1F ~ 

t! ~ 

~w i

,,~S)V R¡~i ~~t;tj
 

UNITED STATES OF AMERICA 53r991 

FEDERAL TRADE COMMISSION .s' r: _~~~ ;:.-- L'. '.~~.\( 

OFFICE OF ADMINISTRATIVE LAW JUGES 

In the Matter of 

) 

) 

POL YPORE INTERNATIONAL, INC., 

Respondent. 

) 

) 

) 

Docket No. 9327 

) 

ORDER ON NON-PARTY ENERSYS' MOTION FOR
 

ATTORNEYS' FEES AND COSTS, LIMITATION OF THE SUBPOENA,
 

AND MODIFICATION OF THE PROTECTIVE ORDER
 

I. 

On December 16, 2008, non-pary EnerSys filed a motion for an order directing 

Respondent Polypore International, Inc. ("Polypore," "Daramic,"or "Respondent") to compensate 

EnerSys for certain costs it would incur in responding to the subpoena that Respondent served on 

EnerSys. EnerSys' motion also seeks to limit the subpoena, by striking nine specific document 

requests, and to modify the Protective Order to shield EnerSys' production from disclosure to 

Respondent's special counseL. Respondent filed its Memorandum in Opposition to EnerSys' 

motion on December 23,2008. 

For the reasons set forth below, EnerSys' motion is DENIED. 

II. 

EnerSys' motion seeks three types of 
 relief. First, EnerSys seeks an order directing 

Respondent to compensate it for fees, costs, and charges that it would incur in reviewing 

documents that are potentially responsive to the subpoena. In the alternative, EnerSys requests 

an order directing Respondent to participate in a procedure proposed by EnerSys which, EnerSys 

states, is designed to reduce its burden of complying with the subpoena. Second, EnerSys seeks 

an order limiting the subpoena by striking requests 10, 13-14, and 19-24. Third, EnerSys seeks 

modification of the Protective Order to shield EnerSys' production from disclosure to 

Respondent's special counsel, Michael Shor. 
A. Attorneys' Fees and Costs
 

EnerSys states that it has expended considerable time and resources to comply with 

Respondent's subpoena by gathering approximately 200,000 potentially responsive documents. 

EnerSys further states that it will likely spend more than $50,000 to review and produce the 

requested documents. EnerSys stresses that it is neither a pary to this litigation nor a competitor 

of Polyp ore; it is, instead, a customer of Polyp ore and a former customer of Microporous 

Products L.P. ("Microporous"), whose acquisition by Polypore is challenged in the Federal 

Trade Commission's ("FTC" or "Commission") Complaint in this matter. 

EnerSys argues that, as a non-party, Its burden of responding to the subpoena is undue. 

As a result, EnerSys seeks an order requiring Respondent to pay EnerSys the attorneys' and 

paralegals' fees and costs and the outside vendors' charges that EnerSys wil incur in reviewing 

the subpoenaed documents prior to their production to Respondent. EnerSys states that it 

proposed to Respondent a three-phase procedure which, EnerSys asserts, would reduce the 

burden imposed by the subpoena, but that Respondent rejected that proposal. 

Respondent asserts that its subpoena is tailored to seek documents that are relevant to the 

issues raised by the Complaint and to Respondent's defenses. Respondent further states that its 

subpoena does not impose an unreasonable or extraordinary burden on EIierSys. 

In agency actions, "( s Jome burden on subpoenaed parties is to be expected and is 

necessary in furtherance of 
 the agency's legitimate inquiry and the public interest." Federal 

Trade Commission v. Dresser Indus., 1977 U.S. Dist. LEXIS 16178, at *13 (D.D.C. 1977). The 

Commission, in 
 In re Intl TeL. & Tel. Corp., 97 F.T.C. 202, 203, 1981 FTC LEXIS 75, at *3 

(March 13, 1981), has held that a "subpoenaed party is expected to absorb the reasonable 

expenses of compliance as a cost of doing business, but reimbursement by the proponent of the 

subpoena is appropriate for costs shown by the subpoenaed party to be unreasonable." See In re 

North Tex. Specialty Physicians, 2004 FTC LEXIS 18, at *7 (Feb. 4, 2004) (denying cost 

reimbursement because the subpoena did not impose an undue burden on the non-pary); In re 

R.R. Donnelley & Sons Co., 1991 FTC LEXIS 268, at *1-2 (June 6, 1991) (holding that 

subpoenaed party "can be required to bear reasonable costs of compliance with the subpoena"). 

To determine whether expenses are "reasonable," the Administrative Law Judge "should 

compare the costs of compliance in relation to the size and resources of the subpoenaed party." 

