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PUBLIC 

08 02 2012 

UNITED STATES OF AMERICA
	

BEFORE THE FEDERAL TRADE COMMISSION
	

OFFICE OF ADMINISTRATIVE LAW JUDGES
	

) PUBLIC 

In the Matter of ) 

) 

MCWANE, INC., )

 a corporation, and ) 

STAR PIPE PRODUCTS, LTD., )

 a limited partnership. ) DOCKET NO. 9351 

) 

__________________________________ ) 

RESPONDENT’S MOTION IN LIMINE TO EXCLUDE OPINION TESTIMONY 

Remarkably, after nearly three years of investigation and litigation, Complaint Counsel 

proffers an “expert” economist, Dr. Laurence Schumann, who did not employ any economic test 

of any issue in the case. Instead, he reviewed documents and testimony and simply opined on 

his interpretation of them - - something that is entrusted to this Court and does not require any 

economic expertise. Schumann concedes that his opinion is simply his ipse dixit and cannot be 

independently verified or tested. He also concedes that he literally ignores substantial record 

evidence that flatly contradicts his untestable theories - - including, for example, 

domestic fittings customers in 2010 

and again in 2011. Schumann’s untestable interpretation of the record is junk science plain and 

simple. McWane, Inc. (“McWane”) accordingly moves to exclude his opinion in its entirety.

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SUMMARY OF ARGUMENT 

The Supreme Court has been clear: an expert’s untestable say-so is not reliable evidence 

at trial. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 579-80 (1993) (“whether the 

theory or technique in question can be (and has been) tested, [and] whether it has been subjected 

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 Counsel for the parties conferred, but were unable to reach a resolution. 

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to peer review”); General Elec. Co. v. Joiner, 522 U.S. 136, 146 (1977) (“Nothing . . . requires a 

district court to admit opinion evidence which is connected to existing data only by the ipse dixit 

of the expert”). To prevent unreliable opinions from getting to trial, the Court mandated that 

courts “must determine at the outset” that the proposed opinion is “scientifically valid,” 

“properly can be applied to the facts,” and “will assist the trier of fact[.]” Daubert, 509 U.S. at 

592-93. This gatekeeping role requires the exclusion of an expert “when indisputable record 

facts contradict or otherwise render the opinion unreasonable[.]” Brooke Group Ltd. v. Brown & 

Williamson Tobacco Corp., 509 U.S. 209, 242 (1993). 

a grounding in the methods and procedures of science, rather than subjective belief or 

unsupported speculation”). The tests are supposed to be peer-accepted and duplicable, so that 

any conclusion the expert draws from the tests can itself be subject to the rigors of the scientific 

method and tested. Daubert, 509 U.S. at 580. 

That is not what Schumann did: he admits that he did not employ any test at all. 

He concedes that his opinion is untestable: 

FACTUAL BACKGROUND 

I. Schumann’s Ipse Dixit Opinion Is Not Based On Testable Empirical Analyses 

Experts are supposed to use the scientific method to construct tests of the hypotheses put 

before them. Meister v. Medical Eng’g Corp., 267 F.3d 1123, 1127 (D.C. Cir. 2001) (“demands 

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Instead of employing empirical tests of the issues he was asked to evaluate, Schumann 

reviewed the record - - and then But that is no 

“test” at all, it is simply a tautology: he reviewed the record and formed his opinion which he 

believes is reliable because . . . he reviewed the record and formed his opinion. More critically, 

it is simply not an expert opinion: as he concedes, the Court is tasked with reviewing the record 

and forming its own conclusions. 

Schumann’s failure to do any empirical testing led him to extraordinary speculation 

about the very things he should have tested. For example, he acknowledges that 

, but he opines 

that Sigma, Star and McWane “ 

. He cannot define those times because he did not analyze any pricing 

data from any of the suppliers . Nor does he know whether the suppliers’ prices were moving in 

different directions at the same time or in parallel. 

Extraordinarily, Schumann concedes that he did not use the ordinary-course invoice price 

data of McWane, Sigma, or Star to determine whether their prices suggested competition or a 

conspiracy - -

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Instead, his opinion boils down to his assumption that prices 

He 

acknowledges that , but did not study 

whether 

Schumann conceded that Star grabbed more than domestic fittings customers in 

2010, 

 He 

also conceded that Star grabbed of all domestic fittings sold nationwide - - which it 

in 2011. 

Schumann did not employ any empirical test to determine whether McWane “excluded” 

Star from domestic production or “raised rivals costs.” Indeed, 

 Nor could he identify any cost Star incurred as a result of McWane’s rebate policy. 

 Instead, he conceded that 

 he did no empirical study of what amount of sales Star would 

need to become an efficient competitor, how it would do so, how McWane did anything to 

prevent its efforts, or whether consumers were better or worse off than they would have been 

otherwise. . 

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 Schumann’s Report contained no critique of the invoice price databases the companies maintained in the ordinary 

course. In his Rebuttal Report, he 

raised a newfound “concern” about McWane’s data. He initially suggested extensive efforts to get to the bottom of 

his purported concern, claiming that 

 When pressed, however, he recanted the entire story: there were no 

phone calls, (id. at 84:5-15 ), and he spent little or no time on the issue, (id. at 63:16-20), suggesting his “concern” 

was made-up or overblown. (Id. at 84:5-86:14.) 

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Instead of empirical testing, he just “posited” his say-so 

 In short, he “posited” the very thing he was supposed to test. 

Schumann’s opinion with regard to Sigma was equally conclusory and non-expert. 

II. Schumann Ignores Substantial Evidence That Contradicts His Ipse Dixit 

Schumann’s review of the record ignores substantial evidence that flatly contradicts his 

opinion. 

