UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

__________________________________________

)

In the Matter of )

)

CHICAGO BRIDGE & IRON COMPANY N.V., )

)

a foreign corporation, )

)

CHICAGO BRIDGE & IRON COMPANY, )

)

a corporation, ) Docket No. 9300

)

and )

)

PITT-DES-MOINES, INC., )

)

a corporation. )

__________________________________________)

RESPONDENTS' MOTION TO WITHDRAW 

INADVERTENTLY STIPULATED DOCUMENTS FROM EVIDENCE 

Respondents respectfully request that this Court grant the withdrawal of two 

exhibits inadvertently entered as evidence pursuant to Joint Exhibit 7 ("JX 7"). Specifically, the 

deposition testimony (in two parts and thus constituting two exhibits) of an expert witness that 

Respondents do not intend to call, was inadvertently entered into evidence through a joint 

stipulation offered by Complaint Counsel on December 16, 2002. At this time, in order to speed 

up this trial, Respondents do not believe it is necessary and do not plan on calling this expert at 

trial. However, if the entirety of the depositions are allowed to remain in evidence, Respondents 

may be forced to call the expert, or another CB&I employee, in order to provide this Court with 

complete testimony, an event which could potentially add two additional trial days to

Respondents' case. Although Complaint Counsel is aware that Respondents did not intend to 
2

stipulate this deposition into evidence, Complaint Counsel has failed to consent to the removal of 

the disputed exhibits from evidence and instead argues their admissibility on the merits. On the 

merits, the expert deposition at issue is inadmissible hearsay. For this reason and the reasons 

stated herein, the two inadvertently entered documents should be removed from evidence. 

I. Both Respondents and Complaint Counsel Inadvertently Admitted Two Documents 

That Continued To Be In Dispute 

On December 16, 2002, after extensive discussion of dozens of potential exhibits, 

Complaint Counsel offered a document stipulation marked as JX 7 and the documents listed 

therein to be entered into evidence. (Attached as Exhibit A). Over the week preceding the 

entering of JX 7 into evidence, Respondents reviewed numerous versions and variations of JX 7 

submitted by differing attorneys for Complaint Counsel. See Dahlquist Declaration at ¶ 4 

(Attached as Exhibit B). When Respondents received the final version from Complaint Counsel, 

Respondents hurriedly reviewed and signed the stipulation when it was offered by Complaint 

Counsel. See Dahlquist Declaration at ¶ 4 (Attached as Exhibit B). On December 20, 2002, four 

days after JX 7 was entered into evidence, Respondents learned that it had inadvertently agreed 

to the admission of two documents, CX 1577 and CX 1578, that were contained within

stipulation JX 7. See Dahlquist Declaration at ¶ 6 (Attached as Exhibit B). These documents, 

the two part deposition of John Vaughn, an expert witness that Chicago Bridge and Iron

("CB&I") does not intend to call at trial, were extensively discussed prior to the submission of 

JX 7. Complaint Counsel wanted the deposition to be admitted as part of the stipulation, and 

Respondents never wavered in their resistance to this extraordinarily questionable approach. See

Dahlquist Declaration at ¶ 3 (Attached as Exhibit B).

Respondents learned of their error when, on December 20, 2002, Complaint 

Counsel informed Respondents that it intended to seek the admission of CX 1577 and CX 1578 
3

into evidence before the close of its case. See Dahlquist Declaration at ¶ 5 (Attached as Exhibit 

B). Complaint Counsel inquired if any agreements could be made as to the admissibility of the 

documents. Respondents informed Complaint Counsel that it continued to object to the

admissibility of CX 1577 and CX 1578 and would not stipulate to their admissibility. See

Dahlquist Declaration at ¶ 5 (Attached as Exhibit B). Both parties agreed that they were at an 

impass with respect to these two documents and would be required to address the issue before 

this Court. See Dahlquist Declaration at ¶ 5 (Attached as Exhibit B). As is apparent from 

Complaint Counsel's inquiry on December 20, 2002, four days after JX 7 was submitted and 

admitted by this Court, both Complaint Counsel and Respondents were unaware that these 

documents had been entered into evidence four days earlier. 

