O.RIGI NAL
 

UNITED STATES OF AMERICA o2f~" ~ft,7 FEDERAL TRADE COMMISSION ~.J; i l:: L~iUj 

OFFICE OF ADMINISTRATIVE LAW JUGES 51-5D'SIn the Matter of 

) 

) 

) Docket No. 9327 

POL YPORE INTERNATIONAL, INC., ) 

Respondent. ) Public 

) 

ORDER GRANTING RESPONDENT'S SECOND
 

MOTION TO REOPEN THE HEARIG RECORD
 

AND SETTING HEARING SCHEDULE
 

I. 

On September 25,2009, Respondent submitted its Second Motionto Reopen the 

Hearing Record ("Motion"). Complaint Counsel submitted its opposition on October 1, 

2009 ("Opposition"). By Order dated October 2,2009, Respondent was required to fie a 

reply brief. 

Respondent submitted its reply, with an affidavit of 
 HaITY D. Seibert, on October 

7,2009. On October 9,2009, Respondent submitted a motion for leave to fie a 

supplemental affidavit of Harr D. Seibert. In that motion, Respondent states that 

additional relevant information related to Exide Technologies, Inc. ("Exide") and the 

subject of the affidavit arose after the deadline for filing Respondent's reply. On October 

14,2009, Complaint Counsel submitted an opposition to Respondent's motion to file a 

supplemental affdavit. Complaint Counsel states that the information contained in the 

supplemental affidavit is merely a restatement ofthe opinions Seibert expressed in his 

original affidavit. Upon review of 
 both affidavits, the supplemental affdavit does 

contain additional statements that could not have been made prior to the filing of the 

original affidavit. Accordingly, Respondent's motion for leave to fie the supplemental 

affidavit of 
 HaITY D. Seibert is GRANTED. 

For the reasons set forth below, Respondent's Second Motion to Reopen the 

Hearng Record is GRANTED. 

II. 

As a preliminary matter, Respondent's and Complaint Counsel's briefs refer to 

information from documents or testimony which had previously been granted in camera 

treatment or which constitute confidential information pursuant to the Protective Order 
entered in this case. i In addition, on October 9,2009, Exide filed a motion for in camera 

treatment for the Declaration of 
 Douglas Gilespie, submitted with Complaint Counsel's 

Opposition. That motion is pending. 

Commission Rule 3.45(a) allows the Administrative Law Judge "to grant in
 

camera treatment for information at the time it is offered into evidence subject to a later 

determination by the (administrative J law judge or the Commission that public disclosure 

is required in the interests of facilitating public understanding of their subsequent 

decisions." In re Bristol-Myers Co., No. 8917-19,90 F.T.C. 455, 457, 1977 FTC LEXIS 

25, at *6 (Nov. 11, 1977). As the Commission later reaffirmed in another leading case on 

in camera treatment, since "in some instances the ALJ or Commission canot know that 

a certain piece of information may be critical to the public understanding of agency 

action until the Initial Decision or the Opinion of the Commission is issued, the 

Commission and the ALJ s retain the power to reassess prior in camera rulings at the time 

of publication of decisions." In re General Foods Corp., No. 9085, 95 F.T.C. 352, 356
 

n.7, 1980 FTC LEXIS 99, at *12 n.7 (Mar. 10, 1980).
 

Although the parties have designated in their briefs information as "in camera" or 

confidential "subject to Protective Order," there are portions of that information 

discussed in this Order that do not require in camera or confidential treatment. 

Accordingly, such material is disclosed in the public version of 
 this Order, pursuant to 

Commission Rule 3.45(a) (the ALJ "may disclose such in camera material to the extent 

necessary for the proper disposition of the proceeding"). Where in camera or 

confidential information subject to the Protective Order is used in this Order, it is 

indicated in bold font and braces ("t l") in the in camera version and is redacted from 

the public version ofthe Order, in accordance with 16 C.F.R. § 3.45(f).2 

III. 

