___________________________________ 

 

 

 

 

 

 

 

 

 

 

 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES 

PUBLIC 

01 25 2013 

) 

In the Matter of ) 

) 

MCWANE, INC., ) 

a corporation, and ) 

STAR PIPE PRODUCTS, LTD., ) 

 a limited partnership. ) 

) 

__________________________________ ) 

PUBLIC 

DOCKET NO. 9351 

POST TRIAL REPLY BRIEF OF RESPONDENT MCWANE, INC.
 

J. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

Attorneys for Respondent McWane, Inc. 

Dated: January 25, 2013 

 Joseph A. Ostoyich 

 Erik T. Koons 

William C. Lavery 

 Heather Souder Choi 

Baker Botts L.L.P. 

 The Warner 

 1299 Pennsylvania Ave., N.W.

 Washington, D.C. 20004-2420 
PUBLIC 

RECORD REFERENCES 

References to the record are made using the following citation forms and abbreviations: 

JX# – Joint Exhibit 

CX# – Complaint Counsel Exhibit 

RX# – Respondent Exhibit 

Name of Witness, Tr. xx – Trial Testimony 

JX/CX/RX# (Name of Witness, Dep. at xx) – Deposition Testimony 

JX/CX/RX # (Name of Witness, IHT at xx) – Investigational Hearing Testimony 

JSLF ¶ x – Joint Stipulations of Law and Fact 

Complaint ¶ x – Complaint Counsel’s Complaint filed January 4, 2012 

Answer ¶ x - Respondent McWane, Inc’s Answer to Complaint 

RRFA No. x - Respondent’s Response to Complaint Counsel’s Requests for Admission. 

CRFA No. x – Complaint Counsel’s Response to Respondent’s Requests for Admission 

{ bold } - In Camera Material 

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TABLE OF CONTENTS
 

INTRODUCTION ...........................................................................................................................1 

DISCUSSION OF LEGAL ANALYSIS.........................................................................................7 

I. COMPLAINT COUNSEL FAILED TO MEET ITS BURDEN OF PROVING A 

SEPARATE MARKET FOR DOMESTIC FITTINGS ......................................................7 

II. COMPLAINT COUNSEL’S CONSPIRACY ARGUMENTS ARE
 

CONTRADICTED BY THE OVERWHELMING FACT RECORD ..............................11 

A. Complaint Counsel Failed To Proffer Any Direct Evidence That McWane 

Agreed To Fix Published Prices Or To Eliminate Or Reduce Job Discounts........11 

B. Complaint Counsel’s Claimed Circumstantial Evidence Is Insufficient As A 

Matter Of Law........................................................................................................16 

1. Complaint Counsel Failed To Establish The Prerequisite Of Parallel 

Conduct......................................................................................................17 

2. Complaint Counsel’s “Plus Factors” Are All “Minus Factors,” 

Consistent With McWane’s Self-Interest ..................................................19 

a) A Concentrated Market Is Insufficient To Infer A Preceding 

Agreement On Published Prices Or Job Price Discounts...............23 

b) Complaint Counsel And Dr. Schumann’s Speculation About 

CX 627 Is Contradicted By The Evidence .....................................24 

c) DIFRA’s Tons-Shipped Data Does Not Suggest A Preceding 

Agreement On Published Prices Or Job Price Discounts...............26 

d) Internal Star Documents Referencing “Cheating” Show 

Ongoing Job Pricing And Do Not Suggest That McWane Was
 

Involved In A Preceding Agreement..............................................29 

e) The Two Emails Cited By Complaint Counsel Are Consistent 

With Ongoing Job Discounting And Do Not Suggest An
 

Agreement ......................................................................................30 

f) A Handful Of Phone Calls And Other “Opportunities To 

Conspire” Between Sigma And McWane Personnel Were 

Legitimate And Do Not Suggest A Preceding Agreement On 

Published Prices Or Job Discounts.................................................33 

(1) The Few Phone Calls Between Mr. Rybacki And Mr. 

Tatman (And Mr. Frank) Were Perfectly Legitimate ........33 

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(2) Mr. Pais’ Legitimate Discussions With Mr. Page Do 

Not Suggest Any Agreement on Published Prices Or 

Job Discounts .....................................................................36 

C. Complaint Counsel’s April 2009 Evidence Is Consistent With Independent 

Decision-Making....................................................................................................38 

D. McWane’s Independent Decision To Issue Its June 2010 Multipliers, And 

The Independent Decisions by Star and Sigma to Follow McWane’s 

Announcement, Were Lawful Oligopoly Behavior ...............................................41 

E. Complaint Counsel’s Alternate “Invitation To Collude” Via Price Signaling 

Theory In McWane’s January And May 2008 Letters Is Defective As A 

Matter Of Law........................................................................................................43 

III.	 THE TONS SHIPPED DIFRA DATA DID NOT FACILITATE COLLUSION ............47 

IV. THE MASTER DISTRIBUTORSHIP AGREEMENT WITH SIGMA WAS PROCOMPETITIVE AND DID NOT EXCLUDE SIGMA FROM DOMESTIC 

FITTINGS .........................................................................................................................49 

A. The MDA Was Pro-Competitive And Did Not Harm Competition Or
 

Consumers..............................................................................................................55 

V. MCWANE DID NOT MONOPOLIZE OR ATTEMPT TO MONOPOLIZE THE
 

PURPORTED MARKET FOR DOMESTIC FITTINGS..................................................56 

A. McWane Did Not Have Monopoly Power Over All Fittings Or Domestic 

Fittings....................................................................................................................58 

B. McWane Did Not Exclude Star From Domestic Fittings ......................................60 

VI. COMPLAINT COUNSEL FAILED TO PROVE THAT MCWANE OR SIGMA 

HAD THE REQUISITE “SPECIFIC INTENT” TO MONOPOLIZE DOMESTIC 

FITTINGS ..........................................................................................................................65
 

VII. COMPLAINT COUNSEL IS NOT ENTITLED TO ITS PROPOSED REMEDY...........68 

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TABLE OF AUTHORITIES
 

Page(s) 

CASES 

A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc., 

881 F.2d 1396 (7th Cir. 1989) .................................................................................................66 

AD/SAT v. Associated Press, 

181 F.3d 216 (2d Cir. 1999).....................................................................................................58 

Advo, Inc. v. Philadelphia Newspapers, Inc., 

51 F.3d 1191 (3d Cir. 1995)...............................................................................................61, 66 

Allied Orthopedic Appliances Inc. v. Tyco Health Care Group LP, 

592, F.3d 991, 996 (9th Cir. 2010) ..........................................................................................63 

Am. Tobacco Co. v. United States, 

328 U.S. 781 (1946).................................................................................................................16 

American Counsel of Certified Pediatric Physicians & Surgeons v. American Board. of 

Podiatric Surgery, Inc., 

185 F.3d 606 (6th Cir. 1999) ...................................................................................................59 

Ball Mem’l Hosp., Inc. v. Mut. Hosp. Ins., Inc., 

784 F.2d 1325 (7th Cir. 1986) .................................................................................................59 

Barr Labs., Inc. v. Abbott Labs., 

978 F.2d 98 (3d Cir. 1992).......................................................................................................59 

Belfiore v. The New York Times Co., 

826 F.2d 177 (2nd Cir. 1987)...................................................................................................66 

Bell Atl. Corp. v. Twombly, 

550 U.S. 544 (2007).....................................................................................................15, 19, 38 

Blomkest Fertilizer, Inc. v. Potash Corp. of Saskatchewan, Inc., 

176 F.3d 1055 (8th Cir. 1999) ...............................................................................17, 19, 39, 41 

Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 

140 F.3d 494 (3rd Cir. 1998) ...................................................................................................10 

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 

509 U.S. 209 (1993).....................................................................................................19, 23, 61 

Burtch v. Milberg Factors, Inc., 

662 F.3d 212 (3d Cir. 2011).........................................................................................28, 35, 38 

iv 
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Cable Holdings of Ga., Inc. v. Home Video, Inc., 

825 F.2d 1559 (11th Cir. 1987) ...............................................................................................51 

Catalano, Inc. v. Target Sales, Inc., 

446 U.S. 643 (1980).................................................................................................................45 

City of Moundridge v. Exxon Mobil Corp., 

429 F. Supp. 2d 117 (D.D.C. 2006), aff’d City of Moundridge v. Exxon Mobil Corp., 

409 F. App’x. 362 (D.C. Cir. 2011)...................................................................................15, 22 

Clamp-All Corp. v. Cast Iron Soil Pipe Inst., 

851 F.2d 478 (1st Cir. 1988)..................................................................................18, 19, 22, 23 

Collins v. Wayne Corp., 

621 F.2d 777 (5th Cir.1980) ....................................................................................................40 

Copperweld Corp. v. Independence Tube Corp., 

467 U.S. 752 (1984).................................................................................................................16 

Cosmetic Gallery, Inc. v. Schoeneman Corp., 

495 F.3d 46 (3d Cir. 2007).......................................................................................................36 

Defiance Hosp. v. Fauster-Cameron, Inc., 

344 F. Supp. 2d 1097 (N.D. Ohio 2004)..................................................................................59 

E. Food Servs., Inc. v. Pontifical Catholic Univ. Servs. Ass’n, Inc. 

357 F.3d 1 (1st Cir. 2004)........................................................................................................63 

E.I. duPont de Nemours & Co. v. FTC, 

729 F.2d 128 (2d Cir. 1984).....................................................................................................46 

eBay Inc. v. MercExchange, L.L.C., 

547 U.S. 388 (2006).................................................................................................................67 

Engine Specialties, Inc. v. Bombardier, Ltd., 

605 F.2d 1 (1st Cir. 1979)..................................................................................................53, 54 

FTC v. Swedish Match, 

131 F. Supp. 2d 151 (D.D.C. 2000).........................................................................................11 

Gas Utilities Co. of Alabama. v. S. Natural Gas Co., 

996 F.2d 282 (11th Cir. 1993) .................................................................................................51 

Gateway Contr. Servs., LLC v. Sagamore Health Network, Inc., 

2002 WL 731686 (S.D. Ind. Mar. 20, 2002)..............................................................................9 

Gibson v. Greater Park City Co., 

818 F.2d 722 (10th Cir. 1987) .................................................................................................16 

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Glendale Federal Bank, F.S.B. v. United States, 

39 Fed. Cl. 422 (Fed. Cl. 1997) ...............................................................................................40 

Hayes v. Solomon, 

597 F.2d 958 (5th Cir. 1979) ...................................................................................................52 

In re Baby Food Antitrust Litig, 

166 F.3d 112 (3d Cir. 1999)...........................................................14, 15, 24, 28, 33, 39, 43, 45 

In re Beef Industry Antitrust Litig., 

907 F.2d 510 (5th Cir. 1990) ...................................................................................................17 

In re Citric Acid Litigation, 

191 F.3d .....................................................................................................19, 22, 23, 28, 43, 48 

In re Flat Glass Antitrust Litig., 

385 F.3d 350 (3d Cir. 2004)...................................................................................15, 24, 35, 43 

In re High Fructose Corn Syrup Antitrust Litigation, 

295 F.3d 651 (7th Cir. 2002) .............................................................................................20, 21 

In re Ins. Brokerage Antitrust Litig., 

618 F.3d 300 (3rd Cir. 2010) ...................................................................................................19 

In re National Association of Music Merchants, Musical Instruments and Equipment 

Antitrust Litigation, 

MDL No. 2121, 2012 WL 3637291 (S.D. Cal., Aug. 20, 2012) .............................................18 

In re Travel Agent Commission Antitrust Litig., 

583 F.3d 896 (6th Cir. 2009) .............................................................................................36, 38 

In re U-Haul Int’l Inc., 

FTC File No. 081 0157 (F.T.C. July 14, 2010). (CC’s Op. Br. at 94.)....................................46 

In re Valassis Commc’ns, Inc., 

FTC File No. 051-0008, 2006 WL 1367833 (F.T.C. April 19, 2006) .....................................46 

Intervest, Inc. v. Bloomberg, L.P., 

340 F.3d 144 (3d Cir. 2009).....................................................................................................24 

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 

466 U.S. 2 (1984) (O’Connor, J., concurring).........................................................................63 

Kreuzer v. American Academy of Periodontology, 

735 F.2d 1479 (D.C. Cir. 1984)...............................................................................................26
 

Lamb’s Patio Theatre, Inc. v. Universal Film Exchanges, Inc., 

582 F.2d 1068 (7th Cir. 1978) .................................................................................................15 

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Lantec, Inc. v. Novell, Inc., 

306 F.3d 1003 (10th Cir. 2002) ...........................................................................................9, 65 

Martin v. Phillips Petroleum Company, 

365 F.2d 629 (5th Cir. 1966) ...................................................................................................51 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

475 U.S. 574 (1986)...........................................................................................................16, 35 

McGahee v. Northern Propane Gas Co., 

658 F.Supp. 189 (N.D. Ga. 1987)............................................................................................57 

McLaughlin Equipment Co., Inc. v. Servaas, 

No. IP98-127-C-T/K, 2004 WL 1629603 (S.D. Ind. Feb. 18, 2004)...................................9, 10 

Metro Indus., Inc. v. Sammi Corp., 

82 F.3d 839 (9th Cir. 1996) .......................................................................................................9 

Metro Mobile CTS, Inc. v. NewVector Commc’ns, Inc., 

892 F.2d 62 (9th Cir. 1989) .....................................................................................................58 

Moecker v. Honeywell Int’l, Inc., 

144 F. Supp. 2d 1291 (M.D. Fla. 2001)...................................................................................59 

Monsanto Co. v. Spray-Rite Serv. Corp., 

465 U.S. 752 (1984)...........................................................................................................16, 48 

NicSand, Inc. v. 3M Co., 

507 F.3d 442 (6th Cir. 2007) ...................................................................................................64 

Oahu Gas Serv., Inc. v. Pacific Res., Inc., 

838 F.2d 360 (9th Cir. 1988) (“Oahu Gas”)......................................................................58, 59 

Omega Envtl., Inc. v. Gilbarco, Inc., 

127 F.3d 1157 (9th Cir. 1997) .................................................................................................61 

PPG Industries, Inc. v. Payne, 

2012 WL 1836314 ...................................................................................................................66 

Race Tires Am. Inc. v. Hoosier Racing Tire Corp., 

614 F.3d 57 (3d Cir. 2010).......................................................................................................64 

Rebel Oil Co. v. Atlantic Richfield Co., 

51 F.3d 1421 (9th Cir. 1995) ...............................................................................................9, 56 

Reserve Supply Corp. v. Owens-Corning Fiberglas Corp., 

971 F.2d 37 (7th Cir. 1992) ...............................................................................................19, 45 

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Sugar Inst. v. United States, 

297 U.S. 553 (1936).....................................................................................................20, 21, 22 

Summers v. Earth Island Inst., 

555 U.S. 488 (2009).................................................................................................................67 

Sunbeam Television Corp., v. Nielsen Media Research, Inc., 

763 F. Supp. 2d 1341 (S.D. Fla. 2011) ....................................................................................52 

Tampa Elec. Co. v. Nashville Coal Co., 

365 U.S. 320 (1961).................................................................................................................63 

Theatre Enter., Inc. v. Paramount Film Distributing Corp., 

346 U.S. 537 (1954).................................................................................................................19 

Top Mkts., Inc. v. Quality Mkts, Inc., 

142 F.3d 90 (2d Cir. 1998).......................................................................................................61 

U.S. Anchor Mfg. Inc. v. Rule Indus., Inc., 

7 F.3d 986 (11th Cir. 1993) ...............................................................................................57, 65 

United States v. Am. Airlines, Inc., 

570 F. Supp. 654 (N.D. Tex. 1983), rev’d on other grounds, 743 F. 2d 1114 (5th Cir. 

1984) ........................................................................................................................................45 

United States v. Consol Packaging Corp., 

575 F.2d 117 (7th Cir. 1978) ...................................................................................................46 

United States v. E.I. du Pont de Nemours & Co., 

351 U.S. 377 (1956)...................................................................................................................9 

United States v. Grinnell Corp., 

384 U.S. 563 (1966).................................................................................................................58 

United States v. U.S. Gypsum Co., 

438 US 422 (1978)...................................................................................................................28 

Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 

540 U.S. 398 (2004) (“Verizon”) .............................................................................................58 

Wal-Mart Stores, Inc. v. Dukes, 

131 S. Ct. 2541 (2011).............................................................................................................67 

Williamson Oil Co. v. Philip Morris USA, 

346 F.3d 1287 (11th Cir. 2003) .............................................................................18, 28, 45, 48 

Winter v. Natural Res. Def. Council, Inc., 

555 U.S. 7 (2008).....................................................................................................................67 

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Yamaha Motor Co. v. FTC, 

657 F.2d 971 (8th Cir. 1981) .............................................................................................51, 54 

Yankee Atomic Elec. Co. v. U.S., 

2004 WL 2450874 (Fed. Cl. 2004)..........................................................................................40 

STATUTES 

FTC Act Section 5 .........................................................................................................................46 

Sherman Act Section 2.............................................................................................................45, 58 

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Respondent McWane, Inc. (“McWane”) submits the following Post Trial Reply Brief in 

support of its Proposed Findings of Fact and Conclusions of Law. 

INTRODUCTION 

At trial and in its post-trial submissions, Complaint Counsel alleges a complicated and 

convoluted horizontal conspiracy (the so-called “Tatman Plan”) among McWane and its 

competitors, Sigma and Star, that somehow vaguely affected pricing. At times, Complaint 

Counsel argued it was “one conspiracy” lasting several years, but its own expert disagreed with 

that and claimed the conspiracy he opined was much, much shorter. At times, Complaint 

Counsel suggested there were overt price discussions. But, again, its own expert flatly disagreed. 

Moreover, during the same time period Complaint Counsel alleges the parties were in agreement 

with each other, it also conversely accuses McWane of hostile, exclusionary conduct towards the 

same alleged co-conspirators. 

Surprisingly, however, a simple comparison of McWane’s and Complaint Counsel’s 

proposed Findings of Fact reveals material agreement on a number of crucial (and, ultimately, 

dispositive) issues: 

•	 There was no evidence of any agreement in a “smoke filled” meeting among the 

competitors and, indeed, Complaint Counsel’s expert concedes “I have not found 

anything to suggest” such an agreement; 

•	 McWane made its pricing decisions independently at all times and did not agree with 

Sigma or Star on its January or June 2008 imported Fittings multipliers, its April 2009 list 

prices, or its June 2010 multipliers; 

•	 McWane, Sigma and Star all continued to offer hundreds of job price discounts below 

published multipliers and rebates and other prices concessions to win specific jobs during 

the alleged conspiracy period; 

•	 There is no evidence of a parallel change in the amount or level of job pricing; 

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•	 The trial record contains dozens of sworn denials of any price agreements from every 

single McWane, Sigma and Star witness who appeared at trial, including flat denials of 

any agreement to eliminate or reduce job pricing; 

•	 The trial record contains more than 250 additional sworn denials of any pricing 

agreements in deposition and investigational hearing testimony; 

•	 Not one witness testified that there were any pricing communications between McWane 

and either Star or Sigma; 

•	 Complaint Counsel’s own expert testified that the only “communications” he identified - 

- a handful of customer letters and announcements - - did not contain the key tenets of the 

conspiracy he opined; 

•	 Each member of DIFRA testified that they never discussed Fittings prices or exchanged 

any sales or pricing information, and flatly denied that the tons-shipped data suggested 

anything about prices or that it impacted their decisions; 

•	 Complaint Counsel’s own expert testified that the DIFRA data could not be used to 

divine pricing actions; 

•	 Star succeeded in expanding into virtual manufacturing of domestic Fittings in roughly 

six months between Spring and Fall 2009, and grabbed of the market with over

 domestic customers in its first year; 

•	 Star doubled its share of domestic Fittings to in 2011, and was on pace to have its 

best domestic Fittings year yet in 2012; 

•	 Star’s customers included the largest waterworks distributors (HD Supply and Ferguson) 

in the United States as well as dozens of regional and local distributors; 

•	 Complaint Counsel concedes it cannot identify a single distributor - - out of 

approximately 630 - - that wanted to buy Star’s domestic Fittings, but did not because of 

McWane’s rebate policy; and 

•	 McWane did not exclude Sigma from production of domestic Fittings, as Sigma’s dire 

financial situation in 2009 prevented it from taking the concrete steps necessary to 

expand into domestic Fittings during the brief ARRA period. Indeed, the facts were so 

flimsy, Complaint Counsel asked its expert to assume Sigma would have entered. 

