UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the matter of
COMMONWEALTH LAND TITLE INSURANCE
COMPANY, a corporation.
File No. 981-0127
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission") having initiated an investigation
of certain acts and practices of Commonwealth Land Title Insurance Company
("Commonwealth"); and it now appearing that:
Commonwealth, hereinafter sometimes referred to as "proposed respondent," is
willing to enter into an agreement containing an order to cease and desist from certain
acts and practices, and providing for other relief; and Lawyers Title Corporation
("LTC"), having entered into an agreement providing for the acquisition by LTC
of the title insurance operations of Reliance Group Holdings, Inc. ("Reliance
Group"), including Commonwealth, is willing to be bound by such agreement as the
prospective parent corporation of Commonwealth:
IT IS HEREBY AGREED by and between proposed respondent and its prospective
parent, by their respective duly authorized officers and attorneys, and counsel for the
Commission, that:
1. Proposed respondent Commonwealth is a corporation organized, existing and doing
business under and by virtue of the laws of the Commonwealth of Pennsylvania with its
office and principal place of business located at 1700 Market Street, Philadelphia,
Pennsylvania.
2. Reliance Group is a corporation organized, existing and doing business under and by
virtue of the laws of the State of Delaware with its office and principal place of
business located at Park Avenue Plaza, 55 East 52nd Street, New York, New York.
3. LTC is a corporation organized, existing and doing business under and by virtue of
the laws of the Commonwealth of Virginia with its office and principal place of business
located at 6630 West Broad Street, Richmond, Virginia.
4. Proposed respondent and LTC admit all the jurisdictional facts set forth in the
draft of complaint here attached.
5. Proposed respondent and LTC waive:
a. any further procedural steps;
b. the requirement that the Commission's decision contain a statement of findings of
fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or contest the validity
of the order entered pursuant to this agreement; and
d. any claim under the Equal Access to Justice Act.
6. Proposed respondent shall submit, within thirty (30) days of the date this agreement
is signed by proposed respondent and every thirty (30) days thereafter until this order
becomes final, a report pursuant to Section 2.33 of the Commission’s Rules, signed by
the proposed respondent, setting forth in detail the manner in which the proposed
respondent will comply with Paragraph II. of the order when and if entered. Such report
will not become part of the public record unless and until the accompanying agreement and
order are accepted by the Commission for public comment.
7. This agreement shall not become part of the public record of the proceeding unless
and until it is accepted by the Commission. If this agreement is accepted by the
Commission it, together with the draft of complaint contemplated thereby, will be placed
on the public record for a period of sixty (60) days and information in respect thereto
publicly released. The Commission thereafter may either withdraw its acceptance of this
agreement and so notify the proposed respondent, in which event it will take such action
as it may consider appropriate, or issue and serve its complaint (in such form as the
circumstances may require) and decision, in disposition of the proceeding.
8. This agreement is for settlement purposes only and does not constitute an admission
by proposed respondent or LTC that the law has been violated as alleged in the draft of
complaint here attached, or that the facts as alleged in the draft complaint, other than
jurisdictional facts, are true.
9. This agreement contemplates that, if it is accepted by the Commission, and if such
acceptance is not subsequently withdrawn by the Commission pursuant to the provisions of
§ 2.34 of the Commission's Rules, the Commission may, without further notice to the
proposed respondent or LTC (1) issue its complaint corresponding in form and substance
with the draft of complaint here attached and its decision containing the following order
to divest and to cease and desist in disposition of the proceeding and (2) make
information public with respect thereto. When so entered, the order to cease and desist
shall have the same force and effect and may be altered, modified or set aside in the same
manner and within the same time provided by statute for other orders. The order shall
become final upon service. Delivery by the U.S. Postal Service of the complaint and
decision containing the agreed-to order to proposed respondent's address as stated in this
agreement shall constitute service on proposed respondent and LTC. Proposed respondent and
LTC waive any right they may have to any other manner of service. The complaint may be
used in construing the terms of the order, and no agreement, understanding,
representation, or interpretation not contained in the order or the agreement may be used
to vary or contradict the terms of the order.
10. By signing this agreement containing consent order, proposed respondent and LTC
represent that they can accomplish the full relief contemplated by this agreement.
