ORIGINAL 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

In the Matter of ) 

) Docket No. 9327 

) Polypore International, Inc., )
 PUBLIC

a corporation
 ) 

) 

RESPONDENT'S PROPOSED FINDINGS OF FACT 

AND CONCLUSIONS OF LAW FOR RE-OPENED HEARING 

Counsel for Respondent: 

Wiliam L. Rikard, Jr. 

Eric D. Welsh 

Deborah L. Edney 

Adam C. Shearer 

Brian R. Weyhrich 

Sarah A. Fulton 

Katie C. Miler 

PARKER POE ADAMS & BERNSTEIN LLP 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 372-9000
 

Facsimile: (704) 335-9689 

wiliamrikard~parkerpoe.com 

ericwelsh~parkerpoe.com 

John F. Graybeal 

PARKR POE ADAMS & BERNSTEIN LLP 

150 Fayettevile Street
 

Raleigh, NC 27602 

Telephone: (919) 835-4599
 

Facsimile: (919) 828-0564
 

johngraybeal~parkerpoe.com 

PP AB 1631446v 1
 
Table of Contents
 

i. EXHIBIT AND WITNESS INDICES ................................................................................ 1
 

II. PROCEDURAL BACKGROUND..................................................................................... 1
 

III. ~
 ~ ...................................................... ........... 2
 

A. ~
 l ...........................2
 

a. f...................................................................................................................3
 

b.
 f l ....................................................................................................... 5
 

B. f l .......................................................................... 7
 

a. f l ................................................................ 7
 

b.
 f l ................................... .................. 8
 

c. f l .............................................................................................................. 10
 

D. f l .............................. 18
 

E. t l .......................................................................................................... 20
 

a. f l ................................................................................................... 21
 

b.
 f l .......................................................................... 23
 

F. f l ...................................................................................................................... 28
 

IV. ~
 ~ .................................. 32
 

V. CONCLUSION................................................................................................................. 42
 

PPAB 1631446vl 
I. EXHIBIT AND WITNESS INDICES
 

A. Exhibit Index - see Exhibit A hereto. 

B. Witness Index - see Exhibit B hereto.
 

II. PROCEDURAL BACKGROUND
 

1494. On June 22, 2009, after a five-week hearing in this proceeding, the record was closed. 

1495. On September 25, 2009, Respondent, Polypore International, Inc. ("Polypore or 

Respondent") moved for a second time to re-open the record in this proceeding to permit the 

introduction of new and additional evidence (the "Second Motion to Re-open"). By its Second 

Motion to Re-open, Respondent sought leave to introduce new and additional evidence regarding 

(1) ~
 

~ and (2) ~
 J, set
 

forth in four proffers. 

1496. After briefing, the Honorable D. Michael Chappell granted Respondent's Second Motion 

to Re-open. 

1497. On November 12,2009, in connection with the Second Motion to Re-open, a hearing was 

held before Administrative Law Judge Chappell. At the November 12 hearing, Respondent 

presented additional evidence to the Court through witnesses and exhibits regarding the four 

proffers. Respondent called two witnesses: Mr. Robert Toth ("Toth"), Chief Executive Officer 

of Respondent and Mr. Har D. Seibert ("Seibert"), Vice President and Business Director for 

Respondent's Daramic subsidiary. Respondent also cross-examined Mr. Douglas Gilespie 

("Gilespie"), Vice President of Global Procurement for Exide, who was called by Complaint 

Counsel as their witness. Respondent introduced 46 exhibits which were admitted into evidence, 

some over Complaint Counsel's objections. (Tr. 5632-5642, 5812, 5841; Pre. Tr. 10-11, 14-20). 

Complaint Counsel called only Gilespie in rebuttaL. The record of the November 12, 2009 

hearing was closed by Order dated November 23,2009. 

PPAB 1631446vl 
1498. Respondent incorporates herein the definitions set forth in its Proposed Findings of Fact 

and Conclusions of 
 Law, submitted on July 10,2009. 

III. f 

l

A. i )


1499. On May 28 and May 29,2009, Gilespie testified in this proceeding. (JX-9). 

1500. At the time of the hearing this past spring, ~
 

~. (RXOI720, in camera). ~ 

~. (Gilespie, Tr. 5807-08, in camera;
 

see also RFOF 524, 530, 531). 

1501. ~
 

~. (JX-9, in camera). 

1502. ~
 

~. (RXOI119, in camera; Hauswald,
 

Tr. 1118; Gilespie, Tr. 3126, in camera; RXO 1120, in camera). 

1503. ~
 

~. (Gilespie, Tr. 5855-56, in
 

camera). 

PPAB 1631446vl 2 
1504. At the time of 
 the hearing this past summer, ~ 

~. (Seibert, Tr. 

5646-48, in camera; RX01721, in camera). 

a. i 

1505. ~
 

~. (RX01721 at 002, in 

camera; Seibert, Tr. 5648, in camera). 

