ORIGINAL

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

In the Matter of )

)

)

)

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Docket No. 9327

Polypore International, Inc.

a corporation PUBLIC DOCUMENT

RESPONDENT'S MEMORANDUM IN OPPOSITION TO

ENERSYS' MOTION FOR AWARD OF ATTORNEYS' FEES AND

COSTS AND TO LIMIT SUBPOENA SERVED ON NON-PARTY

Respondent Polypore International, Inc. ("Polyp ore") submits its memorandum In

opposition to EnerSys' ("EnerSys") Motion for Award of Attorneys' Fees and Costs and to Limit

Subpoena Served on Non-Party.

PRELIMINARY STATEMENT

EnerSys seeks to limit a subpoena, served upon it by Polypore, which seeks documents

that go to the central issues raised in the Federal Trade Commission's ("FTC" or "Commission")

Complaint (the "Complaint") in this matter. The Complaint contends that Polypore's acquisition

of Microporous Products L.P. ("Microporous") led to a monopoly in the alleged deep-cycle,

motive, and UPS battery separator markets and led to higher prices and decreased competition in

the alleged automotive battery separator market. The Complaint fuher alleges that there are

significant barriers to entry in these markets. The Complaint's allegations are based in large

measure on information submitted and put forth by EnerSys -- a customer of Respondent -- in

response to the FTC's Civil Investigative Demand ("CID"). EnerSys admits in its own motion

that it has cooperated extensively with the FTC in the investigation leading up to the filing of the

Complaint. As EnerSys states in its motion:

"EnerSys has already produced two witnesses in Washington, D.C. to testify in

this matter, produced hundreds of pages of documents to the F.T.C. in response to

a prior subpoena, and gone to great lengths to gather more than 15,000 documents
that are potentially responsive to Respondent's Subpoena. Only at this point does

EnerSys 'cry uncle' . . .". (Memorandum at p. 11).

Now, after providing this one-sided discovery to the FTC, outside of Respondent's presence and

without Respondent having the opportunity to examine EnerSys and its allegations in the light of

the day with the relevant documents, EnerSys cries foul and attempts to impede Respondent's

efforts at obtaining discovery that is balanced on all probative issues.

Polypore's subpoena is tailored to seek documents pertinent to the issues raised by the

FTC in the Complaint and to Polypore's defense. Despite its close involvement with the facts

that underlie the Complaint's allegations, ÉnerSys seeks to limit the subpoena, claiming that (1)

the subpoena does not seek relevant information; (2) compliance would be overly burdensome;

and (3) it should be reimbursed for the costs of compliance. None of the arguments has any

merit, and EnerSys' motion should be denied.

In paricular, EnerSys improperly seeks reimbursement for its costs in complying with

Respondent's subpoena, which it claims could amount to as much as $50,000. (Memorandum at

p. 12). EnerSys' request for reimbursement should be sumarily rejected as it ignores FTC

authority holding that subpoenaed third parties with a potential interest in the litigation (such as

EnerSys) are, at most, entitled only to the reimbursement of copying costs - which as EnerSys

points out in its supporting memorandum, Respondent has already agreed to pay. (Memorandum

at p. 16)(See November 14,2008 letter of Eric D. Welsh, Esq., attached hereto at Tab A).

FACTUAL BACKGROUND

EnerSys is a global manufacturer of flooded lead acid batteries. (Memorandum at p. 4).

Prior to Respondent's acquisition of Microporous, EnerSys purchased polyethylene battery

separators from both Respondent and Microporous and, purorts to currently purchase

polyethylene battery separators solely from Respondent. (Id.). As a high-volume consumer of

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polyethylene battery separators, EnerSys is an important participant in the battery separator

market and stands to be impacted by the outcome of Respondent's proceedings with the FTC.

The subpoena in question originated in an adjudicatory proceeding currently pending

before the Commission in which Polypore is alleged to have violated Section 5 of the Federal

Trade Commission Act, 15 U.S.C. § 45, and Section 7 ofthe Clayton Act, 15 U.S.c. § 45, by its

acquisition of Microporous. In order to obtain the information necessary for its defense,

Polypore applied to the Commission's Administrative Law Judge for issuance of several

subpoenas duces tecum to participants in the battery separator industry. On October 24, 2008,

one such subpoena was issued to EnerSys, a purchaser of battery separators (i.e. a customer),

pursuant to the Commission's authority under Section 9 of the Federal Trade Commission Act,

15 U.S.C. § 49, which provides that "the Commission shall have power to require by subpoena. .

. the production of all such documentary evidence relating to any matter under investigation."

EnerSys received the subpoena on November 7, 2008. (Memorandum at p. 5).

Counsel for Respondent and counsel for EnerSys had a telephone conversation on

Wednesday, November 12, 2008 to discuss any issues EnerSys may have had in regards to the

subpoena. (Memorandum at pp. 6-7). At that time, counsel for Respondent explained

Respondent's wilingness to discuss and resolve any concerns EnerSys may have concerning its

compliance with the subpoena - a fact conveniently omitted from EnerSys' memorandum. (Id.)

Two days later, counsel for Respondent reiterated Polypore's position:

"Third, I think it important that your client understand our position fully prior to

producing documents and making such an application to the Administrative Law

Judge in this case, if it chooses to do so. As I mentioned to you, Polypore is

wiling to discuss the subpoena with you, including any concern that your client

may have with respect to its scope, prior to EnerSys' production of documents

under the subpoena. As I do not know how EnerSys maintains its documents, and

I do not know any specific concerns that EnerSys would have with respect to the

subpoena, I cannot address any concerns at this time, including any as to burden,

to avoid any difficulties in the future, including through motion practice. I make

this comment to you in advance of any application for costs. As I also mentioned

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on Wednesday, if you are aware of any applicable authority in the area, please

bring it to my attention promptly." (See Tab A).

Respondent's counsel received no response to its November 14, 2008 letter. Having not heard

anything further from EnerSys on the subject of the subpoena, Respondent's counsel sent an

electronic mail communication to EnerSys' counsel on December 4,2008 in which Respondent's

counsel again indicated Respondent's wilingness to discuss any concerns EnerSys may have had

with the subpoena requests. (See December 4, 2008 e-mail of Eric D. Welsh, Esq., attached

hereto at Tab B). In a response the following day, EnerSys' counsel stated that EnerSys had

"been working hard gathering documents" and for the first time suggested a meet and confer to

discuss "a number of issues" EnerSys had with the Subpoena. (See December 5, 2008 e-mail

correspondence between counsel, attached hereto at Tab C). Thus, despite Respondent's

counsel's previous request to discuss the subpoena, including the manner of production and any

issues as to scope or burden, before, not after, EnerSys began gathering documents, EnerSys

choose to immediately proceed with the gathering of responsive documents without first

communicating with Respondent's counseL. (Id.)

A meet and confer conference was held on December 10, 2008. During this

conversation, counsel for EnerSys indicated for the first time, despite the fact that approximately

100,000 pages of documents had already been compiled, viewed as responsive to the subpoena

and then electronically searched for privilege, that EnerSys had concerns regarding the scope of

the subpoena and the involvement of Mr. Shor, Polypore's Special Counsel, in the review of

documents produced pursuant to the subpoena. For the first time, EnerSys also objected to

specific document requests in the subpoena.

Respondent's counsel proposed -- in light of EnerSys' counsel's statement that the

compiled documents had been apparently deemed responsive to the subpoena by EnerSys -- that

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EnerSys produce the documents it had gathered with an agreement that privilege would not be

waived by any inadvertent production. In order to address one of EnerSys' concerns, counsel for

Respondent agreed to permit EnerSys to redact irrelevant material from management reports.

