UNTED STATES OF AMERICA
 

BEFORE THE FEDERA TRADE COMMSSION
 

OFFICE OF ADMINISTRA TIVE LAW JUDGES
 

)
 

In the Matter of PUBLIC
 ) 

) McWANE, INC., ) DOCKET NO. 9351 

Respondent. ) 

) 

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

EXCLUDE EVIENCE, OR IN THE ALTERNATIVE, MOTION FOR CONTINANCE 

Respondent McWane's Motion to Exclude Evidence, or in the Alternative, Motion for 

Continuance ("Motion") should be denied. McWane's latest fiing is yet another untimely 

distraction filled with hyperbole that reflects Respondent's continuing disregard for the 

Commission's Rules of 
 Practice and the Court's February 15,2010 Scheduling Order, as 

amended June 1,2012. ("Scheduling Order"). McWane's Motion should be denied because 

McWane fails to meet the standards for motions in limine: the facts surrounding McWane's April 

2009 price-fixing agreement and June 2010 price signaling are directly relevant to the claims and 

defenses in this case, particularly in light ofMcWane's assertion that any remedy in this case 

would be moot. McWane's Motion should also be denied because it is untimely, its claimed lack 

of notice is simply untrue, and perhaps most importantly, because the Commission has already 

considered and rejected McWane's arguments.! 

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2009 

PUBLIC
 

I. The Evidence of McWane's Communications with its Co-conspirators in April 


and June 2010 is Relevant and Probative to the Claims and Defenses in this Case 

As this Court has already ruled, "( e )vidence should be excluded on a motion in limine 

only when the evidence is clearly inadmissible on all potential grounds." (Order Denying 

Respondent's Motion to Preclude Complaint Counsel's Proposed Proffer of 
 Investigational 

Hearing Transcripts at Trial, issued August 15,2012 ("August 15 Order"), at 1 (citations 

omitted)). Commission Rule 3.34(b) provides that "(r)elevant, material, and reliable evidence 

shall be admitted. Irrelevant, im:iaterial, 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 oftime, or needless presentation of cumulative evidence." 

16 C.F.R. § 3.43(b). 

This is a price-fixing case. Yet, McWane's Motion seeks to exclude all evidence related 

to its agreement to fix prices with one co-conspirator, Star Pipe Products Ltd ("Star"), in April 

2009 when both sides provided mutual assurances that they would adopt the same price list. 

McWane's Motion also seeks to exclude evidence that McWane and its other co-conspirator, 

Sigma, Inc., used pricing letters to communicate their intent to stabilize prices. These facts are 

directly relevant to the Complaint's allegations that Mc Wane, along with its co-conspirators Star 

and Sigma, colluded to fix prices. The June 2010 episode is also relevant to a key issue in this 

case: whether McWane and its co-conspirators communicated among themselves through the 

guise of letters nominally addressed to customers - an allegation that Mc Wane denies. The 

documentary evidence and testimony surrounding the June 2010 episode corroborates that, in 

fact, McWane and Sigma used their letters to communicate with each other. 

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These facts are also directly relevant to McWane's Fourth Defense, mootness. (Answer 

of Respondent McWane, Inc. (Feb. 2, 2012), at 10 ("McWane Answer"). McWane's Pretrial 

Brief attacks the proposed remedies as "moot or otherwise flawed," claiming that Complaint 

Counsel has no evidence that the conduct is likely to recur. The June 2010 episode is 

particularly telling. After receiving subpoenas pursuant to the Commission's investigation in this 

matter, McWane and Sigma continued to craft letters, only nominally addressed to customers, 

with the intent and effect of communicating to competitors and stabilizing prices. McWane's 

brazen effort to continue to stabilize prices after learning of 
 the Commission's investigation 

provides strong support for the need of a remedy in this case. 

Importantly, McWane does not assail the relevance or probative value ofthe evidence in 

question. McWane's only meaningful reference to the standard for motions in limine is that it 

would introduce prejudice, but McWane's Motion does not explain the basis for its prejudice 

claim. It does not argue that the evidence itself is somehow unfairly prejudiciaL. Instead, the 

basis for its argument seems to be that, based on its crabbed reading ofthe Complaint, McWane 

now finds itself surprised that this evidence is relevant. Mc Wane's conclusory claims are of the 

same sort that this Court has repeatedly rejected. See August 15 Order, at 4 ("Respondent's 

general assertions of unreliability or duplication of evidence are insufficient.") (citations 

omitted). 

II. McWane's Motion to Exclude is Untimely and Respondent Had Ample Notice ofthe
 

Relevance April 2009 and June 2010 Price Events 

McWane acknowledges that its Motion is untimely because the July 27, 2012, deadline 

for filing motions in limine has passed. See Motion at 1 n.l. The Court may deny Mc Wane's 

Motion as untimely without considering its merits. In re N C. Bd. of Dental Examiners, 2011 

FTC LEXIS 135, *7-8 (declining to consider Respondent's arguments because motion was 

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PUBLIC
 

untimely); See also Dedge v. Kendrick, 849 F.2d 1398 (11th Cir. 1988) ("(T)he district court 

properly denied the motion as untimely, and we need not address the merits of the motion in this 

appeaL."); United States Dominator, Inc. v. Factory Ship Robert E. Resoff 768 F.2d 1099, 1104 

(9th Cir. 1985) (''the record reveals that the defendants never requested a modification ofthe 

pretrial order to allow the fiing oftheir motion. Accordingly, we conclude that the district court 

properly denied the motion as untimely."). 

McWane attempts to circumvent the Scheduling Order's requirements by arguing that it 

lacked notice before the fiing deadline that the April 
 2009 and June 2010 price actions were 

relevant, and it points to Complaint Counsel's Pretrial Brief as the intervening event that 

warrants an exception to the Scheduling Order. But Complaint Counsel's Pretrial Brief did not 

introduce any new allegations, and McWane had notice of 
 the relevance of 
 the April 2009 and 

June 2010 events well before the July 27,2012 deadline for fiings motions in limine. 

A. McWane Had Ample Notice ofthe Relevance ofthe April 2009 Price-Fixing
 

Agreement 

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

of the April 2009 price-fixing agreement between McWane and Star and took substantial 

discovery on the issue. This particular price fixing episode first emerged in Mr. McCutcheon's 

2011 Investigational Hearing, a copy of which was produced to Mc Wane at the beginning of 

discovery. The April 2009 price-fixing agreement was discussed at the depositions of no less 

than nine individuals. McWane's counsel not only attended these depositions, they asked 

questions about the April 2009 price-fixing agreement, and even raised the issue of 
 the April 

2009 agreement at the deposition of 
 Star's President, Dan McCutcheon, before Complaint 

Counsel raised the issue in that deposition. Complaint Counsel also questioned Mc Wane 

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PUBLIC
 

executives Rick Tatman and Leon McCullough about the April 2009 episode without objection 

by McWane's counsel? 

In addition to McWane's actual notice (described above) of 
 the relevance of 
 the April
 

2009 price-fixing agreement, Complaint Counsel's Motion for Partial Summary Judgment
 

regarding assurances McWane and Star exchanged in April 
 2009 regarding future plans for list 

prices, which was fied on June 1,2012, provided explicit notice of 
 Complaint Counsel's
 

intention to introduce the April 
 2009 events as evidence ofMcWane's unlawful price fixing. 

The Pretrial Briefis consistent with Complaint Counsel's Partial Summary Judgment Motion, 

and there simply is no basis for McWane's argument that it did not have notice of 
 the relevance 

of April 
 2009 price-fixing agreement before the July 27,2012 deadline for fiing motions in 

limine. 

B. McWane Had Ample Notice of the Relevance of 
 the June 2010 Price

Signaling Conduct 

Like the April 
 2009 price-fixing agreement, the parties also took discovery related to the 

June 2010 price-signaling between Sigma and McWane. During the course of 
 fact discovery, 

Complaint Counsel elicited deposition testimony from two witnesses regarding the June 2010 

episode.3 Respondent also took testimony about the subject. On May 14,2012, Complaint 

Counsel deposed Larr Rybacki, Sigma's current President and Vice President of 
 Marketing and 

Sales at the time ofthe events, and questioned him about Sigma's June 2010 signaling letter (CX 

1413) that was directed to McWane: 

2 This significant discovery flatly contradicts McWane's stated need for 60 days of additional 

discovery or else it wil suffer unfair prejudice. See also Ansaldo Decl., Exh. 2, at. 
 1 0 (Complaint 

Counsel's Reply Memorandum in Support of 
 its Motion for Partial Summary Decision, Filed 

June 25, 2012); Complaint Counsel's Pre-Trial Brief 
 and Accompanying Exhibits at 33-34. 

3 See also Complaint Counsel's Pre-Trial Brief and Accompanying Exhibits at 34-36. 

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PUBLIC
 

Q. Do you know what Mr. Pais means by hopefully 

to create some momentum and traction? 

