ORlG~~JAL

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

In the Matter of

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POL YPORE INTERNATIONAL, INC., Docket No. 9327

Respondent.

ORDER ON RESPONDENT'S MOTION FOR LEAVE TO TAKE

THE DEPOSITION OF GRAEME FRASER-BELL IN THE

UNITED KIGDOM PURSUANT TO 16 C.F.R. § 3.36

I.

On January 14, 2009, Respondent submitted a motion and memorandum in support

thereof for leave to take the deposition of Graeme Fraser-Bell in the United Kingdom, pursuant

to 16 C.F.R. § 3.36 ("Motion"). ENTEK International LLC ("ENTEK"), whose wholly-owned

subsidiar in the United Kingdom is the employer of Fraser-Bell, submitted an Opposition on

January 23,2009. In addition, Complaint Counsel submitted an Opposition to Respondent's

Motion on January 23,2009.

For the reasons set forth below, Respondent's Motion is DENIED WITHOUT

PREJUDICE.

II.

Respondent seeks the issuance of a subpoena, to be served in the United Kingdom, to

enable Respondent to take the deposition of Mr. Graeme Fraser-Bell, Vice President of

International Sales for ENTEK International Ltd. ENTEK is a global battery separator

manufacturer and a competitor of Respondent. Respondent asserts that it has met the

requirements of Commission Rule 3.36.

ENTEK disputes that Respondent has met the requirements of Commission Rule 3.36

and claims that the "vast majority" of the information sought from Fraser-Bell is available

through less burdensome and less expensive means. Complaint Counsel asserts that Respondent

has failed to meet three of the four requirements of Commission Rule 3 .36(b).
III.

Rule 3.36(b) ofthe Commission's Rules of Practice requires the pary seeking issuance

of a subpoena to be served in a foreign country to make specific showings that:

(1) the material sought is reasonable in scope;

(2) the material sought falls within the limits of discovery under § 3.31(c)(1);

(3) the information or material sought cannot reasonably be obtained by other

means; and

(4) the party seeking discovery has a good faith belief that the discovery

requested would be permitted by treaty, law, custom or practice in the

country from which the discovery is sought and that any additional

procedural requirements have been or wil be met before the subpoena is

served.

16 C.F.R. § 3.36(b).

In 2001, the Commission amended its Rules of Practice to require Administrative Law

Judge supervision of proposed foreign compulsory process. In explaining the reasons for the

amendment, the Commission stated:

Respondents have from time to time attempted to serve such subpoenas

abroad. To the extent the subpoenas appear to have the imprimatur of the

Commission, an attempt to serve them on foreign entities outside the

terrtorial limits of the U.S. may raise serious issues of Commission

jurisdiction and international law. In the interest oflimiting or avoiding

conflcts with foreign authorities in this area, the Commission is putting

foreign discovery requests back into the category of ALJ -supervised

discovery under § 3.36.

Statement of the Federal Trade Commission re Amendments to Its Rules of Practice, 66 Fed.

Reg. 17622, 17623 (April 3, 2001). The Commission further explained that the requirements of

Rule 3.36 are designed "(iJn the interest oflimiting or avoiding conflicts with foreign authorities

occasioned by foreign discovery requests." ¡d.

Indeed, the tests provided in § 3.36(b) provide a framework that closely

tracks the prerequisites for foreign discovery as commonly recognized by

treaty, custom and practice in many countries: That is, such discovery

should only occur if a judge determines that the request is reasonable and

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that other means of obtaining the information (such as domestic discovery or

voluntary arrangements) have been exhausted or are not available.

¡d.

Section 9 of the Federal Trade Commission Act authorizes the Commission to require the

"attendance of witnesses and the production of. . . documentar evidence. . . from any place in

the United States." 15 U.S.C. § 49. In Commodity Futures Trading Comm'n v. Nahas, 738

F.2d 487 (D.C. Cir. 1984), the court, interpreting the similar statutory provision that authorized

the Commodity Futures Trading Commission to compel the attendance of witnesses and the

production of documents "from any place in the United States," held that the district court lacked

jurisdiction to enforce an investigative subpoena served upon a foreign citizen in a foreign

nation. ¡d. at 491,496.

In Federal Trade Comm'n v. Compagnie de Saint-Gobain-Pont-a-Mousson, 636 F.2d

1300, 1304 (D.C. Cir. 1980), the court held that the Federal Trade Commission did not have the

authority to serve investigatory subpoenas directly upon the citizens of another country by

registered mail, in the face of the foreign country's direct protest to that mode of service and in

the absence of clear congressional intent to authorize that manner of exercise of American

sovereign power. "The exercise of jurisdiction by any governental bødy in the United States is

subject to limitations reflecting principles of international and constitutional law, as well as the

strictures ofthe particular statute governing that body's conduct." Id. at 1315. Consistent with

these limitations, Respondent's request for the issuance of a subpoena is evaluated under

Commission Rule 3.36(b).

iv.