Equally telling is what the evidence does NOT show. After nine (9) weeks of trial 

composed entirely of testimony from government witnesses (with the exception of McWane’s 

single expert witness), Complaint Counsel failed to answer some of the most fundamental 

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questions presented by each and every conspiracy case. Specifically, Complaint Counsel did not 

(and cannot) tell us: 1) what the “agreement” was;1

 2) when it started or ended;2 3) how it was 

reached; 3 or 4) even whether it was implemented or successful (especially since Complaint 

Counsel and its expert made no effort to quantify the amount of project pricing before, during 

and after the alleged conspiracy).4 

In contrast, the McWane executive in charge of the company’s Fittings operations, Rick 

Tatman, presented cogent and consistent explanations for all of McWane’s pricing actions - ­

explanations which demonstrate clear competitive, not collusive, decisions. In the face of a 

severe economic downturn and in response to dramatic market share losses, McWane decided on 

a comprehensive competitive approach. Rather than follow large list price increases announced 

by Sigma and Star, the company elected to underprice its competitors in Winter 2008 and 

1

 There is no description of any “agreement” beyond a vaguely-defined desire to “curtail” project pricing. There is 

no description of what would be curtailed, by how much, for what job and when the “curtail[ment]” was going to 

occur. Complaint Counsel and its expert, however, do concede that the objective of the “Plan” was not to stop 

project pricing entirely but only to reduce or curtail it in some fashion. The questions left unanswered, however, are 

how much reduction was to take place (only a specific number of projects not to be project priced? if so, which ones 

or in what areas? only a limited reduction off published multipliers? if so, how much?). Other than a conclusory 

statement that the agreement was to “cut back” project pricing, Complaint Counsel has never explained the actual 

supposed details. 

2

 The Complaint unambiguously states, “Beginning in January, 2008 . . . ,” but Dr. Schumann suggested both a later 

date (after the companies’ customer letters in late January) and an earlier date (Fall 2007) with no solid factual basis 

for either. It is even more unclear when the alleged conspiracy ended. Complaint Counsel argued that there was 

“one conspiracy” lasting until mid-2010, but Dr. Schumann disagreed and opined that the conspiracy was over years 

earlier (he claimed it “fell apart” in the Fourth Quarter of 2008). The Complaint, in contrast, alleged yet another end 

date: that ARRA’s enactment in February of 2009 “upset the terms of coordination.” 

3

 Complaint Counsel and its expert admit that it was not reached in a “smoke filled” room at a specific meeting, but 

rather, only vaguely imply that it was reached as part of unspecified phone calls or “coded” messages. Specifically, 

Complaint Counsel trumpeted stacks of phone records at trial, which it references repetitively in literally dozens of 

proposed Findings, but only a small handful actually involved McWane. Yet, the crux of Complaint Counsel’s case 

is the so-called “Tatman Plan” and its alleged use of customer pricing letters to “signal” messages to competitors. 

The convoluted “Tatman Plan” also involved the alleged creation of a sham trade association (and the hiring and 

implied duping of antitrust counsel retained in connection with the association) as well as a “coded” customer letter 

in Spring, 2008 that only made sense to Sigma and Star. What is extremely unclear is why such a complicated 

“Plan” was necessary if senior executives routinely called one another to discuss pricing. 

4

 One would expect that a wide-scale effort to curtail project pricing by the three largest suppliers could be measured 

in some fashion. Dr. Schumann, however, admittedly made no effort to quantify the alleged reduction in project 

pricing at all. 

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indeed, in many instances, to decrease its own existing published multipliers. The strategy was 

aimed at increasing volume, reducing inventory, regaining share and ultimately, keeping 

McWane’s foundries open and operational. 

When confronted with another large price increase by his competitors in Spring 2008 

(Sigma’s “Big Bold Move, Baby”), Mr. Tatman again followed the strategy he had initially 

advocated and underpriced his competitors. Significantly, McWane (as well as Star and Sigma) 

continued to project price throughout the relevant timeframe, as well as offer a host of other 

price concessions (including rebates, cash discounts, freight allowances, payment terms and the 

like). 

The evidence was clear that the fittings marketplace was defined by aggressive and fierce 

price competition, that Mr. Tatman barely knew Sigma and Star’s price decision-makers 

(Sigma’s Mr. Rybacki and Star’s Mr. McCutcheon) and every single witness testified they never 

discussed prices with McWane. Moreover, they testified they distrusted each other’s public 

price letters and always made their own assessment of where to price their Fittings.. In sum, 

McWane consistently competed on price. It undercut Sigma and Star’s published prices in 

Winter and Spring 2008, it lowered its list prices dramatically in Spring 2009, and it always 

offered job discounts, rebates and other price concessions, as did Sigma and Star. There was 

simply no hard evidence to the contrary, leaving only Complaint Counsel’s unsupported theories. 

In addition, the alleged role that DIFRA played, which was central to Complaint 

Counsel’s horizontal conspiracy theory, did not hold up to scrutiny. First, there were no price 

communications at all at any DIFRA meeting. Second, Complaint’s Counsel’s amorphous 

DIFRA theory was flatly rejected by the witnesses: indeed, not a single witness testified that the 

DIFRA data was utilized to decide to pull their competitive punches or to stop or reduce job 

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discounting. Rather, they unanimously explained that the DIFRA data was utilized for the 

legitimate purposes of production planning, inventory management, and general industry data 

needed by lenders. Finally, the evidence at trial also demonstrated that pricing declined during 

the brief period that DIFRA was operational and that market shares were not stable.5 

In similar fashion, Complaint Counsel has not and cannot prove its monopoly claims. As 

with its horizontal case, Complaint Counsel at trial and in its post-trial submissions suggests a 

complicated and nefarious scheme6 while McWane provides a simple and economically-rational 

explanation for its conduct. 

By early 2009, the domestic Fittings industry was on its last legs. Traditional long-time 

domestic foundries had abandoned the market. McWane itself had shut its Tyler foundry, and its 

last remaining domestic Fittings foundry (Union Foundry) was operating at a fraction of its 

capacity. A flood of cheap imports from China, Korea, India, Mexico, and Brazil had opened the 

vast majority of specifications to overseas product and decimated domestic Fittings. Imports 

were 80-85% of all Fittings bought in the U.S., and domestic Fittings were 15-20% and 

dropping. When ARRA with its accompanying “Buy American” preference was enacted, 

McWane modified its voluntary rebate program, commonly known as a competitive price cut, in 

a weak effort to get customers to support the production volume it needed to stay afloat at its 

struggling plant by discouraging “cherry-picking” by distributors. The evidence was 

overwhelming that this short-term (12 week) and voluntary policy was viewed by Star as being 

5

 Complaint Counsel’s theory about DIFRA’s role was also severely undermined by Dr. Schumann’s testimony. Dr. 

Schumann testified that the companies’ invoice price data was so dated, incomplete, and riddled with errors as to be 

completely unusable for determining pricing activity. If Dr. Schumann is correct, it begs the question how the 

aggregated volume data on those very same invoices, which was the basis for the DIFRA reports, could be used for 

that purpose. Complaint Counsel cannot have it both ways - - either the data is reliable and Dr. Schumann could 

have analyzed it, or it is not and the DIFRA reports could not have been used as alleged. In any event, the fact 

witnesses flatly contradicted Dr. Schumann’s theorizing. 

6

 Importantly, it is also a scheme utterly inconsistent with the horizontal price agreement conspiracy. 

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“more bark than bite” and that Star successfully and quickly grabbed 100-plus distributors and 

almost 10% of the market. 

Lastly, Complaint Counsel challenges McWane’s pro-competitive agreement to sell 

domestic Fittings to its competitor Sigma. Despite the fact that this arrangement provided 

volume to McWane’s domestic foundry, increased domestic output, improved the efficiency and 

timeliness of service to distributors who purchased domestic Fittings, provided a domestic option 

to distributors who did not have a relationship with McWane, and allowed Sigma to sell 

domestic fittings in the marketplace, Complaint Counsel argues that it somehow excluded Sigma 

from domestic manufacturing. The evidence was overwhelming to the contrary. 

All of Sigma’s top three (3) executives testified that Sigma did not have the financial 

wherewithal for such an undertaking, and their testimony was completely supported by the 

company’s contemporaneous financial documents. Sigma was simply not an actual potential 

competitor. The rejoinder that somehow Sigma would have found a way to finance such a “very, 

very risky” project in the extraordinarily short timeframe involved is pure speculation. 

Significantly, the evidence was so flimsy that Complaint Counsel asked its expert to simply 

assume that Sigma could have and would have entered (in some vague way). In essence, 

Complaint Counsel asks this Court to substitute’s Complaint Counsel’s assumption for the 

uniform business judgment of Sigma’s management. 

It is a fundamental axiom of the antitrust laws that they are designed to protect 

competition, not competitors. Here, McWane’s conduct increased competition at every turn. 

During 2008 McWane consistently undercut its rivals in every dimension of price, negating any 

inference of collusion. In 2009 McWane agreed to provide a supply of domestic fittings to a 

rival otherwise incapable of developing an independent source of manufacture, thereby 

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enhancing competition for customers during ARRA. It offered a voluntary rebate program in an 

effort stave off Star’s cherry-picking and keep Union Foundry afloat (and its people employed). 

It did not increase domestic Fittings prices in any material way (and, indeed, expressly avoided 

the very idea that customers would worry it might try to gouge them during the ARRA period). 

As a result, its domestic Fittings invoice prices were slightly lower than Star’s across the 

country. Moreover, McWane’s rebate letter did not deter Star. Star successfully exploded into 

the manufacture and sale of domestic fittings, catapulting from 0% to 10% market share quickly 

and effectively. Competition could not have been more robust, despite the theoretical, 

philosophical, and political desires of Complaint Counsel. 

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DISCUSSION OF LEGAL ANALYSIS
 

I.	 COMPLAINT COUNSEL FAILED TO MEET ITS BURDEN OF PROVING A 

SEPARATE MARKET FOR DOMESTIC FITTINGS 

Complaint Counsel’s “monopoly” claims hinge, in part, on the threshold question of 

whether domestic Fittings constitute their own separate product market - - entirely distinct from 

imported Fittings. If they do not, and all Fittings are a single market, then the monopoly counts 

fail. Indeed, the Complaint did not allege that McWane possessed monopoly power over all 

Fittings, and Dr. Schumann conceded that McWane did not have any such power. (Schumann 

Tr. 4535-37 (“I do not believe they are a monopolist”).) 

The record evidence established that all Fittings compete against each other in a single 

market. Complaint Counsel concedes that imported and domestic Fittings are “commodity 

products” that are “functionally interchangeable” wherever they are made, (CC’s Opp. Br. At 

10), and does not challenge the evidence at trial which demonstrated that (1) the ITC 

unanimously determined in 2003 that a surge of Chinese imports not only competed head to head 

with domestic Fittings, but had “materially damaged” domestic fittings producers, (2) there has 

long been vigorous competition to open specifications and, in fact, the vast majority of 

specifications have been opened to imported Fittings for many years as a result, (3) imports from 

China, Korea, India, Brazil, and Mexico now constitute the lion’s share of all Fittings purchased 

in the U.S., (4) domestic Fittings have declined from 70% of all Fittings sold in the U.S. to only 

15-20% of all Fittings sold in the U.S. in the last decade, and (5) imported Fittings were still the 

vast majority of all Fittings purchased in the U.S. even during the brief ARRA period. (CC’s 

Op. Br. at 9-14.) Dr. Normann also analyzed the market and concluded, for a number of reasons, 

that ARRA did not create a domestic-only Fittings market, (see McWane Op. Br. at 85-86; 

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Normann, Tr. 4830, 4832, 4847, 4870), none of which Complaint Counsel disputed in its 

opening brief. 

Complaint Counsel did not present any study of cross-elasticity to establish a domesticonly market, the proper and court-accepted means of determining market definition, as discussed 

below. Dr. Schumann conceded he did no such study. Instead, Complaint Counsel simply 

argues - - based on Dr. Schumann’s say-so - - that “by definition” only domestic Fittings could 

satisfy the Buy America requirements of the ARRA, and “imported Fittings are not 

interchangeable or a reasonable substitute for Domestic Fittings on Domestic-only 

Specifications.” (See CC’s Op. Br. at 73.) 

The evidence showed - - and Dr. Schumann acknowledged - - that imported Fittings 

outsold domestic Fittings during ARRA, that ARRA contained a number of statutory waivers 

permitting assistance-recipients to buy imported product, and that the EPA actually granted 

multiple blanket nationwide waivers and multiple project-specific waivers. But Dr. Schumann 

simply turned a blind eye to that evidence. He conceded that he did not study ARRA funding or 

interview recipients of ARRA funding to determine the extent to which ARRA-funded jobs 

purchased imported Fittings. (Schumann, Tr. 4569, 4571.) He also ignored evidence in the 

record showing competition between domestic and imported Fittings for ARRA-funded jobs, 

including Star’s own bid log records. (Schumann, Tr. 4379-4381; McCutcheon, Tr. 2602, 2632­

2634; CX 2294.) 

Instead of studying the real world elasticities of imported and domestic Fittings, Dr. 

Schumann just assumed that the Hypothetical Monopolist Test would have shown a separate 

domestic market if he had used data to run it (which he did not). Dr. Schumann’s speculation 

about what the test would have shown had he bothered to run it was exacerbated because, as he 

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acknowledged, it was “controversial” to use the test (which is used for merger analyses) in the 

context of this non-merger case and he had never done so before in his career. (Schumann, Tr. 

4538, 4543 (“It is a more difficult application in nonmerger cases than in merger cases and 

somewhat more controversial” . . . “I don’t recall using it in the sort of nonmerger cases that I 

recall.”).) 

Markets are properly defined by elasticity studies, not conjecture. Dr. Schumann’s 

unsupported opinion, based only on his say-so about what he believed a “controversial” test 

would have shown if he had run it for the first time in his career, should be disregarded and 

cannot meet Complaint Counsel’s burden of “substantial proof” on this critical threshold 

element. Courts routinely reject such unsupported speculation as inadmissible and insufficient to 

establish relevant markets and market power as a matter of law. See, e.g., Lantec, Inc. v. Novell, 

Inc., 306 F.3d 1003, 1025-26 (10th Cir. 2002) (affirming exclusion of expert’s opinion as 

unreliable because expert “did not calculate the cross-elasticity of demand to determine which 

products were substitutes”); McLaughlin Equipment Co., Inc. v. Servaas, No. IP 98-127-C-T/K, 

2004 WL 1629603, at *7 (S.D. Ind. Feb. 18, 2004) (excluding expert’s testimony as 

“inadequately supported and insufficient to establish the relevant product market” where the 

expert “did no statistical analysis of the cross-elasticity of price, demand or supply”).7 

Complaint Counsel’s own cases underscore two additional defects in its argument. First, 

the Supreme Court has held that a relevant product market includes all products that are 

“reasonably interchangeable by consumers for the same purposes” from a buyer’s point of view 

7 See also Metro Indus., Inc. v. Sammi Corp., 82 F.3d 839, 848 (9th Cir. 1996) (holding expert’s opinion insufficient 

to prove relevant market where his “inconclusive opinion was not reasonably based on sound data. There was no 

detailed examination of market data or any analysis of cost, comparable usage, or comparative features of other 

competing products. The opinion was based on limited anecdotal evidence”); Gateway Contr. Servs., LLC v. 

Sagamore Health Network, Inc., 2002 WL 731686, at *26 (S.D. Ind. Mar. 20, 2002) (excluding expert report which 

was conclusory, based on data or facts gathered from discussions with plaintiff's employees or its counsel, and not 

based on reliable principles and methods). 

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at the time it is considering which products to purchase. United States v. E.I. du Pont de 

Nemours & Co., 351 U.S. 377, 395 (1956); Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421, 

1435 (9th Cir. 1995). Thus, Complaint Counsel’s argument - - that “by definition” someone who 

has already chosen to purchase domestic is limited to domestic - - improperly defines the market. 

That is akin to saying that once someone decides to buy Coca-Cola there is sufficient evidence to 

define the relevant market as Coke, rather than all soft drinks. It is not proper economics, nor 

permissible under the case law. 

Second, it is well-settled that preferences are insufficient as a matter of law to serve as 

the basis for a separate relevant antitrust market. Complaint Counsel concedes, as it must, that 

all buyers have a choice of whether to buy domestic or imported Fittings. The fact that some 

buyers have “preferences” for domestic Fittings (out of patriotism, for example), (CC’s Op. Br. 

15), does not mean that they must buy domestic Fittings. It simply means that they have chosen 

to buy domestic rather than imports, much as a Coke fanatic will choose to buy Coke over Pepsi. 

That some of these buyers may memorialize those preferences into specifications, although Dr. 

Schumann did not identify who they are and which specifications, does not diminish their 

mutability - - they easily can and do frequently change these specifications as their preferences 

change. Indeed, the undisputed evidence in this case shows there is a long history of imported 

Fittings producers steadily convincing buyers to change their specifications, gaining share and, in 

recent years, dominating domestic Fittings. Brokerage Concepts, Inc. v. U.S. Healthcare, Inc., 

140 F.3d 494, 513 (3rd Cir. 1998) (reversing district court judgment in favor of plaintiffs, 

holding that “[i]nterchangeability implies that one product is roughly equivalent to another for 

the use to which it is put; while there might be some degree of preference for the one over the 

other, either would work effectively”) (quotation omitted); McLaughlin Equip, 2004 WL 

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1629603 at *18 (granting summary judgment, holding that “a mere preference for a specific 

manufacturer’s brand bus is not sufficient for purposes of establishing a relevant product 

market.”).8 

II.	 COMPLAINT COUNSEL’S CONSPIRACY ARGUMENTS ARE 

CONTRADICTED BY THE OVERWHELMING FACT RECORD 

A. Complaint Counsel Failed To Proffer Any Direct Evidence That McWane 

Agreed To Fix Published Prices Or To Eliminate Or Reduce Job Discounts 

McWane proffered substantial direct evidence at trial that it engaged in independent 

decision-making and cutthroat competitive pricing at all times in an effort to win back business it 

had steadily lost to importers for more than a decade. Mr. Tatman testified at length, for 

example, about his pain-staking state-by-state spreadsheet analyses for determining what 

imported Fittings multiplier to choose in each state around the country before each of McWane’s 

announcements, and why the company repeatedly decided to underprice Sigma and Star (and not 

follow their large increases) in Winter and Spring 2008, all in an effort to win business and gain 

share. He testified about his decision to dramatically lower McWane’s imported list prices 20­

25% for all medium and large diameter Fittings in Spring 2009, and his independent decision on 

McWane’s multipliers in Summer 2010. (E.g., Tatman, Tr. 363-64, 882-93, 967 (“I went out 

and I tried to get volume, I tried to get share”), 978, 1005-06 (“they were done independently”); 

CX 176 (“our business objective of regaining share”); RX 424 (“make victory all the swe[e]ter”); 

CX 1664.) 