1506. ~
 

~. (Seibert, Tr. 5648-49,5662-63, in camera). ~ 

~. (Seibert, Tr. 5682, in camera). Even this year, ~ 

~. (Seibert, Tr. 5681-83, in 

camera; RX01724, in camera). ~ 

~. (Seibert, Tr. 5682-83, in camera; RX01724, in camera). t 

~. 

PPAB 1631446vl 3 
1507. ~
 

~. (Toth, Tr. 5648-49, in camera). ~ 

~. (Toth, Tr. 5749-50, in camera). 

1508. ~
 

~. (Seibert, Tr. 5649, 

5658, in camera; RX01667 at 002, in camera; RX01668 at 002, in camera; RX01669 at 002, in 

camera; RXOI713, in camera; RX01718, in camera; RX01714 at 001 ("~ 

~."), in camera). 

1509. ~
 ~. (Seibert,
 

Tr. 5651, in camera). ~ 

~. (Seibert, Tr. 5668, in camera). 

1510. ~
 

~. (Seibert, Tr. 5668, 

in camera). t 

~." (Seibert, Tr. 5668, in camera). 

1511. This Cour finds Seibert to be a credible witness. Seibert's testimony is consistent with 

Respondent's exhibits. This Court credits Seibert's testimony in this matter. In contrast, for the 

PPAB 1631446vl 4 
reasons stated herein and previously, this Cour does not find Gilespie to be a credible witness. 

The evidence adduced during the hearing on November 12 and May 28 and 29, 2009 

demonstrates that Exide has attempted to manipulate this proceeding by intentionally refraining 

from certain relevant conduct until after the hearing record had been closed. Gilespie's 

testimony on May 28 and 29, 2009 was rehearsed with Complaint Counsel, including Exide's 

"recommendation" of relief. (RFOF 602). Accordingly, this Cour does not credit Gilespie's 

testimony. 

b. i )
 

1512. After Gilespie testified in this hearing on May 28 and 29, 2009, t 

~. (Seibert, Tr. 5650, in camera; RX01665, in 

camera). ~
 

~." (RX01665 at 001, in 

camera). 

1513. t 

~. (Seibert, Tr. 5650-51, 5697, 5669-70, in camera; RX01665 at 002­

003, in camera). 

1514. In addition, t 

PPAB 1631446vl 5 
~. 

(RX01665 at 003, in camera). ~ 

J, (Gilespie, Tr. 2934, in 

camera), and is further evidence that ~ 

~ and therefore, contrary to Complaint Counsel's assertions, there are no significant 

bariers to entry for battery separators due to testing, whether for automotive, motive or some 

other application or use. 

1515. ~
 

~. (Seibert, Tr. 5670, in camera; RX01697, in camera). 

1516. At the hearing, ~ 

~." (Gilespie, Tr. 5852, in camera). ~ 

~. (RX01665 at 001, in camera). ~ 

~. This Cour finds Gilespie's 

testimony not to be credible and further finds that Exide has attempted to manipulate this
 

proceeding to its benefit. 

PPAB 1631446vl 6 
B. i ) 

1517. t 

~. (RXOI713, in camera; RX01667, in camera; Seibert, Tr. 

5665, in camera). ~ 

~. (RXOI713 at 002, 

in camera). ~
 

~. (RXOI713 at 003; Seibert, Tr. 5657, in camera). 

a. i ) 

1518. ~
 

~. (Seibert, Tr. 5651-53, 5655, in camera;
 

RX01617, in camera). 

1519. ~
 

~. (Seibert, Tr. 5651-52, 5670, in camera). ~ 

~. (Seibert, Tr. 5652,
 

in camera). ~
 ~. (Seibert, Tr. 5652,
 

in camera). ~ 

~. (Seibert, Tr. 5658, in camera). 

1520. t 

~. (Seibert, Tr. 5652-53, in camera). t 

PPAB 1631446vl 7 
~. (RX01667 at 002, in camera; Seibert, Tr. 5658, in camera). ~ 

~. (Gilespie, Tr. 5858, in camera). 

1521. ~
 

~. (RX01667 at 002; Seibert, Tr. 5670, in camera). 

b. i 

) 

1522. ~
 

~. (RXOI668, in camera; RX01669, in camera;
 

Seibert, Tr. 5658-59, 5662, in camera). ~ 

~. (RX01668 at 002, in camera; Seibert, Tr. 5659-60, in camera; Gilespie, Tr. 

5839, 

in camera). 

1523. At the same time ~
 

~. (RXO 1668 at 002
 

U ~), in camera; Seibert, 

Tr. 5734, in camera). ~ 

PPAB 1631446vl 8 
~. 

1524. Upon learing that ~ 

~. (Seibert, Tr. 5660, in camera). t 

~. (RX01720 at 035, in camera; 

Seibert, Tr. 5660, in camera). ~ 

~. (Seibert, Tr. 5660, in camera). 

