79394 Federal Register / Vol. 75, No. 243 / Monday, December 20, 2010 / Notices 

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cost) payable to the U.S. Treasury or, if 

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[FR Doc. 2010–31808 Filed 12–17–10; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States v. L.B. Foster Company 

and Portec Rail Products, Inc.; 

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, 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. 

L.B. Foster Company and Portec Rail 

Products, Inc., Civil Action No. 1:10– 

cv–02115. On December 14, 2010, the 

United States filed a Complaint alleging 

that the proposed acquisition by L.B. 

Foster Company (‘‘Foster’’) of Portec Rail 

Products, Inc. (‘‘Portec’’) would violate 

Section 7 of the Clayton Act, 15 U.S.C. 

18. The proposed Final Judgment, filed 

at the same time as the Complaint, 

requires Foster to divest Portec’s entire 

rail joint operations (excluding some 

assets in the United Kingdom), 

including Portec’s manufacturing 

facility located in Huntington, West 

Virginia and tangible and intangible 

assets associated with Portec’s rail 

joints, as well as assets used to 

manufacture and sell certain other 

related and complementary products 

currently manufactured at the 

Huntington facility. The proposed Final 

Judgment requires that these assets be 

sold to Koppers Inc. Copies of the 

Complaint, proposed Final Judgment, 

and Competitive Impact Statement are 

available for inspection at the 

Department of Justice, Antitrust 

Division, Antitrust Documents Group, 

450 Fifth Street, NW., Suite 1010, 

Washington, DC 20530 (telephone: (202) 

514–2481), on the Department of 

Justice’s Web site at http:// 

www.usdoj.gov/atr, and at the Office of 

the Clerk of the United States District 

Court for 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 and responses thereto will be 

published in the Federal Register and 

filed with the Court. Comments should 

be directed to Maribeth Petrizzi, Chief, 

Litigation II Section, Antitrust Division, 

U.S. Department of Justice, 450 Fifth 

Street, NW., Suite 8700, Washington, 

DC 20530 (telephone: (202) 307–0924). 

Patricia A. Brink, 

Director of Civil Enforcement. 

United States District Court for the 

District Of Columbia 

United States of America, United States 

Department of Justice, Antitrust 

Division, 450 Fifth Street, NW., Suite 

8700, Washington, DC 20530, Plaintiff 

v. 

L.B. Foster Company, 415 Holiday Drive, 

Pittsburgh, Pennsylvania 15220, and 

Portec Rail Products, Inc., 900 Old 

Freeport Road, Pittsburgh, 

Pennsylvania 15238, Defendants. 

Case: 1:10–cv–02115. 

Assigned To: Urbina, Ricardo M. 

Assign. Date: 12/14/2010. 

Description: Antitrust. 

Complaint 

The United States of America 

(‘‘United States’’), acting under the 

direction of the Attorney General of the 

United States, brings this civil antitrust 

action against Defendants L.B. Foster 

Company (‘‘Foster’’) and Portec Rail 

Products, Inc. (‘‘Portec’’) to enjoin 

Foster’s proposed acquisition of Portec 

and to obtain other equitable relief. The 

United States complains and alleges as 

follows: 

I. Nature of the Action 

1. On February 16, 2010, Foster and 

Portec entered into an Agreement and 

Plan of Merger (‘‘Merger Agreement’’). 

Pursuant to the Merger Agreement, on 

February 26, 2010, Foster made a cash 

tender offer to acquire all the 

outstanding shares of common stock of 

Portec for $11.71 per share. On August 

30, 2010, Foster increased its offer to 

$11.80 per share. The transaction is 

valued at approximately $114 million. 

2. In the United States, Foster’s 

proposed acquisition of Portec likely 

would substantially lessen competition 

in two separate product markets— 

bonded insulated rail joints (‘‘bonded 

joints’’) and polyurethane-coated 

insulated rail joints (‘‘poly joints’’). 

Foster and Portec are virtually the only 

manufacturers of bonded joints in the 

United States and currently supply 

approximately 95 percent of the market. 

For many customers, Foster and Portec 

are the only approved suppliers of these 

joints. In addition, Foster and Portec are 

two of only three suppliers of poly 

joints in the United States and currently 

supply approximately 54 percent of the 

market. 

3. Elimination of the competition 

between Foster and Portec likely will 

result in Foster’s ability to unilaterally 

raise prices of bonded joints and poly 

joints to most customers. The proposed 

acquisition also likely would reduce 

Foster’s incentive to invest in 

innovation in bonded joints. In 

addition, by eliminating Portec as a 

supplier, the acquisition increases the 

likelihood of coordinated interaction 

between Foster and the other supplier of 

poly joints. 

4. As a result, the proposed 

acquisition likely would substantially 

lessen competition in the development, 

manufacture, and sale of bonded joints 

and in the development, manufacture, 

and sale of poly joints in the United 

States, in violation of Section 7 of the 

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

II. The Defendants 

5. Foster is incorporated in 

Pennsylvania and has its headquarters 

in Pittsburgh, Pennsylvania. It 

manufactures and distributes numerous 

products and services for the rail, 

construction, energy, and utility 

industries and has approximately 30 

locations throughout the United States. 

For the rail industry, Foster 

manufactures, among other products, 

bonded joints, poly joints, tie plates, 

and rails. Foster had total revenues of 

approximately $512 million in 2008 and 

approximately $382 million in 2009. 

6. Portec is incorporated in West 

Virginia and has its headquarters in 

Pittsburgh, Pennsylvania. Portec also 

manufactures and distributes numerous 

products and services for the rail 

industry and other industries. For the 

rail industry, Portec manufactures, 

among other things, bonded joints, poly 

joints, rail lubricators, end posts, and 

curv blocks. Portec has several locations 

in the United States and abroad. Portec 

had total revenues of approximately 

$109 million in 2008 and approximately 

$92.2 million in 2009. 

III. Jurisdiction and Venue 

7. The United States brings this action 

under Section 15 of the Clayton Act, 15 

U.S.C. 4 and 25, as amended, to prevent 

and restrain Defendants from violating 

Section 7 of the Clayton Act, 15 U.S.C. 

18. 

8. Defendants develop, manufacture, 

and sell bonded joints, poly joints, and 

other products in the flow of interstate 

commerce. Defendants’ activities in the 


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development, manufacture, and sale of 

these products substantially affect 

interstate commerce. This Court has 

subject matter jurisdiction over this 

action pursuant to Section 15 of the 

Clayton Act, 15 U.S.C. 25, and 28 U.S.C. 

1331, 1337(a), and 1345. 

9. Defendants have consented to 

venue and personal jurisdiction in this 

judicial district. 

IV. Trade and Commerce 

A. Background 

(1) Insulated Rail Joints 

10. Railroad tracks are divided into 

discrete sections, called track circuits. 

Electricity flows through the rail in each 

track circuit. Each track circuit is 

electrically isolated from the others. As 

the train enters a track circuit, the 

circuit allows the train to signal that it 

is passing through that particular 

circuit, which leads to the operation of 

automatic signals at rail crossings and 

switches farther up the line. The track 

circuit also enables the railroad operator 

to monitor the location of the trains. 

11. Railroad tracks are generally 

welded together, within a track circuit, 

forming the strongest possible bond. 

However, welding cannot be used to 

connect the pieces of rail between 

separate track circuits because that 

would allow the electric current to flow 

between the circuits and interfere with 

a train’s signaling. Using an insulated 

rail joint is the only method available to 

connect the rail pieces at the ends of the 

track circuits and insulate the circuits 

from one another. Rail joints consist of 

steel bars that are bolted onto the ends 

of each of the rail pieces and are used 

to connect the abutting ends of the rails. 

Insulated rail joints are joints that are 

used to break the electric current 

flowing through the rail, using a 

material placed on the steel bars and 

between the two abutting pieces of rail. 

12. The reliability of an insulated rail 

joint is critical to the safety and efficient 

operation of the railroad. It is difficult 

to develop and manufacture insulated 

rail joints that can successfully 

withstand railroads’ usage without 

failing, particularly in the most 

demanding applications. Rail connected 

by a rail joint is inherently weaker than 

rail that has been welded together. If the 

joint is subjected to heavy usage—for 

example, because the track it is on 

frequently carries heavily loaded rail 

cars—the joint may wear down over 

time and eventually break. In addition, 

an insulated rail joint may lose its 

insulating properties. If an insulated rail 

joint fails, the railroad operator will not 

know the location of the train and the 

signals will not operate properly. At the 

extreme, the failure of an insulated rail 

joint could cause a train derailment. At 

the least, failure of an insulated rail 

joint could cause the railroad to expend 

significant amounts of money 

determining the location of and 

replacing the failed joints. It could also 

bring the operation of the railroad to a 

halt while the failed joints are replaced. 

13. Ensuring that the insulated rail 

joints will last for the expected life of 

the joint without failure is vital to the 

railroads. It is costly to replace these 

joints and an unscheduled replacement 

can disrupt the operations of the 

railroad. As a result, the largest U.S. 

railroads, called Class 1 railroads, 

engage in extensive, multi-year testing 

to ensure that any new insulated rail 

joint, or any insulated rail joint offered 

by a new supplier, will meet their 

reliability and quality needs. The 

railroads must be assured that the joints 

are designed to last and the supplier’s 

manufacturing processes are sufficiently 

well controlled that all joints will last 

the requisite time without failing. 

14. Railroads gain substantially from 

improvements in the reliability and 

effective life of insulated rail joints. 

Therefore, railroads have made research 

and development associated with these 

joints an important component of the 

competitive process. Manufacturers 

must make substantial investments in 

research and development to compete 

effectively for the business of the major 

railroads. 

