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1
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STIPULATION AND ORDER
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EXTRACTED KEY WORDS
DPI JUDGEMENT DIAMOND PARAGRAPH PURCHASER BUSINESS COURT AMERICA PLAINTIFF CIVIL ACTION RCL ATTORNEYS INTERNATIONAL SUPERIOR PRODUCTS PREDECESSOR COMPANY STATES DIAMOND DRILL BAROID CORPORATION ENGAGING TRANSACTIONS MODIFY PARAGRAPH PROHIBITION NOTICE PROVISION COURT GRANTS REQUESTED MODIFICATION ABIDE |
UNITED STATES
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ))
Plaintiff; )
)
v. ) Civil Action No.: 93-2621 (RCL)
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
STIPULATION AND ORDER
It is hereby STIPULATED by Diamond Products International ("DPI") and the United
States, by their attorneys, as follows:
1. In 1994, International Superior Products, Inc., the predecessor company to DPI,
agreed to be bound by the Final Judgment when it purchased the United States diamond drill bit
business of Baroid Corporation.
2. Paragraph V.F. of the Final Judgment prohibits DPI, as the purchaser of Baroid's
diamond bit business, from engaging in certain transactions.
3. DPI has joined the United States in asking this Court to modify Paragraph V.F. of
the Final Judgment to change the prohibition to a notice provision.
4. If this Court grants the requested modification to Paragraph V.F., DPI agrees to
abide by the Final Judgment, as modified.
Dated: 6/12/00
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2
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RESPONSE OF US TO PUBLIC COMMENT ON THE PROPOSAL TO MODIFY FINAL JUDGMENT
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EXTRACTED KEY WORDS
UNITED STATES PROPOSED MODIFICATION DIAMOND DRILL DEFENDANTS DPI TRANSACTION ANTITRUST BAROID PARAGRAPH DECREE BUSINESS ANTITRUST LAWS MOTION PROVISION STANDARD HALLIBURTON DIVESTITURE ASSETS CONSENT DECREE DRILLING FLUIDS PROHIBITION WESTERN ELEC COMPETITION BAKER HUGHES BOCS WASHINGTON COMPETITORS PURCHASER FEDERAL REGISTER GOVERNMENT |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
)
)
Plaintiff;
)
)
v.
) Civil Action No.: 93-2621
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants.
)
)
RESPONSE OF THE UNITED STATES TO PUBLIC COMMENT
ON THE PROPOSAL TO MODIFY FINAL JUDGMENT
The United States and Diamond Products International ("DPI") have filed a motion seeking
modification of a provision of the Final Judgment that restrains DPI's ability to sell the diamond
business divested to it by the defendants. With the modification, Paragraph V.F. would be changed
from a prohibition on DPI's ability to sell the business to a provision requiring DPI to give the
States advance notice if it proposes a transaction with certain specified companies, so that the
States would have an opportunity to review it under the antitrust laws.
Notice of the proposed modification and the 60-day comment period was published in the
Federal Register and the Washington Post; the comment period ended on June 19, 2000. One
comment was submitted, a copy of which is attached. The author of the comment is Halliburton
1
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3
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RESPONSE OF US TO PUBLIC COMENTS
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EXTRACTED KEY WORDS
UNITED STATES PROPOSED MODIFICATION DIAMOND DRILL DEFENDANTS DPI TRANSACTION ANTITRUST BAROID PARAGRAPH DECREE BUSINESS LAWS MOTION PROVISION STANDARD HALLIBURTON DIVESTITURE ASSETS CONSENT DECREE DRILLING FLUIDS PROHIBITION COMPETITION WESTERN ELEC BAKER HUGHES BOCS STRATABIT WASHINGTON COMPETITORS PURCHASER FEDERAL REGISTER |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, )
)
Plaintiff; )
)
v. ) Civil Action No.: 93-2621 (RCL)
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
RESPONSE OF THE UNITED STATES TO PUBLIC COMMENT
ON THE PROPOSAL TO MODIFY FINAL JUDGMENT
The United States and Diamond Products International ("DPI") have filed a motion
seeking modification of a provision of the Final Judgment that restrains DPI's ability to sell the
diamond drill bit business divested to it by the defendants. With the modification, Paragraph V.F.
would be changed from a prohibition on DPI's ability to sell the business to a provision requiring
DPI to give the United States advance notice if it proposes a transaction with certain specified
companies, so that the United States would have an opportunity to review it under the antitrust
laws.
