discovery outweighs its likely benefit.

Complaint Counsel, in its opposition, states that Respondents have already issued
subpoenas duces tecum and subpoenas ad testificandum directing thirteen companies to
designate one or more officers, directors, managing agents, or other persons to testify on their
behalf regarding: (1) foreign and domestic suppliers and manufacturers of cryogenic tanks
worldwide; (2) the ability of foreign companies to compete in the U.S. market for cryogenic
tanks; (3) the ability of foreign and domestic companies to enter the U.S. market for cryogenic
tanks; (4) the ability of foreign companies to hire and utilize U.S.-based field crews in the LS.
market for ficld crection of cryogenic tanks; (5) attempts by Skanska/Whessoe, ‘'okyo Kanetsu
KK. (TKK), Entrepose, Bouygues/Technigaz, Tractebel, MHI, [HI, Technip/Coflexip or any
other foreign company to enter the U.S. market for cryogenic tanks: (6) the extent to which
foreign companies arc aware of, and are able to work with, U.S. design cudes and the domestic
infrastructure needed to compete in the U.S, market for cryogenic tanks; (7) methods used (or
able to be used) by foreign companies in conducting the construction phase of field-erected
cryogenic tanks; and (8) foreign and domestic suppliers and manufacturers of cryogenic tanks
and/or vacuum chambers worldwide. These sources should be able to provide Respondents with
the information they seek, such that discovery from forcign sources would be cumulative or
duplicative.

Respondents have not shown that they cannot obtain information regarding foreign
suppliers” activities in the United States from customers or from the U.S. partners of the foreign
suppliers. Because Respondents have not demonstrated that they cannot obtain the information

requested from domestic sources, Respondents have not demonstrated that the information is not


To make a good faith showing that the discovery requested would be ‘permitted by treaty
Tequires more than a bald assertion that the countries in which the proposed deponents and.
materials are located are signatorics to the Hague Convention. Although Respondents assert that
they intend to prepare the necessary papers in conjunction with local counsel in cach of the
relevant countries, Respondents have not demonstrated this is legally sufficient or would fulfill
all procedural requirements under the laws of each of the countries from which Respondents seek
discovery. Accordingly, Respondents have failed to demonstrate that the discovery requested
would be permitted by treaty, law, custom or practice in the country from which the discovery is
sought and that any additional procedural requirements have been or will be met before the
subpoena is served.

ly.
Because Respondents have not satisfied the requirements of Commission Rule 3.36(b),

Respondents’ motion for issuance of a subpocnas is DENIED WITHOUT PREJUDICE.

Dated: April 18, 2002

. ‘ Te ,

' -
NRW | ysinn
JAMES P. TIMONY
Administrative Law Judge ¢

u



“Such an exercise constitutes a violation of international law.” dé at 1313. “The exercise of
jurisdiction by any governmental body in the United States is subject to limitations reflecting
principles of international and constitutional law, as well as the strictures of the particular statute
governing that body’s conduct.” 7d. at 1315.

To effectuate the Commission's policy not to embroil the Commission in unnecessary
international conflicts, Respondents will be held to the standards the Commission established by
amending Rule 3.36(b).

TIE.

As set forth below, Respondents have failed to satisfy its burden of proof in

demonstrating that the four requirements of Rule 3.36(b} have all heen met.

(1) ~~ Respondents have not demonstrated that the material sought is reasonable in
scope.

Respondents have not demonstrated with sufficient specificity that the material sought is
reasonable in scope. 16 C.F.R. §§ 3.34{b); 3.36(6)(1). Respondents’ motion simply lists the
foreign companies from which they seek discovery and generally describes the materials they
seek. ‘This is not sufficiently specific for a motion secking discovery from foreign sources.

(2) Respondents have not demonstrated that the material sought falls within the
limits of discovery under § 3.31(c)(1).

