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 l-'V '17 fil''' 'qi, ORIG\NAL 

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UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRAE COMMISSION 

In the Matter of ) Docket No. 9327

)

Polypore International, Inc., ) PUBLIC 

a corporation. ) 

) 

COMPLAINT COUNSEL'S POST-TRIAL PROPOSED FININGS OF FACT
 

AN CONCLUSIONS OF LAW ON REOPENED HEARING
 

RICHARD A. FEINSTEIN 

Director 

PETER J. LEVIT AS 

Deputy Director 

Bureau of Competition 

CATHARIE MOSCATELLI
 

Assistant Director 

MORRS BLOOM 

Deputy Assistant Director 

Bureau of Competition 

Mergers II 

DECEMBER i, 2009 

J. ROBERT ROBERTSON 

STEVEN DAH 

BENJAMIN GRIS 

JOEL CHRSTIE 

STEPHEN ANTONIO 

CHRSTIAN WOOLLEY 

PRIY A VISW ANA TH 

Federal Trade Commission 

Bureau of Competition 

600 Pennsylvania Ave., N.W. 

Washington, DC 20580 

Telephone: (202) 326-2008 

Fax: (202) 326-2884 

Counsel Supporting the Complaint 

-----I 
UNITED STATES OF AMERICA
 

BEFORE THE FEERAL TRADE COMMISSION 

DOCKET NO. 9327 

IN THE MATTER OF
 

POLYPORE, INTERNATIONAL, INC.
 

COMPLAINT COUNSEL'S POST-TRIAL
 

PROPOSED FINDINGS OF FACT
 

ON REOPENED HEARING
 
TABLE OF CONTENTS
 

1. Complaint Counsel has Proven that Respondent's Proffers Are Not True................. 1
 

A. Proffer #1 is not true ............................................................................................... 1
 

· Respondent's allegation in the first proffer that "after the close of the 

record" Exide decided to ~
 

L is not accurate because Exide has been ~ 

l........... ................................... 1
 

· Respondent's allegation in the first proffer that "Exide decided to 

move ~ L of its PE separator purchases for ~ 

L to another supplier" is not accurate because Exide has ~ 

L business to 

another supplier....................................................... ............... ...... ............... 1
 

· Respondent's allegation in the first proffer that "Exide decided to 

move ~ L its PE separator purchases for ~ 

L to another supplier" is not accurate because Exide has ~ 

l. ................2
 

· Respondent's allegation in the first proffer that Exide's purchase 

orders of ~ L ofPE separators "amounts to
 

approximately ~ L worth ofPE separators" is not accurate 

because Exide's 

. ............ ............. ....................................................................... 2
 

· Respondent's allegation in the first proffer that Exide's purchase 

orders of ~ L of PE separators "amounts to
 

approximately ~ L worth of PE separators" is not accurate 

even as to Exide's ~ L separator needs because it is not based on a ~ L needs .................... 3
 

· Respondent's allegation in the first proffer that Exide's 

~ L exceeded any reasonable forecast provided by


Exide is not accurate because Exide informed Daramic of 

...... .................... .......... ........... ................. ..... 3
 

· Respondent's allegation in the first proffer that Exide's 

~ L are a result of a decision to move ~ L 

of its business to another supplier is not accurate because Exide 

- ..
 
~ 

.................................. 4
 

· Respondent's allegation in the first proffer that Exide's 

~ L are "inconsistent with past order patterns" is not

accurate because Exide ~ .
 

.......................................................................................... 6
 

B. Proffer #2 is not true ............................................................................................... 7
 

· Respondent's allegation in the second proffer that "Exide does not 

intend to and wil not purchase any additional separators from Daramic 

in either ~ l" is not accurate because Exide intends on
 

purchasing separators from Daramic in ~ L ......................... 7
 

· Respondent's allegation in the second proffer that "Exide does not 

intend to and wil not purchase any additional separators from Daramic 

in either ~ l" is not accurate because Exide offered
 

................................................................................................7 

· Respondent's allegation in the second proffer that Exide wil have 

~ L of separators is not accurate because Daramic
 ~ L to Exide ..... 8 

C. Proffer #3 is not true ............................................................................................. 10 

· Respondent's allegation in the third proffer that Exide has decided 

not to purchase PE separators from Daramic in ~
 

L is not accurate because Exide ~
 

........................................ 10 

· Respondent's allegation in the third proffer that Daramic's 

decision to ~ L is based on Exide's
 

"apparent decision not to purchase PE separators from Daramic in 

~ l" is not accurate because Daramic has been
 

.................................. ..... ........ .................. .......... .............. ..... 10
 

D. Proffer #4 is not true ............................................................................................. 13
 

· Respondent's allegation in the fourth proffer that it "appears 

unlikely" that Daramic wil "retain any small amount of business from 

Exide in ~ l, or thereafter" is not accurate because Daramic
 

anticipates supplying Exide in ~ L with or without a contract ........... 13
 

II 
· Respondent's allegation in the fourth proffer that for Daramic to 

"retain any small amount of business from Exide in ~ J, or
 

thereafter" it "wil only be able to obtain such sales through a ~ 

l" is not accurate because Daramic has never offered Exide ~ l........................ 14
 

· Respondent's allegation in the fourth proffer that for Daramic to 

"retain any small amount of business from Exide in ~ J, or
 

thereafter" it '"wil only be able to obtain such sales through a ~
 

l" i offered ~ ls not accurate because Daramic has nev

....................... er
 15
 

· Respondent's allegation in the fourth proffer that for Daramic to 

"retain any small amount of business from Exide in ~ J, or
 

thereafter" it "wil only be able to obtain such sales through a ~ 

l" is not accurate because Daramic has not 

offered a ~ L on motive, UPS, or deep-cycle
 

separators ......................... ...................... ...... ............ ................................. 16
 

II. Exide is not a power buyer: ...................................................................................... 16
 

. ~
 

........... ........................................................... ............. 16
 

· Daramic has refused to provide Exide ~
 

L ......................................................................... 1 7
 

· Daramic' s proposed ~
 

.................... 17
 

. ~
 

............ 17
 

· Daramic has reneged on a commitment to Exide to~ 

l. ..... .......... .......... .......... ................ ......... ....... 18
 

· Daramic is refusing to ~
 

l ............................... 18
 

· Daramic has reneged on
 

................. 19
 

. ~
 

............................................ .......................................... 20
 

ii 
· Daramic has threatened 

.......................... 20
 

· Daramic is attempting to ~
 

...................... 20
 

II1. Other (Credibility): ..................................................... ...................................... ........ 21
 

PROPOSED CONCLUSIONS OF LA W................................................23
 

iv 
1. Complaint Counsel has Proven 
 that Respondent's Proffers Are Not True 

A. Proffer # 1 is not true 

· Respondent's allegation in the first proffer that "after the close of the record" 

Exide decided to ! 