Soon after Complaint Counsel informed Respondents of its desire to seek the 

admission of Mr. Vaughn's depositions, both parties discovered that CX 1577 and CX 1578 had 

previously been entered as part of JX 7. Respondents immediately requested that Complaint 

Counsel remove the two inadvertently admitted documents from evidence. See Dahlquist 

Declaration at ¶ 8 (Attached as Exhibit B). Complaint Counsel has thus far refused to remove 

the two inadvertently stipulated documents from evidence. Respondents have continually

maintained that Mr. Vaughn's depositions are inadmissible hearsay since their first appearance 

on Complaint Counsel's exhibit list and never intended for these two documents to become part 

of a joint stipulation. See Dahlquist Declaration at ¶ 10 (Attached as Exhibit B). As a result of 

Complaint Counsel's failure to accommodate Respondents' request to remove these documents, 

Respondents have filed this motion. 
4

II. The Documents At Issue Are Inadmissible Hearsay

Complaint Counsel has informed Respondents' that it is unwilling to remove the 

two exhibits at issue from evidence because they are properly admissible. Although

Respondents assert that the two exhibits are required to be removed from evidence solely

because they were inadvertently entered, Respondents also assert that the documents are not 

admissible because they contain inadmissible hearsay. 

The two documents at issue, CX 1577 and CX 1578, are the morning and 

afternoon deposition transcripts of John Vaughn, an expert witness retained by Respondents "for 

the sole purpose of analyzing and testifying about the opinions of the particular witness

identified in the confidential pleadings." See Order Granting Respondents' Motion to Modify 

Witness List (October 16, 2002) (Attached as Exhibit C). Complaint Counsel has suggested that 

the statements made by Mr. Vaughn in his deposition are admissible as admissions of a party 

opponent or party agent. 

First, consistent with this Court's Order during the pre-trial hearing held on

November 7, 2002, statements made by a former employee during a deposition do not constitute 

party admissions. See Final Pre-Trial Hearing Conference Tr. at 114:3-7 (Nov. 7, 2002) 

(Attached as Exhibit D). It is clear that Mr. Vaughn was not an employee of CB&I at the time 

his deposition was taken. Although Mr. Vaughn had a long career with CB&I, he has been 

retired since the end of 2000. Mr. Vaughn was clearly not an employee of CB&I when he 

submitted his expert report on October 23, 2002, and had his deposition taken on October 30, 

2002. 

Consistent with this Court's earlier ruling, the statements made by Mr. Vaughn do 

not constitute party admissions. On November 7, 2002, Complaint Counsel attempted to offer 
5

deposition testimony from various witnesses into evidence. This Court denied Complaint

Counsel's motion with respect one deponent, Carroll Davis, who also has been retired since 2000 

and was not an employee at the time his deposition was taken. See Final Pre-Trial Hearing 

Conference Tr. at 114:3-7 (Nov. 7, 2002) (Attached as Exhibit D). Consistent with this Court's 

ruling on November 7, 2002, the deposition testimony of Mr Vaughn is not admissible because 

he was not an employee of CB&I at the time his deposition was taken. 

Second, contrary to Complaint Counsel's assertions, the statements made by Mr. 

Vaughn in his deposition are hearsay and do not constitute admissions of a party agent. 

Complaint Counsel has attempted to argue that Mr. Vaughn's statements are admissions of a 

party agent. However, case law has held that expert witness testimony does not fall under 

801(d)(2). See Kirk v. Raymark Indus., Inc., 61 F.3d 147, 163-64 (3d Cir. 1995)(stating that an 

expert witness is not in the control of the party who hired him); see also Brandt v. Wand 

Partners, et al., 242 F.3d 6, 21 (1st Cir. 2001) (citing Kirk rule and stating that "an expert is more 

like an independent contractor offering his own opinion and is not ‘controlled’ by the party who 

employs him.”); A-Cal Copiers, Inc. v. North Am. Van Lines, Inc., 180 F.R.D. 183, 189 (D. 

Mass. 1998) (holding that the fact that a party hired a witness to prepare a report does not 

evidence the existence of an agency relationship as required by Rule 801(d)(2)(C) and (D) since 

the party who hired the witness did not “control” the investigation). 

III. Complaint Counsel Seeks To Use Statements Unrelated To The Expert's Narrow 

Purpose Ordered By This Court 

If this Court should find that the statements contained within CX 1577 and CX 

1578 are admissible, the admitted statements should be limited to the testimony directly related 

to Mr. Vaughn's expert report and this Court's order granting Respondents permission to add an 

expert "for the sole purpose of analyzing and testifying about the opinions of the particular 
6

witness identified in the confidential pleadings." See Order Granting Respondents' Motion to 

Modify Witness List (October 16, 2002) (Attached as Exhibit C). Since Mr. Vaughn has been 

retired from the tank industry since 2000 and is no longer familiar with the inner workings of 

CB&I, any testimony unrelated to his expert report is not reliable and should be excluded 

pursuant to FTC Rule 3.43. 

