ORIGINAL
 

UNITED STATES OF AMERICA
 

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.
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) 

ORDER GRANTING IN PART AND DENYING IN PART RESPONDENT'S
 

MOTION IN LIMINE TO PRECLUDE COMPLAINT COUNSEL
 

FROM USING PRIVILEGE AS A SWORD AND A SHIELD 

I. 

On July 27,2012, Respondent McWane, Inc. ("Respondent" or "McWane") fied 

a Motion in Limine to Preclude Complaint Counsel From Using Privilege as a Sword and 

a Shield ("Motion"). Complaint Counsel fied an opposition to the Motion on August 7, 

2012 ("Opposition"). Having fully considered the Motion and the Opposition, and as 

more fully explained below, Respondent's Motion is GRANTED IN PART and DENIED 

IN PART. 

II. 

Respondent contends that Complaint Counsel wil be using privilege as both a 

"sword and a shield" at trial, by relying upon certain "white papers"! and other 

submissions and testimony provided by McWane, SIGMA Corporation ("SIGMA"), and 

Star Pipe Products, Ltd. ("Star") during the investigation phase of 
 this matter (the "Par 2 

submissions"), while at the same time withholding other Par 2 submissions, or parts 

thereof, as privileged. Specifically, Respondent contends that Complaint Counsel's 

expert reviewed, and/or based his opinions in par upon, certain Par 2 submissions; that
 

Complaint Counsel designated as exhibits for trial 19 investigational hearing transcripts 

("IHTs") including IHTs that contain questions on some documents submitted during the 

Part 2 investigation; and that Complaint Counsel's exhibits include six documents 

obtained from Par 2 submissions, but that Complaint Counsel withheld other Par 2 

submissions, including three IHTs. To ilustrate, Respondent states that during 

i A "white paper" is a government or other authoritative report giving information or proposals on an issue. 

See http://ww.merram-webster.com/dictionar/white%20paper. 
questioning of a witness from Star at an investigational hearing, the witness identified 

documents marked as CX0015 and CX0016 as part of 
 Star's August 31,2010 

submission, but that Complaint Counsel also identified as privileged and withheld from 

discovery other documents dated August 31, 2010, which Respondent surmises constitute 

pars of the same submission. As another ilustration, Respondent asserts that Complaint 

Counsel withheld three investigative hearng transcripts of waterworks distrbutors 

(Tysinger, Himes and Henderson) that Respondent asserts were reviewed and relied upon 

by Complaint Counsel's expert, but that Complaint Counsel contended was a mistake and 

continues to refuse to produce these IHTs. 

Respondent claims that it has "legitimate concerns" that Star "misled the 

Commission" with its Part 2 submissions and testimony; that Respondent is entitled to 

determine if Star made misleading statements during the Part 2 phase; and that 

Respondent has "a clear interest to know exactly what information" the Commission and 

Complaint Counsel used in deciding to issue the Complaint in this matter. 

Relying on the "sword and shield" doctrine, discussed further infra, Respondent 

seeks an order (1) precluding Complaint Counsel from proffering an expert opinion based 

on any submission to the FTC by any non-party during the Part 2 investigation, and 

strking those portions of Complaint Counsel's expert's report that rely on any such 

submissions, and (2) precluding Complaint Counsel from introducing testimony 

(including via deposition or investigational hearng transcript designations) regarding any 

submissions from the FTC's Part 2 investigation. In the alternative, Respondent requests 

an order compelling Complaint Counsel to produce all submissions made by Star, and 

others, if any, to the FTC during the Part 2 investigation. 

Complaint Counsel responds that, although designated as a motion in limine, 

Respondent's Motion is actually a motion to compel Complaint Counsel to produce 

documents withheld during discovery as privileged, which motion Complaint Counsel 

asserts is untimely under the Scheduling Order issued in this case.2 Complaint Counsel 

fuher asserts that, while Complaint Counsel withheld as privileged some documents and 

testimony obtained during the Part 2 investigation, it produced all non-privileged Part 2 

submissions, including any investigational hearng transcripts (and exhibits) for any 

individuals who appeared on Complaint Counsel's preliminary witness list, and all nonprivileged non-pary document productions. In addition, Complaint Counsel specifically 

states that "neither Complaint Counsel nor its exper have relied during discovery -- nor 

wil rely upon at tral -- any Par 2 materials withheld from Respondent," that Respondent 

has all white papers that Complaint Counsel's expert reviewed, and that Complaint 

2 Paragraph 9 of 
 the Scheduling Order's Additional Provisions states in part: "Any motion to compel 

responses to discovery requests shall be fied within 30 
 days of service of 
 the responses and/or objections to 

the discovery requests or within 20 days after the close of discovery, whichever first occurs." Complaint 

Counsel asserts that on March 30, 2012, after completing its document production in response to 

Respondent's First Set of 
 Requests for Documents, Complaint Counsel produced its privilege log to 

Respondent that identified documents and investigational hearig transcripts that Complaint Counsel had 

withheld from discovery. Complaint Counsel fuher asserts that Respondent had notice that Complaint 

Counsel had not produced the documents that are now the subject of the Motion as of 
 March 30,2012, and 

a motion to compel is, therefore, untimely. 