L is not accurate because Exide has been! 

1 

1249. Exide decided to 

L (Gilespie, Tr. 5826­ 5827, in camera). 

L (Gilespie, Tr. 2966, in camera; see also Bregman, Tr. 2899-2901, 

in camera; CCFOF605). Mr. Seibert, who has only been in position at 

Daramic since late 2008, admitted that 

L (Seibert, Tr. 5730, in camera; PX5076 (Seibert, Dep. at 48), in camera).
 

1250. Exide's decision to ~
 

L (Gilespie, Tr. 5826-5827, in camera).
 

L (Gilespie, Tr. 5826, 2977,


3049, in camera). 

1251. While Exide has been ~
 

L (Gilespie, Tr. 5829, in camera). 

· Respondent's allegation in the first proffer that "Exide decided to move! 

L of its PE separator purchases for! L to another
 

supplier" is not accurate because Exide has ~ 

L business to another supplier
 

1252. Exide has ~
 

L (Gilespie, Tr. 5826, in camera). 

1253. When asked ifExide had ever informed him that it intended to ~ 

L (PX5076 (Seibert, Dep. at 48-49), in camera). Mr. 

Seibert admitted that ~
 

i 
"l PX5076 (Seibert, Dep. at 48-49), in camera). 

What Mr. Seibert does know is that 

l. (PX5076 (Seibert, Dep. at 74), in camera). 

1254. Mr. Gilespie testified that while Exide intends on purchasing 

L (Gilespie, Tr. 5826, 5838, in
 

camera). Moreover, Exide has
 

L (Gilespie, Tr. 5868, in
 

camera). Additionally, Exide would not ~
 

L (Gilespie, Tr. 5826-5828, in camera). 

1255. Because today Exide has
 

L (Gilespie, Tr. 5823, 5833,


in camera; CCFOFI254). 

· Respondent's allegation in the first proffer that "Exide decided to move ~ 

L its PE separator purchases for! L to another
 

supplier" is not accurate because Exide has!
 

L
 

1256. Exide ~
 

for such products. (Gilespie, Tr. 5829, in camera). 

1257. Exide has informed Daramic that it intends to ~ 

. (Gilespie, Tr. 5810, in camera, 5864-5865, in camera). In fact, 

Mr. Gilespie testified that Exide expects to ~ 

. (Gilespie, Tr. 5825-5826, in camera). 

· Respondent's allegation in the first proffer that Exide's purchase orders of ~ 

L ofPE separators "amounts to approximately ~ L worth 

ofPE separators" is not accurate because Exide's 

.. 

2
 
1258. Exide has not placed any ~ 

l. (Gilespie, Tr. 5798, in camera). Mr. Seibert admitted that
 ~ L (Seibert, Tr.
 5701, in camera). With respect to his conversations with Mr. Gilespie prior 

to Mr. Seibert's testimony in June, Mr. Seibert admits that ~" 

"l 

(PX5076 (Seibert, Dep. at 12), in camera). 

1259. Neither is Exide in any way ~ 

l. (Gilespie, Tr. 5800, 5832, in camera).
 

· Respondent's allegation in the first proffer that Exide's purchase orders of ~ 

L ofPE separators "amounts to approximately ~ 1 

worth ofPE separators" is not accurate even as to Exide's ~ L separator 

needs because it is not based on a ! 

L needs 

1260. ~
 

(Gilespie, Tr. 5862, in camera). It is unrealistic to use 

Exide's 

L (Gilespie, Tr. 5862, in camera). 

l 

(Gilespie, Tr. 5862, in camera). 

· Respondent's allegation in the first proffer that Exide's ! 1
 

exceeded any reasonable forecast provided by Exide is not accurate because 

Exide informed Daramic of ~ 

1261. Exide provided a ~
 

. (Gilespie, Tr.


5791-5792; Seibert, Tr. 5695-5696, in camera). Exide's 

. (Gilespie, Tr. 5792, in camera; Seibert, Tr. 5695­

5696, in camera). 

1262. Exide's 

earl. 

i l 

). Complaint Counsel's Findings of Fact use the term incremental orders in all 

instances for the sake of consistency. 

3 
(Gilespie, Tr. 5792, 5860, in camera). Thus, Exide informed Daramic ~ 

. (RXOI715, in camera H 

)). Mr. Seibert admitted that
 

. (Seibert, Tr. 5697, in camera).
 

1263. Exide's
 

. (PX5076 (Seibert, Dep. at 6, 9), in camera). 

1264. Mr. Seibert wrote a letter to Mr. Gilespie on June 2, 2009, two days before he 

testified in the previous hearing, acknowledging that Daramic 

(PX5076 

(Seibert, Dep. at 10, in camera)). Mr. Seibert confirmed that ~ 

(PX5076 (Seibert, Dep. at 10-11), in camera). 

1265. Exide began
 

. (Gilespie, Tr. 5795, 5845-5846, in camera). 

1266. Exide placed ~
 

. (Gilespie, Tr. 5844-5845, 5860, in camera). 

· Respondent's allegation in the first proffer that Exide's ! 1
 

are a result of a decision to move ~ L of its business to another 

supplier is not accurate because Exide 

1267. The only reason that Exide 

. (Gilespie, Tr. 5795­

5796, in camera). In fact, but for the 

(Gilespie, Tr. 5813, 5832, in camera). 

