ORIGINAL PUBLIC 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

In the Matter of ) 

) PUBLIC 

McWANE, INC., ) 

a corporation, and ) DOCKET NO. 9351 

) 

STAR PIPE PRODUCTS, LTD., ) 

a limited partnership. ) 

MCWANE, INC.'S MOTION TO AMEND THE 

PROTECTIVE ORDER GOVERNING DISCOVERY 

McWane, Inc. ("McWane") respectfully requests this Court to amend Paragraph 7 ofits 

January 5, 2012 Protective Order Governing Discovery to include McWane's General Counsel 

James M. Proctor II as an individual to whom confidential material may be disclosed. As set 

forth in Mr. Proctor's attached Declaration, he is the senior legal officer at McWane and is 

charged with responsibility for managing the company's legal affairs, including protecting the 

company's interests in litigation. Declaration ofJames M. Proctor II, Paragraph 2 (hereinafter, 

"Proctor Decl. ~ _"). With a rapidly approaching trial date and the company in the midst ofits 

final pretrial preparations, it is crucial in order for Mr. Proctor to satisfy his corporate 

responsibilities that he be allowed to review and evaluate the pleadings and evidence in the case. 

Mr. Proctor plans to attend all or a significant portion ofthe trial and, to the extent that certain 

testimony and exhibits are afforded in camera treatment, he similarly needs to hear and evaluate 

such evidence as it is presented.! 

1 Complaint Counsel has indicated that they take no position at this time. 

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Background 

The Administrative Complaint in this matter was filed on January 4,2012. Chief 

Administrative Law Judge Michael Chappell was designated to hear the case the following day 

and immediately entered the Protective Order Governing Discovery Material. The Standard 

Protective Order found at Appendix A to Commission Rule 3.31 was issued verbatim and has 

governed the handling of all Discovery Material throughout. 

The Protective Order provides that the parties and any third parties complying with 

disclosure requirements or discovery requests may designate responsive documents or testimony 

or portions thereof as confidential material. Protective Order, ~ 3. The Order strictly limits the 

disclosure ofsuch material to narrow categories of individuals, including (a) the Court and its 

personnel, the Commission, its supporting personnel and retained experts; (b) future appellate 

judges and supporting personnel; (c) outside counsel and their supporting personnel; (d) 

individuals retained by outside counsel, including consultants and experts; and, ( e) witnesses or 

deponents who authored or received the confidential material. Protective Order, ~ 7. The 

obvious purpose ofthe Protective Order is to protect the parties and third parties' competitively 

sensitive information from disclosure and potential misuse. 

As discovery has unfolded, McWane's outside lawyers have advised Mr. Proctor in broad 

terms consistent with the limits imposed by the Protective Order ofthe progress in the case and 

the merits and weaknesses ofthe claims and defenses. At this stage in the litigation, with crossmotions for summary judgment and expert motions pending, pretrial preparation in the final 

phases and trial roughly four weeks away, Mr. Proctor needs to be able to review unredacted 

pleadings, witness testimony and other potential evidence in order to fulfill his responsibilities to 

the company. As such, McWane seeks to include McWane's General Counsel, Mr. Proctor, as a 

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lawyer who is entitled to full access to confidential materials, with the same ability to review 

such materials as outside counsel. Mr. Proctor would ofcourse also be subject to the Protective 

Order's limitations on disclosure that apply to outside counsel. 

Argument 

"A request to provide in-house counsel with a competitor's confidential information 

might properly be denied in a case where in-house counsel [is] involved in 'competitive 

decision-making', a term defined as shorthand for a counsel's activities, association, and 

relationship with a client that are such as to involve counsel's advice or participation in any or all 

ofthe client's decisions (pricing, product design, etc.) made in light of similar or corresponding 

information about a competitor." In the Matter ofSchering-Plough Corporation, Upsher-Smith 

Laboratories, andAmerican Home Products Corporation, 2001 WL 1478371 (FTC), citing 

Matsushita Elec. Indus. Co., Ltd. v. Int'l. Trade Comm 'n, 929 F.2d 1577, 1579 (Fed. Cir. 1991) 

(quoting United States Steel Corp. v. Int'l. Trade Comm 'n., 730 F.2d 1465, 1468 (Fed. Cir. 