Commission Rule 3.31{c}(1) allows discovery of materials reasonably expected to yield
information relevant to the allegations of the complaint, the proposed relief or the defense of any
respondent, but also sets forth that discovery may be limited by the ALJ if the material sought is
unreasonably cumulative or duplicative or obtainable from some other source that is more

convenient, less burdensome, or less expensive, or if the burden and expense of the proposed


available in a manner that is more convenienl, less burdensome, and less expensive than foreign
discovery.

3) Respondents have not demonstrated the information or material sought
cannot reasonably be obtained by other means.

Rule 3.36(b)(3) requires respondents to make a specific showing that “[t]he information
or material sought cannot reasonably be obtained by other means.” 16 C.F.R. § 3.36(b)(3). The
Federal Register nolice accompanying the amendment to Rule 3.36 explains that:

[foreign] discovery should only occur if a judge determines that... other :

means of obtaining the information (such as domestic discovery or

voluntary arrangements) have been exhausted or are fiot available.
66 Fed. Reg. at 17623 {emphasis added). This is consistent with the express policy of the U.S.
and other nations to minimize conflicts in the enforcement of antitrust laws that can arise from
attempts to enforce discovery outside the territory.

As discussed above, Respondents have failed to demonstrate that they cannot obtain the
information from domestic sources. In addition, Respondents have not demonstrated that they
cannot obtain the requested evidence voluntarily from the foreign companies. See Commission
Statement, 66 Fed. Reg. at 17623 (citing OECD Revised Recommendation, OECD Doc. C
(95)130 (Final) (July 1995}; DOJ & FTC, Antitrust Enforcement Guidelines.) The Antitrust
Enforcement Guidelines For International Operations issued by the U.S. Department of Justice
and the Federal Trade Commission provide:

In conducting investigations that require documents that are located outside the
United States, or contacts with persons located outside the United States, the
Agencies first consider requests for voluntary cooperation when practical and
consistent with enforcement objectives.

DOJ & FTC, Antitrust Enforcement Guidelines J 4.2. (April 1995). Respondents have made no


UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

CHICAGO BRIDGE & IRON COMPANY N.Y.
a foreign corporation,

CHICAGO BRIDGE & IRON COMPANY,
a corporation, and

DOCKET NO, 9300

PITT-DES MOINES, INC.,
a corporation.

Net ee ee ee

ORDER DENYING RESPONDEN'S’ .
MOTION FOR ISSUANCE OF SUBPOENAS

1
On April 5, 2002, Respondents filed a motion for the issuance of several subpoenas duces
fecum and subpocnas ad testificandum, Respondents’ motion is filed pursuant to Rule 3.36 of
the Commission’s Rules of Practice which requires a party seeking the issuance of 2 subpoena to
be served in a foreign country to file a motion demonstrating that the requirements of Rule
3.36(b) have becn met. 16 C.F.R. § 3.36. Complaint Counsel filed its opposition on April 17,
2002. For the reasons set forth below, Respondents’ motion is DENIED WITHOUT
PREJUDICE,
Tl.
Rule 3.36(b) of the Commission's Rules of Practice requires the party seeking issuance of

a subpoena to be served abroad to make specific showings that:


showing in their motion that they have contacted the foreign companies to determine whether
they will voluntarily provide documents, statements, or deposition testimony.

(4) —_ Respondents have not demonstrated that the discovery requested would be
permitted by treaty, law, custom or practice in the country from which the
discovery is sought and that any additional procedural requirements have
been or wil) be met before the subpoena is served, as is required by law.

Respondents have represented that each of the companies fram which they seek discovery
are located in countries that have agreed to abide by the terms of the Hague Convention.
Respondents further assert that, in general, for countries that have adopted the Hague
Convention, the international discovery process can be summarized as the following government
to government transaction: a U.S. judicial proceeding makes a request to the U.S. government
who in tun makes a request its foreign government counterpart, who likewise makes a request to
its judicial equivalent, who then decides whether or not to grant the request and order the
discovery on a particular entity or person.