Respondent's counsel also proposed, in response to EnerSys' claim of burden, that summar

memorandum relating to the testing and qualification of products could be produced in lieu of

the testing/qualification documents themselves (although Respondent's counsel reserved the

right to follow-up on any specific testing/qualification data that was not addressed in the

summaries). In subsequent conversations, Respondent's counsel proposed that, as an alternative,

EnerSys could produce all documents which were identifiable as responsive to specific subpoena

requests, and then, as to the remaining documents, EnerSys could provide a list of the document

custodians, with a description of the custodians' job responsibilities, so that targeted searches,

based on mutually agreed to search terms, could be performed on the remaining documents in

order to target responsive documents. Respondent's counsel also agreed to withdraw requests 5

and 7 of the subpoena and forego the production of foreign-language documents at the present

time. (See December 10-16, 2008 e-mail correspondence between counsel attached hereto as Tab

D). Respondent's counsel also advised EnerSys that while it disagreed with its position

regarding Mr. Shor, Respondent would resolve that issue with EnerSys as part of an agreement

to obtain EnerSys' compliance without the need of having this matter before the Administrative

Law Judge. EnerSys rejected all proposals made by Respondent's counsel and refused to

provide Respondent's counsel with a list of the document custodians and their responsibilities at

EnerSys to permit a targeted search to be conducted. 

1 Instead, EnerSys fied this Motion on

1 On December 22, 2008, almost a full week after fiing its motion, EnerSys' counsel provided Respondent's counsel

with a list of "supervisors" - whom EnerSys identified as having coordinated a portion of the search for responsive documents

within each supervisor's business unit and among each supervisor's subordinates. Importantly, however, this recent response

from EnerSys fails to identify any document custodian or the respective responsibilities of each custodian. EnerSys' response

also suggests a "meet and confer" conference be held in order to resolve EnerSys' "burden", which is somewhat puzzling in light

of the fact that EnerSys refused to communicate with Respondent's counsel in advance of gathering documents, has already

collected over i 00,000 pages of admittedly responsive documents, has refused to produce the responsive documents and has now

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December 16, 2008. Respondent cannot afford any further delay from EnerSys, as important

deadlines are approaching. Respondent requests, for the reasons stated herein, that EnerSys'

motion be denied in its entirety and that EnerSys be ordered to comply with Respondent's

subpoena.

ARGUMENT

I. ENERSYS IS NOT ENTITLED TO COST OR LEGAL FEE REIMBURSEMENT

Without citing a single Commission Rule of Practice or a single FTC authority in support

of its contention, EnerSys argues that it is entitled to reimbursement for its costs in complying

with the subpoena? In support of its position, EnerSys inexplicably relies on case law

construing Federal Rule of Civil Procedure 45, despite an abundance of existing FTC authority

on the issue. As EnerSys admits, "the Federal Rules of Civil Procedure may be consulted for

guidance and interpretation of FTC Rules where no other authority exists." (Memorandum at p.

ll)(emphasis added). It is well settled, however, that in agency actions "(sJome burden on

subpoenaed parties is to be expected and is necessary in furtherance of the agency's legitimate

inquiry and the public interest." FTC v. Texaco, Inc., 555 F.2d 862, 882 (D.C. Cir. 1977); see

also In re Matter olN Tex. Specialty Physicians, No. 9312,2004 WL 527337, at *3 (F.T.C. Feb.

4, 2004)(denying cost reimbursement because the subpoena did not create an undue burden on

the third party).

Reimbursement of costs in FTC adjudicative proceedings is only appropriate where the

subpoenaed party has demonstrated that the cost of compliance would be "uneasonable" or

refused to provide Respondent with a list of document custodians which could potentially target responsive documents in a more

effcient manner. EnerSys has failed to comply with Respondent's subpoena and should be ordered to produce all responsive

documents immediately.

2 EnerSys purports to seek reimbursement only for the costs and fees incurred in the review of gathered documents, but

in actuality also seeks to be reimbursed for "outside vendor charges incurred to facilitate (the) review and the ultimate production

of documents." (Memorandum at p. I7)(emphasis added).

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"extraordinary." See In re Intl Tel. & TeL. Corp., Dkt. No. 9000, 1981 FTC LEXIS 75 at * 3

(March 13, 1981); In re R.R. Donnelley & Sons Co., Dkt. No. 9243, 1991 FTC LEXIS 268 at * 2

(June 6, 1991)(holding that subpoenaed pary "can be required to bear reasonable costs of

compliance with the subpoena"). EnerSys, which had net earnings in excess of 45 milion

dollars in 2007, has made not made any showing or presented any evidence that its estimated

compliance cost of $50,000 is unreasonable.

FTC v. Dresser Indus., Inc., Misc. No. 77-44, 1977 U.S. DIST. LEXIS 16178 at *13

(D.D.C. Apr. 26, 1977) is an ilustrative case. In Dresser, a third-party refused to comply with a

subpoena arguing that the costs necessary to comply with the subpoena were unreasonable - the

estimated cost of compliance was estimated by the third party to exceed $400,000. Nevertheless,

the court ordered compliance and denied costs because the third pary was a participant in the

industry in question and $400,000 was not per se uneasonable. Id. The court opined that it was

"not unmindful of the tremendous impact which compliance with such subpoenas can have upon

companies which appear to be innocent bystanders. The cost of effective economic regulation,

however, is one which must be shared by all industry, indeed by the entire society." Id. at * 16.

Even if EnerSys were to make a showing that the cost of compliance was extraordinary,

which it has not done, reimbursement would be limited to the cost of copying because EnerSys is

a participant in the battery separator industry. FTC authority mandates that "where (a) non-pary

is in the industry in which the alleged acts occurred and the non-party has ( an) interest in the

litigation and would be affected by the judgment, only the cost of copying, and no other costs of

the search need be reimbursed." See In re Flowers Indus., Inc., Dkt. No. 9148, 1982 FTC

LEXIS 96 at * 14 (Mar. 19, 1982); see also In re Kaiser Aluminum & Chem. Corp., Dkt. No.

9080, 1976 FTC LEXIS 68 at *20-21 (Nov. 12, 1976)("Where the public interest is involved,

however, and where the non-pary is in the industry in which the alleged acts occured, the non7
party has an interest in the litigation and would be affected by the judgment. There, only the cost

of copying need be reimbursed."). EnerSys -- a company that not only has an interest in the

litigation but, as Respondent believes and is acknowledged by EnerSys in its motion papers, was

a driving force behind the FTC's investigation and subsequent fiing of the Complaint against it-

- is not even entitled to copying costs, however, as it has not overcome the threshold requirement

of showing that the cost of compliance would be extraordinary. Accordingly, EnerSys' request

should be denied.

EnerSys attempts to argue that the wealth of authority rejecting cost reimbursement for

third paries in agency matters should not apply to EnerSys because a) EnerSys is seeking

reimbursement for attorney and/or paralegal review time in advance of beginning its review; and

b) the subpoena served by Polypore is allegedly not in fuherance of the FTC's legitimate

inquiry or in furtherance of the public interest. EnerSys' "grasping at straws" arguments lack

both factual and legal merit and should be rejected.

First, as noted above, EnerSys has not met the threshold showing that the cost of its

compliance would be "unreasonable" or "extraordinary." Second, while EnerSys is a non-pary

to this litigation, it is clearly not a non-party within the battery separator industry and is

therefore, at most, entitled to only the cost of copying. See In re Kaiser Aluminum & Chern.

