PUBLIC VERSION

UNITED STATES OF AMERICA

BEFORE FEDERAL TRADE COMMISSION

__________________________________________

)

In the Matter of )

)

CHICAGO BRIDGE & IRON COMPANY N.V., )

)

a foreign corporation, )

)

CHICAGO BRIDGE & IRON COMPANY, )

)

a corporation, ) Docket No. 9300

)

and )

)

PITT-DES-MOINES, INC., )

)

a corporation. )

__________________________________________)

RESPONDENTS' POST-TRIAL REPLY BRIEF 

AND MEMORANDUM IN SUPPORT OF THEIR

MOTION TO STRIKE

CHI:1176460.1
-iTABLE OF CONTENTS

Page

INTRODUCTION ...........................................................................................................................1

I. COMPLAINT COUNSEL'S PURPORTED EVIDENCE OF MARKET 

CONCENTRATION IS MISLEADING AND ARBITRARY. ..........................................4

A. HHI CALCULATIONS ARE MISLEADING AND OF LITTLE USE IN 

MARKETS WITH THIN DEMAND. .....................................................................4

B. USE OF HHI EVIDENCE IN THIS CASE IS ARBITRARY. ...............................7

II. CONTRARY TO COMPLAINT COUNSEL'S ASSERTIONS, RESPONDENTS HAVE 

FORCEFULLY REBUTTED ANY PRIMA FACIE CASE. ..............................................9

A. POST-ACQUISITION EVIDENCE IS HIGHLY RELEVANT...........................11

B. COMPLAINT COUNSEL APPLIES THE WRONG LEGAL STANDARDS

TO RESPONDENTS' REQUIRED SHOWING. ..................................................12

C. COMPLAINT COUNSEL HAS IGNORED RESPONDENTS' EVIDENCE 

REBUTTING ITS PRIMA FACIE CASE. ...........................................................14

D. COMPLAINT COUNSEL HAS NOT MET THEIR BURDENS OUTLINED

IN THE MERGER GUIDELINES. .......................................................................17

1. Extensive entry has already occurred in the relevant markets...................18

2. Evidence shows that entry has been and will be profitable at pre-merger 

prices. .........................................................................................................20

3. Evidence shows that new entry has been and will be sufficient to

constrain CB&I's prices. ............................................................................22

a. New entry has and will constrain CB&I's prices in the LNG 

market.............................................................................................22

b. New entry has and will constrain CB&I's prices in the LPG 

market.............................................................................................25

c. New entry has and will constrain CB&I's prices in the 

LIN/LOX market............................................................................25

E. THERE ARE NO SIGNIFICANT ENTRY BARRIERS TO THE

RELEVANT MARKETS. .....................................................................................28
-ii1. Evidence from CB&I witnesses and documents do not support claims 

of entry barriers..........................................................................................29

2. Evidence from Howard Fabrication does not support claims of entry 

barriers. ......................................................................................................30

3. Evidence from AT&V does not support claims of entry barriers..............30

4. Evidence from [xxxxxxxxxx] does not support claims of entry barriers...33

5. The 1994 Memphis bidding process provides no support for claims of 

entry barriers. .............................................................................................34

6. Testimony from Project Technical Liaison Associates provides no

support for claims of entry barriers............................................................34

7. Testimony from [xxxxxxxxx] provides no support for claims of entry 

barriers. ......................................................................................................35

8. Testimony from [xxxxxxxxxx] does not support claims of entry

barriers. ......................................................................................................36

9. Testimony regarding BSL does not support claims of entry barriers. ......37

10. Testimony from Black & Veatch does not support claims of entry

barriers. ......................................................................................................38

11. Testimony from Matrix does not support Complaint Counsel's claims 

regarding entry barriers..............................................................................39

12. Summary: Entry barriers do not exist in the relevant markets..................39

III. ALLEGATIONS REGARDING POST-ACQUISITION ANTICOMPETITIVE

EFFECTS ARE FALSE.....................................................................................................40

A. ARGUMENT THAT THE ACQUISITION HAS INCREASED MARKET 

POWER IS BASED ON INAPPLICABLE AUTHORITY AND MISCITED 

EVIDENCE............................................................................................................41

B. ALLEGED EVIDENCE OF ACTUAL ANTICOMPETITIVE CONDUCT 

IS A COLLECTION OF FALSE STATEMENTS UNSUPPORTED BY

THE EVIDENCE...................................................................................................42

1. Complaint Counsel has shown no evidence of collusion...........................43

a. The Spectrum Astro project provides no evidence of collusion. ...43

b. The TRW project provides no evidence of collusion. ...................44
-iii2. Complaint Counsel has not shown any evidence of price increases..........46

a. The Spectrum Astro project presents no evidence of price 

increases.........................................................................................46

b. The Cove Point project presents no evidence of price increases. ..47

c. MLGW budget pricing does not present evidence of price 

increases.........................................................................................49

d. Budget pricing provided to Linde does not present evidence of 

price increases................................................................................51

e. Pricing provided to [xxxxxx] does not present evidence of price 

increases driven by anticompetitive conduct. ................................52

f. Budget pricing provided to Fairbanks Natural Gas does not

present evidence of price increases................................................53

3. Complaint Counsel's other attempts to show anticompetitive conduct 

have failed..................................................................................................54

a. Negotiations between CB&I and [xxxxxxxxxxxx] do not

present evidence of anticompetitive effect.....................................54

b. CB&I's negotiating efforts regarding the Yankee Gas job 

present no evidence of anticompetitive effects..............................55

c. CB&I's relationship with [xxxxx] presents no evidence of 

anticompetitive effects. ..................................................................57

d. The Dynegy project presents no evidence of anticompetitive 

effects.............................................................................................58

IV. THE EXITING ASSETS DEFENSE IS APPLICABLE, AND UNDISPUTED

EVIDENCE SUPPORTS IT. .............................................................................................59

A. THE EXITING ASSETS DEFENSE EXISTS IN THIS CASE............................60

B. THERE IS A SUBSTANTIAL PROBABILITY THAT PDM EC WOULD 

HAVE BEEN LIQUIDATED ABSENT THE ACQUISITION. ..........................61

C. PDM CONDUCTED A GOOD FAITH EFFORT TO SEEK OFFERS FROM 

OTHER POTENTIAL PURCHASERS. ...............................................................62

V. EVEN IF THIS COURT FINDS THAT THE ACQUISITION VIOLATED 

SECTION 7, A BREAKUP OF CB&I VIA DIVESTITURE IS NOT AN

APPROPRIATE REMEDY IN THIS CASE. ...................................................................64
-ivA. A PUNITIVE REMEDY IS NOT APPROPRIATE..............................................64

B. DIVESTITURE IS NOT A MANDATORY REMEDY FOR A SECTION 7 

VIOLATION..........................................................................................................65

C. ANY REMEDY IMPOSED SHOULD BE BASED ON THE WEIGHT

OF THE EVIDENCE.............................................................................................68

D. THERE IS NO EVIDENCE THAT A COMPLETE DIVESTITURE IS AN 

APPROPRIATE REMEDY. ..................................................................................69

E. RESPONDENTS' PROPOSED TVC REMEDY IS SUPPORTED BY THE 

EVIDENCE............................................................................................................70

F. THERE IS NO CREDIBLE EVIDENCE THAT COMPLAINT COUNSEL'S 

PROPOSED REMEDY WILL BE WORKABLE, DESIRABLE, OR 

EFFECTIVE...........................................................................................................73

1. Complaint Counsel incorrectly argues that it has presented evidence 

regarding its proposed remedy. ..................................................................73

2. There is no evidence that CB&I could assign contracts to a divested

entity...........................................................................................................74

3. There is no evidence to support the conclusion that the divested entity 

could have a sufficient revenue base and scale..........................................75

4. There is no evidence that the assets of the PDM EC and Water

divisions exist, or that they are sufficient to create a new company..........76

5. There is no evidence to support the claim that divestiture of PDM's 

fabrication facilities would assist in creating a viable company................77

6. There is no evidence showing that it is possible to provide a divested 

company with intangible assets that will assist in competing....................78

7. Without evidence as a guide, the appointment of a trustee and the

efforts of the Compliance Division will be wasted gestures......................78

G. COMPLAINT COUNSEL'S PROPOSED ORDER IS COMPLETELY 

LACKING IN EVIDENTIARY SUPPORT..........................................................79

VI. COMPLAINT COUNSEL'S FINDINGS OF FACT ARE A COMPENDIUM OF

FALSE STATEMENTS, MISCITED EVIDENCE, AND UNSUPPORTED 

CONCLUSIONS................................................................................................................82

A. COMPLAINT COUNSEL RELIES ON INADMISSIBLE EVIDENCE. ............82
-vB. COMPLAINT COUNSEL RELIES ON ITS EXPERT WITNESS TO 

BUTTRESS ITS FINDINGS OF FACT................................................................84

C. COMPLAINT COUNSEL RELIES EXTENSIVELY ON WITNESSES 

LACKING FOUNDATION. .................................................................................85

D. MANY OF COMPLAINT COUNSEL'S FINDINGS LACK ANY

CITATION OR SUPPORT....................................................................................84

CONCLUSION..............................................................................................................................87
-iTABLE OF AUTHORITIES

FEDERAL CASES

Advo, Inc. v. Philadelphia Newspapers, Inc., 854 F. Supp. 367 (E.D. Pa. 1994)..........................33

Borden Inc. v. FTC, 674 F.2d 498 (6th Cir. 1982) ..........................................................................8

California v. American Stores, 495 U.S. 271 (1990).....................................................................66

California v. Sutter Health Sys., 130 F. Supp. 2d 1109 (N.D. Cal. 2001)...............................62, 64

Cardinal Health, 12 F. Supp. at 54..................................................................................................4

Charlton v. Estate of Charlton, 841 F.2d 988 (9th Cir. 1988).......................................................69

Citizen Publishing v. U.S., 394 U.S. 131 (1989) ...........................................................................63

Dr. Pepper/Seven-Up Cos. v. FTC, 991 F.2d 859 (D.C. Cir. 1993) ..............................................62

FTC v. Harbour Group Invest L.P., No, 90-525, 1990 WL..........................................................63

FTC v. Staples, 970 F. Supp. 1066 (D.D.C. 1997) ........................................................................27

FTC v. Warner Comm., Inc., 742 F.2d 1156 (9th Cir. 1984)...................................................41, 63

Ford Motor Co. v. United States, 405 U.S. 562 (1972).....................................................66, 69, 70

Greyhound Computer Corp. v. IBM, 559 F.2d at 496-97................................................................8

