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PUBLIC 

08 02 2012 

UNITED STATES OF AMERICA
	

BEFORE THE FEDERAL TRADE COMMISSION
	

OFFICE OF ADMINISTRATIVE LAW JUDGES
	

In the Matter of ) 

) 

McWANE, INC., ) PUBLIC 

) 

a corporation, and ) DOCKET NO. 9351 

) 

STAR PIPE PRODUCTS, LTD., ) 

a limited partnership, ) 

) 

Respondents. ) 

__________________________________________) 

MCWANE, INC.’S MOTION IN LIMINE TO PRECLUDE COMPLAINT COUNSEL’S 

PROPOSED PROFFER OF INVESTIGATIONAL HEARING TRANSCRIPTS AT 

TRIAL
	

Complaint Counsel has designated portions of 19 investigative hearing transcripts for use 

in their case in chief. (See Complaint Counsel’s Proposed Designations.) All 19 witnesses were 

also deposed in this matter after a much more complete documentary record was compiled in the 

Part 3 litigation. The depositions are thus much more reliable than the investigative hearings. 

Moreover, unlike the investigative hearings, McWane was able to cross examine all 19 witnesses 

at their depositions and to object to leading and other improper questions. Accordingly, the 

deposition transcripts (and, of course, live testimony) are more thorough and more reliable than 

the one-way and duplicative investigational hearing transcripts and McWane respectfully 

requests that this Court exclude the investigational hearing transcripts from evidence at trial 

under Rule 3.43(b). 16 C.F.R. § 3.43(b). McWane has met and conferred with Complaint 

Counsel on this issue, and while Complaint Counsel indicated they may be willing to withdraw 

designations for certain individual witnesses, they do not agree to the exclusion of all 

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investigative hearing transcripts, and the parties could not reach an agreement. 

FACTUAL BACKGROUND 

Complaint Counsel has designated excerpts from 19 investigative hearing transcripts for 

use in their case in chief. Complaint Counsel conducted these investigative hearings under Part 2 

of the Federal Trade Commission’s Rules of Practice, and pursuant to those rules Respondent 

was not given notice of 17 of the 19 ex parte hearings, did not have the right to attend 17 of the 

19 hearings, did not have the opportunity to contemporaneously cross-examine any of the 19 

witnesses, and did not have the opportunity to object to flawed questions at any of the 19 

hearings. 16 C.F.R. § 2.8(c). While witnesses are permitted to be represented by counsel at the 

investigative hearings, the Part 2 rules prohibit counsel from objecting or questioning the 

witnesses. 16 C.F.R. § 2.9(b). At the investigative hearings of McWane’s two witnesses, 

At investigative hearings of key witnesses from Sigma and Star, 

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. 

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* * *
	

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. 

Such questioning was completely improper and the risk of confusion outweighs any possible 

value. 

Finally, each of the 19 witnesses for which Complaint Counsel has designated 

investigative hearing testimony was also deposed in this matter, thus making the investigative 

hearing transcripts duplicative and unnecessary. To date there has been no suggestion that any of 

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these witnesses are unavailable to testify at trial and no suggestion that their deposition 

transcripts are insufficient for some reason. On the contrary, Complaint Counsel has listed each 

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of these witnesses on its Final Proposed Witness List and has designated portions of each of their 

deposition transcripts. 

ARGUMENT 

Rule 3.43(b) of the Commission’s Rules of Practice requires that “unreliable evidence 

shall be excluded.” 16 C.F.R. § 3.43(b). Rule 3.43(b) also states that evidence “may be 

excluded if its probative value is substantially outweighed by the danger of unfair prejudice, 

confusion of the issues, or if the evidence would be misleading, or by considerations of undue 

delay, waste of time, or needless presentation of cumulative evidence.” Id. Finally, Rule 3.43(d) 

directs the Administrative law Judge to control the presentation of evidence so as to make the 

presentation “effective for the ascertainment of the truth.” 16 C.F.R. § 3.43(d). 

First, Complaint Counsel’s designation of selected portions of investigative hearing 

testimony clearly violates 3.43(b)’s bar on “unreliable evidence,” of which any probative value 

of the testimony would be far outweighed by the danger of “unfair prejudice” and “confusion of 

the issues.” 16 C.F.R. § 3.43(b). Counsel for witnesses at the hearings did not have the right to 

object, and the witnesses themselves did not have the right to clarify or explain their testimony 

under questioning by their own counsel, or to review, correct and sign the transcripts. More 

importantly, McWane’s counsel was not present at 17 of the 19 hearings, could not object to the 

questions and was not permitted to cross examine any of the 19 witnesses. Thus, the prejudice to 

McWane would far outweigh the limited probative value here. The Supreme Court has held that 

the “right to confront, cross-examine and impeach adverse witnesses is one of the most 

fundamental rights” sought to be protected by the Constitution. Adickes v. S. H. Kress & Co., 

398 U.S. 144, 174 (1970). “It is only when the witnesses are present and subject to crossexamination that their credibility and the weight to be given their testimony can be appraised. 