2
 
Counsel assured Respondent's counsel during "meet and confer" discussions that 

"Complaint Counsel's expert would not review or rely upon any Part 2 materials - either 

in preparng his expert report or in providing testimony at tral - that were not produced 

to Respondent." Holleran Decl. ~ 5. Finally, Complaint Counsel notes that Respondent 

does not contend that any of the withheld documents were not properly withheld as
 

privileged, and that in any event "exactly what information" was relied upon in deciding 

to bring suit in this matter is not relevant. 

III. 

1. In Limine standards generally
 

As stated most recently in In re POM Wonderful LLC: 

"Motion in limine" refers "to any motion, whether made before or during 

tral, to exclude anticipated prejudicial evidence before the evidence is 

actually offered." Luce v. United States, 469 U.S. 38,40 n.2, 105 S. Ct. 

460,83 L. Ed. 2d 443 (1984); see also In re Motor Up Corp., Docket 

9291, 1999 FTC LEXIS 207, at *1 (August 5, 1999). Although the 

Federal Rules of 
 Evidence do not explicitly authorize in limine rulings, the 

practice has developed pursuant to the court's inherent authority to 

manage the course of 
 trials. Luce, 469 U.S. at 41 nA. The practice has 

also been used in Commission proceedings. E.g., In re Telebrands Corp., 

Docket 9313,2004 FTC LEXIS 270 (April 
 26, 2004); In re Dura Lube 

Corp., Docket 9292, 1999 FTC LEXIS 252 (Oct. 22, 1999). 

Evidence should be excluded on a motion in limine only when the 

evidence is clearly inadmissible on all potential grounds. Hawthorne 

Partners v. AT&T Technologies, Inc., 831 F. Supp. 1398, 1400 (N.D. Il. 

1993); see also Sec. Exch. Comm 'n v. US. Environmental, Inc., No. 94 

Civ. 6608 (PKL)(AJP), 2002 U.S. Dist. LEXIS 19701, at *5-6 (S.D.N.Y. 

October 16, 2002). Courts considering a motion in limine may reserve 

judgment until trial, so that the motion is placed in the appropriate factual 

context. u.s. Environmental, 2002 U.S. Dist. LEXIS 19701, at *6; see, 

e.g., Veloso v. Western Bedding Supply Co., Inc., 281 F. Supp. 2d 743, 750 

(D.N.J. 2003). 

2011 FTC LEXIS 77, at *3-4 (May 5,2011). 

In addition, "(Un limine rulings are not binding on the trial judge, and the judge 

may change his mind during the course of a triaL." In re Daniel Chapter One, No. 9329, 

2009 FTC LEXIS 85, at *20 (Apr. 20, 2009) (citations omitted). "Denial of a motion in 

limine does not necessarily mean that all evidence contemplated by the motion wil be 

admitted at tral. Denial merely means that without the context of 
 tral, the court is
 

unable to determine whether the evidence in question should be excluded." Id. (quoting 

Noble v. Sheahan, 116 F. Supp.2d 966,969 (N.D. Il. 2000)). 

3 
2. "Sword and shield" doctrine
 

Respondent's motion to preclude Complaint Counsel from relying on any Par 2 

submissions, because some Part 2 submissions have been withheld as privileged, is based 

upon the "sword and shield" doctrine. As set forth recently in this case, the "sword and 

shield" doctrine holds that a litigant cannot use privileged documents "as both a sword 

and shield by selectively using the privileged documents to prove a point but then 

invoking the privilege to prevent an opponent from challenging the assertion." In re 

McWane, Inc., 2012 FTC LEXIS 126, at *7-8 (July 13, 2012) (Chappell, ALJ) (quoting 

In re Motor Up Corp., Inc., 1999 FTC LEXIS 262, *5 (Aug. 5, 1999)) ("July 13 Order"). 

The July 13 Order continues: 

The operative case law holds that subject matter waiver occurs only where 

a party attempts to gain a tactical advantage by "us(ing) the disclosed 

material for advantage in the litigation but (invoking) the privilege to deny 

its adversar access to additional materials that could provide an important 

context for proper understanding of 
 the privileged materials." Lerman v. 

Turner, 2011 U.S. Dist. LEXIS 715, at *25-26 (N.D. Il. Jan. 5,2011). . . . 

"The primary inquiry is whether the pary claiming privilege wil assert 

the allegedly protected material in aid or in furtherance of its claims or 

defenses." Chevron Corp. v. Stratus Consulting, Inc., 2010 U.S. Dist. 

