UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

__________________________________________

)

In the Matter of )

)

CHICAGO BRIDGE & IRON COMPANY N.V. )

)

a foreign corporation, )

)

CHICAGO BRIDGE & IRON COMPANY )

) Public Record Version

a corporation, )

 ) Docket No. 9300

and )

)

PITT-DES MOINES, INC. )

)

a corporation. )

__________________________________________)

To: The Honorable D. Michael Chappell

Administrative Law Judge

COMPLAINT COUNSEL’S OPPOSITION TO RESPONDENTS’

MOTION TO STRIKE PROPOSED FINDINGS OF FACT

Respondents’ Motion is a meaningless diversion. Shortly after filing its initial brief, Complaint

Counsel discovered that in over 2,650 citations to the record in its initial Post-Trial briefing, five exhibits

were inadvertently omitted from the Joint Exhibit list – as were two of Respondents’ exhibits (CX 1571

and DX 131) – which Respondents cite in their findings but fail to even mention to the Tribunal that they

were also not admitted. Complaint Counsel specifically noted its error in its Reply Findings at page 1.

Only one exhibitsupports a point that is not mentioned elsewhere, that two employeesretired (CCFF 416,

citing CX 1685), whichobviously canbe disregarded. Yet, none of the other exhibits affect the substance

of any finding, each of which has many other citations to prove the same points. 
1

 Complaint counsel has reviewed Complaint Counsel’s Responses to Respondents’ Proposed

Findings of Fact and Conclusions of Law, filed March 7, 2003 to verify the in camera status of cited evidence

and to prepare a public record version of the filing. In the course of this review, Complaint counsel

determined that not all in camera evidence had been so identified. In addition, Complaint counsel identified

five incorrect citations. Complaint counsel will file a corrected copy of Complaint Counsel’s Responses,

correcting the in camera identification and correcting the five citations as follows: CCRF 3.101 delete

reference to CX 1545; CCRF 3.532 correct typographical error reference to “CX 110" to read “CX 109";

CCRF 4.50 correct clerical error reference to “CX 689" to read “JX 27"; CCRF 6.25 delete reference to CX

105; CCRF 6.38 delete second sentence and citation to CX 943 and replace with “RFOF 6.66 and response

thereto.” Complaint Counsel apologizes for these errors.

-2-

AsRespondents concede, priortothe reply briefing, Complaint Counselagreed withRespondents

to point out these minor errors to the Tribunal and that that would be, as Respondents agreed, the

“appropriate” way to deal with this issue.1 (R. Brief 83, n.77) Yet, inexplicably, Respondents filed this

motion without any mention of it to Complaint Counsel. More importantly, since we already pointed out

that these five exhibits were inadvertently omitted from the record, and the substance of all the findings

remain amply supported byother citations inthe record, there issimply no reasonfor anyMotionto Strike.

But Respondents go further. They now claim that (i) two exhibits (CX 105 and CX 1572) that

Complaint Counsel never even mentioned in any of its initial findings or brief are not inthe record, (ii) that

one exhibit (CX 823) is not in the record, when we told them and this Tribunal that this was a typo (the

correct number is CX 832, which is in the record); that certain charts and graphs used in the findings are

not exhibits(neglecting to state that these charts and graphs state that every basis forthemisfromadmitted

testimony and exhibits); that some summary findings have no citations (when they are each followed by

multiple paragraphs with dozens of citations to the record); and that Respondents want any reference to

Fan’s testimony stricken, even though they lost such objections during trial.
2

 Table 1 attached hereto summarizes the relevant CCFFs and the citations therein.

-3-

None of these issues matter to this case. So it is unfortunate that the Tribunal has been diverted

fromthe merits ofthis case withthis meritlessmotion. However, Respondents’ motion disingenuously asks

for relief that goes far beyond the simple omission of these five exhibits and the correction of one

typographical error – which is all we have here. Instead, they ask to strike dozens of key findings that are

overwhelmingly supported by other substantial, admitted evidence that is cited to support these same

findings. Thus, their motion should be denied.

1. Findings with Exhibits “Cited” But Not Admitted Into Evidence

Among the over 2,650 citations to exhibits and testimony in both the CCFFs and CC Post Trial

Brief, Respondents identify 10 that they claim are not in evidence. This is not correct. CX 105 and CX

1572 were not cited by Complaint Counsel anywhere in the initial findings or brief. CX 823 is a

typographical error; the proper cite is CX 832. CX 190, CX 822, and CX 1682 are single cites, which

were inadvertently not admitted as evidence, but which were in a string of other citations to admitted

exhibits and testimony. Disregard of these exhibits does not undermine the evidentiary foundation for any

ofthe findingsthat cite to them.2 CX 1591 was never offered for evidence inany finding; it issimply noted

in CCFF 318 that Dr. Simpson cited it in his testimony. Only one statement in a finding (CCFF 416)

(referring to an extremely minor point of the retirement oftwo employees) is supported by an exhibit that

wasinadvertently omitted fromthe record, CX 1685, and, as pointed out previously to this Tribunalshould

be disregarded.
-4-

CX 370 isthe depositiontranscript of Daniel Britton, an executive of Fairbanks Natural Gas. By

letter dated December 1, 2002, attached hereto, Respondents agreed to the admissibilityofMr. Britton’s

depositiontranscript(except forminor portions), and the partiesunderstoodand agreed that the deposition

would be submitted in evidence. (Leon, Tr. 3112 (“the customer is Dan Britton, whose deposition is

going to be submitted, not read, tomorrow. He’stestified, he was deposed, and to the extent that they

want to talk about what Mr. Britton has said, that’s fine.”) (emphasis added)). Complaint Counsel,

however, inadvertently did not include CX 370 in the final joint exhibit list. 

DroppingBritton’s depositioncite, however, has no bearing onthe issue here. The simple fact that

the Fairbanksjob had a higher price thananothersimilar project (whatBrittonsays)is documented by RX

407 and CX 791, both of which are in evidence and cited by Complaint Counsel in the related findings.

(CCFF 962-964, 966-970, 972-976). RX 407 shows CB&I’s $3.6 million price quote to Fairbanks and

a margin of20%, whichisfar higherthanCB&I’s pre-merger margins (CCFF 1027). This higher margin

rate is one example of CB&I’s post- merger market power. Moreover, comparing CB&I’s $3.6 million

price to Fairbanks with PDM’s pre-merger $2.6 million price quote to BC Gas for a comparable sizedtank (reflected inCX 791) also shows ananticompetitive price increase. Thus, the withdrawal of CX370

(Britton Dep.) changes nothing.

