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UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRAE COMMISSION 

In the Matter of ) PUBLIC 

) Polyp ore International, Inc., ) Docket No. 9327 

a corporation. ) 

) 

COMPLAINT COUNSEL'S REPLY FINDINGS OF FACT 

TO INTERVENOR HOLLINGSWORTH & VOSE COMPANY'S 

PROPOSED FINDINGS OF FACT 

RICHARD A. FEINSTEIN 

Director 

NORMAN ARMSTRONG 

Acting Deputy Director 

Bureau of Competition 

CATHARINE MOSCATELLI 

Assistant Director 

MORRS BLOOM 

Deputy Assistant Director 

Bureau of Competition 

Mergers II 

October 13, 2009 

J. ROBERT ROBERTSON 

STEVEN DAH 

BENJAMIN GRIS 

JOEL CHRISTIE 

STEPHEN ANTONIO 

CHRISTIAN WOOLLEY 

PRIYA VISWANATH 

Federal Trade Commission 

Bureau of Competition 

600 Pennsylvania Ave., N.W. 

Washington, DC 20580 

Telephone: (202) 326-2008 

Fax: (202) 326-2884 

Counsel Supporting the Complaint 
1. H& V makes specialty, industral and technical papers and nonwovens for a variety of 

applications. H& V manufactures and sells, among other products, an absorptive glass mat 

(ltAGMIt) battery separator for use in valve-regulated lead acid (ltVRAIt) batteries in a 

variety of applications. (PX0925 at 3-5 (Porter Dep. at 15-21, in camera)). 

Response to H& V Findin2 No.1: 

Complaint Counsel objects to this proposed finding because it does not address how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. It does not 

comply with the Cour's Order on Motion for Leave to Intervene by Non-Part H&V, dated 

September 23,2009, (the "Order on Intervention by H&V"), which stated H&V was allowed to 

submit proposed findings of fact "only for the limited purose of' demonstrating how the 

proposed remedy might affect H& V's rights under the Cross Agency Agreement. This finding 

does not demonstrate how the proposed remedy might affect H&V's rights under the Cross 

Agency Agreement and should be rejected completely. 

2. Unlike polyethylene (ltPEIt) battery separators made by Daramic, H&V's AGM battery 

separators are not intended for use in flooded lead acid batteries, and are used instead in 

VRLA batteries. (CCFOF ~ 18; PX0925 at 5 (Porter Dep. at 21-23, in camera)). 

Daramic's flooded battery customers cannot substitute H& V's AGM battery separators 

for Daramic's PE battery separators, and H& V's VRA battery customers canot 

substitute Daramic's PE battery separator for H&V's AGM product. (PX0925 at 7-8 

(Porter Dep. at 28- 31, in camera)). Complaint Counsel maintains that AGM battery 

separators do not compete with Daramic's PE battery separators in the same markets. (see 

CC Post-Trial Br. at 25 & n.16). 

Response to H&V Findin2 No.2: 

Complaint Counsel objects to this proposed finding because it does not address how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. It does not 

comply with the Court's Order on Motion for Leave to Intervene by Non-Part H&V, dated 

September 23,2009, (the "Order on Intervention by H&V"), which stated H&V was allowed to 

submit proposed findings of fact "only for the limited purose of' demonstrating how the 

2
 
proposed remedy might affect H&V's rights under the Cross Agency Agreement. This finding 

does not demonstrate how the proposed remedy might affect H& V's rights under the Cross 

Agency Agreement and should be rejected completely. 

3. 

ReSDonse to H&V Findin2 No.3:
 

The proposed finding is incomplete. Complaint Counsel incorporates by reference
 

CCFOF 1184-1187 and CCRF 1124-1129. 

4. 

PX0917 at 77 Cu en Dep. .at 321-23, in 

camera)).
 

ReSDonse to H&V Findin2 No.4:
 

Complaint Counsel objects to this proposed finding because it does not address how the
 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. It does not 

comply with the Court's Order on Motion for Leave to Intervene by Non-Part H&V, dated 

September 23,2009, (the "Order on Intervention by H&V"), which stated H&V was allowed to 

submit proposed findings of fact "only for the limited purose of' demonstrating how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. This finding 

does not demonstrate how the proposed remedy might affect H&V's rights under the Cross 

Agency Agreement and should be rejected completely. 

3 
5. H& V expends time and effort in developing and maintaining customer relationships and 

its goodwill with those customers. (PX0917 at 77 (Cullen Dep. at 320-22, in camera)). 

H& V engineers work closely with customers to solve manufactu issues and 

customers reI on H& V's technical manufactun ex ertise. 