1525. ~
 

~. (Seibert, Tr. 5660-61, in camera). ~ 

~. (Seibert, Tr. 5661, in camera). 

1526. In subsequent discussions, ~ 

~. (Seibert, Tr. 5662-63, 5666, in camera;
 

Toth, Tr. 5749-50, in camera; RX01714 at 002, in camera; RX01718 at 002, in camera). In 

addition, ~
 

). 

(Seibert, Tr. 5663-65, in camera; Toth, Tr. 5750-51, 5760-61, in camera; RX01718 at 002, in 

camera; RX01683, in camera; RX01714 at 002, in camera). t 

~. 

PPAB 1631446vl 9 
1527. ~
 

~. 

(Seibert, Tr. 5732-34, in camera). 

1528. t 

~. (Seibert, Tr. 5645, in camera; Gilespie, Tr. 5851, in camera; RX01665, in camera; 

RX01669 at 002, in camera; RX01687, in camera).

c. i )
 

1529. After the record was closed on June 22, 2009, ~ 

~. (RXOI676,
 

in camera; Seibert, Tr. 5674, in camera; Gilespie, Tr. 5845, in camera). ~ 

~. (Seibert, Tr. 5673-74, 

5676-77, in camera; Gilespie, Tr. 5845-46, in camera; RX01676, in camera). t 

~. (RXOI676, in camera; JX-9, in camera; 

Gilespie, Tr. 5839, 5843, in camera). Specifically, ~ 

PPAB 1631446vl 10 
Date Delivery 

PO# Issued Quantity/feet SQM Date 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

( 

Total ( i 

HRX01676, in camera). 

1530. t 

~. (RX01667 at 001, in camera; RX01670 at 001, 

in camera; RX01671 at 001, in camera; Seibert, Tr. 5675-76, in camera; Gilespie, Tr. 5844, in 

camera). 

1531. ~
 

~. (Seibert, Tr. 5673-74, 5679, in camera). ~ 

~. (Gilespie, Tr. 5842-43, in camera). t 

PPAB 1631446vl 11 
~. (Gilespie, Tr. 5843, in camera; Toth, Tr. 5752-53, in camera;
 

RX01686, in camera). 

1532. Based on past practice, ~ 

~. (Seibert, Tr. 5671, in camera; JX-9, in camera). In 

contrast, ~
 

~. 

(RXOI676, in camera; JX-9, in camera; Seibert, Tr. 5673-74, in camera; Gilespie, Tr. 5839, in 

camera). 

1533. ~
 

~. (Seibert, Tr. 5671, in
 

camera). ~
 

~. (Seibert, Tr. 5672, in camera; 

RX01723, in camera). ~ 

~. (Seibert, Tr. 5673,
 

in camera; RXO 1708 (~
 

~), in camera.) 

1534. ~
 

~. (Seibert, Tr. 5678-79, 5709-10, in 

camera). t 

~. (RXOI698, in 

camera; Seibert, Tr. 5672, in camera). ~ 

PPAB 1631446vl 12 
~. (RXOI699, in camera; Seibert, Tr. 5672-73, in camera). 

1535. ~
 

)J, (Seibert, Tr. 5674, in 

camera), ~
 ~. (Seibert, Tr.
 

5683, in camera). ~
 

~. (Seibert, Tr. 5682-83, in camera; RXO 1724, in camera). ~ 

~. (RXOI723, in camera; Gilespie, Tr. 5837, in camera). 

1536. Moreover, ~
 

~ . (Seibert,
 

Tr. 5681-82, in camera). In addition, ~ ~. (Seibert, Tr.
 

5682-83, in camera; RX01724, in camera). ~ 

~. (Gilespie, Tr. 5849-50, in camera). ~ 

~. (RXOI724, in camera; Seibert, Tr. 5683, in camera). For example, 

~ 

~. (RXOI724,
 

in camera). Similarly, ~ 

~. (RXOI724, in camera). ~
 

~. 

PPAB 1631446vl 13 
1537. ~
 

~. (Seibert, Tr. 5683, in camera). ~ 

~ ."
 

(RXOI717, in camera; Gilespie, Tr. 5848-49, in camera; Seibert, Tr. 5683-84, in camera). 

Here, ~
 

n. (Seibert, Tr. 5676-77, 5732, in camera).
 

1538. ~
 

~. 

(Gilespie, 5842-43, in camera).
 

1539. ~
 

PPAB 1631446vl 14 
~. (Seibert, Tr. 5680-81, 

in camera). 

1540. ~
 

~. 