In short, Complaint Counsel would gladly move to have allthese five exhibits admitted,since they

were inadvertently omitted from the final JX, but their omission simply does not change the substance of

any issue here. Thus, not to burden the Tribunal any further, we accordingly ask that theybe disregarded.
3

 The Commission described a pedagogical-device summary or illustration to include “chalkboard

drawings, graphs, calculations, or listings of data taken from the testimony of witnesses or documents in

evidence, which are intended to summarize, clarify, or simplify testimonial or other evidence that has been

admitted in the case, but which are themselves not admitted, instead being used only as an aid to the

presentation and understanding of the evidence.” Schering-Plough Corporation, September 27, 2002

Commission Order at 2 n.1, citing United States v. Bray, 139 F.3d 1104 at 1112 (6th Cir. 1998).

4

 See Figure 1 as presented in Complaint Counsel’s appeal brief in Schering-Plough Corporation,

F.T.C. Docket No. 9297, attached.

-5-

2. Findings Containing Charts or Graphs Depicting Evidence Admitted into the Record

Respondents object to certain findings that contain charts or graphs. Respondents cite no law in

support oftheir objectionand, remarkably, ignore the Commission’srecentrulinginwhichthe Commission

upheld use ofgraphs as pedagogicaldevices3to summarize orillustrateevidencealreadyinthe record, even

where such graphs are presented, for the first time, during the appeal.4 Schering-Plough Corporation,

F.T.C. Docket No. 9297,Orderre Upsher-Smith’s Motionto Strike Demonstrative Exhibitsthat Are Not

inthe Record and Motionfor Leave to File Reply, at 2, September 27, 2002. The Commissionexplained

that “the illustration of this evidence in graphic form may be an effective aid to the presentation and

understanding of the evidence adduced in this case.” Id. at 2. 

One cannot read any Commission or ALJ opinioninany serious antitrust case and notfind the use

of tables or charts that are based upon admitted testimony and exhibits, as each one of Complaint

Counsel’s graphical descriptions ofevidence are. In cases involving economic testimony, it is often useful

to display admitted evidence in graphical form to say in one chart what might otherwise take a thousand

words. Clarity is simply good writing, and the use of tables or charts is common in opinions by Judges and
5

 See, e.g., R.R. Donnelley & Sons Co., 120 F.T.C. 36, 162 (graph),180 (tables) (1995); id. at 75,

98-99, 105, 109-10, 124 (Initial decision by Lewis F. Parker, ALJ); The Coca-Cola Company, 117 F.T.C.

795, 800-01, 804-06, 827, 848-55 (1994) (Initial decision by Lewis F. Parker, ALJ); Adventist Health

System/West, 117 F.T.C. 224, 251, 256, 263 (1994) (Initial decision by Lewis F. Parker, ALJ); Occidental

Petroleum Corporation, 115 F.T.C. 1010, 1058-59, 1061, 1063, 1195-96, 1198, 1199-1200 (graphs) (1992)

(Initial decision by Thomas F. Howder, ALJ); Owens-Illinois, 115 F.T.C. 179, 324 n.33, 333-34 (1992); id.

at 189-93, 202, 220, 230-37 (Initial decision by James P. Timony, ALJ); Boise Cascade Corp., 113 F.T.C.

956, 989-90 n.59 (1990); id. at 1006-07 (Concurring Opinion of Commissioner Mary L. Azcuenaga); Olin

Corporation, 113 F.T.C. 400, 422-23, 427, 484, 488, 493, 495-96, 503-04, 507, 509, 511, 526-34, 536-38, 543,

549-50, 574 (1990) (Initial decision by Montgomery K. Hyun, ALJ); Ticor Title Insurance Company, 112

F.T.C. 344, 398-99 (1989) (Initial decision by Morton Needelman, ALJ); Midcon Corp., 112 F.T.C. 93, 156

(1989); Massachusetts Board of Registration in Optometry, 110 F.T.C. 549, 563 (1988) (Initial decision

by James P. Timony, ALJ); B.F. Goodrich Company, 110 F.T.C. 207, 307-10, 312-14, 333-34 (1988). 

-6-

Commission alike.5 Respondents have raised no authority for their unusual proposition that charts and

graphs cannot be used, nor is there any.

Morever, Respondentsfalselyrepresent thatthe graphcontainedinCCFF 826 “had originally been

marked as CX 1761, offered as a demonstrative exhibit, and rejected bythe Court.” Respondents’ Reply

Briefat 83. Rather, CCFF 826 shows in a chart form the price information contained in CCFF 825, which

shows the history of price, profit and margin of the Cove Point LNG tank together with citations to the

record exhibits and testimony supporting the 

figures therein. The graphic presentation is simply a pedagogical aid to understanding what is shown in

CCFF 825. The graph in CCFF 826 is not the same one offered as a demonstrative as CX1761. But

even CX1761, if it were used as a graph now and if each data point was based upon uncontroverted

admitted evidence would be an appropriate graph for this Tribunal and the Commission to use. CCFF

826's graph is a more thorough rendition of the Cove Point pricing evidence and simply displays the data

points that are supported by admitted evidence, as clearly indicated on the graph itself.
6 Respondents assert that “Dr. Harris made numerous changes” to CX 1760, which Complaint

Counsel did not use here, but Harris’s commentary is not relevant. However, it should be noted that the only

change Dr. Harris made was to substitute “WGT” for “Whessoe” on CX 1760 because “WGT” was the

abbreviation used on the underlying page of the document. (RX 157 at [ ] 02 004 in camera). (Harris, Tr.

8037). Dr. Harris simply stated that “my best guess, I think it’s Whessoe” (Harris, Tr. 8036). CX 691

confirms that “WGT” is indeed Whessoe: [

 ] (CX 691 at [ ] 02 003 in camera).

7

 The Tribunal’s Order on Post Trial Briefs, issued January 15, 2003, does not require that citations

to the record appear in each finding. It is rather obvious from reading a summary finding that all the following

proposed detailed findings and citations support the first summary point. It would be redundant to have to cite

them all again. 

-7-

Respondentsfurther argue thatCCFF 882 and CCFF 913 should be strickenbecause theydo not

include Dr. Harris’s comments. Respondents’ Reply Brief at 83, n. 77. What Dr. Harris said is not

evidence, and in our view is without any value whatsoever. Respondents are free to present Dr. Harris’s

unsupported commentary in their own proposed findings and cannotrightly insist that we do so.6 It is not

necessarythat before we offer any proposed findingsto this Tribunalthat we obtain Dr. Harris’ agreement.

(See Krulla, Tr. 7977 (Stating that there wasn’t enough time to even attempt to do so with CX 1761)).