11. Proposed respondent and LTC have each read the proposed complaint and order
contemplated hereby. Proposed respondent and LTC each understand that once the order has
been issued, proposed respondent will be required to file one or more compliance reports
showing that it has fully complied with the order. Proposed respondent and LTC agree to
comply with Paragraphs II., IV. and V. of the proposed order from the date they sign this
agreement. Proposed respondent and LTC further understand that they may be liable for
civil penalties in the amount provided by law for each violation of the order after it
becomes final.
ORDER
I.
IT IS ORDERED that, as used in this order, the following definitions shall
apply:
A. "Respondent" or "Commonwealth" means Commonwealth Land Title
Insurance Company, its directors, officers, employees, agents and representatives,
predecessors, successors, and assigns; its direct and indirect parents, subsidiaries,
divisions, groups and affiliates controlled by or under common control with Commonwealth
Land Title Insurance Company, and the respective directors, officers, employees, agents,
and representatives, successors, and assigns of each.
B. "First American" means First American Title Insurance Company, its
directors, officers, employees, agents and representatives, predecessors, successors, and
assigns; its direct and indirect parents, subsidiaries, divisions, groups and affiliates
controlled by or under common control with First American Title Insurance Company, and the
respective directors, officers, employees, agents, and representatives, successors, and
assigns of each.
C. "Commission" means the Federal Trade Commission.
D. "Title plant" means a privately owned collection of records and/or indices
regarding the ownership of and interests in real property. The term includes such
collections that are regularly maintained and updated by obtaining information or
documents from the public records, as well as such collections of information that are not
regularly updated.
E. "Title plant services" means providing selected information contained in a
title plant to a customer or user or permitting a customer or user to have access to
information contained in a title plant.
F. "Commonwealth Washington DC Title Plant" means the title plant owned by
Commonwealth containing information pertaining to real property in the District of
Columbia, which was located prior to November 1997 at 1828 L Street, N.W., Washington, DC,
including all updates of such information.
G. "First American Washington DC Title Plant" means the title plant owned by
First American containing information pertaining to real property in the District of
Columbia.
H. "First American Capitol Hill Premises" means the premises owned or leased
by First American at or adjacent to 605 Pennsylvania Avenue, S.E., Washington, DC.
I. "Interim Plant Use Agreement" means an agreement entered into with any
customer or user of the Commonwealth Washington DC Title Plant or the First American
Washington DC Title Plant, pursuant to which Commonwealth and First American would jointly
provide title plant services to such customer or user pending formation of a joint plant
entity by Commonwealth and First American.
II.
IT IS FURTHER ORDERED that:
A. Respondent shall, no later than the date the agreement containing consent order is
signed by respondent, physically segregate all contents of the Commonwealth Washington,
D.C., Title Plant located at the First American Capitol Hill Premises from all contents of
the First American Washington DC Title Plant.
B. Respondent shall, no later than thirty days after the date the agreement containing
consent order is signed by respondent, relocate the Commonwealth Washington DC Title Plant
to premises within the District of Columbia that are separate and distinct from the First
American Washington DC Title Plant, the First American Capitol Hill Premises, and any
other premises in which First American has any direct or indirect interest of any kind.
Following such relocation respondent shall operate and maintain the Commonwealth
Washington DC Title Plant as a fully functional title plant providing title plant services
in competition with the First American Washington DC Title Plant.
C. Respondent shall, no later than the date the agreement containing consent order is
signed by respondent, cause to be rescinded all Interim Plant Use Agreements and any other
agreements under which respondent purported to or did provide title plant services in the
District of Columbia jointly with First American, and shall cease and desist from claiming
any right, title or interest pursuant to any such agreements.
D. Respondent shall, for a period of no less than one year after the agreement
containing consent order is signed by respondent, provide title plant services in the
District of Columbia to all customers or users of the Commonwealth Washington DC Title
Plant on the most recent prices, terms and conditions applicable to such customer or user
prior to the relocation of the Commonwealth Washington DC Title Plant in November 1997 to
the First American Capitol Hill Premises.
