__________________________________________ 

 

 

 

 

 

06 27 2012 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES
 

) 

In the Matter of ) PUBLIC 

) 

McWANE, INC., ) DOCKET NO. 9351 

Respondent. )

 ) 

__________________________________________) 

COMPLAINT COUNSEL’S MOTION TO EXCLUDE EVIDENCE RELATING 

TO ADVICE RELATED TO DIFRA AND ITS OPERATIONS, 

OR IN THE ALTERNATIVE, TO COMPEL RELATED DISCOVERY
 

McWane wants to have it both ways. It elicits and relies on advice that counsel 

for the Ductile Iron Fitting Research Association (“DIFRA”) provided regarding the 

legality of DIFRA and its information exchange. Yet, at the same time, McWane – as 

well as DIFRA’s counsel and other DIFRA members – have asserted the attorney-client 

privilege to thwart discovery into the substance of that advice. McWane’s use of this 

advice in substantive motion papers and in its responses to requests for admissions 

suggests that it plans to offer such evidence at trial, and indeed, McWane’s counsel 

refused to rule out that possibility during meet and confer discussions. See Holleran 

Decl., Exh. A (Meet and Confer Statement). 

As this Court recognizes, a party may not use a privileged communication as 

“both a sword and shield by selectively using the privileged documents to prove a point 

but then invoking the privilege to prevent an opponent from challenging the assertion.” 

In re OSF Healthcare & Rockford Health Sys., 2012 FTC LEXIS 70, at *4-5 (Mar. 19, 

2012) (citations omitted). Accordingly, Complaint Counsel respectfully requests that this 

Court preclude McWane from introducing evidence relating to any advice from DIFRA’s 
 

PUBLIC

counsel or its members’ reliance on any such advice. Alternatively, Complaint Counsel 

respectfully requests the Court to find that the privilege has been waived, and therefore 

compel DIFRA, its attorneys, and its members (i.e., McWane, Sigma, Star, and U.S. Pipe, 

collectively “Members”) to provide discovery related to any advice provided by DIFRA’s 

attorneys regarding DIFRA’s formation or operation. Complaint Counsel believes that 

raising this issue now is the only way to protect its ability to obtain meaningful discovery 

should it become necessary.1 

I. Factual Background 

In 2007, DIFRA was created as a trade association under the guidance of Thad 

Long and other attorneys at Bradley Arant Boult Cummings LLC (“Bradley Arant”). 

Holleran Decl., Exh. E at 13:20-14:9 (Brakefield Dep. Vol. I). Between June 2008 and 

January 2009, DIFRA operated an information exchange that collected and reported total 

fittings shipped by the Members. DIFRA never engaged in any other functions, and has 

been largely defunct since 2009. 

DIFRA’s Members used the reports generated by the information to track their 

market share, to determine whether they were losing sales to other Members, and to 

detect if one or more of its Members were cheating on their agreement to limit 

discounting on fittings. As result, the Complaint alleges that the DIFRA information 

exchange facilitated collusion. See Complaint at ¶ 37. 

Although McWane claims that it has not asserted an advice of counsel defense, 

see Holleran Decl., Exh. A (Meet and Confer Statement), McWane has nevertheless 

repeatedly injected advice from DIFRA’s counsel into this litigation. For example, in its 

1

 Complaint Counsel has met and conferred with all DIFRA Members and was unable to reach a resolution. 

See Exh. A (Meet and Confer Statement). 

2
 
 

 

 

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Motion for Summary Decision, McWane cited { 

} See Holleran Decl., 

Exh. C at 19 (McWane Summary Decision Memorandum). McWane also cited Mr. 

Long’s advice in three of its responses to Complaint Counsel’s requests for admissions: 

{ 

See Holleran Decl., Exh. D at 29-31 (McWane Responses to Requests for Admissions). 