Heinz, 246 F.3d at 717 ...............................................................................................................8, 42

Hospital Corp. of America v. FTC, 807 F.2d 1381, 1384 (7th Cir. 1986).....................................11

International Distrib. Ctrs., Inc. v. Walsh Trucking Co., Inc., 812 F.2d 786 (2d Cir. 1987) ..18, 33

New York v. Kraft Gen. Foods, Inc., 926 F. Supp. 321 (S.D.N.Y. 1995)......................................30

Tasty Baking Co. v. Ralston Purina, Inc., 653 F. Supp. 1250 (E.D. Pa. 1987).............................41

United States v. Baker Hughes, Inc., 908 F.2d 981 (D.C. Cir. 1990).....................................passim

United States v. Baker Hughes, Inc., 731 F. Supp. 3 (D.D.C. 1990)......................................passim

United States v. Calmar Inc., 612 F. Supp. 1298 (D.N.J. 1985)....................................................30
-iiUnited States v. Country Lake Foods, Inc., 754 F. Supp. 669 (D. Minn. 1990)............................30

United States v. Culbro Corp., 504 F. Supp. 661 (S.D.N.Y. 1981)...............................................63

United States v. DuPont & Co., 353 U.S. 586 (1957) .....................................................................7

United States v. E.I. DuPont de Nemours, 366 U.S. 316 (1961) .......................................64, 65, 66

United States v. Eastman Kodak , 63 F.3d 95, 103 (2d Cir. 1995).................................................40

United States v. El Paso Natural Gas Co., 376 U.S. 651 (1964) ..................................................19

United States v. Falstaff Brewing, 410 U.S. 526 (1973)................................................................15

United States v. Franklin Electric Co., Inc., 130 F. Supp. 2d 1025 (W.D. Wis. 2000).................24

United States v. General Dynamics Corp., 415 U.S. 486 (1974) ..............................................5, 41

United States v. Gillette Co., 828 F. Supp. 78 (D.D.C. 1993) .......................................................33

United States v. Greater Buffalo Press, 902 U.S. 549 (1971) .......................................................63

United States v. M.P.M., Inc., 397 F. Supp. 78 (D. Colo. 1975) ...................................................60

United States v. McGee, 714 F.2d 607 (6th Cir. 1983)..................................................................69

United States v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001) .............................................................68

United States v. Phillips Petroleum, 367 F. Supp. 1226 (C.D. Cal. 1973) ....................................63

United States v. United Tote, Inc., 768 F. Supp. 1064 (D. Del. 1991) ...................................passim

United Stated v. Ward Baking Co., 376 U.S. 327 (1964) ..............................................................69

United States v. Waste Management, Inc., 743 F.2d 976 (2d Cir. 1984).......................................33

FEDERAL STATUTES 

15 U.S.C. § 18 ............................................................................................................................7

FTC CASES

In the Matter of B.F. Goodrich Co., 110 F.T.C. 207, 1988 LEXIS 13..........................................11
-iiiCoca-Cola, 1994 F.T.C. LEXIS 185 at 158-59.............................................................................27

In the Matter of Diamond Alkali Co., 72 F.T.C. 700 (1967) .........................................................71

In the Matter of Ekco Products Co., 65 F.T.C. 1163 (June 30, 1964).....................................67, 68

In re Grand Union Co., 102 F.T.C. 812, Docket No. 9121, 1983 FTC LEXIS 61, 538 

(1983)...........................................................................................................................18, 67

In re Heublein, Inc., 96 F.T.C. 385 (1980) ....................................................................................33

Jim Walter Corp., 90 F.T.C. 671 (1977), rev'd and remanded......................................................30

In re Olin Corporation, 113 F.T.C. 400 (1990).................................................................66, 67, 72

In re Retail Credit Company, No. 8920, 92 F.T.C. 1, 88 (July 7, 1978).......................................67
-1-

INTRODUCTION

It is true as Complaint Counsel notes that "facts are stubborn things" and that a 

lawyer "cannot alter the state of the facts and the evidence." Yet, Complaint Counsel has done 

just that. Its initial post-trial brief, findings of facts and conclusions of law alter and distort the 

facts and the evidence. The initial brief relies upon unadmitted exhibits, mischaracterized 

documents, and miscited trial testimony. Moreover, it ignores relevant trial testimony. 

Respondents, in this Reply Brief and more particularly in their Reply Findings of Fact, will detail 

these deficiencies. To the extent unadmitted evidence has been cited in violation of this Court's 

order, Respondents incorporate herein arguments in support of their motion to strike such

evidence.

In this case, Complaint Counsel bore at all times the burden of showing that the 

Acquisition had a "reasonable probability" of lessening competition in the relevant markets. 

Complaint Counsel has failed to meet its burden to prove a prima facie case because it presented 

arbitrarily chosen market concentration statistics in four product markets where demand is 

extremely thin or non-existent, and where Complaint Counsel's backward-looking statistical 

presentation fails to reflect today's vibrant competitive landscape. Respondents have nonetheless 

forcefully rebutted Complaint Counsel's best efforts to make a prima facie case in each of the 

product markets at issue by proving that its prima facie case is unreliable, that entry has actually 

occurred in the relevant markets, that entry into these markets is easy, that customers are 

sophisticated, and that the financial circumstances of PDM in this case are such that the

Acquisition could not possibly have affected competition in the relevant markets.

Complaint Counsel's response to this evidence in its post-trial brief was

astounding. It simply ignored weeks of testimony regarding the entry efforts of huge,
-2-

multinational construction consortia into the LNG markets and the efforts of several wellrespected domestic tank manufacturers in the LIN/LOX and LPG markets. Instead, Complaint 

Counsel advocates a "heads I win, tails you lose" approach (CC Br. at 58), asserting that 

Respondents must show evidence that entry has actually occurred in the relevant markets and 

that it is timely, profitable at pre-merger prices, and sufficient to constrain prices. Yet the law 

does not require such a specific, detailed showing from Respondents. Respondents need only 

show that Complaint Counsel's prima facie case is flawed. The burden rests with Complaint 

Counsel to prove that anticompetitive effects are likely to occur. The law places this burden 

firmly on the shoulders of Complaint Counsel, and its case collapsed under its heavy weight.

As discussed below, Complaint Counsel has not proven that entry is unlikely to be 

timely, profitable at pre-merger prices, and sufficient. In fact, the evidence shows just the 

opposite. Struggling to meet its burden, Complaint Counsel has conjured up several tales of 

alleged anticompetitive effects wholly unsupported by evidence. In many cases, the "stubborn 

facts" have been so stubborn that Complaint Counsel has been forced to rely on evidence outside 

the record, speculation, conjecture, and miscited and mischaracterized testimony. Because 

Complaint Counsel has not carried its burden of proof, this case should be dismissed with

prejudice.

In addition, Complaint Counsel is not entitled to the relief it seeks because the 

evidence demonstrated that competition absent the Acquisition would not have included a 

vibrant, functioning PDM. Instead, the evidence shows that PDM would likely have been

liquidated and that its assets would have exited the market. Complaint Counsel cannot skirt the 

irrefutable facts supported by the evidence that demonstrate PDM would have been liquidated 

absent the Acquisition.
-3-

Alternatively, if this Court finds that the Acquisition has violated Section 7, 

Complaint Counsel is not entitled to the draconian remedy it seeks. This Court is not, as 

Complaint Counsel would like it to believe, required to break up CB&I by ordering a divestiture 

of all acquired assets to remedy a Section 7 violation. The Supreme Court and the Federal Trade 

Commission itself have expressly rejected Complaint Counsel's "automatic remedy" argument, 

and have instead instructed courts to craft remedies supported by the record evidence. Further, 

they have made clear that complete divestiture is inappropriate in cases where the evidence does 

not support its implementation. Complaint Counsel has presented no credible evidence that 

breaking up CB&I through a complete divestiture would be workable, desirable, or effective in 

restoring competition. In fact, the evidence presented at trial suggests that such a remedy would 

actually harm competition in the relevant markets, as well as the very customers Complaint 

Counsel claims to protect.

Simply stated, the weight of the evidence fails to establish Complaint Counsel's 

burden of showing more than an ephemeral possibility that competition will be substantially 

curtailed in any of its purported product markets. Respondents herein address Complaint 

Counsel's arguments in the order in which they were presented in its initial brief. For all of the 

reasons fully set forth below, the Complaint as to all product markets should be dismissed with 

prejudice. 
-4-

I. COMPLAINT COUNSEL'S PURPORTED EVIDENCE OF MARKET

CONCENTRATION IS MISLEADING AND ARBITRARY.

Complaint Counsel has failed to establish a prima facie case that there is a 

"reasonable probability" that the Acquisition will lessen competition substantially in the relevant 

markets. Complaint Counsel has relied on market share statistics that are misleading and 

arbitrary because they fail to account for the extensive new entry in the relevant markets and are 

calculated using an inordinately lengthy historical time period. For this reason alone, the 

Complaint as to all four product markets should be dismissed with prejudice. 

A. HHI CALCULATIONS ARE MISLEADING AND OF LITTLE USE IN 

MARKETS WITH THIN DEMAND.

Complaint Counsel relies on pre-Acquisition data to support its contention that 

"extraordinarily high concentration in each of the relevant markets . . . establishes a strong1

presumption that the acquisition would reduce competition." (CC Br. at 12; see also CC Br. at 

2). Complaint Counsel's reliance on 12 years of pre-Acquisition concentration data fails to 

satisfy its legal burden for three reasons:

First, Complaint Counsel first asserts that its statistical evidence "satisfies the 

required proof in this case as a matter of law." (CC Br. at 2). Although market concentration 

statistics are relevant in proving a prima facie case, such statistics in this case do not prove a 

"substantial effect" because they are misleading. When such data are misleading, they cannot be 

relied upon to prove a Section 7 violation. (See Opening Br. at 16-19) (FOF 7.78, 7.108, 7.114, 

7.114, 7.116, 7.123, 7.127, 7.130, 7.235, 7.237). Courts have rejected Complaint Counsel's 

position that market concentration statistics establish a prima facie case "as a matter of law," 

 

1

The word "strong" is Complaint Counsel's choice of words. Its cited support for this proposition merely 

holds that structural evidence is sufficient to establish a prima facie case, not that it is "strong" evidence. See

Cardinal Health, 12 F. Supp. at 54 (cited at CC Br. at 12).
-5-

instead holding that such statistics are "not conclusive indicators of anticompetitive effect" and 

that "[e]vidence of past production does not as a matter of logic, necessarily give a proper picture 

of a company's future ability to compete." United States v. General Dynamics Corp., 415 U.S. 