15. The two primary types of 

insulated rail joints are bonded joints 

and poly joints. Customers seek bids for 

either bonded joints or poly joints, 

based on the particular application. 

(2) Bonded Joints 

16. Bonded joints use epoxy in 

addition to bolts to bind the steel bars 

to the rails. With the addition of epoxy, 

the rails, bars, bolts, and insulating 

material that make up the joint are less 

subject to movement when a railcar 

passes over the joint and thus suffer less 

wear and tear. As a result, bonded joints 

are able to withstand the heaviest loads 

for extended periods of time. Because of 

their strength, certain of Foster’s and 

Portec’s bonded joints typically are 

guaranteed to last until 500 million 

gross tons have passed over the joints. 

17. The strength of bonded joints 

makes them necessary for the freight 

railroads’ high-usage main track lines. 

This is especially true for the Class 1 

railroads, which handle most of the 

heavy rail traffic in the United States. 

No other insulated rail joint is strong 

enough to withstand the heavy loads on 

these lines. Bonded joints are also 

necessary for some heavily traveled 

areas on main passenger lines and 

regional and short line railroads. 

(3) Poly Joints 

18. Poly joints can be used to 

electrically isolate track circuits from 

one another. In contrast to bonded 

joints, poly joint components are not 

bound together by epoxy. Instead, 

electrical insulation in poly joints is 

provided by a polyurethane-covered bar 

that is bolted to the rail. No mechanism 

is added to provide additional strength, 

and nothing binds the joint to the rails 

except the bolts. Poly joints are not as 

strong and long lasting as bonded joints. 

They are significantly less expensive 

than bonded joints. 

19. Poly joints are generally used by 

Class 1 railroads to create track circuits 

in areas with lesser loads and traffic 

than on the main tracks, or on other 

less-heavily used sections of track. Poly 

joints also may be used as temporary 

replacements for bonded joints, but only 

until bonded joints can be installed. In 

addition, poly joints are used by some 

passenger railroads or other smaller 

railroads, which carry less weight on 

their tracks. 

B. Relevant Markets 

(1) Bonded Joints 

20. The development, manufacture, 

and sale of bonded joints in the United 

States is a line of commerce and 

relevant market within the meaning of 

Section 7 of the Clayton Act. 

21. Bonded joints have specific 

applications, for which other types of 

joints can rarely, if ever, be employed. 

Bonded joints are typically used on the 

main tracks of the freight railroads. 

Other types of joints, such as poly 

joints, cannot handle over time the 

heavy loads on these tracks because 

they are not strong enough. 

22. The vast majority of Foster’s and 

Portec’s sales of bonded joints are made 

to large customers located in the United 

States. Major U.S. customers consider 

only those suppliers of bonded joints 

located in the United States because of 

these suppliers’ proximity to their rail 

lines. A supplier’s proximity to 

customers’ rail lines reduces both 

freight costs, which are a significant 

factor in the final cost of a bonded joint, 

and delivery times, and allows better 

customer service. 

23. A small but significant increase in 

the price of bonded joints would not 

cause U.S. customers of bonded joints to 

substitute a different joint or other 

product, reduce purchases of bonded 

joints, or turn to suppliers outside the 

United States, in volumes sufficient to 

make such a price increase unprofitable. 


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(2) Poly Joints 

24. The development, manufacture, 

and sale of poly joints in the United 

States is a line of commerce and 

relevant market within the meaning of 

Section 7 of the Clayton Act. 

25. A customer whose requirements 

will be satisfied by a poly joint would 

rarely, if ever, substitute a bonded joint, 

even if the price of poly joints were to 

rise. 

26. The three primary suppliers of 

poly joints in the United States ship 

poly joints to customers located 

throughout the United States. Because 

all three suppliers are located within 

approximately 200 miles of one another, 

customers pay only minimal differences 

in freight costs. U.S. customers of poly 

joints consider only those suppliers 

located in the United States to avoid 

higher freight costs, reduce delivery 

times, and allow better customer 

service. 

27. A small but significant increase in 

the price of poly joints would not cause 

U.S. customers of poly joints to 

substitute a different joint or other 

product, reduce purchases of poly 

joints, or turn to suppliers outside the 

United States, in volumes sufficient to 

make such a price increase unprofitable. 

C. Market Participants 

(1) Bonded Joints 

28. Foster and Portec are the only 

significant competitors in the U.S. 

market for bonded joints. Currently, 

Foster and Portec sell approximately 51 

and 44 percent, respectively, of U.S. 

bonded joints. One other company 

accounts for the remaining five percent 

of this market. In addition, this third 

competitor does not have the same 

commitment to research and 

development as Foster and Portec. As a 

result, the combination of Foster and 

Portec will create a virtual monopoly in 

the U.S. market for bonded joints. 

(2) Poly Joints 

29. Foster, Portec, and one other 

company are the only competitors in the 

U.S. market for poly joints. Currently, 

Foster and Portec sell approximately 21 

and 33 percent, respectively, of U.S. 

poly joints. The third competitor 

accounts for the remaining sales in this 

market. 

V. Competitive Effects 

A. Bonded Joints 

30. Foster’s proposed acquisition of 

Portec likely would substantially lessen 

competition in the U.S. market for 

bonded joints. Foster and Portec are the 

two primary suppliers of bonded joints 

to most U.S. customers. If the 

acquisition is not enjoined, the 

combined firm would supply 

approximately 95 percent of the bonded 

joints in the United States. Using a 

measure called the HerfindahlHirschman Index (‘‘HHI’’) (explained in 

Appendix A), the HHI would increase 

by approximately 4,500 points, resulting 

in a post-acquisition HHI of more than 

9,000 points. 

31. Foster’s and Portec’s bidding 

behavior often has been constrained by 

the possibility of losing sales of bonded 

joints to the other. For many customers 

of bonded joints, Foster and Portec are 

either the only sources, or the two best 

sources. 

32. Customers have benefitted from 

the competition between Foster and 

Portec for sales of bonded joints by 

receiving lower prices. In addition, 

Foster and Portec have competed 

vigorously by providing innovations 

that have resulted in higher-quality and 

longer-lasting joints. The combination of 

Foster and Portec would eliminate this 

competition and its future benefits to 

customers. Post-acquisition, Foster 

likely would have the incentive and 

gain the ability profitably to increase 

prices, reduce quality, reduce 

innovation, and provide less customer 

service compared to these aspects of 

competition absent the acquisition. The 

small remaining competitor has limited 

customer acceptance and would not 

have the ability to make additional sales 

sufficient to discipline post-acquisition 

anticompetitive effects. 

33. The proposed acquisition, 

therefore, likely would substantially 

lessen competition in the United States 

for the development, manufacture, and 

sale of bonded joints. This likely would 

lead to higher prices, lower quality, less 

customer service, and less innovation in 

violation of Section 7 of the Clayton 

Act. 

B. Poly Joints 

34. Foster’s proposed acquisition of 

Portec likely would substantially lessen 

competition in the U.S. market for poly 

joints. If the acquisition is not enjoined, 

the combined firm would supply 

approximately 54 percent of the poly 

joints in the United States. The HHI 

would increase by more than 1,300 

points, resulting in a post-acquisition 

HHI of more than 5,000 points. 

35. Foster’s and Portec’s bidding 

behavior often has been constrained by 

the possibility of losing sales of poly 

joints to the other. 

36. Customers have benefitted from 

competition between Foster, Portec, and 

the other competitor by receiving lower 

prices. The products of the three firms 

are to some degree different, and the 

elimination of Portec likely would allow 

the two remaining competitors to 

increase prices. The combination of 

Foster and Portec would eliminate the 

significant competition between Foster 

and Portec and its future benefits to 

customers. Post-acquisition, Foster 

likely would have the incentive and 

gain the ability to profitably increase 

prices and provide less customer service 

compared to these aspects of 

competition absent the acquisition. 

37. In addition, by reducing the 

number of competitors in the U.S. 

market for poly joints from three to two, 

Foster and its only remaining 

competitor likely would gain the 

incentive and ability to raise prices 

through coordinated interaction by 

directly increasing prices, allocating 

customers, or restricting output or 

capacity. Coordination would be more 

likely or more effective because, with 

two significant competitors in the 

market, both could be reasonably certain 

of the identity of the other’s customers, 

likely making cheating, such as 

discounting, easier to detect and 

discipline. 

38. The proposed acquisition, 

therefore, likely would substantially 

lessen competition in the United States 

for the development, manufacture, and 

sale of poly joints. This likely would 

lead to higher prices and less customer 

service in violation of Section 7 of the 

Clayton Act. 

VI. Difficulty of Entry 

A. Bonded Joints 

39. Sufficient, timely entry of 

additional competitors into the U.S. 

market for bonded joints is unlikely. 

Therefore, entry or the threat of entry 

into this market is not likely to prevent 

the harm to competition caused by the 

elimination of Portec as a supplier. 

40. Firms attempting to enter the U.S. 

market for the development, 

manufacture, and sale of bonded joints 

face several significant impediments to 

rapid, successful, and profitable entry. 

The new supplier of bonded joints must 

develop and successfully operate a 

production process that consistently 

produces a large number of high-quality 

bonded joints that meet the rigorous 

specifications set by the railroads. In 

addition, a new entrant must be 

committed to investing in research and 

development to meet the railroads’ 

ongoing desire for innovation. The 

design for bonded joints is continually 

evaluated in order to improve the 

strength and longevity of the joints. The 

technical know-how and expertise 

necessary to consistently manufacture a 

large number of high-quality bonded 


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joints and to design improvements that 

pass customers’ qualification tests are 

difficult to obtain and learned only after 

years of direct experience. 

