UNITED STATES OF AMERICA ORIGINAL

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 parnership, )


Respondents.
 ) 

) 

ORDER DENYING RESPONDENT'S MOTION TO PRECLUDE
 

COMPLAINT COUNSEL'S PROPOSED PROFFER OF
 

INVESTIGATIONAL HEARING TRASCRIPTS AT TRIAL
 

I. 

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

a Motion in Limine to Preclude Complaint Counsel's Proposed Proffer of 
 Investigational 

Hearing Transcripts at Trial ("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 DENIED. 

II. 

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 oftrials. 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. IlL. 

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 tral, so that the motion is placed in the appropriate factual 

context. Us. 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, "!iJ n limine rulings are not binding on the tral judge, and the judge 

may change his mind during the course of a tral." 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 oftrial, 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)). 

III. 

Respondent states that Complaint Counsel has designated for admission at tral 

portions of 19 investigative hearing transcripts (IHTs). Respondent contends that all the 

IHTs should be excluded pursuant to Rule 3.43(b) of 
 the Commission's Rules ofPractIce 

because they are unreliable, cumulative, a waste of 
 time, and/or anyprobative value is 

outweighed by the risk of confusion and prejudice to Respondent if they are admitted. In 

support of its argument that the IHTs are unreliable and/or present the risk of confusion 

and prejudice, Respondent asserts that, pursuant to Commission Rules of 
 Practice 2.8 and 

2.9, Respondent was not 'given notice of, and did not attend, 17 of the 19 investigative 

hearings, and that there was no opportnity to object to improper questions or to 

contemporaneously cross-examine any of the investigational hearing witnesses. In 

support of Respondent's argument that the IHTs should be excluded as a "waste of 
 time" 

and "needless presentation of cumulative evidence," Respondent asserts that Complaint 

Counsel also has taken the deposition of every witness who provided testimony earlier at 

an investigational hearing and, according to Complaint Counsel's final proposed witness 

list, intends to call each such witness for live testimony at tral. Moreover, Respondent 

argues, depositions and live testimony are more thorough and more reliable than IHTs, 

, and there is no risk of prejudice to Complaint Counsel from being barred from 

introducing the IHTs. 

Complaint Counsel argues that the Commission's Rules expressly allow the 

admission of IHTs, and the procedural rules governing the conduct of investigational 

hearings do not result in testimony so inherently unreliable as to be subject to a blanket 

exclusion. Complaint Counsel asserts that Respondent has failed to demonstrate that any 

of the designated investigational hearing testimony is unreliable. Complaint Counsel 

states that, indeed, Respondent has failed to identify any allegedly objectionable 

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investigational hearng testimony that has been designated for admission. Moreover, 

Complaint Counsel notes, Respondent deposed each investigational hearing witness, 

including examining each witness' credibility and bases for prior testimony. 

Furthermore, Complaint Counsel argues, the IHTs cannot be deemed cumulative 

or unnecessar where, as here, Respondent has failed to point to any testimony that is 

duplicative of other testimony. In addition, the testimony is not duplicative, Complaint ! Counsel asserts, because due to limitations on the time allowed for the depositions of 

each investigational hearng witness, Complaint Counsel did not question the witnesses 

on all areas covered by the investigational hearing testimony, and references to 

investigational hearing testimony in the depositions wil be difficult to understand 

without further reference to the actual investigational hearing testimony. According to 

Complaint Counsel, Respondent has also designated investigational hearing testimony as 

exhibits and Respondent's expert relied on IHTs in forming his opinions. Finally, 

Complaint Counsel notes that investigational hearng testimony of 
 McWane executives is 

admissible pursuant to Rule 3.43 (b) in any event, as statements of a party-opponent. 

iv. 

Pursuant to Commission Rule 3.43(b), "(r)elevant, material, and reliable evidence 

shall be admitted. Irrelevant, immaterial, and unreliable evidence shall be excluded. 

Evidence, even if relevant, may be excluded if its probative value is substantially 

outweighed by the danger of unfair prejudice, confusion of the issues, or if the evidence 

would be misleading, or based on considerations of 
 undue delay, waste of 
 time, or 

needless presentation of cumulative evidence." 16 C.F.R. § 3.43(b). With respect to the 

admissibility ofinvestigaHonal hearing testimony, Rule 3.43(b) further states: 

Evidence that constitutes hearsay may be admitted if it is relevant, material, and 

bears satisfactory indicia of reliability so that its use is fair. . .. If otherwise 

meeting the standards for admissibility described in this paragraph, depositions, 

investigational hearings, prior testimony in Commission or other proceedings, 

expert reports, and any other form of 
 hearsay, shall be admissible and shall not be 

excluded solely on the ground that they are or contain hearsay. 

