__________________________________________ 

 

 

 

 

 

 

06 27 2012 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

COMMISSIONERS: Jon Leibowitz, Chairman 

J. Thomas Rosch 

 Edith Ramirez

 Julie Brill

 Maureen K. Ohlhausen 

)
 

In the Matter of ) 

)
 

McWANE, INC., ) 

a corporation. )
 

__________________________________________) 

PUBLIC

DOCKET NO. 9351 

COMPLAINT COUNSEL’S REPLY MEMORANDUM IN SUPPORT OF ITS MOTION 

FOR PARTIAL SUMMARY DECISION 

Richard A. Feinstein 

Director 

Peter J. Levitas 

Deputy Director 

Melanie Sabo 

Assistant Director 

Geoffrey M Green 

Deputy Assistant Director 

Michael J. Bloom 

Jeanine Balbach 

Office of Policy & Coordination 

June 27, 2012 

Edward D. Hassi 

Linda Holleran 

Thomas H. Brock 

J. Alexander Ansaldo 

Andrew Mann 

Monica Castillo 

Attorneys 

Federal Trade Commission 

Bureau of Competition 

Anticompetitive Practices Division 

600 Pennsylvania Ave., N.W. 

Washington, DC 20580 

Telephone: (202) 326-2470 

Facsimile: (202) 326-3496 

Email: ehassi@ftc.gov 

Counsel Supporting the Complaint 
   

TABLE OF CONTENTS
 

I. Introduction........................................................................................................................ 1
 

II. Argument ............................................................................................................................ 1 

A. There is No Genuine Issue of Material Fact Requiring Trial.............................. 2 

B. The Constitutes an Illegal Price Fixing 

Conspiracy as a Matter of Law>>>>>>>>.................................................. 4 

C. Entry of Summary Decision Will Not Violate McWane's Due Process Rights.......... 8 

1. The is Reasonably Within the Scope of the 

Complaint...................................................................................... 8 

2. The Commission May Conform the Pleadings to the Evidence on a Motion for 

Summary Decision......................................................................... 11 

3. McWane has Impliedly Consented to the Summary Decision of This Issue........ 12 

III. Conclusion ........................................................................................................................ 15
 

ii 
 

 

TABLE OF AUTHORITIES
 

Cases 

Ahmad v. Furlong, 435 F.3d 1196 (10th Cir. 2006)................................................... 11 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)................................................ 3 

Attorney Gen. of Maryland v. Dickson, 717 F. Supp. 1090 (D. Md. 1989)........................ 2 

BankAtlantic v. Coast to Coast Contrs., 22 F. Supp. 2d 1354 (S.D. Fla. 1998)................... 2 

Blomkest Fertilizer Inc. v. Potash Corp. of Saskatchewan, 203 F.3d 1028 (8th Cir. 1999).... 7 

Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980)........................................... 5 

Celotex Corp. v. Catrett, 477 U.S. 317 (1986)......................................................... 2 

Cruz v. Coach Stores, Inc., 202 F.3d 560 (2d Cir. 2000)............................................ 12 

Hardin v. Manitowoc-Forsythe Corp., 691 F.2d 449 (10th Cir. 1982)........................... 12 

In re Baby Food Antitrust Litig., 166 F.3d 112 (3d Cir. 1999).................................... 7 

In re Basic Research, 2004 FTC WL 1658381....................................................... 8 

In re Bucyrus Grain Co., 1987 U.S. Dist. LEXIS 8193............................................. 8 

In re Champion Home Builders, 1982 FTC LEXIS 52 (1982)..................................... 9 

In re Flat Glass Antitrust Litig., 385 F.3d 350 (3d Cir. 2004)..................................... 7 

In re Hearst Corp., 80 F.T.C. 1011 (1972)............................................................ 12 

In re High Fructose Corn Syrup Antitrust Litig, 295 F.3d 651 (7th Cir. 2002)................. 4 

In re Kroger Co., 98 F.T.C. 639 (1981)............................................................... 12 

In re Orkin Exterminating Company, Inc., Dkt. No. 9176, 1984 FTC WL 251774 

(Nov. 15, 1984).............................................................................................. 9 

In re Prescott, 805 F.2d 719 (7th Cir. 1986)...................................................... 12, 13 

In re Publication Paper Antitrust Litig., 2010 U.S. Dist. LEXIS 131931 (D. Conn. 

