56
75 (D.D.C. 2014) (noting the court has efficacy of its remedies, and may not F.3d at 1459; see also U.S. Airways, 38
broad discretion of the adequacy of the require that the remedies perfectly F. Supp. 3d at 75 (noting that the court
relief at issue); United States v. InBev match the alleged violations.’’ SBC must simply determine whether there is
N.V./S.A., No. 08–1965 (JR), 2009–2 Commc’ns, 489 F. Supp. 2d at 17; see a factual foundation for the
Trade Cas. (CCH) ¶ 76,736, 2009 U.S. also U.S. Airways, 38 F. Supp. 3d at 75 government’s decisions such that its
Dist. LEXIS 84787, at *3, (D.D.C. Aug. (noting that a court should not reject the conclusions regarding the proposed
11, 2009) (noting that the court’s review proposed remedies because it believes settlements are reasonable); InBev, 2009
of a consent judgment is limited and others are preferable); Microsoft, 56 F.3d U.S. Dist. LEXIS 84787, at *20 (‘‘the
only inquires ‘‘into whether the at 1461 (noting the need for courts to be ‘public interest’ is not to be measured by
government’s determination that the ‘‘deferential to the government’s comparing the violations alleged in the
proposed remedies will cure the predictions as to the effect of the complaint against those the court
antitrust violations alleged in the proposed remedies’’); United States v. believes could have, or even should
complaint was reasonable, and whether Archer-Daniels-Midland Co., 272 F. have, been alleged’’). Because the
the mechanism to enforce the final Supp. 2d 1, 6 (D.D.C. 2003) (noting that ‘‘court’s authority to review the decree
judgment are clear and manageable.’’).3 the court should grant due respect to the depends entirely on the government’s
As the United States Court of Appeals United States’ prediction as to the effect exercising its prosecutorial discretion by
for the District of Columbia Circuit has of proposed remedies, its perception of bringing a case in the first place,’’ it
held, under the APPA a court considers, follows that ‘‘the court is only
among other things, the relationship 4 Cf. BNS, 858 F.2d at 464 (holding that the authorized to review the decree itself,’’
between the remedy secured and the court’s ‘‘ultimate authority under the [APPA] is and not to ‘‘effectively redraft the
limited to approving or disapproving the consent complaint’’ to inquire into other matters
mstockstill on DSK3G9T082PROD with NOTICES
3 The 2004 amendments substituted ‘‘shall’’ for decree’’); United States v. Gillette Co., 406 F. Supp.
‘‘may’’ in directing relevant factors for court to 713, 716 (D. Mass. 1975) (noting that, in this way,
that the United States did not pursue.
consider and amended the list of factors to focus on the court is constrained to ‘‘look at the overall Microsoft, 56 F.3d at 1459–60. As this
competitive considerations and to address picture not hypercritically, nor with a microscope, Court recently confirmed in SBC
potentially ambiguous judgment terms. Compare 15 but with an artist’s reducing glass’’). See generally Communications, courts ‘‘cannot look
U.S.C. § 16(e) (2004), with 15 U.S.C. § 16(e)(1) Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the
(2006); see also SBC Commc’ns, 489 F. Supp. 2d at remedies [obtained in the decree are] so
beyond the complaint in making the
11 (concluding that the 2004 amendments ‘‘effected inconsonant with the allegations charged as to fall public interest determination unless the
minimal changes’’ to Tunney Act review). outside of the ‘reaches of the public interest’’’). complaint is drafted so narrowly as to
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![Federal Register / Vol. 81, No. 82 / Thursday, April 28, 2016 / Notices 25425
make a mockery of judicial power.’’ SBC IN THE UNITED STATES DISTRICT instructions before making the transfer.
Commc’ns, 489 F. Supp. 2d at 15. COURT FOR THE DISTRICT OF If the payment is made by cashier’s
In its 2004 amendments, Congress COLUMBIA check, the check shall be made payable
made clear its intent to preserve the UNITED STATES OF AMERICA, c/o
to the United States Department of
practical benefits of utilizing consent Department of Justice, Washington, D.C. Justice and delivered to: Janie Ingalls,
decrees in antitrust enforcement, adding 20530, Plaintiff, v. LEUCADIA NATIONAL United States Department of Justice,
the unambiguous instruction that CORPORATION, 520 Madison Avenue, New Antitrust Division, Antitrust Documents
‘‘[n]othing in this section shall be York, NY 10022, Defendant. Group, 450 5th Street NW., Suite 1024,
construed to require the court to CASE NO.: 1:15–cv–01547 Washington, DC 20530.
conduct an evidentiary hearing or to JUDGE: Randolph D. Moss Defendant shall pay the full amount
require the court to permit anyone to FILED: 09/22/2015 of the civil penalty within thirty (30)
intervene.’’ 15 U.S.C. § 16(e)(2); see also FINAL JUDGMENT days of entry of this Final Judgment. In
U.S. Airways, 38 F. Supp. 3d at 76 the event of a default or delay in
(indicating that a court is not required Plaintiff, the United States of payment, interest at the rate of eighteen
to hold an evidentiary hearing or to America, having commenced this action (18) percent per annum shall accrue
permit intervenors as part of its review by filing its Complaint herein for thereon from the date of the default or
under the Tunney Act). The language violation of Section 7A of the Clayton delay to the date of payment.
wrote into the statute what Congress Act, 15 U.S.C. 18a, commonly known as
the Hart-Scott-Rodino Antitrust III.