(Seibert, Tr. 5677-78, in camera). ~ 

~. (RXOI693, in camera; Seibert, Tr. 5679-80, in camera). ~ 

~." (Gilespie, Tr. 5862, in camera). Yet ~ 

~. (Gilespie, Tr. 5846, in camera). ~ 

~. (Gilespie, Tr. 5849, in camera). In any event, ~
 

~. (Seibert, Tr. 5672,
 

in camera). 

1541. t 

~. (Siebert, Tr. 5684-85, in camera; 

Gilespie, Tr. 5840-41, in camera; RX01681, in camera). ~ 

~. (Gilespie, Tr. 5840, in
 

PPAB 1631446vl 15 
camera). ~
 

~." (RXOI681, in camera). ~
 

~. (Gilespie, Tr. 

5839, in camera). Again, Gilespie's testimony is not credible. 

1542. ~
 

~. (Gilespie, Tr. 5836-37, in camera). ~ 

~. (Gilespie, Tr. 5843; RXOI726). 

1543. ~
 

PPAB 1631446vl 16 
~. 

1544. ~
 

~. (RXOI679, in camera; RX01693, in 

camera). 

1545. ~
 

~." (RX01720 at 005, in 

camera). 

1546. ~
 

~. (RXOI693, in camera; 

RX01680, in camera; RX01685, in camera; Seibert, Tr. 5681, 5684, in camera). ~ 

~. (Seibert, Tr. 5734-35, in camera). 

Furher, the Cour finds that ~ 

~. 

1547. t 

~. (Seibert, Tr. 5684,5707,5715,5723, in camera; RX01685, in 

PPAB 1631446vl 17 
camera). ~
 

~. (Seibert, Tr. 5681, 5722, in camera). 

1548. ~
 

~. (Gilespie, Tr. 5807, 5843-44, in 

camera). Gilespie's testimony here, and elsewhere, is not credible. According to Exide's 

second quarter results, Exide's sales of 
 transportation and industrial batteries are down 29% and 

26%, respectively. (Gilespie, Tr. 5843-44; RXOI726). Moreover, Exide's free cash has 

declined 129% from last year, which Gilespie does not dispute. (Gilespie, Tr. 5844). ~ 

~. (Gilespie, Tr. 5862, in
 

camera). This Court does not find Gilespie to be a credible witness. 

D. i 

) 

1549. t 

~." (RXOI704, in camera; Gilespie, Tr. 5838, in 

camera). ~
 

~. (Gilespie, Tr. 5838, in camera). 

~ 

~. (Toth, Tr. 5750-51, in
 

camera; RX01704, in camera). t 

PPAB 1631446vl 18 
~. (Gilespie, Tr. 5838-39, in camera). Accordingly, t 

~. 

1550. Previously, Respondent provided evidence demonstrating that even In Complaint 

Counsel's SLI market in North America, ~ ~. 

(RFOF 927). ~ 

~. (RXOI668, in 

camera). t 

~. 

1551. t 

~. 

1552. Similarly, ~ 

~. (RXO 1687 at 002, in 

camera). ~
 

~. 

PPAB 1631446vl 19 
1553. Based on the foregoing, including specifically ~ 

E. i ) ~. 

1554. Respondent's Chief Executive Officer, Robert Toth ("Toth"), testified at the hearing on 

November 12, 2009. Toth's testimony went uncontradicted by Complaint CounseL. This Cour 

finds Toth to be a credible witness and credits his testimony in this hearing. 

1555. ~ 

~. (Toth, Tr. 5737-38, 5776, in camera). 

t 

~. (Toth, Tr. 5777, in camera). 

1556. Around the same time, ~ 

~. (Toth, Tr. 5737-39, 5741, in
 

camera; Seibert, Tr. 5645, in camera). 

PPAB 1631446vl 20 
a. i
 

) 

1557. ~
 

~. (Toth, Tr. 5738-39, in camera). 

1558. ~
 

~. (Toth, Tr. 5739, in camera). From the very beginning, ~ 

~. (Toth, Tr. 5739, in camera). 

1559. At that time, ~ 

~. (Toth, Tr. 5739-40, in
 

camera). 

1560. ~
 

~. (Toth, Tr. 5739-40, in camera).
 

1561. ~
 

~. (RXOI685, in camera). 

PPAB 1631446vl 21 
1562. ~
 

J, (RXOI694, in camera), t 

(RX01694 at 006, in camera). 

1563. ~
 

~. (Toth, Tr. 5741, in camera). Finally, t 

camera). 

1564. ~
 

Tr. 5742, 5744 in camera). ~ 

~. 

1565. At that time, ~ 

Tr. 5742-43, in camera; RX01712 at 001, in camera). 

1566. ~
 

~. 

~. (Toth, Tr. 5742, in
 

~. (Toth,
 

~. (Toth,
 

~. 

(Toth, Tr. 5742-43, in camera). ~ 

PPAB 1631446vl 22 
). (Toth, Tr. 5744, in
 

camera). 

1567. t 

~. (Toth, Tr. 5743-44, in camera). 

