,.,~, "C~-"O"",~,:::;:...

or~

~~òri"'L Co ,j tu G~Yi '

8 Ri ~ir~,..

UNITED STATES OF AMRICA

BEFORE THE FEDERA TRAE COMMSSION

,f':~~\::¡:!LEi vrD ¡ ,',~/ ~~ ( rldZ i,

\, ,!iii! i,' ;'i,'" ',,,~ ~¡;~ D§Ò ,,,il "'~~~~'

In the Matter of )

)

)

)

)

)

)

)

)

Docket No. 9327

Polypore International, Inc.

a corporation

OPPOSITION OF EXIDE TECHNOLOGIES, INC. TO

RESPONDENT'S MOTION TO COMPEL

Litigants file some discovery motions because they need the Cour's intervention;

they fie others to stre a pose. Respondent's motion to compell is one of the latter.

Exide Technologies, Inc. ("Exide") has already produced a substatial response to

the subpoena issued by the Respondent ("Daramc"), and is workig diligently to

complete its compliance at the earliest practicable date. But Daramc' s subpoena could

be described, with virally no exaggeration, as a demand for every document and

computer file relating to separators in Exide's possession. Daramc filed its motion to

compel less than seven weeks afer the scope of the subpoena was resolved between the

paries. Daramic has demanded a complete response to its extraordinarly broad

subpoena after this very brief period - a period that encompassed the Thansgiving

holiday, a complete shutdown of Exide for a two week period over the Chrstmas and

New Year holidays, Marin Luther Kig's birthday and Inauguation Day, and the

involvement of critical Exide personnel and counsel in preparg for and paricipating in

i Respondent's Motion To Compel Exide Teclmologies To Produce Documents Requested By A Subpoena

Duces Tecum
depositions noticed by Daramc. As we explain below, Exide has devoted extraordinar

efforts to identify, review, and produce the documents demanded by Daramic, and will

continue to do so. But Daramc canot reasonably complain about the time required to

complete this production, when it is the breadth of its own subpoena that has required

such a massive and time-consumg effort for compliance.

FACTUAL BACKGROUND

Exide is one of the world's largest producers of lead acid batteries and,

consequently, is one of the world's largest purchasers of separators, which are an

essential component of those batteries. For many years, Exide has been, and curently

stil is, Daramic's largest customer. Since 1999, Exide has purchased the vast majority of

the separators used in its batteries from Daramic, pursuant to a long term contract that

limits Exide's ability to purchase from other sources.

After Daramic's acquisition of Microporous in early 2008, the FTC issued a

comprehensive subpoena to Exide, seeking documents relating to virally every issue

relevant to an antitrst analysis of the acquisition. In response to that subpoena, Exide

produced more than 27,000 pages of documents to the FTC. In addition, the FTC

conducted an investigational hearng to obtain the testimony of the executive in charge of

Exide's global procurement (the individual withi Exide who is the most knowledgeable

about the company's consideration of separator suppliers). That hearg lasted nearly ten

hours, and resulted in a 299 page transcript.

Afer the FTC instituted ths proceeding, the documents that Exide previously had

produced to the FTC, as well as the transcript of the investigational hearng, were

provided to Daramc. That material undoubtedly should have sufced to give Daramic

2
virally all the discovery it reasonably needed from Exide. Daramc nonetheless chose

to issue an extraordinarly broad subpoena that could be described, with little

exaggeration, as a demand for every document in Exide's possession relating to

separators. Exide recognzes that the documents requested by the subpoena are

potentially relevant to ths proceeding (although the importance of the documents is quite

a different question). For that reason, Exide did not, and does not, contest Daramic' s

right to issue such a subpoena. But if Daramc wants to call the tue, it must pay the

piper; if Daramc chooses to issue an extraordinarly broad subpoena, it must accept that

a necessar consequence of that choice will be the need for a reasonable time to identify,

collect, and review an extraordinarly large number of documents. Exide's efforts to

respond have been more than reasonable.

Exide received the subpoena on November 11, 2009 and imediately sent it to

the company's antitrst counsel, who promptly reviewed it and conferred with the

company to begin to identify the tyes and locations of potentially responsive material

and to identify possible modifications of the subpoena that might be required. On

November 18,2008, Exide's counsel proposed varous modifications to the subpoena, but

Daramic's counsel was unwilling to accept or reject any of Exide's proposals at that time.

Exide waited one week, until November 25,2008, before obtaing Daramic's agreement

to proposed subpoena modifications.

In the meantime, Exide began its compliance effort. The company assigned

personnel to the task of subpoena compliance, identified potential custodians of

responsive material, and determned where such material was located. In order to ensure

a timely, thorough, and effcient response, the company decided to contract with

3
litigation support vendors. It identified thid par vendors who could pedorm the

requisite data processing, solicited proposals from them, and evaluated those proposals.

By December 1, 2008, the company had negotiated a Statement Of Work and contracted

with Guidance Softare to image files stored on each custodian's personal computer and

on each of the servers identified as a potential site of responsive materiaL. This imaging

began on December 4, 2008 and requied twelve days - until December 16 - to complete.

Roughy 375 gigabytes of data were collected, from multiple locations.

A second vendor, ACT Litigation, was hired to process the data. ACT loaded the

data on its computers and generated a catalog of it, a tak that was completed by

December 18, 2008, and promptly began processing the data to identify potentially

responsive material. The processing involved, among other things, the identification of

potentially responsive documents by searchig for "key words" (e.g., separator or

Daramic), and the elimination of duplicate files. This processing by ACT Litigation

required substatially more time than the company anticipated, because of the large

volume of data that had to be processed. (Moreover, ACT Litigation's work spaned the

Chrstmas and New Year holidays which, we presume, ACT's employees celebrated.)