Notice of the proposed modification and the 60-day comment period was published in the
Federal Register and the Washington Post; the comment period ended on June 19, 2000. One
comment was submitted, a copy of which is attached. The author of the comment is Halliburton
Company ("Halliburton"), the successor to the defendants and a major competitor of DPI in the
diamond drill bit business.
The United States has carefully reviewed the comment and has found no reason to alter its
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4
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PROPOSED ORDER
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EXTRACTED KEY WORDS
HEREBY ORDER SEEKING MODIFICATION COURT PARAGRAPH JUDGEMENT |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ))
Plaintiff; )
)
v. ) Civil Action No.:
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
ORDER
Upon consideration of the motion filed by the United States, I hereby ORDER that
Diamond Products International is granted leave to join the United States in seeking modification
from this Court of Paragraph V.F. of the Final Judgment.
DATE: /S/
United States
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5
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ORDER MODIFYING FINAL JUDGMENT
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EXTRACTED KEY WORDS
DIAMOND NOTIFICATION PLAINTIFF PURCHASER WAITING PERIOD ACT PROPOSED SALE PARAGRAPH SELL DRILL AFFILIATES SUBSIDIARIES PROVISION TRANSACTION REPORTING HSR INSTRUCTIONS REPRESENTATIVES AGREEMENT REQUEST FILING WRITTEN REQUEST CONSUMMATE SUBMITTING TERMINATION MANNER RULES PROMULGATED THEREUNDER AMBIGUITY UNCERTAINTY |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, )
)
Plaintiff; )
)
v. ) Civil Action No.: 93-2621(RCL)
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants.
)
)
ORDER MODIFYING FINAL JUDGMENT
Having determined that it is in the public interest to do so, I hereby ORDER that the
Judgment in this case be modified so that the second sentence of Paragraph V.F. reads as follows:
During the life of this decree, the purchaser of Baroid's diamond bit business
(1) shall not sell that business to, or combine that business with the
drill bit operations of, Dresser Industries, Inc. (now part of Halliburton
Company) or any of its affiliates or subsidiaries;
(2) shall not sell that business to, or combine that business with the
operations of, Baker Hughes, Inc., Camco, Inc. (now part of Schlumberger
Smith International, Inc., or any of their affiliates or subsidiaries unless
the following notice provision: If such transaction is not otherwise subject
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"), the
purchaser of Baroid's diamond bit business shall provide such notification
the same format as, and per the instructions relating to the Notification
Form set forth in the Appendix to Part 803 of Title 16 of the Code of Federal
Regulations as amended. Notification shall be provided at least thirty (30)
the proposed sale or combination, and shall include, beyond what may be
the applicable instructions, the names of the principal representatives of
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6
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US REPLY TO OPPOSITION TO ORDER MODIFYING FINAL JUDGMENT
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EXTRACTED KEY WORDS
HALLIBURTON PROPOSED MODIFICATION DECREE DEFENDANTS OPPOSITION JUDGEMENT COURT DIAMOND PARAGRAPH PROTECTION DIVESTITURE ASSETS COMPETITOR BAROID LAW PROVISION ANTITRUST DPI TRANSACTION PURCHASER BUSINESS DIAMOND DRILL BAKER HUGHES MODIFY JOINT MOTION STANDARD DRESSER CONTROL AVOID EFFECTIVE COMPETITOR |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
)
)
Plaintiff;
)
)
v.
) Civil Action No.: 93-2621
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants.
)
)
REPLY OF THE UNITED STATES TO OPPOSITION OF HALLIBURTON COMPANY
TO THE PROPOSAL TO MODIFY FINAL JUDGMENT
On September 18, 2000, Halliburton Company ("Halliburton"), the successor to all of the
defendants, filed a memorandum in opposition to the joint motion of the United States and Diamond
Products International ("DPI") to modify Paragraph V.F. of the Final Judgment entered in this case
April 12, 1994. Halliburton had earlier filed the only public comment received by the United States
regarding the proposed modification, and the United States' response to that comment was filed with
this Court on September 6, 2000.