486, 499, 501 (1974). The Supreme Court in General Dynamics instructed lower courts to look 

beyond such statistics because "only a further examination of the particular market -- its 

structure, history and probable future -- can provide the appropriate setting for judging the 

probable anticompetitive effect of the merger." Id. at 498. Lower courts have followed General 

Dynamics' lead. For example, the D.C. Circuit recognized that heavy reliance on such statistics 

would "grossly inflate the role of statistics in actions brought under Section 7" and warned that 

"[t]he Herfindahl-Hirschman Index cannot guarantee litigation victories." United States v. Baker 

Hughes Inc., 908 F.2d 981, 992 (D.C. Cir. 1990).

2

 

Second, Complaint Counsel's market concentration statistics are particularly 

useless in this case because they are not predictive of future competition. (E.g., Harris, Tr. 

7227).3 As discussed in Respondents' Opening Brief, pre-Acquisition market concentration

statistics are not predictive of future competitive harm in the relevant markets because they fail 

to account for: 1) the entry of several new and strong competitors in the U.S. LNG market; 2) 

recent changes in competitiveness of other market participants in the LIN/LOX and LPG

markets; and 3) recent changes in demand for relevant products that have altered the competitive 

 

2 Complaint Counsel conclusorily asserts that "[o]f course, anticompetitive effects have already occurred in 

this case." (CC Br. at 10). As discussed in Part III, supra, this conclusion is wholly unsupported by any credible 

evidence.

3

The Merger Guidelines, oft-cited throughout Complaint Counsel's brief, state that "[m]arket shares will be 

calculated using the best indicator of firms' future competitive significance." Merger Guidelines, § 1.41 (emphasis 

added). By using solely historical data in calculating its concentration statistics, Complaint Counsel has failed to 

follow Section 1.41 of the Merger Guidelines. 
-6-

landscape. (See Opening Br. at 16-19) (FOF 7.78, 7.108, 7.114, 7.115, 7.116, 7.123, 7.127, 

7.130, 7.235, 7.237).

Third, Complaint Counsel has made a number of errors and incorrect assumptions 

in its presentation of market concentration statistics. For example:

• In the LNG market, Complaint Counsel argues that "[t]he only LNG project that may be 

awarded to another supplier . . . may go to another supplier only because CB&I refused to 

bid." (CC Br. at 13). Evidence does not support this false conclusion. In fact, CB&I 

attempted to bid on Dynegy's LNG tanks. Dynegy rejected CB&I's offer because it was 

"satisfied" with three existing bids that were "within the expected price range." (Puckett,

Tr. 4557, 4559-60) (FOF 3.288, 3.304).

• In the LIN/LOX market, Complaint Counsel argues that "to eliminate the presumption 

created by these HHI results, ATV would have to be as 'equally competitive' as PDM was 

to "[r]eplace the 'lost competition'" and tha t AT&V "cannot even come close." (CC Br. at 

13) (citing Merger Guidelines ¶ 2.212). This is wrong for two reasons. First, the 

evidence has demonstrated that AT&V can compete as effectively as PDM did in the 

LIN/LOX market, as it has beaten CB&I three times in a row post-Acquisition and has 

captured a majority of the post-Acquisition LIN/LOX market in the U.S., and has done so 

at prices lower than PDM's pre-Acquisition prices. (Scorsone, Tr. 5017-18; RX 208) 

(state of mind). Further, as Dr. Harris explained, a collection of competitors can make up 

for a lost competitor under the Merger Guidelines. There is no requirement that only one

firm can take the role of replacing the competitive effect of PDM. (Harris, Tr. 7255-56).

• In the LPG market, Complaint Counsel argues that nothing has changed post-Acquisition 

to "even arguably" affect the HHI for LPG of 8,380 (a change of 3,910). (CC Br. at 13). 

Complaint Counsel's calculation of CB&I's market is inconsistent within its own brief. In 

one place, Complaint Counsel argues that CB&I has a 99% market share. (CC Br. at 13). 

In another, it argues that CB&I has 100%. Further, Complaint Counsel's statement 

completely ignores the vibrant competition in the LPG market post-Acquisition, 

including the fact that AT&V has won 50% of the LPG jobs awarded in the last four 

years. (FOF 5.76-5.78).4

 

4 Complaint Counsel cites Luke Scorsone for the proposition that PDM was CB&I's only competitor on 

domestic LPG projects, and states that "[t]here is no evidence to the contrary." (CC Br. at 14). This is dated 

evidence. Since Mr. Scorsone made that statement, the evidence has shown that AT&V "beat the socks off CB&I" 

on a recent LPG project. Further, on another, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx. 

(N. Kelley, Tr. 7092, 7137; Scorsone, Tr. 5039-43) (FOF 4.56).
-7-

• In the TVC market, Complaint Counsel calculated the HHI figure as "a perfect 10,000." 

(CC Br. at 13). Complaint Counsel fails to note that a properly-calculated preAcquisition HHI is also 10,000, as PDM is the only company to have actually built a 

TVC since 1987. (See Scorsone, Tr. 5055-56; Glenn, Tr. 4089, 4160; Scully, Tr. 1187-

89, 1193; Higgins, Tr. 1276-77) (FOF 6.26). Since there is zero change in a properlycalculated HHI figure, Complaint Counsel has not established a prima facie case. 

(Harris, Tr. 7227-28).

Aside from the deficiencies in its market concentration statistics, Complaint

Counsel failed more fundamentally in its effort to carry the burden of proof in the TVC market. 

This so-called "market" is extremely thin. (Opening Br. at 120-21) (FOF 6.11-6.25). In the past 

decade, only one TVC has been constructed. There is no prospect of demand for these products 

in the near future. (FOF 6.12-6.15). This lack of demand fundamentally prevents Complaint 

Counsel from arguing that the Acquisition will have a "substantial" effect on commerce, as it 

must do in order to succeed on a Section 7 claim. See 15 U.S.C. § 18; United States v. Baker 

Hughes, Inc., 731 F. Supp. 3, 9 (D.D.C. 1990) (citing United States v. DuPont & Co., 353 U.S. 

586, 595 (1957)) (Opening Br. at 120-21).5 This fact alone requires dismissal of the TVC case in 

its entirety.

B. USE OF HHI EVIDENCE IN THIS CASE IS ARBITRARY.

To illustrate the arbitrary nature of HHI evidence in this case, Respondents 

presented evidence showing that HHIs can be easily manipulated. For example, by selecting an 

HHI start date of 1996, as opposed to 1990, the HHI changes in three of the four relevant 

markets are zero. (Harris, Tr. 7222-7229). Complaint Counsel attempts to defend its use of an 

12-year HHI period by arguing that the Merger Guidelines allow it to measure market shares 

over a longer period of time when "individual sales are large and infrequent so that annual data 

 

5 Complaint Counsel incorrectly argues that "it was no surprise that their only defense in TVCs was an offer 

of settlement." (CC Br. at 3). This more fundamental argument requires dismissal of the TVC case. Respondents' 
-8-

may be unrepresentative." (CC Br. at 14-15) (citing Merger Guidelines § 1.41). This reliance is 

misplaced. First, there is a large middle ground between the use of annual data and 12 years of 

data. Nothing in the Merger Guidelines endorses going back so far. Further, a Section 7 case 

examines whether an acquisition will affect competition in the future. It defies logic to base a 

case regarding future competition on old and moldy data. Recognizing this fact, the Merger 

Guidelines do not allow Complaint Counsel to use a time period as long as it likes; they instruct 

that "[m]arket shares will be calculated using the best indicator of firms' future competitive 

significance." Merger Guidelines, § 1.41 (emphasis added). There is no evidence that market 

share data from 1990-1995 is remotely predictive of future competitive conditions. In fact, 

Complaint Counsel's expert witness could offer no other explanation for why he chose to use 

1990 as a starting point for HHI calculations, other than that the information was available to 

him. Complaint Counsel's citations (CC Br. at 15) lend no support for its novel theory; none of 

these cases permit an HHI calculation based on 12 year-old data.6

As Respondents respectfully suggested in their Opening Brief, any use of HHI 

data in this case is unhelpful to the trier of fact. (See Opening Br. at 16-19).7 To the extent this 

Court believes HHI data is helpful, Respondents submit that a more accurate basis for selecting a 

beginning point for an HHI calculation is to select a date around which significant market 

changes have occurred, such as rapidly rising or falling market shares. The validity of this 

 

offer in the TVC market was designed to be an alternative remedy for this Court in the event that it disagreed with 

Respondents on the issue of liability.

6

These cases used an HHI calculation period of five to seven years. See Heinz, 246 F.3d at 717; Borden Inc. 

v. FTC, 674 F.2d 498, 511 (6th Cir. 1982); Greyhound Computer Corp. v. IBM, 559 F.2d at 496-97. 

7 Complaint Counsel attempts to put words in Dr. Harris' mouth, arguing that "[e]ven Dr. Harris testified that 

he could see no reason not to go back to 1995 or any particular year for that matter." (CC Br. at 15) (citing Harris, 

Tr. 7228). This is a mischaracterization of Dr. Harris' testimony. In fact, Dr. Harris testified that any use of HHIs 

was arbitrary, regardless of the start date. 
-9-

approach has been recognized by a leading antitrust commentator relied on by Dr. Simpson in 

forming his expert opinions. (See Simpson Tr. 3044-45) (FOF 7.237). Under the less arbitrary 

approach suggested by Professor Areeda, 1995 or 1996 is a more appropriate measuring date 

because, beginning at that time, CB&I's large LNG and LPG market share fall to zero over a sixyear period. (Simpson, Tr. 3744).8

II. CONTRARY TO COMPLAINT COUNSEL'S ASSERTIONS, RESPONDENTS 

HAVE FORCEFULLY REBUTTED ANY PRIMA FACIE CASE.

As discussed above, Complaint Counsel has not presented a prima facie case. Its 

attempt to do so was seriously hampered by the unreliability of its market share statistics. 

Assuming the existence of a prima facie case, it is weak at best. Accordingly, Respondents are 

under no obligation, as Complaint Counsel contends (CC Br. at 17-18) to rebut it with a "strong 

showing." Respondents need only comply with the teachings of Baker Hughes, which requires 

that Respondents present a showing commensurate with the strength of Complaint Counsel's 

case. 908 F.2d at 991. 