During the deposition of Mr. Vaughn, Complaint Counsel inquired into numerous 

areas concerning Mr. Vaughn's observations while at CB&I which were entirely unrelated to Mr. 

Vaughn's work as an expert in this case. Respondents objected to Complaint Counsel's treatment 

of Mr. Vaughn as a fact witness during the deposition, but permitted Complaint Counsel's 

inquiries in order to provide evidence of Mr. Vaughn's experience and status as an expert on the 

issues related to his report. See J. Vaughn Dep. Tr. 19:16-20:8 (October 30, 2002)(Vol. 2) 

(Attached as Exhibit E). Respondents now believe that Complaint Counsel is seeking to use Mr. 

Vaughn's deposition testimony for a purpose entirely unrelated to his expert analysis. If

Respondents attempted to have Mr. Vaughn testify on a variety of issues beyond the scope of 

this Court's limited order, Complaint Counsel would surely object. Respondents' ask that this 

Court hold Complaint Counsel to the same standard.

Respondents' clearly designated Mr. Vaughn as a expert witness for the limited 

purpose of reviewing the opinions and analysis of complaint Counsel's witness Chung Fan. 

Respondents did not identify Mr. Vaughn as a fact witness, nor would Respondents have been 

permitted to do so as a result of this Court's Order. Despite this limitation, Complaint Counsel 

repeatedly attempted to use Mr. Vaughn as a fact witness during his deposition in order to 

inquire as to the inner workings of CB&I. For example, Complaint Counsel made numerous 

inquiries similar to the following example:
7

Q. Is the estimating department at CB&I

at that time, was it subsumed underneath the sales

department?

A. Yes.

Q. Is that still the case to your

knowledge?

A. As of today I can't say because I'm

not an employee of CB&I.

J. Vaughn Dep. Tr. 12:19-13:2 (October 30, 2002)(Vol. 2)(Attached as Exhibit F). 

Complaint Counsel was aware that Mr. Vaughn had been retired in 2000 and his knowledge 

regarding CB&I and his experience in the industry was only current through December of 2000. 

Nonetheless, Complaint Counsel continually asked Mr. Vaughn questions regarding the

dynamics of a post acquisition CB&I. For example:

Q PDM has now merged with CB&I and that 

information should be available at CBI, is that 

correct?

A Well --

MR. DAHLQUIST: Object to the form.

THE WITNESS: Let me back up and maybe I 

could clarify this a little bit. At the time the 

Connecticut job was built, PDM and CBI were not 

together. 

Now, what happened after they came 

together, I don't know, and I don't know how 

information from one company transferred into the 

other company, and that very well may be the 

reason they were not able to provide that 

information to me.

J. Vaughn Dep. Tr. 14:3-17 (October 30, 2002)(Vol. 2) (Attached as Exhibit F). 

Complaint Counsel should not be permitted to introduce into evidence questions and answers 

that clearly went beyond the scope of Mr. Vaughn's expert report and the Order issued by this 

Court limiting Mr. Vaughn's purpose in this case. Any testimony outside of the scope of Mr. 
8

Vaughn's limited purpose as an expert providing opinions on the analysis of Chung Fan is clearly 

not reliable and should be excluded pursuant to FTC Rule 3.43. 

IV. Complaint Counsel Has Failed To Enter The Exhibits To Mr. Vaughn's Depositions, 

Rendering The Exhibits Incomplete

Complaint Counsel has acted unfairly in failing to include the exhibits to Mr. 

Vaughn's deposition, which includes his expert report, which are required to fully understand the 

testimony included within the depositions. In the event that this Court should decide that the 

inadvertently admitted documents should remain in evidence, Respondents request that Mr. 

Vaughn's expert report, a document that was labeled as an exhibit at the deposition, also be 

admitted into evidence. 

V. Conclusion

Since documents CX 1577 and CX 1578 were inadvertently admitted into 

evidence by both parties on JX 7 and are inadmissible hearsay, Respondents respectfully request 

that this Court grant this motion and permit both documents to be removed from the joint 

stipulation and from evidence. 

Dated: Washington, D.C.