8

 The remaining cases Complaint Counsel cites in its opening brief for its argument are inapposite to the issue. For 

example, Complaint Counsel cites FTC v. Swedish Match, 131 F. Supp. 2d 151, 157 (D.D.C. 2000) for the argument 

that there are no “widely used substitutes” for Fittings and that the closest purported substitute, PVC fittings, do not 

generally compete. (CC’s Op. Br. at 63.) But this argument does not address the issue of whether imported and 

domestic Fittings are in the same product market. The facts show that customers can and did substitute imported 

Fittings in place of domestic Fittings on projects with “Domestic-only Specifications,” including those projects 

subject to Buy America requirements, and imported Fittings make up the lion’s share of the Fittings sold in the U.S. 

12 
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Moreover, Complaint Counsel’s selective focus on a single dimension of the 

interconnected, multi-variable “pricing waterfall” is disingenuous at best. As all of the witnesses 

testified, price competition in the Fittings market occurs at multiple levels, with the relative 

emphasis among those dimensions shifting constantly. For example, Mr. Tatman testified that 

McWane continued to offer a waterfall of job price discounts, rebates and other price 

concessions throughout this period - - and explained that a contemporaneous spreadsheet 

containing hundreds of individual job discounts in 2008 was only a portion of the job discounts 

McWane offered that year. (Tatman, Tr. 924, 1072, 996; RX 396; RDX-001; Tatman, Tr. 550 

(“at the end of the day the price that you give is based up about 12 different factors in a price 

waterfall.”).) Indeed, imported Fittings pricing was so competitive that in Fall 2008 - - right 

smack in the middle of the alleged conspiracy - - Mr. Tatman saw no prospect of any 

improvement for years to come, and he recommended shutting McWane’s foundry in Tyler, 

Texas, and letting its employees go: “I don’t believe the market or competitive conditions over 

the next three to five years will provide a reasonable opportunity to generate acceptable 

income[.]” (Tatman, Tr. 966-68; RX 616.) 

Dr. Normann’s state-by-state analyses of McWane’s published multipliers confirmed that 

the majority of McWane’s published prices stayed the same or declined during the alleged 

conspiracy, and were lower than Sigma and Star’s published prices in Winter and Spring 2008. 

Indeed, even Complaint Counsel’s expert, Dr. Schumann, conceded that McWane’s published 

prices were below Sigma and Star’s across the country, and that lower prices reflect independent 

decision-making and a competitive effort to win business and gain share: 

“Q. I understand, sir. But just so we’re clear on the record, those list prices, when 

McWane did not follow, that’s competitive, that’s an independent decision, isn’t it, sir? 

A. That - - yes, it is. 

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(Schumann, Tr. 4061-62, 4268-73, 4279-80 (“it is correct that the McWane multipliers were 

lower than what multipliers were on the Sigma map”).) He also acknowledged that McWane’s 

competitive decisions to underprice Sigma and Star, despite significant raw materials increases, 

forced them to lower their prices. (Schumann, Tr. 4167-68 (“They did that. Yes.”).) 

Dr. Normann’s analyses of McWane’s invoice prices, which reflect its job discounts 

below published multipliers, confirmed that (1) McWane’s prices steadily declined from 2007 to 

Summer 2010, (2) that McWane’s prices moved in the opposite direction from Sigma or Star’s 

invoice prices (McWane’s prices declined, while theirs rose), and (3) that McWane’s job 

discounting continued throughout the alleged conspiracy and did not move in parallel with 

Sigma’s or Star’s job discounts. (RDX-018.001-003; Normann, Tr. 4821 (“this is inconsistent 

with parallel movements, you know, in reductions in job pricing. Job pricing is -- or the standard 

deviation, the variance, the dispersion of price points is all over the place”), 4778-4779 (“But 

also notice the variability. You know, 28 went down, 8 were unchanged, 14 increased. That to 

me does not strike a notion of coordinated price increases”), 4746-4749 (concluding that this 

price variation was consistent with ongoing job price discounting and competitive behavior and 

flatly inconsistent with the alleged conspiracy: “I literally found no evidence consistent with 

those allegations.”).) 

The evidence at trial also demonstrated that Sigma and Star always found out about 

McWane’s published prices after-the-fact (not beforehand) from customers (not McWane) and 

were routinely surprised, disappointed and upset. (E.g., McCutcheon, Tr. 2532 (“it was a 

confusing time. The -- right after this I believe the multipliers -- let me think about this for a 

minute. The multipliers came down . . . We were out of sync at this point and were confused on 

the market”); RX 24 (“From what?” . . . “Is this up or down? In each state?”); Pais, Tr. 2059-61 

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(“discouraging”); CX 1145; RX 47 (“lack the imitative [sic], creativity, and leadership”); 

Schumann, Tr. 4267-68.) In fact, Sigma even considered suing McWane for pricing too low. 

(Rybacki, Tr. 3719 (“predatorily low”).) Numerous contemporaneous Sigma and Star 

documents reported that McWane not only continued offering job discounts throughout 2008, 

but was “leading markets downward” in large swathes of the country: “We seem to always think 

McWane quotes the same pricing as their map, but I can assure you, that’s not the case.” (RX 

45; RX 17; RX 37; RX 115; RX 116; see also McWane’s Op. Br. at 12-20.) 

Complaint Counsel’s opening brief and proposed findings do not dispute any of these 

bedrock facts. In fact, Complaint Counsel concedes that McWane consistently underpriced 

Sigma and Star’s published prices in Winter and Spring 2008 and in Spring 2009, that McWane 

continued to offer hundreds of job price discounts, rebates and a host of other price concessions 

below its published prices throughout 2008 (as well as 2009 and 2010), and that every single 

witness in this case flatly denied hundreds of times that McWane communicated its published or 

job prices to Sigma or Star or that the companies had any agreements on price. (CC’s Br. at 163­

64.) 

Complaint Counsel’s opening brief and proposed findings do not point to any direct 

evidence of any advance communication of any published price or any specific job discount from 

McWane to Sigma or Star. On the contrary, as noted in McWane’s opening brief, Complaint 

Counsel conceded in its interrogatory answers that its “lacks” such evidence, and Dr. Schumann 

confirmed at trial that it does not exist: “as I said, there was no meeting in a smoke filled room.” 

(Schumann, Tr. 4171-3, 4186-87, 4236.) Indeed, he acknowledged that his review of the record 

in this case did not yield a single piece of direct evidence of any price agreement: “I have not 

found anything to suggest that any executives at Sigma and Star and McWane met in a specific 

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place and had a meeting to hammer out some sort of agreement. That is correct.” (Schumann, 

Tr. 4172-73 (emphasis added).)9 

In the face of this overwhelming direct evidence refuting any implication of collusion by 

McWane, Complaint Counsel’s failure to present any direct evidence to the contrary - - and Dr. 

Schumann’s concession that he had “not found anything to suggest” any such agreement - - is 

fatal. Complaint Counsel simply has not met its burden of “substantial proof” of the alleged 

conspiracy. Complaint Counsel faces a high burden in overcoming the overwhelming number of 

sworn denials in this case: “Facing sworn denial of the existence of conspiracy, it [is] up to 

[Complaint Counsel] to produce significant probative evidence by affidavit or deposition that 

[a] conspiracy existed.” City of Moundridge v. Exxon Mobil Corp., 429 F. Supp. 2d 117, 130 

(D.D.C. 2006) (emphasis added), aff’d City of Moundridge v. Exxon Mobil Corp., 409 F. App’x. 

362, 364 (D.C. Cir. 2011); see also Lamb’s Patio Theatre, Inc. v. Universal Film Exchanges, 

Inc., 582 F.2d 1068, 1070 (7th Cir. 1978) (affirming summary judgment because plaintiff had 

only “its bald allegation of conspiracy to refute the sworn affidavit denying a conspiracy”). 

In Moundridge, the defendants testified, as each McWane, Sigma and Star witness did 

here, that they made their pricing decisions independently. In the face of this testimony, the 

plaintiffs proffered evidence that defendants’ had an opportunity to conspire (during a series of 

industry meetings) and pointed to internal documents that they argued suggested a conspiracy. 

Moundridge, 429 F. Supp. at 130. The D.C. Circuit affirmed the district court’s grant of 

summary judgment and held that the plaintiffs’ “few scattered communications” and other 

evidence “falls far short” of overcoming defendants’ sworn denials. Moundridge, 409 F. App’x. 

at 364. 

9

 “Direct evidence in a Section 1 conspiracy must be evidence that is explicit and requires no inferences to establish 

the proposition or conclusion being asserted.” In re Baby Food Antitrust Litig, 166 F.3d 112, 118 (3d Cir. 1999) 

(“Baby Food”). 

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The “hallmark” of every conspiracy is an agreement that precedes the defendants’ pricing 

decisions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007) (“a preceding agreement”); 

Baby Food, 166 F.3d at 117 (3d Cir. 1999) (“an agreement is the hallmark of a Section 1 

claim.”). “This higher threshold is imposed in antitrust cases to avoid deterring innocent conduct 

that reflects enhanced, rather than restrained, competition.” In re Flat Glass Antitrust Litig., 385 

F.3d 350, 357 (3d Cir. 2004). In this case there is a complete absence of such evidence of a 

preceding agreement. The lack of any preceding agreement on published multipliers or project 

pricing is dispositive here. 

B. Complaint Counsel’s Claimed Circumstantial Evidence Is Insufficient As A 

Matter Of Law 

Recognizing it has no direct evidence to prove its conspiracy theory, Complaint Counsel 

focuses its argument around the proposition that conspiracies may be “proven through 

circumstantial evidence.” (CC’s Op. Br. at 106.) Its claimed circumstantial evidence, however, 

is insufficient as a matter of law - - particularly in the face of such overwhelming direct evidence 

of McWane’s independent decision-making. In fact, the overwhelming weight of the 

circumstantial evidence in this case, like the direct evidence, refutes Complaint Counsel’s 

allegations. 

Proving a case through circumstantial evidence does not negate Complaint Counsel’s 

requirement to prove a “preceding agreement,” i.e., “a meeting of minds in an unlawful 

arrangement,” as discussed infra. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 

771 (1984) (citing Am. Tobacco Co. v. United States, 328 U.S. 781, 810 (1946)). Further, 

inferring the existence of a conspiracy from circumstantial evidence is difficult, at best, and 

requires “evidence that tends to exclude the possibility of independent action.” Monsanto Co. v. 

Spray-Rite Serv. Corp., 465 U.S. 752, 768 (1984). It is well established that “conduct as 

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consistent with permissible competition as with illegal conspiracy does not, standing alone, 

support an inference of antitrust conspiracy.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

475 U.S. 574, 588 (1986); Gibson v. Greater Park City Co., 818 F.2d 722, 725 (10th Cir. 1987) 

(affirming summary judgment: “All of the evidence presented by the plaintiffs is ambiguous: it 

can support either a permissible or a conspiratorial motive. There is no evidence that tends to 

exclude the possibility that the defendants were pursuing independent interests.”). Complaint 

Counsel failed to proffer any evidence to overcome the overwhelming trial record that McWane 

acted in its own self-interest at all times. 

1.	 Complaint Counsel Failed To Establish The Prerequisite Of Parallel 

Conduct 

The threshold requirement in a circumstantial case is that the defendant’s prices were the 

same as its rivals’ prices. See In re Beef Industry Antitrust Litig., 907 F.2d 510, 514 (5th Cir. 

1990) (affirming summary judgment because plaintiff offered no evidence that defendants’ 

prices were identical, despite all defendants’ use of a daily “Yellow Sheet,” which publicly 

published reports prices of recent beef sales: “When an antitrust plaintiff relies on circumstantial 

evidence of conscious parallelism to prove a § 1 claim, he must first demonstrate that the 

defendants’ actions were parallel. . . . . The cattlemen have not done this.”). But here, 

Complaint Counsel concedes McWane underpriced Sigma and Star and did not follow their 

higher published prices. Moreover, Complaint Counsel presented no evidence that McWane’s 

ongoing job discounts were parallel with Sigma and Star’s job discounts in amount, frequency, 

or any other measure. The lack of any evidence that McWane engaged in parallel pricing - - on 

the very threshold element necessary for a circumstantial case - - is dispositive. Id.; see also 

Blomkest Fertilizer, Inc. v. Potash Corp. of Saskatchewan, Inc., 176 F.3d 1055, 1072 (8th Cir. 

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1999) (“The whole premise of the class’s case is parallel pricing. Without parallel pricing, their 

case collapses.”). 

Complaint Counsel argues that Sigma and Star followed McWane’s lower published 

prices after they found out about them, and that is somehow sufficient to infer that McWane 

conspired. But, that argument fails for two reasons. First, as a factual matter, Sigma and Star 

did not price in parallel with McWane. Indeed, Complaint Counsel concedes that Sigma only 

followed some of McWane’s multipliers in Winter 2008, but disregarded others. (CCPF 966 

(Sigma did not follow McWane “where the new multiplier would be below Sigma’s current 

pricing”).) Moreover, Complaint Counsel concedes that McWane, Sigma and Star all continued 

to offer job discounts, rebates and a host of other price concessions below published prices, and 

proffered no evidence at all that Sigma and Star’s job discounts paralleled McWane’s job 

discounts in amount, frequency, location or any other measure. Complaint Counsel’s failure to 

prove actual parallel prices (either published or job discounts) is fatal. Williamson Oil Co. v. 

Philip Morris USA, 346 F.3d 1287, 1310-11 (11th Cir. 2003) (affirming summary judgment in 

favor of defendants despite alleged “signals” between defendants, holding that the evidence does 

not “tend to exclude the possibility that the primary players in the tobacco industry were engaged 

in rational, lawful, parallel pricing behavior” where “instead of continuing with wholesale list 

price competition, RJR and B&W began competing at the retail level.”); Clamp-All Corp. v. 

Cast Iron Soil Pipe Inst., 851 F.2d 478, 484 (1st Cir. 1988) (affirming summary judgment 

because defendants’ discounted price differences “support[ed] the inference that the similarity of 

price lists reflects individual decisions to copy, rather than any more formal pricing 

agreement.”).10 

10 Complaint Counsel suggests that it is enough the Dr. Schumann opined that the companies engaged in a similar 

reduction in job prices. (CC’s Op. Br. at 146.) But Dr. Schumann’s opinion is not a fact, as this Court made clear 

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The second reason Complaint Counsel’s parallel pricing argument fails is because 

parallel pricing is “just as much in line with a wide swath of rational and competitive business 

strategy unilaterally prompted by common perceptions of the market.” Twombly, 550 U.S. at 

557 (allegations of parallel conduct “must be placed in a context that raises a suggestion of a 

preceding agreement, not merely parallel conduct that could just as well be independent action”); 

Theatre Enter., Inc. v. Paramount Film Distributing Corp., 346 U.S. 537, 540-41 (1954) (parallel 

pricing falls short of “conclusively establish[ing] agreement or ... itself constitut[ing] a Sherman 

Act offense.”). As a result, courts routinely uphold “follow-the-leader” pricing as perfectly 

lawful and normal oligopoly behavior that is consistent with a competitor’s self-interest. Brooke 

Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227 (1993) (“firms in a 

concentrated market [that] recogniz[e] their shared economic interests and their interdependence 

with respect to price and output decisions” is “not in itself unlawful”); In re Ins. Brokerage 

Antitrust Litig., 618 F.3d 300, 329-30 (3rd Cir. 2010) (“it is at least equally consistent with 

unconcerted action.”); Blomkest Fertilizer, 203 F.3d at 1032-33 (affirming summary judgment 

because “[e]vidence that a business consciously met the pricing of its competitors does not prove 

a violation of the antitrust laws”).11 

throughout the trial. (Chappell, Tr. 3867 (“I don’t expect to see experts cited for facts. They’re here for opinions.”).) 

Moreover, Dr. Schumann acknowledged that he did no independent analysis of the parties’ job prices and did not 

quantify any actual reduction in job discounting by McWane, Sigma or Star. Instead, he based his opinion entirely 

on his interpretation of a single document that Mr. Tatman testified was just him “speculating . . . speculating . . . 

speculating” based on multiple levels of hearsay his sales force picked up through the grapevine. (McWane’s Br. at 

36-38.) “Similar” prices are also not parallel prices as a matter of law, as the cases above hold, and, in any event, 

are consistent with unilateral decision-making. In re National Association of Music Merchants, Musical Instruments 

and Equipment Antitrust Litigation, MDL No. 2121, 2012 WL 3637291 at *4 (S.D. Cal., Aug. 20, 2012) (granting 

dismissal after discovery: “the only allegation here is that the terms were similar. This could just as easily be 

attributable to a similar business model or similar business conditions.”). 

11 See also Reserve Supply Corp. v. Owens-Corning Fiberglas Corp., 971 F.2d 37, 50 (7th Cir. 1992) (“the mere 

existence of an oligopolistic market structure in which a small group of manufacturers engage in consciously 

parallel pricing of an identical product does not violate the antitrust laws”); Clamp-All, 851 F.2d at 484 (“One does 

not need an agreement to bring about this kind of follow-the-leader effect in a concentrated industry”); In re Citric 

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2.	 Complaint Counsel’s “Plus Factors” Are All “Minus Factors” Consistent 

With McWane’s Self-Interest 

Even if McWane’s pricing paralleled that of its rivals, that alone would not meet 

Complaint Counsel’s burden. To prove its case, Complaint Counsel must also produce “plus 

factors” that tend to exclude any independent reason for the parallel conduct. Blomkest, 176 F.3d 

at 1072. In this case, however, Complaint Counsel’s alleged “plus factors” turn out to be “minus 

factors.” Indeed, in many instances Complaint Counsel offers evidence that contradicts its own 

concessions. For example, Dr. Schumann concedes that “there was no meeting in a smoke filled 

room” and “I have not found anything to suggest” one. (Schumann, Tr. 4171-73 (emphasis 

added).) Yet Complaint Counsel spends an extraordinary number of pages pointing to a handful 

of phone calls and other meetings between McWane and Sigma (all of which, as explained 

below, had legitimate explanations) in an effort to somehow suggest the very meeting Dr. 

Schumann conceded did not exist. Dr. Schumann himself did not buy into that baloney. 

(Schumann, Tr. 4250 (“It’s not my opinion that calling someone to check on them because 

they’re friends and they have a handicapped child is some sort of conspiracy.”).) 

Where, as here, a defendant’s actions are consistent with its own self-interest, the 

defendant is entitled to judgment in its favor. See supra at II(B). As discussed above, 

McWane’s conduct was perfectly consistent with its self-interest at all times. It consistently 

priced lower than its competitors to satisfy the entirely rational goal of gaining sales production 

and volume. 