A. I know we needed a price increase because it 

was -- you know, our profits were so low. 

Q. And so you wanted to create some momentum 

and traction for a price increase, is that fair? 

A. We wanted a price increase desperately, no 

question. 

Q. And you wanted the market and your customers 

to know that, is that fair? 

A. Sure.
 

* * * 

Q. He says "Since our price increase letter at 

this point is largely a 'heads up' to the customers 

and the market," do you see that? 

A. It's to everybody, everybody that's in the 

market. 

Q. Okay, and that would include your 

competitors; right? 

A. Correct. 

(Rybacki, Dep. at 215-216 (objections omitted)). Respondent's counsel asked Mr. Rybacki 

about the same document on re-direct. (Rybacki, Dep at 303-304). 

Complaint Counsel also asked Sigma's Mr. Pais about these events, eliciting seven pages 

of testimony about CX 1413 and the circumstances surrounding the June 2010 price increase. 

(Pais, Dep. at 370-377). McWane's lead counsel, Mr. Ostoyich, even noted at the time that 

McWane's objection of "relevance is reserved and always has been, so I 
 just hope we're not 

going to spend a lot oftime on it at this point, but go ahead." (Pais, Dep. at 370). IfMcWane 

wished to assert a relevance objection, it had from the time of 
 Mr. Pais' deposition until the 

deadline for motions in limine. 

Additionally, on July 6, 2012, Complaint Counsel identified all of 
 the underlying 

documents relating to the June 2010 pricing action as exhibits to be introduced at trial and 

Respondent did not object to any of 
 them based on relevance or undue prejudice. Also on July 6, 

2012, Complaint Counsel designated the relevant portions ofthe deposition transcripts related to 

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PUBLIC
 

the June 2010 episode. While some ofthese designations received objections, others did not. If 

Respondent felt this evidence was irrelevant or unduly prejudicial, it had ample notice ofthe 

relevance ofthe June 2010 signaling behavior to file a timely motiQn_izLlimine_bN_Iuly_27, 2012.
 

III. The Commission Has Already Rejected McWane's Due Process Arguments
 

Perhaps most importantly, McWane made the same notice and Due Process arguments its 

response to Complaint Counsel's Motion for Partial Summary Judgment.4 The Commission 

and that decision is the law of the case. Respondent should not 

be allowed to revive already decided issues in an untimely motion in limine. 

In its Summ'ary Judgment Decision, 

The same analysis applies to the June 2010 events. The Complaint alleges that "McWane 

communicated the terms of its plan to Sigma and Star, at least in part through a public letter sent 

by McWane to waterworks distributors, the common customers of 
 the Sellers." Complaint at ir 

34(b). This allegation provides McWane with notice that its use of 
 nominal pricing letters to 

communicate with its competitors is a subject ofthis litigation. The June 2010 episode is yet 

4 See Ansaldo Dec!., Exh. 3, at 10-17 (Respondent McWane, Inc.'s Opposition to and Motion to Strike Complaint 

Counsel's Motion for Parial Summar Decision). 

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PUBLIC
 

another example of 
 such communication via pricing letters. McWane also had ample 

opportunity to avail itself of discovery on this issue. McWane questioned Mr. Rybacki about the 

June 2010 episode. McWane's decision not to ask Mr. Pais questions about the June 2010 price 

increase does not justify reopening discovery or excluding evidence. 

Not only is the Commission's decision instrctive, but it establishes the law of 
 the case.
 

Once issues have been resolved in litigation, courts generally decline to revisit them under the 

law of 
 the case doctrine. New Yorkv. Microsoft Corp., 209 F. Supp. 2d 132, 141 (D.D.C. 2002). 

Crocker v. Piedmont Aviation, Inc., 49 F.3d 735, 739 (D.C. Cir. 1995) ('''law-of-the-case 

doctrine' refers to a family of rules embodying the general concept that a court involved in later 

phases of a lawsuit should not reopen questions decided (i.e., established as the law ofthe case) 

by that court or a higher one in earlier phases."). This doctrine prevents reconsideration of a 

court's explicit decisions, as well as those issues decided by necessary implication. Id.; LaShawn 

A. v. Barry, 87 F.3d 1389, 1394 (D.C. Cir. 1996) (en banc) ("The law-of-the-case doctrine, the 

Supreme Court said, turns 'on whether a court previously decide(d) upon a rule of 
 law ... not 

whether, or how well, it explained the decision."') (quoting Christianson v. Colt Indus. 

Operating Corp., 486 U.S. 800, 817 (1988)). 

The Commission's decision 

And Mc Wane has offered no justification for asking 

this cour to entertain arguments that contradict the decided law of 
 this case.5
 

5 Respondents' retread Motion relies on newly-cited statements made in the Analysis to Aid 

Public Comment ("AAC") and press release issued by the Commission when McWane's 

coconspirators settled the price fixing allegations. However, the AAPC expressly states that: 

(t)he purpose ofthis Analysis to Aid Public Comment is to invite and facilitate 

public comment concerning the proposed order. It is not intended to constitute an 

official interpretation of the Agreement and proposed order or in any way to 

modify its terms. 

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PUBLIC
 

iv.	 Conclusion 

Respondent had ample notice and ample opportnity to take discovery and to fully 

prepare for its defense in this case related to the April 
 2009 price-fixing agreement and June 

2010 price signaling actions. The evidence related to those events is relevant to the allegations 

against McWane, and the defenses it asserts. Accordingly, this Court should deny Respondent's 

Motion. Complaint Counsel further respectfully requests that the Court order Respondent to 

seek leave prior to filing any further untimely motions. 

Dated: August 29, 2012	 Respectfully submitted, 

s/ J. Alexander Ansaldo 

Edward D. Hassi, Esq. 

Linda Holleran, Esq. 

Joseph R. Baker, Esq. 

Thomas H. Brock, Esq. 

Michael J. Bloom, Esq. 

Jeanine K. Balbach, Esq. 

J. Alexander Ansaldo, Esq. 

Andrew K. Mann, Esq. 

Monica M. Castilo, Esq. 

Counsel Supporting the Complaint 

Bureau of Competition 

Federal Trade Commission 

Washington, DC 20580 

Telephone: (202) 326-2470 

Facsimile: (202) 326-3496 

Electronic Mail: ehassi(aftc.gov 

(available at htt://www.ftc.gov/os/fedreg/2012/01/12011 Osigmafrn.pdf). Unoffcial 

interpretations issued by the Commission do not govern discovery or trial, especially in other 

proceedings. McWane gives no explanation and cites no authority for its proposition that these 

statements should limit the case against it. 

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PUBLIC
 

UNITED STATES OF AMERICA
 

BEFORE THE FEDERAL TRADE COMMISSION
 

OFFICE OF ADMINISTRATIV LAW JUDGES
 

) In the Matter of ) PUBLIC 

) McWANE, INC., ) DOCKET NO. 9351 

Respondent. ) 

) 

DECLARTION OF J. ALEXAER ANSALDO 

Pursuant to 28 U.S.C. § 1746, I make the following statement: 

1. My name is J. Alexander Ansaldo. I am making this statement in In the Matter of 

McWane, Inc., FTC Docket No. 9351, in support of 
 Complaint Counsel's Opposition To 

McWane, Inc.'s Motion to Exclude Evidence, or in the Alternative, Motion for 

Continuance. All statements in this Declaration are based on my personal knowledge as 

a Staff Attorney for the U.S. Federal Trade Commission, Bureau of 
 Competition, and if 

called upon to testify, I could competently do so. 

2. Tab 1 is a true and correct copy of 
 Opinion of 
 the Commission (In Camera), In re 

McWane, Inc. (Aug. 9, 2012) (F.T.C. Docket 
 No. 9351). 

3. Tab 2 is a tre and correct copy of 
 Complaint Counsel's Reply Memorandum in Support 

of its Motion for Partial Summary Decision, Filed June 25, 2012. 

4. Tab ~ is a true and correct copy of 
 Respondent McWane, Inc.'s Opposition to and Motion 

to Strike Complaint Counsel's Motion for Partial Summary Decision, Filed June 18, 

2012. 
PUBLIC
 

Pursuant to 28 U.S.C. § 1746, I declare, under the penalty of 
 perjury, that the foregoing is 

true and correct to the best of my knowledge, information, and belief. Executed this 29th day of 

August, 2012, at Washington, D.C. 