2 Mr. Seibert attempted to evade this question at trial, insisting that he "would have to see a 

communication." (Seibert, Tr. 5699, in camera). Complaint Counsel was forced to impeach him with his 

deposition testimony. (Seibert, Tr. 5699-5701, in camera). 

4
 
l 

1268. Moreover, Mr. Gilespie informed Mr. Seibert and Mr. Roe that 

(Gilespie, Tr. 5796, in camera). Indeed, Daramic admitted that it 

(RX01679 at 002, in camera). 

1269. ~
 

. (Gilespie, Tr. 5789-5790, 5859, in camera; see also RXOI720 at 19­

20, in camera H 

(Gilespie, Tr. 5791, in camera). ~ 

L (Gilespie, Tr. 5793, in camera). 

1270. Exide's concern about a potential 

. (Gilespie, Tr. 5793, 5831, in camera).
 

1271. ~
 

L (Gilespie, Tr. 5798, 5837, in camera; RXOI720 at 019, in camera). Mr. Seibert agreed that all ofExide's 

. (Seibert, Tr. 5699, in
 

camera). Despite this, Daramic is 

. (Gilespie, 5803-5805, in camera).
 

1272. Mr. Gilespie testified that Exide is not ~ 

l. (Gilespie, Tr. 5832, in camera). Mr. Gilespie testified that ifExide was 

separators. (Gilespie, Tr. 5832, in camera). 

5 

-.,
 ." .. 
· Respondent's allegation in the first proffer that Exide's ! 1
 

glre "inconsistent with past order patterns" is not accurate because Exide 

~ 

1273. 2009 was not the first year that Exide ~ 

l. (Gilespie, Tr. 5806, 5833, in camera). In 2008, Exide 

(Gilespie, Tr. 5806, in camera). The reasoning for Exide's 

~ 

. (Gilespie, Tr. 5806, 5833, in


camera). Just as Exide 

. (Gilespie, Tr. 5806, in camera). 

1274. Mr. Seibert admitted that Exide's 

(Seibert, Tr. 5734, in camera). 

1275. As the findings above show, Exide's decision to 

L was 

adopted long before the close ofthe record on June 22, 2009. (CCFOF 1249 ­

1251). ~
 

L (CCFOF 1252 - 1255). Exide wil also ~ 

. (CCFOF 1256 - 1257). 

1276. Exide has not placed orders for ~ L worth ofPE separators from Daramic because 

(CCFOF 1258 - 1259). Nor has it placed orders for ~ L separators from Daramic because Daramic's 

. (CCFOF 1260). Moreover, Exide's 

placement of
 

L before the close ofthe record on June 22, 2009. (CCFOF 1261 ­

1266). 

6 
1277. Exide's decision to place 

. (CCFOF 1267 - 1272). Exide told

Daramic
 

. (CCFOF 1268).
 

l 

(CCFOF 1273-1274). 

B. Proffer #2 is not true 

· Respondent's allegation in the second proffer that "Exide does not intend to 

and wil not purchase any additional separators from Daramic in either! 

l" is not accurate because Exide intends on purchasing separators from Daramic in! 1
 

1278. Exide has informed Daramic that it intends to ~ 

that 

Exide expects to . (Gilespie, Tr. 5810, in camera). In fact, Mr. Gilespie testified 


. (Gilespie, Tr. 5825-5826, in camera).
 

1279. Exide has consistently informed Daramic that it 

. (Gilespie, Tr.


5864-5865, in camera). Between July and October 2009, Mr. Gilespie 

~ 

. (Gilespie, Tr. 5864, in camera; RX01669 at 002, in camera 

(~ D; RX01687 at 002, in camera). Moreover,


on September 30, 2009, Exide's CEO, Mr. Gordon Ulsh, informed Mr. Toth 

that ~
 

(RX01704 at 001, in camera). 

1280. ~
 

l 

(R01687 at 002, in camera; Gilespie, Tr. 5812-5813, in camera). 

· Respondent's allegation in the second proffer that "Exide does not intend to 

and wil not purchase any additional separators from Daramic in either ~ 

l" is not accurate because Exide offered 

7
 
1281. In October 2009, after Daramic ~
 

. (Gilespie, Tr. 5815, in camera). A purchase order is a "firm commitment" and "by definition" is also a contract. 

(Gilespie, Tr. 5815, 5865-5866, in camera). Mr. Gilespie testified that Exide 

~ 

. (Gilespie, Tr. 5815-5816, in camera). According to Mr. 

Gilespie, Daramic' s immediate response was that it ~ 

. (Gilespie, Tr. 5865-5866, in camera).
 

1282. Mr. Seibert later wrote to Mr. Gilespie on October 20,2009, that ~ 

(RX01693 at 002, in camera).

Mr. Seibert confirmed that Mr. Gilespie had 

(Seibert, Tr. 5712, in camera). Mr. Seibert's letter to Mr. Gilespie 

~ 

. (Gilespie, Tr. 5870-5871, in camera; RX01693 at 002, in 

camera). 

· Resp-ondent's allegation in the second proffer that Exide will have ~
 

L of separators is not accurate because Daramic !
 

L to Exide 

1283. Exide wil not have
 

(Gilespie, Tr. 5860, in


camera). Daramic has not agreed to ~ 

. (Gilespie,
 

Tr. 5799,5860, in camera). Daramic has not even ~
 

(Seibert, Tr. 5707, in camera). To date, Exide has ~ 

. (Seibert
 

Tr. 5707-5708, in camera; PX5076 (Seibert, Dep. at 51), in camera; Gilespie, 

Tr. 5799, in camera). 

1284. The total amount of ~ 

. (Gilespie, Tr. 5799, in camera). 

8 
1285. Mr. Seibert testified that it would be 

(Seibert, Tr. 5714-5715, in camera; RX01685 at 001, in camera). Mr. Seibert confirmed at 

his deposition that it would be ~ 

l. (PX5076 (Seibert, Dep. at 38), in camera). 

1286. Mr. Seibert did not know whether or not Daramic would 

(Seibert, Tr. 5720, 5722, in camera). When asked at his deposition whether 

~ 

(PX5076 (Seibert, Dep. at 53), in camera). 