Respondent states that Exide, a significant customer of Respondent, waited until 

after the record was closed, and, in the span of three months, has placed orders for 

t l supply ofPE separators from Daramic Respondent also states that
 

Exide has advised Daramic that Exide intends to move a significant portion of its 

separator purchases to a different supplier. Based on the foregoing, Daramic asserts that 

Exide apparently has decided not to purchase PE separators from Daramic t_
 

~l, and that, thus, Daramic stands to lose this significant customer. Respondent states
 

that Daramic already lost atthe end of 2008 a significant customer, and that if it loses 

Exide, Daramic wil lose another significant customer, which, combined, accounted for 

t~l of 
 Daramic's North American PE business. Respondent contends that if Daramic

1 Under the Commission's Rules of 
 Practice, a par or a non-pary may fie a motion seeking in camera 

treatment for material, or portions thereof, offered into evidence. 16 C.F.R. § 3.45(b). The Administrative 

Law Judge may order that such material be placed in camera only after finding that its public disclosure 

wil likely result in a clearly defined, serious injur to the entity requesting in camera treatment. 16 C.F.R. 

§ 3.45(b). Pursuant to Commission Rule 3.45(b), several orders were issued granting in camera treatment 

to material that met the Commission's standards. 

2 Pursuant to Commission Rule 3.45(f), a public version of 
 this Order shall be fied within five days. 16 

C.F.R § 3.45(f). 

2
 
were to be able to salvage any of Ex ide's future business, it could do so only by

providing Exide with a f l. Respondent argues that both of 

these events - Daramic's lose of a si ificant customer and Exide's ability to exert 

f l - are persuasive evidence ofDaramic's lack
 

of market power. 

For those reasons, Respondent requests that the record be reopened for a half-day 

hearing, at which Respondent proposes to offer testimony regarding the following: 

i. After the close of the record, Exide decided to move f" 

-l its PE separator purchases for f l to another
 

supplier, and in the span of 
 less than three months, Exide has placed

orders from Daramic in excesti_l of PE separators, all

requested to be delivered by t_.~t exceeds any 

reasonable forecast provided by Exide, is inconsistent with past order 

patterns and, based on Exide's f l, amounts to
 

approximately f_l worth ofPE separator(s). Douglas Gilespie
 

of Exide has admitted to Respondent that Exide's recent purchase orders 

equate to f_l worth of PE separator purchases from Daramic.
 

2. With Exide's purchase orders for more than f_ 

_l of PE separators from Daramic, Exide does not intend to and wil
 --l. .
 ~ase any additional PE separators from Daramic in either t~

3. In light of 
 Exide's apparent decision not to purchase PE 

arators from Daramic in t l, Daramic wil 
 likely have to 

4. If Daramic is able to retain any small amount of business from 

Exide in f~l, or thereafter, which appears unlikely, Daramic wil only
 

be able to obtain such sales through a f l.
 

5. Exide's conduct here is strong evidence that Daramic does not 

have market power, as Complaint Counsel contends. 

Complaint Counsel argues that Respondent seeks to delay a ruling in this matter 

by reopening the record to introduce cumulative evidence on issues that Respondent has 

already fully argued at trial and in its post-tral briefs.3 Complaint Counsel further argues 

3 Complaint Counsel cites to In re Chicago Bridge & Iron, Dkt. 9300,2003 FTC LEXIS 98, *3 (June 12, 

2003) for the statement: "Unless due process is to be completely ignored in these proceedings, then the date 

the record closes must mean that the record is indeed closed." The context presented in that case is not 

comparable to the instant motion. Here, Respondent has fied a motion seekig to reopen the record. In 

Chicago Bridge, Complaint Counsel developed charts and graphs after the close of the record and cited to 

them as if they had been offered and introduced at tral without seeking leave to reopen the record to admit 

them. 

3 
that none of 
 Respondent's claimed "new" and "additional" evidence would impact the 

outcome of this matter because none of the proffered evidence addresses the market 

structure, concentration levels, or lack of entry proven by Complaint CounseL. In 

addition, Complaint Counsel contends that reopening the record to allow Respondent to 

present the proffered evidence wil prejudice Complaint Counsel because the resulting 

deiay harms consumers "who continue to pay monopoly prices" and because Complaint 

Counsel "has not had the opportnity to gather additional evidence of ongoing 

anti competitive conduct by Respondent." Opposition at 2-3. 

In its reply, Respondent states that the requested reopening of the record is not 

intended for delay. Respondent reiterates that the proffered evidence shows that Daramic 

is losing market share and pricing power and is, therefore, relevant to whether Daramic 

has monopoly power. In addition, Respondent argues that the proffered evidence is 

relevant to the disputed factual issues of whether Exide is a power buyer and whether 

customers are able or wiling to stockpile and warehouse large amounts ofPE separators. 