The case law Complaint Counsel relies upon does not support its argument to the 

contrary. For example, Complaint Counsel relies heavily on the Seventh Circuit’s decision in In 

re High Fructose Corn Syrup Antitrust Litigation, 295 F.3d 651, 662 (7th Cir. 2002), and the 

Acid Litigation, 191 F.3d at 1102 (“A section 1 violation cannot, however, be inferred from parallel pricing alone, 

nor from an industry’s follow-the-leader pricing strategy”) (internal citations omitted). 

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Supreme Court’s 1936 decision in Sugar Inst. v. United States, 297 U.S. 553, 601 (1936), to 

support its argument that this Court should find a conspiracy even from a case “constructed out 

of a tissue of such [ambiguous] statements and other circumstantial evidence.” (CC’s Op. Br. at 

106.) Complaint Counsel’s great reliance on both cases is misplaced. 

High Fructose Corn Syrup did not involve a judgment at all. The procedural posture of 

that case was simply whether the evidence was sufficient to avoid summary judgment. The 

Court thus did not conclude that the facts of that case established a conspiracy. It merely 

concluded that the evidence was sufficient to present an issue of fact for a jury. See High 

Fructose Corn Syrup, 295 F.3d at 655. Moreover, an explanation of the Seventh Circuit’s 

reasoning actually supports judgment in McWane’s favor. Specifically, the Court reaffirmed the 

long-standing rule that “an agreement involving actual, verbalized communication, must be 

proved in order for a price-fixing conspiracy to be actionable under the Sherman Act,” id. at 654, 

and a plaintiff must prove “that there was an actual, manifest agreement not to compete.” Id. at 

661. Here, Complaint Counsel has not come close to proving an “actual, manifest agreement not 

to compete.” To the contrary, the undisputed testimony of Mr. Tatman and contemporaneous 

documents demonstrate a commitment to intense and unrelenting competition. (Tatman, Tr. 

363-64, 882-93, 967, 978, 1005-06; CX 176; RX 424; CX 1664.) In response, Complaint 

Counsel merely points to “opportunities” to collude and other circumstantial evidence which 

collapses under scrutiny, as discussed infra. 

Complaint Counsel’s reliance on Sugar Institute is equally misplaced. In Sugar Institute, 

members of the association, which collectively processed nearly all the sugar refined in the 

United States, met together and collectively agreed - - in an actual, explicit agreement - - to 

publicly announce prices and conditions of sale in advance, to abolish all price discrimination 

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between customers, and to strictly adhere to their publicly announced prices. Sugar Inst., 297 

U.S. at 573. None of that occurred in this case, as conceded by Complaint Counsel’s own expert. 

Sugar Institute is, thus, inapposite. It is not a circumstantial case utilizing plus factors, but a 

direct evidence case with no relevance here. In contrast, this is a case - - as Dr. Schumann 

conceded - - in which there was no evidence of meetings or discussions about pricing, and the 

suppliers never sold off of list prices (and, instead, offered significant job price discounts, rebates 

and other concessions).12 

As explained in McWane’s opening brief, the First Circuit’s decision in Clamp-All and 

the Seventh Circuit’s decision in Citric Acid are far more instructive than the case law cited by 

Complaint Counsel. (See McWane’s Op. Br. at 71.) In Clamp-All, the First Circuit affirmed 

summary judgment for defendants in a case with a concentrated market in which defendants 

followed each other’s list prices, but - - as here - - routinely offered discounts below list. 851 

F.2d at 484 (Breyer, J.). In fact, there is even more evidence of price competition in this case - - 

McWane regularly provided even more price concessions (including hundreds and hundreds of 

job discounts and also provided numerous rebates and freight absorption, and credit extension) 

below the allegedly parallel published prices than in Clamp-All. Furthermore, the Court in 

Clamp-All noted that the fact that suppliers “often set prices that deviated from their price list 

helps support the inference that the similarity of price lists reflect individual decisions to copy, 

rather than any more formal pricing agreement.” Id. That same analysis applies here, where the 

competitors, including McWane, almost always set prices that deviated from their published 

12 Indeed, even the Commission conceded that the instant situation differs from Sugar Institute in its summary 

decision opinion. See McWane, Slip Op. at 30 (“we disagree that the facts in Sugar Institute are ‘indistinguishable’ 

from those here.”). Moreover, the Court’s opinion in Sugar Institute also favors McWane, as the Court went on to 

hold that the mere exchange of price and other market information is benign conduct that is “normally an aid to 

commerce” and only becomes problematic if it results in an agreement. Sugar Inst., 297 U.S. at 598. 

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prices. Thus, the evidence is entirely consistent with independent and competitive decisionmaking, and cannot support an inference of a conspiracy as a matter of law. Id. 

In Citric Acid, the plaintiff alleged the fact that defendant Cargill’s list prices mirrored 

those of its competitors was evidence of a conspiracy. Citric Acid, 191 F.3d at 1102. 

Emphasizing that a price-fixing conspiracy cannot be inferred from parallel pricing alone, “nor 

from an industry’s follow-the-leader pricing strategy,” the court noted that Cargill, despite its 

identical list prices, priced aggressively in “actual contracts” (i.e., provided discounts along the 

pricing waterfall) and concluded that the plaintiff’s evidence “does not tend to exclude the 

possibility that Cargill acted legally in its pricing decisions.” Id. at 1103. 

Here, there is far less evidence than in Clamp-All and Citric Acid. The trial record 

showed there is simply no evidence that anyone from McWane was involved in any conspiracy. 

Complaint Counsel even conceded that it lacked evidence “that McWane directly communicated 

its prices to any other Fittings manufacturer or supplier in advance of communicating them to its 

customers or potential customers.” (see CRFA No. 19.) Similarly, no document exists which 

demonstrates the existence of a price agreement, (Schumann, Tr. 4236-4238), and Complaint 

Counsel has not presented a single price-related communication among the Competitors 

referencing any “agreement,” not a single document reflecting any advance price communication 

between McWane and either of its competitors, and not a single document suggesting an agreedupon commitment to common prices. (Schumann, Tr. 4236-4238.) To the contrary, all of the 

contemporaneous documents reflect the uncertainty and speculation inherent in normal 

competition, thus implying the absence of an agreement. 

The purported “plus factors” Complaint Counsel specifically points to constitute nothing 

more than innocuous and routine business behavior common to nearly every company in the 

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world. Specifically, Complaint Counsel points to the following: (a) a concentrated market, (b) 

an internal McWane powerpoint presentation that was never communicated to competitors, (c) 

membership in DIFRA and its dissemination of aggregated volume data, (d) internal Star 

documents referencing the word “cheating,” including for products Complaint Counsel and Dr. 

Schumann concede were not in the conspiracy (e) internal complaints about prices, and (f) a 

handful of vague inter-firm communications (i.e., “opportunities” to conspire). Complaint 

Counsel’s “plus factors” either don’t exist at all or are plainly insufficient. 

a)	 A Concentrated Market Is Insufficient To Infer A Preceding 

Agreement On Published Prices Or Job Price Discounts 

The mere fact that a market is concentrated is simply a restatement of the proposition that 

it is an oligopoly in which parallel pricing and follow-the-leader behavior are entirely lawful and 

expected. Brooke Group, 509 U.S. at 227; see also supra at Section II(B). Thus, the market 

concentration here does not qualify as a “plus factor.” Courts recognize that as a result of the 

inherent economic realities of oligopolistic markets, any rational firm must take into account the 

anticipated reaction of its competitors when making its own pricing decisions. In re Flat Glass, 

385 F.3d at 360. Thus, Courts require a plaintiff to show “an actual agreement – instead of the 

‘unilateral, independent conduct of competitors.’” Id. (citing Baby Food, 166 F.3d at 122); see 

also Intervest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 159-160 (3d Cir. 2009) (plaintiff relying on 

circumstantial evidence must meet heightened burden of proof). The mere fact that McWane 

operates in a concentrated market, without more, is meaningless. 

b)	 Complaint Counsel And Dr. Schumann’s Speculation About CX 627 

Is Contradicted By The Evidence 

Complaint Counsel makes much of an internal McWane powerpoint which Dr. 

Schumann dubbed the “Tatman Plan.” (CC’s Op. Br. at 96.) As set out in McWane’s opening 

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brief, that was Dr. Schumann’s own invention: Mr. Tatman testified it was not a plan. 

Regardless, it was meaningless. Dr. Schumann concedes that neither the powerpoint itself nor its 

contents were directly communicated to Star or Sigma and, indeed, that the core tenets of his socalled conspiracy were not in any of the customer letters he points to as indirect communications. 

(See McWane’s Op. Br. at 30-32; see also Schumann, Tr. 4174-4175, 4175-4176, 4176, 4177, 

4178-4179 (“Nothing on the document indicates it was sent to Sigma or Star”), 4179 (“I don’t 

show anything that indicates it was provided to Sigma or Star, that is correct”), 4201-4202 (“I am 

not saying that those rough drafts caused the conspiracy, that’s correct. . . . I don’t say in my 

report that it was given to Star and Sigma, that’s right”).) 

Rather, the undisputed testimony at trial showed that this powerpoint was a brainstorming 

document which he used to explain to his immediate supervisor, Thomas Walton, a strategy for 

recapturing market share from Star and Sigma. By late 2007, McWane’s raw materials costs 

were rising rapidly, its Fittings sales volume had declined to its lowest levels in decades, and it 

continued to lose share to Sigma, Star and other importers. (See Tatman, Tr. 269:6-10 (market 

volume in recent years was “half of what it was in 2006”).) Given the enormous spike in raw 

materials costs, Mr. Tatman was under pressure to try to recoup some of those cost increases. 

But his “primary” concern was to win volume and gain share. (Tatman, Tr. 1069:24-1071:24 & 

CX 627.) Mr. Tatman prepared the powerpoint to help him organize his personal thoughts in 

preparation for a series of “brainstorming sessions” among Mr. Tatman and his supervisors. 

(Tatman, Tr. 1069:24-1071:24 & CX 627.) 

As Mr. Tatman explained in his trial testimony, he believed that the industry-wide 

escalation of raw materials costs in 2007-2008 had a potential silver lining for McWane. In Fall 

2007, Sigma announced both a list price increase and a multiplier increase to its customers in a 

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pricing letter. (Rybacki, Tr. 3683:14-3684:2, 3684:9-12 & CX 2457.) Star quickly followed 

suit, announcing the same price increase. While Mr. Tatman could have simply followed the 

announced price increases, his primary concern was volume. (Tatman, Tr. 347:12-15.) As a 

result, he believed that McWane should not match Sigma’s 25% list price increase, but instead 

keep its published prices much lower than Sigma and Star - - even below the levels of the raw 

materials inflation. (Tatman, Tr. 359:9-21, 360:13-22, 361:2-12, 379:3-18.) Mr. Tatman 

theorized that McWane might have a cost advantage and, if it underpriced Sigma and Star, it 

might be able to gain sales volume. He fully recognized this might not happen (there were 

numerous keys to success that were outside his control), but his “core” idea was to underprice 

Sigma and Star to win more business. (Tatman, Tr. 1017:23-1019:8.) In short, Mr. Tatman did 

not follow Sigma’s (and Star’s) large price increase. Rather, he believed a strategy aimed at 

increasing volume and share by underpricing them was in McWane’s best interests, which he did 

not communicate to Sigma and Star. 

The powerpoint is, thus, nothing more than an internal brainstorming document, which 

never saw the light of day, about the a potential means of winning volume and gaining share, 

made difficult by keys to success outside Mr. Tatman’s control. It is entirely consistent with 

McWane’s self-interest in underpricing Sigma and Star and gaining share (and, perhaps, 

recouping some of the large raw material cost increase). There is no evidence to counter this 

testimony, only the revisionist imagination of Dr. Schumann and Complaint Counsel. Thus, CX 

627 does not “tend to exclude the possibility of independent conduct.” Kreuzer v. American 

Academy of Periodontology, 735 F.2d 1479, 1488 n.12 (D.C. Cir. 1984) (plaintiff must provide 

facts demonstrating that the “acts by the defendants [are] in contradiction of their own economic 

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interests”). If anything, it epitomizes an independent effort to formulate ideas for McWane’s 

benefit. 

c)	 DIFRA’s Tons-Shipped Data Does Not Suggest A Preceding 

Agreement On Published Prices Or Job Price Discounts 

Complaint Counsel’s argument that DIFRA was a “plus factor” that “facilitated price 

coordination” likewise fails. Again, DIFRA is a “minus factor.” Every witness denied that 

prices were communicated during DIFRA meetings and that DIFRA facilitated price 

coordination. Complaint Counsel does not point to a single instance of any price communication 

from McWane to Sigma or Star (or vice versa) and, instead, concedes that DIFRA meetings were 

guided and supervised by experienced antitrust counsel, a partner in one of the South’s largest 

and most respected law firms, and an equally respected accounting firm.13 (Brakefield, Tr. 1229­

1230, 1337-1338 & RX 4, 1341, 1358, 1371-1373 & RX 44; JX 654 (Brakefield, Dep. at 13-17, 

19); (McCutcheon, Tr. 2561-2562 & CX 52; JX 694.) Moreover, Complaint Counsel concedes 

that prices declined during the second half of 2008, when DIFRA was briefly operational. 

(Schumann, Tr. 3837-3843.) Competition was so cutthroat in Fall of 2008, Mr. Tatman 

recommended closing McWane’s Tyler foundry and he saw no prospect of improvement for 

years to come. Sigma also reported a “quick and sharp erosion in market pricing” - - which it 

blamed on “McWane leading markets downward” throughout the southeast. (RX 115; RX 116; 

Pais, Tr. 2129-40; Rybacki, Tr. 3702.) 

Complaint Counsel concedes that only aggregated tons-shipped data - - which did not 

distinguish among the thousands of unique SKUs, domestic or import, which part of the country, 

or when the sales occurred - - were sent by each company to an independent accounting firm 

13 The retention of a large accounting firm and experienced antitrust counsel are clear “minus factors” demonstrating 

an intent of compliance with the laws, not unlawful conduct. Complaint Counsel’s assertion that the members of 

DIFRA would go to the effort and expense of engaging well-respected antitrust counsel and outside accountants to 

ensure compliance with the law, and then engage in illegal conduct while in their presence, simply defies logic. 

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retained by DIFRA’s antitrust counsel. The independent accounting firm further aggregated all 

of the member firms’ tonnage shipped data, and then distributed the aggregated overall figure in 

a report to all DIFRA members. (JX 679 (Haley, Dep. at 7-8, 10, 13).) No DIFRA member was 

permitted to review the tonnage shipped data of any other member; only the aggregate figure was 

made available. (JX 679 (Haley, Dep. at 22).) 

To support its argument that DIFRA was a “plus factor,” Complaint Counsel cites a 

memorandum written by Victor Pais in February 2009 to its lender stating that DIFRA “helps 

maintain the pricing discipline.” But at trial Mr. Pais testified that he wrote the memorandum 

appease Ares Capital, a secondary creditor that loaned tens of millions of dollars to Sigma at 

extraordinarily high interest rates. (Pais, Tr. 1992-1995.) Mr. Pais further acknowledged that 

the memorandum was merely his speculative opinion, which he never discussed with anyone at 

McWane. (Pais, Tr. 1992-1995.) Thus, Complaint Counsel’s argument that DIFRA “facilitated 

price coordination” fails for lack of support. 

It is well established that legitimate trade associations are perfectly legal, as are their 

efforts to gather aggregated data about the industry. The Supreme Court has repeatedly held that 

the “exchange of price data and other information among competitors does not invariably have 

anticompetitive effects; indeed such practices can in certain circumstances increase economic 

efficiency and render markets more, rather than less, competitive.” United States v. U.S. Gypsum 

Co., 438 US 422, 443 n.16 (1978). In Citric Acid, the Ninth Circuit affirmed summary judgment 

for defendant and held that “[g]athering information about pricing and competition in the 

industry is standard fare for trade associations. If we allowed conspiracy to be inferred from 

such activities alone, we would have to allow an inference of conspiracy whenever a trade 

association took almost any action.” Citric Acid, 191 F.3d at 1098 (emphasis added); Burtch v. 

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Milberg Factors, Inc., 662 F.3d 212, 223 (3d Cir. 2011) (“Even if we did assume that price and 

credit information are indistinct, the exchange of price information still requires showing that the 

defendants had an agreement.”). 

Where, as here, the information that the trade association gathers and disseminates is not 

price information, but rather, aggregated volume information, the inference of conspiracy is even 

less plausible. Williamson Oil, 346 F.3d at 1313 (“It is far less indicative of a price fixing 

conspiracy to exchange information relating to sales as opposed to prices” . . . it is “plainly [] 

beneficial” for a company “to keep tabs on the commercial activities of its competitors, so the 

receipt of information concerning their sales does not tend to exclude the possibility of 

independent action or to establish anticompetitive collusion”); Baby Foods, 166 F.3d at 125 (The 

Third Circuit rejected antitrust liability where there was no “evidence that the exchanges of 

information had an impact on pricing decisions.”). That is particularly true here, where 

Complaint Counsel concedes prices declined during the brief DIFRA period in the second half of 

2008, where McWane underpriced Sigma and Star’s published prices after receiving the first 

DIFRA report in June 2008, and then dramatically lowered its medium and large diameter list 

prices in Spring 2009 based in part upon its assessment that those were its competitors’ strongest 

size ranges. Thus, given that case law actually permits the exchange of data, the Court should 

recognize DIFRA for what it was - - a competitive catalyst - - and reject Complaint Counsel’s 

assertion that membership in DIFRA and the exchange of mere non-price data was a “plus 

factor.” If anything, the evidence showed it was a “minus factor.” 

d) Internal Star Documents Referencing “Cheating” Show Ongoing Job 

Pricing And Do Not Suggest That McWane Was Involved In A 

Preceding Agreement 

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Complaint Counsel relies heavily on the use of the term “cheating” in certain Star (not 

McWane) documents as support for the claim that McWane, Sigma and Star reached an 

agreement to stop or somehow limit job pricing. (CC’s Op. Br. at 127-128.) But the only 

evidence in the record regarding those documents contradicts Complaint Counsel’s speculative 

interpretation and demonstrates that the documents are consistent with ongoing, competitive 

decision-making by McWane. 

First, Complaint Counsel did not offer a single McWane document created during the 

existence of the alleged conspiracy that used the term “cheating.” Instead, the phrase was only 

used in a few, scattered Star internal documents. None of the authors of any of those documents 

testified at trial (or were even deposed). Second, the only (and undisputed) Star testimony about 

the company’s use of the term “cheating” made it clear that it was an internal colloquialism for 

job pricing that was used across Star’s various products. This testimony alone is dispositive. 

(Minamyer, Tr. 3255-56 (“Q: The more cheating, the more competition there is out there; is that 

correct? A: Yes”), 3269-73, 3238-40.) Third, Dr. Schumann himself conceded that Star 

personnel used the term “cheating” on competitive products (such as large diameter Fittings) that 

were not involved in the alleged conspiracy. (Schumann, Tr. 3769, 3788, 3792-3793, 4111.) 

Mr. Minamyer’s undisputed testimony and Dr. Schumann’s concession necessarily mean that the 

term is “at least as consistent with independent decision-making” as with a conspiracy, and 

disproves Complaint Counsel’s contention that it can only suggest a conspiracy. The phrase thus 

does not “tend to exclude the possibility” of independent decision-making as a matter of law. 