{ 

Holleran Decl., Exh. E at 56:12-57:6 (Brakefield Deposition Vol. 1); see also id. 

at 75:11-18 { 

} 

Notwithstanding these clear acts of waiver, none of DIFRA’s Members, including 

Respondent, have agreed to waive the attorney-client privilege and to allow Complaint 

Counsel to fully explore the substance of that advice. See Holleran Decl., Exh. A. To the 

contrary, McWane, DIFRA and Bradley Arant have all withheld documents based on the 

attorney-client privilege, see Holleran Decl., Exh. J (McWane Privilege Log), Exh. K 

Further, McWane’s counsel elicited testimony related to Mr. Long’s legal advice to 

DIFRA during the deposition of DIFRA’s president, Mr. Brakefield. For example, Mr. 

Ostoyich affirmatively elicited the following testimony: 

3
 
 

 

 

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(Bradley Arant Privilege Log), Exh. N (Thad Long Privilege/Redaction Letter), and 

during his deposition, Mr. Long asserted the attorney-client privilege and refused to 

answer many questions on subjects that DIFRA’s president had addressed in response to 

questioning by Respondent’s counsel.2 E.g., Holleran Decl., Exh. M (Long Deposition) 

at 29:1-7 { 

} 

II. Legal Analysis 

It is well settled that a litigant cannot use the attorney-client privilege as both a 

sword and a shield. E.g., In re Dynamic Health, 2004 FTC LEXIS 253, at * 3-4 (Dec. 6, 

2004). Here, Respondent has repeatedly injected the issue of advice from DIFRA’s 

counsel into this litigation, thereby waiving any attorney-client privilege. Yet, 

Respondent, DIFRA, and the other DIFRA Members have repeatedly asserted privileged 

to preclude Complaint Counsel from full discovery of that advice. This Court should 

therefore exclude the introduction of any evidence related to any advice by DIFRA’s 

counsel, or any reliance thereof by DIFRA’s Members. This evidence should also be 

excluded because it is irrelevant -- advice of counsel is not a defense to a Section One 

claim. In the alternative, to prevent the unfair prejudice caused by Respondent’s 

2

 Sigma, U.S. Pipe, and Star did not submit privilege logs in Part 3, and it is therefore unclear whether, and 

to what extent, these DIFRA Members are withholding relevant DIFRA-related documents on privilege 

grounds. 

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selective use of privileged information, this Court should re-open discovery and compel 

Respondent, DIFRA and the other DIFRA Members to provide full disclosure of all 

documents and testimony related to any advice by DIFRA’s counsel related to DIFRA’s 

formation and operation. 

A.	 The Court Should Exclude All Evidence Related To Any Advice By DIFRA’s 

Counsel Or Any Reliance Thereof By DIFRA’s Members 

As this Court has explained, “the sword and shield theory applies only if the 

“sword” is proffered or advanced by Respondents.” In re OSF Healthcare, 2012 FTC 

LEXIS 70, at * 6-7. Although McWane has stated that it does not intend to raise an 

advice of counsel defense at trial, its reference to advice by DIFRA’s attorneys in its 

discovery responses and summary judgment papers, as well as its affirmative elicitation 

of related testimony in deposition, implicitly injects privileged issues into the litigation. 

For example, in Cox v. Administrator United States Steel & Carnegie, the 

defendant did not assert an advice of counsel defense, but instead claimed that it believed 

its actions “were lawful.” 17 F.3d 1386, 1418-119 (11th Cir. 1994). By doing so, the 

court ruled that the defendant had waived its privilege: 

Having gone beyond mere denial, affirmatively to assert good faith, USX 

injected the issue of its knowledge of the law into the case and thereby 

waived the attorney-client privilege. 

Id. at 1419 (ordering disclosure of all privileged communications relating to defendant’s 

knowledge of the law relating to leave of absence policy). Likewise here, despite 

disavowing a reliance on an advice of counsel defense, McWane injected the privileged 

issue into this case by purposefully eliciting privileged testimony in depositions and by 

affirmatively asserting its reliance on advice from DIFRA’s counsel in discovery 

responses and summary judgment papers. 