Dec. 14, 2010).......................................................................................... 6, 7 

Kenko Brenntag, Ltd. v. Regina, 1981 U.S. Dist. LEXIS 14933 (S.D.N.Y., Sept. 28, 1981). 8 

iii 
 

 

 

Lujan v. Nat'l Wildlife Fed’n, 497 U.S. 871 (1990)................................................. 3 

McCree v. SEPTA, 2009 U.S. Dist. LEXIS 4803 (E.D. Pa., Jan. 23, 2009)..................... 11 

Nielsen v. Basit, 1992 U.S. Dist. LEXIS 852 (N.D. Ill. 1992).................................... 7 

People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359 (4th Cir. 2001)... 13 

Plymouth Dealers’ Asso. v. United States, 279 F.2d 128 (9th Cir. 1960)...................... 4 

Post v. City of Fort Lauderdale, 7 F.3d 1552 (11th Cir. 1993).................................. 3 

Sagers v. Yellow Freight System, Inc., 529 F.2d 721 (5th Cir. 1976).......................... 4 

Smith v. Transworld Sys., Inc., 953 F.2d 1025 (6th Cir. 1992).............................. 12, 13, 14 

Sugar Institute v. United States, 297 U.S. 553 (1936)........................................... 1, 5, 6 

Suiter v. Mitchell Motor Coach Sales, Inc., 151 F.3d 1275 (10th Cir. 1998)................ 12 

Swierkiewicz v. Sorema, 534 U.S. 506 (2002).................................................... 8 

Travelers Ins. Co. v. Liljeberg Enters., 7 F.3d 1203 (5th Cir. 1993).......................... 3 

TSI Incorporated v. United States, 977 F.2d 424 (1992)........................................ 4 

U.S. v. Socony-Vacuum Oil, 310 U.S. 150 (1940)................................................ 4 

United States v. United States Gypsum Co., 438 U.S. 422 (1978)............................. 4, 6 

United States Fidelity and Guaranty Co. v. United States, 389 F.2d 697 (10th Cir. 1968). 13 

Whitaker v. T.J. Snow Co., 151 F.3d 661 (7th Cir. 1998)........................................ 13 

Statutes 

16 C.F.R. § 3.11.......................................................................................... 9 

16 C.F.R. § 3.15........................................................................... 9, 11, 12, 14, 15 

16 C.F.R. § 3.24........................................................................... 1, 3, 11, 12, 14 

16 C.F.R. § 3.42.......................................................................................... 3 

Fed. R. Civ. Pro. 15(b)(2).......................................................................... 3, 11, 12 

Fed. R. Civ. Pro. 56(e) ................................................................................. 3 

iv 
 

I. Introduction 

McWane’s opposition does not contest the facts or the law on which Complaint 

Counsel’s Motion for Partial Summary Decision rests. McWane fails to even mention, let alone 

distinguish, Sugar Institute, the controlling Supreme Court precedent. See Sugar Institute v. 

United States, 297 U.S. 553 (1936). Instead, McWane attempts to limit the time period covered 

by the Complaint with its own contrived reading of the allegations and by quoting language that 

does not appear anywhere in the Commission’s Complaint. The Complaint does not allege that 

the “conspiracy existed only until ‘January 2009’ and ‘disbanded’ in February 2009” (McWane 

SOF ¶ 2). Indeed, the word “disbanded” does not appear in the Complaint and repeating it in its 