In re Intl Tel. & Tel. Corp., 97 F.T.C. 202, 203, 1981 FTC LEXIS 75, at *3 (March 13, 1981) 

(citingSECv. OKCCorp.,474F. Supp. 1031 (N.D. Tex. 1979)). EnerSysofferedno 

information regarding its size and resources. According to Respondent, EnerSys had net 

earnings of more than $45 milion in 2007. Regardless of its actual earnings, EnerSys has not 

demonstrated that its estimated compliance costs of $50,000 for document review are 

unreasonable. 

2
 
Moreover, even if the subpoenaed pary has shown that its costs of compliance are 

unreasonable, "where the non-pary is in the industry in which the alleged acts occurred and the 

non-pary has (an J interest in the litigation and would be affected by the judgment, only the cost 

of copying, and no other costs ofthe search, need be reimbursed." In re Flowers Indus., Inc., 

1982 FTC LEXIS 96, at *16-17 (March 19, 1982). 

In this case, EnerSys has not demonstrated that its costs of compliance with the subpoena 

are unreasonable. Accordingly, EnerSys' request for reimbursement of attorneys' and 

paralegals' fees and costs and outside vendors' charges that it would incur in reviewing 

documents that are potentially responsive to Respondent's subpoena is DENIED. 

B. Requested Limitation of the Subpoena
 

The subpoena at issue consists of thirty four document requests. EnerSys seeks an order 

limiting the subpoena by striking requests 10, 13-14, and 19-24. 

These nine requests are as follows: 

10. All documents or any database reflecting all lead acid battery separators 

purchased by EnerSys from any supplier, including but not limited to the specific 

product(s) purchased, the amount or volume of each such product(s) purchased, 

the price(s) of the product(s) purchased, the date(s) of 
 purchase, the end use(s) or

application(s) of 
 the product purchased and the EnerSys plant to which such 

product was shipped. 

13. All documents discussing, describing or reflecting, by dollar amount, 

units, price, square meters and product type or brand, all battery separators 

purchased by EnerSys from any source from January 1, 2000 to the present. 

14. For all product responsive to Request No. 13, all documents reflecting the
 

actual or anticipated end use or application of the product purchased by EnerSys 

and the destination of the shipment of such product. 

19. All documents relating to any testing or qualification by EnerSys oflead 

acid battery separators manufactured by Polypore or Microporous. 

20. All documents relating to any testing or qualification by EnerSys of lead 

acid battery separators produced by any entity other than Polypore or 

Microporous. 

21. All documents reflecting or discussing any manufacturer of lead acid 

battery separators.
 

3 
22. All documents describing, discussing or reflecting by brand name or 

manufacturer the products comprising lead acid battery separators including those 

products used for the following end uses or applications: golf car or cart; floor 

scrubber or sweeper; automotive; motorcycle; trck; train; fork lift; pallet truck; 

submarine; uninterrpted power supply for hospitals, telephone companies and 

other uses; motive; industrial; marine; stationary; and/or nuclear power plant. 

23. All documents discussing or referrng to any type of battery separator,
 

including AGM separators, other than those used in flooded lead acid batteries. 

24. All documents describing, discussing or reflecting products that are or 

might be competitive with lead acid battery separators including those products 

used for the following end uses or applications: golf car or cart; floor scrubber or 

sweeper; automotive; motorcycle; truck; train; fork lift; pallet truck; submarine; 

uninterrpted power supply for hospitals, telephone companies and other uses; 

motive; industrial; marne; stationary; and/or nuclear power plant. 

EnerSys argues that these requests are overly broad and unduly burdensome. EnerSys 

battery 

separators are irrelevant to whether Respondent harmed competition by acquiring Microporous. 

states, as an example, that the amount, price, and date of EnerSys' purchases of 


Respondent claims that the documents it seeks are relevant, material, and critical to its 

defense. Respondent further argues that EnerSys' allegations of 
 undue burden are unsupported 

and undermined by EnerSys' own unwilingness, according to Respondent, to mitigate any 

burden by negotiation and compromise. 

"Parties may obtain discovery to the extent that it may be reasonably expected to yield 

information relevant to the allegations of the complaint, to the proposed relief, or to the defenses 

of any respondent." 16 C.F .R. § 3.31 (c)(1). An Administrative Law Judge may limit discovery 

if the discovery sought is unreasonably cumulative or duplicative, or obtainable from some other 

source that is more convenient, less burdensome, or less expensive; or ifthe burden and expense 

of the proposed discovery outweigh its likely benefit. Id. In addition, an Administrative Law 

Judge may enter a protective order to protect a party from undue burden or expense. 16 C.F .R. 

§ 3.3l(d).
 