Corp., 1976 FTC LEXIS at *19-21 (holding that "(w)here the public interest is involved. . and. .

the nonparty is in the industry" and "has an interest in the litigation" then "only the cost of

copying need be reimbursed.")(citations omitted). Thus, even if EnerSys could make an

"unreasonable" or "extraordinary" cost showing, it would stil not be entitled to attorney and

paralegal costs incured in the review of documents, but would instead be limited to recover only

its copying costs. In re Flowers Indus., Inc., 1982 FTC LEXIS at * 14.

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EnerSys' rationale that a subpoena drafted and served by Respondent (as opposed to the

FTC) is not in furtherance of an agency's or the public's interest is also misplaced. The

subpoena in question was issued by the FTC, not the Respondent, pursuant to the FTC's

authority under Section 9 of the Federal Trade Commission Act, 15 U.S.C. § 49, which provides

that "the Commission shall have power to require by subpoena . . . the production of all such

documentary evidence relating to any matter under investigation." Section 3 .34 of the Rules of

the FTC states: The Secretary of the Commission, upon request of a party, shall issue a

subpoena. .." 16 C.PR. § 3.34 (b) (emphasis added). Moreover, EnerSys overlooks the fact

that the public has an interest in acquiring the relevant facts to resolve such economic matters as

the present litigation. See us. v. IBM Corp., 62 F.R.D. 507, 510 (S.D.N.Y. 1974). EnerSys'

attempt in its memorandum to distinguish existing authority on the proposition that those cases

involved subpoena's issued by the Commission and not by the Respondent, as it argues is the

case here, is factually and legally incorrect. (See Memorandum at p. 15)("EnerSys further

submits that the rationale, expressed in a number of opinions denying a subpoenaed party's

request for reimbursement of costs of compliance, that such compliance is in furtherance of an

agency's legitimate inquiry and the public interest makes no sense when a respondent, rather

than the agency itself, drafts and issues the subpoena." (emphasis in original). Polypore did

not issue the subpoena: the FTC did. Moreover, the suggestion that there should be a double

standard if the governent issues a subpoena rather than the Respondent is without any basis in

the law and would be a clear deprivation of Polyp ore's due process rights.

It is also important to note, that almost immediately after the FTC issued Respondent's

subpoena to EnerSys and the same was served, Respondent's counsel contacted counsel for

EnerSys in order to discuss the manner of EnerSys' production and to attempt to address and

resolve any issues as to scope or burden that EnerSys may have had. Respondent's counsel's

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overtres were repeatedly ignored. Now, after refusing to cooperate or even discuss the matter

with Respondent's counsel in advance of gathering documents, EnerSys attempts to "cry uncle"

to the purported costs associated with reviewing and producing documents responsive to the

subpoena. This is the exact situation Respondent's counsel attempted to avoid by encouraging

EnerSys to discuss compliance with the subpoena on the front-end, before EnerSys blindly

rushed into its gathering process. As a result, EnerSys is now faced with 100,000 pages of

information it does not want to pay to review and, therefore, instead seeks shelter from the Court

by seeking the imposition of a "three-phased proposaL." An analysis of EnerSys' proposal,

however, reveals it as simply another attempt by EnerSys to force Respondent to pay the costs of

EnerSys' compliance with the subpoena. The FTC's authority on the reimbursement of a third

party's costs in complying with a subpoena is abundant and clear - a third party is not entitled to

the cost of compliance unless such costs would be unreasonable or extraordinary. EnerSys has

made no such showing and its motion must therefore be denied.

II. POL YPORE'S SUBPOENA is NOT OVERLY BROAD OR UNDULY

BURDENSOME AND SHOULD NOT BE LIMITED BY THE COURT

The FTC's Rules allow Polypore to "obtain discovery to the extent that it may be

reasonably expected to yield information relevant to the allegations in the complaint, to the

proposed relief, or to the defenses of (the) respondent." 16 C.PR. § 3. 31 (c)(1). Discovery

should be limited only if the burden outweighs the benefit. Id. Moreover, "public interest

requires that once a complaint issues. . . Commission counsel (and respondent's counsel when

they put on their defense) be given the opportunity to develop those facts which are essential" to

support or undermine the allegations in the pleadings. In re Gen Foods., Dkt. No. 9085 C, 1978

FTC LEXIS 412 at *6 (April 18, 1978). The applicant for a subpoena need only show that the

materials sought are generally or reasonably relevant. In re Kaiser Aluminum & Chem. Corp.,

1976 FTC LEXIS at *4.

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Thus the Court's inquiry is whether the subpoena seeks information that is reasonably

expected to be "generally relevant to the issues raised by the pleadings." Id. at *4. EnerSys

misapplies the relevant legal standard and fails to understand the scope or nature of the issues

raised in this proceeding. In arguing that the subpoena should be limited, EnerSys ignores the

issues raised by the Complaint and fails to place the subpoena in its proper context.

Evaluating the subpoena in the context of the pleadings demonstrates that Respondent's

subpoena seeks materials from EnerSys which are relevant, material, and critical to Respondent's

defense. Indeed, even a cursory review of the Complaint negates EnerSys' claim that "EnerSys'

purchase of battery separators, the price paid, and the dates of purchase" are irrelevant to the

issues involved in this litigation. (Memorandum at p. 17). The Complaint contends that

Polypore's acquisition of Microporous led to a monopoly in the deep-cycle, motive, and UPS

battery separator markets and led to higher pricing and decreased competition in the automotive

battery separator market. (Complaint, ~ 38). The Complaint further contends that there are

significant barriers for entry into these markets. (Id. at ~~ 32-37). For example, the Complaint

alleges that the testing and qualification process is lengthy and would prevent even existing

battery separator manufacturers from entering other markets for up to two years. (Id. at ~ 33).

Additionally, the Complaint alleges that capital requirements prevent new competitors from

entering these markets. (Id. at ~ 36). Finally, the Complaint alleges that EnerSys, and other

North American battery manufacturers, prefer domestic sources of battery separators and,

consequently, battery separator manufacturers from abroad wil not find it practical to compete in

North America. (Id. at ~~ 16-17). Respondent's subpoena requests materials from EnerSys that

go to the central issues raised in the Complaint, including materials related to market share,

pricing, contract requirements, product qualification, and the availability of battery separators

from other suppliers. (Subpoena Requests Nos. 1-4, 6, 8, 10, 13, 16-21, 29-30). Respondent

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must be able to review the information that forms the basis of the allegations in the Complaint in

order to present an effective defense.

EnerSys requests that the Cour strike subpoena requests 10, 13-14 and 19-24. Yet, the

information sought by these requests is clearly reasonably relevant to the issues in this litigation.

For example, Polypore needs information about EnerSys' purchasing and pricing data and the

end-products for which EnerSys was purchasing battery separators (Subpoena Request Nos. 10,

13-14) to rebut the FTC's allegation that Polypore has monopolized the alleged battery separator

market or the FTC's allegation that Polypore's acquisition of Microporous led to higher prices.

Polypore needs information about EnerSys' qualification and testing of products from

Respondent's competitors (Subpoena Request Nos. 19-20) to rebut the FTC's allegation that

testing and capital requirements prevent entry into the market. Polypore needs information about

EnerSys' qualification and testing of products from Microporous (Subpoena Request Nos. 19-20)

to rebut the FTC's allegation that Microporous was preparing to actively compete in the SLI and

UPS battery separator markets, and was testing its products with customers. Polypore needs

information about EnerSys' use of all types battery separator products - including products that

are or may be competitive with lead acid battery separators (Subpoena Request Nos. 23-24) to

rebut the FTC's allegation that battery separators manufactured for a particular application

cannot be effectively used for other applications. And finally, Polypore needs information about

EnerSys' dealings with other battery separator manufacturers (Subpoena Request Nos. 21-22) to

rebut the FTC's allegation that the acquisition of Microporous removes the only alternative

sources of separator supply in several battery separator markets. Polypore must have access in

discovery to EnerSys' documents related to these issues in order to prepare its defense.