1568. ~
 

). (RXOI704, in camera).
 

b. i ) 

1569. ~
 

~. (Toth, Tr. 5745, in camera; RX01703, in camera). 

1570. ~
 

). (Toth, Tr. 5745-46, in camera).
 

1571. t 

). (Toth, Tr. 5745-46, in camera). As Toth explained: 

1572. ~
 

). (Toth, Tr.
 

5746-47, in camera). 

PPAB 1631446vl 23 
1573. ~
 

). (Toth, Tr. 5746-47, in camera). 

1574. ~
 

). (Toth, Tr. 5746-47, in camera). 

1575. Consequently, ~
 

). (Toth, Tr. 5746, in camera). As Toth elaborated
 

at the November 12,2009 hearing, "~ 

1576. ~ 

)." (Toth, Tr. 5746, in camera)(emphasis added). 

~. 

(Toth, Tr. 5772, in camera). ~ 

~. (Toth, Tr. 5747, in camera). 

1577. First, ~ 

(Toth, Tr. 5748, in camera). 

1578. ~ 

). 

1579. ~ 

). (RXOI706, in camera; Toth, Tr. 5747-49, in camera). 

). (Toth, Tr. 5747, in camera). 

PPAB 1631446vl 24 
1580. ~
 

). (Toth, Tr. 5780, in camera).
 

1581. ~
 

~. (Toth, Tr.
 

5747-48, in camera). 

1582. Finally, t 

). (Toth, Tr. 5748-49,
 

in camera). 

1583. ~
 

). (Toth, Tr. 5749, in camera). Clearly, ~
 

~. 

(PX5075 at 008, in camera). 

1584. ~
 

). (Toth, Tr.
 

5749-50, in camera). 

1585. ~
 

~. (Toth, Tr. 5749-50, in camera). ~ 

PPAB 1631446vl 25 
~. (Toth, Tr. 5749-50, in camera). ~ 

). 

1586. Although, ~ 

). (Toth, Tr. 5750-51, 

in camera). 

1587. ~ 

). (Toth, Tr. 5751-52,5755, in camera). ~ 

~. 

1588. Moreover, ~ 

). (Toth, Tr. 5752, in camera). 

1589. ~ 

PPAB 1631446vl 26 
", 

). (Toth, Tr. 5753-54, in camera). 

1590. ~ 

). (Toth, Tr. 5755-56, in camera). ~
 

~. (Toth, Tr. 5756, 5758, in camera). ~ 

). (RX01712 at 002, in camera). 

1591. Thereafter, ~ 

). (Toth, Tr. 5756-59, in camera).
 

1592. ~
 

~. (Toth, Tr. 5756, 5758-59, in camera). 

1593. t 

PPAB 1631446vl 27 
). (Toth, Tr. 5760-61, 5780, in camera).
 

1594. ~
 

). (Toth, Tr. 5760-61, in camera; Gilespie, Tr. 5838-39, 5867-68, in camera).
 

~ 

~. 

1595. ~
 

). (Toth, Tr. 5760-61, in camera; PX5075 at 007, in camera). 

F. i ) 

1596. ~
 

). (RXOI714, in camera; Toth, Tr. 5761-62, in camera). ~ 

~. (RX01714 at 002, in 

PPAB 1631446vl 28 
camera). ~
 

). (RXOI714, in
 

camera). 

1597. ~
 

~. (RXO 1687 at 002, in camera;
 

Toth, Tr. 5761-62, in camera). 

1598. ~
 

). (RX01687 at 002, in camera; Seibert, Tr. 5686, 

in camera; Gilespie, Tr. 5852-53, in camera). ~ 

~. (Seibert, Tr. 5687, in
 

camera; RX01687, in camera). ~ 

~. (RX01687 at 003, in camera; Seibert, Tr. 5686-87, in camera). ~ 

~. (Seibert, Tr. 5690, in camera). 

~ 

~. (RXOI712, in 

camera). 

1599. ~
 

PPAB 1631446vl 29
). (Seibert, Tr. 5690-91, in camera). ~ 

). (Toth, Tr. 5762-63, in camera; RX01693, in camera; RX01712, in
 

camera; Seibert, Tr. 5691, in camera; Gilespie, Tr. 5854-55, in camera). 

1600. ~
 

). (RXOI712, in camera; Toth, Tr. 5762-63, in camera). ~
 

). (RXOI712, in camera). ~
 

~. 

160 1. ~
 

~. (RXOI681, in camera; Toth, Tr. 5763-64, in 

camera). ~
 

). 

1602. ~
 

PPAB 1631446vl 30 
). (Gilespie, Tr. 5851, in camera). ~ 

). (Gilespie, Tr. 5852, in camera).
 

1603. ~
 

). (
 

) ."), in 

camera). 

1604. ~
 

~. (Gilespie, Tr. 5870, in camera). ~ 

~." (RXOI693, in
 

camera; see also RX01685 ("~ 

)."), in camera). 

