ORIGINAL 

UNITED STAlES OF AMERICA
 

FEDERAL TRADE COMMISSION
 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

) In the Matter of ) 

) POL YPORE INTERNATIONAL, INC., ) Docket No. 9327 

Respondent. ) 

) 

ORDER DENYING RESPONDENT'S MOTION TO DISMISS
 

COUNTS II AND III OF THE COMPLAINT FOR FAILURE TO STATE A CLAIM
 

I. 

On October 15,2008, Respondent Polypore International, Inc. ("Polypore," "Daramic" or 

"Respondent"), filed a Motion to Dismiss Counts II and II of 
 the Complaint for Failure to State a Claim 
 and a Memorandum in Support Thereof ("Motion"). Complaint Counsel fied its 

Response ("Opposition") on October 27, 2008. 

For the reasons set forth below, the motion to dismiss is DENIED. 

II. 

Respondent moves to dismiss for failure to state a claim, Counts II and III of the 

Complaint with respect to any monopolization and attempted monopolization claims regarding 

the alleged automotive, uninterrptible power supply stationar ("UPS") and PE separator 

markets. Motion at 1. Respondent also moves to dismiss, for failure to state a claim, Counts II 

and II to the extent that they apply to the alleged deep cycle and motive battery separator 

marked based upon what Respondent characterizes as an undefined monopolization or attempted 

monopolization offense under Section 5 of the FTC Act. Id Respondent argues that Complaint 

Counsel seeks to assert monopolization or attempted monopolization claims under Section 5 of 

the FTC Act without making allegations that satisfy the standards for offenses under the 

Sherman Act. Id Respondent fuher argues that the Complaint does not plead the elements of 

monopolization and attempted monopolization claims that are required by Sherman Act 

authorities. Id at 2. 
Complaint Counsel responds by asserting that the Complaint properly alleges claims
 

consistent with Sherman Act liabilty standards that entitle Complaint Counsel to relief under
 

Section 5. Opposition at 2. With respect to Count II of 
 the Complaint, Complaint Counsel states 

that it challenges: (i) an agreement between competitors to allocate markets, and (ii) Polypore's 

acquisition of Microporous Products, L.P., ("Microporous") and that each of 
 these transactions 

constitutes an uneasonable restraint of trade. Id Complaint Counsel fuher asserts that all of 

the elements of a standard Sherman Act Section 1 violation are adequately alleged. Id With 

respect to Count II of the Complaint, Complaint Counsel states that it challenges conduct 

"amounting to monopolization and attempted monopolization." Id Complaint Counsel fuher 

asserts that "each and all of the elements of a standard Sherman Act Section 2 violation are 

adequately alleged." Id 

III. 

A. Motion to Dismiss Standard
 

Rule 3 .22( e) of the Commission's Rules of Practice authorizes the filing of a motion to 

dismiss a complaint. 16 C.F.R. § 3.22(e). Although the Commission's Rules of 
 Practice do not have a rule identical to Rule 12(b)(6) of 
 the Federal Rules of 
 Civil Procedure, the Commission 

has acknowledged a par's right to fie, and the Administrative Law Judge's authority to rule 

on, a motion to dismiss for failure to state a claim upon which relief could be granted. E.g., In re 

Times Mirror Co., 92 F.T.C. 230 (1978); In re Florida Citrus Mutual, 50 F.T.C. 959,961 (1954) 

(ALJ may "dismiss a complaint if in his opinion the facts alleged do not state a cause of 

action. "). 

Section 3.1 1 
 the Commission's Rules of
 (b)(2) of Practice sets forth that the 

Commission's complaint shall contain "a clear and concise factual statement sufficient to inform 

each respondent with reasonable definiteness of the tye of acts or practices alleged to be in 

violation ofthe law." 16 C.F.R. §3.11(b)(2). This rule requires only that the complaint contain
 

"a factual statement sufficiently clear and concise to inform respondent with reasonable 

definiteness of the tyes of acts or practices alleged to be in violation of law, and to enable 

respondent to frame a responsive answer." New England Motor Rate Bureau, Inc., 1986 FTC 

LEXIS 5, *114 (Dec. 12, 1986). "Commission complaints, like those in the federal cours, are 

designed only to give a respondent 'fair notice of 
 what . . . the claim is and the grounds upon

which it rests. ", Id (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). 