41. Further, a new supplier’s bonded 

joint must pass potential customers’ 

approval processes by demonstrating 

that the joints can meet rigorous quality 

and performance standards and perform 

well over time with heavy freight loads. 

For example, many railroads, especially 

the Class 1 railroads, insist that new 

bonded joints undergo laboratory testing 

plus several years of in-track testing. 

Railroads want to observe that the joints 

perform well over time before installing 

a significant number on their tracks. 

Moreover, attempts for approval are not 

guaranteed to be successful, and the 

approval process can take several years, 

especially if the first few attempts for 

approval are not successful. Because 

each customer’s specifications may be 

unique, approval by one customer does 

not guarantee approval by any other 

customer. 

42. For these reasons, entry by new 

firms or the threat of entry by new firms 

into the U.S. market for the 

development, manufacture, and sale of 

bonded joints would not defeat the 

substantial lessening of competition that 

likely would result if Foster acquires 

Portec. 

B. Poly Joints 

43. Sufficient, timely entry into the 

U.S. market for poly joints is also 

unlikely. Therefore, entry or the threat 

of entry into this market is not likely to 

prevent the harm to competition caused 

by the elimination of Portec as a 

supplier. 

44. The expertise to design and 

implement a process to manufacture a 

large number of high-quality poly joints 

on a consistent basis is difficult to 

obtain and takes years of experience to 

develop. In addition, a new poly joint 

supplier must obtain approvals from the 

railroads by demonstrating that its joints 

can meet the railroads’ rigorous quality 

and performance standards. This 

rigorous approval process can take 

eighteen months or more. Further, 

attempts for approval are not guaranteed 

to be successful and can take several 

years, especially if the first few attempts 

for approval are unsuccessful. 

45. For these reasons, entry by new 

firms or the threat of entry by new firms 

into the U.S. market for the 

development, manufacture, and sale of 

poly joints would not defeat the 

substantial lessening of competition that 

would likely result if Foster acquires 

Portec. 

VII. The Proposed Acquisition Violates 

Section 7 of the Clayton Act 

46. Foster’s proposed acquisition of 

Portec likely would substantially lessen 

competition in the development, 

manufacture, and sale of bonded joints 

and the development, manufacture, and 

sale of poly joints in the United States 

in violation of Section 7 of the Clayton 

Act, 15 U.S.C. 18. 

47. Unless enjoined, the proposed 

acquisition likely would have the 

following anticompetitive effects, 

among others: 

(a) Actual and potential competition 

between Foster and Portec in the 

markets for the development, 

manufacture, and sale of bonded joints 

and the development, manufacture, and 

sale of poly joints in the United States 

would be eliminated; 

(b) Competition in the markets for the 

development, manufacture, and sale of 

bonded joints and the development, 

manufacture, and sale of poly joints in 

the United States likely would be 

substantially lessened; 

(c) For bonded joints in the United 

States, prices likely would increase and 

quality, customer service, and 

innovation likely would decrease; and 

(d) For poly joints in the United 

States, prices likely would increase and 

customer service likely would decrease. 

VIII. Requested Relief 

48. The United States requests that 

this Court: 

(a) Adjudge and decree that Foster’s 

acquisition of Portec would be unlawful 

and violate Section 7 of the Clayton Act, 

15 U.S.C. 18; 

(b) Preliminarily and permanently 

enjoin and restrain Defendants and all 

persons acting on their behalf from 

consummating the proposed acquisition 

of Portec by Foster, or from entering into 

or carrying out any other contract, 

agreement, plan, or understanding, the 

effect of which would be to combine 

Foster with Portec; 

(c) Award the United States its costs 

for this action; and 

(d) Award the United States such 

other and further relief as the Court 

deems just and proper. 

For Plaintiff United States of America: 

Christine A. Varney, 

Assistant Attorney General. 

Molly S. Boast, 

Deputy Assistant Attorney General. 

Katherine B. Forrest, 

Deputy Assistant Attorney General. 

Patricia A. Brink, 

Director of Civil Enforcement. 

Maribeth Petrizzi (DC Bar #435204), 

Chief, Litigation II Section. 

Dorothy B. Fountain (DC Bar #439469), 

Assistant Chief, Litigation II Section. 

Christine A. Hill (DC Bar #461048), 

Leslie D. Peritz, 

Robert W. Wilder, 

Erin Carter Grace, 

Attorneys, United States Department of 

Justice, Antitrust Division, 450 Fifth Street, 

NW., Suite 8700, Washington, DC 20530. 

(202) 305–2738. 

Dated: December 14, 2010. 

Appendix A 

Definition of HHI 

The term ‘‘HHI’’ means the HerfindahlHirschman Index, a commonly accepted 

measure of market concentration. The HHI is 

calculated by squaring the market share of 

each firm competing in the market and then 

summing the resulting numbers. For 

example, for a market consisting of four firms 

with shares of 30, 30, 20, and 20 percent, the 

HHI is 2,600 (302 + 302 + 202 + 202 = 2,600). 

The HHI takes into account the relative size 

distribution of the firms in a market. It 

approaches zero when a market is occupied 

by a large number of firms of relatively equal 

size and reaches its maximum of 10,000 

points when a market is controlled by a 

single firm. The HHI increases both as the 

number of firms in the market decreases and 

as the disparity in size between those firms 

increases. 

Markets in which the HHI is between 1,500 

and 2,500 points are considered to be 

moderately concentrated, and markets in 

which the HHI is in excess of 2,500 points 

are considered to be highly concentrated. See 

Horizontal Merger Guidelines § 5.3 (issued by 

the U.S. Department of Justice and the 

Federal Trade Commission on Aug. 19, 

2010). Transactions that increase the HHI by 

more than 200 points in highly concentrated 

markets will be presumed likely to enhance 

market power. Id. 

United States District Court for the District 

of Columbia 

United States of America, Plaintiff 

v. 

L.B. Foster Company and Portec Rail 

Products, Inc,. Defendants. 

Case: 1:10–cv–02115. 

Assigned To: Urbina, Ricardo M. 

Assign. Date: 12/14/2010. 

Description: Antitrust. 

Competitive Impact Statement 

Plaintiff United States of America (‘‘United 

States’’), pursuant to Section 2(b) of the 

Antitrust Procedures and Penalties Act 

(‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C. 16(b)– 

(h), files this Competitive Impact Statement 

relating to the proposed Final Judgment 

submitted for entry in this civil antitrust 

proceeding. 

I. Nature and Purpose of the Proceeding 

Defendants L.B. Foster Company (‘‘Foster’’) 

and Portec Rail Products, Inc. (‘‘Portec’’) 

entered into an Agreement and Plan of 

Merger, dated February 16, 2010. Pursuant to 

the Merger Agreement, on February 26, 2010, 

Foster made a cash tender offer to acquire all 

the outstanding shares of common stock of 

Portec for $11.71 per share. Foster later 


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1This excludes, however, Portec’s Coronet 

products, which are manufactured in the United 

Kingdom. The Coronet rail joints are based on 

different specifications than the rail joints 

manufactured and sold by Portec in the United 

States. In addition, the Coronet rail joints have 

never been sold in the United States. 

increased its offer to $11.80 per share. The 

transaction value is currently approximately 

$114 million. 

The United States filed a civil antitrust 

Complaint on December 14, 2010, seeking to 

enjoin the proposed acquisition, alleging that 

it likely would substantially lessen 

competition in two separate product 

markets—bonded insulated rail joints 

(‘‘bonded joints’’) and polyurethane-coated 

insulated rail joints (‘‘poly joints’’)—in 

violation of Section 7 of the Clayton Act, 15 

U.S.C. 18. Foster and Portec are virtually the 

only manufacturers of bonded joints in the 

United States. The loss of competition from 

the acquisition likely would result in higher 

prices, lower quality, less customer service, 

and less innovation in the development, 

manufacture, and sale of bonded joints in the 

United States. In addition, Foster and Portec 

are two of only three suppliers of poly joints 

in the United States. The loss of competition 

from the acquisition likely would result in 

higher prices and less customer service in the 

development, manufacture, and sale of poly 

joints in the United States. 

At the same time the Complaint was filed, 

the United States filed a Hold Separate 

Stipulation and Order (‘‘Hold Separate’’) and 

proposed Final Judgment, which are 

designed to eliminate the anticompetitive 

effects that would result from Foster’s 

acquisition of Portec. Under the proposed 

Final Judgment, which is explained more 

fully below, Foster is required to divest 

Portec’s entire rail joint business,1 including 

Portec’s only U.S. manufacturing facility, 

located in Huntington, West Virginia. Foster 

is also required to divest several other 

products currently manufactured in Portec’s 

Huntington facility. Under the terms of the 

Hold Separate, Foster’s and Portec’s 

operations will remain entirely separate until 

the divestiture takes place. Pursuant to the 

Hold Separate, Foster and Portec must take 

certain steps to ensure that the assets being 

divested continue to be operated in a 

competitively and economically viable 

manner and that competition for the products 

being divested is maintained during the 

pendency of the divestiture. 

The United States and Defendants have 

stipulated that the proposed Final Judgment 

may be entered after compliance with the 

APPA. Entry of the proposed Final Judgment 

would terminate this action, except that the 

Court would retain jurisdiction to construe, 

modify, or enforce the provisions of the Final 

Judgment and to punish violations thereof. 

II. Description of the Events Giving Rise to 

the Alleged Violations 

A. The Defendants 

Foster manufactures and distributes 

numerous products and services for the rail, 

construction, energy, and utility industries. 

For the rail industry, Foster manufactures, 

among other products, bonded joints, poly 

joints, tie plates, and rails. Foster had total 

revenues of approximately $512 million in 

2008 and approximately $382 million in 

2009. Foster supplies approximately 51 

percent of the bonded joints and 21 percent 

of the poly joints in the United States. 