Although they were not required to do so, Respondents have presented

compelling evidence that is more than sufficient to rebut any prima face case Complaint Counsel 

may have made. Because this is a consummated merger case, two years of post-Acquisition 

evidence regarding the effect of the merger on competition is available. This evidence is highly 

relevant and probative of the ultimate issue in this case: whether the Acquisition may

substantially lessen competition in the relevant markets. Respondents presented extensive

evidence -- both pre-Acquisition and post-Acquisition -- regarding actual entry and ease of entry 

 

8

The arbitrary nature of HHI data is most easily seen in the TVC market. Since CB&I has not built a TVC 

since 1984, the HHI change in this market is zero. (See, e.g., Harris, Tr. 7227-29). Recognizing this fact, Complaint 

Counsel essentially argues that HHI statistics do not tell the full story in the TVC market. (See CC Br. at 15-16). 

Either HHI statistics are relevant or they are not relevant. One of Complaint Counsel's arguments must be wrong. 
-10-

in the relevant markets. (Opening Br. at 19-118) (FOF 3.56-3.246 (LNG), 4.16-4.54 (LPG), 522-

5.75 (LIN/LOX)). In addition, Respondents also presented evidence showing that Complaint 

Counsel's market concentration statistics are deficient (as discussed above), that customers in the 

relevant products are extremely sophisticated consumers, and that the financial circumstances 

regarding PDM were such that the Acquisition could not have substantially lessened competition 

in any of the relevant markets. All of these types of evidence are available to Respondents in 

rebutting a prima facie case. See Baker Hughes, 908 F.2d at 983-84. Respondents presented 

extensive evidence on each point.9 

Complaint Counsel committed critical errors in attempting to overcome this entry 

evidence. First, it underestimated the importance of post-Acquisition evidence in this case. 

Second, it applied the wrong standards to Respondents' required showing under the law. Third, 

inexplicably, it virtually ignored weeks of entry evidence presented by Respondents in their casein-chief. Fourth, it fails to address evidence directly contradicting its argument that entry in this 

case is not timely, profitable at pre-merger levels, or sufficient, an argument on which it bears 

the burden of proof. Fifth, and finally, Complaint Counsel grossly distorts the record evidence in 

a desperate attempt to prove the existence of entry barriers to the relevant markets. As discussed 

in detail below, facts are indeed "stubborn things."

 

9 Complaint Counsel incorrectly argues that "Respondents have offered only two arguments to attempt to 

rebut Complaint Counsel's prima facie case: (i) efficiencies and (ii) ease of entry." (CC Br. at 18; see also CC Br. at 

2). In fact, Respondents have offered five different arguments. With respect to the efficiencies defense,

Respondents did not present evidence regarding efficiencies. After reviewing the evidence, Respondents concluded 

that while the Acquisition had generated substantial efficiencies and would continue to do so in the future, it was not 

possible to document them in a manner that would satisfy their burden of proof.
-11-

A. POST-ACQUISITION EVIDENCE IS HIGHLY RELEVANT.

Complaint Counsel misstates the law regarding post-Acquisition evidence. (See

CC Br. at 16-17). It cites authority holding that such evidence is suspect if it "is subject to 

manipulation by the party seeking to use it" and if it "may have been made to improve

[defendant's] litigating position." (CC Br. at 16) (quoting Hospital Corp. of America v. FTC, 807 

F.2d 1381, 1384 (7th Cir. 1986)). Reliance on this authority is misplaced, as Complaint Counsel 

has not produced a shred of evidence to support the view that Respondents have manipulated any 

of the evidence presented at trial or that they would be able to do so. Entry into the markets by 

third party firms is not subject to manipulation. For example, Respondents did not engineer (and 

could not have engineered) the entry of Skanska/Whessoe into the U.S. market for LNG tanks, 

Dynegy's refusal to allow CB&I to bid on its LNG tank project, AT&V's ability to bid on 

projects at lower costs relative to CB&I, and the trend from single-containment to double and 

full-containment LNG tanks. Simply put, competitors are not entering in and succeeding in the 

relevant markets because CB&I is taking "voluntary actions" (CC Br. at 16) to allow them to do 

so. Rather, they are using competitive advantages and market developments to score wins in the 

relevant product markets.10 Complaint Counsel speciously argues that post-Acquisition evidence 

is suspect because it cannot answer the factual record, yet it provides no answer to the extensive 

post-Acquisition factual record. Complaint Counsel disregards such evidence because it does 

not like what that evidence shows. The facts are indeed stubborn.

 

10 For example, the B.F. Goodrich court recognized that post-acquisition evidence should be given little 

weight where the evidence is subject to manipulation by the party. See In the Matter of B.F. Goodrich Co., 110 

F.T.C. 207, 1988 LEXIS 13 at *129 (1988). Further, that decision recognized that post-acquisition "structural" 

evidence, such as reduction in market share, evidence of low entry barriers, and evidence of new entry was highly 

relevant. Id. at *129-*131. 
-12-

B. COMPLAINT COUNSEL APPLIES THE WRONG LEGAL STANDARDS 

TO RESPONDENTS' REQUIRED SHOWING.

Complaint Counsel improperly asserts that Respondents must prove the three 

elements of the Merger Guidelines addressing entry, which state that entry must be timely, likely 

to be profitable at pre-merger prices, and sufficient to deter or counteract the possible

anticompetitive effects of the Acquisition. (CC Br. at 18-19; see also CC Br. at 2, 3) (citing 

Merger Guidelines ¶¶ 3.1-3.4). This argument fails for three reasons:

First, while the Guidelines discuss the issue of entry, they do not assign

Respondents the burden of providing timeliness, profitability, or sufficiency. See Merger

Guidelines § 3.

Second, the Guidelines -- authored by the government -- are guidelines that 

Complaint Counsel uses in determining whether to challenge an acquisition. The Guidelines are 

not the law and are not binding on courts. (See Opening Br. at 14). As discussed herein and in 

Respondents' Opening Brief, Baker Hughes controls this case, not guidelines proffered by

Complaint Counsel as binding when in fact they are not. (See Opening Br. at. 5-14). 

Third, assuming arguendo that the Guidelines require Respondents to bear the 

burden of proof on these points, they contradict settled law. (Opening Br. at 13-14). 

Respondents must make a showing that "the prima facie case inaccurately predicts the relevant 

transaction's probable effect on future competition." They are not obliged to prove that entry has 

been (or will be) "quick and effective," nor are they obliged to present evidence "clearly"

disproving future anticompetitive effects. Baker Hughes, 908 F.2d. at 987, 991. As Baker 

Hughes noted, requiring Respondents to make such a showing would force them to "essentially 

persuade the trier of fact on the ultimate issue in the case." Id. at 991. Because Complaint 

Counsel cannot prevail in this case under Baker Hughes, it seeks to create its own standard based 
-13-

on guidelines authored by the government. This is inappropriate because the ultimate burden of 

persuasion in a Section 7 case "remains with the government at all times." Id. at 983 (emphasis 

added). This Court should reject Complaint Counsel's improper disingenuous setting of legal 

standards. Respondents respectfully suggest that its "heads-I-win, tails-you-lose" approach (CC 

Br. at 58) is flatly inconsistent with controlling precedent and should not be adopted in this case. 

Examination of each entry element discussed in the Merger Guidelines is

instructive. The Merger Guidelines state that entry must be timely, and suggest a two-year 

period as an appropriate measure of timelines. See Merger Guidelines § 3.2. The Guidelines do 

not require Respondents to carry the burden of proof on this issue. In fact, Respondents are not 

even required to prove that actual entry will occur. As Baker Hughes noted, requiring such a 

showing would "overlook[] the point that a firm that never enters a given market can

nevertheless exert competitive pressure on that market. If barriers to entry are insignificant, the 

threat of entry can stimulate competition, regardless of whether entry ever occurs." 908 F.2d at 

988 (emphasis in original). In short, Respondents need not show that entry is timely. To the 

extent that timeliness of entry is an issue, it is Complaint Counsel's burden to show that actual 

entry is needed in the relevant markets and that it will not occur in a timely manner

The Guidelines also suggest that entry should be "profitable at premerger prices." 

(CC Br. at 18-19) (citing Merger Guidelines ¶¶ 3.1-3.4). This is merely a rehash of the 

government's attempt to impose a "quick and effective standard" on respondents in Baker 

Hughes. See 908 F.2d at 987-88. If entry is not a required showing, a showing that entry would 

be profitable at pre-merger prices is certainly not required. 908 F.2d at 988. To the extent that 

the question of whether entry is likely to be profitable at pre-merger prices, it is Complaint 
-14-

Counsel's burden to show that actual entry is needed, and that it is unlikely that it could be 

profitable at pre-merger prices.

The Guidelines also address the issue of sufficiency. (CC Br. at 18) (citing

Merger Guidelines ¶¶ 3.1-3.4). Like the second prong of the Merger Guidelines test, this is 

another effort to resurrect the government's failed argument in Baker Hughes. There, the 

government argued that respondents needed to show that entry would be "effective." This 

argument was flatly rejected by Baker Hughes. See 908 F.2d at 987-88. This Court should 

similarly reject Complaint Counsel's attempt to foist the burden of proving "sufficiency" on 

Respondents. To the extent that sufficiency of entry is an issue, it is Complaint Counsel's burden

to prove that entry is required and that it will not be sufficient. Id. In this case, as demonstrated 

in Respondents' Opening Brief and herein, Complaint Counsel has utterly failed to do so.

C. COMPLAINT COUNSEL HAS IGNORED RESPONDENTS' EVIDENCE 

REBUTTING ITS PRIMA FACIE CASE.

Complaint Counsel's solution for dealing with Respondents' extensive entry

evidence is to simply ignore it. In its initial brief, Complaint Counsel casually asserts that "[t]he 

only supposed evidence of entry were several press releases about joint ventures involving TKK, 

Whessoe, or Technigaz desiring to enter the LNG market" and that "all that Respondents tried to 

prove was that Messrs. Glenn and Scorsone may think that foreign firms might enter the LNG 

market." (CC Br. at 2, 18-19). These statements mischaracterize several weeks of evidence. 