1287. On October 20,2009, Daramic reiterated that it 

"l 

(RX01693 at 001-002, in camera). 

1288. ~
 

L (Seibert, Tr. 5672-5673, 

5707, in camera). 

1289. As the findings above show, Exide has told Daramic it intends to ~ 

(CCFOF 1254 - 1257, 1278-1280). Exide also 

. (CCFOF 1281 - 1282). ~ 

(CCFOF 1281 - 1282). 

1290. Exide wil not receive 

. (CCFOF 1283 - 1287). Daramic has agreed to 

~ 

. (CCFOF 1283, 1286-1288). The 

~ 

. (CCFOF 1284). 

L (CCFOF 1288). 

9 

l 
C. Proffer #3 is not true 

· Respondent's allegation in the third proffer that Exide has decided not to 

purchase PE separators from Daramic in ~ L is not
 

accurate because Exide ! 

1 

1291. ~
 

L (See CCFOF 1252 - 1257). 

· Respondent's allegation in the third proffer that DaramIc's decision to! 

L is based on Exide's "apparent decision not to purchase PE separators from Daramic in ~ l" is not accurate because 

Daramic has been 

1292. Polypore, through its corporate finance personnel and its Daramic business 

unit, has been 

. (PX5075 (Toth, Dep. at 8-9), in camera; Toth, Tr. 5775-5777, in camera). Mr. Toth, 

Polypore's CEO recalled discussing that with Complaint Counsel a year and a 

half earlier. (PX5075 (Toth, Dep. at 9), in camera; Toth, Tr. 5775-5777, in 

camera). 

1293. Daramic is 

. (Seibert, Tr. 5692-5693, in camera). 

~ 

(Seibert, Tr. 5693, in camera). 

1294. Polypore was always
 

L (RXOI692 at 001-002, in camera). In 

analyzing its options 

(Seibert, Tr. 5693, in camera). 

1295. The assessment of ~ 

L (Toth, Tr. 5777, in camera). Daramic has two large North 

American separator plants - Corydon and Owensboro ­

(Toth, Tr. 5737, in camera). 

(Toth, Tr. 5737, in camera). 

1296. With regard to the former Microporous facility located in Piney Flats, TN, 

Daramic's third North American separator facility, that plant is operating ~ 

l. (Toth, Tr. 5777-5778, in camera). Mr. Toth had 

10 
~ 

. (Toth, Tr. 5777, in camera).
 

1297. Neither Mr. Toth nor Mr. Seibert ever testified that the reason ~
 

.J (See generally, 

Toth, Tr. 5737-5782, in camera; Seibert Tr. 5643-5735, in camera). 

L (Toth, Tr. 5748, in camera; see also Polypore 

Opening Statement, Tr. 5610 ~ 

l 

1298. ~
 

L (Toth, Tr. 5747-5748, in 

camera). ~
 

(Toth, Tr. 5748, 

in camera). 

L (Toth, Tr. 5748-5749, in camera). 

1299. Mr. Seibert testified that Daramic 

(Seibert, Tr. 5694, in camera). 

~ 

L (Seibert, Tr. 5645, in camera). 

~ 

(Seibert, Tr. 5694, in camera). This is, as Mr. Seibert confirmed on the stand, because Daramic needed to ~ L (Seibert, Tr. 5718-5719, 

in camera). 

1300. Regardless ofExide's
 

. (Seibert, Tr. 5718-5719, in camera). When asked what the ~
 

3 That Mr. Seibert singles out Daramic's 

L 4 Mr. Seibert evaded this question at trial and had to be impeached with his deposition testimony, which he 

finally adopted. (Seibert, Tr. 5717-5719, in camera). 

11 
(PX5076, Seibert Dep. at 84-85, in camera). 

1301. When asked at his deposition whether Daramic might decide not to 

(PX5076 (Seibert, Dep. at 81), in camera). 

1302. Mr. Toth confirmed that even if 

. (PX5075 (Toth, Dep. at 58-59), in camera). 

1303. Moreover, DaramIc refused to even consider 

. (RX01693 at 002, in camera; Seibert,

Tr. 5712, in camera). 

1304. Polypore's internal documents reiterate that ~ 

. (RXO 1692 at


001-002, in camera). 

1305. Polypore anticipated a 

. (RX01692 at 002, in camera). 

Polypore believes that there is ~ ~ l.
 l. (RX01692 at 002, in camera). Yet, under all scenarios,

(RX01692 at 002, in camera). 

1306. In fact, even under the 

. (RXO 1692 at 002, in camera). 

1307. As the findings above make clear, Exide's PE separator purchasing decision 

for ~
 

. (CCFOF 1292 - 1295, 1297 - 1306).
 

L (CCFOF 1292). The reasons Polypore decided to ~
 

12 

~ 
L (Toth, Tr. 5737; 5747-5748, in camera).' 

1308. ~
 

L (CCFOF 

1253 -1255, 1305 - 1306, 1309-1311). ~
 

L (CCFOF 1304 - 1305). 

L (CCFOF 1304 - 1306). 

D. Proffer #4 is not true 

· Respondent's allegation in the fourth proffer that it "appears unlikely" that 

Daramic wil "retain any small amount of business from Exide in f 1.
 

thereafter" is not accurate because Daramic anticipates supplying Exide in 

1 L with or without a contract
 

1309. Polypore expects that Exide wil continue purchasing PE separators from 

Daramic in 2010, after the NASA expired. ~ 

Rather, Mr. Toth, reported to Polypore's investors, to whom 

he has a duty to be truthful, that Daramic anticipates maintaining a supply 

position with Exide with or without a contract. (Toth, Tr. 5769, in camera; 

Seibert, Tr. 5724). When confronted with the statement, Mr. Toth testified 

that it "sounds like something I would have said." (Toth, Tr. 5769, in 

camera). 

131 O. ~
 

L (Seibert, Tr. 5729-5730, in 

camera). ~
 

L (RXOI692 at 002, in 

camera). ~
 

L (RX01692 at 002, in camera). 

1311. Moreover, Exide has informed Daramic that they intend on ~ 

l. 