The processing was not completed until Janua 19,2009.

At that point, ACT Litigation had a database contag more than 84,200

documents that had been identified as potentially responsive to the subpoena. After

documents are identified as potentially responsive to the subpoena, they must be

reviewed to determe whether they are actually responsive and whether they are (or are

not) privileged. To make those judgments, each document must be reviewed

4
individually. The review requires evaluation by an attorney and, in many cases, by the

document custodian. Ths review is underway now.

Exide did not merely sit back and do nothing while waiting for the completion of

the data processing that was previously described. Exide was able to obtain and review

some documents, albeit a relatively small number, before that processing was complete.

These documents were promptly produced to Daramic on a rolling basis as review was

completed. As of Janua 19,2009, Exide had produced approximately 3,130 documents

to Daramic. Exide has indicated to Daramic that it will continue to devote substantial

resources in order to complete its production as soon as is practicable, and that it will

continue to provide a rolling production as documents are ready for production. Exide

has also offered to prioritize its review and production of documents (e.g., by custodian

or date).

As the foregoing description indicates, Exide has devoted substatial resources to

subpoena compliance. Five attorneys have devoted a substatial majority of their time to

subpoena compliance. Two other attorneys have devoted signficant amounts of their

time to this project. The company estimates that the document custodians have, on

average, devoted at least 37.5 hours to subpoena compliance, and will devote stil more

time in order to complete the document production. The company estimates that it will

pay its outside vendors more than $171,500 for their work in responding to the subpoena.

ARGUMENT

Exide's efforts to respond to Daramic's subpoena have been more than

reasonable, and Daramic' s reckless accusation that Exide "has continued to delay and

stall in its production efforts" (Memorandum at 3) is entirely false. That charge comes

5
less than seven weeks afer the date on which Daramc provided its rust substantive

response to Exide's proposal to modify the scope of the subpoena. Durg almost all of

that seven week period, Exide's subpoena compliance efforts have been in the hands of

third pary vendors that were hied for the precise purose of expediting a thorough and

efficient identification of responsive documents. Those vendors had no incentive to

"delay" or "stall" and Exide is not aware of any reason to believe they did so. Rather, the

time requied is a necessar consequence of the magntude of the task at hand. It is

Daramic, not Exide, that dictated the size of that task and, as a direct result, the time

needed to complete it.

Exide has worked diligently to comply with the subpoena and will continue to do

so even without the Cour's intervention. However, even with extraordinar efforts by

Exide, the schedule for compliance that Daramc seeks (i.e., complete production as early

as Januar 30, 2009) is a virl impossibilty. Exide hopes that it will be able to

complete production by the second half of Februar, but that estimate assumes (perhaps

with undue optimism) that no unanticipated problems will arse.

Because there is no real dispute between the paries that Exide will produce the

requested documents, because Exide has put forth reasonable, good faith efforts to

comply with the subpoena, and because Exide will continue to work diligently to

complete its document production at the earliest practicable time, the Cour should deny

Daramic's motion to compeL.

6
CONCLUSION

For the foregoing reasons, Respondent's Motion To Compel should be denied.

Dated: Januar 22, 2009 Respectfuly submitted,

~ ~i/ ~ -12V;/ D

onad £sell - --

ROBBINS, RUSSELL, ENGLERT, ORSECK,

UNTEREINR & SAUBER LLP

1801 K Street, N.W., Suite 411L

Washigton, D.C. 20006

Telephone: (202) 775-4500

Facsimile: (202) 775-4510

drssellcqrobbinsrussell.com

Counsel for Exide Technologies, Inc.

7
CERTIFICATE OF SERVICE

I hereby certify that on Januar 22,2009, I caused to be filed via hand delivery

and electronic mail delivery an original and two copies of the foregoing Opposition Of

Exide Technologies To Respondent's Motion To Compel, and that the electronic copy is

a true and correct copy of the paper original and that a paper copy with an original

signatue is being fied with:

Donald S. Clark, Secreta

Offce of the Secreta

Federal Trade Commssion

600 Pennsylvana Avenue, N.W., Rm H-135

Washigton, D.C. 20580

secretar~ftc.gOV

I hereby certify that on Janua 22,2009, I caused to be served one copy via

electronic mail delivery and two copies via overnght mail delivery of the foregoing

Opposition Of Exide Technologies To Respondent's Motion To Compel upon:

The Honorable D. Michael Chappell

Admstrative Law Judge

Federal Trade Commssion

600 Pennsylvana Avenue, N.W.

Washington, D.C. 20580

oali~ftc.gov

I hereby certify that on Januar 22,2009, I caused to be served by rust class mail

delivery and electronic mail delivery a copy of the foregoing Opposition Of Exide

Technologies To Respondent's Motion To Compel upon:

Wiliam L. Rikard, Jr.

Eric D. Welsh

Thee Wachovia Center

401 South Tryon Street, Suite

3000

Charlotte, N.C. 28202

wiliamkardcqparkerpoe.com

ericwelsh~arkerpoe.com

J. Robert Robertson

Steven Dah

Federal Trade Commssion

600 Pennsylvana Avenue, N.W.

Washigton, D.C. 20580

rrobertson~ftc.goV

sdah~ftc.gov

Dana i. Wesley S

~~~~

8