Respondents presented an array of evidence from customers and competitors describing in detail 

the entry efforts of several large, multinational corporations and domestic tank builders into the 

relevant markets. (See Opening Br. at 19-118; FOF 3.56-3.246 (LNG), 4.16-4.54 (LPG), 5.22-

5.75 (LIN/LOX). Complaint Counsel represents that "Respondents conceded that the press 

releases and other so-called entry evidence would be admitted solely for proof of the state of 
-15-

mind of CB&I." (CC Br. at 2). This statement is false. During the trial, Respondents presented 

extensive evidence regarding the entry efforts of foreign companies. While Respondents did 

offer testimony for the limited purpose of proving CB&I's state of mind as well as the state of 

mind of the declarant -- in most cases, the new entrant11-- most of this evidence, including press 

releases and promotional materials, was admitted without limitation as to its use. (See JX 11).12

13 Complaint Counsel's assertions that this evidence has "little value" ring hollow; this evidence 

is not only relevant, it is dispositive. The following list provides a few examples of the evidence 

from the LNG, LPG, and LIN/LOX markets that Complaint Counsel has apparently forgotten 

about: 14

• Dynegy (LNG) -- Skanska/Whessoe won the EPC contract for Dynegy's Hackberry LNG 

import terminal. Skanska/Whessoe, Technigaz/Zachry, and TKK/AT&V are competing 

to build the LNG tanks for that facility. (Puckett, Tr. 4547, 4556) (FOF 3.272, 3.287).15

• Freeport LNG (LNG) -- Freeport LNG is currently planning a large LNG import 

terminal in Freeport, Texas. Representatives from Skanska/Whessoe, Technigaz/Zachry, 

TKK/AT&V, Daewoo/S&B, and IHI have all met with Freeport LNG to discuss their 

capabilities and express interest in the project. (See Eyermann, Tr. 6981-83, 6994-96, 

7000-01, 7015-16) (FOF 3.394-3.395).

 

11 Pursuant to this Court's order, Respondents have identified testimony offered for this limited purpose as 

such in their Opening Brief.

12 JX 11 admitted RX 43, RX 44, RX 45, RX 186, RX 770, RX 772, RX 773, RX 836, RX 839, RX 870, RX 

871, RX 872, and RX 908 without limitation.

13 Complaint Counsel cites to United States v. Falstaff Brewing, 410 U.S. 526 (1973) in arguing that entry 

evidence is "inherently suspect." (CC Br. at 19). This argument entirely misses the mark. Most of Respondents' 

entry evidence consisted of detailed testimony from customers and competitors; it did not address CB&I's state of 

mind. (See Opening Br. at 19-118; FOF 3.56-3.246 (LNG), 4.16-4.54 (LPG), 5.22-5.75 (LIN/LOX)). 

14 Complaint Counsel asserts that "[s]ignally, Respondents offer no evidence of attempted entry in any other 

market other than LNG." (CC Br. at 2-3). As the following examples show, this is false. Respondents presented 

extensive evidence of entry in the LIN/LOX and LPG markets as well as compelling evidence of entry in the LNG 

market. (FOF 3.56-3.246 (LNG), 4.16-4.54 (LPG), 5.22-5.75 (LIN/LOX)).

15 Inexplicably, Complaint Counsel argues that "[i]t has been two years since the acquisition, and none of 

these foreign competitors has entered." (CC Br. at 3). Evidence regarding the Dynegy project directly contradicts 

this claim. 
-16-

• Yankee Gas (LNG) -- Skanska/Whessoe and Technigaz/Zachry have submitted pricing 

to Yankee Gas for its peakshaving facility in Waterbury, Connecticut. (Andrukiewicz, 

Tr. 6445-46) (FOF 3.342). 

• ABB Lummus (LPG) -- [xxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (Scorsone, Tr. 5039-43) 

(FOF 4.67-4.69).

• ITC (LPG) -- Matrix and AT&V both bid on an LPG tank for ITC immediately prior to

the Acquisition. This competition to CB&I resulted in a very good price for the

customer, who is satisfied with the current level of competition in this market. (See N. 

Kelley, Tr. 7030-31, 7086) (FOF 4.34, 4.38).16 This evidence, inter alia, directly

contradicts Complaint Counsel's argument that there are "no new competitors of any 

kind" in the LPG market. (CC Br. at 19). 

• BOC (LIN/LOX) -- AT&V constructed two field-erected LIN/LOX tanks for BOC in 

2001. This was AT&V's first bid on a LIN/LOX job. (Cutts, Tr. 2397-98, 2436-37, 

2501) (FOF 5.31). BOC was pleased with AT&V's work, and has awarded it another 

LIN/LOX job as a result. (V. Kelley, Tr. 5291-92) (FOF 5.32, 5.34). In fact, AT&V has 

won every LIN/LOX job that it has bid on since the Acquisition. Further, Chattanooga 

Boiler & Tank bid on this job -- it was the first time that CB&T had bid on a LIN/LOX 

tank. (Stetzler, Tr. 6347) (FOF 5.69-5.70). This evidence, inter alia, directly contradicts 

Complaint Counsel's claim that "[t]here are simply no new entrants in the market for . . . 

LIN/LOX/LAR tanks . . . ." (CC Br. at 3). 

• Air Liquide (LIN/LOX) -- [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxx] (Kamrath, Tr. 2235) (FOF 5.122-5.124).

These examples are merely the tip of the iceberg. Respondents' Opening Brief 

sets forth a compelling entry case demonstrating that new entrants are qualified market

participants, that they have the resources to compete, that they have bid on projects, and that they 

have been successful in many instances. Complaint Counsel appears to be hoisted by their own 

statement; "facts are stubborn things." Its way of dealing with these facts is to simply ignore 

them.

 

16 Despite the fact that ITC is the only LPG customer to testify in this case on either side, Complaint Counsel 

completely ignores this evidence. For example, Complaint Counsel argued that the Acquisition gave CB&I "100% 

of the market" in LPG tanks. (CC Br. at 5). The ITC story shows that this is false. 
-17-

In a classic example of its "heads-I-win, tails-you-lose" mindset (CC Br. at 58), 

Complaint Counsel argues that Respondents have not presented evidence of entry in the TVC 

market, but neglect to mention that a TVC has not been built since the mid-1990s. The fact that 

entry has not occurred in the TVC market is driven by the absence of demand for the product. 

This is a fundamental shortcoming of Complaint Counsel's case, not Respondents'.17

The entry evidence presented by Respondents meets their burden of proof under 

Baker Hughes. This evidence also demonstrates that actual entry has occurred in the relevant 

markets in the last two years, that this entry is sufficient to constrain CB&I's behavior in the 

market, and that entry can be profitable at pre-merger levels. (See Opening Br. at 19-118) (FOF 

3.56-3.246 (LNG), 4.16-4.54 (LPG), 5.22-5.75 (LIN/LOX)). In the face of this evidence, as 

discussed below, Complaint Counsel has not met its ultimate burden of persuasion using the 

factors articulated in the Guidelines, nor has it been able to produce any other credible evidence 

that the Acquisition may substantially lessen competition in the relevant markets. 

D. COMPLAINT COUNSEL HAS NOT MET THEIR BURDENS OUTLINED 

IN THE MERGER GUIDELINES.

Because Respondents have made the necessary showing under Baker Hughes, 

Complaint Counsel bears the burden of showing additional evidence of anticompetitive effects. 

When measuring entry under the Merger Guidelines, Complaint Counsel must prove that new 

entrants cannot enter the markets in a timely manner, that they cannot be competitive at premerger prices, and that their potential entry cannot constrain CB&I's prices in the relevant 

products. Merger Guidelines § 3. As discussed below, not only did Complaint Counsel fail to 

carry its burden, the evidence actually proves the converse -- that entry has been timely, that it 

 

17 Complaint Counsel also argues that "[t]here are simply no new competitors of any kind in the markets for 

LPG tanks or TVCs." (CC Br. at 19). This statement is incorrect. CB&I is a new competitor in the TVC market. 

Since 1984, it has not built a TVC. Further, AT&V is a relatively new competitor in the LPG market. 
-18-

has been profitable at pre-Acquisition levels, and that it has been more than sufficient to 

constrain CB&I's behavior in the relevant markets. 

1. Extensive entry has already occurred in the relevant markets.

As discussed above, to the extent the timeliness of entry is relevant in this case, 

Complaint Counsel must show that entry is both needed and would not be timely. Baker Hughes

specifically rejected the government's attempt to force respondents to show that entry would be 

"quick." 908 F.2d at 987-88. Complaint Counsel must prove that entry will not be quick, and it 

failed to meet this burden. The great weight of the evidence demonstrates that extensive entry 

has already occurred in the relevant markets.18 New entrants have already won bidding contests

in the relevant products. For example, Skanska/Whessoe has been selected as the EPC

Contractor for the Dynegy LNG project, the first competitively bid post-Acquisition LNG

project likely to be awarded. (E.g., Puckett, Tr. 4547) (FOF 3.272). [xxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] AT&V has won all three

competitively bid LIN/LOX projects it has pursued in the U.S. since the Acquisition. (E.g., 

Scorsone, Tr. 5017-18; V. Kelley, Tr. 4599, 5291-92; [xxxxxxxxxxxxxxxxxx] (FOF 5.31, 5.76-

5.78, 5.116)19 AT&V has won half of all LPG tanks purchased in the U.S. in the past four years. 

(See N. Kelley, Tr. 7086) (FOF 4.35).20

 

18 Complaint Counsel misguidedly argues that no entry has occurred in the TVC market. It ignores the fact 

that it must show that entry is necessary and that it will not occur in a timely manner. See Baker Hughes, 908 F.2d 

at 987-88 (holding that Respondents need not show evidence of actual entry). Because the TVC market is virtually 

dormant, there is no need for new entry. (See Opening Br. 120-21) (FOF 6.11-6.25). Allowing Complaint Counsel 

to gain traction by arguing lack of entry in the TVC market would reward it for choosing to litigate over a market 

devoid of demand.

19 Complaint Counsel attempts to skirt the relevance of AT&V by arguing that it has "been a competitor for 

years" and is "not an entrant." (CC Br. at 19). This argument lacks merit for two reasons. First, AT&V is a 

relatively recent entrant. Second, even if AT&V had participated in the market prior to the Acquisition, it does not 

eliminate it from the analysis. The law recognizes that expansion efforts by companies can "tilt the balance" against 
-19-

Many other new entrants have already entered the relevant markets within the past 

two years. At least four major, international construction companies have formed consortia, 

have entered the LNG market, and are actually already bidding on LNG projects in the U.S. 