As set forth below, Respondent has met the first requirement of Commission Rule

3.36(b). However, Respondent has not sufficiently demonstrated compliance with the remaining

requirements.

(1) Whether the material sought is reasonable in scope

ENTEK, a global battery separator manufacturer, is named in the Complaint as "the sole

remaining competitor" of Respondent in North America. Complaint ir 19. Fraser-Bell is Vice

President of International Sales for ENTEK International Ltd., a wholly-owned subsidiary in the

United Kingdom ofENTEK International LLC. Declaration of Graeme Fraser-Bell in Support

ofENTEK's Motion to Quash ir 1; Exhibit A, Respondent's Memorandum in Support of Motion

for Leave to Take Deposition of Graeme Fraser-Bell, at 1. Respondent states that it believes

Fraser-Bell has extensive knowledge ofENTEK's sales of battery separators in a market that

Respondent asserts is globaL. Respondent argues that the material sought is reasonable in scope

because it seeks only one deposition, limited to seven hours, in accordance with the Scheduling

Order in this case. Neither ENTEK nor Complaint Counsel address whether the material sought

is reasonable in scope.

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Respondent has demonstrated that the material sought is reasonable in scope.

(2) Whether the material sought falls within the limits of discovery under

§ 3.31(c)(1)

Commission Rule 3.36(b) requires a specific showing that the material sought falls

within the limits of discovery under Commission Rule 3.31(c)(l). Commission Rule 3.31(c)(1)

allows discovery of materials that may be reasonably expected to yield information relevant to

the allegations of the complaint, the proposed relief, or the defense of any respondent.

Commission Rule 3.31 (c)(1) also provides that discovery shall be limited by the Administrative

Law Judge ifhe or she determines that:

(i) The discovery sought is unreasonably cumulative or duplicative, or is

obtainable from some other source that is more convenient, less

burdensome, or less expensive;

(ii) The party seeking discovery has had ample opportnity by discovery in

the action to obtain the information sought; or

(iii) The burden and expense of the proposed discovery outweigh its likely

benefit.

16 C.F.R. § 3.31(c)(1).

Respondent states that Fraser-Bell has "intimate knowledge ofthe battery separator

industry," including knowledge about pricing, capacity and competition, and is believed to have

knowledge ofENTEK's business dealings with customers located in the United States and

abroad. Respondent argues that the information sought through Fraser-Bell's deposition cannot

be obtained through other means because Fraser-Bell has relevant knowledge about customers

and other suppliers in both Europe and Asia, as well as about any expansion effort by ENTEK in

the United Kingdom to increase its productive capacity for the sale of battery separators in the

United States and elsewhere in the world. Respondent asserts that there is no other person at

ENTEK who could substitute for Fraser-Bell.

ENTEK does not dispute that Fraser-Bell has knowledge relevant to this adjudicatory

proceeding. Instead, ENTEK asserts that taking Fraser-Bells deposition would be unreasonably

duplicative and unduly burdensome because the "vast majority" of the information sought from

Fraser-Bell is available to Respondent through more convenient, less burdensome, and less

expensive means. Those alternative means, ENTEK asserts, include ENTEK's document

production and the deposition of Mr. Daniel Weerts, ENTEK International LLC's Vice President

of Sales and Marketing.

ENTEK asserts that Weerts has relevant knowledge regarding topics identified by

Respondent, as well as the additional subjects identified in a subpoena Respondent served on

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ENTEK's corporate representative. ENTEK states that Weerts has worked at ENTEK or its

predecessor since 1989 and has been involved in the battery separator industry for over 30 years.

ENTEK further states that Weerts is intimately involved in ENTEK's strategic planning and has

extensive experience not only in the sales and marketing of battery separators but also in their

production and manufacturing. In addition, ENTEK avers, Weerts not only oversees all of

ENTEK's sales efforts, in the United States and internationally, with respect to its most

significant customer, Johnson Controls Inc. and its affiliates, but also is very familiar with the

operations, cost structure, and expansion plans ofENTEK's tJ.K. facility.

Complaint Counsel points to representations by ENTEK in a related filing, ENTEK's

Memorandum in Support of Motion to Quash Subpoenas Ad Testifcandum Issued to Graeme

Fraser-Bell and Robert Keith, to support Complaint Counsel's contention that the information

Respondent seeks from Fraser-Bell can be obtained more easily, and with less burden and

expense, from Weerts. Complaint Counsel also argues that a deposition of Fraser-Bell in the

United Kingdom would be a costly endeavor for all concerned, and that the burden and expense

of such discovery would likely outweigh the benefit of any non-duplicative evidence discovered

during that deposition.