E. Respondent shall refund to all customers or users of the Commonwealth Washington DC
Title Plant all amounts paid for title plant services provided during the period when the
Commonwealth Washington DC Title Plant was located at the First American Capitol Hill
Premises, to the extent such payments exceed the amount which would have been payable by
each such customer or user under the most recent prior prices, terms and conditions
applicable to such customer or user. Respondent shall conduct a review of its own files
and all other relevant information available to it to determine to whom and in what amount
such refunds are or may be payable and shall, no later than fourteen days after the
agreement containing consent order is signed by respondent, pay the full amount of such
refunds. Respondent, as part of its reports submitted pursuant to Paragraph 6 of the
agreement containing consent order and Paragraph VI. of this Order, shall state each
person or entity as to whom it has made a determination that such a refund is or is not
payable, and the date and amount of any refund paid, and shall provide copies of all
documents and all other information in its possession pertaining to payments by or amounts
due from each such person or entity for title plant services provided during and for six
months prior to the period when the Commonwealth Washington DC Title Plant was located at
the First American Capitol Hill Premises. Respondent shall, no later than fourteen days
after the agreement containing consent order is signed by respondent, notify in writing
each customer or user of the Commonwealth Washington DC Title Plant of the availability of
refunds and of the customer or user’s rights under this paragraph. In the event that
the respondent shall receive (from the customer or user or from any other source) further
evidence that a refund is payable under the terms of this paragraph, it shall pay such
refund to any customer or user no later than seven days after receiving such evidence. In
the event of any dispute between respondent and any customer or user concerning a refund
pursuant to this paragraph, respondent shall immediately pay to the customer or user any
portion of such refund that is not in dispute, and shall negotiate in good faith with the
customer or user in an attempt to resolve the dispute. If the dispute is not resolved
within fourteen days, respondent shall offer the customer or user the option of referring
such dispute to the Commission for resolution, whose determination shall be binding on
Commonwealth.
III.
IT IS FURTHER ORDERED that:
A. If respondent has not complied absolutely and in good faith with all of the
requirements set forth in Paragraph II.. within three months from the date the agreement
containing consent order is signed by respondent, the Commission may appoint a trustee to
accomplish the required actions. In the event that the Commission or the Attorney General
brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C.
§ 45(l), or any other statute enforced by the Commission, respondent shall consent
to the appointment of a trustee in such action. Neither the appointment of a trustee nor a
decision not to appoint a trustee under this Paragraph shall preclude the Commission or
the Attorney General from seeking civil penalties or any other relief available to it,
including a court-appointed trustee, pursuant to § 5(l) of the Federal Trade
Commission Act, or any other statute enforced by the Commission, for any failure by the
respondent to comply with this order.
B. If a trustee is appointed by the Commission or a court pursuant to Paragraph III. A.
of this order, respondent shall consent to the following terms and conditions regarding
the trustee's powers, duties, authority, and responsibilities:
- The Commission shall select the trustee, subject to the consent of respondent, which
consent shall not be unreasonably withheld. If respondent has not opposed, in writing,
including the reasons for opposing, the selection of any proposed trustee within ten (10)
days after notice by the staff of the Commission to respondent of the identity of any
proposed trustee, respondent shall be deemed to have consented to the selection of the
proposed trustee.
- Subject to the prior approval of the Commission, the trustee shall have the exclusive
power and authority to carry out the actions specified in Paragraph II. that have not been
accomplished by the respondent.
- Within ten (10) days after appointment of the trustee, respondent shall execute a trust
agreement that, subject to the prior approval of the Commission and, in the case of a
court-appointed trustee, of the court, transfers to the trustee all rights and powers
necessary to permit the trustee to accomplish the actions required by this order.
- The trustee shall have three (3) months from the date the Commission approves the trust
agreement described in Paragraph III. B. 3. to accomplish the actions specified by
Paragraph II. If, however, at the end of the three-month period, the trustee has submitted
a plan of action or believes that the required actions can be accomplished within a
reasonable time, the period for accomplishing the required actions may be extended by the
Commission, or, in the case of a court-appointed trustee, by the court; provided, however,
the Commission may extend this period only two (2) times.