1605. ~
 

PPAB 1631446vl 31 
). (Seibert, Tr. 5691, in camera). ~ 

). (Seibert, Tr. 5691, in camera; Toth, Tr.
 

5762-63, in camera). 

iv. f ) 

1606. ~
 

). (Toth, Tr. 5737, in camera). ~ 

). (RXO 170 1, in camera; RXO 1702, in 

camera). 

1607. ~
 

). (Toth, Tr. 5737, in camera). In addition, ~
 

~. (Toth, Tr. 5737, in camera; RX01706,
 

in camera). 

1608. ~
 

~. (Seibert, Tr. 5673, in camera; Toth, Tr. 5737, in 

camera). 

1609. t 

~. (RXOI719, in camera; Seibert, Tr. 5701-03, in camera). 

1610. t 

~. 

(Toth, Tr. 5739-40, in camera). 

PPAB 1631446vl 32 
1611. ~
 

~. (Toth, Tr. 5737, in camera;
 

Seibert, Tr. 5692-93, in camera). t 

~. (Seibert, Tr. 5692, in camera). 

1612. t 

~. 

(RXOI692, in camera; Toth, Tr. 5772, in camera). 

1613. ~
 

~. (Seibert, Tr. 

5718-19, in camera). 

1614. As Toth testified, ~ 

~. (Toth, Tr. 5747-49, 5772, 5739-40, in 

camera). 

1615. ~ 

~. (Seibert, Tr. 5694, in camera; Toth, Tr. 5766, in camera). 

PP AB 1631446v 1 33 
1616. ~
 

~. (RXOI696, in camera; Toth, Tr. 5764-67, in camera; 

Seibert, Tr. 5694-95, in camera). 

1617. ~
 

~. (Toth, Tr. 5766-67, in camera). 

1618. ~
 

~. (Toth, Tr. 5766, in camera). 

1619. t 

~. (Toth, Tr. 5765, in camera). 

1620. ~
 

~. (Toth, Tr. 5766, in camera). 

1621. ~
 

~. 

(Toth, Tr. 5767, in camera). 

1622. Curently, ~
 

~. (RX01707 at 003, in 

camera). 

1623. Based on the foregoing, the Cour finds that ~ 

PPAB 1631446vl 34 
~. The Cour fuher finds that these facts manifest that ~ 

). 

CONCLUSIONS OF LAW 

1624. As previously found in RFOFCOL 1436, Cours and the FTC must not rely on market 

shares and concentration alone to determine whether a violation of Section 7 has occurred. The 

Merger Guidelines state that "market share and concentration data provide only the staring point 

for analyzing the competitive impact of a merger." (Sec. 2.0). The Guidelines fuher provide 

that "market share and market concentration data may either understate or overstate the likely 

future competitive significance of a firm or firms in the market or the impact of a merger." (Sec. 

1.52). The cours have agreed that concentration data "(are) not conclusive indicators of 

competitive effect." United States v. General Dynamics Corp., 415 U.S. 486, 498 (1974). 

"(E)vidence of a high market share does not require a district court to conclude that there is an 

antitrust violation" (United States v. Syufy Enterprises, 903 F.2d 659, 665 n.6 (9th Cir. 1990)), 

because market share statistics can be "misleading as to actual future competitive effect." United 

States v. Waste Management, Inc., 743 F.2d 976, 982 (2d Cir. 1984). As the D.C. Circuit said, 

anti 

"( e )vidence of market concentration simply provides a convenient staring point for a broader 

inquiry into future competitiveness." United States v. Baker Hughes, Inc., 908 F.2d 981, 984 

(D.C. Cir. 1990).
 

1625. As this Cour has previously found, Microporous was not an actual paricipant or 

uncommitted entrant in Complaint Counsel's SLI market in North America prior to the merger. 

RFOFCOL 1437-39. No evidence was presented at the hearing on November 12, 2009 to alter 

this conclusion. 

PPAB 1631446vl 35 
1626. Evidence was introduced, however, at the November 12 hearing further demonstrating to 

this Court that competition is robust in Complaint Counsel's alleged SLI North America market 

and that ~
 

~. 

1627. As found previously by this Cour, ~ 

~. (RFOF 306). Now, 

~ 

~. 

1628. ~
 

~. (RXOI719, in camera). All of this evidence demonstrates 

that even after the merger, competition in North America among separator suppliers is vigorous. 

1629. It is appropriate for this Cour to consider post-acquisition evidence to determine that the
 

acquisition had no anticompetitive effect. See e.g. United States v. Intl Harvester Co., 564 F.2d 

769 (th Cir. 1977) (post acquisition evidence showed no anticompetitive conduct); Lektro- Vend.
 

