Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 64969

attend and need special assistance, such 

as sign language interpretation, or other 

reasonable accommodations, should 

contact the BLM as provided below.

Dated: November 2, 2004. 

Steven Hartmann, 

Acting Field Manager.

[FR Doc. 04–24891 Filed 11–8–04; 8:45 am] 

BILLING CODE 4310–$$–P

DEPARTMENT OF JUSTICE

Antitrust Division 

Competitive Impact Statement, 

Proposed Final Judgment and 

Complaint; United States v. Connors 

Bros. Income Fund and Bumble Bee 

Seafoods, LLC 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h), that a proposed 

Final Judgment, Hold Separate 

Stipulation and Order, and Competitive 

Impact Statement have been filed with 

the United States District Court for the 

District of Columbia in United States v. 

Connors Bros. Income Fund and Bumble 

Bee Seafoods, LLC, Civil Case No: 1:04 

CV 01494. The proposed Final Judgment 

is subject to approval by the Court after 

compliance with the Antitrust 

Procedures and Penalties Act, 15 U.S.C. 

16(b)–(h), including expiration of the 

statutory 60-day public comment 

period. 

On August 31, 2004, the United States 

filed a Compliant alleging that the 

acquisition by Connors Bros. Income 

Fund (‘‘Connors’’) of Bumble Bee 

Seafoods LLC (‘‘Bumble Bee’’) would, as 

originally proposed, violate Section 7 of 

the Clayton Act, 15 U.S.C. 18, by 

substantially lessening competition for 

the sale of sardine snacks in the Untied 

States. Connors’ sardine snack brands 

account for approximately 63 percent of 

the sales in the market, while Bumble 

Bee’s sardine snack brand accounts for 

about 13 percent. The remaining share 

is comprised of small independent 

fringe players or regional sellers of 

sardine snacks unlikely to be able to 

expand to the level required to 

compensate for the loss of a competitor 

of Bumble Bee’s significance. 

To preserve competition, the 

proposed Final Judgment, filed the same 

time as the Complaint, requires Connors 

to divest its Port Clyde, Commander, 

Possum, Bulldog, Admiral, and Neptune 

brands (but not Neptune brand clam 

products) and related assets to an 

acquirer, including, at the acquirer’s 

option, no more than one of the 

following Connors’ processing assets: 

The Bath, Maine plant or the Grand 

Manan, New Brunswick plant, to an 

acquirer acceptable to the United States 

in its sole discretion. A Competitive 

Impact Statement, filed by the United 

States, describes the Complaint, the 

proposed Final Judgment, and the 

remedies available to private litigants. 

Copies of the Complaint, proposed Final 

Judgment, and Competitive Impact 

Statement are available for inspection at 

the Department of Justice in 

Washington, DC in Room 215 North, 

325 Seventh Street, NW., 20530 

(telephone: 202/514–2692) and at the 

Office of the Clerk of the Untied States 

District Court for the District of 

Columbia, 333 Constitution Avenue, 

NW., Washington, DC 20001. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, and responses thereto, will 

be published in the Federal Register

and filed with the Court. Comments 

should be directed to Roger Fones, 

Chief, Transportation, Energy, and 

Agriculture Section, Antitrust Division, 

U.S. Department of Justice, 325 7th 

Street, NW., Suite 500, Washington, DC 

20530 (telephone 202/307–6351).

J. Robert Kramer, II, 

Director of Operations, Antitrust Division.

United States of America, U.S. Department 

of Justice, Antitrust Division, 325 7th 

Avenue, NW., Suite 500, Washington, DC 

20530, Plaintiff, v. Connors Bros. Income 

Fund, 669 Main Street, Blacks Harbour, New 

Brunswick, Canada, E5h 1K1, and Bumble 

Bee Seafoods, LLC, 9655 Granite Ridge Drive, 

San Diego, CA 92123-2674, Defendants; 

Judge: John D. Baker.

Competitive Impact Statement 

Plaintiff United States of America 

(‘‘United States’’), pursuant to Section 

2(b) of the Antitrust Procedures and 

Penalties Act (‘‘APPA’’ and ‘‘Tunney 

Act’’), 15 U.S.C. 16(b)–(h), files this 

Competitive Impact Statement relating 

to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding on August 31, 2004. 

I. Nature and Purpose of the Proceeding 

Defendant Connors Bros. Income 

Fund (‘‘Connors’’), an income trust fund 

organized under Canadian law, entered 

into a Transaction Agreement, dated 

February 10, 2004, in which it proposed 

to acquire Bumble Bee Seafoods, LLC 

(‘‘Bumble Bee’’) from Centre Capital 

Investors III, L.P. (The ‘‘Transaction’’). 

Connors partially financed its 

acquisition through a subscription 

agreement, and those funds were held in 

escrow pending final consummation of 

the Transaction. Under Canadian law, 

the escrow agreement expired on April 

30, 2004; the funds had to be returned 

to subscribers if Connors had not 

consummated the Transaction by that 

date. 

On April 30, 2004, the United States 

and Defendants reached an agreement 

by which: the United States agreed not 

to file suit at that time to enjoin the 

Transaction; the Defendants signed a 

Hold Separate Stipulation and Order 

and a proposed Final Judgment, which 

included remedies that would restore 

the competition that the United States’

preliminary analysis indicated would be 

lost through the combination of the 

Connors and Bumble Bee sardine 

businesses; and the United States agreed 

to defer filing the executed Hold 

Separate and proposed Final Judgment 

until it completed a thorough 

investigation into the likely competitive 

effects of the Transaction. At the 

completion of this investigation, the 

United States confirmed that it was 

likely that the transaction as originally 

proposed would harm competition for 

the sale of sardine snacks in the United 

States, but decided to narrow the scope 

of the original Final Judgment to 

eliminate certain remedies that it had 

subsequently determined were not 

needed to restore competition in the 

relevant antitrust market. 

Accordingly, on August 31, 2004, the 

United States filed a Complaint alleging 

the likely effect of the Transaction, as 

originally proposed, would be to lessen 

competition substantially for the sale of 

sardine snacks throughout the United 

States in violation of Section 7 of the 

Clayton Act. This loss of competition 

would result in U.S. consumers paying 

higher prices for sardine snacks. At the 

same time, the United States also filed 

the Hold Separate Stipulation and Order 

and a proposed Final Judgment, which 

are designed to eliminate the 

anticompetitive effects of the 

acquisition.