5
 
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When a party injects a privileged issue into litigation, fairness dictates subject 

matter waiver: “[A] litigant cannot use the work product doctrine as both a sword and 

shield by selectively using the privileged documents to prove a point but then invoking 

the privilege to prevent an opponent from challenging the assertion.” In re OSF 

Healthcare, 2012 FTC LEXIS 70, at 4-5; see also Mohawk Indus., Inc. v. Interface, Inc., 

2008 U.S. Dist. LEXIS 104317, at *35 (N.D. Ga. Sept. 29, 2008) (ruling that an 

affirmative defense is unnecessary for waiving the attorney-client privilege, and that 

waiver can be caused if defendant raises “factual issues into the case that, in fairness, 

require disclosure of the communications to the opposing party.”). This holds true even 

if the privilege belongs to the corporation, DIFRA, but has been waived by its Members. 

See Moskowitz v. Lopp II, 128 F.R.D. 624, 638 (E.D. Penn. 1989) (holding corporation’s 

privilege waived when individual directors raised advice of counsel defense). 

Here, Respondent apparently wants to introduce evidence that its DIFRA conduct 

received the blessing of counsel while still asserting privilege to thwart discovery into the 

content of that advice. This same tactic was rejected in Allvoice Computing PLC v. 

Nuance Communs., Inc., 2006 U.S. Dist. LEXIS 98478, at * 8-10 (S.D. Tex. Jan. 10, 

2006). In Allvoice, the defendant wanted to introduce evidence regarding the existence of 

an opinion by counsel, but maintain its privilege on the contents of that opinion, as part of 

the jury’s consideration of the totality of evidence regarding the willfulness of its possible 

infringement. Id. The court refused to allow such a tactic and excluded any evidence 

concerning the legal opinion, reasoning that to rule otherwise would allow the defendant 

to “benefit from the mere existence of such an opinion, [and] would [] allow Nuance to 

6
 
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use the attorney-client privilege and the applicable precedents as both shield and sword.” 

Id. at *10. 

Likewise here, McWane should not be permitted to elicit testimony or other 

evidence at trial that the DIFRA Members complied with counsels’ advice without giving 

Complaint Counsel a full and fair opportunity to test and challenge that assertion. Id.; see 

also Columbia Pictures Indus., Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d 

1186, 1196 (9th Cir. 2001) (affirming exclusion of evidence of advice of counsel where 

witness refused to answer questions regarding his interactions with counsel); see also 

Trouble v. The Wet Seal, Inc., 179 F. Supp. 2d 291, 304 (S.D.N.Y. 2001) (failing to make 

full disclosure during discovery “constitutes a waiver of the advice-of-counsel defense”) 

(citations omitted). To do otherwise would cause fundamental unfairness to Complaint 

Counsel. 

For example, in an unredacted e-mail from Thad Long to DIFRA Members, { 

} See Holleran Decl., Exh. L. Yet, in his deposition, Mr. Long asserted the 

privilege and refused to answer Complaint Counsel’s questions about the significance of 

{ 

} See Holleran Decl., Exh. 

M at 28:5-17, 35:16-37:12 (Long Deposition). By preventing Complaint Counsel from 

fully exploring the substance of the advice of DIFRA’s counsel, Respondent can unfairly 

use the attorney-client privilege as a sword to suggest that its actions were lawful while 

improperly shielding possible evidence to the contrary. 

7
 
 

 

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Excluding evidence related to advice from DIFRA’s counsel is also appropriate 

here because its “probative value is substantially outweighed by the danger of unfair 

prejudice.” 16 C.F.R. § 3.43(b) (2012). McWane has stated it does not intend to call Mr. 

Long, but if discovery is any indication, it will elicit testimony from DIFRA’s members 

that they acted in accord with his advice. However, this evidence is not probative. This 

Court, and not Mr. Long, will determine if DIFRA and its operations were unlawful, and 

neither willfulness nor specific intent is an element to a Section 1 claim. Accordingly, 

this Court should exclude any evidence relating to any advice from DIFRA’s counsel. 