1984)). It is well-settled, however, that an attorney's access to such confidential information 

should not be denied based solely on his or her status as inside counsel. In the Matter of 

Schering Plough Corp.,!d. (citation omitted). As explained in the US. Steel decision, the 

leading authority on this issue: 

Denial or grant of access [to confidential information], however, 

cannot rest on a general assumption that one group of lawyers are 

more likely or less likely inadvertently to breach their duty under a 

protective order ... , Like retained counsel, ... in-house counsel 

are officers of the court, are bound by the same Code of 

Professional Responsibility, and are subject to the same sanctions. 

In-house counsel provide the same services and are subject to the 

same types of pressures as retained counsel. The problem and 

importance ofavoiding inadvertent disclosure is the same for both. 

Us. Steel, 730 F.2d at 1468. 

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The court's determination of counsel's access to confidential information is to be based 

"on the specific role of in-house counsel within the business: whether he or she has a part in the 

type ofcompetitive decision-making that would involve the potential use ofthe confidential 

information." In the MatterofSchering Plough Corp., Id. (citations omitted). See also 

Active Video Networks, Inc. v. Verizon Communications, Inc., 274 F.R.D. 576 (E.D. Virgo 2010) 

(fmding that General Counsel and 3 additional inside counsel were not involved in competitive 

decision-making and thus should not be denied access to confidential information); Intervet, Inc. 

v. Merial Limited, 241 F.R.D. 55 (D.D.C. 2007) (after balancing one party's right to try case as it 

sees fit against potential misuse ofa confidential information, finding in-house counsel was not a 

competitive decision-maker and thus did not have to be precluded from access to information 

that other counsel and expert witnesses would see); Matsushita Elec. Indus. Co., Ltd. v. Us. 929 

F.2d 1577 (Fed. Circ. 1991) (reversing decision denying inside counsel access to business 

proprietary information in light of evidence that counsel was insulated from competitive 

decision-making). 

In the case at hand, the inside lawyer in question is the company's General Counsel, 

James Proctor. Mr. Proctor is ultimately responsible for all ofthe company's myriad legal 

affairs involving the 23 plants it operates in multiple business lines across the United States, 

Canada, Australia and China. In his sworn Declaration, Mr: Proctor has testified that he is not 

involved in the day-to-day business or competitive decision-making at any ofthe individual 

businesses, including not being involved in the business affairs or competitive decision-making 

at the TylerlUnion utility fittings division that is the subject ofthe present action. Proctor Decl., 

~ 3. Specifically, Mr. Proctor states: 

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• 	 he is not involved in formulating or implementing Tyler/Union's pricing 

strategies except to the extent that he might be called upon to provide legal 

advice; 

• 	 he does not participate in discussions about the price level the company sets for 

its products, including the published list price, multipliers (discounts offlist), or 

job pricing; nor does he participate in the negotiation offreight terms, payment 

terms, cash discounts, or rebate structures except in his capacity as a lawyer 

providing legal advice; 

• 	 confidential information and how Tyler/Union's competitors make decisions 

regarding pricing, product offerings, marketing or similar competitive issues 

would not be relevant to his function as General Counsel. 

Proctor Decl., ~ 4. 

In sum, while Mr. Proctor may offer legal advice to Tyler/Union, he is not involved in 

"competitive decision-making" as explained by the Court in US. Steel or by this court in In the 

Matter ofSchering-Plough. Although no special need must be established, Mr. Proctor has 

testified that he needs to review all ofthe evidence and pleadings in this matter, includirig 

confidential matters, in order to fulfill his responsibilities to the corporation, specifically to 

ensure that the company's interests are appropriately protected, to evaluate the merits ofthe case 

for strategic purposes, and to report and make recommendations to senior management. 