Portec also manufactures and distributes 

numerous products and services for the rail 

industry and other industries. For the rail 

industry, Portec manufactures, among other 

things, bonded joints, poly joints, rail 

lubricators, end posts, and curv blocks. 

Portec had total revenues of approximately 

$109 million in 2008 and approximately 

$92.2 million in 2009. Portec supplies 

approximately 44 percent of the bonded 

joints and 33 percent of the poly joints in the 

United States. 

B. The Competitive Effects of the Acquisition 

on the U.S. Markets for Bonded Joints and 

Poly Joints 

1. Relevant Markets 

Railroad tracks are divided into discrete 

sections, called track circuits. Electricity 

flows through the rail in each track circuit, 

and each track circuit is electrically isolated 

from the others. As the train enters a track 

circuit, the circuit allows the train to signal 

that it is passing through that particular 

circuit, which leads to the operation of 

automatic signals at rail crossings and 

switches. The track circuits also enable the 

railroad operator to monitor the location of 

the trains. Most pieces of railroad track are 

welded together within a track circuit, 

forming the strongest possible bond. 

However, welding cannot be used to connect 

the pieces of rail between separate track 

circuits because that would allow the electric 

current to flow between the circuits and 

interfere with the train’s signaling. Using an 

insulated rail joint is the only method 

available to connect the rail pieces at the 

ends of the track circuits and insulate the 

circuits from one another. Rail joints consist 

of steel bars that are bolted onto the ends of 

each of the rail pieces and are used to 

connect the abutting ends of the rails. 

Insulated rail joints contain material placed 

on the steel bars and between the two 

abutting pieces of rail, which prevents the 

electric current from flowing between the 

track circuits. 

The reliability of an insulated rail joint is 

critical to the safety and efficient operation 

of the railroad. It is difficult to develop and 

manufacture insulated rail joints that can 

successfully withstand railroads’ usage 

without failing, particularly in the most 

demanding applications. Rail connected by a 

rail joint is inherently weaker than rail that 

has been welded together, and if the joint is 

subjected to heavy usage, the joint may wear 

down over time and eventually break. An 

insulated rail joint may also lose its 

insulating properties over time. The 

consequences of a failed insulated joint can 

be quite serious, as the railroad operator will 

not know the location of the train and the 

signals will not operate properly. 

It is vital to the railroads that insulated rail 

joints last for their expected life without 

failure. To that end, the largest U.S. railroads 

engage in extensive, multi-year testing to 

ensure than any new insulated rail joint 

product, or any insulated rail joint offered by 

a new supplier, will meet their reliability and 

quality needs. The railroads must be assured 

that the joints are designed to last and the 

supplier’s manufacturing processes are 

sufficiently well controlled that all joints will 

last the requisite time without failing. 

Railroads gain substantially from 

improvements in the reliability and effective 

life of joints. Consequently, research and 

development is an important component of 

the competitive process, and insulated joint 

manufacturers must make substantial 

investments in research and development to 

compete effectively for sales to the major 

railroads. 

The two primary types of insulated rail 

joints are bonded joints and poly joints. 

Customers seek bids for either bonded joints 

or poly joints, based on the particular 

application. Bonded joints use epoxy in 

addition to bolts to bind the steel bars to the 

rails. With the addition of epoxy, the rails, 

bars, bolts, and insulating material that make 

up the joint are less subject to movement 

when a railcar passes over the joint, and thus 

suffer less wear and tear. Bonded joints are 

able to withstand the heaviest loads for 

extended periods of time, and are typically 

guaranteed to last until 500 million gross 

tons have passed over them. 

Because of their strength, bonded joints are 

necessary for the freight railroads’ high-usage 

main track lines. This is especially true for 

the Class 1 railroads, which are the largest 

U.S. railroads and handle most of the heavy 

freight rail traffic in the United States. No 

other insulated rail joint is strong enough to 

withstand the heavy loads on these lines over 

time. Bonded joints are also necessary for 

some heavily traveled areas on main 

passenger lines and regional and short line 

railroads. Bonded joints have specific 

applications, for which any other type of 

joint can rarely, if ever, be employed. 

The vast majority of Foster’s and Portec’s 

sales of bonded joints are made to large 

customers located in the United States. Major 

U.S. customers consider only those suppliers 

of bonded joints located in the United States 

because of these suppliers’ proximity to their 

rail lines, which significantly reduces both 

freight costs and delivery times and allows 

better customer service. A small but 

significant increase in the price of bonded 

joints would not cause U.S. customers of 

bonded joints to substitute a different joint or 

any other type of product, reduce purchases 

of bonded joints, or turn to suppliers outside 

the United States, in volumes sufficient to 

make such a price increase unprofitable. 

Thus, the development, manufacture, and 

sale of bonded joints in the United States is 

a line of commerce and relevant market 

within the meaning of Section 7 of the 

Clayton Act. 

Like bonded joints, poly joints also are 

used to electrically isolate track circuits. 

Unlike bonded joints, the electrical 

insulation in poly joints is provided by a 

polyurethane-covered bar that is bolted to the 

rail. The joint components are not bound 

together by epoxy, and no mechanism is 

added to provide additional strength to the 

joint. Poly joints are not as strong and do not 

last as long as bonded joints. They are also 


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significantly less expensive than bonded 

joints. Because they are weaker than bonded 

joints, freight railroads typically use poly 

joints to create track circuits in areas with 

lesser loads and traffic than on the main 

tracks or on other less-heavily used sections 

of track. Poly joints also may be used as 

temporary replacements for bonded joints, 

but only until bonded joints can be installed. 

Poly joints are used by some passenger 

railroads or other smaller railroads, which 

carry less weight on their tracks. A customer 

whose requirements will be satisfied by a 

poly joint would rarely, if ever, substitute a 

bonded joint, even if the price of poly joints 

were to rise. 

The three primary suppliers of poly joints 

in the United States ship poly joints to 

customers located throughout the United 

States. Because all three suppliers are located 

within approximately 200 miles of one 

another, customers pay only minimal 

differences in freight costs. U.S. customers of 

poly joints consider only those suppliers 

located in the United States to avoid higher 

freight costs, reduce delivery times, and 

allow better customer service. 

A small but significant increase in the 

price of poly joints would not cause U.S. 

customers of poly joints to substitute a 

different joint or any other type of product, 

otherwise reduce purchases of poly joints, or 

turn to suppliers outside the United States, 

in volumes sufficient to make such a price 

increase unprofitable. Thus, the 

development, manufacture, and sale of poly 

joints in the United States is a line of 

commerce and relevant market within the 

meaning of Section 7 of the Clayton Act. 

2. Anticompetitive Effects 

Foster’s acquisition of Portec likely would 

substantially lessen competition in the 

United States for bonded joints and poly 

joints. For most U.S. customers of bonded 

joints, Portec and Foster are the two primary 

suppliers and are often the only suppliers. 

Currently, Foster and Portec sell 

approximately 51 and 44 percent, 

respectively, of U.S. bonded joints. One other 

company, which does not have the same 

commitment to research and development as 

Foster and Portec, accounts for the remaining 

five percent of sales. If the acquisition is not 

enjoined, the combined firm would supply 

approximately 95 percent of bonded joints in 

the United States and would have a virtual 

monopoly in that market. Using a measure 

called the Herfindahl/Hirschman Index 

(‘‘HHI’’), the HHI would increase by 

approximately 4,500 points, resulting in a 

post-acquisition HHI of more than 9,000 

points. 

The possibility of losing sales of bonded 

joints to each other has often constrained 

Foster’s and Portec’s bidding behavior. The 

competition between Foster and Portec for 

sales of bonded joints has resulted in lower 

prices and innovations that have produced 

higher-quality and longer-lasting joints. 

Without the competition provided by Portec 

on bonded joints, Foster would have the 

incentive and gain the ability profitably to 

increase prices, reduce quality, reduce 

innovation, and provide less customer 

service. The remaining competitor, with only 

five percent of bonded joint sales, has limited 

customer acceptance and would not be able 

to increase its sales post-acquisition 

sufficiently to discipline the anticompetitive 

effects of the acquisition. 

For most U.S customers, Foster and Portec 

are two of only three suppliers of poly joints. 

Currently, Foster and Portec sell 

approximately 21 and 33 percent, 

respectively, of poly joints in the United 

States. The third competitor accounts for the 

remaining sales in this market. If the 

acquisition is not enjoined, the combined 

firm would supply approximately 54 percent 

of poly joints in the United States. The HHI 

would increase by more than 1,300 points, 

resulting in a post-acquisition HHI of more 

than 5,000 points. The possibility of losing 

sales of poly joints to each other has often 

constrained Foster’s and Portec’s bidding 

behavior. Competition among the three poly 

joint suppliers has resulted in lower prices. 

As the products of the three companies are 

to some degree different, the acquisition of 

Portec likely will eliminate the closest 

competitor to Foster for some customers and 

thus allow the two remaining competitors to 

increase prices. Also, because the price levels 

and the dollar magnitude of the margins are 

higher for bonded joints than poly joints, any 

sales diverted from poly joints to bonded 

joints offer the prospect of additional profits 

to the merged firm. The acquisition of Portec 

by Foster would eliminate the significant 

competition between Foster and Portec and 

its future benefits to customers. Postacquisition Foster likely would have the 

incentive and gain the ability to profitably 

increase prices and provide less customer 

service. 