Corp. v. Vendo Co., 660 F.2d 255 (7th Cir. 1981) (post acquisition evidence showed that 

defendant's profits and market shares declined); Vaney v. Coleman Co., 385 F. Supp. 1337 

(D.N.H. 1974) (post-acquisition evidence showed that defendant lost market share); United 

PPAB 1631446vl 36 
Brewing Corp., 383 F.Supp. 1020 (D.R.I. 1974) (evidence showed a decline in 

market share and profits). From the evidence before this Cour, the merger has had no 

States v. Falstaff 


anti competitive effect in this alleged market. The Court's conclusion here is buttressed by the

fact that ~
 

~. 

1630. The evidence from the November 12, 2009 hearing further demonstrates that the 

conditions for coordinated interaction do not exist in the alleged SLI market. According to the 

Commentary on the Merger Guidelines, "Successful coordination typically requires rivals (1) to 

reach terms of coordination that are profitable to each of the paricipants in the coordinating 

group; (2) to have a means to detect deviations that would undermine the coordinated interaction; 

and (3) to have the ability to punish deviating firms, so as to restore the coordinated status quo 

and diminish the risk of deviations. . . . It may be relatively more difficult for firms to coordinate 

on multiple dimensions of competition in markets with complex product characteristics or terms 

of trade." (Commentary on the Horizontal Merger Guidelines at 18-19). 

1631. Here, at the hearing on November 12,2009, Complaint Counsel offered no evidence to 

the Court to show that these conditions can be met. Rather, ample evidence was presented to this 

Court, both through testimony and exhibits, demonstrating just the opposite. Indeed, ~ 

~. 

PPAB 1631446vl 37 
1632. As this Cour has previously concluded, the presence of powerful customers in markets
 

involving infrequent purchases, long-term contracts and bidding can frequently prevent
 

coordinated interaction. (See RFOFCOL 1441; Baker Hughes Inc., 908 F.2d at 986 ("(t)his 

sophistication. . . was likely to promote competition even in a highly concentrated market."); 

ABA Section of Antitrust Law, Mergers and Acquisitions at 159-60 (3d ed. 2008) ("Courts have 

recognized that evidence that a small number of buyers purchase most of the product in the 

market indicates that sellers may not have a great deal of freedom in establishing prices and thus 

may be less likely to adhere to a collusive agreement. Sophisticated buyers are more likely to 

detect collusion and offer sellers large orders to induce defections from the agreement or to 

vertically integrate."); FTC v. Elders Grain, 868 F .2d 901, 905 (7th Cir. 1989) (powerful buyers 

may cause sellers to cheat on any price agreement); FTC v. R.R. DonneUey & Sons Co., Civ. No. 

90-1619 SSH, 1990 U.S. Dist. LEXIS 11361, at *10 (D.C. Cir. 1990) ("(T)he sophistication and 

bargaining power of buyers play a significant role in assessing the effects of a proposed 

transaction.") ). 

1633. The evidence presented at the November 12 hearing and before readily demonstrates to 

this Cour that ~
 

~. Power buyers such as t ~ make coordinated 

interaction unlikely.
 

1634. Moreover, it has been demonstrated convincingly in this hearing that ~ 

PPAB 1631446vl 38 
~. 

1635. Complaint Counsel's argument that ~ ~ is not a powerful buyer because it does not 

have "~ ~" is incorrect. The courts have not
 

required a minimum market share when making "powerful buyer" determinations. (See, e.g., 

Federal Trade Commission v. Elders Grain, 868 F.2d 901 (7th Cir. 1989); United States v. Baker 

Hughes, Inc., 908 F.2d 918 (D.C. Cir. 1990); In the Matter of Owens-Illnois, Inc., 115 F.T.C.
 

170 (1992); United States v. Archer-Daniels-Midland Co., 781 F.Supp. 1400 (S. Dist. Iowa, 

1991)). In fact, if Complaint Counsel's statement were true, there could be only one powerful 

buyer in each market - a suggestion that is contrary to existing case law. Even the Horizontal 

Merger Guidelines, which recognize the "power buyer" defense, do not require that a powerful 

buyer have a requisite share of the relevant purchases. Rather, the Guidelines note that "(b )uyer 

2.12). 

1636. Based on the Court's foregoing findings of fact and the applicable legal standards and 

principles set forth herein, the Cour concludes that the evidence adduced by Complaint Counsel 

size alone is not the determining characteristic." (Sec. 


is insufficient to show that Polypore's acquisition of Microporous would har competition 

because of coordinated interaction. 

PPAB 1631446vl 39 
1637. The evidence adduced at the November 12 hearing further refutes Complaint Counsel's 

unilateral effects theory. As this Cour previously found, where the FTC focus in a merger case 

is on the alleged dominance of the merged entity, the FTC must show that the "merger may 

result in a single firm that so dominates a market that it is able to maintain prices above the level 

that would prevail if the market were competitive" and it must show that such increased prices 

are accompanied by "lower output." In the Matter of 
 Chicago Bridge & Iron Co., Dkt. No. 9300 

at 7 (Jan. 6,2005). Forsyth v. Humana, Inc., 114 F.3d 1467, 1476 (9th Cir. 1997). (RFOFCOL 

1448). 