Because McWane has established that Mr. Proctor is not involved in competitive 

decision-making, McWane respectfully submits that its Motion is due to be granted and the 

Protective Order modified to allow Mr. Proctor access to confidential materials. 

Dated: July 27,2012 

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/s/ J. Alan Truitt 

J. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

Phone: 205.254.1000 

Fax: 205.254.1999 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

/s/ Joseph A. Ostoyich 

Joseph A. Ostoyich 

William Lavery 

Baker Botts L.L.P. 

The Warner 

1299 Pennsylvania Ave., N.W. 

Washington, D.C. 20004-2420 

Phone: 202.639.7700 

Fax: 202.639.7890 

joseph.ostoyich@bakerbotts.com 

william.lavery@bakerbotts.com 

Attorneys/or Respondent McWane, Inc 

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02398501.1 
CERTIFICATE OF SERVICE 

I hereby certify that on July 27, 2012, I filed the foregoing document electronically using 

the FTC's E-Filing System, which will send notification ofsuch filing to: 

Donald S. Clark 


Secretary 


Federal Trade Commission 


600 Pennsylvania Ave., NW, Rm. H-l13 


Washington, DC 20580 


I also certify that I delivered via overnight delivery a copy ofthe 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 ofthe foregoing document to: 

Edward Hassi, Esq. 


Geoffrey M. Green, Esq. 


Linda Holleran, Esq. 


Thomas H. Brock, Esq. 


Michael L. Bloom, Esq. 


Jeanine K. Balbach, Esq. 


J. Alexander Ansaldo, Esq. 


Andrew K. Mann, Esq. 


By: 	 lsi William C. Lavery 

William C. Lavery 

Counsel for McWane, Inc. 
PUBLIC 


UNITED STATES OF AMERICA 


BEFORE THE FEDERAL TRADE COMMISSION 


In the Matter of ) 

) 

McWANE;, INC., ) 

a corporation, and ) DOCKET NO. 9351 

) 

STAR PIPE PRODUCTS, LTD., ) 

a limited partnership. ) 

DECLARATION OF JAMES M. PROCTOR II 

BEFORE ME, this day personally appeared James M. Proctor II, who, being first duly 

sworn, deposes and says as follows: 

1. I am the General Counsel and a Senior Vice President of Mc Wane, Inc. 

("McWane"). McWane is a privately-held company with its headquarters in Binningham, 

Alabama. McWane manufactures ductile iron pipe, valves and hydrants, and fittings for 

waterworks applications. Mc Wane also manufactures pressure vessels for the containment of 

propane, compressed air, and chemicals; manufactures fire extinguishers and fire suppression 

systems through a subsidiary; and, is also engaged in operation of various technology companies. 

McWane operates 25 manufacturing plants, including 13 iron foundries, across the United States, 

Canada, Australia and China. 

2. I am the senior legal officer at McWane and have overall responsibility for the 

management of all ofthe company's legal affairs. Among other duties, I am charged with 

assigning responsibility for the defense ofthe company in litigation, assuring that the company is 

ably represented and its interests are appropriately defended, and reporting to senior management 

and ownership the progress ofsuch litigation and likely outcomes. I am also responsible for 

02398498.1 
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evaluating the merits of cases and making recommendations to management regarding settlement 

strategies and alternatives. 

3. Outside ofmy role in providing legal advice, I am generally not involved in the 

day~to~day operations or business affairs of any ofthe companies or businesses that make up 

McWane, including McWane's TylerlUnion utility fittings division that is the subject ofthe 

present action. 