EnerSys also argues that the subpoena should be limited because it would be overly

burdensome to respond to it. In its motion, however, EnerSys fails to set forth any facts

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supporting its contention. The burden of showing that a subpoena is unduly burdensome is on

the subpoenaed party. Texaco, 555 F.2d at 882. This is true even if the subpoenaed party is a

non-party. See In re Flowers Indus., Inc., 1982 FTC LEXIS at * 14. Courts have refused to

modify subpoenas unless compliance threatens to unduly disrupt or seriously hinder the normal

operations of a business. Texaco, 555 F.2d at 882. Broadness alone is not a sufficient

justification to refuse enforcement of a subpoena. Texaco, 555 F.2d at 882. EnerSys, therefore,

must put forth specific evidence that demonstrates such a disruption; a "general, unsupported

claim (of burden) is not persuasive." In re Kaiser Aluminurn & Chem. Corp., 1976 FTC LEXIS

at * 19. This is especially true where a third-party, like EnerSys, which is in the same industry

that is the subject of this proceeding, stands to benefit depending on the outcome of this

proceeding, and therefore has "a special stake in seeing that an informed judgment is rendered."

In re Coca-Cola Bottling Co., Dkt. No. 8992, 1976 FTC LEXIS 33 at * 6 (Dec. 7, 1976).

EnerSys has failed to meet its burden and offers up nothing more than unsupported

allegations of an alleged "extraordinary burden." This is manifestly insufficient to support a

limitation of the subpoena. Indeed, "even where a subpoenaed third pary adequately

demonstrates that compliance with a subpoena wil impose a substantial degree of burden,

inconvenience, and cost, that wil not excuse producing information that appears generally

relevant to the issues in the proceeding." In re Kaiser Aluminum & Chem. Corp., 1976 FTC

LEXIS at * 19-20. As Respondent has shown above, its subpoena seeks information relevant to

the issues raised in the Complaint. EnerSys has not put forth any evidence which shows that

compliance would seriously hinder the normal operations of its business.

Equally important, EnerSys fails to point out that Respondent's counsel offered on

multiple occasions to discuss proposals that may limit or eliminate any potential burden of

EnerSys' compliance with the subpoena. Such proposals were either ignored or summarily

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dismissed by EnerSys. Disappointingly, EnerSys inaccurately construes one such proposal by

Respondent's counsel in an attempt to ilustrate that the subpoena is overly broad and unduly

burdensome. Respondent's subpoena sought the production of "documents relating to any

testing or qualification by EnerSys of lead acid battery separators." (Subpoena, Nos. 19-20). As

detailed above, such information is particularly relevant to Polypore's defense of the allegations

as to the supposed barriers to entry levied against it in the Complaint. While EnerSys now

claims that such requests are overbroad, it refused to raise that issue with Respondent's counsel

before proceeding to gather documents responsive to those requests - despite being given the

opportunity on several occasions to do so. After having gathered documents responsive to these

requests, EnerSys, for the first time raised its objection that the review of such documents would

be burdensome. In a good faith effort to facilitate the production of the information sought in a

manner which could ease the alleged burden on EnerSys, Respondent's counsel offered to accept

summaries or reports of the testing/qualification information in lieu of the underlying data itself.

(See December 10-16, 2008 e-mail correspondence between counsel, attached hereto at Tab D).

Importantly, Respondent's counsel reserved the right to seek EnerSys' complete compliance with

the requests, as written, if summary reports were not available or did not contain the necessary

testing/qualification data sought by Respondent's subpoena. EnerSys now attempts to argue the

Respondent's wilingness to accept summary documentation somehow proves that the subpoena

is overbroad and unduly burdensome. EnerSys' contention is disingenuous at best.

EnerSys' refusal to negotiate with Respondent's counsel is fatal to its motion to limit the

subpoena. "(A) Federal Trade Commission subpoena seeking relevant data wil not be quashed

on the grounds that a burden is imposed on a third pary, especially where the party initiating the

subpoena has expressed a wilingness to mitigate whatever burden may exist by negotiation and

compromise." In re Gen Motors Corp., Dkt. No. 9077, 1977 FTC LEXIS 18 * 1 (Nov. 25,

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1977); see also In re R.R. Donnelley & Sons Co., Dkt. No. 9243, 1991 FTC LEXIS 272 at * 2

(June 12, 1991)(refusing to limit subpoena "in light of counsel's offer to modify some of the

subpoena's specifications"). The information sought by Respondent is neither overly broad nor

unduly burdensome; instead it is clearly relevant to the allegations of the Complaint and

Respondent's defenses thereto. As such, EnerSys' motion to limit the subpoena should be

denied and EnerSys should be ordered to comply fully with the Subpoena without further delay.

III. THE PROTECTIVE ORDER ENTERED BY THE COURT IN THIS MATTER

SHOULD NOT BE MODIFIED

On October 23, 2008, this court entered a Protective Order Governing Discovery Material

(the "Protective Order"). The Protective Order negotiated by the FTC and Polypore explicitly

protects third-parties and provides that any materials designated confidential can be used only for

purposes of this proceeding and can only be disclosed to a limited group of people associated

with this proceeding. Nevertheless, EnerSys objects to the disclosure of information to Michael

Shor, Special Counsel for Polypore. (Memorandum at p. 19.) Although EnerSys knows little

about Shor's role at Polypore, it objects on the vague grounds that "there is no need for EnerSys'

confidential documents to be reviewed by Respondent's in-house counsel, Mr. Shor." (Id.)

Courts recognize that it is often necessary to protect a competitor's information from the eyes of

in-house counsel where counsel is involved in "competitive decision making," but this does not

extend to in-counsel with little or no managerial or strategic oversight, nor to Special Counsel

that is not employed by Polypore, as is the case here with Mr. Shor. Moreover, EnerSys is a

customer, not a competitor of Respondent - a fact EnerSys readily admits. (Memorandum at p.

19).

For both the ALJ and federal courts, an important factor in determining whether to grant

in-house counsel access to a competitor's confidential information is whether in-house counsel is

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involved in "competitive decision making." See FTC v. Foster, 2007 U.S. Dist. LEXIS 55163 at

* 15 (April 26, 2007); Glaxo Inc. v. Genpharm Pharm., 796 F.Supp. 872, 874 (E.D.N.C. 1992);

Us. Steel Corp. v. United States, 730 F.2d 1465, 1468 (Fed.Cir. 1984). "Competitive decision

making" is defined as "shorthand for a counsel's activities, associations, and relationship with a

client that are such as to involve counsel's advice or participation in any or all of the client's

decisions (pricing, product design, etc.) made in light of similar or corresponding information

about a competitor." Glaxo, 796 F.Supp. at 874.

While Shor does hold the title of Special Counsel, he is not actually an employee of

Polypore, nor is he involved in "competitive decision making" at Polypore. Shor is employed by

Carolina Legal Staffing and since April of 2008 has served as Special Counsel for Polypore.