Other large LNG contractors have begun to pursue LNG work in the U.S. (See Opening Br. at 

19-46; FOF 3.56-3.246). In the LIN/LOX market, in addition to AT&V, Chattanooga Boiler & 

Tank ("CB&T") has begun bidding on LIN/LOX tank projects, joining CB&I and Matrix as 

competitors in this market. Matrix has also entered the LPG market, competing against CB&I 

for the ITC project. (See N. Kelley, Tr. 7083-84) (FOF 4.34).21

Complaint Counsel's response to this avalanche of entry evidence has been to 

side-step it, and to argue that the success of the foreign entrants on the Dynegy project is 

irrelevant because CB&I "refused" to bid. (CC Br. at 19). Complaint Counsel has the facts 

wrong and has missed the significance of the Dynegy experience. For example, Complaint 

Counsel claims CB&I "refused" to bid on the LNG tanks, when in fact CB&I reconsidered, 

sought to bid on the tanks, and was rebuffed by Dynegy because it was "satisfied" with the three 

bids it had already received from new foreign entrants. (See Glenn, Tr. 4136-37, 4412; Puckett, 

 

the legal presumptions raised by market concentration statistics. In re Grand Union Co., 102 F.T.C. 812, Docket 

No. 9121, 1983 FTC LEXIS 61, *196 (1983); see also International Distribution Centers, Inc. v. Walsh Trucking 

Co., Inc. 812 F.2d 786, 792-93 (2d Cir. 1987) (internal citations omitted).

20 Inexplicably, Complaint Counsel asserts, without citation, that "[t]he simple fact is that two years after the 

acquisition no alleged entrant has won any bid for any of the relevant products." (CC Br. at 19). Dynegy is the only 

post-Acquisition LNG project in the U.S. that has reached a bid stage, and [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx FOF 

3.307-3.308). Similarly, AT&V has won every LIN/LOX job that it bid for since the Acquisition. (E.g., Scorsone, 

Tr. 5017-18) (FOF 5.76-5.78). 

21 Complaint Counsel implicitly argues that entry is defined by winning a bid. There is no authority for this 

argument; in fact, Complaint Counsel's own case law undercuts its position. For example, in United States v. El 

Paso Natural Gas (cited in CC Br. at 16), the Supreme Court observed that "[u]nsuccessful bidders are no less 

competitors than the successful one." See United States v. El Paso Natural Gas Co., 376 U.S. 651, 661 (1964). The 

inquiry is not whether entrants have won. Rather, it is whether they have a price disciplining effect. See United 

States v. United Tote, Inc., 768 F. Supp. 1064, 1080-82 (D. Del. 1991).
-20-

Tr. 4557-60, 4578) (See also Opening Br. at 71-74) (FOF 3.297-3.306).22 Complaint Counsel 

also side-steps Dynegy's award of the EPC phase of its project to Skanska. The Dynegy example 

shows that CB&I has no post-Acquisition market power and that post-Acquisition pricing by 

new entrants is highly competitive. 

2. Evidence shows that entry has been and will be profitable at pre -

merger prices.

As discussed above, Baker Hughes does not require Respondents to make a 

showing of actual entry or prove that entry would be "effective." To the extent the profitability 

of entry is an issue in this case, Complaint Counsel bears the burden of proof. See Baker 

Hughes, 908 F.2d at 982-83. (See also Opening Br. at 13-14). It has failed to carry its burden on 

this point. The evidence strongly supports the view that new entry will be profitable at premerger prices. (See Opening Br. at 64-79, 94-97, 110-18). Customers who have received actual 

prices for the relevant products have confirmed this view. For example, [xxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] Similarly, ITC received a good price on a field-erected 

LPG tank from AT&V. According to ITC, AT&V has historically been one of ITC's low-cost 

suppliers, even when compared with PDM. (N. Kelley, Tr. 7088-89, 7121) (FOF 4.38, 4.130). 

 

22 Complaint Counsel also relies on the testimony of Brian Price, who testified as to his personal views 

regarding the potential differences between those foreign bids and the bid that CB&I would have submitted. (CC 

Br. at 19-20) (citing Price, Tr. 578, 622). This argument is specious at best. The testimony cited by Complaint 

Counsel does not support its conclusion. Mr. Price made no statements regarding pricing levels provided by a 

consortium with a U.S. presence, nor did he know whether CB&I requested permission to bid on the Dynegy 

project. (See Price, Tr. at 661). Further, Mr. Price's testimony should be given no weight since his credibility is 

suspect, as discussed in Section E, infra. 
-21-

In the LNG market, Dynegy [xxxxxxxxxxxxxxxxxxx] satisfied with the post-Acquisition prices 

they received. (See Puckett, Tr. 4559-60; [xxxxxxxxxxxxxx] (FOF 3.304, 3.473-3.474)

In the face of this evidence, Complaint Counsel wrongly argues that CB&I and 

PDM were the low-cost suppliers of the relevant products. (CC Br. at 6, 20). This too is offbase. Prior to the Acquisition, Graver was the low-cost supplier in the LIN/LOX market, not 

CB&I or PDM. [xxxxxxxxxxxxxxxxxxxx]. Post-Acquisition, AT&V has filled this role. (See

[xxxxxxxxxxxxxxxxx]; V. Kelley, Tr. 4599-4600, 5272; RX 208) (FOF 5.76-5.78). Further, 

AT&V has won three of the four competitively-bid LIN/LOX projects since the Acquisition. 

Customers have also found AT&V to be a low-cost supplier in the LPG market. (See, e.g., V. 

Kelley, Tr. 4599-4600, 5272; N. Kelley, Tr. 7092; [xxxxxxxxxxxxxxxxxxx] (See also Opening 

Br. at 95-97, 113-14; FOF 4.56). 

With respect to the LNG market, Complaint Counsel's entry theory relies entirely 

on the prehistoric 1994 bidding for an LNG peakshaving plant in Memphis, Tennessee. (CC Br. 

at 4, 20). As discussed in Respondents' Opening Brief, reliance on the outcome of one nineyear-old bid contest is ridiculous. (See Opening Br. at 83-85). Furthermore, as the Baker 

Hughes court noted, "failed entry in the past does not necessarily imply failed entry in the future 

. . . ." 908 F.2d at 989 n.9. Complaint Counsel's post-trial brief blatantly misrepresents the 

record in its assertion -- without citation -- that "[w]hen a new LNG tank needed to be contracted 

for in Memphis, just last year, the customer ignored the foreign companies and said that CB&I 

was the only one qualified to do the work." (CC Br. at 4). The truth is that MLGW last 

purchased an LNG tank in 1994. It has done no work to locate an LNG tank supplier since, and 

does not intend to purchase an LNG tank until the year 2006. (Hall, Tr. 1832-33, 1843-45). 

Clay Hall of MLGW also acknowledged that he has limited knowledge regarding the LNG 
-22-

market today, that he has no significant knowledge regarding LNG import terminals, and that he 

is not familiar with current competition in the LNG market today. (Hall, Tr. 1854-57). Further, 

Mr. Hall acknowledged that he was not familiar with current capabilities of foreign companies, 

and that he would need to do a significant amount of research as part of a bidder selection 

process for any future LNG tank purchase by MLGW. (E.g., Hall, Tr. 1848, 1854).23 24

3. Evidence shows that new entry has been and will be sufficient to 

constrain CB&I's prices.

It is Complaint Counsel, not Respondents, that must prove that entry is needed 

and that it would not be sufficient to replace PDM. See Baker Hughes, 908 F.2d at 987-88. As 

outlined in Respondents' Opening Brief, the great weight of the evidence demonstrates that 

CB&I is aware of new entrants, fears their ability to compete, and considers their existence in 

making pricing decisions. (See Opening Br. at. 65-71, 96-97, 115-18) (FOF 3.451-3.459 (LNG), 

4.63-4.67 (LPG), 5.212-5.218 (LIN/LOX)).25

a. New entry has and will constrain CB&I's prices in the LNG 

market. 

Post-Acquisition firm, fixed pricing shows that the LNG market is highly

competitive and that new entry has already constrained CB&I's pricing. For example, Dynegy 

accepted bids from Skanska/Whessoe, Technigaz/Zachry, and TKK/AT&V and was satisfied 

with the bids received. (Puckett, Tr. 4556, 4587-88) (FOF 3.287, 3.309). [xxxxxxxxxx 

 

23 Complaint Counsel also argued twice that "[xxx] reached the same conclusion." (CC Br. at 6, 20). This is 

false. [Ixxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxx] (FOF 3.423)

24 As discussed in Part III, supra, reliance on statements of CB&I executives is misplaced. 

25 Because there have been no post-Acquisition TVC jobs, there is no evidence of sufficiency in the record for 

this market. There is no way for Complaint Counsel to carry its burden of proof.
-23-

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] Bid

results in Trinidad and the Bahamas show that foreign competitors can beat CB&I in North 

America, lending further support to the view that they can compete in the U.S. (See Opening Br. 

at 76-78) (FOF 3.140). In fact, the experience in Trinidad is a virtually perfect natural

experience showing that Complaint Counsel's alleged LNG entry barriers are non-existent. (See 

Opening Br. at 59-61). Further support for the sufficiency of new entry can be found in the 

views of current customers, who are largely unconcerned about the effect of the Acquisition on 

their ability to purchase LNG tanks at a competitive price. (See Opening Br. at 78-80) (FOF 

3.247-3.450). 

It is not surprising that Complaint Counsel fails to respond to this evidence. It 

simply has no evidence. Instead, relying on the testimony of Brian Price, it argues that foreign 

entrants have not won any projects in the LNG market. (CC Br. at 21). As noted above, this is 

false, as Skanska has been named as the EPC contractor for the Dynegy project.26 It also argues 

that Technigaz "has failed every time it tried to enter the U.S. LNG market. . . . " (CC Br. at 22). 

This argument ignores the fact that Technigaz is not the only new entrant in the LNG market. 

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

 

26 As explained below, Mr. Price's testimony is not credible. (See Page 38, infra.)
-24-

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (Jolly, Tr. 4764-65). 

It has successfully entered the U.S. market, as it was pre-qualified by Dynegy and submitted a 

bid on the LNG tanks for that project. (Puckett, Tr. 4547, 4556). Complaint Counsel brazenly 

argues that [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx], a fact that 

Complaint Counsel chooses to ignore in its spurious attempt to show that PDM is an

irreplaceable cog in the U.S. LNG industry. (FOF 3.307-3.308).

In its attempt to belittle Technigaz, Complaint Counsel cites to United States v. 

Franklin Electric Co., Inc., 130 F. Supp. 2d 1025, 1033-35 (W.D. Wis. 2000) (CC Br. at 22). 

Franklin Electric is inapposite to the instant case. That court found that entry was insufficient 

because of the entrant's "limited financial resources, small staff, and high priority goals." 130 F. 