4. In particular, except when called up?n to provide legal advice, I am not involved 

in formulating or implementing TylerlUnion's pricing strategies, competitive decision-making 

with respect to pricing levels, product offerings, production, marketing, or other decisions made 

in light ofsimilar or corresponding information about a competitor. Except in my capacity as a 

lawyer proving legal advice, I am not involved in or consulted concerning the price level the 

company sets for its products, including the published list price, multipliers (discounts offlist), 

or job pricing, and do not participate in the negotiation offreight terms, payment terms, cash 

discounts, or rebate structures. I am not involved in decisions concerning the range ofproducts 

offered by TylerlUnion, the design ofsuch products, the location or method ofproduction, 

whether to offer new products, or similar competitive decisions. Similarly, as General Counsel, 

confidential information about how TylerlUnion's competitors make decisions regarding 

pricing, product offerings, marketing or similar competitive issues would not be relevant to the 

function that I serve. 

5. As indicated above, I do on occasion provide legal advice to TylerlUnion (as well 

as other McWane companies) concerning competitive practices; however, it is in the context of 

assisting the company in understanding and complying with existing legal requirements. 

Similarly, I may also provide legal advice with respect to the negotiation of certain contracts that 

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TylerlUnion (or other McWane companies) might consider. For example, I was involved in 

drafting the September 2009 Master Distributorship Agreement entered into by McWane and 

Sigma. I was not involved, however, in the underlying decisions with respect to whether the 

MDA was desirable from a business standpoint. Rather, my role in such instances is to provide 

legal advice and at times to help negotiate the contractual terms, but I do not determine the 

fundamental economic or other business terms ofthe agreement. All decisions about those 

issues are made by the operations executives involved in the transaction. 

6. This matter is set for trial on September 4,2012, and the parties are now actively 

engaged in final pretrial preparations. In order to fulfill my responsibilities to management, 

ownership and the company itself, including ensuring that the company's interests are being 

defended appropriately and evaluating strategic and tactical operations that could have a 

significant impact on the company's prospects, I must be able to review and evaluate the pretrial 

filings, expert reports and rulings ofthe Court. Unless I know and understand all the facts, I 

cannot advise senior management in a meaningful way. It is also my desire to attend all or a 

significant portion ofthe trial ofthis matter. For the same purposes, I need to participate fully, 

and, to the extent that certain testimony or exhibits are afforded in camera treatment, be able to 

hear and evaluate such evidence as it is presented. While any litigation against the company is 

considered important, the pending FTC matter is particularly so in light ofthe nature ofthe 

allegations and the potential impact to the company's reputation and fmancial condition. 

7. I have read and understood the Protective Order entered in the above matter and 

agree to be bound by its terms. Ifgranted access to confidential information, I will not use it, 

directly or indirectly, for any purpose other than the defense ofthis action. I acknowledge and 

agree that I am subject to the jurisdiction ofthis Court and to its contempt powers. 

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8. I have previously received and reviewed confidential or proprietary infonnation in 

numerous cases that were the subject ofprotective orders entered by the respective courts 

adjudicating such cases. I have never revealed nor misused such confidential infonnation in 

those cases, nor has it ever been suggested that I have done so. 

FURTHER AFFIANT SAYETH NOT. 

J 

STATE OF ALABAMA ) 

~6:ilCOIJNTY ) 

I, the undersigned authority, a Notary Public in and for said County in said State, hereby 

certify that James M. Proctor, whose name as General Counsel and Senior Vice President of 

McWane, Inc., an Alabama corporation, is signed to the foregoing instrument, and who is known 

to me, acknowledged before me on this day that, being infonned of the contents of said 

instrument, he, as such officer and with full authority, executed the same voluntarily for and as 

the act ofsaid corporation. 

Given under my band and official seal tills the 'a1-l!>ciay of -30 1'1 '

2012. 

~i~ Mcf2Q\gJ Notary PublIc 

[NOTARIAL SEAL] 

My Commission Expires: a -d 3 -dO15 

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