If the number of competitors in the U.S. 

poly joint market is reduced from three to 

two, Foster and its only remaining 

competitor will have the incentive and 

ability to raise prices through coordinated 

interaction by directly increasing prices, 

allocating customers, or restricting output or 

capacity. Unlike in the bonded joint market 

where post-acquisition Foster will have close 

to a monopoly, coordination will be more 

likely or more effective in the poly joint 

market because, with two significant 

competitors, both could be reasonably certain 

of the identity of each other’s customers, 

likely making cheating, such as discounting, 

easier to detect and discipline. The enhanced 

ability to detect cheating would be facilitated 

by, among other things, the fact that bids by 

public transit companies are often or usually 

made public. 

3. Entry 

Sufficient, timely entry of additional 

competitors into either the U.S bonded joint 

market or the U.S. poly joint market is 

unlikely, and the threat of entry thus will not 

prevent the likely competitive harm resulting 

from Foster’s acquisition of Portec. For 

bonded joints, rapid, successful, and 

profitable entry requires that a new supplier 

develop and successfully operate a 

production process that consistently 

produces a large number of high-quality 

bonded joints that meet the railroads’ 

rigorous specifications. A new supplier of 

bonded joints also must invest in research 

and development to meet the railroads’ 

desire for innovation and increased strength 

and longevity. These capabilities are difficult 

to obtain, and it takes years for a joint 

manufacturer to develop the know-how and 

expertise required to meet customers’ 

qualification requirements. Further, many 

Class 1 railroads insist that new bonded 

joints undergo not only laboratory testing, 

but also several years of in-track testing on 

the railroads’ lines, to ensure that the joints 

meet the railroads’ performance standards 

under actual usage conditions. Attempts by 

suppliers to meet a Class 1 railroad’s 

requirements may not be successful, and 

approval by one railroad does not guarantee 

approval by others. 

Similarly, a new supplier of poly joints in 

the United States must develop the expertise 

to manufacture a large number of joints on 

a consistent base, which could take years. A 

new poly joint supplier must obtain 

approvals from its customers, whose rigorous 

approval processes can take eighteen months 

or more. Approval by any customer cannot be 

assured, and approval by one customer does 

not guarantee approval by any other. 

Therefore, entry by new firms or the threat 

of entry by new firms would not defeat the 

substantial lessening of competition in the 

development, manufacture, and sale of 

bonded joints and poly joints in the United 

States that likely would result from Foster’s 

acquisition of Portec. 

III. Explanation of the Proposed Final 

Judgment 

The divestiture required by the proposed 

Final Judgment will eliminate the 

anticompetitive effects that likely would 

result from Foster’s acquisition of Portec. 

This divestiture will preserve competition in 

the development, manufacture, and sale of 

bonded joints and the development, 

manufacture, and sale of poly joints by 

creating an independent, economically viable 

competitor to Foster in the United States for 

these products. 

The acquirer of the divested assets will 

obtain from Defendants the assets it needs to 

replace the competition in the sale of bonded 

joints and poly joints that would be lost as 

a result of Foster’s acquisition of Portec. The 

proposed Final Judgment requires 

Defendants to divest the assets used to 

manufacture and sell Portec’s bonded joints 

and poly joints, including Portec’s facility in 

Huntington, West Virginia, and the tangible 

and intangible assets used to manufacture 

and sell these joints. The tangible assets 

include, among other things, manufacturing 

equipment, tooling, inventory, and materials. 

The intangible assets include, among other 

things, patents, licenses, intellectual 

property, know-how, trade secrets, trade 

names, drawings, specifications, computer 

software, marketing and sales data, manuals 

and technical information, and research data. 

The divested assets will provide the acquirer 

with the assets it needs to successfully 

manufacture and sell bonded joints and poly 

joints in the United States. 

This divestiture also ensures that the 

Huntington facility will be able to operate 

efficiently. Defendants are required to divest 

the assets used to manufacture and sell the 

following other Portec products currently 

manufactured at the Huntington facility: end 


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2The Hold Separate requires that until the assets 

being divested are sold according to the terms of the 

proposed Final Judgment, Foster and Portec must 

continue to operate their entire businesses as 

independent, ongoing, and economically viable 

businesses that are held entirely separate, distinct, 

and apart. Foster and Portec shall not coordinate 

their production, marketing, or terms of sale until 

the assets being divested are sold. It is necessary to 

keep Portec’s entire business separate from Foster’s 

business in the event the divested assets are not 

sold to Koppers for any reason. If the assets are not 

sold to Koppers, Foster and Portec will be unable 

to combine their operations, thereby preserving 

Portec as an independent competitor in the bonded 

joint and poly joint markets. 

3Friction management products are defined as 

wayside gauge-face lubrication systems, top-of-rail 

lubrication systems, and any other system or 

equipment used to lubricate rail. 

posts, polyurethane-coated gauge and tie 

plates, fiberglass joint kits, plastic insulation, 

standard rail joints, compromise and 

transitional rail joints, and Weldmate joint 

bars. These assets need to be divested 

because the products use the same inputs or 

machinery as bonded joints and poly joints 

or are closely related or complementary to 

the bonded joints and poly joints. The assets 

used to manufacture these related or 

complementary products will be sold to the 

acquirer so the acquirer’s ability to continue 

producing bonded joints and poly joints 

efficiently at that facility will not be 

impaired. These products together constitute 

Portec’s full line of rail joints and 

complementary products and will make the 

acquirer a stronger competitor than if it 

acquired only the bonded joint and poly joint 

assets. This full range of products will allow 

the Huntington facility to be operated as a 

viable standalone facility. 

A few other Portec products currently 

being manufactured at the Huntington 

facility, primarily friction management 

products and Shipping Systems Division 

(‘‘SSD’’) products, are not being divested. 

These products are not related to bonded 

joints and poly joints and do not use the 

same equipment or inputs. For example, the 

friction management and SSD products are 

merely assembled at Huntington from off-theshelf parts. As a result, the products not 

being divested do not directly alter the 

efficient operation of the bonded joint and 

poly joint assets. 

The proposed Final Judgment designates 

Koppers Inc. as the company to which the 

divested assets must be sold. While the 

United States does not generally require that 

the purchaser of the divested assets be 

identified and approved prior to and as a 

condition of settlement, the unique 

circumstances of this case necessitate such 

an approach. In many cases, numerous 

potential acquisition candidates would be 

acceptable to the customers and the United 

States. Also, acquirers in most cases would 

be able to continue selling the divested 

products without significant delays made 

necessary by extensive testing requirements. 

Here, the upfront designation of the acquirer 

ensures the sale will be made to an acquirer 

with the expertise and resources necessary to 

replace Portec immediately as a full-fledged 

competitor to Foster. 

Because bonded joints and poly joints are 

critical to the safe and efficient operation of 

a railroad, customers must be confident that 

the acquirer of the divested assets will be 

able to maintain the current quality and longterm reliability of these joints. If the 

customers lack this confidence, they likely 

would conduct lengthy in-track testing before 

purchasing joints from a new supplier in 

significant quantities. Such lengthy testing 

periods could mean that the divested Portec 

joint businesses would not provide 

meaningful competition to Foster for several 

years, and, as a result, the divestiture would 

not remedy the competitive harm that would 

likely result from Foster’s acquisition of 

Portec. The possibility that customers would 

require long testing periods before 

purchasing from an acquirer led the United 

States to require an acceptable acquirer prior 

to entering into a settlement. 

Defendants presented Koppers to the 

United States as a potential acquirer of the 

divested assets. Foster and Koppers entered 

into an agreement for the purchase of the 

divested assets on December 9, 2010. 

Koppers is a global integrated producer of 

carbon compounds and treated and untreated 

wood products and services for use in a 

variety of industries, including the rail 

industry. In 2009, Koppers had total revenues 

of approximately $1.12 billion. 

Approximately 58 percent of its 2009 sales 

were generated in the United States. Koppers 

currently supplies all the Class 1 railroads. In 

addition, Koppers maintains relationships 

with many short-line and regional rail lines. 

Koppers has a strong relationship with the 

Class 1 railroads, an excellent reputation as 

a supplier to railroads, and is committed to 

research and development. The United States 

determined, after a thorough investigation, 

that railroad customers would be sufficiently 

confident in Koppers’s ability consistently to 

manufacture quality bonded joints and poly 

joints and, therefore, would not be likely to 

insist upon a lengthy in-track testing period 

for these joints. 

The United States typically requires that 

assets be divested within 60 to 90 days after 

the filing of the Complaint or five days after 

the entry of the Final Judgment by the Court. 

Because the acquirer of the divested assets 

has been selected and approved by the 

United States prior to the filing of the 

Complaint, there is no need for 60 to 90 days 

to engage in a search for an acquirer. Further, 

the United States has already reviewed the 

documents related to the divestiture. 

Accordingly, the proposed Final Judgment 

requires that the divested assets be sold to 

Koppers within ten days after the Court signs 

the Hold Separate.2 The entry of the Hold 

Separate was chosen as the date upon which 

the divestiture period begins to run because 

Foster cannot consummate its acquisition of 

Portec until the Court enters the Hold 

Separate, and that acquisition must be 

consummated before the divested assets are 

sold. 

The proposed Final Judgment prohibits 

Defendants from interfering with any 

negotiations by Koppers to employ any 

current or former Portec employee who is 

responsible in any way for the design, 

production, and sale of the products being 

divested. It also requires that Defendants 

waive any non-compete agreements for 

current or former employees involved in the 

design, production, and sale of the products 

being divested. The proposed Final Judgment 

also requires that the assets being divested be 

operational on the date of sale. In addition, 

the proposed Final Judgment requires that 

Defendants divest Portec’s entire business 

relating to each of the divested products and 

not manufacture any products using the 

intangible assets divested pursuant to the 

proposed Final Judgment. To allow Foster 

time to remove the assets used for those 

products not being divested, the proposed 

Final Judgment allows Defendants to occupy 

that portion of the Huntington facility that is 

used to manufacture the products not being 

divested for sixty days from the date Foster 

acquires Portec. 