The proposed Final Judgment, which 

is explained more fully below, requires 

Connors to divest its Port Clyde brand, 

several smaller brands (Commander, 

Possum, Bulldog, Admiral and 

Neptune), and related assets that an 

acquirer of those brands might need in 

order to become a viable and active 

competitor in the sale of sardine snacks 

throughout the United States. Under the 

terms of the Hold Separate Stipulation 

and Order, Connors must maintain the 

commercial value of the Port Clyde 

brand until it is divested to an acquirer 

acceptable to the United States. 

The United States and the 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 

64970 Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 

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 

Connors marketed the first, second 

and fourth largest selling brands of 

sardine snacks in the United States 

(Brunswick, Beach Cliff, and Port Clyde, 

respectively) before this Transaction. In 

2003, Connors brands accounted for 

approximately 63% of the sardine snack 

sales in the United States; and it earned 

revenues of about $43 million from the 

sale of these products. 

Bumble Bee, a Delaware limited 

liability corporation with its 

headquarters in San Diego, California, 

marketed the third largest selling brand 

of sardine snacks in the United States 

before the Transaction. In 2003, its 

Bumble Bee brand accounted for 

approximately 13% of U.S. sardine 

snack sales; and it earned about $9 

million from the sale of these products. 

The Transaction, as initially proposed 

by Defendants, would lessen 

competition substantially as a result of 

Connors’ acquisition of Bumble Bee’s 

sardine snack business. This acquisition 

is the subject of the Complaint and 

proposed Final Judgment filed by the 

United States on August 31, 2004. 

B. The Competitive Effects of the 

Transaction on Consumers of Sardine 

Snacks 

The Complaint alleges that the 

relevant product market is sardine 

snacks, which is an ‘‘overlap’’ product, 

because Connors and Bumble Bee sell 

competing sardine snack products in the 

United States. Several characteristics 

distinguish sardine snacks (also called 

‘‘mainstream’’ sardines in the industry) 

from other sardine products. Typically, 

sardine snacks are made from herring 

and other varieties of small fish, which 

are caught off the coasts of the United 

States (primarily Maine), Canada, 

Poland, Morocco, South America and 

Thailand, processed in those countries, 

and sold in the United States. Sardine 

snacks, as the name implies, are sold 

primarily as snacks; and they are packed 

in snack-size cans (primarily 3.75 ounce 

‘‘dingley’’ cans or 4.4 ounce ‘‘club’’

cans). In the United States, the average 

retail price of sardine snacks is about 

$.21 per ounce. 

Evidence gathered in the course of the 

United States’ investigation indicated 

that a sardine product called 

‘‘premium’’ sardines in the industry is 

not in the same product market as 

sardine snacks. Premium sardines 

typically consist of the brisling species 

of fish, which are caught off the coasts 

of Norway and Scotland, processed in 

those countries, and imported into the 

United States (and other countries). In 

the United States, the average retail 

price of premium sardines is about $.52 

per ounce.

The evidence also showed that a 

sardine product called ‘‘ethnic’’

sardines in the industry is not in the 

same product market as sardine snacks. 

Typically, these sardines are marketed 

to specific ethnic groups, consumed as 

main courses rather than as snacks, and 

packed in meal-size cans (primarily 15 

ounce ‘‘oval’’ cans). They typically 

consist of larger herring and other 

species that are perceived to be of a 

lower quality than the herring used for 

sardine snacks, and sell for an average 

of about $.08 per ounce (or about 40% 

of the price of sardine snacks). In 

addition, grocery stores often display 

these sardines exclusively in the ethnic 

section of their stores, rather than the 

canned seafood section (e.g., Perla 

Pacifica might be displayed next to 

other Hispanic food products, several 

aisles away from Connors and Bumble 

Bee sardine snacks). 

Connors and Bumble Bee sell sardine 

snacks throughout the United States. A 

small, but significant, increase in the 

price of sardine snacks would not cause 

a sufficient number of purchasers to 

switch to sardine snack brands not 

presently marketed in the United States 

to make the increase unprofitable. The 

United States, therefore, concluded that 

the appropriate geographic market for 

the purpose of analyzing the 

competitive effects of the Transaction is 

no larger than the United States, and 

that the United States is the relevant 

geographic market within the meaning 

of Section 7 of the Clayton Act. 

Even before Connors acquired Bumble 

Bee, the U.S. sardine snack market was 

highly concentrated. Connors brands 

accounted for approximately 63% of the 

sales in this market, while Bumble Bee’s 

sardine brand held about a 13% share. 

The remaining share is accounted for by 

brands with small individual market 

shares that can be described as ‘‘fringe’’

players. Using a measure of 

concentration called the HerfindahlHirschman Index (‘‘HHI’’), which is 

defined and explained in Exhibit A to 

the Complaint, the pre-transaction HHI 

was about 4200—well in excess of the 

1800 point level for characterizing 

markets as highly concentrated. 

The Transaction resulted in Connors’

main rival exiting the sardine snack 

market and a substantial increase in 

concentration in an already 

concentrated market. Post-transaction, 

the combined Connors/Bumble Bee firm 

would account for over 75% of the 

market; and none of its remaining 

competitors would have as much as a 

5% share of the remaining sales. The 

Transaction would increase the HHI by 

about 1600 points—well in excess of 

levels that raise significant antitrust 

concerns. 

In fact, as the Complaint alleges, it is 

likely that the elimination of Bumble 

Bee as an independent competitor 

would give the combined Connors/

Bumble Bee firm unilateral power to 

profitably raise prices, whether or not 

the remaining fringe players responded 

by raising their prices. For example, the 

combined firm could raise the price of 

the Bumble Bee brand of sardine snacks 

with little concern that it would lose 

sufficient sales to make the Bumble Bee 

price increase unprofitable. 

The evidence gathered during the 

investigation also indicated that entry 

into the sale of sardine snacks in the 

United States would not be timely, 

likely, or sufficient to deter any exercise 

of market power by the combined 

Connors/Bumble Bee entity. Brand 

recognition is an important factor in the 

marketing and sale of sardine snacks in 

the United States, and consumers of 

sardine snacks generally restrict their 

purchases to brands they know and 

trust. New entry would require years of 

effort and the investment of substantial 

sunk costs, including promotion 

expenditures and slotting allowances (in 

many grocery chains), to create brand 

awareness among consumers. Likewise, 

the investigation showed that these 

same barriers would make it difficult for 

existing fringe players or regional sellers 

of sardine snacks to expand to the level 

required to make up for the loss of a 

competitor of Bumble Bee’s 

significance.