ReSDonse to H&V Findin2 No.5:
 

Complaint Counsel objects to this proposed finding because it does not address how the
 

proposed remedy might affect H& V's rights under the Cross Agency Agreement. It does not 

comply with the Court's Order on Motion for Leave to Intervene by Non-Part H&V, dated 

September 23,2009, (the "Order on Intervention by H&V"), which stated H&V was allowed to 

submit proposed findings of fact "only for the limited purose of' demonstrating how the 

proposed remedy might affect H& V's rights under the Cross Agency Agreement. This finding 

does not demonstrate how the proposed remedy might affect H& V's rights under the Cross 

Agency Agreement and should be rejected completely. 

6. In order to permit the paries to exchange confidential information about their sales and
 

distribution forces, customers and confidential technical information know-how and 

ricin the A eement rovided that 

ReSDonse to H&V Findin2 No.6:
 

Complaint Counsel also incorporates by reference CCFOF 1191 and 1195, and CCRF
 

1130-1132, which demonstrate that the 

_l to permit Daramic and H& V to exchange confidential information durg the course
 

of their agency relationship. 

7. Section 4 of 
 the Cross Agency Agreement states in relevant part: 

4
 
(Agreement § 4(a-b)). 

ReSDonse to H& V Findin2 No.7:
 

Complaint Counsel has no specific response. 

8. :. . :.:. ~fD 

ResDonse to H&V Findin2 No.8:
 

Because this proposed finding is a legal conclusion, without any factual support, it should
 

be rejected. The factual record shows that Daramic and H& V understood their arrangement 

under Sections 4( a) and (b) as a reciprocal obligation to stay out of each other's markets. (See 

CCFOF 1180-1182, 1191; CCRF 1123-1124). 

9. 

5 

l 
ReSDonse to H&V Findin2 No.9: 

With respect to the second sentence, Complaint Counsel objects to this proposed finding 

because it does not address how the proposed remedy might affect H&V's rights under the Cross 

Agency Agreement. It does not comply with the Court's Order on Motion for Leave to Intervene 

by Non-Part H&V, dated September 23,2009, (the "Order on Intervention by H&V"), which 

stated H& V was allowed to submit proposed findings of fact "only for the limited purose of' 

demonstrating how the proposed remedy might affect H& V's rights under the Cross Agency 

Agreement. This finding does not demonstrate how the proposed remedy might affect H& V's 

rights under the Cross Agency Agreement and should be rejected completely. Complaint 

Counsel incorporates by reference its Response to H&V Finding No. 11, below. 

ReSDonse to H&V Findin2 No. 10: 

Complaint Counsel objects to this proposed finding because it does not address how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. It does not 

comply with the Cour's Order on Motion for Leave to Intervene by Non-Part H&V, dated 

September 23,2009, (the "Order on Intervention by H&V"), which stated H&V was allowed to 

submit proposed findings of fact "only for the limited purose of' demonstrating how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. This finding 

does not demonstrate how the proposed remedy might affect H&V's rights under the Cross 

Agency Agreement and should be rejected completely. 

11. In the course of makin sales calls on behalf of H& V Daramic re resentatives_ 

. PX0917 at 077­

6
 
ReSDonse to H& V Findin2 No. 11:
 

Complaint Counsel objects to this proposed finding because it does not address how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. It does not 

comply with the Court's Order on Motion for Leave to Intervene by Non-Part H&V, dated 

September 23,2009, (the "Order on Intervention by H&V"), which stated H&V was allowed to 

submit proposed findings of fact "only for the limited purose of' demonstrating how the 

proposed remedy might affect H&V's rights under the Cross Agency Agreement. This finding 

does not demonstrate how the proposed remedy might affect H& V's rights under the Cross 

Agency Agreement and should be rejected completely. 

Complaint Counsel incorporates by reference CCFOF 1184-1186 and 1191, and CCRF 

1126-1129, which demonstrate 

_.l Complaint Counsel also incorporates by reference CCFOF 1195 and CCRF 1130­

1132, which demonstrate that the 

L durng the 

course of their agency relationship. 

The testimony of Mr. Cullen on which H&V relies 

.l (PX0917 at
 

077 (Cullen Dep. at 322, in camera)). No testimony or documentary evidence supports the 

conclusion that H&V appears to imply in the last sentence of 
 this proposed finding, namely, 

7
 
,l Complaint 

Counsel incorporates by reference its Response to H&V Finding No. 13, below.

12. - - . .

ReSDonse to H&V Findin2 No. 12: 

Complaint Counsel has no specific response. 