Respondent argues that it wil be prejudiced if it is denied the opportnity to place 

relevant evidence in the record, and that Exide's decision to wait until after the hearing to 

place the orders at issue should not be held against Respondent. 

iv. 

A. 

Under the Commission's Rules of Practice governing this adjudication, Rule 

3.51(e)(1) states: "At any time prior to the filing of his initial decision, an Administrative 

Law Judge may reopen the proceeding for the reception of further evidence." 16 C.F.R. 

§ 3.51(e).4 Commission cases confirm this standard. In re Kellogg Co., 1979 FTC 

LEXIS 89, at *3 (Nov. 16, 1979) ("(W)e note that the ALJ is free to reopen the record at 

any time prior to filing the Initial Decision, Rule 3.51 (d)."); In re Chicago Bridge & Iron 

Co" 139 F.T.C. 553, at *561 n.27 (May 10, 2005). See also In re Litton Indus., 82 F.T.C. 

793, 1973 FTC LEXIS 83, at *35-36 (Mar. 13, 1973) (where respondent filed a motion to 

reopen the record for the limited purpose of receiving evidence with reference to relevant 

matters occurrng after the close of the record, the hearing examiner reopened the record, 

held a hearing at which respondent offered evidence, re-closed the record, and authorized 

the parties to file supplemental proposed findings regarding the new evidence received). 

When the FTC recently amended its Rules of 
 Practice, Rule 3.51(e)(1) was 

revised to add a "good cause" standard. "At any time from the close of the hearing 

record pursuant to § 3.44(c) until the filing of 
 his or her initial decision, an 

Administrative Law Judge may reopen the proceeding for the reception of further 

evidence for good cause shown." 16 C.F.R. § 3.51(e). The comments to the interim final 

4 On Januar 13,2009, while this matter was pending, the FTC amended Pars 3 and 4 of its Rules of 

Practice. However, in the interim final rules, the FTC stated that the rules that were in effect before 

January 13,2009 would govern all then pending adjudicatory proceedings. 74 Fed. Reg. 1804 (Jan. 13, 

2009). Because the instant case was pending before Januar 13,2009, the prior Rule 3.51(e) is applicable. 

4
 
rules that accompanied the Januar 13, 2009 rule changes do not define "good cause." 

Interim Final Rules with Request for Comment, 74 Fed. Reg. 1804 (Jan. 13,2009). In 

other contexts, good cause has been defined to require a showing that the action sought 

could not have been achieved despite the diligence of the party makng the request. In re 

Chicago Bridge, No. 9300,2002 FTC LEXIS 64, at *4 (Oct. 16,2002). 

The Commission, in deciding whether to reopen the record to receive 

supplemental evidence when the case is pending before it, considers: "(1) whether the 

moving pary can demonstrate due diligence (that is, whether there is a bona fide 

explanation for the failure to introduce the evidence at trial); (2) the extent to which the 

proffered evidence is probative; (3) whether the proffered evidence is cumulative; and (4) 

whether reopening the record would prejudice the non-moving party." In re Brake Guard 

Products, Inc., No. 9277, 125 F.T.C. 138,248 n.38 (Jan. 15, 1998) (citing Chysler Corp. 

v. FTC, 561 F.2d 357,362-63 (D.C. Cir. 1977)) (affirming admission of 
 supplemental 

evidence where the Commission noted that the evidence was not available at the time of 

the trial before the ALJ and that Complaint Counsel had acted with due diligence). The 

Commission reaffirmed this standard for reopening the record while a case is before the 

Commission in In re Rambus Inc., No.' 9302,2004 FTC LEXIS 230, at *3 (Dec. 6,2004). 

As the foregoing authorities make clear, Complaint Counsel's argument that the 

hearing should not be reopened because the proffered evidence will not "affect the 

outcome" is not the standard and places too high a barrer for a pary moving to reopen 

the record. At this stage of the proceedings, the "outcome" canot be presumed, and new 

evidence that is relevant to the issues to be determined should be admitted in the interest 

offairness and 
 justice. See Caracci v. Brother Int'l Sewing Mach. Corp., 222 F. Supp. 

769, 771 (E.D. La. 1963), aff'd, 341 F.2d 377 (5th Cir. 1965) (holding that the trial court 

may properly look with more favor upon a motion to reopen made after submission, but 

before any indication by it as to its decision, so that the court may have all of the facts 

upon which it can render full justice on the merits). 