Opposition like a mantra will not permit McWane to escape the undisputed facts. McWane’s 

counsel did not operate under any illusion that McWane’s actions after February 2009 were not 

at issue in these proceedings. McWane elicited testimony from the only non-McWane 

participant in during his deposition and McWane never once 

witnesses. McWane’s due process and related procedural defenses are a smokescreen designed 

to hide the fact that McWane cannot contest the law or the facts that McWane and Star conspired 

to restrain price competition 

II. Argument 

McWane has failed to identify a genuine issue of material fact relating to the 

requiring a trial, and partial summary decision on this issue is 

appropriate. Rule 3.24(3); 3.24(5), 16 C.F.R. §§ 3.24(3); 3.24(5). McWane has had actual 

notice of the claims against it arising out of the has actively 

objected when Complaint Counsel took testimony related to those events from nine different 

1 
 

 

 

attempted to develop exculpatory evidence in discovery regarding the 

A. There is No Genuine Issue of Material Fact Requiring a Trial 

, and has impliedly consented to the summary disposition of this issue. 

In its Opposition, McWane admits or fails to adequately contest the material facts that 

compel judgment for Complaint Counsel as a matter of law. McWane does not contest the 

existence, contents or circumstances of any material fact relating to the 

 Specifically, McWane does not dispute: 











McWane only points to two pieces of relevant admissible evidence to dispute the factual 

predicates of Complaint: 

. McWane SOF ¶¶ 30, 34. Mr. 

 lack of memory of the event, which is no more than the absence of contrary evidence, 

does not create a triable issue. See Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986); Attorney 

Gen. of Maryland v. Dickson, 717 F. Supp. 1090, 1097 (D. Md. 1989) (failure to recall 

participation in a conspiracy does not create a genuine issue of fact as to the element of 

agreement). 

2 
 

 

Inconsistencies in Mr. testimony similarly do not create a triable issue on 

the existence of an agreement. McWane argues that Mr. conclusory denials that 

he never reached an “agreement or understanding regarding price or price levels” create a triable 

issue of fact.1 McWane SOF ¶ 14. McWane’s theory flatly contradicts the text of Rule 3.24(3), 

which provides that “a party opposing the motion may not rest upon the mere allegations or 

denials of his or her pleading ... [but instead] must set forth specific facts showing that there is a 

genuine issue of material fact for trial.” 16 C.F.R. § 3.42(3). As the Supreme Court has held of 

(1990). The law is clear that conclusory denials do not create a genuine issue of material fact. 

See Travelers Ins. Co. v. Liljeberg Enters., 7 F.3d 1203, 1206-07 (5th Cir. 1993) (conclusory 

denial of an element of the movant’s claim insufficient to defeat summary judgment); Post v. 

City of Fort Lauderdale, 7 F.3d 1552, 1557 (11th Cir. 1993) (“Conclusory allegations or 

evidence setting forth legal conclusions are insufficient” to create a genuine fact issue”). 

as set forth in 

Complaint Counsel’s motion papers, therefore trumps any conclusory denials 

McWane’s other factual arguments fail to identify factual disputes that are material. See 

Rule 56(e), the analogous provision of the Federal Rules of Civil Procedure, the “object of this 

provision is not to replace conclusory allegations of the complaint or answer with conclusory 

allegations of an affidavit” or deposition. Lujan v. Nat'l Wildlife Fed’n, 497 U.S. 871, 888 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (“As to materiality, the substantive 

law will identify which facts are material. Only disputes over facts that might affect the outcome 

3 

1 
 

    

 

of the suit under the governing law will properly preclude the entry of summary judgment. 

U.S. v. 

Socony-Vacuum Oil, 310 U.S. 150, 223 (1940) (“a combination formed for the purpose 

Factual disputes that are irrelevant or unnecessary will not be counted”). For example, it is 

irrelevant, as a matter of substantive antitrust law, whether or not: 



and with the effect of raising [or] depressing ... the price of a commodity in interstate ... 

is illegal per se”); 



In re High 

Fructose Corn Syrup Antitrust Litig, 295 F.3d 651, 656 (7th Cir. 2002) (“An agreement 

to fix list prices is . . . a per se violation of the Sherman Act, even if most or for that 

matter all transactions occur at lower prices”) (Posner, J.); Plymouth Dealers’ Asso. v. 