Respectfully submitted,
 

sf 1. Alexander Ansaldo 

J. Alexander Ansaldo 

Counsel Supporting the Complaint 

Bureau of Competition 

Federal Trade Commission 

600 Pennsylvania 
 Ave., N.W. 

Washington, DC 20580 

(202) 326-3695 
PUBLIC
 

CONFIDENTIAL EXHIBIT
 

REDACTED IN ENTIRETY
 

EXHIBIT 1
 
PUBLIC
 

EXHIBIT 2
 
PUBLIC 

UNTED STATES OF AMRICA
 

BEFORE THE FEDERAL TRAE COMMISSION
 

COMMISSIONERS: Jon Leibowitz, Chairman 

J. Thomas Rosch 

Edith Ramirez 

Julie Bril 

Maureen K. Ohlhausen 

) PUBLIC 

In the Matter of ) 

) 

MeW ANE, INC., ) DOCKET NO. 9351 

a corporation. ) 

) 

COMPLAINT COUNSEL'S REPLY MEMORAUM IN SUPPORT OF ITS MOTION 

FOR PARTIAL SUMMAY 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 

Edward D. Hassi 

Linda Holleran
 

Thomas H. Brock 

J. Alexander Ansaldo 

Andrew Mann 

Monica Castilo 

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 

June 27, 2012 
PUBLIC
 

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 Ilegal Price Fixing 

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

C. Entr of 
 Summary Decision Wil Not Violate McWane's Due Process Rights.......... 8
 

1. The is Reasonably Within the Scope ofthe
 

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 
PUBLIC
 

TABLE OF AUTHORITIES
 

Cases
 

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

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

Attorney Gen. ofMarylandv. 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 Antitrst 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.¥., Sept. 28, 1981). 8
 

11 
PUBLIC 

Lujan v. Natl 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
 

Suiterv. 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
 

TSllncorporatedv. 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
 

Whitakerv. 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
 
PUBLIC
 

I. Introduction
 

Mc Wane'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 Commissi~:m's Complaint. The Complaint does not allege that 

the "conspiracy existed only until 'January 2009' and 'disbanded' in February 2009" (McWane 

SOF ir 2). Indeed, the word "disbanded" does not appear in the Complaint and repeating it in its 

Opposition like a mantra wil not permit McWane to escape the undisputed facts. McWane's 

counsel did not operate under any ilusion 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
 

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

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

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

to restrain price competition 

II. Argument
 

Mc Wane 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 

1 
PUBLIC
 

attempted to develop exculpatory evidence in discovery regarding the
 

, and has impliedly consented to the summary disposition ofthis issue.
 

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

In its Opposition, Mc Wane 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 irir 30, 34. Mr. 

_ lack of memory of the event, which is no more than the absence of contrar 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 
PUBLIC
 

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

the existence of an agreement. Mc Wane argues that Mr. conclusory denials that
 

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

issue offact.! McWane SOF ir 14. McWane's theory flatly contradicts the text of 
 Rule 3.24(3), 

which provides that "a part 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 

Rule 56(e), the analogous provision of the Federal Rules of Civil Procedure, the "object ofthis
 

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

allegations of an affdavit" or deposition. Lujan v. Natl Wildlife Fed'n, 497 U.S. 871, 888
 

(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 insuffcient" to create a genuine fact issue"). II
 

as set forth in 

Complaint Counsel's motion papers, therefore trmps any conclusory denials.
 

McWane's other factual arguments fail to identify factual disputes that are materiaL. See 

Anderson v. LibertyLobby, Inc., 477 U.S. 242, 248 (1986) ("As to materiality, the substantive 

law wil identifY which facts are materiaL. Only disputes over facts that might affect the outcome 
PUBLIC 

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

Factual disputes that are irrelevant or unnecessar wil not be counted"). For example, it is 

irrelevant, as a matter of substantive antitrust law, whether or not: · U.S. V.
 

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

and with the effect of raising (or) depressing ... the price of a commodity in interstate ... 

is ilegal 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 negotiatioIis, most 

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

. 

Specific intent is not an 

United States v. United 

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

these issues. 

B.	 The Constitutes an Ilegal Price Fixing 

Conspiracy as a Matter of Law 

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

to a per se ilegal 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) (affrming 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
 
PUBLIC
 

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 oflaw. 

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. !d. at 

585-86. Sugar Institute sets forth a simple rule: while follow-the-Ieader 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 ilegality 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 ofMcWane'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 
PUBLIC 

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. !d. 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 ilegality. 

Three related features 0 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 part, not by one another, and thus already knew what 

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

6 
PUBLIC
 

Publication Paper communication, 

McWane's reliance on In re Baby Food Antitrst 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 casesas 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 

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

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

7 
PUBLIC
 

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

1987) ("mere denial ofthe existence of such an agreement cannot avoid summar judgment"); 

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

agreement) are not sufficient to avert summary judgment"). For the 

same reasons, 

("conclusory denials (of 


. McWane SOF irir 25,28. 

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

Entry of summary decision against Mc Wane on is
 

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

is reasonably within the scope ofthe Commission's Complaint, 

McWane had actual notice 0 , 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 Mc Wane 

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

1. is Reasonably Within the Scope of the
 

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 
PUBLIC
 

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). 

is one example ofthe conspiratorial conduct - price 

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 ofthe original complaint allegations"). 

Mc Wane 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., irir 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 Januar 2009, and that the passage of the American 

Recovery and Reinvestment Act of2009 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., iiir 3,36. Nowhere 

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

9
 
PUBLIC
 

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

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

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

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

involving McWane was "disbanded" "in early 2009." McWane SOF irir 1-2; Opp. Brief at 5 

("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 

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

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

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

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

o and took substantial discovery on this issue. This 

particular price fixing episode first emerged a 

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 o.
 

. 

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 surounding them in the depositions of nine 

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

10 
PUBLIC 

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

fact distinguishes this case from all ofthe 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 parial 

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 ofthe 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 Ahmadv. Furlong, 435 F.3d 1196, 1203 n.l (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 ofthe 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 paries' express or 

implied consent, it must be treated in all respects as if raised in the pleadings. A par 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 ofthat issue.") 

11 
PUBLIC 

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 summar 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) ofthe 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 ofthe 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 part 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 (lOth Cir. 1982). 

McWane's litigation 0 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 ofthe Complaint McWane 

12 
PUBLIC
 

now espouses. See Prescott, 805 F.2d at 725 ("Implied consent may also be found ifthe 

opposing part 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 (lOth 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 opportnity to defend itself 
 by entering 

additional affdavits 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) (affrming 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 liabilty 

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

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

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

defendant's... claims after raising his objections to use ofthe defense... (and) had ample 

opportnity to fie affidavits or deposition testimony to rebut defendant's use of 
 the defense"). 

13 
PUBLIC
 

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) (outlning procedure for nonmoving part 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 part that claim was raised for the first time 

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

nonsensical, allowing any part 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 part 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 summar 

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

14 
PUBLIC
 

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 o~ 

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

Mc Wane unlawfully restrained price competition and to

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

may result in broader relief. 

Respectfully submitted,
 

sf Edward D. Hassi 

Edward D. Hassi 

Counsel Supporting the Complaint 

Bureau of Competition 

Federal Trade Commission 

Washington, DC 20580 

Dated: June 27, 2012 

15 
PUBLIC
 

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
 

TATMA DEPOSITION EXCERPT
 

WALTON DEPOSITION EXCERPT
 
~. PUBLIC 

CERTIFICATE OF SERVICE 

I hereby certify that on June 27, 2012, I filed the foregoing document 

electronically using the FTC's E-Filng System, which wil send notification of such 

fiing to: 

Donald S. Clark 

Secretary 

Federal Trade Commission 

600 Pennsylvania Ave., NW, Rm. H-I13 

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-ll 0 

Washington, DC 20580 

I further certify that I delivered via electronic mail a copy of the foregoing document to: .
 

Joseph A. Ostoyich 

Wiliam 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 II
 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

(205) 254-1000 

atruitt@maynardcooper.com 

tthagard@inaynardcooper.com 

Counsel for Respondent Mc Wane, Inc. 
PUBLIC 

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 paries and the adjudicator. 