LEXIS 110023, at *32 (D. Co. Oct. 1,2010) (citation omitted). "In an 

adversarial proceeding, a process designed to reach the trth of the matter
 

through the presentation of opposing perspectives, justice does not permit 

one side to inform and facilitate a damages assessment, purposed for the 

reliance of the court, without permitting its opponent access to the 

materials and process underlying the assessment." 2010 U.S. Dist. LEXIS 

110023 at *33. 

2012 FTC LEXIS 126, at *8-9 (quoting In re OSF Healthcare System, 2012 FTC LEXIS 

70, at *4-6 (March 19,2012)). 

iv. 

Respondent has not sufficiently identified any Par 2 submission being proffered 

as evidence in this case, including any submission reviewed or relied upon by Complaint 

Counsel's expert, that has been withheld by Complaint Counsel. Respondent's 

contention, that three withheld IHTs (from Tysinger, Himes and Henderson) were 

considered by the expert, is not supported by the record. In support of this contention, 

Respondent cites to Appendix B to the expert report, attached to Respondent's Motion, 

which is a list of all the materials considered by the expert; however, the three IHTs 

identified by Respondents do not appear to be listed. Respondent's further reliance on 

the deposition testimony of 
 Complaint Counsel's expert that he received "all the 

investigational hearing transcripts" is misplaced, because it does not appear that the 

expert could have personal knowledge as to whether or not what he received, in fact, 

4
 
constituted "all the investigational hearing transcripts" in the case. Complaint Counsel's 

Opposition fails to address this issue. Complaint Counsel maintains that the Par 2 

submissions being relied upon by Complaint Counsel are non-privileged and that neither 

Complaint Counsel nor its expert is relying on any Par 2 submissions that have not been 

produced to Respondent. 

It cannot be determined on the basis of the motion papers and attachments that 

Complaint Counsel has used, or intends to use, privileged materials as a sword while 

shielding others from discovery. Because it does not appear that privileged materials are 

being used as a "sword," the fact that other, assertedly privileged documents are being 

shielded is insufficient to invoke the "sword and shield" doctrine. See McWane, Inc., 

2012 FTC LEXIS 126, at * 10 (holding that "sword and shield" did not apply where, 

although Respondent appeared to be relying on a defense of advice of counsel as a 

"sword," Complaint Counsel failed to identify evidence Respondent was shielding from 

Complaint Coun~el on the ground of privilege). Respondent raises no basis other than 

the "sword and shield" doctrine for precluding use of 
 Par 2 submissions. Accordingly, 

Respondent's request to preclude Complaint Counsel from relying on any Part 2 

submissions is unjustified. 

Respondent's alternative request that Complaint Counsel be compelled to produce 

privileged Part 2 materials is similarly based upon the "sword and shield" doctrine. 

Respondent does not contend that the withheld Par 2 submissions are not subject to a 

valid privilege, but rather argues that it is fundamentally unfair to permit Complaint 

Counsel to rely upon some Par 2 submissions while withholding others. However, as 

noted above, the "sword and shield" doctrine is inapplicable because it has not been 

demonstrated that Complaint Counsel has used, or intends to use, any privileged Par 2 

submissions. Because Respondent has not raised any other valid basis for compellng 

production of privileged Part 2 submissions, Respondent has failed to justify an order 

compelling these materials. 

In the event that any Complaint Counsel witness, expert or fact, has relied upon 

any information, including documents, testimony or other information, that was withheld 

from Respondent, it would be unfair to allow Complaint Counsel to rely upon any such 

information as evidence at triaL. Accordingly, Complaint Counsel wil be prohibited from 

doing so by this Order, as set forth infra. In this regard, Respondent's Motionto 

Preclude Complaint Counsel from Using Privilege as a Sword and a Shield is GRANTED 

IN PART, but is otherwise DENIED. 

v. 

Having fully considered the Motion and the Opposition, and for the foregoing 

reasons, Respondent's Motion in Limine to Preclude Complaint Counsel From Using 

Privilege as a Sword and a Shield Motion is GRANTED IN PART, and it is hereby 

ORDERED that Complaint Counsel is precluded from offering at tral in this case, by 

documents or testimony, including deposition testimony, or by any other method or 

means, including as the basis 'of opinions or conclusions of its expert, any information, 

5 
documents, testimony or other information, from the Par 2 investigation in this matter 

that Complaint Counsel has withheld from Respondent on the basis of privilege. In all 

other respects, the Motion is DENIED. This Order is not a determination, and shall not 

be construed as a ruling, as to the admissibility of any particular Par 2 submission that 

may be offered at the hearng, or of any expert opinion based thereon, in whole or in par. 

ORDERED: ~bM~ 

D. Michael Chappel 

Chief Administrative Law Judge 

Date: August 14,2012 

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