The Court should reject Complaint Counsel’s effort to substitute its own interpretation of the 

term for the definition provided by a first hand witness. 

e)	 The Two Sigma Emails Cited By Complaint Counsel Are Consistent 

With Ongoing Job Discounting And Do Not Suggest An Agreement 

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Notably, none of McWane’s contemporaneous internal documents, emails, and other 

communications contain any reference to an alleged understanding or agreement on the Winter 

or Spring 2008 (or April 2009 or June 2010) published prices or on job discounting. 

In the face of the dozens of documents indicating the absence of an agreement, 

Complaint Counsel cites two internal Sigma emails - - dated March 10, 2008 and August 22, 

2008 - - from its OEM account manager, Mitchell Rona, to other Sigma employees. Neither 

email says anything about published prices. The first email was sent several months after 

McWane’s January 2008 published multiplier announcement, and several months before its June 

2008 multipliers. The second email was sent months after McWane underpriced Sigma and 

Star’s multipliers in June 2008, and months before it cut its medium and large diameter list 

prices 20-25% in April 2009. 

The emails, on their face and according to the testimony of Mr. Rona, were generated by 

him in the course of legitimate, arm’s-length buy-sell discussions he had with McWane on two 

occasions in 2008. At the time of the emails, Mr. Rona was Sigma’s OEM business manager, 

with no authority for determining Sigma’s prices to its distributor customers - - the pricing 

that is at issue in this action. (Rona, Tr. 1437-1440, 1453-1454, 1627-1628.) Mr. Rona was, 

thus, not competing with Mr. Tatman, he was Mr. Tatman’s customer when his own product ran 

short or was otherwise unavailable. Moreover, he did not compete against Mr. Tatman in selling 

Fittings: Mr. Rona sold to Sigma’s OEM customers (for example, pipe manufacturers and 

fabricators), while Mr. Tatman sold to distributors. (Rona, Tr. 1446-1449, 1626, 1628-1629.) 

Thus, Mr. Rona and Mr. Tatman, who regularly negotiated ordinary, arm’s-length buy-sell 

agreements with each other, had legitimate business reasons to be in regular communication. 

(Tatman, Tr. 365-366, 639-641 & CX 1434; Rona, Tr. 1446-1449, 1626, 1628-1629.) 

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Consistent with this reality, Mr. Rona did not attach any significance to Mr. Tatman’s 

alleged comments, and merely passed them on as an “FYI,” as he would any other competitive 

intelligence he received in the ordinary course of his business. (Rona, Tr. 1658-1659; CX 1149.) 

Mr. Rona also did not receive any response to either email. (Rona, Tr. 1658-1659.) Of the 

Sigma handful of employees who received Mr. Rona’s emails, not a single one of them 

mentioned or referred in any fashion to the comments Mr. Rona attributed to Mr. Tatman, and 

Mr. Rona testified they never discussed the emails with anyone. (Rona, Tr. 1454, 1647-1648, 

1653-1654; CX 1124, CX 2014, CX 2015.) In fact, Mr. Rona did not even send the March 10 

email to Mr. Rybacki. (Rona, Tr. 1641-1642; CX 1124.) Further, he sent the August 22 email to 

a general email group “M05” that happened to include Mr. Rybacki, but Mr. Rybacki does not 

recall receiving the email and testified that he never discussed it with Mr. Rona. (Rybacki, Tr. 

3715-3717; CX 1149.) Most significantly, Mr. Rybacki, who was in charge of Sigma’s pricing 

to its distributor customers, paid no attention to the email and testified that it had no effect on his 

pricing decisions. (Rybacki, Tr. 3716-3717; CX 1149.) Indeed, Mr. Rona, Mr. Tatman and Mr. 

Rybacki all testified they always made their pricing decisions on their own, and each expressly 

denied discussing or agreeing upon prices at any time. Instead, the emails appear to have passed 

unnoticed by the Sigma personnel. (Rona, Tr. 1647-1648, 1653-1654; CX 1124, CX 2014, CX 

2015.) The evidence is thus undisputed that the two Rona internal emails had no effect on 

McWane’s or Sigma’s Fittings prices. (Rybacki, Tr. 3715-3717 & CX 1149; Rona, Tr. 1645, 

1647, 1662.) 

Finally, a fair reading of the two emails refutes the construction implied by Complaint 

Counsel. On their face, they are (at most) complaints about ongoing job discounting - - 

competitive activity that is consistent with independent decision-making and inconsistent with 

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any conspiracy. On the one hand, had there been a pre-existing agreement in place to limit job 

pricing back at the beginning of 2008, as Complaint Counsel alleges, one would have expected 

Mr. Tatman to reference that agreement and complain that Sigma was not living up to its 

commitment. The emails contain no such reference. On the other hand, if Mr. Tatman had been 

trying to forge an agreement in March or August 2008, presumably he would have asked Mr. 

Rona to talk to Mr. Rybacki and seek his agreement going forward to stop discounting to 

distributors. But neither email says anything of the sort. Once again, the emails simply reflect 

ongoing job discounting (and thus are entirely consistent with competitive decision-making) and 

say nothing at all that “tends to exclude the possibility” of independent action. They are “minus 

factors” that refute an inference of an agreement forged in early 2008. 

In any event, it is well-established that competitor communications alone are insufficient 

evidence of a price-fixing conspiracy. Baby Food, 166 F.3d at 133. For example, in Baby Food, 

the Third Circuit affirmed summary judgment in a case where “each defendant independently 

was able to obtain information concerning its competitors’ product pricing and promotions” 

through “advance price announcements” and its sales representatives met at trade shows. Id. 

The Court held that “the exchanges of information among the defendants’ sales representatives 

amounted to mere ‘chit chat’ at chance meetings or trade shows among persons with no pricing 

authority” and “courts generally reject conspiracy claims that ‘seek to infer an agreement from ... 

communications despite a lack of independent evidence tending to show an agreement and in the 

face of uncontradicted testimony that only informational exchanges took place.’” Id. at 132-133 

(internal citation omitted). Thus, to prove a violation of the antitrust laws, Complaint Counsel 

must show that there was an actual exchange of pricing information, and that the exchange made 

an impact on pricing decisions. Id. Complaint Counsel has not done so. 

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f) A Handful Of Phone Calls And Other “Opportunities To Conspire” 

Between Sigma and McWane Personnel Were Legitimate And Do Not 

Suggest A Preceding Agreement on Published Prices Or Job 

Discounts 

(1)	 The Few, Brief Phone Calls Between Mr. Rybacki And Mr. 

Tatman (and Mr. Frank) Were Perfectly Legitimate 

Dr. Schumann’s concession that “I have not found anything to suggest” that McWane, 

Sigma and Star met and agreed upon prices, as well as his conclusion that “there was no meeting 

in a smoke filled room” and the companies “did not meet and hammer out a specific agreement,” 

moots Complaint Counsel’s effort to parade out phone records and suggest that somehow, maybe 

there was a price discussion. (Schumann, Tr. 4172.) Complaint Counsel marked stacks and 

stacks of phone records - - but only a small handful showed a phone calls between Sigma and 

McWane (and none showed a call between anyone from McWane and anyone from Star). (See 

CX 1621A in camera.) 

First, Complaint Counsel identified only 

prior to the formation of the alleged conspiracy in January 2008. (See CX 1621A 

in camera and Complaint ¶ 2.) The phone records confirm that each of these calls was of 

extremely limited duration. (CX 1621A in camera.) Mr. Rybacki and Mr. Tatman both testified 

that they never discussed or agreed upon fittings prices. (Rybacki, Tr. 3626-3628 & CX 1621A 

in camera, 3650, 3682; Tatman, Tr. 367-370.) 

(Rybacki, Tr. 3626-3628 & CX 1621A in camera, 

3650, 3682; Tatman, Tr. 367-370 & CX 1621A in camera.) 

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(See CX 1621A in camera.) 

It defies common sense to believe that the terms and details of the complex conspiracy 

alleged by Complaint Counsel (a conspiracy so complex Dr. Schumann cannot define precisely 

when or how it was formed, who formed it, or what “reduction” in job pricing they agreed to), 

between two men who did not know each other at all (and companies that had a history of 

fighting tooth and nail), could be hatched in a matter of minutes. (See Rybacki, Tr. 3508.) And 

that is why Dr. Schumann concluded he did not find anything to suggest such an implausible 

thing. 

Complaint Counsel also points to phone records showing that Mr. Rybacki periodically 

called his friend and former colleague who was then at McWane, Mr. Tom Frank, to check in on 

the health of his son. Even Dr. Schumann recognized that was ordinary human kindness, and not 

suggestive of any conspiracy. (Schumann, Tr. 4250.) 

In sum, the phone records disprove Complaint Counsel’s case. The calls between Sigma 

and McWane were few and far between, very short, and their innocuous purposes were fully 

explained to the best of anyone’s recollection years later. Indeed, this Court repeatedly noted 

that the phone record “evidence” was so vague as to be meaningless: “[t]his record does nothing 

but indicate a call was made from one phone number to another phone number.” (Chappell, Tr. 

2475.) 

Given the legitimate topics and the timing of the alleged calls, Complaint Counsel’s 

evidence of calls to and from Mr. Rybacki does not “tend to exclude the possibility” that the calls 

were legitimate business and personal communications having nothing to do with any illicit 

agreement. See Matsushita, 475 U.S. at 588; Flat Glass, 385 F.3d at 360. Courts have held that 

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evidence of “opportunity to conspire” - - such as frequent meetings of CEOs of alleged coconspirators - - is insufficient to infer an antitrust conspiracy. Burtch, 662 F.3d at 217 (affirming 

dismissal despite exchanges of information “through at least 27 telephone conversations,” 

holding that a violation of the Sherman Act “still requires showing that the defendants had an 

agreement”); In re Travel Agent Commission Antitrust Litig., 583 F.3d 896, 905 (6th Cir. 2009); 

Cosmetic Gallery, Inc. v. Schoeneman Corp., 495 F.3d 46, 53 (3d Cir. 2007). 

(2)	 Mr. Pais’ Legitimate Discussions With Mr. Page Do Not 

Suggest An Agreement on Published Prices Or Job Discounts 

Complaint Counsel argues that “Pais-Page Discussions” and “other communications” 

constitute “plus factors” that suggest a conspiracy, but the fact record showed the opposite: that 

the two men had periodic discussions with legitimate purposes, including arms’ length 

negotiations for Sigma to sell McWane imported Fittings (before McWane had its Tyler Xin Xin 

foundry), for Sigma to buy domestic Fittings from McWane (because it had none), a potential 

merger of the companies, and discussions about joint venture opportunities abroad related to pipe 

(not Fittings). 

Mr. Pais testified, for example, that he contacted Mr. Page in 2003 - - years before the 

alleged conspiracy - - after learning that McWane might be interested in sourcing Fittings from 

China. (Pais, Tr. 1868-1870.) Mr. Pais introduced Mr. Page to Chinese foundries, including 

some of his own suppliers, and ultimately sold McWane Chinese Fittings. (Pais, Tr. 1869-1871; 

JX 642 (Page, Dep. at 28-29, 30-32, 110-111, 123-124, 243-244).) 

Significantly, Mr. Page had no day-to-day involvement in McWane’s Fittings business 

throughout this period. As McWane’s Corporate President and CEO, he had a number of other, 

much larger (and even more beleaguered) businesses all reporting to him and, when the housing 

and financial crises hit in 2006-08, McWane’s Fittings business was only a small part of 

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McWane’s overall businesses. (JX 642 (Page, Dep. at 14, 43-45.) Thus, although Complaint 

Counsel elicited testimony at trial regarding meetings between Mr. Pais and Mr. Page in 

September and December, 2007, there was no evidence at all the two men discussed Fittings 

prices. (Pais, Tr. 1881-1886.) On the contrary, Mr. Pais testified that those meetings concerned 

various global opportunities and only peripherally touched on personnel changes related to Mr. 

Green’s departure from McWane. (Pais, Tr. 1883-1884, 1887.) 

Mr. Pais testified that he was very wary of McWane’s competitive drive in the Winter of 

2008 - - his conversations with Mr. Pais had nothing to do with Fittings prices, and no effect on 

his “guess” that McWane would price in its own self-interest in order to beat Sigma in the 

marketplace. (CX 2119 (“Perhaps, he has now done a thorough competitive review and has 

decided that an aggressive offensive strategy is the best form of defense -- which may call for 

using any and all options they have to strengthen their vulnerable positions including those they 

hurt us . . . keeping FTG price down during our rise in costs”) (emphasis added); Pais, Tr. 2043 

(“Q. . . . Perhaps -- why do you say “perhaps”? A. Because I’m just guessing and speculating. . . 

. Q. . . . Now, what you’re speculating is that Mr. Page has done a thorough competitive review 

and has decided that an aggressive offensive strategy may be the best form of defense; right, sir? 

A. Sure. That’s my guess, yes.”).) Both Mr. Pais and Mr. Page deny discussing Fittings prices or 

market strategy in either meeting, and Complaint Counsel has presented no evidence to the 

contrary. (Pais, Tr. 1897; JX 642 (Page, Dep. at 80-82).) 

Complaint Counsel’s plea that this Court to leap to the unwarranted and speculative 

assumption that the two executives discussed pricing during one of their conversations is not 

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only contradicted by the witness’ testimony, but impermissible as a matter of law.14 Court after 

court has held that the mere opportunity to conspire is not sufficient to suggest a conspiracy: 

If Adam Smith is peering down today, he may be surprised to 

learn that his tongue-in-cheek remark would be authority to force 

his famous pinmaker to devote financial and human capital to hire 

lawyers, prepare for depositions, and otherwise fend off allegations 

of conspiracy; all this just because he belonged to the same trade 

guild as one of his competitors. 

Twombly, 550 U.S. at 567 n. 12 (holding the mere opportunity to conspire insufficient to suggest 

conspiracy); Burtch, 662 F.3d at 228 (“frequent meetings between the alleged conspirators ... 

will not sustain a plaintiff's burden absent evidence which would permit the inference that those 

close ties led to an illegal agreement”); In re Travel Agent, 583 F.3d at 903 (evidence of 

“opportunity to conspire” – such as frequent meetings of CEOs of alleged co-conspirators – is 

insufficient to infer an antitrust conspiracy). Thus, Complaint Counsel has failed to meet its 

burden of evidence, or “plus factors,” which tend to exclude the possibility of independent 

conduct. 

C. Complaint Counsel’s April 2009 Evidence Is Consistent With Independent 

Decision-Making 

Complaint Counsel concedes that in April 2009, McWane independently decided to 

lower its list price dramatically on all medium and large diameter imported Fittings 

approximately 20-25% in order to win business and gain share. Mr. Tatman testified that 

14 In its opening brief, Complaint Counsel also references alleged discussions between Sigma’s Mr. Pais and Star’s 

Mr. McCutcheon, and argues that prices were “surely discussed at some point during these conversations.” (CC’s 

Op. Br. at 131.) To be clear, these alleged conversations had nothing to do with McWane. Both Mr. Pais and Mr. 

McCutcheon testified that they never discussed pricing and, in any event, never discussed the conversations between 

the two of them with McWane. (Pais, Tr. 2028, 2035, 2045-2048, 2080, 2102, 2130-2131; McCutcheon, Tr. 2524­

2525.) Thus, the alleged conversations do not fall within a “co-conspirator” exception to the hearsay rule, as 

Complaint Counsel has not shown that they were statements in the furtherance of a conspiracy (and certainly not a 

conspiracy involving McWane). What relevance these alleged conversations could possibly have to the issue of 

whether McWane violated the antitrust laws is not clear from Complaint Counsel’s brief. What is clear is that this is 

yet another example of Complaint Counsel leaping to a conclusion that because two competitors may have had a 

conversation, pricing was “surely discussed.” Complaint Counsel’s unsupported conclusion fails as a matter of law. 

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beginning in the summer of 2008, McWane spent six to eight months internally determining how 

to restructure its list prices to make it more competitive against the imported Fittings of Star and 

Sigma, which had both done particularly well in medium (14”-24”) and large diameter (30” and 

above) size ranges. (Tatman, Tr. 586-587, 594-595.) McWane’s new list prices were so low that 

Sigma thought they were “predator[y]” and considered suing McWane. (Rybacki, Tr. 3719.) 

Testimony also shows that McWane kept its lower list prices in place throughout the year, which 

hurt both Sigma and Star. (Rybacki, Tr. 3719 (“Q. Kept that in place throughout the year, those 

lower prices? A. Yes, they did.”).) 

It is undisputed that Star learned about McWane’s list price decrease from customers 

after the fact and internally decided - - on its own - - to follow McWane’s lower price lists. 

(McCutcheon, Tr. 2526-2527.) Complaint Counsel further concedes that the after-the-fact call 

from Mr. McCutcheon to Mr. Tatman (not the other way around) was not about prices, but 

simply to verify that McWane’s already-announced list price was not going to be rescinded and 

replaced with something else (it was not), which Mr. McCutcheon wanted to know before 

incurring the cost of printing out hundreds of price books - - and then finding out that he would 

have to do it all over again. (McCutcheon, Tr. 2457, 2460-2461, 2529-2530.) Mr. McCutcheon 

flatly denied discussing any prices (or that he was seeking any agreement) on the call. 

(McCutcheon, Tr. 2460-2461, 2529-2530.) 

Moreover, even if Mr. McCutcheon’s call could be construed as Star’s effort at “price 

verification,” courts have held that insufficient as a matter of law to prove a conspiracy, and 

Complaint Counsel cites no case holding that Star’s call to verify McWane’s prices somehow 

suggests McWane conspired. To prove that the alleged call unlawful, Complaint Counsel must 

show Mr. Tatman and Mr. McCutcheon reached an actual agreement to set prices during this 

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call. Blomkest, 203 F.3d at 1034 (affirming summary judgment, the Court found “no evidence 

here that price increases resulted from any price verification or any specific communication of 

any kind. Subsequent price verification evidence on particular sales cannot support a 

conspiracy.”) (italics in original). Mr. Tatman had already made his announcement and 

Complaint Counsel does not argue that McWane’s decision changed, or that its conduct was in 

any other way affected by the alleged call. In fact, it is undisputed that after the call McWane 

made no change to its previously announce decision. Courts have uniformly held that a call to 

simply confirm a competitor’s previously announced price does not amount to an illegal 

agreement. Id.; see also Baby Food, 166 F.3d at 128 (decisions to follow an industry leader’s 

price increases are perfectly legitimate, especially where, as here, the same behavior occurred 

before, during and after the alleged conspiracy). 

Finally, Complaint Counsel’s own expert, Dr. Schumann, did not believe that this 

conversation was part of the alleged conspiracy. Instead, he repeatedly opined that any 

conspiracy ended by the Fall of 2008 at the latest. (Schumann, Tr. 4298 (“I believe that by the 

end of 2008, that last quarter, the conspiracy was collapsing.”); 4304 (“Q. October 23, 2008, so 

right around the time you say the conspiracy is falling apart and ending; correct? A. This is 

around the time - Q. Yeah. A. -- it seemed to be really starting to collapse.”); Schumann, Tr. 

4200-4201).) Dr. Schumann’s concession is significant, as case law makes clear that expert 

witnesses can bind the government with their statements. See Glendale Federal Bank, F.S.B. v. 