Id. (emphasis added); see also 74 Fed. Reg. 1804 at *1816 (January 20,2009) 

(Commission explaining that under revised Rule 3 .43(b), investigational hearngs "would 

be admissible and would not be excluded solely because they constitute or contain 

hearsay, if the testimony or other form of 
 hearsay was sufficiently reliable and 

probative"). 

Regarding the conduct of 
 investigational hearings, the Commission's Rules 

provide that: 

(s )uch hearings shall be stenographically reported and a transcript thereof shall be 

made a part of the record of 
 the investigation. . .. Unless otherwise ordered by 

the Commission, investigational hearings shall not be public. In investigational 

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hearings conducted pursuant to a civil investigative demand for the giving of oral 

testimony, the Commission investigators shall exclude from the hearing room all 

other persons except the person being examined, his counsel, the officer before 

whom the testimony is to be taken, and the stenographer recording such 

testimony. . . . 

16 C.F.R. § 2.8(b), (c). In addition, pursuant to Rule 2.9, investigational hearing 

witnesses are entitled to review, correct and sign the hearing transcript; bring counsel; 

and be advised by counsel during questioning. However, there are only limited rights to 

object to questions, and there are no provisions for cross-examination. 16 C.F.R. § 2.9. 

Respondent cites no authority for its position that the Commission's Rules that do 

not allow Respondent's counsel to appear, object to questions, or cross-examine the 

investigational hearng witness, necessarily result in testimony that is unreliable and, 

therefore, must be excluded under Rule 3.43(b). Moreover, the witness' abilty to review 

and correct the IHT, and to be advised by counsel, are indicia of 
 the testimony's 

reliability. In addition, the IHT attached to Respondent's motion shows that the 

testimony was given under oath, which also adds to its reliability. Respondent's argument 

that deposition testimony and live testimony are more reliable than investigational 

hearng testimony, because of the ability to cross-examine, does not mean that the 

investigational hearing testimony is unreliable to the extent that it is inadmissible in its 

entirety. Rather, this argument goes to the weight to be given the investigational hearng 

testimony, not to its admissibility. 

The Rules do not, however, provide for the automatic admission of IHTs at tral. 

Rather, Rule 3.43 clearly contemplates that individual portions of 
 investigational hearng 

testimony can be excluded, like any other proffered evidence, if the testimony is 

irrelevant, uneliable, duplicative, or otherwise fails to "meet( ) the standards for 

admissibility described in" Rule 3.43. 16 C.F.R. § 3.43(b). Respondent has failed to 

identify any testimony that has been designated by Complaint Counsel to which it 

objects, and Respondent's general assertions of 
 unreliability or duplication of evidence 

are insufficient. See In re Rambus, 2002 FTC LEXIS 90, at *10 (Nov. 18,2002) (holding 

that conclusory assertions of 
 burden were insuffcient basis for quashing subpoena). See 

also In re North Texas Specialty Physicians, 2006 FTC LEXIS 10, at * 8-9 (Jan. 10, 

2006) (denying motion to stay injunctive order, in par because "(s)imple assertions of 

harm or conclusory statements based on unsupported assumptions" were insuffcient to 

meet burden of showing harm). Such general assertions are particularly insuffcient to 

exclude evidence, prior to, and outside the context of, tral. 

Respondent has failed to meet its burden of demonstrating that Complaint 

Counsel's proffered IHTs are clearly inadmissible on all potential grounds. Accordingly, 

Respondent's Motion is DENIED. 

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v. 

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

reasons, Respondent's Motion to Preclude Complaint Counsel's Proposed Proffer of 

Investigational Hearing Transcripts at Trial is DENIED. This Order is not a 

determination, and shall not be constred as a ruling, as to the admissibilty of any 

paricular IHT testimony that may be offered at tral. 

ORDERED: ~~~L

D. Michael Chappell 

Chief Administrative Law Judge 

Date: August 15,2012 

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