Finally, the proposed Final Judgment 

requires that Defendants provide advance 

notice to the United States of any acquisition 

of the assets of or any interest in, any 

company in the business of designing, 

developing, producing, marketing, servicing, 

distributing, and/or selling bonded joints 

and/or poly joints, or any company in the 

business of producing, marketing, 

distributing, and/or selling friction 

management products; or any relationship 

with another company that involves the 

distribution of friction management products 

in North America.3 Until very recently, 

Foster and Portec competed in the sale of 

friction management products in the United 

States. Few competitors sell these products 

in the United States. Portec is the leader in 

the development, production, and sale of 

certain friction management products. Foster 

was a distributor of friction management 

products for an overseas manufacturer and it 

recently terminated its relationship with that 

manufacturer. However, in the future Foster 

could begin selling friction management 

products made by that manufacturer or 

others. As a result, the proposed Final 

Judgment ensures that the United States will 

have the ability to investigate the competitive 

impact if Foster attempts to resume its sale 

of friction management products in the 

United States. 

IV. Remedies Available to Potential Private 

Litigants 

Section 4 of the Clayton Act, 15 U.S.C. 

§ 15, provides that any person who has been 

injured as a result of conduct prohibited by 

the antitrust laws may bring suit in Federal 

court to recover three times the damages the 

person has suffered, as well as costs and 

reasonable attorneys’ fees. Entry of the 

proposed Final Judgment will neither impair 

nor assist the bringing of any private antitrust 

damage action. Under the provisions of 

Section 5(a) of the Clayton Act, 15 U.S.C. 

16(a), the proposed Final Judgment has no 

prima facie effect in any subsequent private 

lawsuit that may be brought against 

Defendants. 

V. Procedures Available for Modification of 

the Proposed Final Judgment 

The 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 


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4Cf. 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’ ’’). 

consent. The APPA conditions entry upon 

the Court’s determination that the proposed 

Final Judgment is in the public interest. 

The APPA provides a period of at least 

sixty (60) days preceding the effective date of 

the proposed Final Judgment within which 

any person may submit to the United States 

written comments regarding the proposed 

Final Judgment. Any person who wishes to 

comment should do so within sixty (60) days 

of the date of publication of this Competitive 

Impact Statement in the Federal Register, or 

the last date of publication in a newspaper 

of the summary of this Competitive Impact 

Statement, whichever is later. All comments 

received during this period will be 

considered by the United States Department 

of Justice, which remains free to withdraw its 

consent to the proposed Final Judgment at 

any time prior to the Court’s entry of 

judgment. The comments and the response of 

the United States will be filed with the Court 

and published in the Federal Register. 

Written comments should be submitted to: 

Maribeth Petrizzi, Chief, Litigation II Section, 

Antitrust Division, United States Department 

of Justice, 450 Fifth Street, NW., Suite 8700, 

Washington, DC 20530. 

The proposed Final Judgment provides that 

the Court retains jurisdiction over this action 

and the parties may apply to the Court for 

any order necessary or appropriate for the 

modification, interpretation, or enforcement 

of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

The United States considered, as an 

alternative to the proposed Final Judgment, 

a full trial on the merits against Defendants. 

The United States could have continued the 

litigation and sought preliminary and 

permanent injunctions preventing Foster’s 

acquisition of Portec. The United States is 

satisfied, however, that the divestiture of the 

assets described in the proposed Final 

Judgment will preserve competition for the 

development, manufacture, and sale of 

bonded joints and poly joints in the United 

States. Thus, the proposed Final Judgment 

would achieve all or substantially all of the 

relief the United States would have obtained 

through litigation, but avoids the time, 

expense, and uncertainty of a full trial on the 

merits of the Complaint. 

VII. Standard of Review Under the APPA for 

the Proposed Final Judgment 

The Clayton Act, as amended by the APPA, 

requires that proposed consent judgments in 

antitrust cases brought by the United States 

be subject to a sixty-day comment period, 

after which the court shall determine 

whether entry of the proposed Final 

Judgment ‘‘is in the public interest.’’ 15 U.S.C. 

16(e)(1). In making that determination in 

accordance with the statute, the court 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 (DC Cir. 1995); see 

generally United States v. SBC Commc’ns, 

Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 

(assessing public interest standard under the 

Tunney Act); United States v. InBev N.V./ 

S.A., 2009–2 Trade Cas. (CCH) ¶76,736, 2009 

U.S. Dist. LEXIS 84787, No. 08–1965 (JR), at 

*3 (D.D.C. Aug. 11, 2009) (noting that the 

court’s review of a consent judgment is 

limited and only inquires ‘‘into whether the 

government’s determination that the 

proposed remedies will cure the antitrust 

violations alleged in the complaint was 

reasonable, and whether the mechanisms to 

enforce the final judgment are clear and 

manageable.’’). 

As the United States Court of Appeals for 

the District of Columbia has held, under the 

APPA, a court considers, among other things, 

the relationship between the remedy secured 

and the specific allegations set forth in the 

government’s complaint, whether the decree 

is sufficiently clear, whether enforcement 

mechanisms are sufficient, and whether the 

decree may positively harm third parties. See 

Microsoft, 56 F.3d at 1458–62. With respect 

to the adequacy of the relief secured by the 

decree, a court may not ‘‘engage in an 

unrestricted evaluation of what relief would 

best serve the public.’’ United States v. BNS, 

Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 

United States v. Bechtel Corp., 648 F.2d 660, 

666 (9th Cir. 1981)); see also Microsoft, 56 

F.3d at 1460–62; United States v. Alcoa, Inc., 

152 F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 

2009 U.S. Dist. LEXIS 84787, at *3. Courts 

have held that: 

[t]he balancing of competing social and 

political interests affected by a proposed 

antitrust consent decree must be left, in the 

first instance, to the discretion of the 

Attorney General. The court’s role in 

protecting the public interest is one of 

insuring that the government has not 

breached its duty to the public in consenting 

to the decree. The court is required to 

determine not whether a particular decree is 

the one that will best serve society, but 

whether the settlement is ‘‘within the reaches 

of the public interest.’’ More elaborate 

requirements might undermine the 

effectiveness of antitrust enforcement by 

consent decree. 

Bechtel, 648 F.2d at 666 (emphasis added) 

(citations omitted).4 In determining whether 

a proposed settlement is in the public 

interest, the court ‘‘must accord deference to 

the government’s predictions about the 

efficacy of its remedies, and may not require 

that the remedies perfectly match the alleged 

violations.’’ SBC Commc’ns, 489 F. Supp. 2d 

at 17; see also Microsoft, 56 F.3d at 1461 

(noting the need for courts to be ‘‘deferential 

to the government’s predictions as to the 

effect of the proposed remedies’’); United 

States v. Archer-Daniels-Midland Co., 272 F. 

Supp. 2d 1, 6 (D.D.C. 2003) (noting that the 

court should grant due respect to the United 

States’s prediction as to the effect of 

proposed remedies, its perception of the 

market structure, and its views of the nature 

of the case); United States v. Republic Serv., 

Inc., 2010–2 Trade Cas. (CCH) ¶ 77,097, 2010 

U.S. Dist. LEXIS 70895, No. 08–2076 (RWR), 

at *10 (D.D.C. July 15, 2010) (finding that 

‘‘[i]n light of the deferential review to which 

the government’s proposed remedy is 

accorded, [amicus curiae’s] argument that an 

alternative remedy may be comparably 

superior, even if true, is not a sufficient basis 

for finding that the proposed final judgment 

is not in 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 

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). 

Therefore, 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; Republic 

Serv., 2010 U.S. Dist. LEXIS 70895, at *2–3 

(entering final judgment ‘‘[b]ecause there is 

an adequate factual foundation upon which 

to conclude that the government’s proposed 

divestitures will remedy the antitrust 

violations alleged in the complaint.’’). 

Moreover, the court’s role under the APPA 

is limited to reviewing the remedy in 

relationship to the violations that the United 

States has alleged in its Complaint, and does 

not authorize the court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 F.3d 

at 1459; see also InBev, 2009 U.S. Dist. LEXIS 

84787, at *20 (‘‘the ‘public interest’ is not to 

be measured by comparing the violations 


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5The 2004 amendments substituted the word 

‘‘shall’’ for ‘‘may’’ when directing the courts to 

consider the enumerated factors and amended the 

list of factors to focus on competitive considerations 

and address potentially ambiguous judgment terms. 

Compare 15 U.S.C. 16(e) (2004), with 15 U.S.C. 

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). 

6See United States v. Enova Corp., 107 F. Supp. 

2d 10, 17 (D.D.C. 2000) (noting that the ‘‘Tunney 

Act expressly allows the court to make its public 

interest determination on the basis of the 

competitive impact statement and response to 

comments alone’’); United States v. Mid-Am. 

Dairymen, Inc., 1977–1 Trade Cas. (CCH) ¶ 61,508, 

at 71,980 (W.D. Mo. 1977) (‘‘Absent a showing of 

corrupt failure of the government to discharge its 

duty, the Court, in making its public interest 

finding, should * * * carefully consider the 

explanations of the government in the competitive 

impact statement and its responses to comments in 

order to determine whether those explanations are 

reasonable under the circumstances.’’); S. Rep. No. 

93–298, 93d Cong., 1st Sess., at 6 (1973) (‘‘Where 

the public interest can be meaningfully evaluated 

simply on the basis of briefs and oral arguments, 

that is the approach that should be utilized.’’). 