(Gilespie, Tr. 5810, in camera; see also PX5076 (Seibert, Dep. at 74), in 

camera). 

13 
· Respondent's allegation in the fourth proffer that for Daramic to "retain any 

small amount of business from Exide in ~ l, or thereafter" it "wil only be 

able to obtain such sales through a ! l" is no!
 

accurate because Daramic has never offered Exide ! 

1 

1312. ~
 

L (See generally, CCFOF 1069-1078). 

1313. Mr. Seibert was unable to testify as to ~ 

(Seibert, Tr. 5722, in camera). Mr.

Seibert could not testify as to 

L (PX5076 

(Seibert, Dep. at 101), in camera). Mr. Seibert confirmed at trial that he did 

not know what ~
 

l. (Seibert, Tr. 5726, in camera). Mr. Seibert was unable to even 

confirm that Daramic would 

l. (Seibert, Tr. 5725, in camera). Mr. Seibert

could not testify about anything less than 

L (Seibert, Tr. 5725, in

camera). 

1314. Mr. Seibert testified that Daramic had not even resolved whether it would 

~ 

. (PX5076 (Seibert, Dep. at 101), in camera). 

1315. Daramic has not considered what ~ 

(Seibert, Tr. 5723, in camera). IfExide does not ~ 

(PX5076 (Seibert, Dep. at 96), in camera). Mr. Seibert testified that the possibility that Exide would ~ L
 

(PX5076 (Seibert, Dep. at 96), in camera). While Mr. Seibert testified that 

~ 

(Gilespie, Tr. 5814-5815, in camera). 

5 Mr. Seibert evaded this question at trial and had to be impeached with his deposition testimony, which he 

finally adopted. (Seibert, Tr. 5725-5726, in camera). 

14 
· Respondent's allegation in the fourth proffer that for Daramic to "retain any 

small amount of 
 business from Exide in ~ J, or thereafter" it "wil only be 

able to obtain such sales through a ! l" is not
 

accurate because Daramic has never offered f 

1 

1316. ~
 

L (See e.g., RXOI713-003, in 

camera H 

)J; see also RX01666 at 002, in camera; RX01667 at 

002, in camera; RX1668 at 02, in camera; RX01683 at 001, in camera; 

RX01718 at 002, in camera; RX01714 at 002, in camera). 

1317. As recently as October 1, 2009, Daramic understood that 

L (Toth, Tr. 5749-5750, in camera). Despite that 

understanding, Daramic, ~
 

. (Toth, Tr. 5750-5751, in camera; Seibert, Tr. 5663-5664, in 

camera; see also RXO 1714 at 001-003, in camera ( 

)). 

131 8. Mr. Seibert testified at trial that Daramic has not ~ 

. (Seibert, Tr.


5725, in camera). Mr. Seibert testified that 

. (Seibert, Tr.


5663-5664, in camera). 

1319. Mr. Seibert testified that all of the ~ 

l. (PX5076 (Seibert, Dep. at 33-34), in camera). 

When challenged at his deposition that Daramic had never 

(PX5076 (Seibert, Dep. at 30­ 31), in camera). 

1320. Mr. Gilespie testified that Exide has 

6 Mr. Seibert evaded this question at trial and had to be impeached with his deposition testimony. (Seibert, 

Tr. 5703-5706, in camera). 

15 
l. (Gilespie, Tr. 5814, in
 

camera). Mr. Gilespie testified Daramic has never 

. (Gilespie, Tr. 5814, in camera). 

· Respondent's allegation in the fourth proffer that for Daramic to "retain any 

small amount of 
 business from Exide in ~ L or thereafter" it "wil only be 

able to obtain such sales through a ! l" is not


accurate because Daramic has not offered a ~ L on 

motive. UPS. or deep-cycle separators 

1321. Daramic has not offered ~ 

l. (Gilespie, Tr. 5808-5810, in camera). Daramic has also not 

offered to ~
 

L (RX01667 at 002, in camera). 

1322. As evidenced in previous findings, Daramic expects to 

. (CCFOF 1253­ 1255, 1305 - 1306). However, Daramic has never ~ 

. (CCFOF 1312 - 1315).

To this day, Daramic has only 

(CCFOF 1312, 1316-1320). However, because Daramic is 

. (CCFOF 1321). 

II. Exide is not a power buyer:
 

. ~
 

1323. ~
 

L (Seibert, Tr. 5645, in camera). 

1324. Daramic has been unwiling to ~ 

l. (Gilespie, Tr. 5817, in camera). ~ 

L (Seibert, Tr. 5690,5715, in camera). 

"l (Seibert, Tr. 5716,
 

in camera). 

16 

~- .."'
 .. 
· Daramic has refused to provide Exide ! 

1 

1325. Daramic has never offered 

(CCFOF 1316-1318, 1320; Toth Tr. 5750, in camera). 

L (Gilespie, Tr. 5814-5815, in camera). 

· Daramic' s proposed ~
 

1326. Exide currently pays ~ L for SLI separators in
 

North America. (Gilespie, Tr. 3018-3020, 3059, in camera). ~ 

L 

(Gilespie, Tr. 5807-5808, in camera). This fact is well-known by both 

companies, and is the result of ~ 

l. (Gilespie, Tr. 5807, in camera).
 

L (Gilespie, Tr. 5807­ 5808, in camera). 

1327. Notwithstanding the fact that Exide is Daramic's 

. (PX5076 (Seibert, Dep. at 75­ 76), in camera). 

. ~
 

1328. ~
 

(PX5076 (Seibert, Dep. at 58), in 

camera). ~
 

"l 

(RX01685 at 001, in camera) 

1329. Daramic has only agreed to ~ 

l. (Seibert, Tr. 5707, in camera). Mr. Seibert testified that the 

17
 
L 

l. (PX5076 (Seibert, Dep. at 58), in camera). 

1330. ~
 

(Toth, Tr. 5766, in camera; see also Seibert, Tr. 5694-5695, in camera). 

1331. Mr. Seibert testified at his deposition that Daramic has not 

. (PX5076 (Seibert, Dep. at 27), in camera). 