United States, 39 Fed. Cl. 422, 425 (Fed. Cl. 1997). In Glendale, the experts retained were on 

the government’s trial witness list, and the Court held that their opinions in the case bound the 

government as the sponsoring party. Id. The Court went on to find that by designating them as 

experts, the government conferred agency on the experts and were thus bound by their 

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statements. Id. (“By the time the trial begins, we may assume that those experts who have not 

been withdrawn are those whose testimony reflects the position of the party who retains them.”); 

see also Collins v. Wayne Corp., 621 F.2d 777, 782 (5th Cir. 1980) (court treated that expert’s 

deposition testimony as an admission of the defendant: “district court erred in not allowing the 

plaintiffs to offer Greene’s deposition into evidence as an admission of Wayne.”). Thus, because 

Complaint Counsel designated Dr. Schumann as its expert, it is bound by his statement that the 

alleged conspiracy ended in 2008. 

Complaint Counsel then asks this Court to infer that McWane is somehow liable because 

of a single email, created on April 28 - - after McWane announced its lower prices and after 

Star’s decision to follow them down - - in which Tatman says he is “highly confident” that Star 

will follow McWane’s list price. (CC’s Op. Br. at 40-41.) But additional subsequent documents 

demonstrate that Mr. Tatman did not know what Star was doing and whether it was likely to 

follow McWane’s dramatic price drop. For example, on April 30, 2009 - - two days after Mr. 

McCutcheon called him - - Mr. Tatman expressed a lack of knowledge and complete uncertainty 

about what Star would do. He internally opined to his National Sales Manager, Jerry Jansen, that 

“I think it will be mid-next week until the dust settles. If they stick with the old List and a 

0.32/0.35 the[n] we should sell allot [sic] in the Northwest.” (CX 3027 (emphasis added).) 

Complaint Counsel cites no case finding liability where someone is temporarily “highly 

confident” about his competitors’ prices and then, two days later, acknowledges he has no clue 

what they were going to do. Relying mainly on Sugar Institute, Complaint Counsel argues that 

an agreement to adhere to previously announce prices is unlawful. (CC’s Op. Br. at 157-158.) 

As discussed in Section II(B), supra, Sugar Institute is completely inapplicable here. Further, 

there was no agreement to adhere to a previously announced price. At best Complaint Counsel is 

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left with a call from Star to McWane amounting to “price verification,” which has been 

consistently held not to violate the antitrust laws. See Blomkest, 203 F.3d at 1034. 

D. McWane’s Independent Decision To Issue Its June 2010 Multipliers, And The 

Independent Decisions by Star and Sigma to Follow McWane’s Announcement, 

Were Lawful Oligopoly Behavior15 

Mr. Tatman’s testimony regarding its June 2010 pricing was clear: McWane 

independently determined its June 2010 multipliers, raising some, lowering others, and keeping 

some flat. (Tatman, Tr. 978; 1005-1006.) He testified that McWane made its decisions 

independently, using a state-by-state analysis for the express purpose of undercutting his 

competitors, and did not discuss the analysis with any competitors. (Tatman, Tr. 978; 1005­

1006; RXD 001 in camera.) Star and Sigma witnesses testified that they independently decided 

to follow. Trial testimony also confirms that McWane, Sigma and Star never discussed the 

multiplier changes in the customer letters that each issued to its respective customers prior to 

their publication in June 2010, and each witness consistently denied coming to any agreement. 

(Tatman, Tr. 978; 1005-1006 & RXD 001 in camera; Rybacki, Tr. 3720-3722 & CX 2453; Pais, 

Tr. 2048; Brakefield, Tr. 1337; CX 2440, CX 2450, CX 2453, CX 1396.) 

Complaint Counsel does not appear to have a coherent theory on whether McWane’s 

June 2010 price change was “conspiratorial,” or simply involved “signaling,” but the facts show 

neither were present. Complaint Counsel’s conspiracy theory fails because it does not dispute 

that McWane made its own independent decision which Sigma and Star independently decided 

to follow. Complaint Counsel also presented no direct evidence of any agreement to set 2010 

15 Complaint Counsel did not address the June 2010 allegations in its argument. However, because Complaint 

Counsel briefly references June 2010 in its statement of facts (see CC’s Op. Br. at 39), McWane briefly addresses 

the allegations here. McWane addresses the allegations in more detail in its opening brief, and Response to 

Complaint Counsel’s Proposed Findings of Fact. 

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Fittings prices, and no circumstantial evidence of any “plus factors” sufficient to suggest any 

preceding agreement on the June 2010 multipliers. 

Complaint Counsel’s signaling theory fails because in conclusory fashion, Complaint 

Counsel merely asserts that “McWane, Sigma, and Star nevertheless continued to engage in 

improper signaling practices” in June 2010. This hollow assertion, on its face, is insufficient as 

a matter of law. Notably, Complaint Counsel does not argue anywhere in its brief that McWane, 

Sigma and Star had a preceding agreement, and even assuming arguendo that Sigma and Star 

followed McWane’s plain vanilla price announcement, that fact is consistent with independent 

and self-interested follow-the-leader behavior that is lawful (and expected) in an oligopoly, and 

does not suggest an agreement as a matter of law.16 See In re Flat Glass, 385 F.3d at 359; In re 

Baby Food, 166 F.3d at 128; In re Citric Acid Litigation, 191 F.3d at 1102-03. Thus, McWane is 

entitled to judgment in its favor on Complaint Counsel’s claims relating the June 2010 pricing 

actions. 

E. Complaint Counsel’s Alternate “Invitation To Collude” Via Price Signaling 

Theory In McWane’s January And May 2008 Letters Is Defective As A Matter 

Of Law 

Tacitly recognizing its lack of any actual direct or circumstantial evidence to support its 

claims of a price fixing conspiracy, Complaint Counsel simply assigns a fictitious meaning to the 

letters and argues that they are unlawful “invitations to collude,” “even if unsuccessful[.]” (CC’s 

Op. Br. at 91.) Complaint Counsel’s “invitation to collude” theory is defective as a matter of law 

and unsupported by the facts. 

16 If plain vanilla customer letters can be dubbed “signaling” and held unlawful under the antitrust laws, nearly every 

business in the country could be prohibited from announcing price changes to their customers for fear of being sued. 

Luckily, the antitrust laws do not condemn such conduct. Williamson Oil, 346 F.3d 1307 (price increase announced 

at press conference did not constitute unlawful “invitation”); Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647 

(1980) (per curium) (“advance price announcements are perfectly lawful”); Reserve Supply, 971 F.2d at 54 (advance 

announcements of price changes not unlawful, as they “served an important purpose” in the industry). 

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The overwhelming evidence at trial showed that McWane never discussed its January or 

May 2008 letters with anyone from Sigma or Star, and always made its decisions independently. 

(Tatman, Tr. 363-364.) There is no testimony or other evidence of any discussion between 

McWane and any competitor regarding the January or May 2008 price letters, much less any 

acknowledgement of an “invitation” between McWane and any competitor with regard to 

pricing. For example, Mr. Tatman testified that the May 7, 2008 letter was merely a letter sent 

to McWane’s customers “for planning purposes only” in response to the “unusual” “40 percent 

price increase” issued by Sigma. (Tatman, Tr. 502-503.) Before sending the May 7 letter, Mr. 

Tatman undertook a painstaking analysis to determine the path that would create the greatest 

competitive advantage. Sigma and Star witnesses flatly rejected Complaint Counsel’s 

interpretation that McWane’s letter was some sort of secret “message” linking a price increase to 

receipt of DIFRA data, and that the thought never occurred to them. ( JX 698 (McCutcheon 

Dep. at 198:13-199:4 (“Absolutely none. As a matter of fact, the first time that thought - - I’ve 

even heard that was today. Of linking that to DIFRA?”); Pais Dep. at 381:4-382: 11 (“It is so 

farfetched and ridiculous, what can I say? No, no.”).) 

Complaint Counsel does not point to any evidence at trial to refute the witnesses’ 

explanations, but argues that the letter contained a secret “message for Sigma and Star.” (CC’s 

Op. Br. at 32.) However, even Dr. Schumann conceded that McWane’s customer letters were 

plain vanilla pricing letters that did not contain or communicate the key tenets of the conspiracy 

he opined to Sigma and Star. (Schumann, Tr. 4203 (“Q. And the words “Star and Sigma” aren’t 

in it at all, are they, sir? A. That is correct. Q. And the words “must cooperate” aren’t in this at 

all; right? A. That’s also correct. Q. And it doesn’t say you must cooperate or prices will not 

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increase further, does it, sir? A. That is correct”), 4202 (“I don’t say in my report that it was 

given to Star and Sigma, that’s right.”).) 

Even if this Court finds that the pricing letter contained an implied suggestion of less job 

pricing, Mr. Tatman testified it was a “head fake,” he hoped would lull Star and Sigma into 

complacency, and allow McWane to beat Star and Sigma with job pricing. That is a perfectly 

legitimate and competitive tactic. (Tatman, Tr. 386.) There is nothing illegal about attempting 

to bait your competitor into a more vulnerable position from which you can achieve an 

advantage. That is called competition. Moreover, witnesses consistently testified that they did 

not trust the pricing letters sent to customers. (Pais, Tr. 1931 (“As I’ve said -- and I hope, if 

nothing else, you’ll get a sense of this industry -- this has been a bitterly competitive, mistrustful, 

even vengeful supply base”), 1995-1996 (“everyone in our industry is mistrustful, vengeful, and 

looking for any way to react and hurt each other while they’re trying to protect themselves”); 

Rybacki, Tr. 3566 (“Because there’s such a mistrust amongst the group as a whole anyway.”).) 

Thus, Complaint Counsels condemns McWane’s January and May 2008 letters, but has fallen far 

short of proving those letters represent an actual “invitation” to do anything. 

Further, Complaint Counsel’s “invitation to collude” theory fails for legal reasons. 

Courts have repeatedly upheld the permissibility of customer letters and advance price 

announcements in industries, like this one, that are cyclical and where projects are bid well in 

advance. Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647 (1980) (per curium) (“advance 

price announcements are perfectly lawful”); Reserve Supply, 971 F.2d at 54 (advance 

announcements of price changes “served an important purpose” in construction industry because 

customers “bid on building contracts well in advance of starting construction and, therefore, 

required sixty days’ or more advance notice of price increases”). In addition, as set out in 

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McWane’s opening brief, no court has ever held that a one-way “invitation” to collude that did 

not contain the claimed invitation (and was not understood as an invitation), and was clearly not 

accepted as such, constitutes an antitrust violation. On the contrary, court after court has rejected 

antitrust liability when presented with a vague one-way offer. Williamson Oil, 346 F.3d 1307 

(rejecting argument that a press conference announcing price increases was an unlawful 

“invitation”, the Court held “the allegation of Marlboro Friday as ‘invitation to collude’ is not 

supported”); Baby Foods, 166 F.3d at 125 (“to survive summary judgment, there must be 

evidence that the exchanges of information had an impact on pricing decisions”), United States v. 

Am. Airlines, Inc., 570 F. Supp. 654, 657 (N.D. Tex. 1983) (Sherman Act’s prohibition of 

conspiracies “does not reach attempts”), rev’d on other grounds, 743 F. 2d 1114, 1119 (5th Cir. 

1984) (“our decision that the government has stated a claim [under Sherman Act Section 2] does 

not add attempt to violations of Section 1 of the Sherman Act”). 

The cases Complaint Counsel cites are inapplicable. For example, Complaint Counsel 

relies heavily on the holding in United States v. Consol Packaging Corp., 575 F.2d 117, 126 (7th 

Cir. 1978), but that case did not hold that a mere invitation to collude is actionable even if 

unsuccessful, as alleged here. To the contrary, the Court held that “[i]t is understood that the 

essence of conspiracy is agreement” and found that the evidence in that case “established directly 

and circumstantially a prima facie case that there existed a wide price-fixing conspiracy.” Id. at 

126. That situation does not exist in this case. 

Complaint Counsel also makes much of the fact that the Commission has “challenged 

public invitations to collude” by filing complaints in In re Valassis Commc’ns, Inc., FTC File 

No. 051-0008, 2006 WL 1367833 (F.T.C. April 19, 2006), and most recently, in In re U-Haul 

Int’l Inc., FTC File No. 081 0157 (F.T.C. July 14, 2010). (CC’s Op. Br. at 94.) But those cases 

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settled before litigation and thus did not establish any binding rule of law, let alone governing 

precedent. 

Notably, Complaint Counsel fails to cite a single litigated case in which an invitation to 

collude was judged illegal by any federal court, under Section 5 or otherwise. The fact that the 

Commission has taken the position - - in the Valassis and U-Haul settlements - - that amorphous 

“invitations to collude” are encompassed within Section 5 does not make it so. E.I. duPont de 

Nemours & Co. v. FTC, 729 F.2d 128, 137-38 (2d Cir. 1984) (rejecting the FTC’s expansive 

interpretation of “unfairness” under FTC Act Section 5 when it attempted to penalize 

competitive conduct based on the “elusive concept” of unfairness which is “often dependent 

upon the eye of the beholder.”). 

III. THE TONS-SHIPPED DIFRA DATA DID NOT FACILITATE COLLUSION 

To the extent Complaint Counsel contends that dissemination of the tons-shipped data by 

DIFRA constitutes a free-standing violation of Section 5, that claim fails for the same reasons 

that McWane’s participation in DIFRA failed to constitute a “plus factor,” as discussed in 

Section II(B)(2)(c), supra. (See also McWane’s Op. Br. at 23-26, 77-79.) The overwhelming 

record evidence shows that DIFRA was a procompetitive trade association that in no way 

“facilitated coordination” either in theory or in practice. The aggregated volume (not price) data 

contained in the DIFRA reports helped each member to assess overall market trends and estimate 

its own market share, and thereby better manage production schedules and inventory. (JX 694 

(Bhutada, Dep. at 20-21); JX 654 (Brakefield, Dep. at 77-78); Rybacki, Tr. 3539-3541.) For 

example, McWane used the tons-shipped data to finalize its independent decision in June 2008 to 

keep its published multipliers lower than the large price increases that Sigma announced in its 

“Big Bold Move.” (Tatman, Tr. 536-540.) In fact, and in direct contradiction of its theory, 

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Complaint Counsel concedes that the only McWane pricing decisions after DIFRA became 

operational in mid-2008 were (1) its decision to underprice its competitors on June 17, 2008 and 

not follow the “big, bold move” Sigma announced (and Star followed), and (2) McWane’s 

decision to dramatically lower all medium and large diameter list prices in April 2009. Both 

decisions were designed to win business and gain back share. Moreover, the evidence at trial 

also showed that McWane continued job discounting throughout this period and that prices 

sharply deteriorated in the second half of 2008 - - during the time period when the DIFRA data 

was available. Ironically, the Star and Sigma witnesses blamed this sharp decline on McWane’s 

rampant job pricing. (RX 116; Pais, Tr. 2129-2131; Rybacki, Tr. 3702.) 

In any event, each witness testified that the historic tons-shipped DIFRA data did not 

give McWane or any other DIFRA member any insight into competitor pricing, and that they 

never discussed pricing at DIFRA meetings (all of which were monitored by antitrust counsel). 

(Brakefield, Tr. 1352-53,1384-1389; McCutcheon, Tr. 2563.) Every witnesses who knew 

anything about DIFRA confirmed that the reports did not in any way serve as a vehicle to permit 

McWane, Sigma or Star to fix and stabilize Fittings prices or otherwise “facilitate” price 

coordination. (Brakefield, Tr. 1337 (“Q. Did DIFRA serve as a vehicle to permit Sigma, Star 

and McWane to fix and stabilize prices for ductile iron fittings? A. No, sir.”).) Complaint 

Counsel’s suggestion that an illicit inference should be drawn from this perfectly legitimate 

business purpose is contrary to both the evidence and well-established legal authority. 

Complaint Counsel tacitly concedes each of these facts, but argues that “[a]n information 

exchange, although not inherently anticompetitive, is well-recognized as a potential tool for 

facilitating coordinated behavior.” (CC’s Op. Br. at 164.) Complaint Counsel then leaps to the 

conclusion that “McWane’s participation in the DIFRA information exchange” should be 

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condemned because it “represents concerted activity” with the likely effect of facilitating “noncompetitive or collusive pricing.” (CC’s Op. Br. at 164.) This unsupported argument is 

incorrect as a matter of law, and the dearth of facts Complaint Counsel cites to support its 

assertion is telling. The case law consistently holds that the pro-competitive use of trade 

association data is perfectly lawful and should be encouraged. Monsanto, 465 U.S. at 767 (“The 

correct standard is that there must be evidence that tends to exclude the possibility of 

independent action by the manufacturer and distributor”); Williamson Oil, 346 F.3d at 1313 

(“exchange [of] information relating to sales . . . does not tend to exclude the possibility of 

independent action or to establish anticompetitive collusion”). “If we allowed conspiracy to be 

inferred from such activities alone, we would have to allow an inference of conspiracy whenever 

a trade association took almost any action.” Citric Acid, 191 F.3d at 1097-98. In the absence of 

a shred of evidence, much less substantial evidence, that the DIFRA data was actually used or 

capable of use for an improper purpose, the Court must ignore Complaint Counsel’s hypothetical 

speculation. 

IV.	 THE MASTER DISTRIBUTORSHIP AGREEMENT WITH SIGMA WAS PROCOMPETITIVE AND DID NOT EXCLUDE SIGMA FROM DOMESTIC 

FITTINGS 

Complaint Counsel’s argument that Sigma could have (and would have) expanded into 

the manufacture of domestic Fittings during the ARRA period was contradicted by the evidence 

at trial that demonstrated Sigma’s dire financial straits in 2009. Sigma had already breached its 

bank loan covenants and was on the verge of doing so again, it had more than $100 million in 

debt (tens of millions of it at extraordinarily high, double digit interest rates approaching 20%), 

little or no equity (it had only a few hundred thousand dollars in cash on its books) and 

plummeting revenue. (Pais, Tr. 2181 (“Q. And what you’re telling him is, as we head into this 

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bank meeting, we’re actually in an even worse position than we believed; right? A. Yes.”).) 

Sigma’s CEO and Vice President both confirmed Sigma’s “grave” situation. (Pais, Tr. 2163­

2164 (“Q. And the fact is that Sigma in May of 2009 was in a grave situation. A. Grave, yes”); 

Rybacki, Tr. 3728 (“there were grave concerns over the costs of getting into domestic fittings.).) 

In the Summer of 2009, with the ARRA clock ticking away, Sigma’s Vice President of 

Engineering, Mr. Bhattacharji, concluded that after exploring the possibility, virtual 

manufacturing was “not a viable option.” (JX 682 (Bhattacharji Dep. at 121:20-124:8).) As a 

result, neither Sigma’s board nor its banks authorized the company to exceed its capital expense 

limit imposed by the banks or to move forward with domestic manufacturing. (JX 682 

(Bhattacharji Dep. at 83:11-15 (“Q. How could you even get into domestic production with $5 to 

$10 million of potential capex if you’re capped at $2-1/2 million? A. Absolutely. You could 

not.”).) 

In 2009 Sigma simply was not in a position financially, commercially or practically to 

domestically manufacture fittings. It could not have become a producer of domestic Fittings in 

time to compete for jobs under ARRA. As a practical matter, it would have taken Sigma at least 

18-24 months to develop a full line of fittings, long after the ARRA period was over. (Rona, Tr. 