III. Explanation of the Proposed Final 

Judgment 

The devestiture required by the 

proposed Final Judgment will eliminate 

the anticompetitive effects of the 

acquisition in sardine snack products by 

establishing a new, independent, and 

economically viable competitor with 

several recognized brand names in the 

sardine snack market. The purchaser 

will acquire several sardine snack 

brands. Moreover, the acquirer may sell 

other canned seafood products under its 

brand names (as do Connors, Bumble 

Bee and other sellers of sardine 

snacks)—as Connors will transfer all of 

its rights to produce, distribute and sell 

seafood products under the divested 

brands (with the limited exception of 

Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 64971

clam products, which Connors may 

continue to sell under the Neptune 

brand.) For example, the acquirer will 

obtain the right to sell kippered herring 

snacks, which a firm with a sardine 

snack processing plant can easily 

produce at its plant, in addition to 

sardine stacks. The divestiture also 

includes a packing plant, inventories, 

and the other tangible and intengible 

assets that an acquirer might need to 

produce, distribute and sell sardine 

snacks under the divested brand names 

in the United States. 

Port Clyde is the fourth largest brand 

of sardine snacks, and Commander is in 

the top ten. The remaining brands to be 

divested (Possum, Bulldog, Admiral and 

Neptune) have relatively small national 

market shares, but each is a significant 

seller in one or more regions. In the 

aggregate, the divested Connors brands 

accounted for approximately 14% of 

U.S. sardine snack sales in the United 

States in 2003, as compared to about a 

13% market share for the Bumble Bee 

brand. 

The proposed divesture, therefore, 

will re-establish the competitive 

constraint that the Transaction would 

have removed from the U.S. sardine 

snack market. Within one hundred and 

twenty calendar days after the filing of 

the Complaint, or five days after notice 

of the entry of the Final Judgment by the 

Court, whichever is later, Connors must 

transfer the divested brands, and related 

assets, in a way that satisfies the United 

States, in its sole discretion, that the 

operations can and will be operated by 

the purchaser as a viable, ongoing and 

competitive business. In exercising its 

discretion, the United States will ensure 

that the assets are transferred to an 

acquirer who has the incentive and 

opportunity to compete as effectively in 

the sardine snack business as did 

Bumble Bee. 

Defendants must take all reasonable 

steps necessary to accomplish the 

divestiture quickly and shall cooperate 

with prospective purchasers. In the 

event that Defendants do not 

accomplish the divestiture within the 

periods prescribed in the proposed 

Final Judgment, the Final Judgment 

provides that the Court will appoint a 

trustee selected by the United States to 

effect the divestiture, and the 

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. 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 three months after the 

trustee’s appointment, 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.

IV. Remedies Available to Potential 

Private Litigants 

Section 4 of the Clayton Act (15 

U.S.C. 15) provides that any person who 

has been injured as a result of conduct 

prohibited by the antitrust laws may 

bring suit in federal court to recover 

three times the damages the person has 

suffered, as well as costs and reasonable 

attorneys’ fees. Entry of the proposed 

Final Judgment will neither impair nor 

assist the bringing of any private 

antitrust damage action. Under the 

provisions of Section 5(a) of the Clayton 

Act (15 U.S.C. 16(a)), the proposed Final 

Judgment has no prima facie effect it 

any subsequent private lawsuit that may 

be brought against the 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 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 days of the 

date of publication of this Competitive 

Impact Statement in the Federal 

Register. All comments received during 

this period will be considered by the 

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 and published in the Federal 

Register. 

Written comments should be 

submitted to: Roger W. Fones, Chief, 

Transportation, Energy, & Agriculture 

Section, Antitrust Division, United 

States Department of Justice, 325 7th 

Street, NW.; Suite 500, Washington, DC 

20530. 

The proposed Final Judgment 

provides that the Court retains 

jurisdiction over this action, and the 

parties may apply to the Court for any 

order necessary or appropriate for the 

modification, interpretation, or 

enforcement of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

The United States considered, as an 

alternative to the proposed Final 

Judgment, a full trial on the merits 

against the Defendants. The United 

States could have entered into litigation 

and sought an injunction against the 

combination of Connors and Bumble 

Bee’s sardine snack business. The 

United States is satisfied, however, that 

the divestiture of assets described in the 

proposed Final Judgment will preserve 

competition for the provision of sardine 

snacks in the United States. 

The United States also considered 

requiring the Defendants to grant a longterm, but finite, license allowing an 

acquirer to use the Bumble Bee brand 

name for sardine snacks while it 

transitioned the product to its own 

brand name, but rejected this in favor of 

a clean structural remedy. 

VII. Standard of Review Under the 

APPA for the Proposed Final Judgment 

The APPA requires that proposed 

consent judgments in antitrust cases 

brought by the United States be subject 

to a sixty-day comment period, after 

which the Court shall determine 

whether entry of the proposed Final 

Judgment ‘‘is in the public interest.’’ 15 

U.S.C. 16(e)(1). In making that 

determination, the Court shall consider:

(A) The competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration or relief sought, 

anticipated effects of alternative remedies 

actually considered, 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). As the 

United States Court of Appeals for the 

District of Columbia Circuit has held, 

the APPA permits a court to consider, 

among other things, the relationship 

64972 Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 

1See United States v. Gillette Co., 406 F. Supp. 

713, 716 (D. Mass. 1975) (recognizing it was not the 

court’s duty to settle; rather, the court must only 

answer ‘‘whether the settlement achieved [was] 

within the reaches of the public interest’’). A 

‘‘public interest’’ determination can be made 

properly on the basis of the Competitive Impact 

Statement and Response to Comments filed by the 

Department of Justice pursuant to the APPA. 

Although the APPA authorizes the use of additional 

procedures, 15 U.S.C. 16(f), those procedures are 

discretionary. A court need not invoke any of them 

unless it believes that the comments have raised 

significant issues and that further proceedings 

would aid the court in resolving those issues. See

H.R. Rep. No. 93–1463, 93rd Cong., 2d Sess. 8–9 

(1974), reprinted in 1974 U.S.C.C.A.N. 6535, 6538.

2Cf. BNS, 858 F.2d at 463 (holding that the 

court’s ‘‘ultimate authority under the [APPA] is 

limited to approving or disapproving the consent 

decree’’); Gillette, 406 F. Supp. at 716 (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’ ’’).

between the remedy secured and the 

specific allegations set forth in the 

government’s complaint, whether the 

decree is sufficiently clear, whether 

enforcement mechanisms are sufficient, 

and whether the decree may positively 

harm third parties. See United States v. 

Microsoft Corp., 56 F.3d 1448, 1458–62 

(D.C. Cir. 1995). 