3. Findings that Are Undisputed or Summarize Other Findings

Respondents object to 66 findings that are undisputed or summarize related but more detailed

findings (which directly follow each summary sentence) because they purportedly lack “citation” to the

numbers ofthe related findings.7 Simply reading the findings would obviate burdening the Tribunal with this

motion. In every case, either the statement is self evident (e.g. Respondents “failed to offer evidence” on

a point) orthe statement issimply a summarystatement whichisfollowed bymany paragraphs ofproposed

detailed findings withsubstantialevidence insupport of eachand everypoint stated inthe summaryingreat

detail.
8

 For the convenience of the Tribunal, Table 2 attached hereto identifies the summary findings

objected to by Respondents and cross references their respective underlying findings.

-8-

For example, CCFF 265 states: “There are no PDM documents that discuss any firm as a greater

competitive threat thanCB&I in the relevant markets.” Complaint Counselcannot cite to a document that

does not exist. But of course this is the whole point of the finding, and Respondents, rather than pointing

to evidence that would refute the finding, seek to have the Tribunal ignore the facts.

In an example of a summary sentence, CCFF 50 states that “The relevant product markets in

which to analyze the acquisition are field-erected LNG storage tanks (individually, or as a component of

anLNGimport terminalor a LNG peak shaving plant), LIN/LOX storage tanks, LPG storage tanks and

TVCs.” From day one, Respondents have conceded the product market definitions in this case and yet

they seek to have the Tribunal not make a finding on this issue. Moreover, in each case, Complaint

Counsel then cites dozens of findings with dozens of admitted evidence to support this very statement.8

Finally, without any evidentiary support, Respondents challenge CCFF 29, which states: “By

proposing a TVC remedyto the Tribunal during the trial, Respondents have conceded that this merger will

likely have anticompetitive effectsinthe TVC market.” Respondents cannot suggest in good faith that Mr.

Glenn did not make a settlement offer to the Tribunalto “addressthe competitive concerns that complaint

counsel has in this case concerning thermal vacuum chambers...” (Glenn, Tr. 4164-65). In essence,

Respondents ask the Tribunal to ignore the truth simply because of the absence of a page number.

In short, there is nothing about these findings that is improper in any way. Rather, these findings

are supported by substantial evidence.

4. Findings Relating to Chung Fan
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Finally, Respondents incorrectly assert that the findings relating to Mr. Fan’s testimony about

CB&I’s post-merger 8.7% price increase to his company (Linde BOC Process Plant LLC) should be

stricken because the Tribunal“ruled that Mr. Fan’sstatisticalanalysis ofCB&I’s price was not admissible

for the truth of the matter asserted” – although this Tribunal never said that at all. (Motion at 2).

Respondents point to one page ofthe transcript, but ignore what this Tribunal actually said when referring

to one piece of Fan’s testimony, where this Tribunal stated: “I’m allowing this because you’re telling me

he got these bids, he looked at this, he acted onit,I’m allowing it for that purpose only. I’m not allowing

it for proof that he was right about any of this.” Respondents ignore the five other times in which the

Tribunaloverruled their objections and permitted Mr. Fanto explain the basis for his perceptionthat prices

had risenby8.7% since the merger. (Tr. 1004 (“Well, if I understand it right, it's part of his job. I'm going

to allow him to tell me that”); Tr. 1007-08; Tr. 1010; Tr. 1014 (Tribunal: “I'm fine with what he believes

and why he did what he did, and that's the way I'm accepting this testimony”); Tr. 994-95 (Tribunal: “I

don’t have a problem with someone telling me, as I said, what he saw, what he did, and I understand. I

don’t have a problem with a witness telling me this was my job, I had these bids, I looked at these bids,

I didn’t accept this bid, I think it was high.”). 

In short, this Tribunal clearly did not want Fan to speculate about the future, but allowed him to

testify about what he observed and believed at the time – that the CBI price “was high.” Id. Moreover,

one of the reasons one has post-trial briefing is to argue and propose the value of certain evidence by

relating to it the weight of other evidence on this same point. Often what is not clear during a particular

examinationbecomes clear at the closing of the case. In this instance, Mr. Fan and his exhibit, whichwas

admitted as a businessrecord, both state that it was Fan’s observation at the time that CB&I’s price was
-10-

higher by8.7%. (Tr. 975 (Tribunal: “I find [CX1584] to be reliable based onhistestimony, I don’t see any

evidence of untrustworthiness or unreliability, therefore 1584 is admitted”)). 

Respondents are free to argue that this one piece of evidence might not be clear enough. But other

admitted evidence corroborates Mr. Fan’s precise observation. As Complaint Counsel has already

pointed out in previous briefing, and at closing, CB&I’s prices to PraxAir on comparable tanks at

approximately the same time revealed the exact same 8.7% price increase that Mr. Fan observed. (See

CX1584-2; CX448; DX92 at 7402, 7411; Fan, Tr. 1009-10). Thus, while Respondents’ counsellikes

to poke fun at Mr. Fan, his observations were dead-on accurate, as supported by substantial evidence.

And from those observations, as well as multiple corroborating evidence, the ultimate issue in the case is

whether the acquisition “may...lessen competition.” As substantial evidence, including one piece from an

actual customer, shows that it has already happened, there is simply no basis to reject Fan’s direct

observation here.

Conclusion

In sum, it is unfortunate that Respondents have asked this Tribunal to waste time on this issue,

whichdiverts attentionawayfromthe undisputed evidence, whichis amply set forth in the several hundred

pages ofbriefs and findings and over 2,650 citations to admitted evidence inthis voluminousrecord. Since

Complaint Counselhad already agreed with Respondents to ask the Tribunalto disregard the five exhibits

that were inadvertently omitted from the final JX, and since none of their omissions affect any of the

substantive findings offered by Complaint Counsel, there is nothing for this Tribunal to do here except to

disregard these five exhibits and proceed witha determination in this case. A proposed order is attached.