June 27, 2012 By:	 sf Thomas H. Brock 

Attorney 
PUBLIC
 

EXHIBIT 3
 
UNITED STATES OF AMERICA
 

BEFORE THE FEDERA TRAE COMMSSIO 

~ 

In the Matter of ) 

) PUBLIC 

MCW ANE, INC., 

a corporation, and 

STAR PIPE PRODUCTS, LTD., 

) 

) 

) 

) 

a liited partnership. ) DOCKET NO. 9351 

) 

) 

MEMORAUM OF LAW IN SUPPORT OF 

RESPONDENT McWANE, INC.'S OPPOSITION TO AND MOTION TO STRI
 

COMPLAINT COUNSEL'S MOTION FOR PARTIA SUMARY DECISION 

CONFIDENTIA 

MATERI PROTECTED PURSUANT TO
 

JANUARY 5,2012 PROTECTIVE ORDER ENTERED BY THIS COURT 
PUBLIC 

PUBLIC 

TABLE OF CONTENTS
 

SUMY OF ARGUMENT .....................................................................................................1
 

SUMRY OF ALLEGATIONS AN UNISPUTED MATERIAL 

FACTS ................................................................................~...............................................4
 

I. THE COMPLAINT ALLEGED A CONSPIRCY THAT WAS
 

"DISBANDED" BY "EARY 2009" ...............................................................................4
 

II. COMPLAIT COUNSEL'S NEWLY MAE-UP _ CLAM
 

CONTRAICTS TI COMPLAIT .............................................................................5
 

III. CC IGNORES SIGNIICANT EXCULPATORY EVIENCE THAT 

DEMONSTRATES THAT MCWANE
 

......................................5
 

IV. . SIGNIFICANT UNISPUTED FACTS DEMONSTRATE THAT S 

.................................................................................................... 7
 

ARGUMNT .................................................................................................................................11
 

I. THE COURT SHOULD STRI COMPLAINT COUNSEL'S MOTION 

FOR SUMMAY DISPOSITION OF A MAE UP CLAIM NOT
 

CONTAID IN AND CONTRAY TO THE COMPLAIT..................................12
 

A. The Due Process Clause Prohibits The Court From Addressing An
 

Alegation Not Contained In The Complaint ....................................................12
 

B. The FTC Act Prohibits The Court From Addressing An Allegation
 

Not Contailled In The Complaint.......................................................................14
 

III. THE COURT SHOULD ALSO THE MOTION BECAUSE 

COMPLAIT COUNSEL IGNORES SIGNIFICANT 

EXCULPATORY EVIDENCE, INCLUDING A SWORN DENIAL 

BY THE ONLY WITNESS IT RELIES ON .................................................................1S 

....................................................19
 

CONCLUSION ......................................................................................~.....................................23
 

ii 
PUBLIC 

PUBLIC 

TABLE OF AUTHORITIES 

Page(s) 

CASES 

Ala. Farm Bureau Mut. Cas. Co. v. American Fid. Lif Ins. Co., 

606 F.2d 602 (5th Cir. 1979) ...................................................................................................17 

American Tobacco Co. v. United States, 

328 U.S. 781 (1946)..........:......................................................................................................20 

Apex Oil Co. v. DiMauro, 

822 F .2d 246 (2nd Cir. 1987)...... ..... ........ ..... ........... ........ .... .... ...... ...... .... ... .......... ... ...... ..... .... .23 

Beacon Journal Publishing Co., Inc. v. Gonzales, 

No. 5:05-cv-1396, 2005 WL 2099787 (N.D. Ohio 2005) .......................................................14
 

Bell Atl. Corp. v. Twombly, 

550 U.S. 544 (2007).....................................................................................................18,19,22 

Blomkest Fertilizer, Inc. v. Potash Corp. of 
 Saskatchewan, 

203 F .3d 1028 ... .......... ..... ...... ......... ............. ....... ........ ............ .... .......... ..... ........ .................... .22
 

Christopher v. Harbury, 

536 U.S. 403 (2002).................................................................................................................13 

Clamp-All Corp. v. Cast Iron Soil Pipe Institute, 

851 F.2d 478 (1st Cir. 1988) (Breyer, J.)..................................................................,..............23
 

Copperweld Corp. v. Independence Tube Corp., 

467 U.S. 752 (1984).................................................................................................................19 

Daury v. Smith, 

842 F.2d 9 (1st Cir. 1988)........................................................................................................14
 

Farrell v. Einemann, 

CA No. 04-2088,2006 WL 1644826 (D.N.J. 2006)..........................................................16, 17 

FTC v. Cement Institute, 

333 U.S. 683 (1948).................................................................................................................20 

Golodner v..City of 
 New London, 

No. 3:08-cv-1319, 2010 WL 3522489 (D.Conn. 2010)...........................................................14' 

In re Baby Food Antitrst Litig., 

166 F.3d 112 (3d Cir. 1999)...............................................................................................20,22. 

In re Hearst Corp., 

80 F.T.C. 1011 (1972)..................................,...........................................................................18
 

ii
 
PUBLIC 

PUBLIC 

In re Publication Paper Antitrust Litigation, 

CA No. 3:04-md-1631, 2010 WL 5253364 (D.Conn. 2010)...................................................22 

In re Ruffalo, 

390 U.S. 544 (1968).................................................................................................................13
 

Karath v. Board of 
 Trustees, 

No. 3:07-cv-l073, 2009 WL 4879553 (D. Conn. 2009)..........................................................14 

King v. Cooke, 

26 F.3d 720 (7th Cir. 1994) .....................................................................................................17 

Kost v. Kozakiewicz, 

1 F.3d 176 (3d Cir. 1993).........................................................................................................14
 

Mennonite Bd. of Missions v. Adams, 

462 U.S. 791 (1983).................................................................................................................12 

Mullane v. Central Hanover Bank & Trust Co., 

339 U.S. 306 (1950).................................................................................................................13 

Parkv. City of 
 Chi., 

297 F .3d 606 (7th Cir. 2002) ............. ................ .... ... ..................... ................. .............. ...........17 

Seeds of Peace Collective v. City of Pittsburgh, 

, 453 Fed.Appx. 211 (3d Cir. 2011)...........................................................................................14 

Venzie Corp. v. United States Mineral Products Co., 

521 F.2d 1309 (3d Cir. 1975)...................................................................................................19
 

Willamson Oil Co. v. Philp Morris USA, 

346 F.3d 1287 (11th Cir. 2003) ...............................................................................................19 

STATUTES 

15 U.S.C. § 45................................................................................................................................15
 

15 U.S.C. § 45(b)...........................................................................................................................15
 

American Recovery and Reinvestent Act of2009 ("ARR") ........................0.............................4
 

AR ............................................................................................................................2, 13, 16, 17
 

FTC Act Section 5 .........................................................................................................................20
 

FTC Act Section 5 and.. ....... ..... ......................... ...... ..... .... ......... .................... ....... ......... ..... .......... ...1
 

Sherman Act Section 1.......................................................................................................19,20,23
 

iv 
I 

PUBLIC 

PUBLIC 

OTHER AUTHORITIES 

16 C.F.R. 3.24(a)(2).......................................................................................................................18
 

16 C.F.R. § 3.11.............................................................................................................................15,
 

16 C.F.R. § 3.15 .............................................................................................................................16
 

Fed. R. Civ. P. 15...........................................................................................................................17
 

. Fed.R.Civ.P. 15 (a) ........................................................................................................................16
 

Fed.R.Civ.P. 15 (b) ......................................,...........................................................................16, 17
 

Fed. R. Civ. P. 56...........................................................................................................................18
 

Federal Rule 56(f)..........................................................................................................................18
 

Federal Rule of 
 Civil Procedure 56(f) ...........................................................................................18
 

Federa Trade Commssion.. ........ .................................... .... ........... ....... .... ...... ........ ........... ....... ..2, 4
 

Foureenth Amendment ....... ........ ..... ..... ... .......... ..... .......... ... ..... ......... ....... ............... ..... ... ....... ... ....12
 

Rule 3.24....................................................................................................................................1,18
 

Rule 3.24(a)(3)...........................................................................................................................1,12
 

Rule 3.15 ..............................................................................................................................2, 16, 17
 

Rule 3.24(a)(4)...............................................................................................................................18
 

United States Constitution .............................................................................................................12
 

v 
PUBLIC 

PUBLIC 

Pursuant to Rule 3.24 of the Federal Trade Commission's Rules of 
 Practice, Respondent 

McWane, Inc. ("McWane"), submits ths memorandum of 
 law, and the accompanying Separate 

Statement of Undisputed Material Facts ("SOP"), in support of 
 its Opposition and Motion to 

Strike Complait Counsel's Motion for Parial Sumar Decision. 

SUMMARY OF ARGUMENT 

Complaint Counsel- - in what appears to be a first in the 98-year history of the Federal 

Trade Commission - - filed a motion for sumar decision on ''facts'' tht the Commssion's 

Administrative Complaint ("Complaint") does not allege violate FTC Act Section 5 and, indeed, 

are not contaed anywhere in the Complaint. To the contrar, they are expressly outside the 

scope of the alleged violation - - and, thus, not subject to adjudication in this proceeding. (See 

Rule 3.24(a)(3).) 

is, on its face, outside the Commssion's Complaint: indeed, the 

~laint did not allege any conspircy related to , did not alle e any conspiracy I 

., and did not allege any conspiracy to . (SOF '¡.)
 

Intead, it alleged a conspiracy to raise prices though increases in.=iers el 

~ and an end to job price discounts in Januar 2008 and June 2008 ~. (Id.)
 

Complait Counel's int motion is thus entiely disconnected from, and contr to, 

the allegations contaned in the actu Complaint. Most notably, the allegations in the actual 

Complaint allege that the conspiracy "disbanded in early 2009(,)" when the passage of the 

AR Buy-America statute ''upset the terms of coordiation" which, of course, predates the 

1 

FTC Docket No. 935 I 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

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instt allegations. (Id ("between June 2008 and Januar 2009"); (SOF ir 4 ("disbanded in early
 

2009").) 

