United States v. BNS Inc.

ORDER Before PREGERSON, BOOCHEVER, and BEEZER, Circuit Judges. On April 5, 1988, the United States District Court for the Central District of California entered a preliminary injunction prohibiting BNS Inc. from attempting to acquire a controlling interest in Koppers Co. through a cash tender offer. The order was issued to maintain the status quo while the court considered a proposed consent decree pursuant to the Antitrust Procedures and Penalties Act (APPA), 15 U.S.C. § 16(bMh) (1982). The United States, BNS, and Gifford-Hill & Co., an affiliated firm, stipulated to the proposed decree to remedy anticompetitive effects the government alleged would result in the Los Angeles and Orange County aggregate market from the acquisition of Koppers. Aggregate is rock, sand, and gravel suitable for mixing in concrete, asphalt, and other road or construction materials. Both BNS, through Gifford-Hill, and Koppers, through its wholly-owned subsidiary Sully-Miller Contracting Co., manufacture and distribute road and construction materials in Southern California. The consent decree, if approved by the district court, would require BNS to maintain Koppers’ aggregate facility in Irwin-dale, California separately and to divest it by January 1, 1989. [947] Koppers, which was granted leave to “participate” in the APPA proceedings under 15 U.S.C. § 16(f), requested the injunction. The court found that its jurisdiction under the APPA would be hindered and irreparable harm to competition in the aggregate market threatened if the transaction was completed before it reviewed the consent decree. The government, BNS, and Gifford-Hill opposed the injunction, and sought interlocutory review under 28 U.S.C. § 1292(a)(1) (1982). We conclude that the district court had authority to issue a preliminary injunction to preserve its APPA jurisdiction under the All Writs Act, 28 U.S.C. § 1651 (1982). Control by BNS of Koppers’ aggregate operation and related facilities in Ir-windale during the pendency of the court's proceedings could conceivably result in irreparable anticompetitive harm. We believe that if BNS is sufficiently divorced from control of that operation and related facilities, which currently are managed by Sully-Miller, the district court’s concerns will be adequately addressed. An appellate court may modify an injunction. State of Washington v. Central Contractors Ass’n, 453 F.2d 383, 384 (9th Cir.1971); see Bresgal v. Brock, 843 F.2d 1163, 1171-72 (9th Cir.1987). Upon consideration of possible harm to competition in the aggregate market and the relative hardships to the parties in this case, we have concluded that appointment of an independent trustee to assume control of Sully-Miller will preserve the district court’s jurisdiction. We therefore order that the injunction be modified as follows: (1) The preliminary injunction shall remain in force until a trustee is appointed by the district court to assume control of Sully-Miller. At such time as BNS may acquire a controlling interest in Koppers, the trustee shall: (a)manage the Irwindale aggregate operation and related facilities separately and independently from the other assets owned by Koppers, BNS, and Gifford-Hill; (b) maintain the confidentiality of all records and plans pertaining to the aggregate operation and related facilities; and (c) remain in control of Sully-Miller until the court enters its order approving or disapproving the consent decree under the APPA. (2) In the event the court disapproves the proposed decree, the trustee shall remain in control of Sully-Miller for an additional fourteen-day period to permit the parties to take such action, if any, that they deem appropriate. (3) The trustee shall not assume control of Sully-Miller until the United States District Court for the Western District of Pennsylvania has lifted the injunction on the proposed acquisition ordered in Koppers Co. v. American Express Co., Civ. No. 88-557 (W.D.Pa. April 15, 1988). (4) Reasonable costs of such trusteeship shall be paid by BNS. In the event that BNS does not agree to this provision, the preliminary injunction previously entered by the district court shall remain in effect without modification until such time as the court approves or disapproves the proposed consent decree. Because this matter has been expedited, we have not set forth our reasons in detail. An opinion will follow. The district court’s order is MODIFIED and the case REMANDED for the immediate appointment of a trustee in accordance with this order.