B. In the Alternative, Complaint Counsel Should Be Permitted To Conduct Full 

and Fair Discovery 

As discussed above, Respondent has waived the attorney-client privilege with 

respect to advice from DIFRA’s counsel regarding the formation and operation of 

DIFRA. See supra at Part I.3

 If the Court does not exclude any reference at trial related 

to any advice from DIFRA’s counsel, or any reliance thereof by its Members, then this 

Court should reopen discovery for the limited purpose of allowing Complaint Counsel to 

investigate fully the substance of that advice and the role DIFRA’s attorneys played in its 

creation and operation. Specifically, Complaint Counsel should receive all documents 

related to DIFRA that are currently being withheld on privilege grounds by all DIFRA 

Members and their attorneys, and Complaint Counsel should have the right to re-depose 

Mr. Long, Mr. Brakefield, and each DIFRA Member regarding the substance of that 

advice. 

3

 Respondent also waived the privilege by affirmatively questioning witnesses on privileged materials and 

not objecting to questions on privileged documents. See Holleran Decl., Exh. E (Brakefield deposition) at 

20:16-22:22; 55:13-60:6; and 102:11-104:8 . See AHF Community Dev., LLC v. The City of Dallas, 258 

FRD 143, 148-49 (N.D. Tex. 2009) (voluntary waiver where documents and questions provided sufficient 

notice that privileged information was being sought). 

8
 
 

 

 

 

 

III. Conclusion 

PUBLIC

For the foregoing reasons, this Court should exclude all evidence relating to any 

advice by DIFRA’s counsel, or any reliance thereof by DIFRA Members; or in the 

alternative, compel the production of any DIFRA related documents that have been 

withheld on the basis of privilege and permit Complaint Counsel to re-depose DIFRA’s 

counsel and its Members related to the substance of that advice. 

Dated: June 27, 2012 Respectfully submitted, 

 s/ Linda Holleran 

Edward Hassi, Esq. 

Linda Holleran, Esq. 

Joseph A. Baker, Esq. 

Thomas H. Brock, Esq. 

Michael J. Bloom, Esq. 

Jeanine K. Balbach, Esq. 

J. Alexander Ansaldo, Esq. 

Andrew K. Mann, Esq.

 Monica M. Castillo, Esq. 

Counsel Supporting the Complaint 

 Bureau of Competition

 Federal Trade Commission

 Washington, DC 20580 

 Telephone: (202) 326-2470 

 Facsimile: (202) 326-3496 

 Electronic Mail: ehassi@ftc.gov 

9
 
 

__________________________________________ 

 

 

 

 

 

 

 

 

 

 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES
 

PUBLIC

) 

In the Matter of ) 

) 

McWANE, INC., ) DOCKET NO. 9351 

Respondent. ) 

__________________________________________) 

COMPLAINT COUNSEL’S [PROPOSED] ORDER 

On June 25, 2012, Complaint Counsel filed its Motion to Exclude 

Evidence Relating to Advice Related to DIFRA and Its Operations, Or In the 

Alternative, To Compel Related Discovery Motion. Upon consideration of this 

motion, and all responses thereto, the Court Grants Complaint Counsel’s motion. 

IT IS ORDERED that Respondent may not introduce at trial, or 

otherwise refer to at trial or otherwise, any documents, testimony or other 

evidence related to or reflecting: (i) any advice or opinions by counsel relating to 

DIFRA’s formation, operation or legality; or (ii) any reliance or compliance with 

such advice by any DIFRA member. 

ORDERED:

 D. Michael Chappell

 Administrative Law Judge 

Date: July , 2012 
__________________________________________ 

 

 

 

 

 

 

 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES
 

PUBLIC

) 

In the Matter of ) 

) 

McWANE, INC., ) DOCKET NO. 9351 

Respondent. ) 

__________________________________________) 

DECLARATION OF LINDA M. HOLLERAN 

1.	 I have personal knowledge of the facts set forth in this declaration, and if called as 

a witness I could and would testify competently under oath to such facts. 

2.	 I am an attorney at the Federal Trade Commission and Complaint Counsel in 

these proceedings. Attached to this declaration are the exhibits submitted in 

support of Complaint Counsel’s Motion to Exclude Evidence Relating to Advice 

Related to DIFRA and Its Operations, Or In the Alternative, To Compel Related 

Discovery. 

