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PUBLIC 

08 28 2012 

UNITED STATES OF AMERICA
	

BEFORE THE FEDERAL TRADE COMMISSION
	

OFFICE OF ADMINISTRATIVE LAW JUDGES
	

In the Matter of 

McWANE, INC., 

 Respondent. 

) PUBLIC 

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) DOCKET NO. 9351

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JOINT STIPULATIONS OF LAW AND FACT 

Pursuant to this Court’s February 15, 2012 Scheduling Order, as amended, Complaint 

Counsel and Respondent McWane, Inc. stipulate to the following: 

JOINT STIPULATIONS OF FACT 

1.		 Respondent McWane, Inc. manufactures, markets and sells products for the waterworks 

industry, including ductile iron pipe fittings that are 3” to 24” in diameter (“Fittings”). 

2.		 Sigma, Inc. imports and sells Fittings and other waterworks products. 

3.		 Star Pipe Products Ltd. (“Star”) imports and sells Fittings and other waterworks products. 

4.		 Beginning in 2009, Star has contracted with foundries in the United States to manufacture 

Domestic Fittings. 

5.		 Non-domestic Fittings have accounted for the majority of sales of Fittings in the last five 

years. 

6.		 Fittings are used in pressurized water distribution and treatment systems to join pipes, 

valves and hydrants, and to change, divide or direct the flow of water. 

7.		 Fittings are commodity products produced to American Water Works Association 

(“AWWA”) standards and specifications. 
 

PUBLIC
	

8.		 There are several thousand unique configurations of Fittings in different sizes, shapes and 

coatings. 

9.		 Approximately 80 percent of the demand for Fittings may be serviced with only 100 or 

fewer commonly used sizes and configurations of Fittings. These Fittings are commonly 

referred to in the industry as “A” or “B” Fittings. 

10. Fittings typically comprise five (5) percent or less of the total cost of a typical 

waterworks project. 

11. Demand for Fittings is largely driven by housing-related infrastructure construction and 

by construction of wastewater treatment plants, which in turn are driven by such factors 

as the rate of housing growth, and the age and condition of existing systems. 

12. The end users of Fittings are typically municipalities, regional water authorities, and the 

contractors they engage to construct waterworks projects (collectively, “End Users”). 

13. At times, some waterworks projects require that only Domestic Fittings be used because 

of either End User preference or because it is required by municipal, state, or federal law 

(“Domestic-only projects”). 

14. McWane, Sigma, Star, and others sell Fittings directly to Distributors, which then re-sell 

the Fittings to End Users. 

15. All or virtually all of McWane’s sales of Fitting are to Distributors. 

16. At times, McWane, Sigma, and Star have provided additional discounts and price 

concessions to Distributors in the form of rebates, reductions in freight charges, and/or 

extensions of credit or payment terms. 

17. The Ductile Iron Fittings Research Association (“DIFRA”) had four members: McWane; 

Sigma; Star; and U.S. Pipe. 
 

PUBLIC
	

18. The shipment tonnage data gathered by DIFRA’s accounting firm, Sellers Richardson 

Holman & West, did not distinguish between domestic fittings and non-domestic fittings 

and did not indicate whether the tonnage was sold into open preference or domestic 

preference jobs. 

19. In February 2009, Congress passed the American Recovery and Reinvestment Act of 

2009, known as “ARRA.” 

20. ARRA allocated more than $6 billion to water infrastructure products. 

21. ARRA contained certain Buy-American provisions applicable to Fittings. 

22. The total number of waterworks projects being built, repaired, or otherwise 

commissioned in the United States generally increased during the period that ARRA 

funding was available. 

23. At a June 2009 AWWA industry conference, Star publicly announced that it would offer 

Domestic Fittings starting in September 2009. 

24. HD Supply is the largest waterworks distributor in terms of sales in the United States. 

25. Ferguson is the second largest waterworks distributor in terms of sales in the United 

States. 

JOINT STIPULATIONS OF LAW 

1.		 McWane is a corporation as “corporation” is defined in Section 4 of the Federal Trade 

Commission Act, 15 U.S.C. § 44. 
PUBLIC
	

For Counsel Supporting the Complaint: For Respondent: 

_/s/ Linda Holleran______________ 

Linda Holleran 

Federal Trade Commission 

Washington, DC 

__/s/ William C. Lavery____________ 

William C. Lavery 

Baker Botts LLP 

Washington, DC 

Date: August 28, 2012 
PUBLIC
	

CERTIFICATE OF SERVICE 

I hereby certify that on August 28, 2012, I filed the foregoing document electronically 

using the FTC’s E-Filing System, which will send notification of such filing to: 

Donald S. Clark
	

Secretary
	

Federal Trade Commission
	

600 Pennsylvania Ave., NW, Rm. H-113
	

Washington, DC 20580
	

I also certify that I delivered via hand delivery a copy of the 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 of the 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: ______/s/ William C. Lavery_____ 

William C. Lavery 

Counsel for McWane, Inc.