‘‘Nothing 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. 16(e)(2). Thus, in 

conducting this inquiry, ‘‘[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).1 Rather:

[a]bsent a showing of corrupt failure of the 

government to discharge its duty, the Court, 

in making its public interest finding, should 

* * * carefully consider the explanations of 

the government in the competitive impact 

statement and its responses to comments in 

order to determine whether those 

explanations are reasonable under the 

circumstances.

United States v. Mid-America 

Dairymen, Inc., 1977–1 Trade Cas. 

(CCH) ¶ 61,508, at 71,980 (W.D. Mo. 

1977).

Accordingly, with respect to the 

adequacy of the relief secured by the 

decree, a court may not ‘‘engage in an 

unrestricted evaluation of what relief 

would best serve the public.’’ United 

States v. BNS, Inc., 858 F.2d 456, 462 

(9th Cir. 1988) (citing United States v. 

Bechtel Corp., 648 F.2d 660, 666 (9th 

Cir. 1981)); see also Microsoft, 56 F.3d 

at 1460–62. 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 would best serve society, but 

whether the settlements 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).2

The proposed Final Judgment, 

therefore, should not be reviewed under 

a standard of whether it is certain to 

eliminate every anticompetitive effect of 

a particular practice or whether it 

mandates certainty of free competition 

in the future. Court approval of a final 

judgment requires a standard more 

flexible and less strict than the standard 

required for a finding of liability. ‘‘[A]’’

proposed decree must be approved even 

if it falls short of the remedy the court 

would impose on its own, as long as it 

falls within the range of acceptability or 

is ‘within the reaches of public 

interest.’’’ United States v. AT&T, 552 F. 

Supp. 131, 151 (D.D.C. 1982) (citations 

omitted)(quoting Gillette, 406 F. Supp. 

at 716), 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). 

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. Because the ‘‘court’s 

authority to review the decree depends 

entirely on the government’s exercising 

its prosecutorial discretion by brining 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. Id. at 1459–60. 

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: October 19, 2004.

Respectfully submitted, 

Robert L. McGeorge, DC Bar #91900. 

U.S. Department of Justice, Antitrust 

Division, Transportation, Energy & 

Agriculture Section, 325 7th Street, NW; 

Suite 500, Washington, DC 20530.

Certificate of Service 

I hereby certify that on October 19, 

2004, I have caused a copy of the 

foregoing Competitive Impact Statement 

to be served on counsel for defendants 

by electronic mail and first class mail, 

postage prepaid:

Counsel for Defendants Connors Bros. 

Income Fund and Bumble Bee Seafoods, LLC:

David Beddows, Esq., 

Richard G. Parker, Esq. 

O’Melveny & Myers LLP, 1625 Eye Street, 

NW., Washington, DC 2006.

Michelle Livingston, Member of the DC Bar, 

#461268. 

U.S. Department of Justice, Antitrust 

Division, 325 Seventh Street, NW., Suite 500, 

Washington, DC 20530; (202) 353–7328, (202) 

307–2784 (Fax).

Final Judgment 

Whereas, plaintiff, United States of 

America, and defendants, Connors Bros. 

Income Fund and Bumble Bee Seafoods, 

LLC, by their respective attorneys, have 

consented to the entry of this Final 

Judgment without trial or adjudication 

of any issue of fact or law, and without 

this Final Judgment constituting any 

evidence against or admission by any 

party regarding any issue of fact or law; 

And whereas, defendants agree that 

venue and jurisdiction are proper in this 

Court; 

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 the Divestiture 

Assets by defendants to assure that 

competition is not substantially 

lessened; 

And Whereas, plaintiff 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 claim 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:

Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 64973

I. Jurisdiction 

This Court has jurisdiction over the 

subject matter of and each of the parties 

to this action. The Complaint states a 

claim upon which relief may be granted 

against defendants under Section 7 of 

the Clayton Act, as amended (15 U.S.C. 

18). 

II. Definitions 

As used in this Final Judgment: 

A. ‘‘Acquirer’’ menas the entity to 

whom defendants or the trustee divest 

the Divestiture Assets.

B. ‘‘Bumble Bee’’ means defendant 

Bumble Bee Seafoods, LLC, a Delaware 

limited liability corporation with its 

headquarters in San Diego, California, 

its successors and assigns, and its 

subsidiaries, divisions groups, 

partnerships and joint ventures, and 

their directors, officers, mangers, agents, 

and employees. 

C. ‘‘Connors’’ means defendant 

Connors Bros. Income Fund, a Canadian 

income trust with its headquarters in 

Blacks Harbour, New Brunswick, 

Canada, its successors and assigns, and 

its subsidiaries, divisions, groups, 

partnerships and joint ventures, and 

their directors, officers, mangers, agents, 

and employees. 

D. ‘‘Label’’ means all legal rights 

owned or possessed by the defendants 

pertaining to a brand’s trademarks, trade 

names, service names, service marks, 

copyrights, designs, and trade dress 

associated with the goods and services 

sold under a brand name. 

E. ‘‘Divestiture Assets’’ include: 

1. The Port Clyde, Commander, 

Bulldog, Neptune, Admiral, and Possum 

Labels, except the Neptune Label for 

clam products; 

2. All existing inventories of sardines, 

kippered herring snacks, and other 

canned seafood products sold under the 

Port Clyde, Commander, Bulldog, 

Neptune, Admiral, and Possum Labels; 

3. All existing inventories of cans and 

wrappings for sardines, kippered 

herring snacks, and other canned 

seafood products that are marked with 

Port Clyde, Commander, Bulldog, 

Neptune, Admiral, and Possum Labels; 

4. At the Acquirer’s option, no more 

than one of the following Connors 

processing assets: 

a. The Bath plant located at 101 

Bowery Street, Bath, Maine 04530; 

including all rights, titles and interests 

in any tangible assets (e.g. land, 

buildings, docking and unloading 

facilities, warehouses, other real 

property and improvements, fixtures, 

machinery, equipment, tooling, fixed 

assets, personal property, and office 

furniture), relating to Connors canned 

seafood business, including all fee and 

leasehold and renewal rights in such 

assets or any options to purchase any 

adjoining property; or 

b. The Grand Manan plant located in 

New Brunswick, Canada at Seal Cove, 

Grand Manan, New Brunswick EOG 

3BO; including all rights, titles and 

interests in any tangible assets (e.g., 

land, buildings, docking and unloading 

facilities, warehouses, other real 

property and improvements, fixtures, 

machinery, equipment, tooling, fixed 

assets, personal property, and office 

furniture), relating to Connors canned 

seafood business, including all fee and 

leasehold and renewal rights in such 

assets or any options to purchase any 

adjoining property; 