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But the totality was not very much. He relied only upon a small handful of purported 

communications - -

Schumann’s opinion thus boils down to 

 He does not identify the specific amount or number of 

instances of any agreed-upon reduction, and is 

unable to point to anything that supports his opinion :

 But when pressed, he conceded they were not of 

one mind: 

More importantly, 

3

 Schumann’s Report ¶¶ 87-88 cited a few other documents - - but acknowledged that they could not have led to a 

conspiracy in early 2008 because they were dated in late 2008 or mid-2009, after the alleged conspiracy ended. 

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Schumann did not empirically study whether job price discounts, in fact, declined. On the 

contrary, he acknowledges that job discounting continued throughout 2008 - - McWane reported 

ARGUMENT

 “[T]he trial judge must ensure that any and all scientific testimony or evidence admitted 

is not only relevant, but reliable.” Daubert, 509 U.S. at 589 (emphasis added. This requires a 

determination that the expert’s methodology is generally accepted in the scientific community, 

testable, and properly applied to the facts. Id. at 592-93 (emphasis added). A leading treatise 

identifies “red flags” which indicate unreliability and inadmissibility, including subjectivity and 

untestability, piecemeal review of the record, and failure to evaluate contradictory evidence. 2 

Saltzburg, Martin & Kapra, Federal Rules of Evidence Manual, 1229-37 (7th ed. 1998). 

Schumann’s opinion raises all of those red flags. 

I. Courts Routinely Exclude Expert Opinions That Are Untestable 

Expert opinion that is nothing more than the expert’s untestable say-so is inadmissible as 

matter of law. Joiner, 522 U.S. at 146; Weisgran v. Manley Co., 528 U.S. 440, 453 (2000) 

(contributes “nothing to a ‘legally sufficient evidentiary basis’”); Calhoun 350 F.3d at 321 

(“‘must be based on the methods and procedures of science rather than on subjective belief or 

unsupported speculation.’”). 

Schumann’s opinion is not based on any peer-accepted empirical test. Instead, he 

subjectively interprets a few select documents and testimony. He concedes that his interpretation 

cannot be tested. Courts routinely exclude expert opinions based entirely on the expert’s own 

say-so. In City of Moundridge v. Exxon Mobil Corp., No. 04-940, 2009 U.S. Dist. LEXIS 

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123954, at * 39 (D. D.C. Sept. 30, 2009), the court held that plaintiffs’ expert was entitled to “no 

weight” because his opinion ignored dozens of sworn denials and was “wholly unsupported and 

speculative.” The D.C. Circuit affirmed and held that the expert’s “unsupported assertion[],” 

based on a “few scattered communications,” “falls far short” of the proof necessary to create a 

genuine fact issue. 409 Fed. Appx. 362, 364 (D. C. Cir. 2011); see also In re Baby Food 

Antitrust Litig., 166 F.3d 112, 135 (3d Cir. 1999) (opinion “based on meager superficial 

information” was “highly speculative, unreliable, and of dubious admissibility”). 

II. Overwhelming Record Evidence Contradicts Schumann’s Ipse Dixit 

Schumann’s say-so is particularly unreliable because he flatly ignores substantial record 

evidence that contradicts his subjective belief - - for example, 

domestic fittings customers in 2010. “[W]hen 

indisputable record facts contradict or otherwise render the opinion unreasonable, it cannot 

support a jury’s verdict.” Brooke Group, 509 U.S. at 242. Again, courts routinely exclude 

experts whose say-so is contradicted by the evidence. Nebraska Plastics, Inc. v. Holland Colors 

Americas, Inc., 408 F.3d 410, 416-17 (8th Cir. 2005) (failed to “take into account a plethora of 

specific facts”); Williamson Oil Co. v. Philip Morris USA, 346 F.3d 1287, 1323 (11th Cir. 2003) 

(“did not differentiate between legal and illegal pricing behavior” and “could not have aided a 

finder of fact”); Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1056-57 (8th Cir. 

2000) (“mere speculation,” “not supported,” “indisputable record facts contradict or otherwise 

render the opinion unreasonable”) (quoting Brooke Group, 509 U.S. at 242). 

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/s/ J. Alan Truitt 

J. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

Phone: 205.254.1000 

Fax: 205.254.1999 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

Dated: August 2, 2012 

/s/ Joseph A. Ostoyich____ 

Joseph A. Ostoyich 

William 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 

william.lavery@bakerbotts.com 

Attorneys for Respondent McWane, Inc 

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PUBLIC
	

CERTIFICATE OF SERVICE 

I hereby certify that on August 2, 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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__________________________________________ 

 

 

PUBLIC
	

UNITED STATES OF AMERICA
	

BEFORE THE 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 partnership, ) 

) 

Respondents. ) 

__________________________________________) 

PROPOSED ORDER 

On July 27, 2012, McWane, Inc. filed its Motion in Limine to Exclude 

Opinion Testimony of Dr. Laurence Schumann. Upon consideration of this motion, 

it is hereby GRANTED. 

ORDERED: __________________________ 

D. Michael Chappell 

Administrative Law Judge 

___________, 2012 

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__________________________________________ 

 

 

PUBLIC
	

UNITED STATES OF AMERICA
	

BEFORE THE 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 partnership, ) 

) 

Respondents. ) 

__________________________________________) 

STATEMENT REGARDING MEET AND CONFER 

Pursuant to Paragraph 4 of the Scheduling Order, counsel for McWane met 

and conferred in good faith with Complaint Counsel regarding the issues raised in 

this motion but could not reach an agreement. 

By:		 _/s/ William C. Lavery________ 

Counsel for McWane, Inc. 

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