In short, Complaint Counsel - - implicitly conceding the weakess of its actual case - ­

1 The Cour should ste Complait Counel's
 has simply made up a new and diferent case. 


motion in its entirety. It is outside the sco e of 
 the Commssion's case - - indeed, the core 

"facts" concernng the were known to the Commission during the 

Par 2 investigation and the Commission chose not to include them in its Complait and, instead, 

to allege a consiracy that ended in early 2009. (SOF irir 1-3.) The Complait has not been 

amended by the Commission, and Complaint Counsel did not seek amendment at any time as 

required by FTC Rule 3.15. Cour routinely refuse to address motions for sumar disposition 

that challenge alleged conduct that is outside the scope of 
 the complaint. Complait Counel's 

made-up violation is beyond the Commssion's statutory authority, was not the subject of full 

Par 3 litigation. and would violate the due process clause if addressed here. . 

If the Commssion had elected to include the alleged 

the Complaint (which it did not), this Cour should stll deny the motion because it literaly 

witnesses involved and contem oraneous documents. 

testiony and the documents are clear (and 

1 Complait Counsel did not move for sumar decision on any of 
 the allegations actually in the Complaint. 

2 

FTC Docket No. 9351
 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 

II 
FP'm'tfc 

2 SOF'l 14. 

3 ¡d. 

4 ¡d. 

3 

FTC Docket No. 935 i 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 

.; . 
PUBLIC 

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Complaint Counsel does not address . For that additional 

reason, the Cour should deny the motion. Complaint Counsel canot simply ignore sworn 

testimony that contradicts its argument. The denials are insurountable and Complaint Counsel 

canot get around them by simply pretending they do not exist. Instead ~f addressing the sworn 

(SOF~23.) 

SUMRY OF ALLEGATIONS AN UNDISPUTED MATERI FACTS' 

I. The Complaint Alleged A Conspiracy That Was "Disbanded" By "Early 2009" 

4 

FTC Docket No. 935 I 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Deision 
PUBLIC 

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II. Complaint Counsel's Newly Made-Up _ Claim Contradicts The
 

Complaint 

Nonetheless, Complaint Counsel moves for sumar decision 

. (SOF ir 8.) 

III. CC Ignores Si
 

McWaneMade 

5 

FTC Docket No, 9351 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summary Decision 
)'~t~~
 

-


* * * 

-

* * * 

-

* * * 

-

6 

FTC Docket No. 9351 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
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concedes the point. (SOF ir 12 .)5 

IV. Si nificant Undis uted Facts Demonstrate That 

7 

FTC Docket No, 935! 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Partial Summar Decision 
PUBLIC PUBLIC 

-

(SOF'r 23 (objections omitted).)6 

8 

FTC Docket No. 9351 

McWane, 1nc.'s Opposition to 

Complaint Counsel's Motion for Partial Summary Decision 
PUBLIC 

PUBLIC 

-


-


(SOFir26.) 

FTC Docket No. 9351 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

-


10
 

FTC Docket No. 9351
 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
~'ú~t~~ 

(SOF ir 44 (emphasis added) (objections omitted. 

simply no factual support for that asserton and significant evidence that contradicts it. 

ARGUMENT 

FTC Rule 3.24(a)(3) provides that a par may only move for a sumar decision in its. 

favor upon all or par "of 
 the issues being adjudicated." The rues does not care out an 

exception for Complaint Counsel to allow it alone to move for sumary disposition on issues 

tht are not being adjudicated. But that is exactly what Complaint Counsel here has done: it 

moves for paral sumar decision on an allegation that is not contaed in the Administative 

Complait and, in fact, is expressly contrar to the Complaint's allegations. Ths kind of 

11 

FTC Docket No. 935 I 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
~~t~'t 

gamesmanship is beyond Complaint Counsel's statutory authority and a clear violation of 

McWane's due process rights. 

I. The Court Should Strike Complaint Counsel's Motion For Summary Disposition 

. Of A Made Up Claim Not Contained In And Contrary To The Complaint 

A. The Due Process Clause Prohibits The Court From Addressing An 

Allegation Not Contained In The Complaint 

The Supreme Cour has made clear that the Due Process Clause of the Foureenth 

Amendment of the United States Constitution protects the life, libert, and propert of all U.S.
 

citizens and "requires. . . notice reasonably calculated, under all circumstaces, to apprise 

interested pares of the pendency of the action and aford them an opportty to present their 

objections." Mennonite Bd of 
 Missions v. Adams, 462 U.S. 791, 795 (1983). 

The relief 
 Complaint Counsel seeks in its Motion directly afects McWane's interests. 

Accordingly, McWane is entitled to procedural due process, which includes advance notice -­

prior to the close of discovery - - of 
 the precise clais against it. Complaint Counel's attempt 

to avoid ths fudamenta due process requirement by moving for sumar decision on 

allegatons not contaed in - - and contrar to - - the Complaint is a clear violation ofMcWane's 

due process rights. For example, in In re Rufalo, 390 U.S. 544 (1968), an attorney was 

informed of new allegations against hi for the first time durng his hearng. He had no 

opportty to conduct discovery or prepare an adequate defense. The United States Supreme
 

Cour found that ths violated the fudaenta faiess of due process, holding that "( s )uch 

procedural violation of due process would never pass muster in any normal civil or criminal 

litigation." Id at 550-51.
 

Fundamenta faiess is thus a key element of due process for all proceedings, including 

this one, and cours have long recognized that a pary must not only receive notice of the claims 

against it, but the notice must also contain suffcient specificity to allow the pary to defend 

itself. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) ("An 

12 

FTC Docket No. 9351 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Paral Summar Decision 
PUBLIC 

PUBLIC 

elementa and fudamenta requirement of due process in any proceeding which is to be 

accorded fiality is notice reasonably calculated. . . (and) notice must be of such natue as 

reasonably to convey the required information."); Christopher v. Harbury, 536 U.S. 403, 416 

(2002) (the elements of the plaitiffs claim(s) "must be addressed by allegations in the
 

complaint suffcient to give fair notice to a defendant" . . . "the underlying cause of action and its 

lost remedy must be addressed by allegations in the complaint suffcient to give fair notice to a 

defendat. "). 

In ths cas, Mc Wane had no notice tht change would be a 

subject of adjudication. In fact, it was notified the opposite: that the Commission did not allege 

wrongdoing related (which was not mentioned anywhere in the 

Complaint) and, instead, alleged that the conspiracy was "disbanded" in early 2009 when 

Congress passed the AR in Februar. The Com laint was also clearly limited to Januar and 

June 2008 multiplier increases, not and job pricing in 2008). 

Cours routiely refue to address clais beyond the scope of complaints, holding that it 

is unai and prejudicial for plaintiffs to attempt to "amend" their complaints afer-the-fact durg 

sumar judgment briefing. Daury v. Smith, 842 F.2d 9, 15 (1st Cir. 1988) ("We will not 

rewrte plaitiffs complait to contain a count that was not included in it. . . . No motion was
 

made to amend the complaint. We do not think our duty to liberally constre the pleadings gives 

a: plaitiff the license to amend the complait by memorandum in the distrct cour and by brief 

in the appellate cour."); Golodner v. City of 
 New London, No. 3:08-cv-1319, 2010 WL 3522489 

at *9 (D.Conn. 2010) (grting defendant's motion for sumar judgment, the cour refused to 

address plaintiffs' allegations that were "beyond the scope of the complaint", holding that a 

"plaintiff canot amend his clai though a response to sumar judgment"); Karath v. Board 

of Trutees, No. 3:07-cv-1073, 2009 WL 4879553 at *3 (D. Conn. 2009) ("The Cour wil not 

permit plaintiff to amend his complaint by implication in response to sumar judgment"); 

Beacon Journal Publishing Co., Inc. v. Gonzales, No. 5:05-cv-1396, 2005 WL 2099787 at *2 

13 

FTC Docket No. 935 i 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

(N.D. Ohio 2005) (in granting sumar judgment for the defendat, the cour noted that "the 

relief Plaintiff requests in its (reply briefJ is beyond the scope of the Complaint. The Cour,
 

therefore, will not address Plaintiffs allegations").
 

Ths is not a novel rue. It applies to all cour in all jurisdictions. For example, appellate
 

cours have similarly refused to consider factual allegations made for the first time in appellate 

briefs as a matter of fudamenta fairness. See Seeds of Peace Collective v. City of Pittsburgh, 

453 Fed.Appx. 211,215 n.3 (3d Cir. 2011) ("we do not consider factu allegations made in 

Thee Rivers' brief 
 but not pleaded in the complaint"); see Kost v. Kozakiewicz, 1 F.3d 176, 183 

n.4 (3d Cir. 1993) ("We firmly reject appellants' attempt to augment the factual record relevant
 

to their claims by the voluminous inclusion in their briefs on appeal of facts not alleged in their
 

complaint or otherwse properly appearng in the record.") 