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Trial by affidavit is no substitute for trial by jury which so long has been the hallmark of ‘even 

handed justice.’” Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473 (1962). 

Second, aside from the question of reliability, the investigative hearings are a “waste of 

time” and “needless presentation of cumulative evidence.” 16 C.F.R. § 3.43(b). Rule 3.33(b) 

provides that “[t]he fact that a witness testifies at an investigative hearing does not preclude the 

deposition of that witness.” 16 C.F.R. § 3.33(b). Following that provision, Complaint Counsel 

took the deposition of every witness who earlier provided testimony at investigative hearings.4 

Accordingly, there is no need for any use of the investigative hearing transcripts, and no 

prejudice to Complaint Counsel for being denied use of them, as they were present at each of the 

depositions. Admission of the investigative hearing testimony would thus violate Rule 3.43(b)’s 

injunction against “unreliable” evidence, and would be unnecessarily cumulative. 

Finally, Complaint Counsel presumably intends to call many of these witnesses live. 

(See Complaint Counsel’s Final Proposed Witness List.) Compared to reliance on investigative 

hearing transcripts, live testimony is widely recognized as being more conducive to the 

ascertainment of the truth. See Loinaz v. EG & G, Inc., 910 F.2d 1, 8 (1st Cir. 1990) (“testimony 

by deposition is less desirable than oral testimony and should ordinarily be used as a substitute 

only if the witness is not available to testify in person” . . . “second best, not to be used when the 

original is at hand”). If live testimony is not sought or not available, deposition testimony - -

based on a more complete documentary record and subject to the crucible of cross-examination 

(and with the ability to object to improper questions) - - is more probative than any one-way and 

early-stage investigational hearing transcript. As such, the testimony should be excluded for the 

additional reason that Complaint Counsel presumably intends to call each witness for which they 

4

 With the exception of three investigative hearings that Complaint Counsel is withholding transcripts on the basis of 

privilege. 

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have designated investigative hearing testimony live. 

CONCLUSION 

For the reasons set forth herein, McWane’s Motion is due to be granted. 

/s/ Joseph A. Ostoyich____
	

Joseph A. Ostoyich
	

One of the Attorneys for McWane, Inc.
	

OF COUNSEL: 

Joseph A. Ostoyich 

William C. 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 

andreas.stargard@bakerbotts.com 

J. Alan Truitt 

Thomas W. Thagard, III 

Julie S. Elmer 

Maynard, Cooper & Gale, P.C. 

1901 Sixth Avenue North 

2400 AmSouth/Harbert Plaza 

Birmingham, AL 35203-2608 

(205) 254-1000 

(205) 254-1999 (facsimile) 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

jelmer@maynardcooper.com 

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CERTIFICATE OF SERVICE 

I hereby certify that on August 2, 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. 

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__________________________________________ 

 

 

PUBLIC
	

UNITED STATES OF AMERICA
	

BEFORE THE FEDERAL TRADE COMMISSION
	

OFFICE OF ADMINISTRATIVE LAW JUDGES
	

In the Matter of ) 

) 

McWANE, INC., ) 

) 

a corporation, and ) DOCKET NO. 9351 

) 

STAR PIPE PRODUCTS, LTD., ) 

a limited partnership, ) 

) 

Respondents. ) 

__________________________________________) 

PROPOSED ORDER 

On July 27, 2012, McWane, Inc. filed its Motion in Limine to Preclude 

Complaint Counsel’s Use of Investigative Hearing Testimony at Trial. Upon 

consideration of this motion, it is hereby GRANTED. 

ORDERED: __________________________ 

D. Michael Chappell 

Administrative Law Judge 

___________, 2012 

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__________________________________________ 

 

 

PUBLIC
	

UNITED STATES OF AMERICA
	

BEFORE THE FEDERAL TRADE COMMISSION
	

OFFICE OF ADMINISTRATIVE LAW JUDGES
	

In the Matter of ) 

) 

McWANE, INC., ) 

) 

a corporation, and ) DOCKET NO. 9351 

) 

STAR PIPE PRODUCTS, LTD., ) 

a limited partnership, ) 

) 

Respondents. ) 

__________________________________________) 

STATEMENT REGARDING MEET AND CONFER 

Pursuant to Paragraph 4 of the Scheduling Order, counsel for McWane met 

and conferred in good faith with Complaint Counsel regarding the issues raised in 

this motion but could not reach an agreement. 

By:		 _/s/ William C. Lavery________ 

Counsel for McWane, Inc. 

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EXHIBIT 1
	

This exhibit has been 

marked Confidential 

and redacted in its 

entirety