1638. The testimony and exhibits introduced at the November 12 hearing demonstrate
 

Daramic's complete lack of ability to unilaterally increase price. In fact, the evidence 

demonstrates just the opposite: ~
 

~. Monopoly power is 

"the power to control prices or exclude competition." United States v. E.I duPont de Nemours 

& Co., 351 U.S. 377, 391 (1956). Daramic has no ability to control prices or exclude 

competition. 

1639. Based on the Cour's foregoing findings of fact and the applicable legal standards and 

principles set forth herein, the Cour concludes that the evidence adduced by Complaint Counsel 

is insufficient to show that Polypore's acquisition of Microporous would har competition 

because of anti 
 competitive unilateral effects. 

1640. The evidence adduced at the November 12 hearing fuher demonstrates that Daramic
 

does not have monopoly power in Complaint Counsel's SLI market. As found previously, Dr. 

Simpson's data shows ~
 

~. (RFOF 1287, 1388) By
 

themselves, those figures are too low to find monopoly power. Here, however, the evidence 

PPAB 1631446vl 40 
shows that ~ 

). Accordingly, ~
 

~. 

1641. Finally, additional evidence was introduced at the November 12 hearing supporting this 

Cour's previous finding that there are no substantial barriers to entry into the production of 

battery separators. (RFOFCOL 1453-57). First, ~ 

J, (RFOF 1209, 1212), ~ 

~. 

1642. Second, ~
 

~. 

1643. Based on the Court's foregoing findings of fact and the applicable legal standards and 

principles set forth herein, the Cour concludes that Complaint Counsel has not shown that there 

are significant bariers to entry into the production of and sale of battery separators. 

PPAB 1631446vl 41 
v. CONCLUSION
 

F or the reasons stated above, and in Respondent's previous submissions, the Court finds 

that Complaint Counsel have not proven their claims and the acquisition between Polypore and 

Microporous Products has not, and wil not, cause competitive har in the worldwide PE 

separator market. Accordingly, the Cour dismisses the FTC's claims with prejudice. 

PPAB 1631446vl 42 
Dated: December ", 2009 Respectfully Submitted, 

rØ wA/ ~
 

Wiliam L. Rikard, Jr. 

Eric D. Welsh 

PARKER POE ADAMS & BERNSTEIN LLP 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 372-9000
 

Facsimile: (704) 335-9689 

wiliamikard~parkerpoe.com 

ericwelsh~parkerpoe.com 

John F. Graybeal 

PARR POE ADAMS & BERNSTEIN LLP 

150 Fayettevile Street 

Raleigh, NC 27602 

Telephone: (919) 835-4599
 

Facsimile: (919) 828-0564 

johngraybeal~parkerpoe.com 

Attorneys for Respondent 

PPAB 1631446vl 
CERTIFICATE OF SERVICE 

I hereby certify that on December ~, 2009, I caused to be fied via hand delivery and 

electronic mail delivery an original and two copies of the foregoing Respondent's Proposed 

Findings of Fact and Conclusions of Law for Re-opened Hearing ¡PUBLICI, and that the 

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

original signature is being fied with: 

Donald S. Clark, Secretar 

Office of the Secretar 

Federal Trade Commission 

600 Pennsylvania Avenue, NW, Rm. H-135 

Washington, DC 20580 

secretary~ftc. gov 

I hereby certify that on December c= , 2009, I caused to be served one copy via 

electronic mail delivery and four copies via hand delivery of the foregoing Respondent's
 

Proposed Findings of Fact and Conclusions of Law for Re-opened Hearing ¡PUBLICI upon: 

The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Avenue, NW 

Washington, DC 20580 

oali~ftc.goV 

I hereby certify that on December:: , 2009, I caused to be served via first-class mail 

delivery and electronic mail delivery a copy of the foregoing Respondent's Proposed Findings 

of Fact and Conclusions of Law for Re-opened Hearing ¡PUBLICI upon: 

1. Robert Robertson, Esq. Steven Dah, Esq. 

Federal Trade Commission Federal Trade Commission 

600 Pennsylvania Avenue, NW 600 Pennsylvania Avenue, NW 

Washington, DC 20580 Washington, DC 20580 

rro bertson~ftc. gov sdah~ftc.gov 

Brian R. Wey ich 

f3.: ~¿L

PARKR POE ADAMS & BERNSTEIN LLP 

Three Wachovia Center 

401 South Tryon Street, Suite 3000 

Charlotte, NC 28202 

Telephone: (704) 335-9534 

Facsimile: (704) 334-4706 

PPAB 1631446vl