5. All additional tangible and 

intangible assets that are used in 

manufacturing, distributing, marketing 

and selling sardines, kippered herring 

snacks, and other canned seafood 

products sold under the Port Clyde, 

Commander, Bulldog, Neptune, 

Admiral, and Possum Labels, including 

research and development activities and 

equipment; all licenses, permits and 

authorizations issued by any 

governmental organization; all 

contracts, teaming arrangements, 

agreements, leases, commitments, 

certifications, and understandings; 

marketing studies, promotion plans, 

advertising materials; packaging, 

marketing and distribution know-how 

and documentation, such as route maps; 

inventory, delivery and storage vehicles, 

storage and warehouse facilities and 

agreements; customer lists, contracts 

accounts, credit records, and 

agreements; supplier lists and 

agreements; repair and performance 

records, and all other records; and 

6. All additional intangible assets that 

are used in manufacturing, distributing, 

marketing, and selling sardines, 

kippered herring snacks, and other 

canned seafood products sold under the 

Port Clyde, Commander, Bulldog, 

Neptune, Admiral, and Possum labels, 

including those used in developing, 

producing, and servicing such products, 

including, but not limited to all patents, 

licenses, and sublicenses, intellectual 

property, copyrights; grand technical 

information and production know-how, 

including but not limited to, recipes and 

formulas and any improvements to, or 

line extensions thereof; and computer 

software and related documentation; 

know-how, trade secrets, drawings, 

blueprints, designs, design protocols, 

specifications for materials, 

specifications for parts and devices; 

safety procedures for the handling of 

materials and substances; all research 

data concerning historic and current 

research and development; quality 

assurance and control procedures; 

design tools and simulation capability; 

all manuals and technical information 

defendants provide to their own 

employees, customers, suppliers, agents 

or licensees; and all research data 

concerning historic and current research 

and development efforts, including, but 

not limited to designs of experiments, 

and the results of successful and 

unsuccessful designs and experiments.

III. Applicability 

A. This Final Judgment applies to 

defendants Connors and Bumble Bee, as 

defined above, and all other persons in 

active concert or participation with any 

of them who receive actual notice of this 

Final Jugment by personal service or 

otherwise. 

B. If the defendants sell or otherwise 

dispose of all of their assets, or lesser 

business units that include the 

Divestiture Assets, they shall require 

that the purchaser agrees to be bound by 

the provisions of this Final Judgment, 

provided, however, that defendands 

need not obtain such an agreement from 

the Acquirer. 

IV. Divestitures 

A. Defendants are ordered and 

directed, within one hundred and 

twenty (120) calendar days after the 

filing of the Complaint in this matter, or 

five (5) days after notice of the entry of 

this Final Judgment by the Court, 

whichever is later, to divest the 

Divestiture Assets in a manner 

consistent with this Final Judgment to 

an Acquirer acceptable to the United 

States in its sole discretion. The United 

States, in its sole discretion, may agree 

to one or more extensions of this time 

period, which collectively shall not 

exceed sixty (60) days in total, and shall 

notify the Court in such circumstances. 

Defendants shall use their best efforts to 

divest the Divestiture Assets as 

expeditiously as possible. 

B. In accomplishing the divestiture 

ordered by this Final Judgment, 

defendants promptly shall make known, 

by usual and customary means, the 

availability of the Divestiture Assets. 

Defendants shall inform any person 

making inquiry regarding a possible 

purchase of the Divestiture Assets that 

they are being divested to this Final 

Judgment and provide that person with 

a copy of this Final Judgment. 

Defendants shall offer to furnish to all 

prospective Acquirers, subject to 

customary confidentiality assurances, 

all information and documents relating 

to the Divestiture Assets customarily 

provided in a due diligence process 

except such information or documents 

64974 Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 

subject to the attorney-client or workproduct privileges. 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 provide the 

prospective Acquirers and the United 

States information relating to the 

personnel involved in the operation and 

management of the Divestiture Assets to 

enable the Acquirer to make offers of 

employment. Defendants will not 

interfere with any negotiations by the 

Acquirer to employ any defendant’s 

employee whose primary responsibility 

is the operation and management of the 

Divestiture Assets. 

D. Defendants shall permit 

prospective Acquirers to have 

reasonable access to personnel and to 

make inspections of the physical 

facilities of the Divestiture Assets, 

access to any and all environmental, 

zoning, and other permit documents 

and information relating to the 

Divestiture Assets, and access to any 

and all financial, operational, strategic 

or other documents and information 

relating to the Divestiture Assets 

customarily provided as part of a due 

diligence process. 

E. Defendants shall warrant to all 

prospective Acquirers that each asset 

will be operational on the date of sale. 

F. Defendants shall not take any 

action that will impede in any way the 

permitting, operation, or divestiture of 

the Divestiture Assets.

G. Defendants will not introduce or 

sell any canned seafood products under 

the Labels contained in the Divestiture 

Assets; however, defendants may 

continue to introduce and sell clam 

products under the Neptune Label. 

H. Defendants shall warrant to the 

Acquirer of the Divestiture Assets that 

there are no material defects in the 

environmental, zoning or other permits 

pertaining to the operation of each asset, 

and that following the sale of the 

Divestiture Assets, defendants will not 

undertake, directly or indirectly, any 

challenges to the environmental, zoning, 

or other permits relating to the 

operation of the Divestiture Assets. 

I. Unless the United States otherwise 

consents in writing, the divestiture 

pursuant to Section IV, or by trustee 

appointed pursuant to Section V, of this 

Final Judgment, shall include the entire 

Divestiture Assets, shall be sold to a 

single Acquirer, and shall be 

accomplished in such a way as to satisfy 

the Untied States, in its sole discretion, 

that the Divestiture Assets can and will 

be used by the Acquirer as part of a 

viable, ongoing business of the sale of 

canned sardines. 

J. The divestitures, whether pursuant 

to Section IV or Section VI of this Final 

Judgment, 

1. Shall be made to an Acquirer that, 

in the United States’s sole judgment, has 

the intent and capability (including the 

necessary managerial, operational, 

technical and financial capability) of 

competing effectively in the business of 

packing and producing (unless 

otherwise acquired), marketing, 

distributing, and selling canned sardine 

products; 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 an Acquirer and 

defendants give defendants the ability 

unreasonably to raise the Acquirer’s 

costs, to lower the Acquirer’s efficiency, 

or otherwise to interfere in the ability of 

the Acquirer to compete effectively. 

V. Appointment of Trustee 

A. If defendants have not divested the 

Divestiture Assets within the time 

period specified in Section IV(A), 

defendants shall notify the United 

States of that fact in writing. 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 the 

Divestiture Assets. 