By moving for sumar decision on an the - - which the Complaint 

expressly alleges occured after the alleged cons iracy "disbanded" - -. Complaint Counsel is 

simply attempting to bully Mc Wane regarding a tht the Commission has 

implicitly decided was lawful. Mc Wane did not have notice of any alleged wrongdoing and did 

not conduct ful discover on the alleged
 . Ths Cour should thus strke 

Complaint Counsel's motion for paral sumar decision as improper under the due process 

clause. 

B. The FTC Act Prohibits The Court From Addressing An Allegation Not 

Contained In The Complaint 

In the FTC's administrative process, the Commission itself is responsible for deciding 

on the content of Administrtive Complaints. (15 U.S.C. § 45; 16 C.F.R. § 3.1 1.) Whle the 

Commission has delegated authority to varous subordinate unts, like the Bureau of 

Competition, the Commssion retains final authority as to whether any complaint shall issue and 

must vote on the content of any issued complaint. (16 C.F.R. § 3.11.) In this case, the 

14 

FTC Docket No. 935 i 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

Commission voted to issue a Complaint that specifically alleges that the conspiracy ended in 

early 2009. (AC irir 1-3, 32-36.) Under Section 5(b) of 
 the FTC Act, the Commission can issue 

a complait "(w)henever the Commssion shall have reason to believe that any such person, 

parership, or corporation has been or is using any unai method of competition(.)" (15 U.S.C. 

§ 45(b).)
 

All pertnent inomiation cited in Complaint Counsel's motion regarding McWane's 

was obtaed duriiig the stas Par 2 investigation and was thus
 

fully known to the FTC staf, the Commssion; and Complaint Counsel before this litigation 

began. The Commission afrmatively chose not to include allegations regarding 

_ in its Adminstrative Com lait. Because the Commission had all inormation
 

regarding the alleged when it voted on the Complaint, it implicitly 

concluded that there was no "reason to believe" that a violation of 
 the law.had occured durg 

tht time period. (Id.)
 

The Commission has never amended its Complait. Indeed, Complaint Counsel has 

never moved for leave to do so. Thus, Complait Counel has no statutory authority to move for 

sumar decision on an allegation that is beyond the scope of - - and contrar to - - the 

Complaint. Moreover, ths Cour's jursdiction is limited to the allegations that are actually 

contaed in the Complait. Even an amendment under Rule 3.15 - - which, again, Complait 

Counsel has never requested - - is permis~ible "only if 
 the amendment is reasonably within the 

scope of the original complaint or notice." In addition, of course, a motion to amend must be 

sent to the Commssion itself: "Motions for other amendments of complaits or notices shall be 

certified to the Commission." (16 C.F.R. § 3.15 (emphasis added).) None of 
 that is applicable 

here, however, because Complait Counsel has never bothered to fie a motion to amend the 

Complaint. Had it done so, this stil would be beyond its statutory authority because allegations 

relating to are clearly not "reaonably within the scope of the 

original complaint" when the AC specifically stated that the conspiracy "disbanded" in "early 

15 

FTC Docket No. 935 I 

McWane, Inco's Opposition to. 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

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2009" with the Februar 2009 enactment of 
 the ARR. (Ae irir 2-3,36; 16 C.F.R. § 3.15.)
 

Thus, any amendment would have to be certified to the Commission.
 

Again, this is not a novel rule -- the requirements under the Federal Rules of Civil
 

Procedure are the same. Paries have long been requied to either obtan wrtten consent of 
 the 

opposing par, or to move the cour for leave to amend, if 
 they wish to litigate claims beyond 

. the scope of 
 the complaint. See Fed.R.Civ.P. 15 (a) ("par may amend its pleading only with 

the opposing par's wrtten consent or the cour's leave"); Fed.R.Civ.P. 15 (b) (requiring 

consent of the paries for the Cour to treat issues not raised in the pleadings as if 
 they had been 

included). 

In addition, a pary seeking to amend must do so in a timely 
 maner, i.e., before the close 

of discovery. Attempts to "amend" a complaint - - without ever a formal motion to amend - - by 

simply tossing a new claim into a sumar judgment brief are routinely denied. In Farrell v. 

Einemann, CA No. 04-2088,2006 WL 1644826 (D.N.J; 2006), a plaitiff 
 raised a clai for the
 

first time in its sumar judgment brief. The cour refued to rue on the claim, holdig that 

"the paries seem to have moved on to litigating a clai which is absent from the Complaint. . . 

ths Cour will not. . . rue on a claim which has not been stated in the Complaint." Id. at *2.
 

The cour went on to note that Federal Rule of Civil Procedure 15(b) prevented it from treating 

issues not rased in the pleadings without consent of the pares. Id.; Fed. R. Civ. P 15(b).9 . 

Even assuming arguendo that Complaint Counsel had the statutory authority seek leave 

to amend the complait (which they do not), they should not be permtted to do so in such an 

improper and afer-the-fact maner. They should have followed Rule 15, but did not. rfthey 

had followed the Commission's rues and requested leave to amend the Complait, the motion 

should still have been denied. Under Rule 15, a cour may deny leave to amend if 
 there is undue 

delay, bad faith, dilatory motive, undue prejudice to the opposing par, or if 
 the amendment 

would be. futile. See Park v. City of 
 Chi., 297 F.3d 606,612-13 (7th Cir. 2002). "(T)he longer 

9 Federal Trade Commission Rule 3.15 is substantively identical to Fed. R. Civ. P. 15. 

16 

FTC Docket No. 935 i 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

the delay, the greater the presumption against granting leave to amend." King v. Cooke, 26 F.3d 

720, 723 (7th Cir. 1994) (internal quotation marks and citation omitted). Here, there is both 

undue prejudice and undue delay. McWane has been operating under the assumption that the 

Complaint meant what it said: that the alleged conspircy was limited in tie to 2008 and was , 

"disbanded" in "early 2009" when AR was enacted in Februar (and also that it was limited 

to 2008 multiplier increases and job prices, 

Again, the pertinent facts related to Mc Wane's were 

obtaed by FTC staf durng its Par 2 investigation and were, thus, known to the Commission 

(which chose to exclude them from its Complaint) and to Complaint Counsel - - which chose not 

to move to amend the Complaint. Discovery is now closed. Whle a pary may move for 

sumar decision at any time, as a genera rue sumar judgment should not be granted until 

the pary opposing the motion has had an adequate opportity to conduct discovery. Ala. Farm
 

Bureau Mut. Cas. Co. v. American Fid. Life Ins. Co., 606 F.2d 602 (5th Cir. 1979). Indeed,
 

Federal Rule of Civil Procedure 56(f) expressly gives a defendat facing a sumar judgment
 

motion before the close of discovery the opportty to oppose the motion in order to complete 

. discovery. The provisions of 
 FTC Rule 3.24 governg the stadards for sumar decision are 

vily identical to the provisions of 
 Fed. R. Civ. P. 56, governing sumar judgment in the 

federal cour. In re Hearst Corp., 80 F.T.C. 1011, 1014 (1972) ("Rule 3.24 a 4 tracks Federal
 

iiule 56 f)"). Because the Commission's Complait told McWane that its . was not at issue in the case, it has not had a full opportity to conduct discovery on


Complaint Counsel's new allegation. Sumar decision should be denied and the Cour should 

strke Complaint Counsel's made-up motion.
 

17 

FTC Docket No. 935 i 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
JPWi'tfc 

III. The Court Should Also The Motion Because Complaint Counsel Ignores
 

Significant Exculpatory Evidence, Including a Sworn Denial By the Only Witness it 

Relies On 

Complait Counsel's made-up clai, flatly contradicted by the testimony and other 

evidence in ths case, falls far short of showig that there is "no genuie issue as to any matenal 

fact regarding liabilty or relief(.)" 16 C.F.R. 3.24(a)(2). To the contrar, the evidence is not 

only highy disputed (thus showing signifcant "genuie issues" as to material facts), it is 

If ths were a real clai in the case, those undisputed facts
 

judgment in 
 McWane'sfavor. Indeed, Complait Counsel concedes 

Instead, the Supreme Cour and every Circuit have repeatedly dismissed cases 

challenging parallel, follow-the-Ieader conduct because that, by itself, does not suggest any 

preceding agreement. See, e.g., Bell Atl. Corp. v. Twombly, 550 U.S. 54~, 557 (2007) 

(''when alegations of parallel conduct are set out in order to make a § 1 claim, they must be 

placed in a context that raises a suggestion of a preceding agreement, not merely parallel conduct 

that could just as well be independent action") (emphasis added); Willamson Oil Co. v. Philip 

Morris USA, 346 F.3d 1287, 1310 (11th Cir. 2003)(''None of 
 the actions. . . tht appellants label 

'signals' tend to exclude the possibilty that the priar players in the tobacco industr were 

engaged in rational, lawfl, parallel pricing behavior"); Venzie Corp. v. United States Mineral 

Products Co., 521 F.2d 1309, 1314 (3d Cir. 1975) ("The absence of 
 action contrar to one's
 

economic interests renders consciously parallel business behavior 'meanngless, and in no way 

indicates agreement. "'). 