In its opposition to the joint motion, Halliburton elaborates upon one of the arguments
its public comment -- its belief that, because Halliburton is opposed to the proposed modification,
Court should apply a more stringent standard than the public interest. In doing so, however,
1
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7
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US EXPLANATION OF MODIFICATION PROCEDURES
|
EXTRACTED KEY WORDS
JUDGEMENT MEMORANDUM MOTION EXPLANATION MEMORANDUM SUMMARIZING MODIFY SUPPORT JOINT MOTION REGISTER NEWSPAPER GENERAL CIRCULATION DISTRICT COLUMBIA MEMBERS UNITED STATES DEPARTMENT JUSTICE ANTITRUST DIVISION RESPONSES WITHDRAWN CONSENT COURT THEREAFTER MODIFICATION ORDER |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ))
Plaintiff; )
)
v. ) Civil Action No.:
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
UNITED STATES' EXPLANATION OF MODIFICATION PROCEDURES
The United States submits this memorandum summarizing the procedures regarding the
proposed modification of the Final Judgment.
1. Today, the United States and Diamond Products International ("DPI") have
Motion to Modify Final Judgment. The United States has also filed a memorandum in support of the
joint motion.
2. The United States will publish a notice of the proposed modification in the
Register and in a newspaper of general circulation in the District of Columbia. The notice will
members of the public that they may submit comments during a sixty day period about the proposed
modification to the United States Department of Justice, Antitrust Division.
3. During the comment period, the United States will consider, and at the close
period respond to, any comments received.
4. After the expiration of the comment period, the United States will file with
comments and the government's responses. Unless the United States has withdrawn its consent to
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8
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PROPOSED ORDER MODIFYING FINAL JUDGMENT
|
EXTRACTED KEY WORDS
DIAMOND NOTIFICATION PURCHASER WAITING PERIOD ACT PROPOSED SALE PARAGRAPH SELL DIAMOND DRILL AFFILIATES SUBSIDIARIES PROVISION TRANSACTION REPORTING HSR PLAINTIFF INSTRUCTIONS REPRESENTATIVES AGREEMENT REQUEST FILING WRITTEN REQUEST CONSUMMATE SUBMITTING TERMINATION MANNER THEREUNDER AMBIGUITY UNCERTAINTY |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ))
Plaintiff; )
)
v. ) Civil Action
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
ORDER MODIFYING FINAL JUDGMENT
Having determined that it is in the public interest to do so, I hereby ORDER that the
Final Judgment in this case be modified so that the second sentence of Paragraph V.F. reads as
follows:
During the life of this decree, the purchaser of Baroid's diamond bit business
(1) shall not sell that business to, or combine that business with the
diamond drill bit operations of, Dresser Industries, Inc. (now part of
Halliburton Company) or any of its affiliates or subsidiaries;
(2) shall not sell that business to, or combine that business with the
bit operations of, Baker Hughes, Inc., Camco, Inc. (now part of Schlumberger
Ltd.), Smith International, Inc., or any of their affiliates or
complies with the following notice provision: If such transaction is not
subject to the reporting and waiting period requirements of the
Antitrust Improvements Act of 1976, as amended, 15 U.S.C. § 18a (the "HSR
Act"), the purchaser of Baroid's diamond bit business shall provide such
notification to plaintiff in the same format as, and per the instructions
the Notification and Report Form set forth in the Appendix to Part 803 of
of the Code of Federal Regulations as amended. Notification shall be
least thirty (30) days prior to the proposed sale or combination, and shall
beyond what may be required by the applicable instructions, the names of the
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9
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SEEKING MODIFICATION OF FINAL JUDGMENT
|
EXTRACTED KEY WORDS
UNITED STATES DPI DIAMOND DRILL PARAGRAPH JOINT MOTION COURT BUSINESS PARTY PERMIT DIAMOND PRODUCTS MODIFY PURCHASER ORDER GRANTING ENFORCING BAROID SEEKING PENDING REQUESTS DIVEST PROVISION PURSUANT CIV OBEDIENCE PERSONAL SERVICE AFFIDAVIT ABIDE COURT GRANTS JURISDICTION PARAGRAPH XIV DELAY DISPOSITION |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, )
)
Plaintiff; )
)
v. ) Civil Action No.: 93-2621
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
MOTION FOR LEAVE TO PERMIT DIAMOND PRODUCTS INTERNATIONAL
TO JOIN THE UNITED STATES IN SEEKING MODIFICATION OF THE FINAL
JUDGMENT FROM THIS COURT
The United States hereby asks this Court for leave to permit Diamond Products
International ("DPI") to join the United States in moving for modification of the Final Judgment.