United States, 279 F.2d 128, 132-33 (9th Cir. 1960) (agreement on list prices per se 

unlawful despite the fact that list prices are only the starting point in negotiations, most 

sales are made below list prices, and prices declined during the conspiracy); and 



 Specific intent is not an 

element of a civil claim under Section 1 of the Sherman Act. United States v. United 

States Gypsum Co., 438 U.S. 422, 436 n.13 (1978). 

The Commission can enter partial summary decision against McWane without addressing any of 

these issues. 

B. The Constitutes an Illegal Price Fixing 

Conspiracy as a Matter of Law 

McWane argues that the material facts set forth above do not, as a matter of law, amount 

to a per se illegal price fixing agreement. The legal conclusions to be drawn from the undisputed 

material facts are an appropriate issue for summary decision. TSI Incorporated v. United States, 

977 F.2d 424, 426 (1992) (affirming summary judgment where the “only dispute below was over 

the legal conclusions to be drawn from the agreed facts.”); Sagers v. Yellow Freight System, 

Inc., 529 F.2d 721, 728 n.13 (5th Cir. 1976) (“the mere fact that the [non-movant] vigorously 

disputed the legal conclusions to be drawn from the facts presented by the [movant] was no bar 

4 
to the grant of summary judgment.”). Here, McWane argues that because it is undisputed or 

assumed arguendo that, 

is not a price fixing agreement as a 

matter of law. 

McWane’s argument simply ignores controlling Supreme Court and appellate precedent. 

In Sugar Institute, the Court applied the per se rule on indistinguishable facts. In Sugar Institute, 

as here, there was an exchange of assurances that the firm announcing a price change would 

implement in that announced change in fact. Id. at 582. In Sugar Institute, as here, prices were 

assumed to be set unilaterally, as was the decision to follow the rival’s announced prices. Id. at 

585-86. Sugar Institute sets forth a simple rule: while follow-the-leader parallelism is lawful, the 

exchange of assurances that facilitate price parallelism is per se unlawful. Thus, even assuming 

they 

committed a per se unlawful agreement under Sugar Institute when 

 The Supreme 

Court has affirmed the continued vitality of Sugar Institute. See Catalano, Inc. v. Target Sales, 

Inc., 446 U.S. 643, 647 (1980) (per curiam) (reiterating the illegality of “an agreement to adhere 

to previously announced prices and terms of sale, even though advance price announcements are 

perfectly lawful and even though the particular prices and terms were not themselves fixed by 

private agreement”) (citing Sugar Institute, 297 U.S. 553, 601-602). Sugar Institute also 

disposes of McWane’s argument that a price fixing agreement must come before prices are 

formulated and announced (Opp. at 18-19, 22); an agreement regarding implementation of 

previously announced prices is itself unlawful. Sugar Institute, 297 U.S. at 601. 

5 
 

 

McWane’s reliance on In re Publication Paper Antitrust Litig., 2010 U.S. Dist. LEXIS 

131931 (D. Conn. Dec. 14, 2010), is misplaced. In Publication Paper, two competitors 

exchanged information about prior and unilaterally determined plans to follow the announced 

price increase of a third rival. Id. at *37-46. There was no bargained-for exchange of assurances 

about future pricing in Publication Paper; each competitor simply announced its price in turn. 

Such an exchange of price information, without more, is analyzed under the rule of reason. 

United States v. United States Gypsum Co., 438 U.S. 422, 441 n.16 (1978). However, an 

exchange of assurances on pricing, with the intent of inducing reliance, crosses the line into per 

se illegality. 

Three related features of distinguish it from the 

Publication Paper communication. First, and most importantly, 

 went much further than Publication Paper. 