B. After the appointment of a trustee 

becomes effective, only the trustee shall 

have the right to sell the Divestiture 

Assets. The trustee shall have the power 

and authority to accomplish the 

divestiture to an Acquirer 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 other powers as this Court deems 

appropriate. Subject to Section V(D) of 

this Final Judgment, the trustee may 

hire at the cost and expense of 

defendants any investment bankers, 

attorneys, or other agents, who shall be 

solely accountable to the trustee, 

reasonably necessary in the trustee’s 

judgment to assist in the divestiture. 

C. Defendants shall not object to a sale 

by the trustee on any ground other than 

the trustee’s malfeasance. Any such 

objections by defendants must be 

conveyed in writing to the United States 

and the trustee within ten (10) calendar 

days after the trustee has provided the 

notice required under Section VI. 

D. The trustee shall serve at the cost 

and expense of defendants, on such 

terms and conditions as the plaintiff 

approves, and shall account for all 

monies derived from the sale of the 

assets sold by the trustee and all costs 

and expenses so incurred. After 

approval by the Court of the trustee’s 

accounting, including fees for its 

services and those of any professionals 

and agents retained by the trustee, all 

remaining money shall be paid to 

defendants and the trust shall then be 

terminated. The compensation of the 

trustee and any professionals and agents 

retained by the trustee shall be 

reasonable in light of the value of the 

Divestiture Assets 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, but 

timeliness is paramount. 

E. Defendants shall use their best 

efforts to assist the trustee in 

accomplishing the required divestiture. 

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 business to be divested, and 

defendants shall develop financial and 

other information relevant to such 

business as the trustee may reasonably 

request, subject to reasonable protection 

for trade secret or other confidential 

research, development, or commercial 

information. Defendants shall take no 

action to interfere with or to impede the 

trustee’s accomplishment of the 

divestiture. 

F. After its appointment, the trustee 

shall file monthly reports with the 

United States and the Court setting forth 

the trustee’s efforts to accomplish the 

divestiture ordered under this Final 

Judgment. 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 Divestiture 

Assets, and shall describe in detail each 

contact with any such person. The 

trustee shall maintain full records of all 

efforts made to divest the Divestiture 

Assets.

G. If the trustee has not accomplished 

such divestiture within three (3) months 

after its appointment, the trustee shall 

promptly file with the Court a report 

setting forth (1) the trustee’s efforts to 

accomplish the required divestiture, (2) 

the reasons, in the trustee’s judgment, 

why the required divestiture has not 

been accomplished, and (3) the trustee’s 

recommendations. To the extent such 

reports contain information that the 

trustee deems confidential, such reports 

Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 64975

shall not be filed in the public docket 

of the Court. The trustee shall at the 

same time furnish such report to the 

plaintiff who shall have the right to 

make additional recommendations 

consistent with the purpose of the trust. 

The Court thereafter shall enter such 

orders as it shall deem appropriate 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. 

VI. Notice of Proposed Divestiture 

A. Within two (2) business days 

following execution of a definitive 

divestiture required herein, shall notify 

the United States of any proposed 

divestiture required by Section IV or V 

of this Final Judgment. If the trustee is 

responsible, it shall similarly notify 

defendants. The notice shall set forth 

the details of the proposed divestiture 

and list the name, address, and 

telephone number of each person not 

previously identified who offered or 

expressed an interest in or desire to 

acquire any ownership interest in the 

Divestiture Assets, together with full 

details of the 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, 

any other third party, or the trustee if 

applicable, additional information 

concerning the proposed divestiture, the 

proposed Acquirer, and any other 

potential Acquirer. Defendants and the 

trustee shall furnish any additional 

information requested within (15) 

calendar days of the receipt of the 

request, unless the parties 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, any 

third party, and 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, the 

divestiture may be consummated, 

subject only to defendants’ limited right 

to object to the sale under Section V(C) 

of this Final Judgment. Absent written 

notice that the United States does not 

object to the proposed Acquirer or upon 

objection by the United States, a 

divestiture proposed under Section IV 

or Section V shall not be consummated. 

Upon objection by defendants under 

Section V(C), a divestiture proposed 

under Section V shall not be 

consummated unless approved by the 

Court. 

VII. Financing 

Defendants shall not finance all or 

any part of any purchase made pursuant 

to Section IV or Section V of this Final 

Judgment. 

VIII. Hold Separate 

Until the divestiture required by this 

Final Judgment has been accomplished 

defendants shall take all steps necessary 

to comply with the Hold Separate 

Stipulation and Order entered by this 

Court. Defendants shall take no action 

that would jeopardize the divestiture 

ordered by this Court.

IX. Affidavits 

A. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, and every thirty (30) calendar 

days thereafter until the divestiture has 

been completed under Section IV or 

Section V, defendants shall deliver to 

the United States an affidavit as to the 

fact and manner of its compliance with 

Section IV or Section V of this Final 

Judgment. Each such affidavit shall 

include the name, address, and 

telephone number of each person who, 

during the preceding thirty (30) 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 Divestiture 

Assets, shall describe in detail each 

contact with any such person during 

that period, and shall describe in detail 

which of the Divestiture Assets each 

such person made an offer to acquire, 

expressed an interest in acquiring, 

entered into negotiations to acquire, or 

was contacted or made an inquiry about 

acquiring. Each such affidavit shall also 

include a description of the efforts 

defendants have taken to solicit buyers 

for the Divestiture Assets, and to 

provide required information to 

prospective purchasers, including the 

limitations, if any, on such information. 

Assuming the information set forth in 

the affidavit is true and complete, any 

objection by the United States to 

information provided by defendants, 

including limitation on information, 

shall be made within fourteen (14) days 

of receipt of such affidavit. 

B. Within twenty (20) calendar days 

of the filing of the Complaint in this 

matter, defendants shall deliver to the 

United States an affidavit that describes 

in reasonable detail all actions 

defendants have taken and all steps 

defendants have implemented on an 

ongoing basis to comply with Section 

VIII of this Final Judgment. Defendants 

shall deliver to the United States an 

affidavit describing any changes to the 

efforts and actions outlined in 

defendants’ earlier affidavits filed 

pursuant to this section within fifteen 

(15) calendar days after the change is 

implemented. 

C. Defendants shall keep all records of 

all efforts made to preserve and divest 

the Divestiture Assets until one year 

after such divestiture has been 

completed. 