3.	 Exhibit A is a true and correct copy of Complaint Counsel’s Statement Regarding 

Meet and Confer pursuant to Rule 3.22(g) and the Court’s Scheduling Order. 

4.	 Exhibit B is a true and correct copy of a letter from Michael Kades to William 

Lavery, dated June 21, 2012. 

5.	 Exhibit C is a true and correct of an excerpt of the title page and pages 18 and 19 

of the Memorandum Of Law In Support of Respondent McWane, Inc.’s Motion 

For Summary Decision, dated June 1, 2012. 
PUBLIC

6.	 Exhibit D is a true and correct copy of the title page and pages 29, 30 and 31 of 

the in camera version of Respondent McWane, Inc.’s Objections and Responses 

to Complaint Counsel’s Requests for Admissions, dated June 8, 2012. 

7.	 Exhibit E is a true and correct copy of Volume I of the Rule 3.33(c)(1) Deposition 

of Thomas Brakefield, dated May 4, 2012 (“Brakefield Deposition”). 

8.	 Exhibit F is a true and correct copy of a redacted version of a Summary of Third 

Meeting To Establish Trade Association For Ductile Water Works Fittings, dated 

November 21, 2006, which was produced by DIFRA with the bates number 

DIFRA 000011-12. 

9.	 Exhibit G is a true and correct copy of an unredacted version of the Summary of 

Third Meeting To Establish Trade Association For Ductile Water Works Fittings, 

dated November 21, 2006, which was produced by Star Pipe & Products LLP 

with a bates number MESP0000344. Attachment G is an unredacted copy of 

Attachment F, and was used as Exhibit 3 in the Brakefield Deposition. 

10. Exhibit H is a true and correct copy of a redacted copy of an email from Thad 

Long to Tom Brakefield, the then-President of DIFRA, and to representatives of 

DIFRA’s members: Victor Pais, Larry Rybacki, Gary Crawford, Dan 

McCutcheon and Rick Tatman; and cc’d to Wood Herron and Michael 

McKibben, dated Apr. 4, 2008, with the subject line: DIFRA Input Output Format 

(3).xls. This document was produced by DIFRA with the bates number DIFRA 

000322. 

11. Exhibit I is a true and correct copy of a redacted version of an e-mail string 

between Thad Long and DIFRA members, which was produced by Star Pipe 

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Products with the bates number MESP000563-64. The second page of 

Attachment I is an unredacted version of Exhibit H, and was used as Exhibit 8 in 

the Brakefield Deposition. 

12. Exhibit J is a true and correct copy of McWane’s Amended Privilege Log 

provided to Complaint Counsel. Upon information and belief, entries 2 and 3 

refer to documents relating to DIFRA that were withheld on the grounds of 

attorney-client privilege. 

13. Exhibit K is a true and correct copy of the Privileged Log provided by the law 

firm of Bradley Arant Boult Cunnings. Upon information and belief, all entries 

refer to documents relating to DIFRA that were withheld on the grounds of 

attorney-client privilege or work product. 

14. Exhibit L is a true and correct copy of a unredacted version of an email from T. 

Long to Tom Brakefield, that is cc’d to Michael McKibben and K. Wood Herren, 

dated Mar. 18, 2008, with the subject line: RE: DIFRA Meeting, which was 

produced by SIGMA, Inc. with the bates number SIG – 0034192. Counsel for 

SIGMA, Inc. had originally claimed that this document was privileged. 

15. Exhibit M is a true and correct copy of the deposition transcript of Thad Long, 

counsel for DIFRA during the relevant time period, dated May 30, 2012. 

16. Exhibit N is a true and correct copy of a letter from Thad Long to Andrew Mann, 

Complaint Counsel, which states that he has redacted documents on behalf of 

DIFRA. Thad Long is the custodian of DIFRA documents that have been 

withheld on the basis of the attorney-client privilege. DIFRA did not produce a 

privilege log. 