- The trustee shall have full and complete access to the personnel, books, records and
facilities related to the properties specified in Paragraph II. and to any other relevant
information as the trustee may request. Respondent shall develop such financial or other
information as such trustee may request and shall cooperate with the trustee. Respondent
shall take no action to interfere with or impede the trustee's accomplishment of the
required actions. Any delays in the required actions caused by respondent shall extend the
time for accomplishing the required actions under this Paragraph in an amount equal to the
delay, as determined by the Commission or, for a court-appointed trustee, by the court.
- To the extent consistent with the terms of Paragraph II., the trustee shall use his or
her best efforts to negotiate expeditiously the most favorable price and terms available
in connection with each required action, subject to respondent's absolute and
unconditional obligation to accomplish the required actions.
- The trustee shall serve, without bond or other security, at the cost and expense of
respondent, on such reasonable and customary terms and conditions as the Commission or a
court may set. The trustee shall have the authority to employ, at the cost and expense of
respondent, such consultants, accountants, attorneys, investment bankers, business
brokers, appraisers, and other representatives and assistants as are necessary to carry
out the trustee's duties and responsibilities. The trustee shall account for all expenses
incurred and monies received in connection with the required actions. After approval by
the Commission and, in the case of a court-appointed trustee, by the court, of the account
of the trustee, including fees for his or her services, all amounts due to the trustee
shall be paid by the respondent, and the trustee's power shall be terminated. The
trustee's compensation shall be based at least in significant part on a commission
arrangement contingent on the trustee's promptly accomplishing the actions required by
Paragraph II.
- Respondent shall indemnify the trustee and hold the trustee harmless against any losses,
claims, damages, liabilities, or expenses arising out of, or in connection with, the
performance of the trustee's duties, including all reasonable fees of counsel and other
expenses incurred in connection with the preparation for, or defense of any claim, whether
or not resulting in any liability, except to the extent that such liabilities, losses,
damages, claims, or expenses result from misfeasance, gross negligence, willful or wanton
acts, or bad faith by the trustee.
- If the trustee ceases to act or fails to act diligently, a substitute trustee shall be
appointed in the same manner as provided in Paragraph III. A. of this order.
- The Commission or, in the case of a court-appointed trustee, the court, may on its own
initiative or at the request of the trustee issue such additional orders or directions as
may be necessary or appropriate to accomplish the actions required by this order.
- The trustee shall have no obligation or authority to operate or maintain the properties
specified in Paragraph II.
- The trustee shall report in writing to respondent and the Commission every thirty (30)
days concerning the trustee's efforts to accomplish divestiture.
IV.
IT IS FURTHER ORDERED that:
A. For a period of ten (10) years from the date this order becomes final, respondent
shall not, without providing advance written notification to the Commission, directly or
indirectly, through subsidiaries, partnerships, or otherwise:
- Acquire any stock, share capital, equity or other interest in any concern, corporate or
non-corporate, that has any direct or indirect ownership interest in a title plant serving
the District of Columbia; or
- Acquire any assets (other than in the ordinary course of business) or ownership interest
in a title plant serving the District of Columbia; or
- Sell or transfer any stock, share capital, equity or other interest in, or any assets
of, the Commonwealth Washington DC Title Plant to any person or concern, corporate or
non-corporate, that has any direct or indirect ownership interest in a title plant serving
the District of Columbia; or
- Merge, combine or otherwise consolidate the Commonwealth Washington DC Title Plant with
any other title plant serving the District of Columbia; or
- Enter into any contract, venture or arrangement to provide title plant services for the
District of Columbia jointly with any person or concern, corporate or non-corporate, that
has any direct or indirect ownership interest in a title plant serving the District of
Columbia.
Notification is not required to be made pursuant to this Paragraph IV. with respect to
any acquisition by respondent of a copy of title records or other information from a
person or entity which thereafter retains the original information in its ownership and
control, and where competition in the ordinary course between the parties is not otherwise
restrained.
B. Notification pursuant to this Paragraph shall be given on the Notification and
Report Form set forth in the Appendix to Part 803 of Title 16 of the Code of Federal
Regulations as amended (hereinafter referred to as "the Notification"), and
shall be prepared and transmitted in accordance with the requirements of that part, except
that no filing fee will be required for any such notification, notification shall be filed
with the Secretary of the Commission, notification need not be made to the United States
Department of Justice, and notification is required only of respondent and not of any
other party to the transaction.
