UNITED STATES OF AMERICA
 

FEDERAL TRADE COMMISSION
 

OFFICE OF ADMINISTRATIVE LAW JUGES 

)
 In the Matter of
 ) 

)
 McWANE, INC.,
 )
 a corporation, and ) DOCKET NO. 9351
 

) STAR PIPE PRODUCTS, LTD., )
 a limited partnership,
 )
 Respondents.
 ) 

) 

ORDER DENYING MOTION TO QUASH SUBPOENA AD TESTIFICANDUM
 

I. 

On August 31, 2012, non-party Sigma Corporation ("Sigma") fied a motion to quash a 

subpoena ad testifcandum served on it by Complaint Counsel on August 28,2012 ("Motion"). 

Complaint Counsel fied its Opposition to the Motion on September 5,2012 ("Opposition"). For 

the reasons set forth below, Sigma's Motion is DENIED. 

II. 

At the final prehearng conference in this matter on August 30, 2012, Complaint Counsel 

sought to offer into evidence numerous documents authored by Sigma ("Sigma documents"). 

Final Prehearing Conference, Tr. 123-27. Respondent McWane, Inc. objected to the 

admissibility of the Sigma documents on the basis that the proper foundation for admissibilty 

had not been laid. ¡d. Complaint Counsel responded that it did not have a declaration from 

Sigma in compliance with Commission Rule 3.43(c), discussed below, and that Complaint 

Counsel had issued a subpoena for a deposition of 
 Sigma for August 31, 2012. ¡d. 

By its Motion, Sigma moves to quash the subpoena ad testifcandum noticing a 

deposition for August 31, 2012 (the "deposition subpoena"). The deposition subpoena 

designated one topic: the "authenticity and admissibilty" of almost 500 documents listed in the 

attachment to the subpoena. Sigma states that "( t )he focus of (its) Motion primarily is on 24 

documents to which Complaint Counsel and McWane's counsel have not agreed upon 

admissibilty." Sigma recites that Complaint Counsel advised Sigma that Complaint Counsel 

seeks to admit these 24 documents as being "kept in the course of regularly conducted activity," 

and "made by the regularly conducted activity as a regular practice." 
Sigma seeks an order quashing the deposition subpoena pursuant to Commission Rules 

3.31(c)(2) and 3.34(c), on the grounds that: (i) the remaining discovery sought from Sigma is 

unreasonably cumulative; (ii) Complaint Counsel has had ample opportnity to obtain the 

information now sought; and (iii) the burden of the proposed discovery on Sigma outweighs the 

benefit. 

Complaint Counsel asserts that it has been meeting and conferrng with counsel for 

Sigma since July 17, 2012, when Complaint Counsel provided Sigma with a list of all Sigma 

documents, identified by Bates and CX exhibit number, that Complaint Counsel intends to offer 

as evidence in this matter. Complaint Counsel further states that in its letter, Complaint Counsel 

notified Sigma that it would accept a declaration conforming with Commission Rule 3.43(c) in 

lieu of a deposition to establish admissibility of Sigma documents. Complaint Counsel argues 

that: (i) the subpoena isnot unduly burdensome; (ii) the subpoena is not vague and provides a 

reasonable response date; and (ii) the benefits of discovery outweigh the burdens. 

III. 

The relevant Commission rule governing limitations on discovery is set forth in 

Commission Rule 3.31(c)(2), which states: 

The frequency or extent of use of 
 the discovery methods otherwise permitted 

under these rules shall be limited by the Administrative Law Judge ifhe or she 

determines that: 

(i) The discovery sought from a party or third party is unreasonably 

cumulative or duplicative, or is obtainable from some other source that is more 

convenient, less burdensome, or less expensive; 

(ii) The pary seeking discovery has had ample opportunity by discovery in 

the action to obtain the information sought; or 

(iii) The burden and expense of the proposed discovery on a pary or third 

pary outweigh its likely benefit. 

16 C.F.R. § 3.31(c). 

Relevant Commission rules governing the admissibilty of evidence are as follows. 

Commission Rule 3.43(b) states: 

(b) Admissibilty. Relevant, material, and reliable evidence shall be admitted.
 

. .. Evidence that constitutes hearsay may be admitted if it is relevant, material, 

and bears satisfactory indicia of reliability so that its use is fair. . . . 

16 C.F.R. § 3.43(b). Commission Rule 3.43(c) sets forth: 

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( c) Admissibility of third party documents. Extrnsic evidence of authenticity 

as a condition precedent to admissibility of documents received from third paries 

is not required with respect to the original or a duplicate of a domestic record of 

regularly conducted activity by that third party that otherwise meets the standards 

of admissibilty described in paragraph (b) if accompanied by a wrtten 

declaration of its custodian or other qualified person, in a maner complying with 

any Act of Congress or rule prescribed by the Supreme Court pursuant to 

statutory authority, certifyng that the record: 

(1) was made at or near the time of the occurrence of the matters set forth by, 

or from information transmitted by, a person with knowledge of those matters; 

(2) was kept in the course of 
 the regularly conducted activity; and

(3) was made by the regularly conducted activity as a regular practice. 