3
 
 

 

 

 

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I declare under the penalty of perjury that the foregoing is true and correct. Executed this 

27th day of June, 2012, at Washington, DC. 

 s/ Linda Holleran 

 Linda M. Holleran

 U.S. Federal Trade Commission 

 Bureau of Competition

 600 Pennsylvania Avenue, NW 

 Washington, DC 20580 

(202) 326-2267 

lholleran@ftc.gov 

Counsel Supporting the Complaint 

4
 
 

 

 

 

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CERTIFICATE OF SERVICE 

I hereby certify that on June 27, 2012, 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 and hand delivery 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 

 I further certify that I delivered via electronic mail a copy of the foregoing 

document to: 

Joseph A. Ostoyich 

William C. Lavery 

Baker Botts L.L.P. 

The Warner 

1299 Pennsylvania Ave., NW 

Washington, DC 20004 

(202) 639-7700 

joseph.ostoyich@bakerbotts.com 

william.lavery@bakerbotts.com 

J. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

(205) 254-1000 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

Counsel for Respondent McWane, Inc. 
 

PUBLIC

Gregory S.C. Huffman 

William Katz 

Nicole Williams 

Brian Stoltz 

Thompson and Knight LLP 

One Arts Plaza 

1722 Routh Street, Suite 1500 

Dallas, TX 75201 

(214) 969-1700 

Gregory.Huffman@tklaw.com 

William.Katz@tklaw.com 

Nicole.Williams@tklaw.com 

Brian.Stoltz@tklaw.com 

Counsel for Star Pipe Products, LTD 

Matthew A. White 

Jason A. Leckerman 

Ballard Spahr LLP 

1735 Market Street, 51st Floor 

Philadelphia, PA 19103-7599 

(215) 665-8500 

whitema@ballardspahr.com 

leckermanj@ballardspahr.com 

Counsel for SIGMA Corporation and Tom Brakefield 

Richard Gill 

Copeland, Franco, Screws & Gill 

444 South Perry Street 

Montgomery, AL 36104 

(334) 834-1180 

gill@copelandfranco.com 

Counsel for Tom Brakefield 

Thad G. Long 

Thad Long Legal Services 

2880 Balmoral Road 

Birmingham, AL 35223-1236 

(205) 870-0171 

Counsel for Ductile Iron Fittings Research Association 
 

 

 

 

PUBLIC

Michael S. Denniston 

Bradley Arant Boult Cummings, LLP 

One Federal Place 

1819 Fifth Avenue North 

Birmingham, AL 35203 

(205) 521-8000 

mdenniston@babc.com 

Counsel for Bradley Arant Boult Cummings, LLP 

Jason D. Cruise 

Latham & Watkins LLP 

555 Eleventh Street NW Suite 1000 

Washington, D.C. 20004-1304 

(202) 637-2200 

Jason.Cruise@lw.com 

Counsel for U.S. Pipe 

CERTIFICATE FOR ELECTRONIC FILING 

 I certify that the electronic copy sent to the Secretary of the Commission is a true 

and correct copy of the paper original and that I possess a paper original of the signed 

document that is available for review by the parties and the adjudicator. 

June 27, 2012 By: s/ Thomas H. Brock 

Thomas H. Brock 
PUBLIC

Exhibit A 
__________________________________________ 

 

 

 

 

 

 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

OFFICE OF ADMINISTRATIVE LAW JUDGES
 

PUBLIC

) 

In the Matter of ) 

) 

McWANE, INC., ) DOCKET NO. 9351 

Respondent. ) 

__________________________________________) 

COMPLAINT COUNSEL’S MEET AND CONFER 

STATEMENT 

On or about June 20, 2012, Complaint Counsel met and conferred with counsel 

for Respondent McWane, Inc., regarding Complaint Counsel’s Motion to Exclude 

Evidence Relating to Advice Related to DIFRA and Its Operations, Or In the Alternative, 

To Compel Related Discovery. Complaint Counsel discussed its concern that McWane 

was relying on the advice of counsel while still asserting privilege to prevent fair 

discovery on the issue. McWane claimed that it did not think that the attorney-client 

privilege had been waived, and that it would not agree to forego relying upon evidence at 

trial related to Mr. Long’s advice regarding DIFRA, or any reliance thereof by any of the 

DIFRA members. After a good faith attempt to resolve the issue, both sides agreed that 

they were at an impasse. These meet and confer efforts are summarized in a letter from 

M. Kades to W. Lavery, dated June 22, 2012, and is attached as Exhibit B to the Holleran 

Declaration. 

