J 

! McWANE,INC., 

a corporation. Docket No. 9351 

In the Matter of 

PUBLIC 

Star Pipe Products, Ltd.'s Motion for In Camera Treatment of Proposed Evidence 

Star Pipe Products, Ltd. ("Star") requests that the Administrative Law Judge enter an 

order pursuant to Rule 3.45(b) of the FTC Rules of Practice, 16 C.F.R. § 3.45, granting in 

camera treatment for no less than five years to the documents and deposition testimony listed in 

Attachment A submitted with motion and also listed in the proposed order. These materials, 

which have been designated by either Complaint Counselor Respondent Mc Wane, Inc. for 

possible introduction into evidence at the evidentiary hearing in this matter, contain secret, 

competitively sensitive information of Star, the disclosure of which could cause serious 

competitive injury. Accordingly, Star files this motion for in camera treatment, and also 

respectfully refers the Administrative Law Judge to the accompanying Declaration of Rishi 

Bhutada (Star's Vice President, Finance), which is submitted in support of the request for in 

camera treatment. 

I. Background 

Star, a non-party to this proceeding, has produced documents in response to subpoenas 

duces tecum served on it by Complaint Counsel and McWane, and has also made available a 

number of its officers and employees for deposition pursuant to subpoenas ad testificandum. 

Star also previously produced documents to the FTC pursuant to subpoenas served during the 
FTC's pre-complaint investigation, which documents were later produced to McWane after this 

adjudicative proceeding began, and certain Star personnel were questioned at investigative 

hearings during the pre-complaint investigation. 

Star recently received notice of Complaint Counsel's and McWane's intent to offer into 

evidence at the evidentiary hearing certain documents and deposition testimony reflecting Star's 

highly confidential and business-sensitive information. These materials had previously been 

designated by Star as "Confidential" under the FTC's Rules of Practice and the terms of the 

Protective Order entered in this matter. Complaint Counsel and McWane's counsel collectively 

identified over 500 documents or excerpts of deposition testimony! containing Star confidential 

information that Complaint Counselor Mc W ane state that they plan to offer into evidence at the 

evidentiary hearing. After reviewing these materials, Star has identified a narrow subset of these 

documents that are the subject of this motion, because of the sensitive nature of the materials and 

because Star believes their disclosure would cause it serious competitive harm. Accordingly, 

Star now moves for in camera treatment ofthese materials. 

II. Standards for In Camera Treatment 

Under FTC Rule 3.45(b), a party or third party to an adjudicative proceeding may obtain 

in camera treatment of materials offered into evidence. See 16 C.F.R. § 3.45(b). Materials merit 

in camera treatment when their public disclosure will result in a clearly defined, serious injury to 

the person or corporation whose records are involved. See In re Kaiser Aluminum & Chem. 

Corp., 103 F.T.C. 500 (1984); In re HP. Hood & Sons, Inc., 58 F.T.C. 1184, 1188 (1961). This 

showing can be made by establishing that the evidence is "sufficiently serious and material to the 

1 Mc Wane's July 17, 2012 notice to Star did not identify specific deposition testimony by page and line designation, 

but instead simply designated a number of deposition transcripts in their entirety. Star objects to this blanket method 

of designating evidence and reserves its rights to more specifically request in camera treatment for any specific 

portions of this deposition testimony that McWane may seek to introduce as evidence at trial. 

FTC DOCKET No. 9351 CONFIDENTIAL PAGE 2 
applicant's business that disclosure would result in serious competitive injury.,,2 Kaiser, 103 

F.T.C. at 500; In re Gen. Foods Corp., 95 F.T.C. 352, 355 (1980); In re BristolMeyers Co., 90 

F.T.C. 455,456 (1977). 

The following factors are relevant in determining secrecy and materiality: (1) the extent 

to which the information is known outside the applicant's business; (2) the extent to which the 

information is known by employees and others involved in the applicant's business; (3) the 

extent of measures taken by the applicant to guard the secrecy of the information; (4) the value 

of the information to the applicant and its competitors; (5) the amount of effort or money 

expended by the applicant in developing the information; and (6) the ease or difficulty with 

which the information could be properly acquired or duplicated by others. In re BristolMeyers 

Co., 90 F.T.C. at 456. A showing of injury may consist of extrinsic evidence or, in certain 

instances, may be inferred from the nature of the documents themselves. In re E.l Dupont de 

Nemours & Co., 97 F.T.C. 116 (1981). Third party requests for in camera treatment deserve 

special solicitude. Kaiser, 103 F.T.C. at 500. 