B. 

Respondent has proffered five items for which it seeks to reopen the proceeding 

for the reception of further evidence. The items listed by Respondent, set forth above and 

numbered as 1 through 4, are factual propositions. Respondent's item number 5, as set 

forth above, constitutes legal argument and, therefore, is not an appropriate proffer. 

Accordingly, for puroses ofthis Order, Respondent's proffer is hereby limited to items 

numbered 1 through 4 above. 

Although Respondent is neither required to show good cause for reopening this 

proceeding for the reception of further evidence under the Rule 3. 51( e) that governs this 

proceeding, nor held to the standard for reopening the record when a proceeding is before 

the Commission, as set forth below, Respondent has met those standards. 

First, Respondent has demonstrated due diligence. According to the proffer, after 

the close of the record, Exide submitted purchase orders for PE separators in an amount 

5 
sufficient to meet Exide's needs for t_l, and, according to Respondent, Exide, 

whose contract with Daramic expires t_l, confirmed to Daramic
 

that it wil move a significant portion of its business to another supplier. Because both of 

these events were under the control of 
 Ex ide and did not occur until after the close ofthe 

record, Respondent has provided a bona fide explanation for the failure to introduce the 

proffered evidence at tral, and, therefore, has demonstrated due diligence. 

Second, the proffered evidence would be probative. The Complaint in this case 

charges that the effect of 
 the challenged acquisition may be substantially to lessen 

competition or tend to create a monopoly in violation of 
 Section 7 of 
 the Clayton Act, 15 

U.S.C. § 18, and Section 5 ofthe Federal Trade Commission Act ("FTC Act"), 15 U.S.c. 

§ 45. Complaint irir 48,49. The Complaint alleges that the acquisition and Daramic's 

conduct substantially lessened competition in numerous ways, including increasing the 

level of concentration and market power in the automotive market; leading to increased 

prices in the relevant markets; and allowing Daramic to unilaterally exercise its market 

power in the relevant markets. Complaint ir 38. The Complaint also charges Respondent 

with unlawful monopolization in several markets, including PE separators for automotive 

batteries. Complaint irir 52,53. See generally Complaint Counsel's Post-Trial Brief at 2­

4. If Daramic has, after the close of the record, potentially lost a significant customer, as 

proffered by Respondent, such evidence would directly bear on Respondent's market 

share and power to control prices -- critical elements for evaluating the Section 7 and 

monopolization charges. 

Third, the evidence described in the proffer is not cumulative. Respondent did 

not have, and, thus, did not present at trial, facts described in the proffer regarding what 

Daramic claims is a decision by Exide not to purchase PE separators from Daramic in 

t L, or the claimed consequence that Daramic wil 
 likely have to t_

l. 

Lastly, an evaluation of prejudice to Complaint Counsel, the non-moving party, 

weighs in favor of 
 reopening the record. By previous Order, dated September 8,2009, 

Respondent's motion to reopen the record to admit PX 3016 after the completion of all 

post-trial briefs, proposed findings of 
 fact, and replies thereto, and closing arguments was 

denied on the ground that it would be prejudicial to Complaint Counsel, since Complaint 

Counsel was not able to rely on or respond to the exhibit in its post-trial pleadings. No 

such prejudice exists here, where, as set forth below, Complaint Counsel wil be allowed 

to conduct cross-examination and provide briefing and argument on the evidence 

described in the proffer. 

Complaint Counsel contends that reopening the record to allow Respondent to 

present the proffered evidence wil prejudice Complaint Counsel because the resulting 

delay harms consumers "who continue to pay monopoly prices." Opposition at 2. 

Complaint Counsel's assertion assumes as "fact" that Respondent is charging monopoly 

prices, which is a disputed issue that has not yet been determined. Because the evidence 

described in the proffer is relevant to that issue, Complaint Counsel's argument only 

6
 
reinforces the importance of admitting the evidence. It does not support a finding of 

undue prejudice against Complaint CounseL. 

Complaint Counsel fuher contends that it wil be prejudiced because Complaint 

Counsel "has not had the opportnity to gather additional evidence of ongoing 

anti competitive conduct by Respondent." Opposition at 3. To the extent that Complaint 

Counsel is claiming that discovery and production of supplemental evidence for its case 

in chief are necessary to avoid prejudice, that argument is unpersuasive. Avoidance of 

prejudice does not require a "quid pro quo." Complaint Counsel does not contend that it 

wil be unable to effectively cross-examine or otherwise rebut the evidence described in 

the proffer. This Order provides Complaint Counsel with pre-hearing procedures to 

ensure that Complaint Counsel is capable of effective rebuttaL. 