On March 30, 2000, DPI and the United States filed a Joint Motion to Modify the Final
Judgment. The Joint Motion to Modify the Final Judgment is now pending, and the notice and
public comment period will expire on June 19, 2000. The Joint Motion requests modification of
1
Paragraph V.F. of the Final Judgment, which prohibits DPI, as the purchaser of the divested
diamond drill bit business, from entering certain transactions. The proposed modification would
change Paragraph V.F. from a prohibition to a notice provision.
As of June 12, the United States has received one comment.
1
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10
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MOTION FOR ENTRY OF PROPOSED MODIFIED FINAL JUDGMENT
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EXTRACTED KEY WORDS
PROPOSED MODIFICATION ORDER MODIFYING JUDGEMENT MOTION PARAGRAPH BUSINESS BAKER HUGHES PUBLICATION WASHINGTON FILING COUNSEL BAROID COURT SECOND SENTENCE DPI DIAMOND CAMCO SMITH AFFILIATES SUBSIDIARIES PROVISION NEWSPAPER GENERAL CIRCULATION DISTRICT COLUMBIA FEDERAL REGISTER HALLIBURTON DEFENDANTS HEREBY CERTIFY |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
)
)
Plaintiff;
)
)
v.
) Civil Action No.: 93-2621
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants.
)
)
MOTION TO ENTER ORDER MODIFYING FINAL JUDGMENT
The United States moves this Court to enter the order modifying Paragraph V.F. of the Final Judgment
entered in this case, and in support of this motion, states as follows:
1. On March 30, 2000, the United States and Diamond Products International ("DPI") jointly
moved to modify the second sentence of Paragraph V.F. of the Final Judgment entered in this case on
April 12, 1994. The second sentence of Paragraph V.F. presently states that DPI, as the purchaser
Baroid's diamond bit business, "shall not sell that business to, or combine that business with the
diamond drill bit operations of, Dresser Industries, Inc., Baker Hughes, Inc., Camco, Inc., Smith
International, Inc., or any of their affiliates or subsidiaries during the life of this decree."
modification would change the provision with respect to Baker Hughes, Camco (now owned by
Schlumberger), or Smith or any of their affiliates or subsidiaries from a prohibition to a notice
2. The United States tentatively consented to the proposed modification, subject to a 60-day
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12
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US COMPLETION OF MODIFICATION PROCEDURES
|
EXTRACTED KEY WORDS
JUDGEMENT CONSENT PROPOSED MODIFICATION MODIFICATION PROCEDURES SCHLUMBERGER WASHINGTON COUNSEL CONTINUED CONSENT MODIFY BAKER BOTTS ORDER MODIFYING HEREBY CERTIFY FIRST CLASS MAIL BRADFORD REYNOLDS MARY JEAN COLLIER SHANNON RILL SCOTT PLLC RUFUS OLIVER BRUCE MCDONALD BAKER SHELL PLAZA HOUSTON SPEARING BAKER WARNER PENNSYLVANIA AVENUE |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, )
)
Plaintiff; )
)
v. ) Civil Action No.:
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
NOTICE OF COMPLETION OF MODIFICATION PROCEDURES AND OF THE UNITED
STATES' CONTINUED CONSENT TO MODIFICATION OF THE FINAL JUDGMENT
On December 22, 1999, Smith International, Inc. ("Smith") and Schlumberger Ltd.
("Schlumberger") moved to modify the Final Judgment entered in this case on April 12, 1994, and
modified on September 19, 1996, by removing "Schlumberger Ltd." from the second sentence of
Paragraph IV.F. of the Final Judgment, as amended. On that same date, the United States filed its
consent to the proposed modification, reserving the right to withdraw its consent based upon public
comments made or other information that came to its attention.