18 

FTC Docket No. 935 i 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Paral Summar Decision 
PUBLIC 

PUBLIC 

Complait Counsel's made-up clai is entirely dependent on 

_, whose testimony on ths issue FTC staff and the Commssion obtaned during the
 

Par 2 investigation - - and decided not to include in the Complaint - - and which Complaint 

Counsel had from the beginning of 
 this litigation and decided not to move to amend and add to 

the Complaint. That alone warants ths Cour denying the motion. In addition, though, even the 

paral discovery taken on ths issue shows facts quite different flom the pictue Complait 

Counel aits. In short, Com lait Counsel ignores substantial evidence and testimony tht
 

facts that demonstrate 

.. Twombly, 550 U.S. at 557 ("preceding agreement"); Copperweld Corp. v. Independence
 

Tube Corp., 467 U.S. 752, 771 (1984) (conspiracy requires proof of 
 ''uity of 
 purose or a 

common design and understading or a meeting of minds in an unlawfl arangement") (citation 

omitted).!O That requires proof 
 that defendants discussed and agreed upon "a unty of 
 purose or 

a common design and understading, or a meetig of minds in an unlawf arangement." 

American Tobacco Co. v. United States, 328 U.S. 781, 810 (1946); In re Baby Food Antitrst 

.10 An agreement under FTC Act Section 5 requires the same proof as an agreement under Sherman Act Section 1. 

See, e.g., FTCv. Cement Institute, 333 U.S. 683,691-92 (1948) ("soon after its creation the Commission began to 

interpret the prohibitions of s 5 as including those restrints of trade which also were outlawed by the Sherman Act, 

and that this Cour has consistently approved that interpretation of the Act"). 

19 

FTC Docket No. 9351 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

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Litig., 166 F.3d 112, 117 (3d Cir. 1999) ("The existence of an agreement is the hallmark" of a 

conspiracy claim). 

At most, Complaint Counsel's evidence shows that 

20 

FTC Docket No, 9351 

McWane, lnc.'s Opposition to 

Complaint Counsel's Motion for Parial Summary Decision 
PUBLIC 

PUBLIC 

as lawf: 

"the record demonsates that their testimony, at most, ca be characterized as an 

exchange of information tht each entity had aleady independently decided to follow the 

price increae anounced by IP on Februar 10,2003. Ajur could not reasonably
 

interpret the cited testimony as proof of an agreement to raise, fix or stabilze futue 

prices" . .. "at most, Korhonen simply communicated SENA's decision afer it had been 

made. That communcation canot have affected the decision UPM had already made to 

follow" 

In re Publication Paper Antiirust Litigation, CA No. 3:04-md-1631, 2010 WL 5253364 at *8 

(D.Conn. 2010) 

In Baby Food, the Cour found evidence lacking even though there was evidence that 

defendants notified each other of price increases before anouncing them to customers and 

regularly exchanged sales inormation. Baby Food, 166 F.3d at 117. Unlike Bab 

is undisputed tht (1)
 

21 

FTC Docket No. 9351 

McWane, Inco's Opposition to 

Complaint Counsel's Motionfor Parial Summar Decision 
PUBLIC 

PUBLIC 

Cours have made clear tht an afer.:the-fact communcation, without more, is not
 

evidence of a price-fixing agreement even when it actually addresses prices. Blomkest Fertilizer,
 

Inc. v. Potash Corp. ofSaskatchewan,'203 F .3d 1028, 1034 (8th Cir. 1999) (affirmng sum
 

judgment because "( e )vidence that a business consciously met the pricing of its com etitors does
 

not rove a violation of 
 the antitrst laws." . It is hard to understand 

- - could somehow 

suggest a "preceding agreement." Twombly, 550 U.S. at 557. 

Cour afer cour has held that no inerence of conspiracy can be drawn from the aferthe-fact decision by one company to follow 
 another company's price. Id. at 1036 ("evidence that 

the aleged conspirtors were aware of each other;s prices, before anouncing their own prices, is 

notlng more than a resttement of conscious parallelism, which is not enough to show an 

antitrst conspiracy"); Clamp-All Corp. v. Cast Iron Soil Pipe Institute, 851 F.2d 478, 484 (1st 

Cir. 1988) (Breyer, J.) (afng sumar judgment for defendants in a case in which
 

defendats in a concentrated market followed each other's list prices, holding that ''te price lists 

stil show no more than what defendats concede: that each firm, acting individually, copied the 

price list of 
 the industr leader. A firm in a concentrated industr tyically has reason to decide 

22 

FTC Docket No. 935 i 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

(individually) to copy an industr leader" . . . "such individual pricing decisions (even when each 

firm rests its own decision upon its belief that competitors will do the same) do not constitute an 

unawfl agreement under section 1 of the Sherman Act"); Apex Oil Co. v. DiMauro, 822 F.2d 

246, 253-54 (2nd Cir. 1987) ("parallel conduct alone will not sufce as evidence of such a 

conspiracy, even if 
 the defendants 'knew the other defendant companies were doing likewise. "'). 

Moreover, it would be paricularly perverse - - ånd contrar to Su reme Cour and 

Complaint Counsel does not cite any case for that novel proposition, 

and none exists. 

CONCLUSION 

For the reasons discussed herein, the Cour should strke Complait Counel's motion 

for swnar decision on a clai that is not contaed in - - and contrar to - - the Complait. 

Complait Counsel canot simply ignore those facts. Accordingly, the Cour should 

stre Complait Counsel's made-up motion (or, at a minimum, deny it because there are 

genuie issues of 
 material disputed fact). 

23 

FTC Docket No. 9351 

McWane, lnco's Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

Dated: June 25, 2012 

lsi J. Alan Trutt lsi Joseph Ostoyich 

J. Alan Trutt Joseph A. Ostoyich 

Thomas W. Thaard III Wiliam Lavery 

Maynard Cooper and Gale PC Baker Botts L.L.P. 

1901 Sixth Avenue Nort The Warer 

2400 Regions Harbert Plaz 1299 Pennsylvana Ave., N.W. 

Biringham, AL 35203 Washington, D.C. 20004-2420 

Phone: 205.254.1000 Phone: 202.639.7700 

Fax: 205.254.1999 Fax: 202.639.7890 

atrtt@maynardcooper.com joseph.ostoyich@bakerbotts.com 

ttagard@maynardcooper.com , willam.lavery@bakerbotts.com 

Attorneysfor Respondent McWane, Inc. 

24 

FTC Docket No. 935 I 

McWane, Inc.'s Opposition to 

Complaint Counsel's Motion for Parial Summar Decision 
PUBLIC 

PUBLIC 

CERTIFICATE OF SERVICE 

I hereby certfy that on June 25, 2012, I filed the foregoing document electronically using 

the FTC's E-Filig System, which will send notification of such filing to: 

Donald S. Clark 

Secretar 

Federa Trade Commission 

600 Pennsylvana Ave., NW, Rm. H-l13 

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 

Federa Trade Commission 

600 Pennsylvania Ave., NW, Rm. H-I1O 

Washington, DC 20580 

I fuer certfy that I delivered via electronic mail a copy of the foregoing document to: 

Edward Hassi, Esq. 

Geoffey M. Green, Esq. 

Linda Holleran, Esq. 

Thomas H. Brock, Esq. 

Michael L. Bloom, Esq. 

Jeanine K. Balbach, Esq. 

1. Alexander Ansaldo, Esq. 

Andrew K. Man, Esq. 

