33538 Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Notices

1. GC–96–031, Notice of amendments to

Parts 201 and 207 of Rules of Practice

and Procedure (Title VII matters).

In accordance with Commission

policy, subject matter listed above, not

disposed of at the scheduled meeting,

may be carried over to the agenda of the

following meeting.

By order of the Commission.

Issued: June 25, 1996.

Donna R. Koehnke,

Secretary.

[FR Doc. 96–16612 Filed 6–25–96; 2:43 pm]

BILLING CODE 7020–02–P

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Georgia-Pacific Corp.;

Proposed Consent Judgments

Pursuant to the Antitrust Procedures

and Penalties Act, 15 U.S.C. § 16(c)–(h),

the United States publishes below the

comment received on the proposed final

judgment in United States v. GeorgiaPacific Corp., Civil Action No. 96–164,

filed in the United States District Court

for the District of Delaware, together

with the United States’ response to that

comment.

Copies of the comment and response

to comment are available for inspection

and copying in Room 207 of the U.S.

Department of Justice, Antitrust

Division, 325 7th Street, N.W.,

Washington, D.C. 20530 (telephone:

(202) 514–2481), and at the office of the

Clerk of the United States District Court

for the District of Delaware. Copies of

these materials may be obtained upon

request and payment of a copying fee.

Constance K. Robinson,

Director of Operations.

June 7, 1996.

Morgan A. Chivers,

Chairman of the Board and Chief Operating

Officer, Continental Gypsum Company,

265 Distribution Street, Port Newark,

New Jersey 07114

Re: United States v. Georgia-Pacific

Corporation, Civil Action No. 96–164 (D.

Del., March 29, 1996)

Dear Mr. Chivers: This letter responds to

your letters dated April 30, 1996 and May 21,

1996 commenting on the proposed Final

Judgment in the above-referenced antitrust

case, which challenges the acquisition of the

gypsum business of Domtar Inc. (‘‘Domtar’’)

by Georgia-Pacific Corporation (‘‘GP’’). The

Complaint alleges that the acquisition

violates Section 7 of the Clayton Act, 15

U.S.C. § 18, because its effects may be to

lessen substantially competition in the

production and sale of gypsum board in the

Northeast Region of the United States. As

defined in the Complaint, the Northeast

Region encompasses the twelve eastern

seaboard states from Maine through Virginia

and Washington, D.C. Under the proposed

Final Judgment, GP is required to divest to

one or more purchasers its Buchanan, New

York and Wilmington, Delaware gypsum

board plants and related tangible and

intangible assets. GP must accomplish the

divestitures within 150 calendar days after

the date on which the proposed Final

Judgment was filed (March 29, 1996).

In your April 30 letter, you noted that

Continental Gypsum Company is a small

independent gypsum board manufacturer

which commenced production on August 23,

1995 and did not obtain expected levels of

production and sales until April 1996. You

expressed two concerns about the provisions

on the proposed Final Judgment. One

concern arises from the requirement that GP

‘‘use all reasonable efforts to maintain and

increase sales of gypsum board’’ at the

Buchanan and Wilmington plants until the

divestitures of these facilities have been

accomplished. GP also is required to

‘‘maintain at 1995 or previously approved

levels, whichever are higher, promotional,

advertising, sales, marketing and

merchandising support’’ for gypsum board

sales at these two plants. You believe that

complying with these provisions could have

a ‘‘predatory’’ effect on Continental and

possibly force Continental out of the market,

particularly if demand stays the same or falls

in 1996.

We do not believe these provisions will

have an adverse effect on competition in the

gypsum wallboard market. The provision

were intended to prevent GP from taking any

actions that might jeopardize the competitive

viability of the Buchanan and Wilmington

plants pending divestiture. To ensure

continued viability, GP must use all

‘‘reasonable efforts’’ to maintain sales at

existing levels or to increase sales during the

divestiture period. This requirement imposes

no greater obligation on GP than could

reasonably be expected if the plants were not

candidates for divestiture. Moreover,

Continental could reasonably anticipate that

any prospective purchaser would operate the

Buchanan and Wilmington plants in a similar

manner after the divestiture period. Thus,

any loss of sales by Continental from

operating the plants in the manner required

by the proposed Final Judgment would result

from competitive, not anticompetitive, forces.

Your second concern arises from the

requirement that GP, at the option of the

purchaser or purchasers, enter into a supply

contract for gypsum rock and/or gypsum

linerboard paper sufficient to meet all or part

of the capacity requirements of the Buchanan

and Wilmington plants over a period up to

ten (10) years. The proposed final Judgment

expressly provides that the terms and

conditions of any such supply contract ‘‘must

be related reasonably to market conditions

for gypsum rock and/or gypsum linerboard

paper.’’ You noted that Continental currently

purchases some of its paper requirements

from GP and that it views GP as a potential

source of its gypsum rock requirements. You

are concerned that the supply contracts

provided for in the Final Judgment will

‘‘seriously restrict’’ Continental’s ability to

source these vital raw materials.