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 confirmed in SBC 

Communications, courts ‘‘cannot look beyond 

the complaint in making the public interest 

determination unless the complaint is drafted 

so narrowly as to make a mockery of judicial 

power.’’ 489 F. Supp. 2d at 15. 

In its 2004 amendments to the Tunney 

Act,5 Congress made clear its intent to 

preserve the practical benefits of utilizing 

consent decrees in antitrust enforcement, 

stating: ‘‘[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. 

16(e)(2). The language wrote into the statute 

what Congress intended when it enacted the 

Tunney Act in 1974, as Senator Tunney 

explained: ‘‘[t]he court is nowhere compelled 

to go to trial or to engage in extended 

proceedings which might have the effect of 

vitiating the benefits of prompt and less 

costly settlement through the consent decree 

process.’’ 119 Cong. Rec. 24,598 (1973) 

(statement of Senator Tunney). Rather, the 

procedure for the public interest 

determination is left to the discretion of the 

court, with the recognition that the court’s 

‘‘scope of review remains sharply proscribed 

by precedent and the nature of Tunney Act 

proceedings.’’ SBC Commc’ns, 489 F. Supp. 

2d at 11.6

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: December 14, 2010. 

Respectfully submitted, Christine A. Hill 

(DC Bar No. 461048), U.S. Department of 

Justice, Antitrust Division, Litigation II 

Section, 450 Fifth Street, NW., Suite 8700, 

Washington, DC 20530. (202) 305–2738. 

Certificate of Service 

I, Christine A. Hill, hereby certify that on 

December 14, 2010, I caused a copy of the 

foregoing Competitive Impact Statement to be 

served upon Defendants L.B. Foster Company 

and Portec Rail Products, Inc. by mailing the 

documents electronically to the duly 

authorized legal representatives of 

Defendants as follows: 

Counsel for L.B. Foster Company 

John H. Korns, Esquire, Buchanan, 

Ingersoll & Rooney PC, 1700 K Street, NW., 

Suite 300, Washington, DC 20006. (202) 452– 

7939. john.korns@bipc.com. 

Wendelynne J. Newton, Esquire, 

Buchanan, Ingersoll & Rooney PC, One 

Oxford Centre, 20th Floor, 301 Grant Street, 

Pittsburgh, PA 15219. (412) 562–8932. 

wendelynne.newton@bipc.com. 

Counsel for Portec Rail Products, Inc. 

Timothy M. Walsh, Esquire, Steptoe & 

Johnson, LLP, 1330 Connecticut Avenue, 

NW., Washington, DC 20036. (202) 429–3000. 

twalsh@steptoe.com. 

Christine A. Hill, Esquire, United States 

Department of Justice, Antitrust Division, 

Litigation II Section, 450 Fifth Street, NW., 

Suite 8700, Washington, DC 20530. (202) 

305–2738. 

United States District Court for the District 

of Columbia 

United States of America, Plaintiff 

v. 

L.B. Foster Company and Portec Rail 

Products, Inc., Defendants. 10 2115. 

Proposed Final Judgment 

Whereas, Plaintiff United States of America 

(‘‘United States’’) filed its Complaint on 

December 14, 2010, the United States and 

Defendants L.B. Foster Company and Portec 

Rail Products, Inc., 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 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 certain rights or assets by 

Defendants to assure that competition is not 

substantially lessened; 

and whereas, the United States requires 

Defendants to make certain divestitures for 

the purpose of remedying the loss of 

competition alleged in the Complaint; 

and whereas, Defendants have represented 

to the United States that the divestitures 

required below can and will be made and 

that Defendants will later raise no 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: 

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’’ means Koppers, the entity to 

which Defendants shall divest the Divestiture 

Assets. 

B. ‘‘Foster’’ means Defendant L.B. Foster 

Company, a Pennsylvania corporation 

headquartered in Pittsburgh, Pennsylvania, 

its successors and assigns, and its 

subsidiaries, divisions, groups, affiliates, 

partnerships and joint ventures, and their 

directors, officers, managers, agents, and 

employees. 

C. ‘‘Portec’’ means Defendant Portec Rail 

Products, Inc., a West Virginia corporation 

headquartered in Pittsburgh, Pennsylvania, 

its successors and assigns, and its 

subsidiaries, divisions, groups, affiliates, 

partnerships and joint ventures, and their 

directors, officers, managers, agents, and 

employees. 

D. ‘‘Koppers’’ means Koppers Inc., a 

Pennsylvania corporation headquartered in 

Pittsburgh, Pennsylvania, its successors and 

assigns, and its subsidiaries, divisions, 

groups, affiliates, partnerships and joint 

ventures, and their directors, officers, 

managers, agents, and employees. 

E. ‘‘Divested Portec Product Lines’’ means 

Portec’s bonded insulated rail joints 

(assemblies and kits), polyurethane-coated 

insulated rail joints, end posts, polyurethanecoated gauge and tie plates, fiberglass (CyPly) 

joint kits, plastic insulation, standard rail 

joints, compromise and transitional rail 

joints, and Weldmate joint bars, but 

excluding Coronet rail joints and end posts 

manufactured by Coronet Rail Limited. 

F. ‘‘Divestiture Assets’’ means: 

(1) Portec’s facility located at 900 9th 

Avenue W, Huntington, West Virginia (the 

‘‘Huntington Facility’’), including all 

equipment located in and around the 

Huntington Facility that is used in 

connection with the Divested Portec Product 

Lines; 

(2) All tangible assets that are used for any 

of the Divested Portec Product Lines, 

including research and development 

activities; all manufacturing equipment, 

tooling and fixed assets, personal property, 

inventory, office furniture, materials, 

supplies, and other tangible property and all 

assets used in connection with any of the 

Divested Portec Product Lines; all licenses, 

permits and authorizations issued by any 

governmental organization relating to any of 

the Divested Portec Product Lines; all 

contracts, teaming arrangements, agreements, 

leases, commitments, certifications, and 

understandings, relating to any of the 

Divested Portec Product Lines, including 

supply agreements; all customer lists, 


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contracts, accounts, and credit records; all 

repair and performance records and all other 

records relating to any of the Divested Portec 

Product Lines; 

(3) All intangible assets used in the design, 

development, production, marketing, 

servicing, distribution, 

and/or sale of any of the Divested Portec 

Product Lines, including, but not limited to, 

all patents, licenses and sublicenses, 

intellectual property, copyrights, trademarks, 

trade names, service marks, service names, 

technical information, 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 marketing and sales data 

relating to any of the Divested Portec Product 

Lines, quality assurance and control 

procedures, design tools and simulation 

capability, all manuals and technical 

information Portec provides to its own 

employees, customers, suppliers, agents or 

licensees, and all research data concerning 

historic and current research and 

development efforts relating to any of the 

Divested Portec Product Lines, including, but 

not limited to, designs of experiments, and 

the results of successful and unsuccessful 

designs and experiments; and 

(4) The Divestiture Assets exclude the 

trademark, trade name, service mark, or 

service name ‘‘Portec.’’ 

G. ‘‘Friction Management Products’’ means 

wayside gauge-face lubrication systems, topof-rail lubrication systems, and any other 

system or equipment used to lubricate rail. 

H. ‘‘Transaction’’ means Foster’s acceptance 

for payment of at least 65 percent of the Fully 

Diluted Number of Company Shares of 

Portec, as defined in the Agreement and Plan 

of Merger dated February 16, 2010, between 

L.B. Foster Company, Foster Thomas 

Company, and Portec Rail Products, Inc. 

III. Applicability 

This Final Judgment applies to Foster and 

Portec, as defined above, and all other 

persons in active concert or participation 

with any of them who receive actual notice 

of this Final Judgment by personal service or 

otherwise. 

IV. Divestitures 

A. Defendants are ordered and directed, 

within ten (10) calendar days after the Court 

signs the Hold Separate Stipulation and 

Order in this matter, to divest the Divestiture 

Assets to the Acquirer in a manner consistent 

with this Final Judgment. 

B. Defendants will not interfere with any 

negotiations by the Acquirer to employ any 

current or former Portec employee who is 

responsible in any way for the design, 

development, production, marketing, 

servicing, distribution, and/or sale of any of 

the Divested Portec Product Lines. 

Interference with respect to this paragraph 

includes, but is not limited to, enforcement 

of non-compete clauses and offers to increase 

salary or other benefits apart from those 

offered company-wide. In addition, for each 

employee who elects employment by the 

Acquirer, Defendants shall vest all unvested 

pension and other equity rights of that 

employee and provide all benefits to which 

the employee would have been entitled if 

terminated without cause. 

C. Defendants shall warrant to the Acquirer 

that each asset will be operational on the date 

of sale. 

D. Defendants shall not take any action that 

will impede in any way the permitting, 

operation, use, or divestiture of the 

Divestiture Assets. 

E. Defendants shall warrant to the Acquirer 

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. 

F. Defendants shall be permitted to occupy, 

under sublease to the Acquirer or other 

arrangement, for a period of sixty (60) days 

from the date the Transaction is closed, that 

portion of the Huntington Facility that is not 

currently being used to manufacture any of 

the Divested Portec Product Lines. 

G. Defendants shall divest Portec’s entire 

business relating to each of the Divested 

Portec Product Lines and will not 

manufacture any products using any 

intangible assets divested pursuant to 

paragraph II(F)(3) of this Final Judgment. 

H. Defendants shall, as soon as possible, 

but within one business day after completion 

of the relevant event, notify the United States 

of: (1) The effective date of the Transaction; 

and (2) the effective date of the sale of the 

Divestiture Assets to the Acquirer. 