Supp. 2d at 1033. By contrast, Technigaz is a powerful global competitor with strong financials, 

deep experience in LNG, and is committed to entering the U.S. market. (See Opening Br. at. 35-

38) (FOF 3.141-3.194). Unlike the potential competitor at issue in Franklin Electric, there is not 

a shred of evidence in the record to suggest that Technigaz does not have the horsepower to 

compete effectively in the U.S. market. United States v. United Tote, Inc., 768 F. Supp. 1064, 

1080-82 (D. Del. 1991) (cited at CC Br. at 22) is also off-base. That court held that despite the 

fact that the new entrant was "actively bidding," its entry was not sufficient to rebut a prima facie 

case because the defendant was unable to provide an example of a competitor adjusting its price 

in response to the entrant's arrival on the competitive scene. 768 F. Supp. 2d at 1081-82. The 

evidence in this case shows that CB&I is concerned about the power of Technigaz/Zachry, and 
-25-

that it will take the alliance into account when pricing future LNG work. (See Glenn, Tr. 4224; 

Scorsone, Tr. 4850-52) (FOF 3.41-3.459). Further, United Tote implicitly rejected Complaint 

Counsel's proffered test for an entrant -- that it win every single bid contest that it enters. That 

court implicitly recognized that a new entrant could exert competitive pressure without even 

winning a job, provided that it had some impact on other competitors' pricing. 768 F. Supp. at 

1081 (quoting Baker Hughes).

b. New entry has and will constrain CB&I's prices in the LPG 

market.

The evidence also demonstrates that new entry is sufficient in the LPG market. 

Norman Kelley, the only LPG customer to testify in this case, received a very good price for 

ITC's LPG tank and believes that there is more than enough competition in the market to ensure 

competitive prices. (Opening Br. at 94-97) (FOF 4.55-4.62). The evidence also shows that 

CB&I has been constrained in its pricing behavior in the market. In a post-Acquisition LPG 

bidding contest [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxx]. (See Opening Br. at 96-97) (FOF 4.66-4.70). 

c. New entry has and will constrain CB&I's prices in the 

LIN/LOX market.

Finally, the evidence demonstrates that new entry in the LIN/LOX market has 

constrained CB&I's pricing behavior. Both [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See Opening

Br. at 111-13) (FOF 5.125, 5.157-5.158). [xxxxxxxxxx] BOC, and [xx], the [xxxxx] customers 

who awarded LIN/LOX projects after the Acquisition via a competitive bidding process, were 

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See

Opening Br. at 111-14) (FOF 5.96, 5.125, 5.157-5.158). As a result of these bid contests, CB&I 
-26-

believes that this market is competitive and plans to act accordingly. In fact, over the past two 

years, CB&I has been forced to cut its price to LIN/LOX customers in order to win work from 

other competitors. (See Opening Br. at 115-18) (FOF 5.128-5.130, 5.151-5.152). In fact, 

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. (RX 208) (state of mind). Other CB&I documents 

and the testimony of CB&I executives further reflect CB&I's concern regarding its ability to 

compete in this market. (FOF 5.212-5.218). 

In an effort to address this compelling evidence, Complaint Counsel falsely

argues that entry in the LIN/LOX market is insufficient to replace PDM, and that "[t]he high 

level of prices for other competitors is . . . apparent in the LIN/LOX market. . . ." (CC Br. at 4). 

In lieu of presenting actual evidence of price increases, Complaint Counsel chooses to rely on 

baseless allegations that AT&V lacks the capacity of PDM, that it has been "pricing higher," and 

that AT&V has been generating "poor results." (CC Br. at 21). These arguments are dead 

wrong. Customers receiving fixed, firm price bids from LIN/LOX tank suppliers over the last 

[xxxxxx] years have been [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See V. Kelley, Tr. 5272, 

4600-01; [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]) (FOF 5.96, 5.125, 5.157-5.158). 

Further, Complaint Counsel assumes that a single firm must assume the role of PDM in order for 

entry to be sufficient. There is no support for this conclusion. Competition from a variety of 

firms can be amalgamated to generate a competitive effect equal to or greater than a company 

exiting a market, such as PDM. (See Harris, Tr. 7301-3) (FOF 7.123-7.135). For example, [xx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (FOF 5.157-5.158). 
-27-

Complaint Counsel also brazenly asserts that AT&V has been "pricing higher 

than CB&I." (CC Br. at 21). [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See V. Kelley, Tr. 4599-600; 

[xxxxxxxxxxxxxxxxxxxxxx] N. Kelley, Tr. 7092, 7137) (FOF 4.56, 5.95-5.96, 5.124-5.125). 

While Complaint Counsel claims that AT&V lacks "capacity" (CC Br. at 21), AT&V's business 

strategy belies that claim. The evidence shows that AT&V is committed to this market and has 

provided firm bids and budget prices for numerous LIN/LOX projects in the U.S. (Cutts, Tr. 

2452-53). Further, AT&V has won three out of four competitively bid LIN/LOX jobs since the 

Acquisition. (See Opening Br. at 98-103; FOF 5.76-5.78). In short, the evidence demonstrates 

that AT&V's capacity is sufficient to be a major player in this market.27 

In attempting to belittle AT&V as a bona fide force in the relevant markets, 

Complaint Counsel cites to Coca-Cola, Cardinal Health, Staples, and Swedish Match (CC Br. at 

21-22). This authority is off-base. As an initial matter, all of those cases involved markets that 

were too large to permit a smaller player to gain a majority share of the post-Acquisition market, 

as AT&V has been able to do in the LIN/LOX and LPG markets. Further, these courts found 

entry of smaller competitors was insufficient to rebut a prima facie case because of the existence 

of entry barriers. For example, the Coca-Cola court found that entry barriers such as

"grow[ing]" a brand name and increased government regulation made entry difficult. CocaCola, 1994 F.T.C. LEXIS 185 at *158-59. Similarly, the Staples court found entry to be unlikely 

in the office superstore market because of extremely high sunk costs. FTC v. Staples, 970 F.

 

27 Complaint Counsel argues that [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See Opening Br. at 100-02).
-28-

Supp. 1066, 1087-88 (D.D.C. 1997). As Respondents have explained in detail, no such entry 

barriers exist in the relevant markets. (See Opening Br. at. 46-61, 90-94, 107-09) (FOF 3.509-

3.564 (LNG), 4.120-4.131 (LPG), 5.129-5.223 (LIN/LOX)).28 

E. THERE ARE NO SIGNIFICANT ENTRY BARRIERS TO THE

RELEVANT MARKETS.

Complaint Counsel mistakenly argues, as if this were a preliminary injunction 

hearing, that entry barriers will prevent CB&I's competitors from having "much of an impact." 

(CC Br. at 22; see also CC Br. at 4). However, entry has already occurred in the relevant 

markets, thus disproving Complaint Counsel's theoretical claims. (Opening Br. at 20-46, 89-90, 

98-107). In a failed attempt to counter this evidence, Complaint Counsel has cobbled together a 

collection of half-truths and mischaracterizations. While this effort is erroneous in many specific 

ways, as discussed below, it suffers from one fundamental problem: it fails to differentiate 

between different product markets. Because the products at issue are built differently, have 

different customers, and cost different amounts, an entry barrier in one product market is not 

necessarily an entry barrier in another. For example, a patent regarding the door seal technology 

for a TVC may be an entry barrier for a TVC competitor.29 Yet, this issue would have no

relevance to an LNG tank manufacturer. For this reason, Respondents addressed the issue of 

entry barriers on a product-by-product basis. Complaint Counsel's failure to treat this issue in a 

similar manner essentially robs its analysis of any value. 

 

28 The Cardinal Health court found that entry efforts were insufficient, in part because potential new entrants 

had "made no plans to expand in response to any post-merger pricing practices." 12 F. Supp. 2d at 57. However, 

the entry efforts in the market at issue were found to be "insignificant on a national scale." Id. In this case, the entry 

efforts of AT&V, Matrix, and CB&T are far more significant on a national scale. Of the five LIN/LOX projects that 

have been awarded post-Acquisition in the U.S., new entrants have captured a majority of them. 

29 As discussed in Section V, supra, Respondents have offered to make this technology freely available.
-29-

1. Evidence from CB&I witnesses and documents do not support claims 

of entry barriers.

Because it has no credible evidence of entry barriers from customers or

competitors, Complaint Counsel chooses to lead off its argument by using statements from CB&I 

personnel that are little more than commercial puffery. For example, Complaint Counsel cites 

statements by Gerald Glenn from an investor meeting, during which he stated that CB&I has

"unequaled capability." (CC Br. at 23; see also CC Br. at 4). Complaint Counsel's reliance on 

these statements is misplaced. As Mr. Glenn explained at trial, his statements were general in 

nature and did not refer to any specific product market or any specific job. (Glenn, Tr. 4402). 

Further, while Complaint Counsel attaches a talismanic significance to Mr. Glenn's statements 

regarding his competitors, it failed to establish that Mr. Glenn has access to any specific 

information regarding his competitors' costs. (See Glenn, Tr. 4379-99). While Mr. Glenn has 

views and observations on the state of competition globally, he does not have access to

information regarding the cost structures of Skanska/Whessoe, Technigaz, TKK, or any other 

competitor. In fact, CB&I's competitors make similar commercial puffery claims.30 For

example, AT&V claims to be able to "meet all your refrigerated storage needs on time, safely, 

with industry leading quality" and that the TKK/AT&V alliance is "at the forefront of the 

industry within the United States." (RX 936). Similarly, Technigaz claims to be a "pioneer" in 

the liquefied gas market. (RX 934). The fact is, other than these meaningless statements found 

in CB&I's documents, Complaint Counsel has not pointed to a "capability" that CB&I's LNG 

competitors lack. 

 

30 Such puffery statements are nothing new to commerce. Virtually every competitor in every market uses 

some form of commercial puffery. The fact that Kleenex claims it has the softest tissue does not make it true. 
-30-

2. Evidence from Howard Fabrication does not support claims of entry 

barriers.

Complaint Counsel mistakenly relies on testimony of Howard Fabrication's John 

Gill to support its entry barrier argument. Mr. Gill's testimony provides virtually no support for 

this argument. As an initial matter, Mr. Gill's testimony is limited to the TVC market, as he has 

no specific knowledge regarding other product markets. Further, while Mr. Gill claims that he 

cannot compete in the TVC market,31 he did not identify reasons that would prevent other

companies from entering the market. For example, while Mr. Gill testified that he has two 

engineers on staff (CC Br. at 23), Complaint Counsel did not establish that: 1) more than one or 

two engineers are needed to build a TVC; or 2) even if more than two engineers were required 

for this purpose, whether other companies have access to those engineers. Similarly, while Mr. 