We do not believe that the supply contracts

mandated in the Final Judgment would have

any adverse competitive effect on

Continental, should a purchaser or

purchasers elect to negotiate such contracts

with GP. As an initial matter, it should be

noted that GP currently is supplying the

Buchanan and Wilmington plants with

gypsum rock and linerboard paper and

(presumbly) would continue to do so in the

absence of the Department’s challenge to the

Domar acquisition. Thus, allowing the

purchaser or purchasers of these facilities to

contract for a long-term source of these raw

materials from GP would not mean that the

amount of such materials GP has available to

sell to others in the industry would be any

less than would otherwise be the case.

Moreover, should GP decide to sue its own

resources to supply gypsum rock and paper

to the two Domtar facilities that it is

acquiring in the Northeast Region—Domtar’s

Newington, New Hampshire and Camden,

New Jersey plants— the gypsum rock and

paper that presently are being supplied to

these facilities from third party sources

would become available on the market.

Accordingly, there is no net reduction in

gypsum rock or paper available to the

industry as a result of GP entering into

supply contracts for the Buchanan and/or

Wilmington plants, and the ability to enter

into these contracts, if needed, should greatly

facilitate the divestiture of the two plants. In

addition, it is important to recognize that the

supply contracts provided for in the Final

Judgment will be the result of arms-length

negotiations reflecting market conditions; it

is unlikely, in these circumstances, that the

purchaser or purchasers will gain undue

advantage over other market participants as

a result of these contracts.

We appreciate you bringing your concerns

about the proposed Final Judgment to our

attention and hope that the foregoing analysis

has helped to alleviate them. While we

understand your position, we believe that the

proposed Final Judgment offers the best

feasible solution to the anticompetitive

effects posed by GP’s acquisition of Domtar’s

gypsum business in the Northeast Region.

Pursuant to the Antitrust Procedures and

Penalities Act, a copy of your letters and this

response will be published in the Federal

Register and filed with the Court.

Sincerely,

J. Robert Kramer, II

Chief, Litigation II Section.

May 21, 1996.

Mr. J. Robert Kramer,

Litigation II Section, Antitrust Division, U.S.

Department of Justice, 1401 H St., N.W.,

Suite 3000, Washington D.C. 20530.

Re: U.S.A. v. Georgia Pacific Corporation

Civil Action No.: 96–164.

Dear Mr. Kramer: This letter shall serve as

additional comments of the Continental

Gypsum Company comment letter to you of

April 30, 1996:

In the April 30, 1996 letter we expressed

our fear that the Final Judgment mandate that

Georgia Pacific maintain or increase sales

and production to 1995 levels would cause

predatory actions by Georgia Pacific against
Federal Register / Vol. 61, No. 125 / Thursday, June 27, 1996 / Notices 33539

Continental Gypsum Company, that now

appears to be the case

In the past 45 days we have had extreme

pressure to lower pricing levels to

distributors in our prime market area. While

the pricing at our outer sales regions i.e.,

Maryland, Virginia, Delaware, western

Pennsylvania, have been relatively strong,

the New Jersey and Metropolitan New York

are off significantly. In each and every case,

we find we must meet a Georgia Pacific price

to maintain a reasonable level of business.

Continental Gypsum is clearly being targeted

by Georgia Pacific. Further, it is our opinion

that Georgia Pacific has been caused to such

action by reason of the Final Judgment

mandate that they maintain a level of

business that totally ignores consideration

that a new competitor (Continental Gypsum)

is now in the market.

The allegations that are made here can be

documented and will be documented at your

request.

Again, I would request that you give

consideration to our recommendation to

amend the Final Judgment as proposed in our

April 30, letter. For Continental Gypsum to

remain viable we must have some relief from

this matter.

Respectfully,

Morgan A. Chivers,

Chairman of the Board & C.O.O.

Rhyne Simpson, Jr.,

President.

April 30, 1996.

Mr. J. Robert Kramer,

Litigation II Section, Antitrust Division, U.S.

Department of Justice, 1401 H St., N.W.,

Suite 3000, Washington, D.C. 20530.

Re: U.S.A. v. Georgia Pacific Corporation

Civil Action No.: 96–164.

Dear Mr. Kramer: The following are the

comments of Continental Gypsum Company

relating to the above referenced case:

Background

Continental Gypsum Company is the only

small independent manufacturer of gypsum

wallboard in the United States. The Company

was formed January 26, 1995 to lease the

former Atlantic Gypsum Company facility

located at Port Newark, New Jersey. The

plant had been idled for approximately six

years as a result of bankruptcy and

foreclosure proceedings. The founders of

Continental Gypsum are Morgan A. Chivers

and Rhyne Simpson, Jr. both of whom are its

major stockholders. About thirty (30) percent

of the outstanding stock is owned by

wallboard distributors and applicators from

the region. After a rather lengthy negotiation

with the Port Authority of NY&NJ,

Continental Gypsum gained occupancy of the

facility on June 1, 1995. Production

commenced on August 23, 1995 and the

gypsum wallboard is marketed in the region

under the trade name MoreRock. Because of

numerous engineering deficiencies with the

plant equipment and the unusually harsh

winter, the plant did not obtain expected

levels of production and sales until late April

1996. (see attached shipping report)