B. Analysis
 

As correctly stated by Complaint Counsel, the FTC does not and canot directly enforce 

the Sherman Act; however, conduct that violates the Sherman Act is generally deemed to 

constitute an unfair method of competition and. hence a violation of Section 5 of the FTC Act as 

welL. Opposition at 1; 15 U.S.C. §§ 1-7. Complaint Counsel urges that if 
 the Commission's 

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Complaint against Polypore states a cause of action under Sherman Act standards, then the 

Complaint necessarily states a cause of action under Section 5 of the FTC Act. Opposition at 1. 

Complaint Counsel fuher states that because the Commission's Complaint alleges 

claims consistent with Sherman Act liability standards that entitle Complaint Counsel to relief 

under Section 5, it is not necessary to explore or delineate the outer bounds of Section 5. Id at 

2. Indeed, according to Complaint Counsel, "whether Section 5 reaches beyond the Sherman 

Act. . . is irrelevant because each claim in the Commission's Complaint states a cause of action 

under traditional Sherman Act standards." Id at 4. 

Count II of the Complaint, titled "Unfair Method of 
 Competition," charges: "Daramic 

has, through the acquisition of Microporous, and the other conduct alleged herein, engaged in 

unair methods of competition in or affecting commerce in violation of Section 5 of the (FTC) 

Act." Complaint Counsel asserts that Count II is patterned after Sherman Act Section 1, not 

Sherman Act Section 2. Opposition at 6. Specifically, Count II of the Complaint challenges: (i) 

an agreement between competitors Daramic and Hollingsworth & V ose to allocate markets, and 

Microporous Products, L.P. Id Respondent does not argue that 

the Complaint is deficient in regard to the allegations modeled after Sherman Act Section 1. 

Instead, Respondent urges dismissal only with respect to monopolization or attempted 

monopolization claims - claims patterned after Sherman Act Section 2. Complaint Counsel has 

asserted that Count II does not allege Sherman Act Section 2 claims. Id Accordingly, 

Respondent's motion to dismiss Count II with respect to monopolization or attempted 

monopolization claims patterned after Sherman Act Section 2 is without merit and fails. 

(ii) Polypore's acquisition of 


Count II of 
 the Complaint, titled "Monopolization," like Count II, also charges: 

"Daramic has, through the acquisition of 
 Microporous, and the other conduct alleged herein, 

engaged in unair methods of competition in or affecting commerce in violation of Section 5 of 

the (FTC) Act." According to Complaint Counsel, Count II alleges the elements of 

monopolization and/or attempted monopolization in five relevant markets, patterned after 

Sherman Act Section 2. Id at 2, 7. Elements of a Sherman Act Section 2 monopolization case 

are: (1) the possession of monopoly power in the relevant markets; and (2) the wilful 

acquisition or maintenance of that power through predatory or anti 
 competitive conduct. Aspen 

Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585,595-96 (1985); United States v. 

Grinnell Corp., 384 U.S. 563, 570-71 (1966). Elements ofa Sherman Act Section 2 attempted 

monopolization case are: (1) that the defendant possesses monopoly power, and (2) has engaged 

in predatory or anti 
 competitive conduct with (3) a specific intent to monopolize, and (4) a 

dangerous probability of maintaining monopoly power. Spectrum Sports, Inc. v. McQuilan, 506 

U.S. 447, 456 (1993); Lorain Journal Co. v. United States, 342 U.S. 143, 154 (1951). The 

Complaint in this case makes allegations consistent with Sherman Act Section 2 liabilty 

standards. Complaint ~~ 2,4, 19-31,38-43,46,47. These allegations are sufficient to inform 

Respondent with reasonable definiteness of 
 the types of acts or practices alleged to be in 

violation of the law. 16 C.F.R. § 3.11(b)(2).
 

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iv.
 

The Commission's Complaint against Respondent states a cause of action under Sherman 

Act standards, thus, the Complaint necessarily states a cause of action under Section 5 of 


the FTC Act. The allegations in the Complaint suffciently inform Respondent of practices alleged 

to be in violation of the law consistent with Sherman Act liability standards. Accordingly, 

Respondent's motion to dismiss is DENIED. 

ORDERED: :D ÌV ç/_~tl

D. Michael Chappell 

Administrative Law Judge 

Date: December 4, 2008 

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