13. Complaint Counsel seeks an order requirng Daramic to modify the Cross Agency 

Agreement by declaring Sections 4(a) and (b) void and by ordering Daramic to refrain 

from Itimplementing or enforcinglt either sub-sections 4(a) or 4(b). The requested relief 

requires the Respondent to do as follows: 

1. Within fifteen (15) days after the date this Order becomes final:
 

(a) modif and amend the H& V Agreement in writing to terminate and 

declare null and void, and (b) cease and desist from, directly or indirectly, 

or through any corporate or other device, implementing or enforcing, the 

covenant not to compete setforth in Section 4 of 
 the H& V Agreement, and 

all related terms and definitions, as that covenant applies to North America 

and to actual and potential customers within North America. 

2. Within thirt (30) days after the date this Order becomes final,
 

fie with the Commission the written amendment to the H& V Agreement 

(It Amendmentlt) that complies with the requirements of Paragraph VI.A.1
 

(sic J . 

(CC Proposed Order VIII.A, at 26-27 (emphasis added)). 

1 Aside from deposition testimony ofH&V employees and exhibits taken from H&V's document 

production, H&V has not been provided access to in camera exhibits. The citation to PXOl58 is taen from 

Complaint Counsel's Exhibit List (pXOOOI at 004), which is described as "Cross Agency Agreement - Renewal 

and Daramc Correspondence." H& V does not know what is meant b "DaramIc Corres ondence" and 

_. 

understands the Renewal to the Cross A enc A eement to be

8 
ReSDonse to H& V Findin2 No. 13:
 

Complaint Counsel does not disagree. For clarity and completeness, it should be noted 

that Complaint Counsel does not seek to modify 

l. (See PX0094 at 007-008 and 012, in camera).
 

ReSDonse to H&V Findin2 No. 14: 

Because this proposed finding is a legal conclusion, without any factual support, it should 

be rejected. To the extent any such "valuable propert right" derives from the overbroad and 

unlawful agreement to refrain from competition, it is not cognizable in antitrust law and would 

not be accepted by this Cour. 

15. If the requested relief were to be awarded with res 

4 a Daramic would be entitled to 

L within fifteen days 0
 

final order. (Agreement § 4(a); CC Proposed Order VIII.A(1)). 

ReSDonse to H&V Findin2 No. is: 

This proposed finding is a legal conclusion, and impermissibly speculative. Complaint 

Counsel also incorporates by reference its Response to H&V Finding No. 14 above. For 

completeness, it should be noted that - assuming Intervenor's assertion is correct - the requested 

relief would permit H& V to 

,l which is a pro-competitive result. Furhermore, the parties 

to the Cross Agency Agreement have agreed 

9
 
_l (PX0094-010, in camera)? Thus, the Cour can modify the terms ofthe Agreement to
 

allow Daramic and H&V to compete head-to-head in Nort America 

l. 

10
 
Dated: October 13,2009 Respectfully submitted,
 

~~/~R~

J. obert Robertson
 

Complaint Counsel
 

Bureau of Competition
 

Federal Trade Commssion
 

600 Pennsylvania Ave, NW (H-374)
 

Washington, DC 20580
 

Telephone: (202) 326-2008
 

Facsimile: (202) 326-2214
 

11
 
CERTIFICATE OF SERVICE 

I hereby certify that on October 13, 2009, I fied via hand and electronic mail delivery an 

original and two copies of the foregoing public version of 
 Complaint Counsel's Reply Findings 

of Fact To Intervenor Hollingsworth & Vose Company's Proposed Findings of Fact with: 

Donald S. Clark, Secretary 

Office of the Secretary 

Federal Trade Commission 

600 Pennsylvania Avenue, NW, Rm. H-135 

Washington, DC 20580 

I hereby certify that on October 13,2009, I fied via hand delivery two copies of the 

foregoing public version of Complaint Counsel's Reply Findings of Fact To Intervenor 

Hollingswort & Vose Company's Proposed Findings of Fact with:
 

The Honorable D. Michael Chappell
 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Avenue, NW 

Washington, DC 20580 

I hereby certify that on October 13,2009, I fied via electronic mail delivery a copy of the 

foregoing public version of Complaint Counsel's Reply Findings of Fact To Intervenor 

Hollingswort & V ose Company's Proposed Findings of Fact with: 

William L. Rikard, Jr., Esq. Kathr K. Conde 

Eric D. Welsh, Esq. Jonathan D. Persky 

Parker, Poe, Adams & Bernstein, LLP Nutter McClennen & Fish LLP 

401 South Tryon Street, Suite 3000 155 Seaport Boulevard 

Charlotte, North Carolina 28202 World Trade Center West 

williaimikard(aparkerpoe.com Boston, MA 02210 

ericwelsh(qparkerpoe.com kconde(cùnutter. com 

i persky(qnutter. com 

.(1' r-
 By: \ r-j
 

. a D. Cuningham
 

Federal Trade Commis 'on 

600 Pennsylvania Avenue, 

Washington, DC 20580 

Telephone: (202) 326-2638 

lcunningham(aftc.gov