On or about June 21-22, 2012, Complaint Counsel conferred with Michael S. 

Denniston, Esq., counsel for Bradley Arant Boult Cummings (“Bradley Arant”); Gregory 

S.C. Huffman, Esq., counsel for Star Pipe Products, Ltd. (“Star”); Jason Leckerman, 

Esq. ̧counsel for SIGMA Corp.; and Jason D. Cruise, Esq. and Michael L. Hitsky, Esq., 
 

 

 

 

 

 

 

 

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counsel for United States Pipe and Foundry Company LLC (“US Pipe”). In each case, 

Complaint Counsel explained its concerns and its intention to file the present motion. 

Counsel for Bradley Arant, Star, Sigma and US Pipe each expressed their refusal to 

waive the attorney-client privilege with respect to DIFRA. Because Complaint Counsel’s 

requested alternative relief could implicate their obligations to produce relevant 

discovery, Complaint Counsel agreed to serve the instant motion on each party so that 

they could protect their rights in any way in which they saw fit. 

On or about June 21-22, 2012, Complaint Counsel conferred with Richard Gill, 

personal counsel for Mr. Brakefield, the then-President of DIFRA, regarding Complaint 

Counsel’s concerns. Mr. Gill expressed his wish to defer any decision regarding waiver 

of the attorney-client privilege with respect to DIFRA to Mr. Thad Long. 

On or about June 21 through June 25, 2012, Complaint Counsel tried on multiple 

separate occasions to contact Thad Long, an attorney for DIFRA during the relevant time 

period. Specifically, Complaint Counsel telephoned and left voice messages for Mr. 

Long on June 21, 2012, June 22, 2012, and June 25, 2012. In his deposition, Mr. Long 

asserted the attorney-client privilege on multiple occasions and explained that his clients 

had not waived the attorney-client privilege. See Holleran Decl., Exh. M at 14:10-15:18. 

Dated: June 25, 2012 Respectfully submitted, 

 s/ Linda M. Holleran

 Linda M. Holleran 

Counsel Supporting the Complaint 

 Bureau of Competition

 Federal Trade Commission

 Washington, DC 20580 

(202) 302-4996 

lholleran@ftc.gov 

2
 
PUBLIC

Confidential Exhibit 

Redacted in its Entirety 

Exhibit B 
PUBLIC

Exhibit C 
 

___________________________________ 

 

 

 

 

PUBLIC

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION
	

) 

In the Matter of ) PUBLIC 

) 

MCWANE, INC., )

 a corporation, and ) 

STAR PIPE PRODUCTS, LTD., )

 a limited partnership. ) DOCKET NO. 9351 

) 

__________________________________ ) 

MEMORANDUM OF LAW IN SUPPORT OF RESPONDENT McWANE, INC.’S 

MOTION FOR SUMMARY DECISION 

REDACTED MATERIALPROTECTED 

PURSUANT TO JANUARY 5, 2012 PROTECTIVE ORDER ENTERED BY THIS COURT
	
 

 

 

the fitting, linings, and coatings. (SOF ¶ 85 (“there [were] so many different approaches to that, 

that it needed some housecleaning”).) 

DIFRA’s operations were overseen by three lawyers, including very experienced antitrust 

counsel, Thad Long, of the Bradley Arant firm in Birmingham, Alabama. (SOF ¶ 86.) 