This communication was absent in Publication Paper, and 

brings this case under the rule of Sugar Institute. Second, 

– the first step in cartel formation – was to be achieved. There 

was no such reduction in uncertainty or incremental tendency towards coordination and cartel 

formation in the Publication Paper communication, as the communicating competitors sought to 

match the prices previously set by a third party, not by one another, and thus already knew what 

prices to set to facilitate coordination. Third, there was no expression of interdependence in the 

6 
 

 

Publication Paper communication, 

McWane’s reliance on In re Baby Food Antitrust Litig., 166 F.3d 112 (3d Cir. 1999), is 

also misplaced. That case stands for the proposition that “[e]vidence of sporadic exchanges of 

shop talk among field sales representatives who lack pricing authority” does not establish a price 

fixing agreement. Id. at 125. The Third Circuit expressly distinguished its holding from cases – 

executives engaged in secret conversations regarding product pricing”) (emphasis in original); 

as in this one – where the exchange of information about future pricing took place among senior 

managers with pricing authority. See id. at 125 fn.8 (distinguishing cases where “upper level 

see also In re Flat Glass Antitrust Litig., 385 F.3d 350, 369 (3d Cir. 2004) (same). 

and not simply a sharing of information. 

Finally, Blomkest Fertilizer Inc. v. Potash Corp. of Saskatchewan, 203 F.3d 1028, 1034 

(8th Cir. 1999), is distinguishable from this case because the communications there related to the 

exchange of price information about “particular completed sales, not future market prices.” 

Whether constitutes an agreement within the meaning 

of the antitrust laws is a legal question to be decided by the Commission. 

BankAtlantic v. Coast to Coast Contrs., 22 F. Supp. 2d 1354, 1358-59 (S.D. Fla. 1998) (mere 

denials of participation in a conspiracy do not create a genuine issue of fact); Nielsen v. Basit, 

1992 U.S. Dist. LEXIS 852, *9-10 (N.D. Ill. 1992) (“Conclusory denials of conspiracy contained 

in affidavits are entitled to little weight in deciding whether to grant a motion for summary 

7 
judgment”); In re Bucyrus Grain Co., 1987 U.S. Dist. LEXIS 8193, at *14 (D. Kan., Aug. 13, 

1987) (“mere denial of the existence of such an agreement cannot avoid summary judgment”); 

Kenko Brenntag, Ltd. v. Regina, 1981 U.S. Dist. LEXIS 14933, at *6 (S.D.N.Y., Sept. 28, 1981) 

(“conclusory denials [of agreement] are not sufficient to avert summary judgment”). For the 

same reasons, 

. McWane SOF ¶¶ 25, 28. 

C.	 Entry of Summary Decision Will Not Violate McWane’s Due Process Rights 

Entry of summary decision against McWane on is 

fully consistent with the Commission’s Rules and fundamental fairness. As discussed below, 

is reasonably within the scope of the Commission’s Complaint, 

McWane had actual notice of , and McWane took extensive 

discovery on this issue. Moreover, the Commission has the authority to conform the pleadings to 

the evidence on a motion of summary decision, and such action is proper here because McWane 

has impliedly consented to the litigation and summary disposition of this issue. 

1. is Reasonably Within the Scope of the 

Complaint 

It is well settled law that federal and administrative complaints require only notice 

pleading, with the specific facts being established during discovery. Swierkiewicz v. Sorema, 

534 U.S. 506, 512 (2002) (“This simplified notice pleading standard relies on liberal discovery 

rules and summary judgment motions to define disputed facts and issues and to dispose of 

unmeritorious claims.”); In re Basic Research, 2004 FTC WL 1658381, at *6 (notice pleading 

applies to Commission complaints). Rule 3.11(b)(2) of the Commission’s Rules of Practice 

8 
is one example of the conspiratorial conduct – price 

provides that the Commission’s complaint shall contain “a clear and concise factual statement 

sufficient to inform each respondent with reasonable definiteness of the type of acts or practices 

alleged to be in violation of the law.” 16 C.F.R. § 3.11(b)(2) (emphasis added). 

fixing – that is expressly alleged within the Commission’s Complaint. As such, Commission 

precedent establishes that is “reasonably within the scope of 

the original complaint.” Rule 3.15(2). Although there appears to be no Commission precedent 

interpreting the cited language of Rule 3.15(2), the identical language in Rule 3.15(1) has been 

interpreted to encompass “amendments which clarify the allegations of a complaint or which 

merely add examples of practices already challenged.” See In re Champion Home Builders, 

1982 FTC LEXIS 52, at *2-3 (1982); In re Orkin Exterminating Company, Inc., Dkt. No. 9176, 

1984 FTC WL 251774, at *1 (Nov. 15, 1984) (in action involving price increases of contracted 

services, “enumerat[ing] an additional contract service falling within the category of services on 

which annual fees were raised is well within the scope of the original complaint allegations”). 

