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UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

OFFICE OF ADMINISTRATIVE LAW JUDGES

In the Matter of

McWANE, INC.,

a corporation, and

STAR PIPE PRODUCTS, LTD.,

a limited partnership.

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DOCKET NO. 9351

RESPONDENT MCWANE, INC.'S OPPOSITION TO COMPLAINT COUNSEL'S

MOTION TO EXCLUDE EVIDENCE RELATED TO DIFRA AND ITS OPERATIONS

OR IN THE ALTERNATIVE TO COMPEL RELATED DISCOVERY

COMES NOW, Respondent McWane, Inc. ("McWane"), and responds to Complaint

Counsel's motion to exclude evidence relating to the defunct trade association Ductile Iron

Fittings Research Association ("DIFRA") and its operations or in the alternative to compel

related discovery ("Motion") as follows.

INTRODUCTION

Complaint Counsel's Motion should be denied for four reasons. First, the Motion does

not cite any caselaw for the novel proposition that McWane, one ofseveral members ofDIFRA,

can waive a privilege for the association - - particularly not simply by asking factual questions on

non-privileged issues. In fact, it is striking that CC's Motion has not identified any DIFRArelated question in any deposition that was unanswered because McWane instructed a witness

not to answer based on an assertion of the attorney-client privilege with respect to

communications between DIFRA and its counsel. Moreover, McWane does not have the

07 10 2012 
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unilateral right to assert or to waive, on the behalf of the trade association as a whole or of its

other members, DIFRA's privilege with its counsel. Thus, this Motion is more properly directed

either to DIFRA itself, or to the only parties who have actually asserted the privilege in this

litigation on a question CC complains was not answere

Second, CC's assertion that McWane injected privileged communications with DIFRA's

counsel into this litigation is simply incorrect. To the contrary, CC brought DIFRA into this

litigation by asserting a claim against McWane based on DIFRA's structure, its operations and

its data gathering.l To defend itself against this claim, as McWane clearly has the legal right to

do, McWane has developed underlying/actual evidence regarding the basic structure, purpose

and operation of DIFRA, all of which is highly probative - - and none of which was the subject

of any assertion of privilege by McWane. Indeed, McWane simply asked factual questions about

documents produced - - without any privilege assertion over them - - by a number of thirdparties. CC asked questions about the same documents and did not claim at any deposition that

McWane somehow blocked it from getting answers it sought to DIFRA-related questions. Nor

did CC move to compel at any time during fact discovery in this matter.

1 The Complaint challenges the structure ofDIFRA (how many members) and DIFRA's data gathering. Complaint

~~ 2 ("exchanged sales data in order to facilitate this price coordination"), 34(a) ("This exchange of information was

to be achieved under the auspices of an entity styled as the Ductile Iron Fittings Research Association ("DIFRA"),

34(c) ("Sigma and Star manifested their understanding and acceptance of McWane's offer by initiating their

participation in the DIFRA information exchange in order to induce McWane to support higher price levels"), 35-38

(extensive allegations ofhow DIFRA's structure and info gathering facilitated collusion).
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McWane has not relied on any privileged 

communications with DIFRA's counsel in establishing these fundamental facts about DIFRA. 

Thus, no implied waiver of the attorney client privilege may be found. In addition, given the 

nature of Complaint Counsel's claim, it would be arbitrary, capricious, and grossly prejudicial to 

preclude McWane from presenting such non-privileged factual evidence. 

Third, CC has failed to meet its legal burden of proof to establish implied waiver of the 

privilege. It has not identified a single document that McWane allegedly withheld based on an 

attorney-client privilege with Bradley Arant or Long, or a single instance in which McWane's 

counsel instructed a witness not to answer a question based on an attorney-client privilege with 

Bradley Arant or Long. Furthermore, Complaint Counsel has not shown that it has been 

prejudiced by any alleged assertion of privilege. 

Fourth, Complaint Counsel has failed to comply with the procedural meet and confer 

requiremen 
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FACTUAL BACKGROUND

The Complaint in this proceeding alleges that McWane, Star and Sigma conspired

beginning in January, 2008 to raise the price at which ductile iron fittings were sold in the United

States. Complaint, 2. The Complaint further alleges that McWane, Star, and Sigma

"exchanged sales data in order to facilitate this price coordination." Id. DIFRA was the socalled "information exchange" that facilitated the alleged price coordination. Complaint, 35.1

2 See also Complaint, 'If 34 a:

Before announcing the June 2008 price increase, McWane planned to trade its support for higher prices in

exchange for information from Sigma and Star documenting the volume oftheir monthly sales ofDIPF.

This exchange ofinformation was to be achieved under the auspices of an entity styled as the Ductile Iron

Fittings Research Association ("DIFRA").

and Complaint, 'If 34 c:

Sigma and Star manifested their understanding and acceptance ofMcWane's offer by initiating their

participation in the DIFRA information exchange in order to induce McWane to support higher price

levels.
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CC does not cite (and did not raise at any point during discovery in this matter) any 

McWane assertion of privilege based on communications between DIFRA's lawyers and DIFRA 

that it claims has blocked it from getting answers to DIFRA-related questions. Nor does CC cite 

a DIFRA-related document that it argues McWane redacted based on an improper privilege 

assertion. To the contrary, substantial DIFRA documents have been produced by various parties, 

including McWane, with very little redaction - - and CC did not challenge any redaction during 

discovery. 
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ARGUMENT 

Implied waiver, or "at-issue" waiver, is an involuntary forfeiture of a privilege that may 

arise when a party "attempts to use the privilege as both a shield and a sword by partially 

disclos[ing] privileged communications or affirmatively rely[ing] on [them] to support its claim 

or defense and then shield[ing] the underlying communications from scrutiny." Pall Corp. v. 