Dated: March 19, 2003 Respectfully submitted,
-11-

_______________________________

J. Robert Robertson

Chul Pak

Rhett R. Krulla

Counsel Supporting the Complaint

Yasmine Carson

Honors Paralegal

Federal Trade Commission

601 New Jersey Avenue, N.W.

Washington D.C. 20580

(202) 326-3498
UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

__________________________________________

)

In the Matter of )

)

CHICAGO BRIDGE & IRON COMPANY N.V. )

)

a foreign corporation, )

)

CHICAGO BRIDGE & IRON COMPANY )

)

a corporation, )

 ) Docket No. 9300

and )

)

PITT-DES MOINES, INC. )

)

a corporation. )

__________________________________________)

ORDER

On March 10, 2003, Respondents filed a Motion to Strike certain exhibits and Complaint

Counsel’s Findings of Facts. On March 12, 2003 Complaint Counsel filed an Opposition to

Respondents’ Motion to Strike. Having fully considered Respondents’ Motion and Complaint

Counsel’s Opposition thereto, the Court finds that Complaint Counsel’s proposed findings, identified in

Respondents’ Motion to Strike, are supported by the record. Complaint Counsel has identified the

following exhibits that were not admitted into evidence but inadvertently cited in their proposed findings

of fact: CX 190, CX 370, CX 822, CX 1682, and CX 1685. Complaint Counsel has withdrawn any

reference to these inadvertently included exhibits. Because these exhibits were not admitted into

evidence, they will be disregarded. CCFF 416, which relies on CX 1685 has been withdrawn as well
-2-

and thus both will be disregarded. All other of Complaint Counsel’s findings are supported by

evidence in the record and will be considered by this Tribunal in its review of the findings in this case. 

Accordingly,

IT IS HEREBY ORDERED that, except as stated above, Respondents’ motion is denied.

_____________________

D. Michael Chappell

Administrative Law Judge

Date: March , 2003
CERTIFICATE OF SERVICE

I hereby certify that I caused a copy of the public record version of Complaint Counsel’s

Opposition to Respondents’ Motion to Strike Proposed Findings of Fact to be delivered by hand to

The Honorable D. Michael Chappell

Federal Trade Commission

H-104

6

th and Pennsylvania Ave. N.W.

Washington D.C. 20580

Administrative Law Judge

and by first-class mail to:

Jeffrey A. Leon

Duane M. Kelley

Winston & Strawn

35 W. Wacker Drive

Chicago, IL 60601-9703

(312) 558-5600

Counsel for Respondents Chicago Bridge & Iron Company

N.V. and Pitt-Des Moines, Inc.

Dated: March 19, 2003

___________________________

Rhett R. Krulla
December 1, 2002 Letter Agreement signed by Eric M. Sprague and Jeffrey A. Leon
Figure 1 as presented in Complaint Counsel’s Appeal Brief in

Schering-Plough Corporation, F.T.C. Docket No. 9297
Table 1 

CXs Inadvertently Cited by Complaint Counsel 
-1-

Table 1 – CXs Inadvertently Cited by Complaint Counsel 

CX Finding Response

105 Not Cited by Complaint Counsel Complaint Counsel did not use this

document in either its findings or its

post-trial brief.

190 406. There are no LPG tank suppliers in the United States that can match

Respondents’ track record. (CX 152). (See CX 160 at CBI-PL004768;

CX 171 at CBI-PL009817; CX 172 at CBI-PL009975; CX 179; CX

190 at CBI-PL017044; CX 207 at CBI-PL031456; CX 217 at CBI-PL

034420; CX 244 at CBI-PL4005377; CX 417 at CBI 026845-52-

HOU).

Complaint Counsel respectfully

requests that the Tribunal disregard the

document that is not in evidence, and

consider the other nine documents that

support Complaint Counsel’s Finding. 

Dr. Simpson’s testimony (Simpson, Tr.

3107) is cited as additional support for

CCFF 956. In addition, CCFF 956 is

supported by RX 407 at CBI 066667. 

Dr. Simpson’s testimony (Simpson, Tr,

3120) is cited as additional support for

CCFF 961. 

CX 791 is

cited as additional support for CCFF

970. In addition, CCFF 970 is
-2-

1286. Customers would benefit from the increased competition resulting from

an effective divestiture. (Neary, Tr. 1502 (TVC; competition would be

restored if PDM EC were returned to the marketplace); CX 370, 89

(Britton, Dep.) (LNG; prefers to have more than one competitor,

CB&I, for a project); Patterson, Tr. 462, in camera

([ ]);

 Simpson, Tr. 3606-07, 3611 (customers would benefit by reconstituting

PDM EC)).

The Fairbanks, Alaska Project: In 2002, Fairbanks explored the possibility of

expanding its storage capacity with a field-erected LNG tank. Based on an

outside consultant’s analysis, Fairbanks concluded that the tank it wanted would

cost approximately $2.2 million dollars. (CX 370 at 18, 19, 21 (Britton, Dep.)). 

But CB&I’s $3.6 million price was $1.4 million higher than Fairbanks’ estimate

of $2.2 million based on its consultant’s analysis. (RX 407 at CB&I 066666;

CX 370 at 19 (Britton, Dep.)). CB&I had also included a 50% margin for the

supported by RX 407 at CBI 066666

and by RX 626 at CBI 063013. 

CCFF cites as additional support the

testimony of Mr. Neary (Neary, Tr.

1502 ), by the testimony of Mr.

Patterson (Patterson, Tr. 462, in

camera), and by the testimony of Dr.

Simpson (Simpson, Tr. 3606-07,

3611).

Complaint Counsel respectfully

requests that the Tribunal only

disregard the document that is not in

evidence, and consider the other

documents that support Complaint

Counsel’s Findings.

This paragraph of Complaint

Counsel’s Post-Trial Brief is supported

by RX 407 at CB&I 066666 and by

CX 791 at 260.
-3-

job. (RX 407 at 6666 (“includes 20% margin” plus “30%” for location). Yet,

on a recent LNG tank project in nearby British Columbia before the acquisition,

PDM had offered a price that was comparable to the estimated price of $2.2

million for the tank – demonstrating that if PDM had not been eliminated from

competition, Fairbanks could have received a substantially lower price. (See

CX791 at 260; CX370 at 94-97) (Complaint Counsel Corrected Post-Trial Brief

at 36-7).

Several witnesses testified as to the desirability of Complaint Counsel’s

proposed remedy. (Neary, Tr. 1489, 1502) (Reestablishing PDM would give

his company the “competition” they’re “looking for”); CX 370 at 89 (Britton

Dep.) (better to have competition); (Simpson, Tr. 3606-09 (“PDM EC was as

strong a competitor as it was because it possessed certain tangible and intangible

assets. For a reconstituted firm to be as strong a competitor, it, too, would have

to possess similar assets like the fabrication plants..., its work force, its

engineering staff and its intangible assets, such as its learning by doing, enabled

it to compete as a very strong competitor in this marketplace.”) In short, as Dr.

Simpson testified, the remedy would “restore the competition that existed prior

to the acquisition.” (Id. at 3608-09) This is exactly what the law requires. Olin,

113 F.T.C. at 619. (Complaint Counsel’s Post-Trial Brief 52).

This paragraph of Complaint

Counsel’s Post-Trial Brief is supported

by the testimony of Mr. Neary (Neary,

Tr. 1489, 1502 ), by the testimony of

Dr. Simpson (Simpson, Tr. 3606-07,

3611), and by the Commission’s

decision in Olin. 