· Daramic has reneged on a commitment to Exide to!
 

1
 

1332. On August 13, 2009 Mr. Seibert informed Mr. Gilespie that ~ 

l 

(RXOI670, in camera). 

1333. Mr. Gillespie testified that in August 2009, Daramic confirmed 

. (Gilespie, Tr. 5800, in camera). Later, Daramic 

reneged on this 

. (Gilespie, Tr. 5800-5801, in camera).
 

· Daramic is refusing to ~
 

1334. In recent months, Daramic has been
 

l. 

(Gilespie, Tr. 5821-5822, in camera). On October 20,2009, Mr. Seibert 

wrote to Mr. Gilespie notifying him that ~ 

L (RXO 1693 at 002, in camera). 

1335. ~
 

18 
L (Gilespie, Tr. 5822, in camera). 

l 

(Gilespie, Tr. 5822, in camera). Mr. Gilespie testified that ~ 

L (Gilespie, Tr. 5867, in camera). 

1336. Daramic's refusal to ~ , 

L 

(Gilespie, Tr. 5805, in camera). Daramic is the only one ofExide's 15,000 suppliers that has ~ l.
 

(Gilespie, Tr. 5822, in camera). Daramic's refusal to ~ 

. (Gilespie, Tr. 5822-5823, in camera). 

· Daramic has reneged on
 

1337. In September 2009 Daramic had agreed to
 

(RX01685 at 001, in camera). 

1338. However, by October 20th, when ~ 

. (RX01693 at 001, in camera). Daramic informed 

Exide that the ~ 

l. (RX01693 at 001, in camera). 1339. ~ L (Gilespie, Tr. 5801, in camera). In response to the question whether Daramic would give 

~ 

L (PX5076 (Seibert, Dep. at 71-72), in camera). 

19 
. ~
 

1340. ~
 

L (Gilespie, Tr. 5829, in camera). Mr. Gilespie 

testified that Exide expects to ~ 

. (Gilespie, Tr. 5825-5826, in camera). 

. Daramic has threatened
 

1341. During discussions about a 

(Gilespie, Tr. 5817-5818, in camera). Mr. Gilespie 

understood Mr. Bryson's comment to be 

L (Gilespie, Tr. 5818, in camera). 

1342. Exide believes that 

(Gilespie, Tr. 5829-5830, in camera). Mr. Gilespie testified that ifExide were 

L (Gilespie, Tr. 5818,5829,5867, in camera). Moreover, Exide's industrial battery 

manufacturing facilities accounted for more than 35% of 
 Ex ide's net sales in 

its most recent quarter. (RXOI726 at 006,015). 

· DaramIc is attempting to ~ 

1343. Daramic has attempted to link any ~ 

. (Gilespie, Tr. 5819, in
 

camera). Polypore's general counsel explained to Mr. Gilespie that 

DaramIc's reasoning for linking the ~ 

"l 

(Gilespie, Tr. 5820, in camera). Exide understood from these comments that 

Daramic was attempting to 

L (Gilespie, Tr. 5820, in camera). 

20
 
1344. As the above findings indicate Exide is not a power buyer. ~ 

L (CCFOF 1326 - 1327). Moreover, Daramic's refusal to provide Exide ~ L (CCFOF 1320, 1325), along with Exide's inability to ~ 

L (CCFOF 1317, 1324); its inability to have 

~ 

(CCFOF 1328 - 1330, 1332 - 1336);

its inability to have 

(CCFOF 1337 -1339); its inability to ~ 

L (CCFOF 1256, 1340); its inability to ~ 

(CCFOF 1341 - 1342); and its inability to 

(CCFOF 1343), all indicate that Exide is not a power buyer. 

II. Other (Credibility):
 

1345. At trial, when Mr. Seibert was asked ~ 

(Seibert, Tr. 5701, in camera). At his deposition, Mr. Seibert gave the following testimony: 

~ 

l 

(PX5076 (Seibert, Dep. at 27), in camera). 

1346. Mr. Seibert testified in his deposition that he had not 

. (PX5076 

(Seibert, Dep. at 27), in camera). The deposition began at 12:51 pm at the 

21 
offices of 
 Parker Poe on October 27. (PX5076 (Seibert, Dep. at 3), in 

camera). At the end of 
 the deposition, after a lengthy break and under 

redirect, Mr. Seibert testified that~ 

(PX5076 (Seibert, Dep. at 102), in camera). In his deposition testimony, Mr.

Seibert made no mention of ~ l. At trial,
 

Mr. Seibert testified that 

(Seibert, Tr. 5703, in camera). Mr. Seibert's testimony at trial, that he had communicated at his 

deposition that Daramic had 

. (Seibert, Tr. 5703, in camera; PX5076 

(Seibert, Dep. at 102), in camera). 

1347. When Respondent produced its exhibits to Complaint Counsel it included a 

letter from ~ 

(RXOI719, in camera). The timing ofthis letter, ~ 

is extraordinarily 

suspicious. (RXOI719, in camera; Seibert, Tr. 5703, in camera). 

22
 
UNITED STATES OF AMERICA
 

BEFORE THE FEERAL TRADE COMMISSION 

DOCKET NO. 9327 

IN THE MATTER OF
 

POL YPORE, INTERNATIONAL, INC.
 

COMPLAINT COUNSEL'S
 

PROPOSED CONCLUSION OF LAW 

23
 
1348. A prima facie violation of Section 7: (I) the "line of commerce" or product
 

market; (2) the "section ofthe country" or geographic market; and (3) the
 

transaction's probable effect on concentration in the product and geographic
 

markets. FTC v. HJ. Heinz Co., 246 F.3d 708, 713 (D.C. Cir. 2001); FTC v. 

University Health, Inc., 938 F.2d 1206, 1218 (11th Cir. 1991); United States v. 

Baker Hughes Inc., 908 F.2d 981 (D.C. Cir.1990). 