Cuno Inc., 268 F.R.D. 167, 168 (E.D.N.Y. 2010) (citations omitted, brackets in original). To 

support a finding of implied waiver, the party arguing for a waiver must show that the opposing 

party "relies on the privileged communication as a claim or defense or as an element of a claim 

or defense." Id (citations omitted, emphasis in original). Waiver may also be found if the 

privilege holder "makes factual assertions the truth of which can only be assessed by 

examination of the privileged communication." Id at 169 (citations omitted). In practical terms, 

the doctrine of implied waiver is intended to prevent parties from asserting claims the opposing 

party cannot adequately dispute without access to the privileged materials. Bittaker v. Woodford, 

331 F.3d 715, 719 (9th Cir. 2003). 

Complaint Counsel has not established that McWane is relying on a privileged 

communication with Bradley Arant or Long to establish a claim or defense. The only evidence 
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McWane has presented regarding DIFRA consists of underlying facts and non-privileged 

communications, each of which has been independently assessed by Complaint Counsel through 

its examination of witnesses. See Sony Electronics, Inc. v. Soundview Technologies, Inc., 217 

F.R.D. 104, 110 (D.Conn. 2002) (distinguishing purely factual information from legal advice of 

counsel). 

McWane's use of that factual evidence- - all of which was produced in discovery by multiple 

parties and was the subject of testimony from multiple witnesses elicited by McWane and CC - ­

has not injected any privileged communication with Long or Bradley Arant into this litigation. 

"Only if the disclosure is of privileged information can it justify the forced disclosure of 

additional privileged information." Trustees of the Electrical Workers Local No. 26 Pension 

Trust Fund v. Trust Fund Advisors, Inc., 266 F.R.D. 1, 10 (D.D.C. 2010) (emphasis supplied). 

The disclosure of underlying facts or non-privileged communications with an attorney can never 

waive privileged communications. Id 

Where the party seeking to overcome a privilege is the party that has injected an issue 

into the litigation, an implied waiver of the privilege is not justified. See In re: Sims, 534 F.3d 

117, 134 (2nd Cir. 2008) ("a party's psychotherapist-patient privilege is not overcome when his 

mental state is put in issue only by another party"). To waive the attorney-client privilege, the 

defendant "must do more than merely deny" the allegations in the complaint; it "must inject a 

new factual or legal issue into the case." Cox v. Administrator United States Steel & Carnegie, 

17 F.3d 1386, 1419 (11 th Cir. 1994) (quoting Lorenz v. Valley Forge Ins. Co., 815 F.2d 1095, 
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1098 (ih Cir. 1987)). In presenting underlying facts about DIFRA's structure, purpose and data 

gathering functions, McWane is doing nothing more than denying Complaint Counsel's 

allegations that DIFRA was a nefarious organization designed to further an alleged price-fixing 

conspiracy. The fact that DIFRA was guided by experienced antitrust counsel is not itself 

privileged. See In re Grand Jury Proceedings, 899 F.2d 1039, 1042-43 (lIth Cir. 1990) (it is 

well established that a client's identity and the fact of legal representation itself is not 

privileged). 

Complaint Counsel's Motion is misdirected to McWane. As only one of the former 

members of DIFRA, McWane possesses neither the right nor the ability to waive the attorneyclient privilege on behalf ofDIFRA or the other members ofthe organization. See In re: Seagate 

Technology, LLC, 497 F.3d 1360, 1372 (Fed.Cir. 2007) ("The attorney-client privilege belongs 

to the client, who alone may waive it."). See also Cox, 17 F.3d at 1417 (same). _ 

If Complaint Counsel wishes to 

take this matter up with those parties, it should have done so at the time. In any event, McWane 

should not be penalized because CC now disagrees with an assertion of privilege by DIFRA's 

counsel. However, it would be arbitrary, capricious and grossly unfair to preclude McWane 

from submitting in its defense underlying, non-privileged facts regarding DIFRA, as the result of 

the actions of parties it did not subpoena and does not control. 

Not only has Complaint Counsel failed to show that McWane has relied on a privileged 

communication but it also has failed 
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to explain how it has been prejudiced by this alleged reliance. Absent proof of prejudice,

Complaint Counsel's Motion must be denied. See Cox, 17 F.3d at 1418.

CONCLUSION

For each ofthe independent reasons set forth above, Complaint Counsel's Motion is due

to be denied.

Joseph A. Ostoyich

One ofthe Attorneys for McWane, Inc.

OF COUNSEL:

Joseph A. Ostoyich

William C. Lavery

Baker Botts L.L.P.

The Warner

1299 Pennsylvania Ave., N.W.

Washington, D.C. 20004-2420

Phone: 202.639.7700

Fax: 202.639.7890

joseph.ostoyich@bakerbotts.com

andreas.stargard@bakerbotts.com

J. Alan Truitt

Thomas W. Thagard, III

Julie S. Elmer

Maynard, Cooper & Gale, P.C.

1901 Sixth Avenue North

2400 AmSouth/Harbert Plaza

Birmingham, AL 35203-2608

(205) 254-1000

(205) 254-1999 (facsimile)

atruitt@maynardcooper.com

tthagard@maynardcooper.com

jelmer@maynardcooper.com
 

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CERTIFICATE OF SERVICE 

I hereby certify that on July 10, 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 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: 

Edward Hassi, Esq. 

Geoffrey M. Green, Esq. 

Linda Holleran, Esq. 

Thomas H. Brock, Esq. 

Michael L. Bloom, Esq. 

Jeanine K. Balbach, Esq. 

J. Alexander Ansaldo, Esq. 

Andrew K. Mann, Esq. 

By: ______/s/ William C. Lavery_____

 William C. Lavery 

 Counsel for McWane, Inc. 
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