ENTEK has not yet fully complied with document production, and depositions of

ENTEK's employees have not been completed. Thus, at this stage in the discovery process,

Respondent has not demonstrated that it cannot obtain the requested information from other

sources, such as ENTEK's documents and the deposition testimony of Weerts or other ENTEK

employees.

(3) Whether the information or material sought cannot reasonably be obtained

by other means

Commission Rule 3.36(b)(3) also requires respondents to make a specific showing that

the "information or material sought cannot reasonably be obtained by other means." 16 C.F .R.

§ 3.36(b)(3). As discussed above, with other discovery ongoing, Respondent has not

demonstrated that it cannot reasonably obtain the information sought from Fraser-Bell by other

means.

(4) Whether the discovery requested would be permitted by treaty, law, custom

or practice in the country from which the discovery is sought, and whether

any additional procedural requirements have been or wil be met before the

subpoena is served

Respondent represents that it "has a good faith belief that the deposition of Fraser-Bell is

permitted in the United Kingdom and that any additional procedural requirements have been or

wil be met before the subpoena is served." Memorandum in Support of Respondent's Motion

for Leave to Take the Deposition of Graeme Fraser-Bell, at 6. In support of its belief,

Respondent states only that both the United States and the United Kingdom are signatories to the

Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters, which

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provides the opportnity to depose a witness overseas. Id. (citing 28 U.S.C. § 1781 (1979)).

Respondent states, alternatively, that it could hire a British solicitor to take the deposition of

Fraser-Bell in the United Kingdom. Id. (citing U.S. Department of State website at

http://travel.state.gov/law /info/iudicial/iudicial 671.html).

Complaint Counsel contends that the Hague Convention on the Taking of Evidence

Abroad in Civil or Commercial Matters does not provide for the use of subpoenas to obtain

information abroad. According to Complaint Counsel, the three established methods for such

discovery are by letter of request, by consular or diplomatic official, or by appointed

commissioner. Complaint Counsel's Opposition at 6 (citing 28 U.S.C. § 1781, Articles 1, 15,

17). Complaint Counsel claims that the first method can be compulsory, but that the second and

third methods can only be used with wiling witnesses. Because ENTEK has moved to quash

Respondent's subpoena ad testifcandum to Fraser-Bell, Complaint Counsel concludes that

Fraser-Bell is not a wiling witness, and, therefore, that the second and third methods are

unavailable to Respondent.

Complaint Counsel further asserts that Respondent's Motion fails to mention other likely

legal impediments to the use of compulsory process to obtain evidence in the United Kingdom.

Complaint Counsel states that the United Kingdom has enacted a blocking statute that can limit

or prohibit subpoenaed parties from producing evidence in connection with a foreign legal

proceeding. Complaint Counsel suggests that impediments to obtaining personal jurisdiction

and to effecting valid service can also render it "highly problematic" to obtain evidence in a

manner that is consistent with U.K. law and practice.

Commission Rule 3.36(b)( 4) requires the party seeking issuance of a subpoena to be

served in a foreign countr to make a specific showing that it "has a good faith belief that the

discovery requested would be permitted by treaty, law, custom or practice in the country from

which the discovery is sought and that any additional procedural requirements have been or wil

be met before the subpoena is served." 16 C.F .R. § 3 .36(b)( 4). A specific showing of a good

faith belief that the discovery requested would be permitted by treaty, law, custom or practice

requires more than a simple assertion that both the United States and the country in which the

proposed deponent is located are signatories to the Hague Convention. Rather, Respondent is

required to set forth the specific treaty, law, custom or practice in the United Kingdom that

authorizes the discovery Respondent seeks, and to explain how that treaty, law, custom or

practice wil be complied with.

The express language of Commission Rule 3.36(b)(4) also requires a specific showing of

"a good faith belief that. . . any additional procedural requirements have been or wil be met

before the subpoena is served." 16 C.F.R. § 3.36(b)(4). While Respondent states that any

additional procedural requirements have been or wil be met before the subpoena is served,

Respondent does not describe any additional procedural requirements, or show whether or how

they would be fulfilled. To meet its burden under Commission Rule 3.36(b)(4), Respondent

must specify in detail all additional procedural requirements that must be met and indicate

specifically how they have been or wil be met.

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v.

For the above stated reasons, Respondent's Motion is DENIED WITHOUT

PREJUDICE.

ORDERED:

D. Michael Chappell

':DM~

Administrative Law Judge

Date: February 10, 2009

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