1349. Finding aprimafacie violation of 
 Section 7 creates a rebuttable presumption of 

anticompetitive effects and shifts the burden of going forward with evidence to 

Respondent. Respondent have the burden of producing evidence that shows that 

the market share statistics supporting the prima facie case give an inaccurate 

account of 
 the acquisition's probable effects on competition. Baker Hughes, 908 

F.2d at 982-83; FTC v. Cardinal Health, 12 F. Supp. 2d 34,54 (D.D.C. 1998). 

1350. The appropriate lines of commerce within which to evaluate the probable 

competitive effects of the acquisition are separators for flooded lead-acid batteries 

in the following markets: (I) deep-cycle; (2) motive; (3) Automotive ("SLI"); and 

(4) uninterruptable power supply stationary ("UPS"). 

1351. The appropriate geographic area within which to evaluate the probable 

competitive effects of 
 the acquisition is North America. 

1352. A merger that significantly increases market shares and market concentration 

beyond already high levels is so inherently likely to lessen competition 

substantially that it is presumptively unlawful under Section 7 ofthe Clayton Act. 

United States v. Philadelphia Natl Bank, 374 U.S. 321, 363 (U.S. 1963); Baker 

Hughes, 908 F.2d at 982-83; PPG, 798 F.2d at 1502-03; Cardinal Health, 12 F. 

Supp. 2d at 52 ("under Section 7 ofthe Clayton Act, a prima facie case can be 

made ifthe government establishes that the merged entities wil have a significant 

percentage ofthe relevant market - enabling them to raise prices above 

competitive levels"). 

1353. The Herfindahl-Hirschman Index ("HHI") is an appropriate measure of market 

concentration. E.g., University Health, 938 F.2d at 1211 n.12 (HHI is "most 

prominent method" of 
 measuring market concentration); FTC v. Staples, 970 F. 

Supp. 1066, 1081-82 (D.D.C. 1997); Ivaco, 704 F. Supp. at 1419. 

1354. Complaint Counsel established its prima 
 facie case by showing that the acquisition produces a firm controllng a percentage share and HHI concentration 

levels in each of the four relevant markets that make the merger inherently likely 

to lessen competition substantially, which means that the merger is presumptively 

unlawful under Section of7 ofthe Clayton Act. Brown Shoe, 370 U.S. at 343. 

24
 
1355. Complaint Counsel established that Daramic and Microporous were the number 

one and two competitors in the deep-cycle, motive, and UPS markets and that no 

other company provides effective competition. Complaint Counsel established 

that Microporous was at least the third best alternative for customers in the SLI 

market. The acquisition of Micro porous by Daramic significantly increased 

concentration in the relevant product markets in North America, and resulted in 

highly concentrated markets. 

1356. Having established a prima facie case, the burden of production and proof shifts 

to the defendants to rebut this presumption of anticompetitive harm. United 

States v. Marine Bancorporation, Inc., 418 U.S. 602, 631 (U.S. 1974); Heinz, 246 

F.3d at 715; Baker Hughes, 908 F.2d at 982-83. "The more compellng the prima 

facie case, the more evidence the defendant must present to rebut it successfully." 

Heinz, 246 F.3d at 725 (quoting Baker Hughes, 908 F.2d at 991). Respondent has 

not demonstrated that the market share statistics give an inaccurate prediction of 

the acquisition's probable effects on competition. "To meet their burden, the 

defendants must show that the market-share statistics. . . 'give an inaccurate 

prediction ofthe proposed acquisition's probable effect on competition.'" 

Cardinal Health, 12 F. Supp. 2d at 54 (quoting Staples, 970 F. Supp. at 1083); see 

Baker Hughes, 908 F.2d at 991. 

1357. The power buyer argument is not itself 
 independently adequate to rebut a prima 

facie case. Chicago Bridge & Iron Co. N. v., 534 F.3d 410, 440 (5th Cir. 2008); 

FTC v. Cardinal Health, 12 F.Supp. 2d 34,61 (D.D.C. 1998). 

1358. The presence of 
 powerful buyers can be considered "along with other such factors 

as the ease of entry and likely effciencies." Chicago Bridge & Iron Co. N. v., 534 

F.3d 410,440 (5th Cir. 2008) (quoting FTC v. Cardinal Health; 12 F.Supp. 2d 34, 

58 (D.D.C. 1998).
 

1359. The presence of 
 multiple supply alternatives is a critical factor in establishing the 

applicability of a power buyer argument. 

1360. In order to show precompetitive impact of 
 power buyers Respondent must show 

that buyers continually play suppliers off against one another to establish a 

defense. United States v. Archer-Daniels-Midland Co., 781 F. Supp. 1400, 1419 

(S.D. Iowa 1991). 

1361. When the presence of 
 powerful customers with the ability to protect themselves 

from anticompetitive price increases has been established, the presence of smaller, 

less powerful customers in the relevant market invalidates a power buyer defense. 

United States v. United Tote, 768 F.Supp.1064 (D. DeL. 1991); FTC v. Cardinal 

Health, 12 F.Supp. 2d 34, 40 (D.D.C. 1998).
 

1362. The presence of small buyers undermines a power buyer argument unless the 

smaller purchasers possess similar bargaining power to their larger counterparts, 

25 
with a demonstrated ability to negotiate "meaningful discounts" from suppliers in 

the relevant market. United States v. Archer-Daniels-Midland Co., 781 F. Supp. 

1400, 1419 (S.D. Iowa 1991). 

1363. The validity ofthe power buyer argument depends, in part, on the ability of the 

large buyers to "directly affect the market price" of the input or product in 

question. United States v. Archer-Daniels-Midland Co., 781 F. Supp. 1400, 1416 

(S.D. Iowa 1991). 

1364. Respondent has not demonstrated that it is constrained by power buyers. 

1365. Post-acquisition evidence that is subject to manipulation by the part seeking to 

use it is entitled to little or no weight. In re Chi. Bridge & Iron Co. N V, 139 

F.T.C. 553, 583 n.97 (F.T.C. 2005); Hospital Corp. of America v. FTC, 807 F.2d 

1381, 1384 (7th Cir. 1986) ("Post-acquisition evidence that is subject to 

manipulation by the party seeking to use it is entitled to little or no weight."); B.F. 

Goodrich Co., 110 F.T.C. 207, 341 (1988). 