1673; RX-284 ¶¶ 4-15; RX-287 ¶¶ 3-14; RX-286 ¶¶ 5-6; JX 682 (Bhattacharji, Dep. 30-31, 47, 

118-119, 121-124.) Sigma’s opinion that it could not expand to domestic production in time to 

compete for jobs under ARRA was further confirmed by the fact that no other domestic foundry, 

including ones that had previous experience producing domestic fittings, chose to enter domestic 

production. Tellingly, every current and former domestic Fittings manufacturer, including 

Griffin Pipe, U.S. Pipe, and Backman Foundry, concluded it was not worthwhile to expand or 

return to domestic Fittings production. (Morton, Tr. 2875; JX 646 (Burns, Dep. at 30-31, 35-36, 

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176-177); JX 667 (Kuhrts, Dep. at 38, 49-50, 74).) Mr. Backman of Backman Foundry testified 

that his firm did not even consider expanding its production of domestic Fittings as a result of 

ARRA because “anybody and their dog can see that this market is going to end at some point.” 

(See JX 648 (Backman, Dep. at 109-110).) Sigma’s good judgment in not attempting to get into 

domestic Fittings was confirmed by Sigma’s failed attempt to become a virtual supplier of 

domestically produced pipe restraints, a product distinct from Fittings which required far less 

investment (and only a few dozen patterns, as opposed to 700+), that was a 

(Rybacki, Tr. 3672-3673 in camera.) Thus, it is hardly surprising that Mr. Rybacki believed that 

it was inadvisable for Sigma to attempt to become a domestic Fittings supplier in 2009, when its 

financial situation was so precarious. (Rybacki, Tr. 3677-3678; 3682.) 

Given Sigma’s financial situation, its expectation that ARRA would only last for a short 

time, and its failed attempt to enter virtual production of domestic restraints, Sigma made the 

independent and rational judgment that its only option for a source of domestic Fittings was the 

MDA with McWane. (Pais, Tr. 2217 (“I have explained very descriptively the various 

challenges that we had as we went down that path. And we never got to a point of having any 

viable domestic production capability at all”), 1755 (“we had no clear option. We had no idea 

about what would really be a feasible option”).) Complaint Counsel did not proffer any evidence 

at trial to the contrary, and instead simply asked its expert, Dr. Schumann, to “assume” that 

Sigma would have entered, and makes the same assumption that “Sigma was a potential 

competitor” that “intended to” and was “capable” of entering the purported domestic market in 

its post trial brief. (Schumann, Tr. 4473 (“I was asked to assume that but for the MDA Sigma 

would have entered into the domestic fittings market”); CC’s Op. Br. at 180-189.) However, 

wish as they might that it were different, as the holder of the burden of proof Complaint Counsel 

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cannot ignore the undisputed testimony in this case and substitute its speculative assumptions for 

evidence. This Court should reject Complaint Counsel’s assertions, and not second-guess the 

judgment of executives running Sigma. 17 

To succeed on its claims relating to the MDA, Complaint Counsel must prove that - - as 

of September 2009 when the MDA was executed - - Sigma had “an intention and preparedness 

to enter the business.” 18 Gas Utilities Co. of Alabama. v. S. Natural Gas Co., 996 F.2d 282, 283 

(11th Cir. 1993) (emphasis added). “Without these two showings it cannot fairly be concluded 

that the antitrust violation was the cause of the failure to expand.” Cable Holdings of Ga., Inc. v. 

Home Video, Inc., 825 F.2d 1559, 1562 (11th Cir. 1987). 

As the Court in Martin v. Phillips Petroleum Company, 365 F.2d 629, 633-34 (5th Cir. 

1966) further explained, a plaintiff must demonstrate four elements to establish “preparedness”: 

(1) “the ability of plaintiff to finance the business and to purchase the necessary facilities and 

equipment”; (2) “the consummation of contracts by the plaintiff”; (3) “affirmative action by 

plaintiff to enter the business”; (4) “the background and experience of plaintiff in the prospective 

business.” Complaint Counsel failed to show even one of these requirements, much less all four. 

As explained above, Complaint Counsel produced no evidence that Sigma had secured 

financing or consummated contracts to supply domestic Fittings. See id. Again, Mr. Pais 

testified that, in the spring and summer of 2009, Sigma was in a “grave” financial situation. 

17 Complaint Counsel’s argument that because Sigma acquired The Unique Company in the first quarter of 2010 and 

thus, Sigma had the financial capability to enter domestic production of Fittings, is not supported by the record. 

First, Sigma did not acquire the entire company. (Pais, Tr. 2212.) Sigma acquired a small portion of The Unique 

Company, which was an existing company with a small product line and actual revenue stream. (Pais, Tr. 2212.) 

Second, Sigma’s investment in The Unique Company was approximately “four and a quarter million.” (Pais, Tr. 

2212.) This is far less than the $5-10 million Sigma estimated it would cost to enter domestic production of Fittings. 

(JX 682 (Bhattacharji, Dep. 83).) 

18 Complaint Counsel tacitly concedes this standard in its pre-trial brief. (CC’s Pre-trial Br. at 74.) Citing Yamaha 

Motor Co. v. FTC, 657 F.2d 971, 977-79 (8th Cir. 1981), Complaint Counsel argues that the “evidence at trial will 

show that Sigma intended and was prepared to enter the Domestic Fittings business, and took affirmative steps to 

enter the market.” 

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(Pais, Tr. 2163-2165, 2167-2168; CX 214, 2186-2187, RX 163 in camera; 2199-2203; see also 

Pais, Tr. 1760 (Sigma was in a “precarious position overall in financial terms”).) The mere 

speculative possibility that Sigma might have been able to find financing (at who knows what 

double-digit interest rate) is inadequate as a matter of law. “The mere possibility of financing 

being available in the abstract is not enough. Showing that someone somehow could possibly 

obtain financing is not the same as showing that plaintiffs themselves were able and prepared 

to.” Hayes v. Solomon, 597 F.2d 958, 975 (5th Cir. 1979); Sunbeam Television Corp., v. Nielsen 

Media Research, Inc., 763 F. Supp. 2d 1341, 1354 (S.D. Fla. 2011) (a plaintiff claiming 

exclusion of a potential competitor that is not yet in the market “must prove the excluded firm 

was willing and able to supply it but for the incumbent firm’s exclusionary conduct”). 

Complaint Counsel also failed to meet its burden of showing Sigma - - as a company - - 

had a corporate intention to enter the market. Corporate decisions requiring millions in capital 

expenditures are made by votes by boards of directors. But here, Sigma’s board took no vote 

and never authorized the expenditures. Mr. Rona testified (and told his OEM customers) that, by 

September 2009, Sigma had not taken any concrete steps to supply its own domestic Fittings. 

(Rona, Tr. 1693-1694 (“at that point we had not invested in or made a decision to invest in any 

equipment, that’s correct”); CX 258 (“To date Sigma has not made any concrete plans to either 

invest in all the required tooling or not invest at all.”).) He conceded that the timetable to enter 

would have been unworkable, given ARRA’s short window of opportunity. (Rona, Tr. 1671.) 

Further, given the short duration of the MDA and lack of any provision whatsoever preventing 

Sigma from pursuing domestic production efforts, it would logically follow that if Sigma had 

any intention of developing an alternate source, all while building its market with McWane’s 

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domestic Fittings, it could have done so and then terminated the agreement at any time. 

Tellingly, it did not. 

The cases cited by Complaint Counsel provide them no support. First, Engine 

Specialties, Inc. v. Bombardier, Ltd., 605 F.2d 1, 11 (1st Cir. 1979), involved a strict agreement 

not to compete between competitors, which is absent here. Second, the decision in Bombardier 

actually reinforces McWane’s position. Consistent with the authorities cited above, and as 

McWane noted in its opening brief, the Court in Bombardier reaffirmed that to prove foreclosure 

of a potential competitor, Complaint Counsel must prove “that the potential competitor 

Bombardier had the necessary desire, intent, and capability to enter the market.” Bombardier, 

605 F.2d at 9. Although the Court in Bombardier concluded that the potential competitor was 

viable, the list of circumstances present in that case (and for the particular potential competitor) 

stand in sharp contrast to Sigma’s situation here, in terms of both financial stability and 

preparedness. Bombardier not only had the financial capability to enter on its own, but also 

manufacturing facilities and had already “developed a prototype.” Id. Moreover, Bombardier 

had “boasted there was ‘no part of a motorcycle that we (Bombardier) cannot produce.”’ Id. 

Obviously, Sigma’s ability to enter production of domestic Fittings was not “consistent with 

Bombardier,” as Complaint Counsel argues. (CC’s Op. Br. at 184.) Sigma did not own any 

domestic foundries and did not have any contracts with existing domestic foundries; it owned 

only a handful of the 700-800 patterns it would need, but no core boxes, no machining facilities, 

and no finishing facilities in the United States. (Pais, Tr. 2173-2175.) In late August 2009, 

Sigma did not have the necessary financing available, and still had not taken any concrete steps 

towards entering production of domestic Fittings. (Rona, Tr. 1672-73, 1693-1694; CX 258; Pais, 

Tr. 1799, 2163-2164, 2173-2174, 2317.). 

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Complaint Counsel’s reliance on Yamaha Motor Co. v. FTC, is also factually inapposite. 

657 F.2d at 977-79. Again, the Court in Yamaha upheld the fundamental rule that to prove 

foreclosure of a potential competitor “it must be shown that the alleged potential entrant had 

‘available feasible means’ for entering the relevant market, and second, ‘that those means 

offer(ed) a substantial likelihood of ultimately producing deconcentration of that market or other 

significant procompetitive effects.’” Id. at 977 (emphasis added). Similar to Bombardier, the 

Court in Yamaha found the alleged potential entrant “had the technology needed to be a viable 

entrant into the United States market,” “was close to possessing a ‘complete line’ of models with 

a wide horsepower range suitable for entry into the United States market,” and its “management 

had the requisite experience in the production and marketing of outboard motors.” Id. at 978. 

The Court further found “considerable evidence of Yamaha’s subjective [corporate] intent to 

enter the United States,” including testimony from top management that it was “about the time 

we can go into a developed market like the United States.” Id. 979. Here, Sigma had no such 

corporate intent. On the contrary, neither its board of directors nor its banks authorized Sigma to 

move forward with domestic production. Again, Sigma had recently breached its bank 

covenants and its banks imposed capital expenditures caps that were far below what it needed to 

get into domestic Fittings. 

A. The MDA Was Pro-Competitive And Did Not Harm Competition Or Consumers 

As discussed in McWane’s opening brief and Section VI, supra, the MDA with Sigma 

was a pro-competitive agreement beneficial to both the competitors, and consumers. (McWane’s 

Op. Br. at 57-60.) Complaint Counsel tacitly concedes that the domestic Fittings business has 

been dying a slow death for 20 years. Within the last several years, numerous large 

manufacturers such as U.S. Pipe, Griffin Pipe, and ACIPCO exited production of domestic 

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Fittings entirely. McWane was forced to close one of its two Fittings foundries, laying off 

hundreds of workers, and its remaining Union Foundry was operating at partial capacity, 

struggling for survival. The evidence at trial showed the MDA offered McWane more tons, 

wider distribution, and was output enhancing for McWane. (See McWane’s Op. Br. at 58-60.) 

In short, the MDA allowed McWane to reach customers that it otherwise could not. (JX 643 

(Tatman, IHT at 176-177); JX 642 (Page, Dep. at 62-63).) Sigma, with its network of regional 

distribution yards and larger field sales force, was better able than McWane to provide certain 

servicing benefits, such as faster delivery, to purchasers of domestic Fittings. (JX 689 (Rona 

Dep. at 123-124, 133-134); JX 643 (Tatman, IHT at 176-177); JX 688 (Rona, IHT at 177-178).) 

Sigma also had relationships with certain distributors and in certain geographic areas that 

McWane lacked. (JX 642 (Page, Dep. at 69-73).) Further, the MDA was pro-competitive and 

beneficial to Sigma’s consumers, as it was the only way Sigma could effectively supply domestic 

Fittings to its customers during ARRA’s short time window. (Rona, Tr. 1481, 1671.) 

V.	 MCWANE DID NOT MONOPOLIZE OR ATTEMPT TO MONOPOLIZE THE 

PURPORTED MARKET FOR DOMESTIC FITTINGS 

Complaint Counsel’s argument that McWane monopolized a separate domestic Fittings 

market also fails. First, Complaint Counsel concedes that Fittings are completely 

“interchangeable” and that there is vigorous competition to open specifications that has resulted 

in imports constituting the lion’s share of all Fittings sold in the U.S. Indeed, the fact witnesses 

testified - - and Complaint Counsel concedes - - that imported Fittings are roughly 80-85% of all 

Fittings purchased in the U.S., while domestic Fittings are only 15-20% and declining. (CC’s 

Op. Br. at 9-14.) The trial evidence demonstrated that the EPA granted a number of blanket, 

nationwide waivers and several individual job-specific waivers permitting imported product to 

be used on ARRA-funded jobs. Dr. Schumann conceded that imports outsold domestic Fittings 

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during the ARRA period (and that Star’s bid log reported examples of imports competing 

successfully for ARRA-funded jobs) - - but he turned a blind eye to that evidence and (literally) 

made no effort to figure out which ARRA-funded jobs purchased domestic and which purchased 

imported Fittings and why. Nor did he bother to conduct any elasticity study of domestic and 

imported Fittings - - or, indeed, any data-driven economic analysis pertinent to a relevant market 

determination. Instead, he simply posited his own say-so opinion that domestic Fittings were 

their own market (for some undefined customers and some undefined jobs). That “evidence” is 

non-expert speculation and fails for the reasons set out in Section I, supra - - and with it, all of 

Complaint Counsel’s claims that McWane monopolized a “domestic Fittings” market also fail. 

Complaint Counsel tacitly concedes that it was never McWane’s expectation or intention 

to profit from ARRA by overcharging its customers. As Mr. Tatman explained at trial, McWane 

“didn’t want to overcharge in the short term, make a large business profit off the situation and set 

ourselves up for the long term where people felt that we took advantage of the situation.” 

(Tatman, Tr. 981.) This expression of intent is not a recent construct - - it was expressly stated at 

the time by Leon McCullough, Mr. Tatman’s boss. (RX 595 (“It has never been our intent to 

overcharge because of the Buy America provision”). Nor was this sentiment a product of mere 

benevolence. As Tatman explained at trial, it flowed from a recognition that any short term price 

increase would have adverse long term consequences, in the form of customer retaliation once 

the short term of ARRA expired. In other words, combination of the concentration and buying 

power within the customer base with the short duration of ARRA deprived McWane of any 

theoretical market or pricing power. Thus, there is no evidence that McWane had the ability to 

charge monopoly prices for its domestic Fittings during ARRA “for an extended period,” a key 

requirement for proving monopoly power. Rebel Oil Co, 51 F.3d at 1434. On the contrary, the 

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overwhelming evidence shows that McWane did not charge monopoly prices, and that its prices 

were even lower than Star’s in the vast majority of states. (Normann, Tr. 4768.) 

McWane’s lack of “intent to overcharge because of the Buy America provision” also 

shows that McWane did not have the specific intent to monopolize. To establish its attempted 

monopoly claim, Complaint Counsel must prove that McWane possessed the “specific intent” to 

achieve monopoly power by predatory or exclusionary conduct; that the defendant in fact 

engaged in such anticompetitive conduct; and that a “dangerous probability” existed that the 

defendant might have succeeded in its attempt to achieve monopoly power. U.S. Anchor Mfg. 

Inc. v. Rule Indus., Inc., 7 F.3d 986, 994 (11th Cir. 1993) (“To have a dangerous probability of 

successfully monopolizing a market the defendant must be close to achieving monopoly 

power”); McGahee v. Northern Propane Gas Co., 658 F.Supp. 189, 196 (N.D. Ga. 1987) 

(granting summary judgment finding “no evidence that such a scheme had a dangerous 

probability of success.”). In McGahee, a case involving allegations of monopolization and 

attempted monopolization against a large propane seller, the district court granted summary 

judgment in a case where, like here, “defendant’s market share declined [steadily] during 1981– 

1983.” Id. The district court held that “[c]ourts have viewed such declines as evidence that an 

alleged attempt to monopolize is not dangerously close to success.” Id. Further, the court held 

that while “defendant controlled a large segment of the market,” “[t]here is no evidence that 

defendant has ever been able to obtain supracompetitive prices.” Id. 

McWane clearly did not have a “dangerous probability” to obtain a monopoly. Its share 

has declined steadily over the last decade in the face of a flood of cheap imports, and its 

domestic foundry is running at a fraction of capacity. In fact, Complaint Counsel concedes that 

McWane’s overall Fittings share has been declining for years while Star and Sigma’s shares have 

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steadily increased. (CC’s Op. Br. at 10-11.) Further, there no evidence that McWane has ever 

charged, or intended to charge, supracompetitive prices in response to ARRA. The facts showed 

the opposite. (RX 595 (“It has never been our intent to overcharge because of the Buy America 

provision.”).) 

Finally, McWane’s share of domestic Fittings, if it is a separate market, was thrust on it 

by historic accident (i.e., U.S. Pipe, Griffin Pipe, and ACIPCO exiting the market in the wake of 

cheap imports). Acquiring or maintaining monopoly power through “growth or development as 

a consequence of a superior product, business acumen, or historic accident” is not a violation of 

Section 2. Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 

407 (2004) (“Verizon”) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966)). 

A. McWane Did Not Have Monopoly Power Over All Fittings Or Domestic Fittings 

Even if Complaint Counsel had proven a separate domestic Fittings market, and that 

McWane had a high share of that purported market, that alone does not support a finding of 

monopoly power here. The definition of monopoly power is “the ability to (1) price substantially 

above the competitive level and (2) to persist in doing so for a significant period without 

erosion by new entry or expansion.” AD/SAT v. Associated Press, 181 F.3d 216, 226-27 (2d 

Cir. 1999) (emphasis added). McWane’s situation does not meet this definition. The record 

evidence showed that McWane never attempted to raise prices, in fact, prices were flat and not a 

single distributor or end customer complained about prices of domestic Fittings at trial. If a 

defendant is unable to control prices or exclude competitors, then it is not a monopoly, regardless 

of its market share. See Metro Mobile CTS, Inc. v. NewVector Commc’ns, Inc., 892 F.2d 62, 63 

(9th Cir. 1989) (a defendant’s possession of even 100% market share does not necessarily 

establish defendant has power to charge monopoly prices or control output); Oahu Gas Serv., 

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Inc. v. Pacific Res., Inc., 838 F.2d 360, 366 (9th Cir. 1988) (“Oahu Gas”) (reversing jury verdict 

in favor of plaintiff, holding that a high market share will not raise an inference of monopoly 

power in a market with low entry barriers or other evidence of a defendant’s inability to control 

prices or exclude competitors). 