The Complaint in this case charges thatPolypore's acquisition of Micro porous and other 

conduct by Polypore substantially lessens competition in numerous ways in the deep-cycle, 

motive, automotive, and UPS markets for flooded lead-acid batteries. Complaint irir 5, 38. The 

Complaint further alleges that there are significant barrers to entry into these markets. Id. 

irir 32-37. The challenged requests in Respondent's subpoena seek materials that go to central 

issues in this case, such as market definition, market share, pricing, and entr conditions, 

including product testing and qualification as possible barrers to entry. Thus, the information 

sought by the challenged requests may reasonably be expected to yield information relevant to the 

Complaint's allegations, to the proposed relief, or to the Respondent's defenses. 

4 
"The burden of showing that the request is unreasonable is on the subpoenaed party." FTC 

v. Dresser Indus., 1977 U.S. Dist. LEXIS 16178, at *13 (D.D.C. 1977). "Further, that burden is 

not easily met where, as here, the agency inquiry is pursuant to a láwful purpose and the 

requested documents are relevant to that purpose." Id. (enforcing subpoena served on non-party 

by the respondent). See In re Kaiser Alum. & Chem. Corp., 1976 FTC LEXIS 68, at *19-20 

(Nov. 12, 1976) ("Even where a subpoenaed third party adequately demonstrates that compliance 

burden, inconvenience, and cost, that wil not 

excuse producing information that appears generally relevant to the issues in the proceeding."). 

with a subpoena wil impose a substantial degree of 


EnerSys' allegation that Respondent's subpoena imposes an "unreasonable and 

extraordinary burden" is insufficient to carr its burden of showing why the requested discovery 

should be denied. EnerSys has not demonstrated that the information sought is overly broad or 

unduly burdensome. Accordingly, EnerSys' motion to limit the subpoena is DENIED. 

C. Modifcation of the Protective Order
 

The Protective Order entered in this case on October 23,2008 limits disclosure of 

confidential material, but permits disclosure of such material to Michael Shor, Polypore Special 

CounseL. Protective Order ir 9. EnerSys states that many ofthe requested documents contain 

confidential information that it considers highly sensitive, such as information regarding pricing, 

testing, and efforts to find an alternative source of 
 battery separators. EnerSys seeks

the Protective Order to shield confidential material from disclosure to Mr. Shor, 

whom EnerSys describes as "Respondent's in-house counseL" 

modification of 


Respondent argues that the Protective Order adequately protects the confidentiality of 

any materials EnerSys produces. Respondent states that Mr. Shor is not an employee of 

Polypore. Respondent further notes that EnerSys is its customer, not its competitor, and that Mr. 

Shor is not involved in "competitive decision making" at Polypore. Respondent further asserts 

the battery separator industry is an 

invaluable asset, especially in light of the impending deadlines in this litigation. 

that Mr. Shor's understanding of the technical aspects of 


Requests to provide in-house counsel with a competitor's confidential information 

"might properly be denied in a case 'where in-house counsel are involved in competitive 

decisionmaking,' a term we defined as 'shorthand for a counsel's activities, association, and 

or 

all of the client's decisions (pricing, product design, etc.) made in light of similar or 

corresponding information about a competitor.'" Matsushita Elec. Indus. Co. v. United States 

Intl Trade Comm 'n, 929 F.2d 1577, 1579 (Fed. Cir. 1991) (quoting United States Steel Corp. v. 

United States, 730 F.2d 1465, 1468 at n.3 (Fed. Cir. 1984)). "Access to confidential information 

relationship with a client that are such as to involve counsel's advice and participation in any 


may not be denied solely because of an attorney's status as in-house counseL. . .. Rather, the 

decision turns largely on the specific role of in-house counsel within the business: whether he or 

she has a part in the type of competitive decision-making that would involve the potential use of 

the confidential information." Sullvan Marketing, Inc. v. Yalassis Communications, Inc., 1994 

U.S. Dist. LEXIS 5824, at *5-6 (S.D.N.Y. 1994). 

5 
Mr. Shor indicates inhis Declaration that he is employed by Carolina Legal Staffing and 

has served as Special Counsel for Polypore in this matter since April 7, 2008. Declaration of 

Michael L. Shor ir 2. He avers that he has not paricipated in any contract negotiations for 

Polypore or Daramic since early August 2008, and that he has agreed to not paricipate in any 

such negotiations for a period oftwo years. Id. ir 7. He further affirms that he is "not permitted 

to, and (he J wil not, share any confidential material or information with Company (Polypore or 

DaramicJ representatives." Id. ir 8. 

Since Mr. Shor is not in-house counsel and does not appear to be involved in competitive 

decision-making, EnerSys' request for a protective order shielding its confidential information 

from Mr. Shor is DENIED. 

III. 

For the reasons stated above, EnerSys' motion for an award of 
 fees and costs, limitation 

Respondent's subpoena, and modification ofthe Protective Order is DENIED. EnerSys shall 

produce all responsive documents within ten calendar days. 

of 

ORDERED: 

:bw- ~J 

D. Micfiael Cfi pell
 

Administrative Law Judge 

Date: January 15,2009 

6