X. Compliance Inspection 

A. For purposes of determining or 

securing compliance with this Final 

Judgment, or of determining whether 

the Final Judgment should be modified 

or vacated, and subject to any legally 

recognized privilege, from time to time 

duly authorized representatives of the 

United States Department of Justice, 

including consultants and other persons 

retained by the United States, shall, 

upon written request of a duly 

authorized representative of the 

Assistant Attorney General in charge of 

the antitrust Division, and on reasonable 

notice to defendants, be permitted:

1. Access during defendants’ office hours 

to inspect and copy, or at the United States’

option, to require defendants to provide 

copies of, all books, ledgers, accounts, 

records, and documents in the possession, 

custody, or control of defendants, relating to 

any matters contained in this Final Judgment; 

and 

2. To interview, either informally or on the 

record, defendants’ officers, employees, or 

agents, who may have their individual 

counsel present, regarding such matters. The 

interviews shall be subject to the reasonable 

convenience of the interviewee and without 

restraint or interference by defendants.

B. Upon the written request of a duly 

authorized representative of the 

Assistant Attorney General in charge of 

the antitrust Division, defendants shall 

submit written reports or interrogatory 

responses, under oath if requested, 

relating to any of the matters contained 

in this Final Judgment as may be 

requested. 

C. No information or documents 

obtained by the means provided in this 

section shall be divulged by the United 

States to any person other than an 

authorized representative of the 

executive branch of the United States, 

except in the course of legal proceedings 

to which the United States is a party 

(including grand jury proceedings), or 

for the purpose of securing compliance 

with this Final Judgment, or as 

otherwise required by law. 

D. If at the time information or 

documents are furnished by defendants 

to the United States, defendants 

64976 Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 

represent and identify in writing the 

material in any such information or 

documents to which a claim of 

protection may be asserted under Rule 

26(c)(7) of the Federal Rules of Civil 

Procedures, and defendants mark each 

pertinent page of such material, 

‘‘Subject to claim of protection under 

Rule 26(c)(7) of the Federal Rules of 

Civil Procedure, then the United States 

shall give defendants ten (10) calendar 

days notice prior to divulging such 

material in any legal proceeding (other 

than a grand jury proceeding). 

XI. No Reacquisition 

Defendants may not reacquire any 

part of the Divestiture Assets from the 

Acquirer, or their successors, during the 

term of this Final Judgment. 

XII. Retention of Jurisdiction 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

its provisions.

XIII. Expiration of Final Judgment 

Unless this Court grants an extension, 

this Final Judgment shall expire ten (10) 

years from the date of its entry. 

XIV. Public Interest Determination 

Entry of this Final Judgment is in the 

public interest.

Date: llllllllllllllll

Court approval subject to procedures 

of Antitrust Procedures and Penalties 

Act, 15 U.S.C. 16

lllllllllllllllllll

United States District Judge 

Complaint 

The United States of America, acting 

under the direction of the Attorney 

General of the United States, brings this 

civil action to obtain equitable relief 

against defendants Connors Bros. 

Income Fund (‘‘Connors’’) and Bumble 

Bee Seafoods, LLC (‘‘Bumble Bee’’), and 

complains and alleges as follows: 

1. The United States brings this suit 

to prevent Connors from retaining a 

newly acquired near monopoly in 

sardine snack foods. On April 30, 2004, 

Connors consummated its acquisition of 

Bumble Bee. At the time of the 

transaction, Connors and Bumble Bee 

were the only two significant sellers of 

sardine snacks in the United States. 

2. Unless remedied, the acquisition 

will eliminate substantial head-to-head 

rivalry between Connors and Bumble 

Bee. Consequently, the elimination of 

Bumble Bee as an independent 

significant competitor will substantially 

lessen competition for the sale of 

sardine snacks and result in higher 

prices to United States consumers. The 

acquisition, therefore, violates Section 7 

of the Clayton Act, as amended, 15 

U.S.C. 18. 

I. Jurisdiction and Venue 

3. This Complaint is filed and this 

action is instituted under Section 15 of 

the Clayton Act, as amended, 15 U.S.C. 

25, in order to prevent and restrain 

defendants from violating Section 7 of 

the Clayton Act, as amended, 15 U.S.C. 

18. 

4. Connors and Bumble Bee sell 

sardine snacks in the flow of U.S. 

interstate commerce. Defendant’s 

activities in producing and marketing 

that product also substantially affect 

interstate commerce. The Court has 

subject matter jurisdiction over this 

action, 28 U.S.C. 1331, 1337(a) and 

1345. 

5. The defendants have consented to 

personal jurisdiction and venue in this 

judicial district.

II. The Defendants 

6. Connors Bros. Income Fund is a 

Canadian income trust with its 

headquarters in Blacks Harbour, New 

Brunswick, Canada. 

7. Even before its acquisition of 

Bumble Bee, Connors was the largest 

canned sardine company in the United 

States. It also sold other canned seafood 

products such as kippered herring 

snacks, fish steaks, shrimp, anchovies 

and oysters, as well as fish meal and 

fish oil. Connors operates four canning 

and processing facilities, two in Maine 

and two in New Brunswick, Canada. It 

sells three of the top four sardine snack 

brands in the United States—Beach 

Cliff, Brunswick, and Port Clyde; and its 

total sales of sardine snacks exceed $43 

million in 2003. 

8. Bumble Bee Seafoods, LLC, is a 

Delaware limited liability corporation 

with its headquarters in San Diego, 

California. Bumble Bee became a wholly 

owned corporate subsidiary of Connors 

after Connors acquired it on April 30, 

2004. Prior to its acquisition by 

Connors, Bumble Bee was a leading 

seller of canned seafood products. The 

Bumble Bee brand of sardine snacks was 

the third largest selling brand in the 

United States. In addition, Bumble Bee 

is one of the three largest sellers of tuna 

in the United States, and is a leading 

seller of other canned seafood products, 

such as premium sardines, salmon, 

mackerel and scallops. Bumble Bee 

reported U.S. sardine snack sales of 

approximately $9 million in 2003. 

III. Background 

9. Canned sardines are a processed 

fish product ready for immediate 

consumption by consumers. Sardine 

companies sell an array of canned 

sardine products, varying the fish, 

packaging, prices, and marketing. 

10. Sardine snacks, sometimes 

referred to as ‘‘mainstream’’ sardines in 

the industry, are the principal sardine 

product in the United States, with 

revenue and unit volumes far in excess 

of any other sardine product. They 

typically consist of herring and other 

small varieties of fish that are caught off 

the coasts of the United States 

(primarily Maine), Canada, Poland, 

Morocco, Thailand and South America, 

and processed in those countries. They 

are consumed primarily as snacks and 

packed in snack-size 3.75 ounce and 4.4 

ounce cans. 