Complaint Counsel argues that “McWane’s power can be inferred from its high Domestic 

Fittings market shares and the existence of high entry barriers in that market.” (CC’s Op. Br. at 

208.) However, market share is only the starting point and McWane does not meet the 

definition, as it did not have the ability to, or even attempt to, raise prices to a supracompetitive 

level. Further, given Complaint Counsel’s failure to meet its burden of proving a separate 

domestic Fittings market, McWane’s 40-45% share of overall Fittings does not rise to the level 

of “monopoly power.” See Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98, 112-13 (3d Cir. 1992) 

(market share of 50% did not establish monopoly power); see American Counsel of Certified 

Pediatric Physicians & Surgeons v. American Board. of Podiatric Surgery, Inc., 185 F.3d 606, 

623 (6th Cir. 1999) (“market share is only a starting point for determining whether monopoly 

power exists, and the inference of monopoly power does not automatically follow from the 

possession of a commanding market share”); Defiance Hosp. v. Fauster-Cameron, Inc., 344 F. 

Supp. 2d 1097, 1113 (N.D. Ohio 2004) (“market share is only a starting point for determining 

whether monopoly power exists.”) Complaint Counsel’s own expert, Dr. Schumann, conceded 

that McWane did not have monopoly power in an all Fittings market. 

Moreover, where, as here, barriers to entry into a market are low, a defendant’s market 

power is often much less than its market share would seem to indicate. Moecker v. Honeywell 

Int’l, Inc., 144 F. Supp. 2d 1291, 1308 (M.D. Fla. 2001). As one court has explained, “[m]arket 

share reflects current sales, but today’s sales do not always indicate power over sales and price 

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tomorrow.” Ball Mem’l Hosp., Inc. v. Mut. Hosp. Ins., Inc., 784 F.2d 1325, 1336 (7th Cir. 

1986); see also Oahu Gas, 838 F.2d at 366 (a firm with a high market share may be able to exert 

market power in the short run, but substantial market power can persist only if there are 

significant and continuing barriers to entry). 

B. McWane Did Not Exclude Star From Domestic Fittings 

Star’s successful and dramatic expansion of its sales of domestic Fittings affirmatively 

disproves the allegation that McWane possessed monopoly power and excluded Star. Complaint 

Counsel concedes that in its first full year with a domestic product, 2010, 

 of all 

domestic Fittings sales, including sales to not only HD Supply and Ferguson, the two largest 

distributors, but WinWholesale, Ramsco, Dana Kepner, Hajoca, Mainline Supply, Minnesota 

Pipe, Michigan Pipe & Supply, Utility Supply in Tulsa, Oklahoma, H.D. Fowler, C.I. Thornburg, 

Western Water, Groeniger, and Cohen. (McCutcheon, Tr. 2591-2594.) 

As early as November 2009, Star’s domestic performance had exceeded the expectations 

of its CEO. (See RX 231 (Mr. Bhutada’s November 10, 2009, congratulatory email to Star’s 

sales team states that “our domestic quote log is very impressive. . .lot better than I expected at 

this stage. . . congratulations”).) In December 2009, Star announced plans to build a 30,000 

square foot finishing facility in Houston, Texas to further support its domestic Fittings program. 

(McCutcheon, Tr. 2618-2620; RX 572.) The finishing facility represented an investment of 

hundreds of thousands of dollars by Star. (McCutcheon, Tr. 2618-2620; RX 572.) Star’s 

success increased in the first and second quarters of 2010, the peak of the ARRA period, and 

throughout 2010. (McCutcheon, Tr. 2613-2614.) In February 2010, for example, Mr. 

McCutcheon enthusiastically responded to news that Star had won all of the domestic Fittings 

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business of Dana Kepner, large regional distributor: “Yahoooooo!!” (McCutcheon, Tr. 2612­

2613, 2595; CX 0585.) Tellingly, in April 2010, a Star sales manager reported that “The Tyler 

program seems to be all bark and no bite.” (McCutcheon, Tr. 2615-2617; JX 695 (Leider, Dep. 

at 176-181); RX 280.) Indeed, Star’s sales growth was extraordinary: it gained, on average, two 

new customers per week throughout 2010. (McCutcheon, Tr. 2595). 

(McCutcheon, Tr. 2591-2592, 2607-2608; CX 1973.) Mr. 

McCutcheon and other Star executives acknowledged that Star grew its domestic Fittings sales 

month after month throughout Fall 2009, all of 2010, and 2011. (McCutcheon, Tr. 2590, 2597, 

2300; Bhargava, Tr. 3027; JX 696 (McCutcheon, IHT at 40-41)). Star’s “Domestic Bid Log” 

indicates that between September 2009 and June 2010, Star actively competed for ARRA jobs, 

submitting roughly four bids per day. (McCutcheon, Tr. 2602; CX 2294.) 

Further, Dr. Normann analyzed Star sales records and found that, in some states, Star’s 

share of the domestic segment was 20-30% of the total domestic Fittings sales (and, in a few, 

even higher). (Normann, Tr. 4930-4931.) 

Normann, Tr. 5041 in camera.) 

Successful, actual expansion by Star precludes a finding of monopolization against 

McWane. Given Star’s distributor customers, and the fact that HD Supply and Ferguson 

comprise 50% of the distribution market alone, Complaint Counsel’s argument that Star was 

somehow “substantially foreclosed” from the market falls flat. 

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Indeed, having lost share so quickly, McWane could not have monopolized anything as a 

matter of law. Brooke Group, 509 U.S. at 226 (“where new entry is easy . . . summary 

disposition of the case is appropriate”); Advo, Inc. v. Philadelphia Newspapers, Inc., 51 F.3d 

1191, 1202 (3d Cir. 1995). Successful, actual expansion by an existing competitor (like entry by 

a new competitor) “precludes a finding that exclusive dealing is an entry barrier of significance,” 

Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1164 (9th Cir. 1997), and easy entry 

conditions “rebut inferences of market power.” Top Mkts., Inc. v. Quality Mkts, Inc., 142 F.3d 

90, 99 (2d Cir. 1998). 

Complaint Counsel also argues that distributors “otherwise willing to purchase Domestic 

Fittings from Star were deterred from doing so” by McWane’s rebate policy, but that argument 

was not only unsupported by any material testimony at trial - - it was contradicted by Complaint 

Counsel’s own expert. Dr. Schumann conceded he could not identify a single distributor - - out 

of 630 - - that wanted to buy Star domestic, but was unable to do so because of McWane’s rebate 

letter. (Schumann, Tr. 4440). Dr. Normann, likewise, found none. (Normann, Tr. 4929-4930.) 

Dr. Normann confirmed this fundamental fact and concluded, as a result, that there was no 

exclusion. (Normann, Tr. 4929-4930.) 

Nonetheless, Complaint Counsel asserts that the two largest waterworks distributors, HD 

Supply and Ferguson, as well as a number of other regional distributors, did not purchase 

domestic Fittings from Star because of McWane’s rebate policy. (CC’s Op. Br. at 228-232.) 

This is simply untrue. First, HD Supply did purchase domestic from Star following the rebate 

policy announcement, (Webb, Tr. 2798-2800), and Mr. Webb of HD Supply testified that the 

rebate policy did not have an impact on HD Supply’s purchasing decisions, and McWane never 

refused to pay HD Supply rebates. (JX 673 (Webb, Dep. at 123-25.) Ferguson likewise 

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purchased domestic Fittings from Star following the issuance of McWane’s September 22 letter, 

and Bill Thees of Ferguson testified that the rebate policy had no influence on Ferguson’s 

purchasing decisions and McWane never refused to pay Ferguson rebates. (Thees, Tr. 3108­

3111.) 

Further, each regional distributor identified by Complaint Counsel in its opening brief as 

being precluded from purchasing from Star by McWane’s rebate policy, did in fact purchase 

domestic Fittings from Star after McWane’s rebate policy was announced. For example, 

Complaint Counsel argued that Groeniger stopped purchasing domestic Fittings from Star 

because of the rebate policy. (CC’s Br. at 231.) But to the contrary, Groeniger did in fact 

purchase domestic Fittings from Star following the issuance of the rebate policy, and McWane 

never refused to sell it domestic Fittings or pay a rebate as a result of purchases from Star. (JX 

669 (Groeniger, Dep. 99.) Complaint Counsel likewise argued that C.I. Thornburg also declined 

to purchase from Star in 2010 because of McWane’s rebate policy. (CC’s Op. Br. at 232; CCPF 

2015.) But directly contradicting this bald assertion, Mr. Morrison of C.I. Thornburg expressly 

testified that McWane’s domestic rebate policy did not affect his 2010 purchases. (JX 650 

(Morrison, Dep. at 74-44 (“I’d really like to say it was because of this letter, but Star’s not – I 

can’t consider them at this point in time”).) These are just two examples of the many 

inconsistencies in Complaint Counsel’s arguments. (See McWane’s Responses to Complaint 

Counsel’s Proposed Findings of Fact and Conclusions of Law.) 

As noted above, McWane’s rebate policy did not impose a contractual mandate that its 

customers buy exclusively from McWane, as is typical of true exclusive dealing contracts. 

However, even if it had, exclusive dealing contracts have “well-recognized economic benefits.” 

Allied Orthopedic Appliances Inc. v. Tyco Health Care Group LP, 592, F.3d 991, 996 (9th Cir. 

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2010). Such contracts are only problematic if they are multi-year in length and “foreclose 

competition in a substantial share of the line of commerce affected.” Tampa Elec. Co. v. 

Nashville Coal Co., 365 U.S. 320, 327 (1961). To foreclose competition in a substantial share of 

the affected line of commerce, the exclusive deals must “foreclose so large a percentage of the 

available . . . outlets that entry into the concentrated market is unreasonably restricted.” E. Food 

Servs., Inc. v. Pontifical Catholic Univ. Servs. Ass’n, Inc. 357 F.3d 1, 8, (1st Cir. 2004), and 

significant sellers are “frozen out of a market by the exclusive deal.” Jefferson Parish Hosp. 

Dist. No. 2 v. Hyde, 466 U.S. 2, 45 (1984) (O’Connor, J., concurring). 

In this case McWane did not have any contracts that required its customers to buy its 

domestic Fittings exclusively. McWane’s customers always could, and many did, purchase from 

Star. McWane simply issued a letter asking customers to support its last domestic foundry - - 

which was operating at a fraction of its capacity and teetering on the edge of extinction because 

of the flood of cheap imports over the years - - fully and offering a rebate (i.e., a price cut) in 

exchange. Thus, Star had ample opportunity to compete and did, very successfully. That is all 

the antitrust laws require. Race Tires Am. Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3d 

Cir. 2010) (plaintiffs “had the clear opportunity to compete and did compete, sometimes 

successfully”); NicSand, Inc. v. 3M Co., 507 F.3d 442, 454 (6th Cir. 2007) (“no explanation why 

it could not compete for these multi-year agreements.”). 

VI.	 COMPLAINT COUNSEL FAILED TO PROVE THAT MCWANE OR SIGMA 

HAD THE REQUISITE “SPECIFIC INTENT” TO MONOPOLIZE DOMESTIC 

FITTINGS 

At trial Complaint Counsel presented no evidence that McWane or Sigma entered the 

MDA with the “specific intent to monopolize.” To the contrary, McWane did not have any 

intent to monopolize the purported market for domestic Fittings, as evidenced by the fact that it 

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was far from lucrative - - “break even at best.” (JX 638 (McCullough, IHT 219-220.) Further, 

all other foundries that manufactured fittings domestically discontinued production due to the 

flood of cheap imported and declining revenues. McWane was the last remaining major 

manufacturer of domestic Fittings. It was desperate for volume, having closed its Tyler South 

plant, and operating its Union Foundry at a fraction of capacity. McWane was also worried that 

Star would “cherry pick” its remaining volume, and it would have to shut down and lay off its 

remaining employees. Thus, McWane’s focus in signing the MDA was getting more tons, wider 

distribution, and increased output for its domestic Fittings foundry that was operating at only a 

fraction of its capacity. (See McWane’s Op. Br. at 58-60.) The MDA accomplished both 

companies’ goals - - it allowed McWane to reach customers that it otherwise could not, and it 

enabled Sigma to supply domestic Fittings to its customers that it otherwise would not have. (JX 

643 (Tatman, IHT at 176-177); JX 642 (Page, Dep. at 62-63). McWane did not budget for major 

price increases, and had no intention of gouging its customers. In fact, McWane did not achieve 

any major price increase and its Fittings prices barely stayed at pace with inflation. 

Sigma’s focus in signing the MDA was on keeping its own customers happy and 

providing domestic Fittings to those customers when needed. (JX 689 (Rona, Dep. at 231); JX 

688 (Rona, IHT at 218-220).) Sigma perceived that if it was unable to supply domestic Fittings 

to its customers, it might also lose some portion of its non-domestic business with those 

customers. (JX 689 (Rona, Dep. at 118-119); JX 688 (Rona, IHT at 187-188, 218-220).) 

To establish conspiracy to monopolize, a plaintiff must prove: (i) the existence of a 

conspiracy to monopolize; (ii) overt acts done in furtherance of the conspiracy; (3) an effect 

upon an appreciable amount of interstate commerce; and (4) a specific intent to monopolize. 

Lantec, 306 F.3d at 1028. To establish “specific intent,” Complaint Counsel must prove that 

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McWane and Sigma possessed the “specific intent” thrust monopoly power on McWane by 

predatory or exclusionary conduct; that the defendants in fact engaged in such anticompetitive 

conduct; and that a “dangerous probability” existed that the defendant might have succeeded in 

its attempt to achieve monopoly power. Rule Indus., 7 F.3d at 993. Proof that McWane and 

Sigma shared an intent to prevail over rivals or to improve market position is insufficient; the 

shared intent must have been to make McWane a monopolist. Id. 

Here, Complaint Counsel has not established that McWane and Sigma had the specific 

intent to monopolize the purported market for domestic Fittings. First, it did not prove the 

existence of a conspiracy between McWane and Sigma. As discussed, each company had its 

own pro-competitive justifications for entering the MDA. Second, it was Sigma’s idea to enter 

the MDA, not McWane’s. The argument that Sigma had the intent to thrust a monopoly on 

McWane, its primary competitor that it “mistrust[ed],” defies logic. 

To support its argument, Complaint Counsel points to a few internal McWane and Sigma 

documents - - none of which were communicated between the competitors - - and attempts to 

read into their meaning. Complaint Counsel points to a few buzzwords in the documents such as 

McWane wanting to “put pressure on Star” and a reference by Sigma to making Star “suffer,” 

but presented no evidence at trial regarding the actual meaning of the statements. Thus, all 

Complaint Counsel has is a few scattered documents with a few strong statements. However, it 

is well-settled that “[t]he antitrust statutes do not condemn, without more, such colorful, vigorous 

hyperbole.” Advo, Inc. v. Philadelphia Newspaper, Inc., 51 F.3d 1191, 1199 (3rd Cir. 1995) 

(internal quotation marks omitted). “The context of this conduct is the highly competitive arena 

of corporate America. Business competitors use strong language and hyperbole when referring to 

competitors. Several courts have noted such language.” PPG Industries, Inc. v. Payne, 2012 WL 

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1836314 at *9 (E.D. Tenn. 2012). The Seventh Circuit in A.A. Poultry Farms, Inc. v. Rose Acre 

Farms, Inc., 881 F.2d 1396, 1401–02 (7th Cir. 1989), noted that “[f]irms ‘intend’ to do all the 

business they can, to crush their rivals if they can. [I]ntent to harm without more offers too vague 

a standard in a world where executives may think no further than ‘Let’s get more business.’” Id. 

What we have here is just that. A few colorful words in a few internal documents, which 

Complaint Counsel picked out from the literally hundreds of thousands produced in this case, 

and which were never communicated to competitors. That is plainly insufficient to prove a 

conspiracy to monopolize. 

The truth of the matter is that the MDA was a pro-competitive distribution agreement that 

allowed McWane to increase its volume and allowed Sigma to supply domestic Fittings to its 

customers. Complaint Counsel’s assertions to the contrary are unsupported by the record. Thus, 

McWane is entitled to judgment in its favor. See Belfiore v. The New York Times Co., 826 F.2d 

177, 183 (2nd Cir. 1987) (no conspiracy where plaintiff failed to prove that alleged coconspirator shared intent to make primary conspirator a monopoly). 

VII. COMPLAINT COUNSEL IS NOT ENTITLED TO ITS PROPOSED REMEDY 

For the reasons stated in McWane’s opening brief, Complaint Counsel’s proposed 

remedy should be denied. There was no proof at trial of any ongoing actual or threatened injury 

to competition or consumers. Dr. Schumann conceded that his “conspiracy” ended in Fall 2008 

and that DIFRA stopped operating at the end of that year. ARRA expired in 2010, McWane’s 

rebate letter changed long ago, and the Master Distributorship Agreement with Sigma was 

terminated in 2010. 

Here, Complaint Counsel proposes an injunction for a period of ten (10) years. (CC’s 

Op. Br. at 160-61.) However, courts cannot grant injunctions unless a plaintiff shows ongoing or 

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imminent harm. The Supreme Court has held that a plaintiff “must show that he is under threat 

of suffering ‘injury in fact’ that is concrete and particularized” and “the threat must be actual 

and imminent, not conjectural or hypothetical[.]” Summers v. Earth Island Inst., 555 U.S. 488, 

493 (2009). A plaintiff, like Complaint Counsel here, that fails to meet these requirements is not 

entitled to injunctive relief. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2559-60 (2011) 

(“plaintiffs no longer employed [by Wal-Mart] lack standing to seek injunctive and declaratory 

relief against its employment practices”). The mere possibility that past conduct might occur 

again is insufficient. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008); eBay Inc. 

v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). For the same equitable reasons applicable 

to the well-settled case law governing injunctions, this Court to deny Complaint Counsel’s 

proposed remedy. 

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OF COUNSEL: 

Joseph A. Ostoyich 

Erik T. Koons 

William C. Lavery 

Heather Souder Choi 

Baker Botts L.L.P. 

The Warner 

1299 Pennsylvania Ave., N.W. 

Washington, D.C. 20004-2420 

Phone: 202.639.7700 

Fax: 202.639.7890 

joseph.ostoyich@bakerbotts.com 

erik.koons@bakerbotts.com 

william.lavery@bakerbotts.com 

heather.choi@bakerbotts.com 

J. Alan Truitt 

Thomas W. Thagard, III 

Julie S. Elmer 

Maynard, Cooper & Gale, P.C. 

1901 Sixth Avenue North 

2400 AmSouth/Harbert Plaza 

Birmingham, AL 35203-2608 

(205) 254-1000 

(205) 254-1999 (facsimile) 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

jelmer@maynardcooper.com 

__/s/ Joseph A. Ostoyich____

 Joseph A. Ostoyich 

Counsel for McWane, Inc. 

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CERTIFICATE OF SERVICE 

I hereby certify that on January 25, 2013, I filed the foregoing document electronically 

using the FTC’s E-Filing System, which will send notification of such filing to: 

Donald S. Clark 

Secretary 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Rm. H-113 

Washington, DC 20580 

I also certify that I delivered via electronic mail a copy of the foregoing document to: 

The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Rm. H-110 

Washington, DC 20580 

oalj@ftc.gov 

I further certify that I delivered via electronic mail a copy of the foregoing document to: 

Edward Hassi, Esq. 

Geoffrey M. Green, Esq. 

Linda Holleran, Esq. 

Thomas H. Brock, Esq. 

Michael L. Bloom, Esq. 

Jeanine K. Balbach, Esq. 

J. Alexander Ansaldo, Esq. 

Andrew K. Mann, Esq. 

By: ______/s/ William C. Lavery_____

 William C. Lavery 

 Counsel for McWane, Inc. 

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