16 C.F.R. § 3.43(c). 

Complaint Counsel states that because Sigma has been unwiling to provide a declaration 

that meets the requirements of 
 Rule 3.43(c), it needs to take a deposition to establish the
 

admissibilty of Sigma's documents. Sigma's arguments for quashing the subpoena pursuant to
 

Rule 3.31 ( c )(2) are addressed below. 

A. Objections based upon vagueness and unreasonable response date
 

Sigma's charge that the subpoena is vague and has an unreasonable response date is
 

rejected. The subpoena states that the deposition topic is "the authenticity and admissibilty
 

under the provisions of Rule 3.43 of the Rules of Practice for Adjudicative Proceedings of the Federal Trade Commission, 16 C.F.R. § 3.43 of the documents listed in Attachment A." This 

deposition topic is not vague and clearly provides Sigma notice ofthe topic of deposition. 

Although served on Sigma on August 28,2012, the subpoena's response date of August 31, 2012 

is not unreasonable in light ofthe six weeks' notice Sigma had to review the documents. 

According to the Declaration of Alexander Ansaldo and the July 17, 2012 
 letter from Complaint 

Counsel to Sigma's counsel, attached to Complaint Counsel's Opposition, Complaint Counsel 

provided Sigma over six weeks' notice of 
 which documents Complaint Counsel intends to 

introduce at tral. The July 17, 2012 letter further asked Sigma to sign a declaration regarding
 

the admissibility of the documents, attached a proposed declaration tliat tracked the language for 

authenticity as laid out in Rule 3.43(c), and informed Sigma that Complaint Counsel was seeking 

a declaration in lieu of a deposition on the admissibility of the documents. 

B. Objections that the subpoena seeks cumulative or duplicative evidence
 

Sigma's charge that the subpoena is unreasonably cumulative or duplicative is also 

rejected. Sigma asserts that Complaint Counsel has already questioned Sigma witnesses about 

documents produced by Sigma and that employees of a non-party should not be repeatedly 

burdened by submitting to multiple depositions about the same sets of documents. As Complaint 

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Counsel notes, Sigma need not present those same witnesses in response to the subpoena. 

Depositions for purposes of establishing authenticity may be of any witness with knowledge of 

the record keeping practices of 
 the business. See Rule 3.43(c) (permitting a wrtten declaration 

from a document's "custodian or other qualified person"); Commodities Future Trading 

Commission v. Dizona, 594 F.3d 408,415 (5th Cir. 2010) ("There is no requirement that the 

witness who lays the foundation be the author of 
 the record or be able to attest to its accuracy."). 

. Moreover, the Scheduling Order in this case allows for "discovery for puroses of authenticity 

and admissibilty of exhibits" after the close of discovery. The fact that 
 Complaint Counsel
 

questioned Sigma's fact witnesses about the substance of some of these documents does not
 

preclude "discovery for puroses of authenticity and admissibilty of exhibits" as cumulative or 

duplicative. 

C. Objections based upon burden 

Sigma asserts that the burden of 
 the deposition on Sigma's employees outweighs its
 

benefit because the deposition wil not likely lead to establishing any of the documents as an
 

admissible business record. Complaint Counsel responds that at the deposition, Complaint
 

Counsel wil seek discovery regarding the circumstances of 
 the documents' creation, the activity 

that Sigma was engaged in when preparing the documents, and Sigma's practices with respect to 

such documents in order to establish admissibilty under Commission Rule 3.43. 

Although the subpoena imposes some burden on Sigma, the burden is far outweighed by 

the benefit of 
 the discovery. The Complaint in this case alleges that McWane conspired with 

Sigma to raise and stabilize the prices of ductile iron pipe fittings. Complaint ir 2. Because 

Sigma's documents are relevant to the issue of coordination between Respondent and Sigma, the 

benefits of discovery outweigh the burden on Sigma. 

iv. 

Sigma has failed to show that the subpoena is vague, requires an unreasonable response 

date, is unreasonably cumulative or duplicative, or that the burden to Sigma outweighs its likely 

benefit. Thus, Sigma has failed to meet its burden to quash the subpoena under Rule 3.31 (c )(2). 

Accordingly, Sigma's Motion to Quash is DENIED. Sigma shall comply with the subpoena ad 

testifcandum on 
 or before September 10,2012. 

ORDERED: :DM ~1'U 

=F¡

D. Michael Chappell 

Chief Administrative Law Judge 

Date: September 6,2012 

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