11. Other sardine products include 

premium and ethic sardines. Premium 

sardines typically consist of brislings 

that are caught off the costs of Norway 

and Scotland, and processed in those 

countries. They sell for about two and 

a half times as much as sardine snacks. 

Ethnic sardines typically consist of 

pilchards and lower quality herring. 

They are generally consumed as main 

courses, packed in 15 ounce cans, sell 

for less than half the price of sardine 

snacks, are marketed primarily to 

members of specific ethnic groups, and 

are often displayed exclusively in ethnic 

sections of grocery stores. 

12. Brand recognition is an important 

factor in the marketing and sales of 

sardine snacks in the United States. 

Brands are generally used to distinguish 

different sardine products (i.e., sardine 

snacks, premium sardines and ethnic 

sardines), and to distinguish the 

different sellers who compete to sell 

each of those products. Consumers of 

sardine snacks generally will restrict 

their purchases to brands that they 

know and trust. 

IV. Trade and Commerce 

A. Relevant Product and Geographic 

Market 

13. A small but significant increase in 

the price of sardine snacks would not 

cause enough consumers to switch to 

other products (including premium and 

ethnic sardines) to make such a price 

increase unprofitable. Accordingly, the 

sale of sardine snacks is a line of 

commerce and a relevant product 

market within the meaning of Section 7 

of the Clayton Act.

14. Both Connors and Bumble Bee sell 

sardine snacks throughout the United 

States. A small but significant price 

increase in sardine snacks would not 

Federal Register / Vol. 69, No. 216 / Tuesday, November 9, 2004 / Notices 64977

cause a sufficient number of purchasers 

to switch to sardine snack brands not 

presently marketed in the United States 

to make the increase unprofitable. The 

relevant geographic market, therefore, 

within the meaning of Section 7 of the 

Clayton Act is no larger than the United 

States. 

B. Anticompetitive Effects 

15. The sardine snack market is 

highly concentrated, and the defendants 

are, by far, the largest sellers of those 

products in the United States. Connors 

and Bumble Bee both sell well 

established sardine brands. Brand 

recognition is important to consumers of 

sardines, and the transaction has 

combined the two owners of the four 

most successful sardine snack brands in 

the United States (Connors’ Brunswick, 

Beach Cliff and Port Clyde brands, and 

Bumble Bee). Connors accounts for an 

approximately 63 percent market share 

and Bumble Bee’s share is 

approximately 13 percent. Together, the 

two firms account for more than 75 

percent of United States sales of sardine 

snacks, and the remaining sales are 

widely dispersed among numerous 

firms with small individual market 

shares. 

16. The acquisition of Bumble Bee by 

Connors would substantially increase 

concentration and lessen competition in 

the United States sardine snack market. 

Using a measure of concentration called 

the Herfindahl-Hirschman Index 

(‘‘HHI’’), defined and explained in 

Exhibit A, combining Connors and 

Bumble Bee would substantially 

increase the already high concentration 

in the market. The combination would 

increase the HHI from about 4200 to 

more than 5800, well in excess of levels 

that raise significant antitrust concerns. 

17. The acquisition of Bumble Bee by 

Connors gives Connors the power 

profitably to increase prices unilaterally 

for one or more of its brands of sardine 

snacks, to the detriment of consumers. 

C. Entry and Expansion 

18. It is difficult to enter into the sale 

of sardine snacks in the United States, 

or to significantly expand sales of 

smaller brands. New entry or expansion 

requires years of effort and the 

investment of substantial sunk costs, 

including promotional expenditures and 

slotting allowances (for sales through 

grocery stores) to create brand 

awareness among consumers. Therefore, 

new entry or expansion would not be 

timely, likely or sufficient to thwart the 

anticompetitive effects of the 

acquisition. 

V. Violation Alleged 

19. The effect of Connors’ acquisition 

of Bumble Bee may be to substantially 

lessen competitive and tend to create a 

monopoly in interstate trade and 

commerce in violation of Section 7 of 

the Clayton Act. 

20 The combination will likely have 

the following effects, among others: 

a. Competition generally in the sale of 

sardine snacks in the United States 

would be substantially lessened; 

b. Actual and potential competition 

between Connors and Bumble Bee in the 

sale of sardine snacks in the United 

States would be eliminated; and

c. Prices for sardine snacks sold in the 

United States likely would increase. 

21. Unless restrained, the acquisition 

will violate Section 7 of the Clayton Act, 

as amended, 15 U.S.C. 18. 

VI. Requested Relief 

Plaintiff requests: 

1. That Connors’ acquisition of 

Bumble Bee be adjudged and decreed to 

be unlawful and in violation of Section 

7 of the Clayton Act, as amended, 15 

U.S.C. 18; 

2. That Connors be ordered to divest 

Bumble Bee, and defendants and all 

persons acting on their behalf be 

permanently enjoined and restrained 

from carrying out any agreement, 

understanding, or plan, the effect of 

which would be to combine the 

businesses or assets of the defendants; 

3. That plaintiff be awarded its costs 

of this action; and 

4. That plaintiff receive such other 

and further relief as the case requires 

and the Court deems proper.

Dated: August 31, 2004. 

Respectfully submitted,

R. Hewitt Pate, D.C. Bar #473598; 

Assistant Attorney General.

J. Bruce McDonald 

Deputy Assistant Attorney General.

J. Robert Kramer, II, Pa. Bar #23963, 

Director of Operations and Civil Enforcement.

Roger W. Fones, DC Bar #303255, 

Chief, Transportation, Energy and Agriculture 

Section.

Donna Kooperstein, 

Assistant Chief, Transportation, Energy and 

Agriculture Section.

Robert L. McGeorge, DC Bar #91900. 

Michelle J. Livingston. 

Hillary L. Snyder, 

Trial Attorneys, United States Department of 

Justice, Antitrust Division, Transportation, 

Energy and Agriculture Section, 325 7th 

Street, NW.; Suite 500, Washington, DC 

20530. Telephone: (202) 307–6351. Facsimile 

(202) 307–2784.

Exhibit A—Definition of ‘‘HHI’’

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 and 

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 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 

1000 and 1800 are considered to be 

moderately concentrated, and markets 

in which the HHI is in excess of 1800 

points are considered to be highly 

concentrated. Transactions that increase 

the HHI by more than 100 points in 

highly concentrated markets 

presumptively raise significant antitrust 

concerns under the Department of 

Justice and Federal Trade Commission 

1992 Horizontal Merger Guidelines.

[FR Doc. 04–24902 Filed 11–8–04; 8:45 am] 

BILLING CODE 4410–11–M

DEPARTMENT OF LABOR

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