1366. The events, transactions, and evidence presented by Respondent are subject to 

manipulation by it. This evidence is entitled to little or no weight. 

1367. Respondent has not produced any significant evidence rebutting the presumption 

of a violation of Section 7 ofthe Clayton Act and Section 5 ofthe FTC Act. 

Because Respondent did not produce evidence sufficient to rebut the presumption 

of a violation of Section 7 ofthe Clayton Act, the burden of producing further 

evidence of anticompetitive effects did not shift to Complaint CounseL. 

1368. Although Complaint Counsel is not required to prove the existence of actual 

anticompetitive effects resulting from the merger, such evidence, either in the 

form of 
 unilateral post merger price increases or coordinated interaction, negates 

any attempt to rebut the FTC's prima 
 facie case, and independently establishes a violation of Section 7 of the Clayton Act and Section 5 of the FTC Act. 

1369. The Acquisition violates Section 7 of the Clayton Act because "the effect of such 

acquisition may be substantially to lessen competition or to tend to create a 

monopoly." 15 D.S.C. § 18. The Acquisition also constitutes an unfair method of 

competition in or affecting commerce in violation of Section 5 ofthe FTC Act. 15 

D.S.C. § 45. 

1370. Section 5 ofthe FTC Act prohibits "unfair methods of competition in or affecting 

commerce, and unfair or deceptive acts or practices in or affecting commerce." 

15 D.S.C. § 45(a)(I) (2008).
 

1371. Conduct that violates Section 1 or 2 of 
 the Sherman Act is deemed to constitute 

an unfair method of competition and hence a violation of Section 5 of the FTC 

26 
Act as welL. FTC v. Cement Inst., 333 U.S. 683, 694 (1948); Fashion 

Originators' Guildv. FTC, 312 U.S. 457, 463-64 (1941). 

1372. Prior to the Acquisition, Daramic engaged in monopolistic conduct and/or 

attempts to monopolize, which constituted unfair methods of competition in 

violation of Section 5 of 
 the FTC Act. 

1373. To meet its burden of proof under Count II ofthe Complaint, Complaint Counsel 

may establish an offense of monopolization or attempted monopolization 

patterned on standards of liability under Section 2 of the Sherman Act. Cement 

Inst., 333 U.S. at 694. 

1374. Complaint Counsel makes out aprimafacie case of 
 monopolization, and gives 

rise to a presumption of 
 violation, by demonstrating two elements: 1) the 

possession of monopoly power in the relevant market and 2) the wilful 

acquisition or maintenance of that power as distinguished from growth or 

development as a consequence of superior product, business acumen, or historic 

accident. United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966); see also 

United States v. Microsoft Corp., 253 F.3d 34,50 (D.C. Cir. 2001). 

1375. Complaint Counsel makes out aprimafacie case of 
 attempted monopolization, 

and gives rise to a presumption of violation, by demonstrating four elements: 1) 

that the defendant possesses monopoly power, and 2) has engaged in predatory or 

anticompetitive conduct with 3) a specific intent to monopolize, and 4) a 

dangerous probability of success. Lorain Journal Co. v. United States, 342 U.S. 

143, 154 (1951).
 

1376. Daramic's anticompetitive conduct meets the standards ofliability for 

monopolization or attempted monopolization under Section 2 ofthe Sherman Act, 

and constitutes a violation of 
 the FTC Act. 

1377. Complaint Counsel met its burden of proof in support of Count I, Count II, and 

Count II ofthe Complaint.
 

1378. Divestiture is the appropriate and natural remedy. In re Chi. Bridge & Iron Co., 

138 F.T.C. 1024, 1161 (FT.C. 2005). "The very words of § 7 suggest that an 

undoing ofthe acquisition is a natural remedy." United States v. E.l du Pont de 

Nemours and Co., 366 U.S. 316, 329 (1961). Divestiture is "simple, relatively 

easy to administer, and sure. It should always be in the forefront of a court's mind 

when a violation of § 7 has been found." Du Pont, 366 U.S. at 330-1. 

27
 
Dated: December 1, 2009 Respectfully subrnitted, 

By: ~ ~ ~ø'
 

J. ROBERT ROBERTSON
 

Federal Trade Commission
 

Bureau of Competition
 

600 Pennsylyana Ave., N.W.
 

Washington, DC 20580
 

Telephone: (202) 326-2008
 

Fax: (202) 326-2884
 

Complaint Counsel 

28
 
CERTIFICATE OF SERVICE
 

I hereby certify that on Decernber 1,2009, I fied via hand deliyery an original 

and two copies of the foregoing public version of 
 Complaint Counsel's Post-Trial 

Proposed Findings of Fact and Conclusions of 
 Law on Reopened Hearing with: 

Donald S. Clark, Secretary 

Office of the Secretar 

Federal Trade Commission 

600 Pennsylyania Avenue, NW, Rm. H-135 

Washington, DC 20580 

I hereby certify that on Decernber 1, 2009, I served via electronic mail and hand 

delivery two copies of the foregoing public yersion of Complaint Counsel's Post-Trial 

Proposed Findings of Fact and Conclusions of 
 Law on Reopened Hearing with: 

The Honorable D. Michael Chappell
 

Administratiye Law Judge 

Federal Trade Commission 

600 Pennsylvania Ayenue, NW, H-106 

Washington, DC 20580 

oaliêftc.gov 

I hereby certify that on December 1,2009, I served via electronic mail delivery 

and first class mail two copies of the foregoing public version of Cornplaint Counsel's 

Post-Trial Proposed Findings of Fact and Conclusions of 
 Law on Reopened Hearing 

with: 

Wiliam L. Rikard, Jr., Esq. 

Eric D. Welsh, Esq. 

Parker, Poe, Adams & Bernstein, LLP 

401 South Tryon Street, Suite 3000 

Charlotte, North Carolina 28202 

williamrikardêparkerpoe.com 

ericwelshêparkerpoe.com 

Linda Cunnghai 

Federal Trade Co issi
 

600 Pennsylvania A yenue, NW 

Washington, DC 20580 

Telephone: (202) 326-2638 

lcunninghamêftc.gov