Following Mr. Long’s guidelines, each member began submitting monthly tons-shipped data for 

January through April 2008 (and annual tons-shipped data for 2006-07) to a third-party 

accounting firm, Seller Richardson, in June 2008. (SOF ¶ 87.) Sellers Richardson then 

combined the members’ monthly data and sent overall total tons-shipped back to the members 

the following month. (Id.)6 

The tons-shipped data did not contain any breakdown of the thousands of unique fittings 

SKUs. Instead, the data was aggregated into broad size-ranges: 2-12”, 14-24”, and 30” and 

greater.7 Each broad size-range lumped together dozens, and perhaps hundreds, of unique SKUs. 

The tons-shipped data did not contain any geographic breakdown of where in the country the 

tons were shipped.8 Nor did it contain any breakdown of whether the shipments were of 

domestic or imported fittings. Indeed, the tons-shipped data each month did not reliably reflect 

anything about price or sales - - not even when they occurred. (SOF ¶ 88.) Indeed, many jobs 

do not ship for six months or more after they are initially bid. Each sale could thus have 

occurred anytime over a six month or longer period before shipment date. (See SOF ¶ 89.) 

McWane witnesses testified, as a result, that the tons-shipped data did not give them any 

insight into their competitors’ prices. (SOF ¶ 90 (“there’s no pricing there”), Id. (“The DIFRA 

data isn’t going to give me any sense of how they’re pricing.”); Id. (“DIFRA numbers report 

nothing as far as prices”).) Star and Sigma witnesses likewise testified that the tons-shipped data 

PUBLIC

6 The AC does not allege that any prices were communicated as part of DIFRA or under its penumbra. 

7

 The data also distinguished in each size range between flanged and mechanical joint fittings. The AC does not 

lodge any allegations related to this distinction. 

8

 As noted above, fittings multipliers vary region-by-region and state-by-state (and job prices, obviously, vary by 

job). The tons-shipped data made no distinction, however. 

18
	 FTC Docket No. 9351
	

McWane, Inc.’s Motion for Summary Decision
	
 

shed no light on their competitors’ prices. (SOF ¶ 91 (“No, sir. . . . Not from what I got, not 

from what we received, it’s not possible”), Id. (“DIFRA didn’t influence the way we ran our 

business at all . . . [o]n the price side”); SOF ¶ 92 (“Not at all”), Id. (“Not at all”), SOF ¶ 95 (“Q. 

And was there any exchange of pricing data as part of DIFRA? A. No, sir, none that I saw at 

all.”).) Indeed, Star’s VP of Sales testified that the DIFRA data had no impact on his pricing 

decisions. (SOF ¶ 93). Sigma’s CEO testified likewise: “You know, for us the pricing was and 

is now, before and after DIFRA, has been largely based on what is happening on a day-to-day 

basis with the orders.” (SOF ¶ 94.) 

The President of DIFRA flatly denied that DIFRA was a mechanism to facilitate price 

collusion. (SOF ¶ 95 (“Q. Mr. Brakefield, as the president of DIFRA, was DIFRA, the Ductile 

Iron Fittings Research Association, a secret mechanism to facilitate price collusion? A. No, 

sir.”).) So did its lawyer.

9

 The undisputed testimony thus demonstrates that the tons-shipped 

data did not “facilitate” price coordination. On the contrary, McWane charted its own course 

with lower multipliers after receiving the tons-shipped data in June 2008 - - and job price 

discounts grew even more fierce in the second half of 2008. (SOF ¶ 96.) 

IV. Star Successfully Began Selling Domestic Fittings 

The undisputed evidence shows that in February 2009, following the passage of the 

America Reinvestment and Recovery Act (“ARRA”), Star began exploring the possibility of 

sourcing and re-selling domestic fittings. In June 2009, Star had announced that it would begin 

selling a full range of small, medium, and large diameter domestic fittings by the end of 2009. 

(See SOF ¶ 97.) Star did not build or buy a foundry. Instead, it sourced castings from seven of 

the 100+ domestic foundries that had excess capacity. (SOF ¶ 99 (“[M]ost foundries have a 

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9 Again, a citation will be added as soon as a transcript is available. 

19
	 FTC Docket No. 9351
	

McWane, Inc.’s Motion for Summary Decision
	
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