C. Respondent shall provide the Notification to the Commission at least thirty days
prior to consummating the transaction (hereinafter referred to as the "first waiting
period"). If, within the first waiting period, representatives of the Commission make
a written request for additional information or documentary material (within the meaning
of 16 C.F.R. § 803.20), respondent shall not consummate the transaction until twenty days
after submitting such additional information or documentary material. Early termination of
the waiting periods in this paragraph may be requested and, where appropriate, granted by
letter from the Bureau of Competition. Provided, however, that prior notification shall
not be required by this paragraph for a transaction for which notification is required to
be made, and has been made, pursuant to Section 7A of the Clayton Act, 15 U.S.C. § 18a.
V.
IT IS FURTHER ORDERED that, for a period of twenty years from the date of entry
of this order, respondent, directly or indirectly or through any corporate or other device
in or affecting commerce, as "commerce" is defined in Section 4 of the Federal
Trade Commission Act, 15 U.S.C. § 44, forthwith cease and desist from entering into,
attempting to enter into, organizing or attempting to organize, implementing or attempting
to implement, or continuing or attempting to continue, any combination, agreement, or
understanding, express or implied, for the purpose or with the effect of raising,
lowering, fixing, maintaining or stabilizing the price, terms or other forms or conditions
of compensation paid for title plant services in the District of Columbia; or encouraging,
advising, pressuring, assisting, inducing, or attempting to induce any person to engage in
any action prohibited by this order.
VI.
IT IS FURTHER ORDERED that:
A. Within thirty (30) days after the date this order becomes final and every thirty
(30) days thereafter until respondent has fully complied with the provisions of Paragraphs
II. or III. of this order, respondent shall submit to the Commission a verified written
report setting forth in detail the manner and form in which it intends to comply, is
complying, and has complied with Paragraphs II. and III. of this order. Respondent shall
include in its compliance reports, among other things that are required from time to time,
a full description of the efforts being made to comply with Paragraphs II. and III. of the
order, including a description of all substantive contacts or negotiations for the
accomplishment of the required actions and the identity of all parties contacted.
Respondent shall include in its compliance reports copies of all written communications to
and from such parties, all internal memoranda, and all reports and recommendations
concerning divestiture.
B. One year (1) from the date this order becomes final, annually for the next nine (9)
years on the anniversary of the date this order becomes final, and at other times as the
Commission may require, respondent shall file a verified written report with the
Commission setting forth in detail the manner and form in which it has complied and is
complying with Paragraphs IV. and V. of this order.
VII.
IT IS FURTHER ORDERED that respondent shall notify the Commission at least
thirty (30) days prior to any proposed change in the corporate respondent such as
dissolution, assignment, sale resulting in the emergence of a successor corporation, or
the creation or dissolution of subsidiaries or any other change in the corporation that
may affect compliance obligations arising out of the order.
VIII.
IT IS FURTHER ORDERED that, for the purpose of determining or securing
compliance with this order, upon written request, respondent shall permit any duly
authorized representative of the Commission:
A. Access, during office hours and in the presence of counsel, to inspect and copy all
books, ledgers, accounts, correspondence, memoranda and other records and documents in the
possession or under the control of respondent relating to any matters contained in this
order; and
B. Upon five days' notice to respondent and without restraint or interference from it,
to interview officers, directors, or employees of respondent.
Signed this _____ day of _______________, 19____.
COMMONWEALTH LAND TITLE INSURANCE COMPANY, A CORPORATION
By:
________________________
Chief Executive Officer
________________________
Counsel for Commonwealth Land Title Insurance Company
LAWYERS TITLE CORPORATION, A CORPORATION
By:
________________________
Chief Executive Officer
________________________
Counsel for Lawyers Title Corporation
FEDERAL TRADE COMMISSION
By:
________________________
Attorney
Bureau of Competition
Approved:
____________________
Assistant Director
Bureau of Competition
______________________
Deputy Director
Bureau of Competition
____________________
Director
Bureau of Competition |