McWane argues that the is outside of, and contrary to the 

Complaint. McWane is incorrect. The Complaint alleges that McWane began fixing prices of 

Fittings in January 2008. Compl., ¶¶ 2, 29. Although the Complaint alleges that the monthly 

exchange of sales information among McWane and its rivals through the Ductile Iron Fittings 

Research Association (“DIFRA”) ceased in January 2009, and that the passage of the American 

Recovery and Reinvestment Act of 2009 in February 2009 “upset the terms of coordination” 

among McWane and its rivals, the Complaint contains no allegations as to the ending date of this 

conspiracy, or indeed any allegation that the conspiracy ended at all. Compl., ¶¶ 3, 36. Nowhere 

in the Commission’s Complaint is there any statement that would have led McWane reasonably 

9 
to believe that the specific examples of price fixing alleged in the Complaint in 2008 were 

exhaustive rather than illustrative. Indeed, the Complaint specifically alleges that McWane and 

Sigma collusively fixed prices of domestically produced Fittings in 2009. Compl., ¶¶ 49-50. 

McWane represents to the Commission that the Complaint alleges that any conspiracy 

involving McWane was “disbanded” “in early 2009.” McWane SOF ¶¶ 1-2; Opp. Brief at 5 

fixing conspiracy described in the Complaint, and it is disingenuous of McWane to equate the 

of and took substantial discovery on this issue. This 

particular price fixing episode first emerged 

copy of which was produced to McWane at the commencement of discovery. McWane’s 

counsel appeared at the deposition of nine individuals where testimony about the events of 

(“the Commission’s Complaint acknowledged the alleged conspiracy ‘disbanded”). This is 

blatantly misleading. the 

conspiracy to exchange information through DIFRA is not coextensive with the larger price 

two. See Compl. ¶¶ 29-32 (conspiracy before DIFRA); ¶¶ 49-50 (conspiracy after DIFRA); ¶¶ 

64-65 (price fixing and information exchange pled as distinct violations of the FTC Act). 

Contrary to its assertions, McWane had actual notice of the claims against it arising out 

a 

was given. McWane’s counsel questioned 

before Complaint Counsel raised the issue in his deposition. Complaint Counsel 

also questioned McWane executives without 

objection by McWane’s counsel. And both McWane and Complaint Counsel raised the 

 and the events surrounding them in the depositions of nine 

different witnesses. Thus, McWane had actual notice of the claims against it well before the 

10 
 

close of discovery and had ample opportunity to defend itself against those claims. This simple 

fact distinguishes this case from all of the due process cases relied upon by McWane. See 

McWane Opp. 12-13. 

2. The Commission May Conform the Pleadings to the Evidence on a Motion 

for Summary Decision 

The Commission’s Rules of Practice give the Commission the authority to enter partial 

summary decision on . Specifically, Rule 3.15(2) provides 

that 

When issues not raised by the pleadings or notice of hearing but reasonably 

within the scope of the original complaint or notice of hearing are tried by 

express or implied consent of the parties, they shall be treated in all respects as if 

they had been raised in the pleadings or notice of hearing; and such amendments 

of the pleadings or notice as may be necessary to make them conform to the 

evidence and to raise such issues shall be allowed at any time. 16 C.F.R. § 

3.15(2). 