(Decl. of Michael L. Shor at ~ 2, attached hereto a Tab E). While in the past he has advised

Polypore on several contract negotiations, none involved EnerSys and he has not done so since

August of 2008 and represents that he wil not paricipate in any negotiations for a period of two

years. (Id. at ~~ 5-7.) Shor's primary role has been to assist the company in responding to the

investigation conducted by the FTC and managing the current litigation before the ALl (Id. at

~~ 3, 6.) Shor's previous litigation experience and in-depth understanding of the technical

aspects of the battery separator industry are invaluable assets to defense counsel in preparing to

appear before the ALl Both the technical nature of the information along with the restrictive

time line necessitate Shor's participation in reviewing EnerSys' materials. Moreover, during the

Prehearing Scheduling Conference, the ALJ recognized the reasonableness of Polypore's request

to grant access to Shor, noting that the scope of the disclosure group in the Protective Order

"looked reasonable." (Tr. at p. 6:6-11.) Thus, the Protective Order more than adequately

protects the confidentiality of any materials produced by EnerSys and should not be modified by

the Court.

16
CONCLUSION

For the foregoing reasons, Respondent Polypore respectfully moves this court to deny

EnerSys' Motion for Award of Attorneys' Fees and Costs and to Limit Subpoena Served on

Non-Pary.

Dated: December 23,2008 Respectfully Submitted,

L--..' L" -v-~

Wiliam L. Rikard, Jr.

Eric D . Welsh

PARKER POE ADAMS & BERNSTEIN, LLP

Three Wachovia Center

401 South Tryon Street, Suite 3000

Charlotte, NC 28202

Telephone: (704) 372-9000

Facsimile: (704) 335-9689

williamrikard(fparkerpoe.com

ericwelsh(fparkerpoe.com

John F. Graybeal

PARKER POE ADAMS & BERNSTEIN, LLP

150 Fayettevile Street

Raleigh, NC 27602

Telephone: (919) 835-4599

Facsimile: (919) 828-0564

iohngraybeal(fparkerpoe.com

Attorneys lor Respondent

17
CERTIFICATE OF SERVICE

I hereby certify that on December 24, 2008, I caused to be filed via hand delivery and

electronic mail delivery an original and two copies of the foregoing Memorandum in Opposition

to EnerSys' Motion for Award of Attorneys' Fees and Costs and to Limit Subpoena Served on

Non-Party, and that the electronic copy is a true and correct copy ofthe paper original and that a

paper copy with an original signature is being filed with:

Donald S. Clark, Secretary

Office of the Secretary

Federal Trade Commission

600 Pennsylvania Avenue, NW, Rm. H-135

Washington, DC 20580

secretary(fftc.gov

I hereby certify that on December 23, 2008, I caused to be served one copy via electronic

mail delivery and two copies via overnight mail delivery of the foregoing Memorandum in

Opposition to EnerSys' Motion for Award of Attorneys' Fees and Costs and to Limit

Subpoena Served on Non-Party upon:

The Honorable D. Michael Chappell

Administrative Law Judge

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, DC 20580

oali (fftc. gov 

I hereby certify that on December 23, 2008, I caused to be served via first-class mail

delivery and electronic mail delivery a copy of the foregoing Memorandum in Opposition to

EnerSys' Motion for Award of Attorneys' Fees and Costs and to Limit Subpoena Served on

Non-Party upon:

J. Robert Robertson, Esq.

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, DC 20580

rro bertson(fftc. gov

Steven Dahm, Esq.

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, DC 20580

sdahm(fftc.gov

Neil C. Schur, Esq.

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, P A 19103

NCSC(fstevenslee.com
( -

Adam C. Shearer

Parker Poe Adams & Bernstein LLP

Three Wachovia Center

401 South Tryon Street, Suite 3000

Charlotte, NC 28202

Telephone: (704) 335-9050

Facsimile: (704) 334-4706
Tab 

A
:PARR. R(JE

Eric D. Welsh

PAR pOEADS &BERSTEINLLP

Attorneys andCounsdors aiLaw

November i 4, 2008

Three Wachovia Center

Suite 3000

401 South Tryon Street

Charlotte, NC 28202- i 935

Telephone 704.372.9000

Fax 704.334.4706

www.parkerpoe.com

Parter

Telephone: 704.335.9052

Direct Fax: 704.335.9755

ericwelsh(garkerpoe.com

VIA EMAIL AND FIRST CLASS MAIL

Neil C. Schur, Esq.

Stevens & Lee PC

i 8 i 8 Market Street

29th Floor

Philadelphia, PA 19103

Re: In the Matter of Polyp ore International, Inc.

Dear Mr. Schur:

I am in receipt of your draft Motion to Extend Time in Which to Move to Limit

Subpoena Served by Respondent upon Third Par and to Seek Cost Reimbursement in the

above-referenced matter (the "Motion"). I have reviewed the draft Motion and have the

following comments.

First, with respect to your request that we consent to the Motion, I have a number of

concerns with respect to the specific statements made in the Motion (addressed below). As a

result, I would request that the motion be revised in Paragraph 19 to state that Po1ypore has no

objection to the "extension of time requested by this Motion".

Second, as I specifically mentioned to you on the telephone on Wednesday, Polypore

does not agree with EnerSys' view that it is entitled to the costs of reviewing and gathering

documents for production. Po1ypore, of course, is wiling to reimburse EnerSys for its

reasonable costs of photocopying the documents. I .understood from our conversation that you

were going to specifically note our position in the motion. I did not see that reference and would

ask that it be included. I simply do not want it to appear that we have consented to that relief.

Third, I think itimportantthatyour client understad our position fuly prior to producing

documents and makng such an application to the Administrative Law Judge in this case, if it

chooses to do so. As I mentioned to you, Po1ypore is wiling to discuss the subpoena with you,

including any concern that your client may have with respect to its scope, prior to EnerSys'

production of documents under the subpoena. As I do not know how EnerSys maintains its

documents, and I do not know any specific concerns that EnerSys would have with respect to the

subpoena, I canot address any concerns at this time, including any as to burden, to avoid any

difficulties in the future, including through motion practice. I make this comment to you in

CHAESTON. SC

COLUMIA, SC

MYRTLE BEACH. SC

RAEIGH, NC

SPARTANURG. sc

PPAB 1502753vl
Neil C. Schur, Esq.

November 14, 2008

Page 2

advance of any application for costs. As I also mentioned on Wednesday, if you are aware of

any applicable authority in the area, please bring it to my attention promptly.

I look forward to speaking with you in the futue about the subpoena.

Sincer~iy yours,

~

Eric D. Welsh

EDW /inb

Enclosure

cc: Wiliam L. Rikard, Jr.

PPAB 1502753vl
TabB
Message Page 1 of 1

Welsh, Eric D.

From: Welsh, Eric D.

Sent: Thursday, December 04, 20086:45 PM

To: 'Schur, Neil C.'

Cc: Rikard, Jr., William L.

Subject: RE: Polypore International, Inc.

Neil

I have not heard anything further from you on the subject of our subpoena since you filed the motion for the

extension of time. I was anticipating that we would be well into discussions about EnerSys' production of

documents under the subpoena. Indeed, from our discussion leading up to my consenting to the extension, it was

my understanding that you were in need of the additional time to confer with your client and then with me

regarding your client's production and compliance under the subpoena. Please let me know when we can expect

to receive documents from EnerSys. As I mentioned to you in my letter, if there are concerns over the subpoena,

I am ready to discuss them with you. i cannot, however, grant any further extension of time to your client.

I look forward to speaking with you soon.

Eric Welsh

-----Original Message-----

From: Schur, Neil C. (mailto:NCSC(§stevenslee.com)

Sent: Wednesday, November 12, 2008 4:39 PM

To: Welsh, Eric D.

Subject: Polypore International, Inc.