In ils opposition, Complaint Counsel asserts that two of the countries from which
Respondents seck discovery are not parties to the Hague Convention on Taking of Evidence
Abroad in Civil or Commercial Matters, which provides for the transmittal of lettcrs rogatory or
request in civil or commercial judicial proceedings. Complaint Counsel Jurther argues that
another two countrics from which Respondents seek discovery may not consider a non-criminal
antitrust case filed by a government in an administrative proceeding to be a “civil or commercial
matter” within the scope of the Hague Convention. Jn addition, Complaint Counsel states that
two of the countries have enacted blocking statutes that can limit or prohibit subpoenaed parties

from producing evidence in connection with a foreign legal proceeding.


(1) the material sought is reasonable in scope;
(2) the material sought falls within the limits of discovery under § 3.31(c}(1);

(3) the information or material sought cannot reasonably be obtained by other
means; and

(4) the party seeking discovery has a good faith belief that the discovery
requested would be permitted by treaty, law, custom or practice in the
country from which the discovery is sought and that any additional
procedural requirements have been or will be met before the subpoena is
served.

16 CER. § 3.36(b).

Tn 2001, the Commission, concerned about the numerous issues and potential conflicts
that often arise in connection with issuing compulsory process to entities outside the United
States, amended its Rules of Practice to require ALJ supervision of proposed foreign compulsory
process. Explaining the reasons behind the amendment to the FTC’s Rules of Practice, the
Commission stated:

Respondents have from time to time attempted to serve such subpoenas

abroad. To the extent the subpoenas appear to have the imprimatur of the

Commission, an attempt to serve them on foreign entities outside the

territorial limits of the U.S. may raise scrious issucs of Commission

jurisdiction and international law. In the interest of limiting or avoiding

conflicts with foreign authorities in this area, the Commission is putting

foreign discovery requests back into the category of ALJ-supervised

discovery under § 3.36.

Federal Trade Commission Amendinents to Rules of Practice. 66 Fed, Reg. 17622, 17623
(F.T.C, April 3, 2001.) The Comnussion further explained that the requirements of Rule 3.36 are

designed to “assist the ALJ in attempting (o prevent unnecessary conflicts with foreign

sovereigns” and to assure that exercise of compulsory process outside the United States will nol


be attempted unless domestic discovery and voluntary arrangements have beén eXhausted or are

not available:
Indeed, the tests provided in § 3.36(b) provide a framework that closely tracks the
prerequisites for foreign discovery as commonly recognized by treaty, custom and
practice in many countries: That is, such discovery should only occur if a judge
determines that the request is reasonable and that other means of obtaining the
information (such as domestic discovery or voluntary arrangements} have been
exhausted or are not available.

66 Fed. Reg. at 17623.

The requirement of Rule 3.36(b)(4) stems trom the statutory limitations on the subpoena
powers of the Federal Trade Commission. Section 9 of the Federal Trade Commission Act
authorizes the Commission to compel depositions and the production of documentary evidence
from any place in the United States. 15 U.S.C. § 49. In Commodity Futures Trading
Commission v, Nahas, 738 F.2d 487 (D.C. Cir. 1984), the Court of Appeals for the D.C. Circuit,
in interpreting the stalulory provision similar to Section 9 of the Federal ‘Trade Commission Act
which authorized the Commodity Futures Trading Commission to compel the attendance of
witnesses and the production of documents “trom any place in the United States,” held that a
district court is without jurisdiction to enforce an investigative subpoena served on a foreign
citizen in a foreign nation. fd. at 496,

Under FTC v. Compagnie de Saint-Gobain-Pont-A-Mousson, 636 F.2d 1300 (D.C. Cir.
1980), a subpoena issued by an administrative agency of the United States must not violate
international law. “When an American regulatory agency directly serves its compulsory process

upon a citizen of a foreign country, the act of service itself constitutes an exercise of American

sovereign power within the area of the foreign country’s territorial sovereignty.” /d at 1304.