December 31, 2002

____________________________

Jeffrey A. Leon

David E. Dahlquist

Winston & Strawn

35 W. Wacker Drive

Chicago, IL 60601-9703

(312) 558-5600 (voice)

(312) 558-5700 (fax)

jleon@winston.com

Counsel for Respondents

Chicago Bridge & Iron Company N.V.

and Pitt Des-Moines, Inc.
9

CERTIFICATE OF SERVICE

I, David E. Dahlquist, hereby certify that on this 31st day of December, 2002, I 

served a true and correct copy of: Respondents' Motion To Withdraw Inadvertently Stipulated 

Documents From Evidence, by hand delivery upon:

The Honorable D. Michael Chappell

Administrative Law Judge

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

(two copies)

Assistant Director

Bureau of Competition

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Room S-3602

Washington, D.C. 20580

Steven L. Wilensky

Federal Trade Commission

601 Pennsylvania Avenue, N.W.

Room S-3618

Washington, D.C. 20580

David E. Dahlquist

 
10

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

__________________________________________

)

In the Matter of )

)

CHICAGO BRIDGE & IRON COMPANY N.V., )

)

a foreign corporation, )

)

CHICAGO BRIDGE & IRON COMPANY, )

)

a corporation, ) Docket No. 9300

)

and )

)

PITT-DES-MOINES, INC., )

)

a corporation. )

__________________________________________)

DECLARATION OF DAVID E. DAHLQUIST

 I, David E. Dahlquist, do solemnly and sincerely declare as follows:

1. I am over the age of eighteen and competent to give testimony. The 

information set forth below is based upon my own personal knowledge information, and/or 

belief.

2. I am an attorney with Winston & Strawn and a member of the team 

representing the Chicago Bridge & Iron Company in the instant action brought by the Federal 

Trade Commission. 

3. Over the weeks preceding the submission of Joint Exhibit 7 ("JX 7"), I had 

dozens of conversations with Complaint Counsel concerning hundreds of documents that each 

party was seeking to enter into evidence. I had discussed with Complaint Counsel on numerous 

occasions that we continued to object to the submission of Mr. Vaughn's deposition testimony 
11

into evidence and were unwilling to stipulate to its admissibility. Both parties agreed that we 

were at an impass with respect to these documents and recognized the need to argue the 

admissibility of these documents before this Court at a future date.

4. In the days prior to the submission of JX 7, I reviewed numerous versions 

of a proposed JX 7 that were sent to me for review by differing attorneys from Complaint 

Counsel. Upon arriving in court on the morning of December 16, 2002, Complaint Counsel 

presented me with a final version of JX 7 for review which continued to contain last minute 

changes and additions. I hurriedly reviewed the list of exhibits contained on JX 7 and compared 

it with a list of document numbers I had complied detailing those documents to which we were 

unwilling to stipulate admissibility. Due to a typographical error, my list did not contain the two 

exhibits at issue in this motion. Due to time pressures, I was unable to verify the exhibit 

numbers with the actual documents. As a result, I mistakenly believed that we had resolved our 

issues relating to the documents contained within JX 7 and agreed to its submission to this Court, 

thereby inadvertently agreeing to the admission of two documents that continued to be at issue. 

5. On Friday, December 20, 2002, four days after JX 7 was admitted into 

evidence, Complaint Counsel informed me of its desire to seek the admission of John Vaughn's 

deposition testimony. As I had done numerous times before, I told Complaint Counsel that 

Respondents continued to object to the admissibility of these documents was not willing to 

stipulate to admissibility. Complaint Counsel informed me that they understood our objection 

but would seek to argue the admissibility of these documents before the Court prior to the close 

of their case. 

6. Shortly after my conversation with Complaint Counsel regarding its desire 

to have these document entered as evidence, Complaint Counsel informed me that Mr. Vaughn's 
12

deposition was marked as CX 1577 and CX 1578 and had already been admitted into evidence as 

part of the documents listed in JX 7.

7. I immediately informed Complaint Counsel that Respondents continued to 

have objections relating to the admissibility of CX 1577 and CX 1578 and stated that I had 

inadvertently agreed to their admission on JX 7. 

8. I immediately requested that Complaint Counsel remove the two

inadvertently admitted documents from the stipulation. 

9. I assumed the removal of the exhibits would not be an issue due to an 

occasion that occurred a few weeks earlier whe re I had removed exhibits from Respondents first 

joint document stipulation when Complaint Counsel represented that they had inadvertently

agreed to the admission of a few documents. At Complaint Counsel's request, I had removed 

those exhibits and asked Complaint Counsel to do the same. Complaint Counsel has thus far 

refused to remove CX 1577 and CX 1578 from their previously entered document stipulation.

10. Complaint Counsel has been aware of my continuing objection to CX 

1577 and CX 1578 since the documents first appeared on its exhibit list. As is evident from the 

conversation where Complaint Counsel expressed its desire to have these documents admitted as 

evidence, even though they were inadvertently admitted four days prior, Complaint Counsel was 

also clearly unaware that these documents were part of stipulation JX 7. 

I declare under penalty of perjury that the foregoing is true and correct.

Executed on December 31, 2002

_____________________________

David E. Dahlquist

1142786.5