Notice of the proposed modification was published in the Federal Register on January 25,
2000 at Volume 65, No. 16, at page 3977, and in The Washington Post, a newspaper of general
circulation in the District of Columbia, on January 11-January 17, 2000. The public had thirty
submit comments, beginning on January 25, 2000 and ending on February 24, 2000. The United
States has received no comments about the proposed modification.
The United States continues to believe the proposed modification is in the public
with the completion of the procedures for public notice and comment, now asks this Court to make its
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13
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CONSENT OF US TO MODIFY FINAL JUDGMENT
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EXTRACTED KEY WORDS
JUDGEMENT SCHLUMBERGER UNITED STATES BUSINESS SMITH M-I COMPETITOR PARAGRAPH BAROID PROPOSED MODIFICATION SECOND SENTENCE DIVESTITURE CONSENT COURT DRESSER INDUSTRIES DRILLING FLUID OPERATIONS MODIFY SUBSIDIARIES PURCHASER PROHIBITED SMITH SELLING M-I ANCHOR EXPECTATIONS NAMED COMPANIES SELL BAKER HUGHES AFFILIATES LIFE DECREE |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, )
)
Plaintiff; )
)
v. ) Civil Action No.:
)
BAROID CORPORATION, ) Judge Stanley Sporkin
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
CONSENT OF THE UNITED STATES TO MODIFY FINAL JUDGMENT
Smith International, Inc. ("Smith") and Schlumberger Ltd. ("Schlumberger") have filed a
motion with this Court to modify the Final Judgment entered in this case on April 12, 1994, and
modified on September 19, 1996. The proposed modification would remove "Schlumberger
Ltd." from the second sentence of Paragraph IV.F. of the Final Judgment, as amended. Smith
and Schlumberger have agreed to a public notice and comment period, at their expense, which
will invite the public to comment to the United States regarding the proposed modification.
The United States hereby consents to the proposed modification, but reserves the right
withdraw its consent to modification, based upon public comments made or other information
that comes to its attention. The notice will specify that the public has thirty days to submit
comments. The United States will then file the comments, along with its response, and notify the
Court and the movants whether the United States continues to believe that the modification is in
the public interest. At that time, the Court can determine whether modification is in the public
interest.
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14
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US SUPPORT OF MOTION TO MODIFY FINAL JUDGMENT
|
EXTRACTED KEY WORDS
BUSINESS JUDGEMENT DIAMOND DRILL TRANSACTION COMPETITION DIVESTITURE ANTITRUST DRESSER CIR SUPP COURT CONSENT DECREE DPI TRADE CAS PARAGRAPH PURCHASER ACT CCH STANDARDS SALE BAKER HUGHES CAMCO AFFILIATES SUBSIDIARIES PROHIBITION PROVISION NOTIFICATION GOVERNMENT |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ))
Plaintiff; )
)
v. ) Civil Action No.:
)
BAROID CORPORATION, )
BAROID DRILLING FLUIDS, INC., )
DB STRATABIT (USA) INC., and )
DRESSER INDUSTRIES, INC.; )
)
Defendants. )
)
MEMORANDUM OF THE UNITED STATES IN SUPPORT
OF MOTION TO MODIFY FINAL JUDGMENT
The United States and Diamond Products International ("DPI") have moved this Court to
modify the Final Judgment entered in this action. This memorandum summarizes the Complaint
that initiated this action and the resulting Judgment, describes the proposed modification, explains
the reasons why the United States has tentatively consented to modification of the Judgment, and
discusses the legal standards and precedents respecting modification of consent decrees. Notice
of the proposed modification will be published and comments invited. The procedures that will
be followed are described in the United States' Explanation of Modification Procedures, also filed
today.
I. THE COMPLAINT AND THE JUDGMENT
On December 23, 1993, the United States filed a civil complaint alleging that the
acquisition of Baroid Corporation ("Baroid") by Dresser Industries, Inc. ("Dresser") would
violate Section 7 of the Clayton Act (15 U.S.C. §7). The Complaint alleged that the effect of the
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