It was a pleasure speaking with you today. As discussed, we represent EnerSys in connection with the

above-referenced matter. This shall confirm that Polypore has agreed not to object to our client's motion to

extend the time to move to limit the subpoena to December 16, 2008, provided that we do not seek to

quash the subpoena. Thank you again for your professional courtesies.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee.com

http://ww.stevenslee.com

This email may contain privileged and confidential information and is solely for the use of the sender's intended recìpient(s). If you received

this email in error, please notify the sender by reply email and delete all copies and attachments. Thank you.

12117/2008
TabC
Message Page 1 of3

Welsh, Eric D.

From: Welsh, Eric D.

Sent: Friday, December 05,20083:44 PM

To: 'Schur, Neil C.'

Cc: Lipkowitz, Eugene V.

Subject: RE: Polypore International, Inc.

Neil

If there are issues, they should have been brought up by now.

Eric

-----Original Message-----

From: Schur, Neil C. (mailto:NCSC(§stevenslee.com)

Sent: Friday, December 05, 2008 3:42 PM

To: Welsh, Eric D.

Cc: Lipkowitz, Eugene V.

Subject: RE: Polypore International, Inc.

Thanks. There are, in fact, a number of issues. We look forward to speaking with you Wednesday at 9.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee.com

http://ww.stevenslee.com

From: Welsh, Eric D. (mailto:ericwelsh(§parkerpoe.com)

Sent: Friday, December 05,20083:40 PM

To: Schur, Neil C.

Cc: Lipkowitz, Eugene V.

Subject: RE: Polypore International, Inc.

i could do it Wednesday morning at 9 am. I am assuming that there will be litte to talk about in that you

are hard at work gathering documents. As i mentioned previously, if there are issues, it was and is my

expectation they would be discussed by us prior to your client gathering the documents. i look forward to

speaking with you on Wednesday.

Best regards,

Eric Welsh

12/17/2008
Message Page 2 of3

Eric Welsh

Partner

Three Wachovia Center I 401 South Tryon Street I Suite 3000 I Charlotte, NC 28202

Phone: 704.335.9052 I Fax: 704.335.9755 I www.parkerpoe.com I vcard I maQ

-----Original Message-----

From: Schur, Neil C. (mailto:NCSC(§stevenslee.com)

Sent: Friday, December 05, 20089:05 AM

To: Welsh, Eric D.

Cc: Lipkowitz, Eugene V.

Subject: Re: Polypore International, Inc.

Thank you for your email. We have been working hard gathering documents. We are available for a

meet and confer next week. Do you have any time free on Wednesday? We look forward to

speaking with you as welL.

Sent from my Blackberry

From: Welsh, Eric D.

To: Schur, Neil C.

Cc: Rikard, Jr., William L.

Sent: Thu Dec 04 18:45:20 2008

Subject: RE: Polypore International, Inc.

Neil

I have not heard anything further from you on the subject of our subpoena since you filed the motion

for the extension of time. I was anticipating that we would be well into discussions about EnerSys'

production of documents under the subpoena. Indeed, from our discussion leading up to my

consenting to the extension, it was my understanding that you were in need of the additional time to

confer with your client and then with me regarding your client's production and compliance under the

subpoena. Please let me know when we can expect to receive documents from EnerSys. As I

mentioned to you in my letter, if there are concerns over the subpoena, I am ready to discuss them

with you. I cannot, however, grant any further extension of time to your client.

i look forward to speaking with you soon.

Eric Welsh

Eric Welsh

Partner

12117/2008
Message Page 3 of3

Three Wachovia Center I 401 South Tryon Street I Suite 3000 I Charlotte, NC 28202

Phone: 704.335.9052 I Fax: 704.335.9755 I www.parkerpoe.com I vcard I map

----Original Message-----

From: Schur, Neil C. (mailto:NCSCt.stevenslee.com)

Sent: Wednesday, November 12, 20084:39 PM

To: Welsh, Eric D.

Subject: Polypore International, Inc.

It was a pleasure speaking with you today. As discussed, we represent EnerSys in

connection with the above-referenced matter. This shall confirm that Polypore has agreed

not to object to our client's motion to extend the time to move to limit the subpoena to

December 16, 2008, provided that we do not seek to quash the subpoena. Thank you again

for your professional courtesies.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee.com

http://ww.stevenslee.com

This email may contain privileged and confidential information and is solely for the use of the sender's intended recipient(s).

If you received this email in error, please notify the sender by reply email and delete aU copies and attachments. Thank you.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax

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This email may contain privileged and confidential information and is solely for the use of the sender's intended recipient(s). If you

received this email in error, please notify the sender by reply email and delete aU copies and attachments. Thank you.

This email may contain privileged and confidential information and is solely for the use of the sender's intended recipient(s). If you received

this email in error, please notify the sender by reply email and delete aU copies and attachments. Thank you.

12/17/2008
TabD
Message Page 1 of 1

Welsh, Eric D.

From: Welsh, Eric D.

Sent: Tuesday, December 16, 2008 8:39 AM

To: 'Schur, Neil C.'

Cc: Lipkowitz, Eugene V.

Subject: RE: Polypore

Foreign language, to address your translation objection.

-----Original Message-----

From: Schur, Neil C. (mailto:NCSC(gstevenslee.comJ

Sent: Monday, December 15, 2008 5:04 PM

To: Welsh, Eric D.

Cc: Lipkowitz, Eugene V.

Subject: Polypore

We seek clarification. When you say you are willing to exclude "foreign" documents for the time being, do

you mean documents written in foreign languages, or documents created or stored in foreign (non-U.S.)

countries?

We also await a response to my email regarding a reconsideration of your position regarding Mr. Shor.

Thanks.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee. com

http://ww.stevenslee.com

This email may ccntain privileged and confidential information and is solely for the use of the sender's intended recipient(s). If you received

this email in error, please notify the sender by reply email and delete all copies and attachments. Thank you.

12/17/2008
Message Page 1 of 4

Welsh, Eric D.

From: Welsh, Eric D.

Sent: Saturday, December 13, 2008 11 :06 AM

To: 'Schur, Neil C.'

Subject: RE: In re Polypore

Neil

I don't think there is much for me to add at this point. i will only be reiterating what I said previously. After you

have talked with your client, if you need clarification of any of our requests, or if any of them pose any specific

issue given the way your client operates its business, then let me know and we can discuss it. From our

discussion earlier this week, you have told me that you do not know what is in the documents (except for the

management reports that you want to redact) and you do not even have a list of the custodians searched, let

alone the people you sent the subpoena to for review. This falls well short of your obligations and makes it very

diffcult to carry on a meaningful discussion with you in this regard. Let me know if your client is willing to consider

one of my proposals or has some meaningful suggestion to resolve the issue. Otherwise, either produce your

documents or file your motion.

As to foreign documents, we disagree with your obligations but would be willing to exclude them from our

discussion for the time being. We would reserve the right to revisit the issue after we see what is produced to us.

As to Mr. Shor, if we could reach an agreement with your client, we would be willng to exclude Mr. Shor from your

client's production.

i have already clarified most of the issues that you raised on the phone with respect to the requests. If there are

specific ones you need clarification of, let me know. We would agree to forego items 5 and 7. We need the

information from you on item 10. Let me know if you have a database that could be produced to respond to this

request.

Eric

-----Orig i na i Message-----

From: Schur, Neil C. (mailto:NCSCCQstevenslee.com)

Sent: Friday, December 12, 2008 4:44 PM

To: Welsh, Eric D.

Cc: Lipkowitz, Eugene V.