Although no Commission precedent exists for conforming the pleadings to the evidence 

on a motion for summary decision pursuant to Rule 3.24, the weight of federal practice under the 

analogous provision of the Federal Rules of Civil Procedure, Rule 15(b)(2), supports the 

authority of the Commission to do so.2

 The majority rule interprets Rule 15(b)(2) to apply at the 

summary judgment stage, and that summary judgment may be sought on issues not previously 

raised in the pleadings. See Ahmad v. Furlong, 435 F.3d 1196, 1203 n.1 (10th Cir. 2006) (noting 

circuit split); McCree v. SEPTA, 2009 U.S. Dist. LEXIS 4803, *33 (E.D. Pa., Jan. 23, 2009) 

(“the vast majority of the Circuit Courts of Appeals” apply Rule 15(b) at summary judgment); 

Cruz v. Coach Stores, Inc., 202 F.3d 560, 569 (2d Cir. 2000); Suiter v. Mitchell Motor Coach 

2 See Fed. R. Civ. Pro. 15(b)(2) (“When an issue not raised by the pleadings is tried by the parties’ express or 

implied consent, it must be treated in all respects as if raised in the pleadings. A party may move—at any time, even 

after judgment—to amend the pleadings to conform them to the evidence and to raise an unpleaded issue. But failure 

to amend does not affect the result of the trial of that issue.”) 

11 
Sales, Inc., 151 F.3d 1275, 1279-80 (10th Cir. 1998); Smith v. Transworld Sys., Inc., 953 F.2d 

1025, 1030 (6th Cir. 1992). 

Because the Commission interprets its Rules of Practice in conformity with analogous 

provisions in the Federal Rules of Civil Procedure, the Commission should follow the majority 

rule of the federal courts and hold that Rule 3.15(2) allows the Commission to conform the 

pleadings to the evidence on a Rule 3.24 motion for summary decision. In re Kroger Co., 98 

F.T.C. 639, 726 (1981) (Commission’s summary decision rule interpreted consistently with 

federal analogue); In re Hearst Corp., 80 F.T.C. 1011, 1014 (1972) (same). 

3. McWane has Impliedly Consented to the Summary Decision of this Issue 

 Like Rule 3.15(2) of the Commission’s Rules of Practice, Rule 15(b) of the Federal 

Rules of Civil Procedure requires that a issues not raised in the pleadings be tried – or litigated – 

by “the express or implied consent of the parties” before the pleadings may be deemed 

conformed to the evidence. 16 C.F.R. § 3.15(2); Fed. R. Civ. Pro. 15(b). Federal courts 

interpreting Rule 15(b) have held that the test for establishing such consent is “whether the 

opposing party had a fair opportunity to defend and whether he could have presented additional 

evidence had he known sooner the substance of the amendment.” Hardin v. ManitowocForsythe Corp., 691 F.2d 449, 456 (10th Cir. 1982). 

McWane’s litigation of shows implied consent to the 

summary adjudication of this issue. “One sign of implied consent is that issues not raised by the 

pleadings are presented and argued without proper objection by opposing counsel.” In re 

Prescott, 805 F.2d 719, 725 (7th Cir. 1986). McWane has demonstrated consent by 

affirmatively developing evidence on and its surrounding 

circumstances – none of which are relevant to the narrow reading of the Complaint McWane 

12 
now espouses. See Prescott, 805 F.2d at 725 (“Implied consent may also be found if the 

opposing party itself presents evidence on the matter”). McWane has also demonstrated consent 

by failing to object to the testimony Complaint Counsel has elicited relating to the same matters. 

See Prescott, 805 F.2d at 725 (“To demonstrate lack of consent, the objection should be on the 

ground that the contested matter is not within the issues made by the pleadings”) (internal 

citation and quotation marks omitted); see also United States Fidelity and Guaranty Co. v. 

United States, 389 F.2d 697, 698-99 (10th Cir. 1968) (“where no objection is made to evidence 

on the ground it is outside the issues of the case, the issue raised is nevertheless before the trial 

court for determination, and the pleadings should be regarded as amended in order to conform to 

the proof”). 