370

957. Fairbanks retained the services of CDS Research, an LNG consulting

firm, to assist in the project. CDS Research helped prepare a budget for

the project. CDS Research’s methodology consisted of taking the

“industry standard for benchmarking at costs per gallon and then

factored in an adjustment factor for size of the tank and referred back to

... recent projects to kind of do 

 a comparison ... ” (CX 370 at 97 (Britton, Dep.)).

958. CDS Research’s analysis included a “15% adjustment factor on the

Complaint Counsel has no objection to

striking these particular findings.

Complaint Counsel has acknowledged

its error in its Response to

Respondents’ Findings of Fact and

apologizes for any inconvenience to

the Tribunal. Complaint Counsel asks

that the Tribunal note the attached

agreement made by Respondents and
-4-

industry standard for size of the facility ... the industry standard budget

pricing for the size.” (CX 370 at 98 (Britton, Dep.)).

959. Based on CDS Research’s analysis, Fairbanks concluded that a onemillion gallon field-erected LNG tank would cost approximately $2.2

million dollars. (CX 370 at 18, 19, 21 (Britton, Dep.)). Fairbanks

further concluded that the total cost of the LNG tank and the necessary

systems would be approximately $5 million. (CX 370 at 46-8 (Britton,

Dep.)).

960. CDS Research contacted multiple tank suppliers in order to create a

competitive bidding situation for Fairbanks. CDS Research found that

suppliers were unwilling to provide budgetary pricing information. (CX

370 at 33 (Britton, Dep.)).

964. CBI’s $3.6 million price was $1.4 million higher than Fairbanks’ estimate

of $2.2 million based on its consultant’s analysis. (RX 407 at CBI

066666; CX 370 at 19 (Britton, Dep.)).

965. Fairbanks expected “margina[l]” cost increases between 1999 and 2002,

but saw no reason that such increases would be “significant” enough to

raise the tank price by more than 60%. (CX 370 at 21 (Britton, Dep.)). 

971. PDM’s $2.6 million price to BC Gas was only $400,000 more than the

$2.2 million estimate CDS Research provided to Fairbanks, which was

based on “industry standard for benchmarking at costs per gallon” and

“recent projects.” (CX 370 at 97 (Britton, Dep.)).

1286. Customers would benefit from the increased competition resulting from

Complaint Counsel regarding the

Deposition of Daniel Britton. 
-5-

an effective divestiture. (Neary, Tr. 1502 (TVC; competition would be

restored if PDM EC were returned to the marketplace); CX 370, 89

(Britton, Dep.) (LNG; prefers to have more than one competitor, CB&I,

for a project); Patterson, Tr. 462, in camera ([

 ]); Simpson, Tr. 3606-07,

3611 (customers would benefit by reconstituting PDM EC)).

822 1356. Prior to the acquisition, PDM EC employed 231 salaried employees and

768 hourly employees. (CX 822 at 8; see CX 522 at 26 (in July 2000,

PDM EC employed 717 hourly field personnel)). PDM EC’s salaried

employees included 46 engineers, 36 draftsmen, and 17 estimators. (CX

522 at 26).

Complaint Counsel respectfully

requests that the Tribunal only

disregard the document that is not in

evidence, and consider CX 522 at 26,

the other document cited in support of

Complaint Counsel’s Finding. 

823 737. At CB&I, Glenn stated that CBI/PDM had “unequaled capability in our

chosen field.” (CX 1720 at CBI/PDM-H 4000784). Rich Goodrich,

Executive Vice President and Chief Financial Officer, called CBI/PDM

the “900 pound gorilla.” (CX 1681 at CBI/PDM 4005289). Daniel

Knight, the same person who anticipated that the combination of CB&I

& PDM would “create barriers to entry,” stated, in a post-acquisition email, that “We are by far the ‘big-dog’ of the industry and I think we

need to better educate our customers of what they gain by buying from

CBI.” (CX 459 at CBI-E 007218; see CX 101 at PDM-HOU002359). 

CB&I boasted internally regarding the LNG market that “no other

company in the world is more uniquely or strategically positioned to

capitalize on that emerging market.” (CX 823 at CBI-E 009355).

Complaint Counsel inadvertently made

a typographical error. CX 823 should

be typed as CX 832. Complaint

Counsel apologizes for the

inconvenience. 

1572 Not Cited by Complaint Counsel Complaint Counsel did not use this
-6-

document in either its findings or its

post-trial brief. 

1591 318. An entrant would need a large engineering staff to design LNG tanks. 

(Simpson, Tr. 3156 (citing CX 258 at 1794; CX 1591 at 15262). Dr.

Harris agreed that an entrant must have engineering capability. (Harris,

Tr. 7249).

The cited authority in CCFF 318 is Dr.

Simpson’s testimony (Simpson, Tr.

3156). CCFF 318 notes that Dr.

Simpson cited CX 258 and CX 1591

as useful to forming his expert opinion. 

Accordingly, Complaint Counsel

respectfully requests that this finding

not be stricken from the record.1

1682 744. Shortly after the “brainstorming” session, Scorsone and other members of

the integration team held an “Integration Kick-off Meeting.” (CX 1544

at CBI 057915; CX 1682 at CBI/PDM-H 4005307).

Complaint Counsel respectfully

requests that the Tribunal only

disregard the document that is not in

evidence, and consider CX 1544 at

CBI 057915, the other document cited

in support of Complaint Counsel’s

Finding. 

1685 416. PDM gained efficiencies and reduced costs by assigning experienced

employees on TVC projects. In an e-mail written relating to the 

Spectrum Astro TVC project, Mr. Scorsone wrote that “[t]he retirement

of Fred Dilliott will hurt our ability to manage [ ]” and

“Bob Watson has left the company and this will hurt our ability to

manage the engineering and startup program.” (CX 1685 at CBI/PDMH 4000903).

Complaint Counsel has no objection to

Respondents’ motion to strike this

particular finding. Complaint Counsel

has acknowledged its error in its

Response to Respondents’ Findings of

Fact and apologizes for any

inconvenience to the Tribunal. 