By: lsi Wiliam C. Lavery One of the Attorneys for McWane 

25 

FTC Docket No. 9351 

McWane, Inco's Opposition to 

Complaint Counsel's Motion for Paral Sumar Decision 
PUBLIC 

PUBLIC 

UNITED STATES OF AMERICA
 

BEFORE THE FEDERA TRAE COMMISSION
 

) In the Matter of	 ) PUBLIC
 

)
 

MCW ANE, INC., ) a corporation, and ) STAR PIPE PRODUCTS, LTD., )
 a limited partership. ) DOCKET NO. 9351
 

)
 

)
 

STATEMENT OF MATERI FACTS AS TO WHICH THERE IS NO GENUINE
 

DISPUTE IN SUPPORT OF RESPONDENT MCW ANE, INC.'S OPPOSITION AND
 

MOTION TO STRIKE COMPLAINT COUNSEL'S MOTION FOR SUMMY
 

DECISION, AN RESPONSE TO COMPLAINT COUNSEL'S STATEMENT OF
 

UNISPUTED FACTS
 

CONFIDENTIAL 

MATERI PROTECTED PURSUANT TO
 

JANARY 5,2012 PROTECTIVE ORDER ENTERED BY THIS COURT 

1 

FTC Docket No. 9351 

Statement of Material Facts in Support of 

McWane, Inc.'s Opposition to CC's Motion for Summar Decision 

i' 
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TABLE OF CONTENTS 

Page 

1. The Complaint Alleged A Conspiracy To Raise Multipliers (And Stop Job Price
 

Discounts) That Was _ By _..........................................................3
 

II. Complait Counsel's New Claim Regarding Is Not 

Contaed In The Complaint......... .......... ................ ..... ........... .... .......... ........ ........ ............. ..3
 

III. Undisputed Testimony Demonstrates That
 

.................................................................5
 

IV. Si 'ficant Undisputed Facts Demonstrate That
 

..............................................................6
 

V. There Is Geniune Dispute As To The Followig "Facts" From Complaint
 

Counsel's Statement Of 
 Undisputed Facts ...:....................................................................14
 

2 

FTC Docket No. 9351 

Statement of Material Facts in Support of 

McWane. Inc.'s Opposition to CC's Motion for Summar Decision 
~~t~~ 

Pusuant to Rule 3.24 of the Federal Trade Commission's Rules of 
 Practice, Respondent 

McWane, Inc. ("McWane"), submits this Statement of Material Facts as to Whch there is no 

Genuie Dispute ("SOF"), in support of its Opposition and Motion to Stre Complaint
 

Counsel's Motion for Parial Sumar Decision. 

There is no genuine dispute as to the following facts: 

I.	 The Complaint Alleg~acy To Raise Multipliers (And Stop Job Price Discounts) That Was __ By 

1. Counts 1 and 2 of the Admstrative Complait ("AC") allege that McWane
 

"conspired" with Sigma and Sta to issue "multiplier" price increases for ductile iron pipe fittings 

in Janua and June 2008 and to stop their "job price" discounting, beginng in Januar 2008 

and ending in "early 2009." (See CC's Motion, Tab 1 AC irir 2-3.) 

2. Accordig to the Complait and statements by the Commission, the alleged 

conspiracy existed only until "and _ in Febru 2009 because ''te 

passage of the American Recovery and Reinvestment Act of 
 2009 ("AR") in Februar 2009. 

. . upset the terms of coordination among the Sellers." (See CC's Motion, Tab 1 AC ir3 

(emphasis added); Januar 4, 2012 Statement by Federal Trade Commission,
 

http://ww.ftc.gov/opa/2012/01/mcwane.shtm); (See CC's Motion; Tab 1 AC ir 36 ("Januay 

2009").) 

II.	 Complaint Counsel's New Claim Regarding Is Not 

Contained In The Complaint 

3. In its Motion for Paral Sumar Decision, Complait Counsel _ 

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FTC Docket No. 935 i 

Statement of Material Facts in Support of 

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4. The Complait did not
 

Instead, it alleged a 
 conspircy to raise 

~ prices though increases in multipliers and an end to job price 

discounts in Janua 2008 and June 2008 _. (See CC's Motion, Tab 1 AC irir 32-24.) 

5. 

. (See CC's Motion, Tab 1 AC irir 2-3.; See CC's Motion, Tab 3 _ 

'6. 

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Statement of Material Facts in Support of 

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7. 

8. 

) 

HI. 

9. 

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.) 

10. 

11. 

12. 

13. 

_.)
 

iv. 

14. 

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15. 

16. 

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17. 

18. 

19. 

8
 

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20.
 

21. 

22. 

23. 

9 

FTC Docket No. 9351 

Statement of Material Facts in Support of 

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24. 

25. 

26. 

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27. 

28. 

30. 

31. 

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32.
 

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33. 

34. 

35. 

-

36. 

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Statement of Material Facts in Support of 

McWane, Inco's Opposition to CC's Motion for Summar Decision 
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37. 

38. 

39. 

40. The undisputed facts also show
 

13 

FTC Docket No. 9351
 

Statement of Material Facts in. Support of 

McWane, Inc.'s Opposition to CC's Motion for Summar Decision 
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v. There Is Genuine Dispute As To The Following "Facts" From Complaint Counsel's
 

Statement Of Undisputed Facts
 

Pursuat to Rule 3.24, Complaint Counsel submitted a Statement of Undisputed Facts
 

with its Motion for Parial Sumar Decision. Respondent McWane Responds as follows.
 

McWane believes that while Complait Counsel has mischaracterized or skewed a number of the 

"facts" cited, for reasons explained in more detail supra, there is genuie dispute as to the 

followig paragraphs in Complait Counsel's Statement:
 

41. 

The 

testimony cited does not support the statement. 

42. 

43. 

This stateme;it mischarcterizes the document -- _ 

14 

FTC Docket No. 9351 

Statement of Material Facts in Support of 

McWlie, lnc.'s Opposition to CC's Motion for Summar Decision 
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FTC Docket No. 9351 

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15 
Dated: June 25, 2012 

lsi J. Alan Trutt 

J. Alan Trutt 

Thomas W. Thagard II
 

Maynard Cooper and Gale PC 

1901 Sixth Avenue Nort 

2400 Regions Harbert Plaz 

Birmingha, AL 35203
 

Phone: 205.254.1 000 

Fax: 205.254.1999 

atritt@maynardcooper.com 

ttagard@maynardcooper.com 

PUBLIC 

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Is. Joseph Ostoyich 

Joseph A. Ostoyich 

Wiliam Lavery
 

Baker Botts L.L.P. 

TheWamer 

1299 Pennsylvana Ave., N.W. 

Washigton, D.C. 20004-2420
 

Phone: 202.639.7700 

Fax: 202.639.7890 

joseph.ostoyich@bakerbotts.com 

willam.lavery@bakerbotts.com 

Attorneys for Respondent McWane, Inc. 

16 

FTC Docket No. 935 i 

Statement of Material Facts in Support of 

McWane, Inc.'s Opposition to CC's Motion for Summar Decision 
PUBLIC
 

CERTIICATE OF SERVICE
 

I hereby certify that on June 25, 2012, I filed the foregoing document electronically using 

the FTC's E-Filng System, which will send notification of such filing to: 

Donald S. Clark 

Secreta 

Federal Trade Commission 

600 Pennsylvana Ave., NW, Rm. H-I13 

Washigton, DC 20580
 

I also certif that I delivered via hand delivery a copy of 


The Honorable D. Michael Chappell 

Administrative Law Judge , 

Federal Trade Commission 

600 Pennsylvana Ave., NW, Rm. H-IlO 

Washington, DC 20580 

I fuer certify that I delivered via electronic mail a copy of 


Edward Hassi, Esq. 

Geoffey M. Green, Esq. 

Linda Holleran, Esq.
 

Thomas H. Brock, Esq. 

Michael L. Blot?m, Esq. 

Jeanne K. Balbach, Esq. 

J. Alexander Ansaldo, Esq. 

Andrew K. Man, Esq.
 

the foregoing document to: 

the foregoing document to: 

By: lsi Wiliam C. Lavery One of 
 the Attorneys for McWane 
PUBLIC
 

EXHIBIT 1
 

This exhibit has been
 

marked Confidential
 

and redacted in its
 

entirety
 
PUBLIC
 

EXHIBIT 2
 

This exhibit has been
 

marked Confidential
 

and redacted in its
 

entirety
 
PUBLIC
 

EXHIBIT 3
 

This exhibit has been
 

marked Confidential 

and redacted in its
 

entirety
 
PUBLIC
 

EXHIBIT 4 

This exhibit has been 

marked Confidential
 

and redacted in its
 

entirety
 
PUBLIC
 

EXHIBIT 5
 

This exhibit has been
 

marked Confidential
 

. and redacted in its
 

entirety
 
PUBLIC
 

EXHIBIT 5
 

This exhibit has been
 

marked Confidential
 

and redacted in its
 

entirety
 
PUBLIC
 

EXHIBIT 7
 

This exhibit has been
 

marked Confidential
 

and redacted in its
 

entirety
 
PUBLIC
 

CERTIFICATE OF SERVICE 

I hereby certify that on August 29,2012, I fied the foregoing document electronically 

using the FTC's E-Filing System, which wil send notification of such fiing to: 

Donald S. Clark 

Secretary 

Federal Trade Commission 

600 Pennsylvania Ave., NW 

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-ll 0 

Washington, DC 20580 

I further certify that I delivered via electronic mail a copy of 
 the foregoing document to: 

Joseph A. Ostoyich 

Wiliam 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 II
 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Biringham, AL 35203
 

(205) 254-1000 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

Counselfor Respondent McWane, Inc. 
PUBLIC 

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. 

August 29,2012 By: sl Thomas H. Brock 

Attorney