Subject: RE: In re Polypore

i apologize. In fairness, you did clarify regarding the test result documents, but i sought further clarification

in a subsequent email. We await a response to that email, sent at 2:55 p.m.

Please also clarify your client's position regarding the other issues below.

Thanks.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

12117/2008
Message Page 2 of 4

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee. com

http://ww.stevenslee.com

From: Schur, Neil C.

Sent: Friday, December 12, 2008 4:42 PM

To: 'ericwelsh(§parkerpoe.com'

Cc: Lipkowitz, Eugene V.

Subject: RE: In re Polypore

Please advise re "your client's position regarding foreign language documents, test results documents (if

there are summary/analysis documents), and not sharing the documents or their contents with Mr. Shor or

anyone else at Polypore, as well as the various specific requests to which we objected."

Thanks.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee.com

http://ww.stevenslee.com

From: Schur, Neil C.

Sent: Friday, December 12, 2008 2:25 PM

To: 'ericwelsh(§parkerpoe.com'

Cc: Lipkowitz, Eugene V.

Subject: RE: In re Polypore

Importance: High

Thank you again for participating in the "meet and confer." We remain hopeful that we can resolve this

dispute regarding the unreasonable and extraordinary burden imposed on EnerSys by your client's

subpoena. Candidly, we expected to receive a substantive response from you Wednesday or at the latest,

yesterday, as discussed, but have not heard from you.

Please let us know as soon as possible whether your client is agreeable to (a) paying EnerSys' attorneys

fees incurred in reviewing the documents (or any portion of those fees); or (b) the proposal we outlined on

the call. We also need to know your client's position regarding foreign language documents, test results

documents (if there are summary/analysis documents), and not sharing the documents or their contents

with Mr. Shor or anyone else at Polypore, as well as the various specific requests to which we objected.

We are compiling the list of individuals to whom the initial internal requests for documents were sent and

12/17/2008
Message Page 3 of 4

hope to get that to you later this afternoon. To clarify, they are not "custodians" but instead are supervisors

of various pieces of EnerSys' business, who then distributed the requests to their subordinates, as

discussed Wednesday.

I understand that my colleague Joe Wolfson is handling a document production in response to a Polypore

subpoena in this matter. For obvious reasons, we have erected a firewall within the firm, and no one

working on one representation can discuss the matter with anyone on the other team.

Finally, your proposal that EnerSys produce the documents without reviewing them is, as expected,

unacceptable. EnerSys cannot produce the documents without reviewing them carefully to avoid

production of irrelevant, non-responsive information, as well as confidential and proprietary information,

attorney-client privileged information, or attorney work product. The fact that business people gathered

potentially relevant or responsive documents by no means ensures that the documents gathered are

relevant or that the entire document gathered is relevant, as you know. You would not produce documents

under such circumstances and, candidly, we think it is unreasonable to propose that solution.

We continue to welcome any creative ideas and remain hopeful that we can resolve these issues amicably

and efficiently, without delay or intervention of the Administrative Law Judge.

We look forward to hearing from you.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncscLmstevenslee.com

http://ww.stevenslee.com

---~,.,,,----~-.,,.~,.-.,.,..,.,.,~,,_._.--,,,._,,,,.,,,,.,,.,,._..~_.,.",-,,.,~--..._.,,,,,_.,-~,,.....-....,,..,,,,..,,..-,_.,,,,,,,,,,..-,.-,,._...._"",_.._..,._.,,-_.,...,,.--~--_....

From: Welsh, Eric D. (mailto:ericwelsh(§parkerpoe.com)

Sent: Wednesday, December 10, 2008 10:59 AM

To: Schur, Neil C.

Subject: In re Polypore

Neil

Thank you for the time you spent with me on the phone today. Obviously we have an number of

fundamental disagreements. i will take your proposal to my client, as i understand you wil do with ours

(although i am not sure of that since you already told me you would not agree to the proposal). To

reiterate, i understand that you have compiled approximately 100,000 pages of documents. You have run

a search on the documents for privilege. We are willing to take the documents on an agreement that

privilege will not be waived by an inadvertent production. I understand there are some high level

management strategy documents that contain information your client believes is unrelated to this matter

which it wants to redact. We are willing to consider that. i have suggested that you can limit the

production by using January 1, 2003 as the cutoff for specification no. 13. i have also suggested, to meet

your concern over burden, that we will be prepared to take summary memorandum and email that discuss

the status of the testing and qualification in lieu of all of the testing documents themselves. (If such

documents do not exist, then we would need all of the documents. i would want the right to follow up on

any specific items if the summary documents do not adequately address all of the issues.) We are willing

to take the balance of the production that has already been compiled subject to confidentiality worked out

between us or by the ALJ.

12/17/2008
Message Page 4 of 4

For our discussion, please provide me with a list of the custodians searched. That may help move our

discussions along. Also, please let me know if the custodians provided specific files or if an

electronic search was conducted. If the latter, let me know the parameters and the terms used in the

search. I may be able to assist in refining that search. If there are documents that can be produced in

response to specific requests, we ask that EnerSys do so. We ask that EnerSys begin a rolling

production. We can then figure out how to handle the balance.

As I said before, I have had a number of conversations with other third parties and seem to have had great

success in dealing with them. In fact, just this morning i had a very good conversation with Joe Wolfson of

your offce that seemed to be very productive. The discussions with EnerSys have unfortunately started at

a completely different point which creates most of our issues. I hope we can work through them but if not,

we wil address them with Judge ChappeL.

i look forward to hearing from you.

Eric Welsh

This amail may contain privileged and confidential information and is solely for the use of the sender's intended recipient(s). If you received

this emaH in error, please notify the sender by reply emaH and delete all copies and attachments. Thank you.

12/17/2008
Message Page 1 of3

Welsh, Eric D.

From: Welsh, Eric D.

Sent: Friday, December 12,20082:54 PM

To: 'Schur, Neil C.'

Cc: Rikard, Jr., Willam L.

Subject: RE: In re Polypore

When we last spoke, you indicated that there were some documents that were identifiable as responsive to

certain of our requests. My suggestion goes to this point. Identify the relevant custodians, talk to those people to

find out what documents are specifically responsive to the subpoena and then produce those documents to us.

As to the balance of your gathered documents, we could then look at the custodians and see if we could prepare

search terms that could be run on those documents. I am not sure this will work and it really depends on your first

making a good faith effort with your client to identify documents that are responsive to the specific requests. Until

that is done, there is really nothing for us to talk about unless you want to accept my first proposaL. You already

told me you had done a search on summation for privilege.

Eric

-'----Original Message-----

From: Schur, Neil C. (mailto:NCSC(§stevenslee.com)

Sent: Friday, December 12, 20082:42 PM

To: Welsh, Eric D.

Cc: Rikard, Jr., Wiliam L.

Subject: RE: In re Polypore

Thank you for your reply. We are certainly not trying to make this difficult for you or your client. As we

explained, we are trying to comply with the subpoena and reduce the unreasonable burden on our client

imposed by the subpoena.

With regard to your latest proposal, I need to understand it better. Please clarify what you mean when you

say "alternatively, produce the documents that are identifiable for the specific requests, including the

management documents in redacted form, and then provide me with a list of the custodians, with job

responsibility descriptions, for the balance that you have gathered. We could then try to agree on search

terms for those documents. (i understand you have already searched for privilege.)"

Any idea that would solve this problem without forcing my client to incur huge expense while protecting its

interests is certainly of interest. Please provide more detail, and we will consider your idea in good faith.

Regards,

Neil C. Schur

Stevens & Lee, P.C.