III. Argument and Authorities 

A. In camera treatment is warranted for the materials listed on Attachment A. 

The documents and deposition testimony identified in Attachment A submitted with this 

motion contain highly sensitive competitive information of Star falling into roughly two 

categories: (1) internal communications, analyses, and data relating to Star's margins and other 

sensitive internal financial profitability and sales information, including specific customer 

information and information about Star's rebating practices; and (2) internal correspondence and 

analyses, as well as agreements and costing documents, relating to Star's efforts to develop and 

2 This factor can also be balanced against the importance of the information in explaining the rationale of 

Commission decisions. Kaiser, 103 F.T.C. at 500. 

FTC DOCKET No. 9351 CONFIDENTIAL PAGE 3 
establish a presence in the market for domestic DIPF3 (DIPF made in the United States), which 

efforts are still ongoing. (Bhutada Decl., ,-r 4.) As explained herein and in the accompany 

declaration, each category of information warrants in camera treatment under the standards of 16 

C.F.R. § 3.45. 

The documents listed on section A.l of Attachment A reveal information about Star's 

internal margin analyses for the products it sells; its pricing, rebating, and other discounting 

practices and policies; certain sensitive, specific information about customers; and Star's internal 

market and profitability analyses and overall strategies. (Bhutada Decl., ,-r 5; see also 

Attachment A) This information was obtained and developed by Star through its own internal 

business analysis and strategic planning, which efforts Star undertook to gain a competitive 

advantage and to enhance its ability to compete in the market for DIPF and related products. 

(Bhutada Decl., ,-r 2.) If these categories of Star's competitive information were revealed, Star's 

ability to compete in the marketplace could be severely damaged and Star's competitors would 

gain a competitive advantage through their access to Star's internal business analyses and 

strategies. (Id,,-r 5.) For example, Star's competitors would be privy to Star's "break even" 

points and margins on different products; they would be able determine how Star analyzes and 

values business opportunities; and they and would be in a position to exploit this information in 

the marketplace against Star. 

This information has been developed by Star over the course of many years and only by 

expending thousands of hours of time and at substantial cost. (Id,,-r 2.) It could not easily be 

accessed or recreated by any of Star's competitors. (Id,,-r 7.) And its disclosure to Star's 

competitors could be extremely damaging to Star, because among other things it could allow 

3 Ductile iron pipe fittings, a product used in the waterworks industry and of which Star is a supplier. 

FTC DOCKET No. 9351 CONFIDENTIAL PAGE 4 
those competitors compete against Star-using the unique knowledge and information that Star 

has developed-for the competitors' own competitive gain and to the detriment of Star after it 

has expended its time and resources over many years to develop its business. (Id, ~~ 2-3,5.) 

The documents listed in section A.2 of Attachment A contain information about Star's 

business planning and strategies in the domestic DIPF market, including Star's costs and the 

terms Star has negotiated for its domestic DIPF production with domestic foundries. (Jd, ~ 6.) 

This information is closely guarded by Star and of extreme competitive sensitivity. If a 

competitor of Star in the market for supplying domestic DIPF were to gain access to Star's plans 

and projections for competing in the domestic DIPF market, including Star's profitability 

analyses and the details of Star's consideration of contracting with or acquiring one or more 

domestic foundries, or to the content of Star's negotiations and pricing arrangements with the 

domestic foundries Star has contracted with or is attempting to contract with to serve as a source 

for domestic DIPF, the competitor would gain an advantage over Star and could use that 

information to the detriment of Star. (Id) In fact, part of this proceeding involves a complaint 

by the FTC that one of Star's competitors engaged in exclusionary conduct in the domestic DIPF 

market, including by using exclusive dealing practices and making threats in an attempt to 

exclude Star from this market. (See Complaint ~~ 56-63.) In light of these matters, Star 

continues to be very concerned about the public release of its plans and arrangements in the 

domestic DIPF market. 

The documents and deposition testimony listed on Attachment A also reveal generally the 

details of Star's business strategy and its internal business strategies and principles and policies 

for dealing with customers and competing in the marketplace. Allowing Star's competitors to 

obtain unfettered access to this information will enable them to understand Star's strengths and 

FTC DOCKET No. 9351 CONFIDENTIAL PAGES 
weaknesses in a manner that will put Star at a disadvantage in the marketplace, including 

because Star possesses no comparable information about its competitors. 

Star has taken measures to protect the confidentiality of the information in the documents 

listed in Attachment A. It has limited the dissemination of such information within Star to select 

employees and officers on a "need to know" basis, and has taken every reasonable step to protect 

its confidentiality. (Bhutada Decl., ~~ 7, 8.) It would difficult if not impossible for other 

entities, including competitors of Star, to access or recreate this information. (Jd, ~~ 2, 7.) 

Accordingly, it is clear that Star has gone to great lengths to preserve the confidentiality of the 

information in question. 