McWane has also fully briefed this issue in its Opposition to Complaint Counsel’s 

Motion for Partial Summary Judgment, and had a full opportunity to defend itself by entering 

additional affidavits or pointing to any exculpatory evidence. See People for the Ethical 

Treatment of Animals v. Doughney, 263 F.3d 359, 367-68 (4th Cir. 2001) (affirming summary 

judgment for the plaintiff on claim raised for the first time in summary judgment motion when 

the defendant “vigorously defended” the summary judgment motion); Whitaker v. T.J. Snow Co., 

151 F.3d 661, 663 (7th Cir. 1998) (“Because both parties squarely addressed the strict liability 

theory in their summary judgment briefs, the complaint was constructively amended to include 

that claim”); Transworld Systems, 953 F.2d at 1030 (affirming summary judgment on affirmative 

defense raised for the first time at summary judgment where “the “plaintiff responded to 

defendant’s ... claims after raising his objections to use of the defense... [and] had ample 

opportunity to file affidavits or deposition testimony to rebut defendant’s use of the defense”). 

13 
McWane has not asserted that it needs more time to prepare a defense to Complaint 

Counsel’s Motion or pointed to any specific potentially exculpatory evidence it would be able to 

marshal at trial that it does not have at present. See Rule 3.24(4) (outlining procedure for nonmoving party to seek additional time to conduct discovery to defeat a motion “for reasons stated” 

in the affidavits in opposition to the motion). McWane’s failure to identify a single fact on 

which it needs more discovery is unsurprising: 

 There is no more discovery to be taken. 

Although McWane objects to the propriety of summary decision, that objection does not itself 

establish a lack of consent under Rule 3.15(2). See PETA, 263 F.3d at 367 (affirming grant of 

summary judgment despite objection by non-moving party that claim was raised for the first time 

on summary judgment); Transworld Systems, 953 F.2d at 1030 (same). A contrary rule would be 

nonsensical, allowing any party that had otherwise demonstrated its consent to the litigation of 

an issue to avoid summary decision simply by changing its mind. 

The cases cited by McWane to support its assertion that courts refuse to address claims 

beyond the scope of complaints are all distinguishable as involving claims added by the nonmoving party to escape summary judgment. See McWane’s Opp. at 13. Evading summary 

judgment by asserting novel claims is not the equivalent of impliedly consenting to the summary 

disposition of claims by actively litigating and briefing in these claims. 

14 
 

 

 

 

 

 

III. Conclusion 

For the reasons given above, Complaint Counsel respectfully request, pursuant to Rule 

3.15(a)(2), that the Commission conform its Complaint against McWane to expressly include 

allegations relating to the existence, circumstances and content of 

 and enter an order granting partial summary decision on the issue of whether 

McWane unlawfully restrained price competition and to 

allow Complaint Counsel to try the remaining price-fixing allegations in the Complaint, which 

may result in broader relief. 

 Respectfully submitted, 

 s/ Edward D. Hassi 

Edward D. Hassi 

Counsel Supporting the Complaint 

 Bureau of Competition

 Federal Trade Commission

 Washington, DC 20580 

Dated: June 27, 2012 

15 
THE FOLLOWING EXHIBITS ARE 

CONFIDENTIAL AND REDACTED IN ENTIRETY: 

BHUTADA, R. DEPOSITION EXCERPT
 

JANSEN DEPOSITION EXCERPT 

MCCULLOUGH DEPOSITION EXCERPT
 

MCCUTCHEON DEPOSITION EXCERPT
 

PAGE DEPOSITION EXCERPT 

PAIS DEPOSITION EXCERPT 

RYBACKI DEPOSITION EXCERPT
 

TATMAN DEPOSITION EXCERPT 

WALTON DEPOSITION EXCERPT 
 

 

 

 

CERTIFICATE OF SERVICE 

I hereby certify that on June 27, 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 electronic mail and 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: 

Joseph A. Ostoyich 

William C. Lavery 

Baker Botts L.L.P. 

The Warner 

1299 Pennsylvania Ave., NW 

Washington, DC 20004 

(202) 639-7700 

joseph.ostoyich@bakerbotts.com 

william.lavery@bakerbotts.com 

J. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

(205) 254-1000 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

Counsel for Respondent McWane, Inc. 
 

 

CERTIFICATE FOR ELECTRONIC FILING 

 I certify that the electronic copy sent to the Secretary of the Commission is a true 

and correct copy of the paper original and that I possess a paper original of the signed 

document that is available for review by the parties and the adjudicator. 

June 27, 2012 By: s/ Thomas H. Brock 

Attorney