intended when it enacted the Tunney
Act in 1974, as Senator Tunney Improvements Act of 1976, and Plaintiff Each party shall bear its own costs of
explained: ‘‘[t]he court is nowhere and Defendant Leucadia National this action.
compelled to go to trial or to engage in Corporation, by their respective
attorneys, having consented to the entry IV.
extended proceedings which might have
the effect of vitiating the benefits of of this Final Judgment without trial or Entry of this Final Judgment is in the
prompt and less costly settlement adjudication of any issue of fact or law public interest.
through the consent decree process.’’ herein, and without this Final Judgment Dated: lllll
constituting any evidence against or an
119 Cong. Rec. 24,598 (1973) (statement lllllllllllllllllllll
of Sen. Tunney). Rather, the procedure admission by the Defendant with United States District Judge
for the public interest determination is respect to any such issue:
Now, therefore, before the taking of [FR Doc. 2016–09915 Filed 4–27–16; 8:45 am]
left to the discretion of the court, with BILLING CODE 4410–11–P
any testimony and without trial or
the recognition that the court’s ‘‘scope
adjudication of any issue of fact or law
of review remains sharply proscribed by
herein, and upon the consent of the
precedent and the nature of Tunney Act DEPARTMENT OF JUSTICE
parties hereto, it is hereby Ordered,
proceedings.’’ SBC Commc’ns, 489 F.
Adjudged, and Decreed as follows: Drug Enforcement Administration
Supp. 2d at 11.5 A court can make its
public interest determination based on I.
the competitive impact statement and Abolghasem Rezaei, M.D.; Decision
The Court has jurisdiction of the and Order
response to public comments alone. subject matter of this action and of the
U.S. Airways, 38 F. Supp. 3d at 76. Plaintiff and the Defendant. The On November 16, 2015, the Deputy
VIII. DETERMINATIVE DOCUMENTS Complaint states a claim upon which Assistant Administrator, Office of
relief can be granted against the Diversion Control, Drug Enforcement
There are no determinative materials Defendant under Section 7A of the Administration, issued an Order to
or documents within the meaning of the Clayton Act, 15 U.S.C. 18a. Show Cause to Abolghasem Rezaei,
APPA that were considered by the M.D. (hereinafter, Registrant) of Lawton,
United States in formulating the II. Oklahoma. GX 1. The Show Cause
proposed Final Judgment. Judgment is hereby entered in this Order proposed the revocation of
Date: April 20, 2016 matter in favor of Plaintiff United States Registrant’s DEA Certificate of
Respectfully Submitted, of America and against Defendant, and, Registration, pursuant to which he is
ll/s/ Kenneth A. Libby pursuant to Section 7A(g)(1) of the authorized to dispense controlled
Kenneth A. Libby Clayton Act, 15 U.S.C. 18a(g)(1), the substances in schedules IV and V as a
Special Attorney Debt Collection Improvement Act of practitioner, on the ground that he does
1996, Pub. L. 104–134 31001(s) ‘‘not have authority to handle controlled
5 See United States v. Enova Corp., 107 F. Supp.
(amending the Federal Civil Penalties substances in the State of Oklahoma, the
2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney
Act expressly allows the court to make its public
Inflation Adjustment Act of 1990, 28 State in which [he is] registered with
interest determination on the basis of the U.S.C. 2461), and Federal Trade the’’ Agency. Id. at 1.
competitive impact statement and response to Commission Rule 1.98, 16 CFR 1.98, 61 More specifically, the Show Cause
comments alone’’); United States v. Mid-Am. FR 54549 (Oct. 21, 1996), and 74 FR 857 Order alleged that effective May 28,
Dairymen, Inc., No. 73–CV–681–W–1, 1977–1 Trade
Cas. (CCH) ¶ 61,508, at 71,980, *22 (W.D. Mo. 1977)
(Jan. 9, 2009), Defendant Leucadia 2013, the Oklahoma State Bureau of
(‘‘Absent a showing of corrupt failure of the National Corporation is hereby ordered Narcotics and Dangerous Drugs Control
government to discharge its duty, the Court, in to pay a civil penalty in the amount of (hereinafter, OBNDD) issued a
making its public interest finding, should . . . two hundred forty thousand dollars Stipulation and Agreed Order to
mstockstill on DSK3G9T082PROD with NOTICES
carefully consider the explanations of the
government in the competitive impact statement
($240,000). Payment of the civil penalty Registrant, pursuant to which his
and its responses to comments in order to ordered hereby shall be made by wire authority to dispense controlled
determine whether those explanations are transfer of funds or cashier’s check. If substances in schedules II and III was
reasonable under the circumstances.’’); S. Rep. No. the payment is made by wire transfer, suspended ‘‘for two years’’; the Order
93–298, at 6 (1973) (‘‘Where the public interest can
be meaningfully evaluated simply on the basis of
Defendant shall contact Janie Ingalls of then alleged that his Oklahoma
briefs and oral arguments, that is the approach that the Antitrust Division’s Antitrust registration ‘‘expired on October 31,
should be utilized.’’). Documents Group at (202) 514–2481 for 2014,’’ and had not been renewed. Id.
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Document Created: 2016-04-28 01:05:57
Document Modified: 2016-04-28 01:05:57
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Dates | April 20, 2016 Respectfully Submitted, | |
| FR Citation | 81 FR 25420 |
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