In sum, the information in the documents and deposition testimony described above and 

in the declaration and on Attachment A thereto is competitively sensitive, and its disclosure 

could result in substantial harm to Star's business. It is also information that is held in strict 

confidence by Star. If this information were disclosed and Star's competitors given access to it, 

these competitors could potentially gain a competitive advantage in the marketplace by using this 

information against Star, to its detriment. The information therefore qualifies for in camera 

treatment under the FTC's applicable standards. 

B. 	 Any public interest in disclosure is outweighed by the risk of competitive harm. 

A non-party requesting in camera treatment for its confidential business information is 

deserving of "special solicitude." In re Kaiser Aluminum & Chem. Corp., 103 F.T.C. 500, 500 

(1984). Reasonable periods of in camera treatment encourage cooperation with future discovery 

requests in adjudicative proceedings, just as Star has cooperated with the discovery demands in 

this case. Conversely, disclosing documents containing Star's highly confidential information 

will not materially promote the resolution of this matter, nor will these documents lend 

FTC DOCKET No. 9351 CONFIDENTIAL 	 PAGE 6 
measurable public understanding of these proceedings. Thus, the balance of interests favors in 

camera protection for the materials listed on Attachment A. See In re Bristol-Myers, 90 F.T.C. 

455,456 (1977) (describing six-factor test for determining secrecy and materiality). 

C. 	 Star requests in camera protection for any hearing testimony regarding the 

information contained in the materials listed in Attachment A. 

Star anticipates that certain of its own officers, employees, or former employees may be 

called to testify at the evidentiary hearing. To the extent testimony is elicited from these 

individuals concerning the documents and testimony listed on Attachment A, or information of 

the type contained therein, Star respectfully requests that it be permitted to designate such 

testimony as confidential and in camera and subject to the same protections afforded the 

underlying documents and testimony listed on Attachment A. 

D. 	 In camera protection should extend for five years. 

The nature of the confidential and sensitive information contained in the documents and 

testimony listed on Attachment A warrants lasting protection. As discussed above and in the 

Declaration of Rishi Bhutada and shown by the documents themselves, the documents contain 

information about Star's plans and strategies that are still in effect, and they also contain 

information about Star's practices and financial analyses that would allow a Star competitor to 

derive knowledge about Star's current competitive position that would give the competitor an 

advantage against Star. Accordingly, Star respectfully requests that the materials listed on 

Attachment A be afforded in camera protection for a period of five years from the date of any 

order granting this motion. 

IV. Conclusion 

For these reasons, Star requests that the Administrative Law Judge enter an order 

granting the documents and deposition testimony listed on Attachment A and in the proposed 

FTC DOCKET No. 9351 CONFIDENTIAL 	 PAGE 7 
order in camera treatment for a period of not less than five years. Star further requests general 

relief. 

Dated: July 30,2012 Respectfully submitted, 

Gr~gory S. c. Huffman 

William M. Katz, Jr. 

Nicole 1. Williams 

Brian W. Stoltz 

Thompson & Knight LLP 

1722 Routh Street, Suite 1500 

Dallas, Texas 75201 

(214) 969-1700 

fax: (214) 969-1751 

gregory.huffman@tklaw.com 

william.katz@tklaw.com 

nicole. williams@tklaw.com 

brian.stoltz@tklaw.com 

Attorneys for Star Pipe Products, Ltd 

FTC DOCKET No. 9351 CONFIDENTIAL PAGE 8 
Certificate of Service and Regarding Electronic Submission 

I certify that on July 30, 2012, I served a copy of the foregoing document on the 

following by the method indicated: 

Joseph A. Ostoyich Edward Hassi 

William Lavery Geoffrey M. Green 

Baker Botts L.L.P. Linda Holleran 

1299 Pennsylvania Ave., N.W. Thomas H. Brock 

Washington, D.C. 20004-2420 Michael L. Bloom 

Jeanine K. Balbach 

1. Alan Truitt J. Alexander Ansaldo 

Thomas W. Thagard III Bureau of Competition 

Maynard Cooper & Gale PC Federal Trade Commission 

1901 Sixth Avenue North Washington, DC 20580 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 Complaint Counsel 

(by Federal Express) 

Counsel for McWane, Inc. 

(by Federal Express) The Honorable D. Michael Chappell 

Administrative Law Judge 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Rm. H-106 

Washington, DC 20580 

(by Federal Express and with a copy of 

the motion and declaration by email to 

oalj@ftc.gov) 

Brian W. Stoltz 

FTC DOCKET No. 9351 CONFIDENTIAL PAGE 9 
ATTACHMENTS WITHHELD FROM PUBLIC VERSION 

OF FILING 

FTC DOCKET No. 9351 CONFIDENTIAL PAGE 10