Finally, any potential prejudice to Complaint Counsel is sufficiently outweighed 

by the potential prejudice to Respondent, should Respondent be precluded from placing 

relevant facts in the record prior to the decision in this case. The purpose of reopening 

the record before a final decision has been reached is to enable the fact finder to "have all 

of the facts upon which it can render full justice on the merits" of the action. Caracci, 

222 F. Supp. at 771. Accordingly, where, as here, newly discovered, relevant evidence is 

available prior to the decision, the "interest of fairness and justice" permits the record to 

be reopened. See id. 

c. 

Respondent has demonstrated good cause for reopening the record prior to the 

filing of the Initial Decision. In addition, Respondent has provided a bona fide 

explanation for the failure to introduce the proffered evidence at trial, demonstrated that 

the proffered evidence is probative and is not cumulative, and shown that the reopening 

of the record would not unduly prejudice Complaint CounseL. 

Accordingly, Respondent's Second Motion to Reopen the Hearing Record is 

GRANTED, and, pursuant to Commission Rule 3.51(e), the hearing record is hereby 

reopened for the reception of evidence limited to Respondent's proffer as set forth in this 

Order. 

v. 

The following schedule shall be adhered to. All depositions, witness and exhibit 

lists, offers of evidence, and post-hearing supplemental briefs and proposed findings of 

fact shall be limited to the proffered evidence, as listed in items numbered 1 through 4 

above. 

October 27, 2009	 Deadline for depositions, limited to the individuals to be 

called at the hearing and limited to the proffered evidence. 

7
 
October 28, 2009 

October 28, 2009 

October 29,2009 

November 2, 2009 

November 3, 2009 

November 3,2009
 

November 3, 2009 

November 4, 2009 

Parties exchange and serve courtesy copies on ALJ of their 

proposed witness and exhibit lists, including designated 

testimony to be presented by deposition, copies of all 

exhibits (except for demonstrative, ilustrative, or summary 

exhibits), and a brief summar of the testimony of each 

witness. 

Parties that intend to offer confidential materials of an 

opposing pary or non-party as evidence at the hearing must 

provide notice to the opposing party or non-party, pursuant 

to 16 C.F.R. § 3.45(b).
 

Deadline for filing motions for in camera treatment of 

proposed exhibits. 

Exchange objections to final proposed exhibit lists. 

Exchange objections to the designated testimony to be 

presented by deposition and counter-designations. The 

parties shall attempt to stipulate to admissibility of exhibits 

and any designated testimony. 

Provide to ALJ any remaining objections to final proposed 

exhibits and any remaining objections to designated 

testimony. 

Deadline for filing responses to motions for in camera 

treatment of proposed exhibits. 

File final stipulations of 
 law, facts, and authenticity. Any 

subsequent stipulations may be offered as agreed by the 

parties. 

Prehearing conference to begin at 10:00 a.m. in Room 532, 

Federal Trade Commission Building, 600 Pennsylvania 

Avenue, NW, Washington, DC 20580. 

The parties are to meet and confer prior to the conference 

regarding trial logistics and proposed stipulations oflaw, 

facts, and authenticity and any designated deposition 

testimony. Counsel may present any objections to the final 

proposed witness lists and exhibits, including the 

designated testimony to be presented by deposition. 

Exhibits wil be admitted or excluded to the extent 

practicable. 

8 
November 4, 2009 

November 17, 2009 

November 24,2009
 

Date: October 22, 2009 

Commencement of 
 hearng, to begin immediately after the 

prehearing conference, in Room 532, Federal Trade 

Commission Building, 600 Pennsylvania Avenue, NW, 

Washington, DC 20580. 

Each party wil be allowed a brief opening statement and 

closing argument. 

Deadline for filing concurrent post-hearing supplemental 

briefs, proposed findings of fact, and proposed conclusions 

oflaw. 

Deadline for filing concurrent post-hearng supplemental 

reply briefs and replies to proposed findings of fact. 

'" 'M ~¡w


D. Michael appe
 

Chief Administrative Law Judge 

9