CCFF

177

Dr. Simpson testified that an analysis of LPG tanks and ammonia tanks sold

between 1990 and early 2001 provides further evidence that CB&I and PDM

CCFF 177 discusses Dr. Simpson’s

testimony regarding his examination of
-7-

were the two strongest suppliers of LPG tanks in the United States. (Simpson,

Tr. 3400). Dr. Simpson testified that the skill set required to build field-erected

ammonia tanks is very similar to the skill set required to build field-erected LPG

tanks (Simpson, Tr. 3398 (citing CX 1615 and interviews with industry

participants)). Nineteen projects for field-erected LPG tanks and field-erected

ammonia tanks were awarded between 1990 and early 2001 in the United

States. (Simpson, Tr. 3400 (referencing CX 1660 (demonstrative))). CB&I

won twelve of these projects, PDM won five of these projects, Morse won one

of these projects, and AT&V won one of these projects. (Simpson, Tr. 3400

(referencing CX 1661 (demonstrative))). Dr. Simpson testified that the

probability of observing CB&I and PDM win seventeen of nineteen projects if

some other firm competed on an equal footing with CB&I and PDM is only 2.4

percent. (Simpson, Tr. 3400 (referencing CX 1661, demonstrative)).

ammonia tank awards to test his

conclusions regarding LPG tank

awards. CCFF 177 notes that Dr.

Simpson cited CX 1615 and, in

addition, relied on his “interviews with

industry participants” for his

observation that the skill set required to

build field-erected ammonia tanks is

very similar to the skill set required to

build field-erected LPG tanks. CCFF

177. Complaint Counsel has clearly

indicated, in CCFF 177, that Dr.

Simpson disclosed the bases for his

opinion. Accordingly, Complaint

Counsel respectfully submits that there

is no basis to strike CCFF 177.2
Table 2 

Summary Findings Objected to by Respondents 
-1-

Table 2 – Summary Findings Objected to by Respondents

CCFF Findings CCFF

Reference

29 “By proposing a TVC remedy to the Tribunal during the trial,

Respondents have conceded that this merger will likely have

anticompetitive effects in the TVC market.” 

Glenn, Tr. 4164-

66

33 “Complaint Counsel has demonstrated sufficiently high market shares

and increases in market concentration to trigger the presumption that

the CB&I/PDM merger will likely have anticompetitive effects. 

Complaint Counsel has also shown that the elimination of CB&I’s

closest competitor will likely lessen competition. Respondents have

not rebutted this presumption with proof of ease of entry, cognizable

efficiencies or an “exiting assets” defense. Although not required to do

so, Complaint Counsel has also shown instances of actual

anticompetitive effects. In other words, the evidence establishes that

this merger violates Section 7 of the Clayton Act and Section 5 of the

FTC Act.”

99-195 (Market

Concentration)

196-290

(Closest

Competitors)

291-580 

(Entry is Not

Easy)

777-1220

(Anticompetitive

Effects of the

Acquisition)

50 “The relevant product markets in which to analyze the acquisition are

field-erected LNG storage tanks (individually, or as a component of an

LNG import terminal or a LNG peak shaving plant), LIN/LOX

storage tanks, LPG storage tanks and TVCs.”

51-94

78 “The evidence demonstrates that a small but significant, nontransitory

increase in the price of a field-erected LPG tank would not prompt

customers to switch to alternative products.”

79-83

260 “No firm exerted a greater consistent competitive threat than PDM

across the relevant markets.”

251-259

265 “There are no PDM documents that discuss any firm as a greater

competitive threat than CB&I in the relevant markets.” 

261-264

384 “Bidding experience is another country-specific intangible asset that

gives CB&I a competitive advantage over other firms.”

385

421 “Respondents[‘] ordinary course of business documents and

communications to the public prior to the commencement of this

proceeding uniformly characterize the competitive landscape as

dominated by CB&I and unthreatened by foreign and domestic firms.”

422-435
-2-

449 “AT&V faces numerous problems that make it unlikely to replace

PDM as CB&I’s closest competitor.”

450-482

581 ”Respondents contend that entry by foreign and domestic firms will

erode CB&I’s market share and market power. The evidence of

post-merger negotiations for LNG projects in the United States that

may be built in the future indicates the opposite conclusion: CB&I is

likely to maintain or increase its dominant position in the United States

LNG tank market.”

582-591

589 “Because the LNG tank owner has not decided how to structure the

bidding process for the LNG tanks, it is unclear who will win the

projects.”

588

615 “Additional evidence further indicates that Dr. Harris incorrectly

identified some variable costs as fixed costs.”

616-623

642 “In using a critical loss analysis to analyze whether CB&I has market

power, Dr. Harris ignored differences between using a critical loss

analysis for market definition and using a critical loss analysis for

assessing market power within a market. Dr. Harris underestimated

the profitability of a price increase to CB&I because he failed to take

into account the sales diversion between CB&I and PDM and because

he failed to take into account price reactions of other firms to a price

increase by CB&I following the acquisition.” 

643-650

687 “Dr. Harris bases his conclusions regarding entry and competitive

effects in the LNG tank market primarily on his observations regarding

Dynegy’s Hackberry LNG project. His testimony reveals a

misunderstanding on his part regarding what happened in the Dynegy

project and serious flaws in his analysis of entry and competitive

effects.”

688-696

749 “Complaint Counsel has established that the merger will likely have

anticompetitive effects through evidence of (1) Respondents’ dominant

position in highly concentrated markets, (2) the elimination of PDM as

CBI’s closest competitor, and (3) the inability of foreign and domestic

firms to replace PDM as a competitive constraint on CBI.”

99-195 (Market

Concentration)

196-290

(Closest

Competitors)

751-1220

(Anticompetitive

Effects)
-3-

752 “The evidence of actual anticompetitive effects further belies

Respondents’ argument that entry by foreign and domestic firms will

deter or counteract any anticompetitive harm that may flow from the

merger.”

753-1220

776 “Respondents’ argument to the Tribunal – that [“vicious”] competition

from foreign and domestic firms restrains CB&I – is a claim that CB&I

has chosen to share with the Tribunal but not with the SEC or the

investment community.”

753-775

777 “The LNG project at Cove Point, Maryland (“Cove Point”) illustrates

two important themes of this case. (1) Prior the merger, CB&I and

PDM competed vigorously to win this project, and Cove Point

benefitted in the form of lower prices. (2) Since the merger, the

elimination of PDM as CB&I’s closest competitor and the inability of

other firms to replace PDM as a price constraint has permitted

Respondents to raise prices and margins markedly. On at least four

occasions, Respondents implemented price increases that raised the

current price of the Cove Point tank by more than 60% from premerger levels, with a nearly five-fold increase in the dollar margins that

the combined entity expects to earn.”

778–830

810 “Steimer’s prediction that the margins realized on Cove Point would

greatly exceed the November estimates proved correct.”