Comments

Continental Gypsum finds two major

mandates in the Final Judgment that are

onerous and do in fact threaten the viability

of this new company. They are as follows:

IX. PRESERVATION OF ASSETS—page 14

paragraph B ‘‘Defendant shall use all

reasonable efforts to maintain and increase

sales of gypsum board produced at its

Buchanan and Wilmington plants, and

defendant shall maintain at 1995 or

previously approved levels, whichever are

higher,’’ * * * This mandate obviously

ignores the additional capacity that

Continental Gypsum has brought to the

region. It is not possible that Continental

could bring at least 270,000 MSF of supply

into the market without competitors giving

up a portion of their market share. The

Buchanan and Wilmington plants are in fact

situated in the heart of Continentals prime

market. The mandate that they maintain sales

at 1995 levels, or higher, basically implies

that there is no room in the market for

Continental.

IV. DIVESTITURES—page 5, paragraph A.

sub. (iii) ‘‘at the option of the purchaser or

purchasers, enter into a supply contract for

gypsum rock (which may or may not include

transportation) and/or gypsum linerboard

paper sufficient to meet all or part of the

capacity requirements of the Buchanan and

Wilmington plants over a period up to (10)

years; ‘* * * Continental currently

purchases some of its linerboard paper from

Georgia Pacific’s Delair, N.J. papermill.

Additionally, Georgia Pacific is considered to

be a primary source of gypsum ore and in fact

did quote on our ore requirements for the

1996 calendar year. The mandate that

Georgia Pacific provide the purchaser(s) with

supply contracts for the gypsum rock and

gypsum linerpaper will seriously restrict

Continentals ability to source these vital raw

materials both in in the present and in the

future.

Summation

The overall thrust of the Final Judgment

appears to be concerning the concentration of

supply with only a few manufactures within

the region. While the concentration of supply

should be of concern, the far more important

factor influencing competitive pricing is the

fundamental law of supply relative to

demand. This is clearly evidenced by the fact

that prices eroded up to $15.00/MSF within

the first three months of Continental’s entry

into the market. In fact, Continental Gypsum

is the only player that brings new supply into

the region. The divestiture of Buchanan and

Wilmington does nothing towards creating

more supply. A more compelling case can be

made that if Continental Gypsum is forced

into closure that the consumer would be

damaged far more than the creation of change

of ownership of two plants.

It is further our concern that the Final

Judgment gives Georgia Pacific license to

become predatory against Continental and if

Continental is forced to closure, then the

Buchanan and Wilmington plants will have

more value as a result of the divestiture

mandate.

In conclusion, for the aforementioned

reasons, we believe that the Final Judgment

be amended by:

(1) Rescinding the mandate that Georgia

Pacific maintain 1995 levels of sales (or

higher) during the 150 day divestiture period.

The only mandate should be that Georgia

Pacific should not be allowed to transfer any

sales from Buchanan and Wilmington to their

other plants, namely Camden, N.J. and the

Newington, N.H.

(2) Continental Gypsum should be afforded

the same opportunity to negotiate supply

agreements with Georgia Pacific for the

purchase of gypsum ore and gypsum

linerpaper on an equal basis of the

purchaser(s) of the Buchanan and

Wilmington plants.

Thank you very much for your

consideration in this matter.

Respectfully,

Morgan A. Chivers,

Chairman of the Board & C.O.O.

Rhyne Simpson, Jr.,

President.

Justin M. Dempsey.

The attached document was not able to be

published in the Federal Register. A copy

can be obtained from the U.S. Department of

Justice, Legal Procedures Office at 325 7th

Street, N.W., Room 215, Washington, D.C.

20530 (telephone: 202–514–2481).

[FR Doc. 96–16445 Filed 6–26–96; 8:45 am]

BILLING CODE 4410–01–M

DEPARTMENT OF LABOR

Office of the Secretary

Submission for OMB Review;

Comment Request

June 21, 1996.

The Department of Labor (DOL) has

submitted the following public

information collection request (ICR) to

the Office of Management and Budget

(OMB) for review and approval in

accordance with the Paperwork

Reduction Act of 1995 (Pub.L. 104–13;

44 U.S.C. Chapter 35). A copy of this

individual ICR, with applicable

supporting documentation, may be

obtained by calling the Department of

Labor Acting Departmental Clearance

Officer, Theresa M. O’Malley ([202]

219–5095). Individuals who use a

telecommunications device for the deaf

(TTY/TDD) may call [202] 219–4720

between 1:00 p.m. and 4:00 p.m. Eastern

time, Monday through Friday.

Comments should be sent to Office of

Information and Regulatory Affairs,

Attn: OMB Desk Officer for

Departmental Management, Office of

Management and Budget, Room 10235,

Washington, DC 20503 ([202] 395–

7316), within 30 days from the date of

this publication in the Federal Register.

The OMB is particularly interested in

comments which:

• Evaluate whether the proposed

collection of information is necessary