1818 Market Street, 29th Floor

Philadelphia, PA 19103

(215) 751-1944 (ph)

(610) 371-7956 (fax)

ncsc~stevenslee. com

http://ww.stevenslee.com

12/17/2008
Message Page 2 of3

From: Welsh, Eric D. (mailto:ericwelsh(§parkerpoe.com)

Sent: Friday, December 12, 20082:36 PM

To: Schur, Neil C.

Cc: Rikard, Jr., Wiliam L.

Subject: FW: In re Polypore

Neil

I have talked with my client and we cannot agree to your proposaL. I will not reiterate the points that I have

already expressed to you regarding the manner in which you have proceeded in gathering documents for

production. i had repeatedly suggested that you discuss with me the manner of your production and

issues as to scope or burden before, not after, you had gathered the documents and information. In light of

the situation that you now find yourself, i would propose either your client produce the documents per my

suggestion made to you on December 10 (outlined below) or alternatively, produce the documents that are

identifiable for the specific requests, including the management documents in redacted form, and then

provide me with a list of the custodians, with job responsibility descriptions, for the balance that you have

gathered. We could then try to agree on search terms for those documents. (I understand you have

already searched for privilege.) If this is of interest, let me know and we can discus it.

Also, I await word from you regarding whether your client's documents contain summaries and status

reports regarding the testing and qualification of separators/suppliers. I told you that i would be willing to

take those documents (instead of a larger production of testing related documents), but noted that if you do

not have them, then I will need all of the testing documents. I look forward to hearing from you on this

subject. Also, I am wiling to try to come to an agreement with you with respect to Mr. Shor and

confidentiality. We wil not pay for EnerSys' attorney fees. As i expressed before, we will reimburse for

reasonable photocopy charges only.

If your client is not interested in either approach discussed above, then I suggest you file your motion next

week.

As i said, I have worked well with others that i have served subpoenas on in this matter, including your

partner, and remain willing to do so with EnerSys. It appears from my discussions with you, and from other

information available to me, that your client has decided to make this as difficult as possible for my client.

Time is pressing here and i am running out of latitude in dealing with your client.

i look forward to hearing from you as to the above.

Eric

Eric Welsh

Partner

Three Wachovìa Center I 401 South Tryon Street I Suite 3000 I Charlotte, NC 28202

Phone: 704.335.9052 I Fax: 704.335.9755 I www.parkerpoe.com I vcard I map

From: Welsh, Eric D.

Sent: Wednesday, December 10, 2008 10:59 AM

To: 'ncsc(§stevenslee.com'

Subject: In re Polypore

12/17/2008
Message Page 3 of 3

Neil

Thank you for the time you spent with me on the phone today. Obviously we have an number of

fundamental disagreements. I will take your proposal to my client, as I understand you wil do with ours

(although i am not sure of that since you already told me you would not agree to the proposal). To

reiterate, I understand that you have compiled approximately 100,000 pages of documents. You have run

a search on the documents for privilege. We are willng to take the documents on an agreement that

privilege will not be waived by an inadvertent production. I understand there are some high level

management strategy documents that contain information your client believes is unrelated to this matter

which it wants to redact. We are wiling to consider that. I have suggested that you can limit the

production by using January 1, 2003 as the cutoff for specification no. 13. I have also suggested, to meet

your concern over burden, that we wil be prepared to take summary memorandum and email that discuss

the status of the testing and qualification in lieu of all of the testing documents themselves. (If such

documents do not exist, then we would need all of the documents. I would want the right to follow up on

any specific items if the summary documents do not adequately address all of the issues.) We are willing

to take the balance of the production that has already been compiled subject to confidentiality worked out

between us or by the ALJ.

For our discussion, please provide me with a list of the custodians searched. That may help move our

discussions along. Also, please let me know if the custodians provided specific files or if an

electronic search was conducted. If the latter, let me know the parameters and the terms used in the

search. I may be able to assist in refining that search. If there are documents that can be produced in

response to specific requests, we ask that EnerSys do so. We ask that EnerSys begin a rolling

production. We can then figure out how to handle the balance.

As I said before, i have had a number of conversations with other third parties and seem to have had great

success in dealing with them. In fact, just this morning i had a very good conversation with Joe Wolfson of

your offce that seemed to be very productive. The discussions with EnerSys have unfortunately started at

a completely different point which creates most of our issues. I hope we can work through them but if not,

we will address them with Judge ChappeL.

I look forward to hearing from you.

Eric Welsh

Eric Welsh

Partner

Ext. 9052

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12/17/2008
TabE
UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

In the Matter of CASE NO. 9327

Polypore International, Inc.

a corporation. PUBLIC DOCUMENT

DECLARATION OF MICHAEL L. SHOR IN SUPPORT OF POLYPORE

INTERNATIONAL, INC.'S OPPOSITION TO ENERSYS' MOTION

FOR AWARD OF ATTORNEYS' FEES AND COSTS AND TO

LIMIT SUBPOENA SERVED ON NON-PARTY

I, Michael L. Shor, under penalty of perjur, declare that the following is true and

correct to the best of my knowledge:

1. I am an attorney duly licensed to practice before the courts of the State of

North Carolina.

2. I am employed by Carolina Legal Staffing and, since April 7, 2008, I have

served as Special Counsel for Polypore International, Inc., Respondent in this matter.

3. From April 2008 until early September 2008, my primary function at

Polypore was to assist the Company in responding to the investigation conducted by the

FTC. My role was to manage outside counsel and to coordinate the Company's response

to the FTC's CID and subpoena duces tecum.

4. I attended some of the investigative hearings, paricipated in several of the

Company's meetings with staff and provided substantive advice and counsel to the

Company while managing outside counseL.

PPAB 1515533vl
5. On several occasions, I provided advice and counsel to Polypore's

Daramic unit by participating in telephone conversations with representatives of Johnson

Controls, Inc. for the purpose of negotiating a supply contract for deep cycle battery

separators and by revising drafts of the contract. On other occasions, I assisted the

Celgard and Membrana units of Polypore with various customer and business-related

matters.

6. Commencing on September 9, on the issuance of the administrative

complaint in this matter, my responsibilties shifted to managing the litigation for the

Company. I was involved in retaining outside counsel and I am actively involved in

managing and coordinating all aspects of the case, including managing outside counsel

and coordinating the collection of data and responsive documents. I am also involved in

advising the Company on the substance of the litigation and offering strategic guidance to

counsel.

7. During the negotiation of the Protective Order entered in this case,

Complaint Counsel objected to my access to confidential materials, asserting the same

concerns as those raised by EnerSys here. I advised Complaint Counsel that I have not

participated in any contract negotiations for Daramic since early August and I represented

to Complaint Counsel that I wil not participate in any such negotiations for a period of

two years. Following that representation, Complaint Counsel agreed to the Protective

Order and it was entered by the ALl

8. During discovery and trial preparation, I wil review documents and

materials produced by third parties-including those identified as confidential-and,

bringing the Company's perspective to bear on the case, advise outside counsel on the

PPAB 1515533vl
conduct of the litigation. I am not permitted to, and I wil not, share any confidential

material or information with Company representatives.

I declare, under the penalty of perjury, that the foregoing is true and correct to the

best of my knowledge, information and belief.

Signed this2211~y of December 2008, in Charlotte, North Carolina.

Î

By: ) -V,"

Mich el L. Shor, Esq.

Speci i Counsel

Polypore International, Inc.

11430 North Community House Road

Suite 350

Charlotte, NC 28277

Tel: (704) 587-8450

Fax: (704) 587-8796

mshor(fpolypore.net

PPAB 1515533vl