The opinion of the court was delivered by: ROYCE LAMBERTH, District Judge
Defendant Smith International, Inc. ("Smith") has moved the
Court for an order construing its obligations under the Modified
Final Judgment entered in this case by Judge Sporkin on September
19, 1996. After Anchor Drilling Fluids U.S.A., Inc. ("Anchor"), a
party to the Modified Final Judgment, filed its opposition and
Smith filed its reply, Anchor moved for leave to file a surreply.
Now before the Court are the motion for leave to file a surreply
and the motion for a construal order. For the reasons set forth
herein, the Court denies the motion for leave to file a surreply
and grants the motion for a construal order. I. BACKGROUND
In 1993, the Department of Justice filed this antitrust lawsuit
against Baroid Corporation and Dresser Industries, Inc. to
prevent the two companies' planned merger. The companies assuaged
the Department of Justice and the parties entered into a consent
decree that became embodied in the Final Judgment entered on
April 12, 1994. In compliance with that Final Judgment, Dresser
Industries sold its ownership interest in M-I, a drilling fluids
business, to Smith, which agreed to be bound by the Final
Judgment. The Final Judgment prohibited Smith, as purchaser, from
further acquiring certain other drilling fluid businesses,
including Anchor Drilling Fluids AS of Norway.
On September 19, 1996, about two years after entry of the Final
Judgment, the Court entered a Modified Final Judgment upon the
joint motion of Smith and the Department of Justice. The Modified
Final Judgment permitted Smith to purchase Anchor Drilling Fluids
AS of Norway so long as Smith sold off that company's United
States drilling fluids operation and complied with the Stipulated
Divestiture Agreement filed on June 5, 1996. Smith then acquired
Anchor Drilling Fluids AS of Norway and divested itself of the
United States operation, which led to the creation of Anchor. As
a result of this transaction, Anchor became bound by the Modified
The Stipulated Divestiture Agreement gives Anchor the
opportunity to purchase from Smith unlimited quantities of crude
barite ore, an important component of drilling fluids. The
agreement provides: At the option of the purchaser of Anchor USA
[Anchor], M-I [now Smith] shall supply the purchaser
unlimited quantities of crude barite ore for its own
consumption until five years from the date the order
modifying the Judgment is filed and entered, at a
price no greater than the highest price set forth in
Industrial Minerals Magazine for the month which the
order is placed with M-I for the country from which
the crude barite ore will be sourced and for the
appropriate form of packaging. If the purchaser of
Anchor USA exercises its option to have M-I supply
crude barite ore, it must notify M-I no less than
four months prior to the date of delivery of the
crude barite ore. At the option of the purchaser of
Anchor USA, M-I's obligation to supply crude barite
ore on the terms stated herein may be extended an
additional five years.
Joint Mot. to Modify Final Judgment & Stipulated Divestiture
Agreement ¶ II.G, United States v. Baroid Corp., No. 93-2621
(D.D.C. June 5, 1996).
Since entry of the Modified Final Judgment, Smith has offered
to supply Anchor with crude barite ore, but Anchor has contracted
with Smith to purchase only ground barite ore, not crude barite
ore. (Brown Aff. ¶¶ 14, 21.). Crude barite ore is a "rock-like
material" in a "semicrushed state, with pieces ranging . . . in
size from approximately 12-inch chunks to particles the size of
sand." Id. ¶ 4. Ground barite ore is a finished product: it is
"flour-like" and "ready for sale and use as a drilling fluid
additive." Id. ¶ 5.
Both Smith and Anchor agree that their companies' relationship
has been rocky and subject to a series of ongoing disputes
concerning Smith's supply of barite ore to Anchor. Due to
transportation costs, Smith has had to raise its price for
delivery of ground barite for all customers, including Anchor.
Anchor protested. Brown Aff. ¶ 17. In 1999, Anchor filed and the
parties settled a suit concerning the supply of barite ore.
Earlier this year, Anchor filed a second suit against Smith in
the United States District Court for the District of Oklahoma.
See Compl., Anchor Drilling Fluids, U.S.A., Inc., v. M-I LLC,
No. 04-CV-375 (D. Okla. Apr. 28, 2004). In several parts of the
complaint, Anchor alleged breach of the supply agreement set
forth in the Modified Final Judgment. See, e.g., id. ¶ 34 (as
violation of the Sherman Act), id. ¶ 61 (as violation of the
Oklahoma law), id. ¶ 67 (as violation of the contract law).
On May 14, 2004, Smith moved this Court to issue an order
construing the September 19, 1996 Modified Final Judgment.
Smith's motion asks the Court to make the following construction
of Paragraph II.G: first, that Smith's obligation to supply
"crude barite ore" does not require Smith to supply ground barite
ore; and second, that the obligation to supply crude barite ore
does not include the obligation to process or deliver that ore.
Smith served its motion on Anchor and on the Department of
Justice. Anchor lodged an opposition with this court; the
Department of Justice has remained silent. Anchor's main argument
is that this Court lacks jurisdiction to enter an order
construing the Modified Final Judgment.
Anchor contends that this Court lacks jurisdiction to issue the
requested construal order because there is no case or controversy
as required by Article III of the Constitution. Anchor is
mistaken on the law. There is "no doubt" that federal courts have
continuing jurisdiction to protect and enforce their judgments
and consent decrees. Central of Ga. R.R. Co. v. United States,
410 F. Supp. 354, 357 (D.D.C. 1976) (citing Riggs v. Johnson
Cty., 73 U.S. (6 Wall.) 166 (1867); Pigford v. Veneman,
292 F.3d 918, 923 (D.C. Cir. 2002). "First, they may interpret and enforce a decree to the extent authorized ...