806, 811

816 “A CB&I “Tank Estimate Summary Sheet,” dated February 21, 2001,

immediately following the CBI/PDM merger, shows that CBI, as an

independent competitor, could have significantly undercut PDM’s bids

on Cove Point. The estimate may have been prepared before this

date.”

817-821

822 “If CB&I and PDM had not merged, the customer at Cove Point

could have avoided these price increase, and may have been able to

reduce prices even further by leveraging CB&I and PDM against each

other.”

778-830
-4-

831 “CB&I’s ability to convince [ ] to

enter into sole-source negotiations illustrates five important themes. (1)

Based on actual prices obtained from CB&I, PDM and Whessoe, [ 

 ] knew that CB&I and PDM offered

significantly lower prices than other firms. (2) [ ] knew that

with the acquisition of PDM, CB&I dominated the United States

market. (3) Without PDM to turn to, [ ] could encourage

competition only by turning to untested, higher-priced alternatives. (4)

Requiring guaranteed access to resources necessary to complete LNG

projects in the United States, [ ] has no choice but to acquiesce to

CB&I’s demand that [ ] work exclusively with CB&I, which may

increase the costs to

[ ]. (5) A sole-source relationship to provide engineering,

procurement and construction services and the LNG tank itself is far

more lucrative for CB&I than having to competitively bid with other

firms or to bid just for the LNG tank alone.”

832-882

849 “CB&I and PDM were the two horses that competed most closely for

LNG tanks in the United States. By acquiring PDM, CB&I turned it

into a one-horse race, thereby giving CB&I an even greater leg up

against other firms to secure not only the LNG tank business itself, but

also the more lucrative EPC work. Without a low-cost LNG tank

supplier that can compete against CB&I’s prices, an EPC engineering

firm will likely face the same competitive disadvantages as Lotepro and

Black & Veatch did in the Memphis project. For the LNG facility

owner, the race would also come down to one horse – CB&I.”

847-8

864 “In July and August of 2001, [ ] further clarified why it would be

prudent to turn exclusively to CB&I in the United States.”

865-869

868 “[ ] possesses real data on which to base its decision that the costeffective strategy going forward is to enter into a sole-source

relationship with CBI.”

869

883 “The prices quoted to [ ] by CB&I, PDM and Whessoe for various

sizes of LNG tanks can be plotted to establish price curves for each

firm. CB&I’s and PDM’s price quotes on the 2000 Cove Point

project can also be plotted against the 1998 

[ ] quotes. CCFF 891. After examining the data observations, a

comparison can be made between the prices quoted on the Cove

Point project and the prices quoted to [ ] for its tanks.”

869, 886-928
-5-

885 “There are three sections of the Cove Point/[ ] comparison. Part I of

the comparison demonstrates the similarities between CB&I’s and

PDM’s bidding practices in 2000 for the Cove Point project and in

1998 for the [ ] project. Part II of the comparison details PDM

and CB&I’s behavior after the letter of intent was signed, and

illustrates that currently, CB&I pricing deviates from any price curves

that existed prior to the acquisition because, in the competitive void

that exists post-acquisition, CB&I has no price constraints (other than

the significantly higher prices of Whessoe). Part III examines the

comparison and relevant calculations on a demonstrative aid.

886-928

906 “PDM’s [ ] adjustment for the difference in tank size does not

explain the movement of PDM’s entire price curve after the letter of

intent was signed nor other subsequent price increases postacquisition.”

903-905

912 “The following graph shows the history of PDM’s and CB&I’s prices

for the Cove Point LNG tank, from early 2000 through December

2002, as well as the price quotations submitted to [ ] by CB&I,

PDM and Whessoe for various size single containment LNG tanks. 

Trend lines show approximate prices for CB&I, PDM and Whessoe

for intermediate tank sizes. “

886-910

913 The most important point made by the graph is that PDM and CB&I’s

pricing after the letter of intent was signed does not fall within a

range of any price curve. CB&I’s current pricing, reflected on the

graph, shows the lack of pricing methodology in the post-acquisition

period when compared with pre-acquisition levels of pricing to [ ] or

Columbia Gas. 

926-927

928 “Absent the acquisition, CB&I and PDM would have constrained each

others’ pricing to levels that are within the ranges of the two firms’

price curves prior to the acquisition. Because CB&I is now

unrestrained, it is now able to increase its price more than [ ] above

pricing levels that existed prior to the acquisition.”

948

929 “Since Cove Point, CB&I has used PDM’s “fat” and “excessive” cost

estimates on Cove Point as a benchmark to implement higher prices

and margins to other LNG customers.”

931-954
-6-

930 “The LNG projects for Memphis Light, Gas & Water (“Memphis”)

illustrate three important themes of this case. (1) Prior to the merger,

CB&I and PDM competed vigorously to win this project, and

Memphis benefitted in the form of lower prices (and CB&I suffered in

the form of single-digit margins). (2) Prior to the merger, foreign firms

– Whessoe and TKK – bid against CB&I and PDM but were not

competitive because their costs and prices were at least 40% higher. 

(3) Since the merger, CB&I recognizes that with the elimination of

PDM as its closest competitor and the inability of other firms to

replace PDM as a price constraint, CB&I can now raise prices and

earn significantly higher margins.”

931-954

942 “CB&I’s firm fixed price to Memphis included an [ ] profit margin.” 1030

954 “In the 1995 Memphis bidding contest, CB&I had to bid at a low

price that garnered it only an [ ] margin in order to beat PDM. Postmerger, unrestrained by PDM and knowing that foreign firms cannot

provide an “economical” or “very competitive” price, CB&I exercised

market power by offering a higher price that includes at least a [ ]

margin, a nearly four-fold increase from pre-merger levels.”

1030, 947

955 “The LNG project for Fairbanks Natural Gas, LLC in Alaska

(“Fairbanks”) illustrates that, since the merger, CB&I recognizes that

the elimination of PDM as its closest competitor and the inability of

other firms to replace PDM as a price constraint provide CB&I with

the opportunity to raise prices and earn significantly higher margins.”

962-963

968 “From Fairbanks’ perspective, CBI’s pricing to Fairbanks compares

unfavorably with PDM’s pricing on a comparable project before the

merger.”

969-70, 972-

976

977 “Using and factoring all of the variables that should have made CB&I’s

Fairbanks price equal to, if not lower than, PDM’s BC Gas price,

PDM’s pre-merger price to BC Gas of $2.6 million on a 1.2 million

gallon tank as a benchmark, CBI’s post-merger price to Fairbanks of

$3.6 million on a 1.0 million gallon tank appears anticompetitive.”