I. Unless the United States otherwise 

consents in writing, the divestiture pursuant 

to Section IV of this Final Judgment shall 

include the entire Divestiture Assets, and 

shall be accomplished in such a way as to 

satisfy the United States, in its sole 

discretion, that the Divestiture Assets can 

and will be used by the Acquirer as part of 

a viable, ongoing business involved in the 

design, development, production, marketing, 

servicing, distribution, and sale of the 

Divested Portec Product Lines, that the 

Divestiture Assets will remain viable, and the 

divestiture of such assets will remedy the 

competitive harm alleged in the Complaint. 

The divestitures shall be: 

(1) 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 design, development, production, 

marketing, servicing, distribution, and sale of 

the Divested Portec Product Lines; and 

(2) Accomplished so as to satisfy the 

United States, in its sole discretion, that none 

of the terms of any agreement between the 

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. Financing 

Defendants shall not finance all or any part 

of any purchase made pursuant to Section IV 

of this Final Judgment. 

VI. Hold Separate 

Until the divestiture required by this Final 

Judgment have 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 

divestitures ordered by this Court. 

VII. Compliance Inspection 

A. For the 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 authorized 

representatives of the United States 

Department of Justice Antitrust Division, 

including consultants and other persons 

retained by the United States, shall, upon 

written request of an authorized 

representative of the Assistant Attorney 

General in charge of the Antitrust Division, 

and on reasonable notice to Defendants, be 

permitted: 

(1) Access during Defendants’ office hours 

to inspect and copy, or at the option of the 

United States, to require Defendants to 

provide hard copy or electronic copies of, all 

books, ledgers, accounts, records, data, and 

documents in the possession, custody, or 

control of Defendants, relating to any matters 

contained in this Final Judgment; and 

(2) To interview, either informally or on 

the record, Defendants’ officers, employees, 

or agents, who may have their individual 

counsel present, regarding such matters. The 

interviews shall be subject to the reasonable 

convenience of the interviewee and without 

restraint or interference by Defendants. 

B. Upon the written request of an 

authorized representative of the Assistant 

Attorney General in charge of the Antitrust 

Division, Defendants shall submit written 

reports or responses to written 

interrogatories, 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), for 

the purpose of securing compliance with this 

Final Judgment, or as otherwise required by 

law. 

D. If, at the time information or documents 

are furnished by Defendants to the United 

States, Defendants represent and identify in 

writing the material in any such information 

or documents to which a claim of protection 

may be asserted under Rule 26(c)(1)(G) of the 

Federal Rules of Civil Procedure, and 

Defendants mark each pertinent page of such 

material, ‘‘Subject to claim of protection 

under Rule 26(c)(1)(G) of the Federal Rules 

of Civil Procedure,’’ then the United States 

shall give Defendants ten (10) calendar days 

notice prior to divulging such material in any 

legal proceeding (other than a grand jury 

proceeding). 


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VIII. Notification 

Unless such transaction is otherwise 

subject to the reporting and waiting period 

requirements of the Hart-Scott-Rodino 

Antitrust Improvements Act of 1976, as 

amended, 15 U.S.C. 18a (the ‘‘HSR Act’’), 

during the term of this Final Judgment, 

Defendants, without providing advance 

notification to the Antitrust Division, shall 

not directly or indirectly: (a) Acquire any 

assets of or any interest (including, but not 

limited to, any financial, security, loan, 

equity, or management interest) in, any 

company in the business of designing, 

developing, producing, marketing, servicing, 

distributing, and/or selling bonded insulated 

rail joints and/or polyurethane-coated 

insulated rail joints, or any company in the 

business of producing, marketing, 

distributing, and/or selling Friction 

Management Products; or (b) enter into any 

relationship with another company that 

involves the distribution of Friction 

Management Products in North America. 

Such notification shall be provided to the 

Antitrust Division in the same format as, and 

per the instructions relating to the 

Notification and Report Form set forth in the 

Appendix to Part 803 of Title 16 of the Code 

of Federal Regulations as amended, except 

that the information requested in Items 5 

through 9 of the instructions must be 

provided only about bonded insulated rail 

joints, polyurethane-coated insulated rail 

joints, and Friction Management Products. 

Notification shall be provided at least thirty 

(30) calendar days prior to acquiring any 

such interest, and shall include, beyond what 

may be required by the applicable 

instructions, the names of the principal 

representatives of the parties to the 

agreement who negotiated the agreement, 

and any management or strategic plans 

discussing the proposed transaction. If 

within the 30-day period after notification, 

representatives of the Antitrust Division 

make a written request for additional 

information, Defendants shall not 

consummate the proposed transaction or 

agreement until thirty (30) calendar days 

after submitting all such additional 

information. Early termination of the waiting 

periods in this paragraph may be requested 

and, where appropriate, granted in the same 

manner as is applicable under the 

requirements and provisions of the HSR Act 

and rules promulgated thereunder. This 

Section shall be broadly construed and any 

ambiguity or uncertainty regarding the filing 

of notice under this Section shall be resolved 

in favor of filing notice. 

IX. No Reacquisition 

Defendants may not reacquire any part of 

the Divestiture Assets during the term of this 

Final Judgment. 

X. 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. 

XI. Expiration of Final Judgment 

Unless this Court grants an extension, this 

Final Judgment shall expire ten (10) years 

from the date of its entry. 

XII. Public Interest Determination 

Entry of this Final Judgment is in the 

public interest. The parties have complied 

with the requirements of the Antitrust 

Procedures and Penalties Act, 15 U.S.C. 16, 

including making copies available to the 

public of this Final Judgment, the 

Competitive Impact Statement, and any 

comments thereon and the United States’s 

responses to comments. Based upon the 

record before the Court, which includes the 

Competitive Impact Statement and any 

comments and responses to comments filed 

with the Court, entry of this Final Judgment 

is in the public interest. 

Court approval subject to procedures of 

Antitrust Procedures and Penalties Act, 15 

U.S.C. § 16 United States District Judge. 

[FR Doc. 2010–31863 Filed 12–17–10; 8:45 am] 

BILLING CODE 4410–11–P 

DEPARTMENT OF JUSTICE 

Drug Enforcement Administration 

[DEA #343E] 

Controlled Substances: Established 

Initial Aggregate Production Quotas 

for 2011 

AGENCY: Drug Enforcement 

Administration (DEA), Justice. 

ACTION: Notice of aggregate production 

quotas for 2011. 

SUMMARY: This notice establishes initial 

2011 aggregate production quotas for 

controlled substances in schedules I and 

II of the Controlled Substances Act 

(CSA). 

DATES: Effective Date: December 20, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Christine A. Sannerud, PhD, Chief, Drug 

& Chemical Evaluation Section, Drug 

Enforcement Administration, 

Springfield, Virginia 22152, Telephone: 

(202) 307–7183. 

SUPPLEMENTARY INFORMATION: Section 

306 of the CSA (21 U.S.C. 826) requires 

that the Attorney General establish 

aggregate production quotas for each 

basic class of controlled substance listed 

in schedules I and II. This responsibility 

has been delegated to the Administrator 

of the DEA by 28 CFR 0.100. The 

Administrator, in turn, has redelegated 

this function to the Deputy 

Administrator, pursuant to 28 CFR 

0.104. 

The 2011 aggregate production quotas 

represent those quantities of controlled 

substances that may be produced in the 

United States in 2011 to provide 

adequate supplies of each substance for: 

the estimated medical, scientific, 

research, and industrial needs of the 

United States; lawful export 

requirements; and the establishment 

and maintenance of reserve stocks (21 

U.S.C. 826(a) and 21 CFR 1303.11). 

These quotas do not include imports of 

controlled substances for use in 

industrial processes. 

On September 15, 2010, a notice of 

the proposed initial 2011 aggregate 

production quotas for certain controlled 

substances in schedules I and II was 

published in the Federal Register (75 

FR 56137). All interested persons were 

invited to comment on or object to these 

proposed aggregate production quotas 

on or before October 15, 2010. 

Seven responses (six from DEA 

registered manufacturers, and one from 

a non-DEA registrant) were received 

within the published comment period, 

offering comments on a total of 31 

schedules I and II controlled substances. 

The commenters stated that the 

proposed aggregate production quotas 

for 3,4-methylenedioxyamphetamine, 

3,4-methylenedioxy-Nethylamphetamine, 3,4- 

methylenedioxymethamphetamine, 

4-anilino-N-phenethyl-4-piperidine, 

amphetamine (for sale), cathinone, 

codeine (for sale), dihydromorphine, 

fentanyl, gamma hydroxybutyric acid, 

heroin, hydrocodone, hydromorphone, 

marihuana, meperidine, methaqualone, 

methylphenidate, morphine (for 

conversion), morphine (for sale), 

nabilone, noroxymorphone (for 

conversion), opium (tincture), 

oxycodone (for sale), pentobarbital, 

phencyclidine, remifentanil, 

secobarbital, tapentadol, 

tetrahydrocannabinols, thebaine and 

tilidine were insufficient to provide for 

the estimated medical, scientific, 

research, and industrial needs of the 

United States, for export requirements 

and for the establishment and 

maintenance of reserve stocks. 

In arriving at the aggregate production 

quotas, DEA has taken into 

consideration the above comments 

along with the factors set forth at 21 

CFR 1303.11(b) and other relevant 2010 

factors, including 2010 manufacturing 

quotas, current 2010 sales and 

inventories, 2011 export requirements, 

additional applications received, as well 

as research and product development 

requirements. Based on this 

information, DEA has adjusted the 

initial aggregate production quotas for 

3,4-methylenedioxyamphetamine, 3,4- 

methylenedioxy-N-ethylamphetamine, 

3,4-methylenedioxymethamphetamine, 

amobarbital, cathinone, 

dimethyltryptamine, ibogaine, lysergic 


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