973

978 “The LNG project for Dynegy illustrates two important themes of this

case. (1) CB&I recognizes that with the elimination of PDM as its

closest competitor and the inability of other firms to replace PDM as a

price constraint, CB&I will attempt to leverage its market power and

force customers to accept CBI’s terms and forego competitive

bidding. (2) If a customer balks, CB&I will walk away and leave the

customer to deal with higher-priced competitors.”

979-1006
-7-

981 “In order to minimize competition and obtain the highest margin, CB&I

attempted to force Dynegy to accept CB&I as a turnkey contractor so

that it could supply the LNG tanks as well as facilitate the other

portions of the project.”

982, 984, 985

997 “Dynegy is likely to pay a higher price for the LNG tanks supplied by

TKK, Whessoe or Technigaz than it would if CB&I had bid.”

359, 979-1006

1006 “The teaching of the Dynegy project is that CB&I attempts to leverage

its dominant position against customers in order to extract higher prices

and margins. In order to avoid CBI’s stranglehold, some customers

perceive no other choice but to seek inferior alternatives. This is

neither competition nor sufficient entry. It is an anticompetitive effect.”

978-1006

1007 “The LNG project for Yankee Gas is similar to the themes of the

Dynegy project, except that with Yankee Gas, CBI’s strong-arm

tactics have achieved considerable success.”

1008-1026

1012 “As with the Dynegy project, CB&I did not want to deal with a

middleman. CB&I wanted the owner’s ear alone and refused to

submit pricing information unless it was selected as the turnkey

contractor.”

1013-1020

1053 “Since the merger, CB&I has implemented the same 8.7% price

increase on at least three different occasions: (1) to Linde BOC

Process Plants LLC in April of 2002; (2) to Praxair in April of 2002;

and (3) to Praxair again in June of 2002.”

1058-1086

1056 “A fourth example of the anticompetitive effects of the merger involves

MG Industries. This situation highlights how customers are

handicapped by the absence of PDM as a leverage point against

CB&I.”

1078-1086

1057 “These four instances illustrate that, since the merger, CB&I recognizes

that the elimination of PDM as its closest competitor and the inability of

other firms to replace PDM as a price constraint provide CB&I with

the opportunity to raise prices and earn significantly higher margins.”

1058-1107

1075 “The difference in CBI’s price to Praxair and CBI’s price to Linde –

for the virtually the same-sized tank and same location – is only [ ],

or less than [ ].”

1072, 1074

1076 “CBI implemented the same [ ] price increase to Praxair as it did

to Linde.”

1070, 1072-

1074
-8-

1085 “The increase in price from $850,000 to $924,000 is precisely 8.7%,

the same price increase observed by Fan of Linde and Praxair on the

Praxair-New Mexico Project 1.”

1070, 1072-4

1086 “After years of intense head-to-head competition between CB&I and

PDM, three separate instances of 8.7% price increases shortly after

the merger cannot be coincidental.”

1058, 1072-4

1087 “The experience of MG Industries, a subsidiary of Messer, (“MG

Industries”) is an example of how the elimination of PDM has reduced

the ability of customers to obtain lower prices from LIN/LOX tank

suppliers.”

1078-1086

1091 “In most of the competitive bidding situations, PDM was either the

lowest or second lowest priced bidder, followed by Graver, and finally

CB&I.”

1094-1097

1099 “Because PDM had merged with CB&I and Graver went out of

business, MG Industries had to look for alternative suppliers besides

CB&I.”

1100

1165 “Having eliminated its only competitor in the TVC market, CB&I

continued, following the acquisition, to attempt to coordinate on

making a TVC bid or price quote with the next closest alternative

available to TVC customers.”

1166-1180

1180 “In the post-acquisition competitive environment, CB&I, a large,

unopposed firm with low costs and efficient practices is in a position of

power over other, smaller firms. These smaller firms know that they

cannot compete with CB&I and will instead acquiesce to “join” CB&I. 

The acquisition has therefore increased the risk of collusion among

suppliers of large, field-erected thermal vacuum chambers.”

1166-1179

1181 “Respondents’ TVC pricing to [ ] demonstrates both how

competition between CB&I and PDM drove TVC prices down prior

to the acquisition and how, following the acquisition, CB&I has

increased price.”

1182-1220

1220 “In the absence of PDM, CB&I, the only existing competitor for large,

field-erected thermal vacuum chambers uses its sole position as a TVC

competitor to its advantage. CB&I now dictates its own bidding

conditions and victimizes customers who have no other suppliers to

turn to.”

1182-1219
-9-

1. FRE 703: “The facts or data in the particular case upon which an expert bases an opinion or

inference may be those perceived by or made known to the expert at or before the hearing. If of a type

reasonably relied upon by experts in the particular field in forming opinions or inferences upon the

subject, the facts or data need not be admissible in evidence in order for the opinion or inference to be

admitted.” There is no reason why Complaint Counsel, in the interest of thoroughness, should not be

permitted to disclose that Dr. Simpson used CX 1591 in forming his expert opinion. Complaint Counsel

also respectfully requests that the Tribunal note that Respondents’ expert is in agreement with Dr.

Simpson on this particular point. 

1221 “Respondents assert an “exiting assets” defense that has never been

recognized by any court as an antitrust defense, and rejected by the

few courts that have addressed it. In essence, Respondents claim that

had the merger not occurred, PDM would have made a business

decision to liquidate the firm, thereby eliminating PDM from the

competitive landscape.”

1222, 1224

1223 “The defense recognized by courts and the Merger Guidelines which

most closely resembles Respondent’s asserted “exiting assets” defense

is the failing firm defense.”

1224

1225 “Respondents failed to prove each element of the defense.” 1226-1281

1226 “Pitt-Des Moines’s regular course of business documents reflect a

strong and profitable firm.”

1227-1237

1281 “Respondents have failed to show that PDM EC would have been an

exiting asset if PDM were not acquired by CB&I.”

1263-1280

1289 “As the viability of PDM EC depended upon the viability of the PDM

Water division, both must be included in an order for complete

divestiture.”

1290-1296

1327 “An effective divestiture would need to include resources necessary to

make flat bottom tanks, gravel tanks, and other tanks outside of the

relevant market.”

1328-1338

1347 “In order to provide New PDM with a backlog of work, CB&I will

have to obtain its customers’ approvals to transfer the work to the

acquirer of New PDM.”

1348-1349

1351 “In order to be an effective competitor, New PDM will need personnel

with experience in the relevant product markets.”

1352-1359
-10-

2. FRE 703: There is no reason why Complaint Counsel, in the interest of thoroughness, should not be

allowed to acknowledge that Dr. Simpson relied upon his interviews with industry participants in

forming his expert opinion. See fn 1.