Gill claimed that he could not be an new entrant because of Howard Fabrication's small size, 

there is no evidence that other smaller companies could not be competitive in this market. In 

fact, some customers view smaller companies as more competitive than CB&I because of their 

lower overhead costs. For example, Devon Hart of Raytheon testified that smaller contractors 

have advantages over CB&I. For this reason, Raytheon chose XL to serve as the prime 

contractor for its TVC project. Raytheon saved money by using the smaller company as the 

prime contractor. (Hart, Tr. 413-14). 

3. Evidence from AT&V does not support claims of entry barriers.

In a classic example of obfuscation by mixing together evidence from different 

product markets, Complaint Counsel cites testimony from W.T. Cutts of AT&V to support its 

 

31 As Howard Fabrication has bid against CB&I on TVC projects, Mr. Gill's statements regarding his inability 

to compete should be viewed with some skepticism. See Jim Walter Corp., 90 F.T.C. 671, *195 (1977), rev'd and 

remanded on other grounds, 625 F.2d 676 (5th Cir. 1980); United States v. Baker Hughes, Inc., 908 F.2d 981, 987-

88 (D.C. Cir. 1990); New York v. Kraft General Foods, Inc., 926 F. Supp. 321, 361 (S.D.N.Y. 1995); United States 
-31-

failed entry barrier argument. (CC Br. at 23-24). Mr. Cutts' testimony lends no support to this 

argument. While Complaint Counsel argues that AT&V lacks necessary bonding capacity, the 

evidence shows that AT&V can bond LIN/LOX jobs, as it has won three of the five available 

post-Acquisition projects in this market. (Cutts, Tr. 2397-98, 2436-37, 2504-06; Scorsone, Tr. 

5017-18). For LNG facilities, AT&V has allied itself with TKK and has bid on several LNG 

projects in the U.S. and North America. (See Opening Br. at 28-35) (FOF 3.99-3.122). TKK's 

bonding capacity allows AT&V to participate in the LNG market. (See Cutts, Tr. 2556-57) (FOF 

3.107). As for LPG tanks, the evidence is uncontradicted that AT&V can bond these jobs; it has 

successfully completed LPG projects in the past to the great satisfaction of its customers. (See

N. Kelley, Tr. 7088-89; Cutts, Tr. 2334) (FOF 4.18, 4.36-4.42).

Complaint Counsel's arguments regarding AT&V's capacity are similarly offbase. AT&V is currently competing for most of the LNG, LIN/LOX, and LPG jobs available in 

the U.S. Since the Acquisition, AT&V has bid on at least three LNG projects in the U.S., three 

of the four available LIN/LOX projects, and all of the LPG projects. The fact that AT&V is 

competing for these jobs demonstrates that, while AT&V may not have the capacity of CB&I, it 

certainly has the capacity to fully compete in the relevant markets.

Complaint Counsel's citations to customers and competitors of AT&V and CB&I 

are misleading. For example, it cites to Hans Kistenmacher to support its criticism of AT&V, 

yet the evidence is uncontroverted that Dr. Kistenmacher has never seen a firm, fixed price bid 

from AT&V for any relevant product. Moreover, his company has not participated in any of the 

 

v. Calmar Inc., 612 F. Supp. 1298, 1305 (D.N.J. 1985); United States v. Country Lake Foods, Inc., 754 F. Supp. 

669, 675-76 (D. Minn. 1990).
-32-

relevant product markets since 1999. (FOF 5.176).32 Similarly, Complaint Counsel

misleadingly cites to the testimony of Michael Patterson in criticizing AT&V. (CC Br. at 24). 

Mr. Patterson did not state, as Complaint Counsel contends, that he would not use AT&V on a 

future project. To the contrary, Mr. Patterson plans to put AT&V on the bid list for MG 

Industries' next LIN/LOX project. (Patterson, Tr. 493) (FOF 5.161). 

In its failed argument regarding alleged entry barriers, Complaint Counsel ignores 

the "stubborn fact" that AT&V is the low-cost competitor in the relevant markets. Victor Kelley 

testified that BOC was satisfied with AT&V's "low cost" price for LIN/LOX tanks and that BOC 

plans to use AT&V for future projects. (V. Kelley, Tr. 4599-4600, 5272, 5282) (FOF 5.32). 

AT&V also beat its competition (including CB&I) by approximately [xxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (FOF 5.124). Norman Kelley of 

ITC testified that AT&V "beat the socks off of CB&I" on a recent LPG project. (N. Kelley, Tr. 

7092, 7137) (FOF 4.56). Further, AT&V and CB&I are both aware of this fact. AT&V knows 

that it has an advantage over CB&I and can sell LIN/LOX tanks at a lower price. (Cutts, Tr. 

2572) (FOF 5.40).33 [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] FOF 5.40). 

 

32 Complaint Counsel misleads this Court by misidentifying Dr. Kistenmacher as working for BOC. As 

Complaint Counsel well knows and has pointed out in other areas of its brief and findings of fact (e.g., CCFF 467, 

469), Dr. Kistenmacher is Vice-President of Linde BOC Process Plants. (See CC Br. at 24).

33 AT&V is not the only company with these types of advantages. CB&T also has competitive advantages 

over CB&I. CB&T is a smaller company better able to respond to certain jobs, It has a lower overhead structure and 

can respond to immediate market conditions more quickly and efficiently than CB&I. In some cases, CB&T may be 

able to purchase materials closer to market price than CB&I. (Stetzler, Tr. 6369) (FOF 5.67). 
-33-

4. Evidence from [xxxxxxxxxxx] does not support claims of entry

barriers.

Complaint Counsel mistakenly argues that testimony from [xxxxxxxxxxx] shows 

that AT&V cannot compete in the relevant markets. As an initial matter, the relevance of any 

testimony from [xxxxxxxxxxx] is limited to the LIN/LOX market. With respect to the LIN/LOX 

market, contrary to Complaint Counsel's claims, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] Complaint Counsel mistakenly argues 

that AT&V cannot compete in the LIN/LOX market because [xxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxx34xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (Opening Br. at 9-10).35

 

34 In a comment unrelated to the issue of entry barriers, Complaint Counsel points out that [xxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See Scorsone, Tr. 5036) (FOF 5.140). 

35 E.g., International Distrib. Ctrs., Inc. v. Walsh Trucking, 812 F.2d 786, 792-93 (2d Cir. 1987); U.S. v. 

Waste Mgmt., Inc., 743 F.2d 976, 983 (2d Cir. 1984); Advo, Inc. v. Philadelphia Newspapers, Inc., 854 F. Supp. 

367, 375 (E.D. Pa. 1994). United States v. Gillette Co., 828 F. Supp. 78, 85 (D.D.C. 1993) In re Heublein, Inc., 96 

F.T.C. 385, 590-91 (1980). 
-34-

5. The 1994 Memphis bidding process provides no support for claims of 

entry barriers. 

While Complaint Counsel leans heavily on evidence surrounding the 1994

Memphis bidding process to support its entry barrier arguments (CC Br. at 24), this aged 

evidence is irrelevant to today's market. As discussed in Respondents' Opening Brief, the 

Memphis project involved different bidders (with different resources and relationships) far less 

committed to the U.S. market. Further, because of the differences in bidding tactics between the 

companies competing for that project, and because the bids are nearly a decade old, it is 

impossible to make any comparisons between that bid process and present-day competition for 

LNG projects in the U.S. (See Opening Br. at. 83-87) (FOF 3.493-3.508). 

6. Testimony from Project Technical Liaison Associates provides no

support for claims of entry barriers.

Complaint Counsel's reliance on the testimony of Patricia Outtrim of Project 

Technical Liaison Associates ("PTL") for its entry barrier argument is sorely misplaced. (CC Br. 

at 24). Ms. Outtrim has no knowledge regarding the issue of "entry barriers" in the LIN/LOX, 

LPG, and TVC markets. Further, with respect to the LNG market, [xxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

36xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

36 Ms. Outtrim also acknowledged [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. (See

Outtrim, Tr. 684, 686, 787) (FOF 3.684, 3.686). 
-35-

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxx]. Finally, and perhaps more importantly, actual customers in the 

LNG market disagree with Ms. Outtrim's opinions. Current customers respect new entrants in 

the U.S. LNG market and are willing to work with them on U.S. LNG projects. (Opening Br. at 

19-46) (FOF 3.56-3.246).

7. Testimony from [xxxxxxxxx] provides no support for claims of entry 

barriers.

In a strained attempt to support its entry barrier argument, Complaint Counsel 

cites testimony from [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (CC Br. at 24), [xxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (See Jolly, Tr. 4693-94) (FOF 3.163).

Further, Complaint Counsel implicitly acknowledges that its alleged entry barriers 

would not prevent foreign companies from competing for double and full-containment tanks in 

the U.S. (See CC Br. at 24). Complaint Counsel fails to mention that most of the LNG projects 

currently being planned in the U.S. will be full or double-containment. For example, Dynegy, 

Yankee Gas, BP, and Freeport LNG are all planning to build full or double-containment tanks in 

the U.S. during the next few years. (See Opening Br. at 48-50) (FOF 3.11-3.14).
-36-

8. Testimony from [xxxxxxxxx] does not support claims of entry

barriers.

Complaint Counsel cites [xxxxxxxxxx], a retired employee of H.B. Zachry, to 

support its claims of entry barriers. (CC Br. at 24). [xxxxxxxxxxx] testimony provides no 

assistance to Complaint Counsel's argument in the LIN/LOX, LPG, or TVC markets, as [xx] has 

no involvement in those markets. With respect to the LNG market, Complaint Counsel

misrepresents [xxxxxxxxxxx] testimony to this Court. For example, Complaint Counsel argues 

that [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] William Puckett testified that Dynegy was 

satisfied that Technigaz/Zachry had the necessary reputation and ability to construct the LNG 

tanks for the Hackberry project and that it could comply with necessary codes and standards. 

(Puckett, Tr. 4551; see also Puckett, Tr. 4557-58) (FOF 3.179). For these reasons, Dynegy 

sought a bid from [xxxxxxxxxxxxxxxx] for the Hackberry project. (Puckett, Tr. 4552-53) (FOF 

3.283). 

Similarly, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]. Volker 

Eyermann of Freeport LNG confirmed that Sam Kumar, Technigaz' U.S. representative, visited 
-37-

Freeport LNG to discuss the project. (Eyermann, Tr. 6994) (FOF 3.175).37 Mr. Kumar provided 

written materials to Freeport LNG regarding Technigaz and Zachry stating that Technigaz "was 

keenly interested" in pursuing the project. (Eyermann, Tr. 6996-98; RX 934) (FOF 3.175). 

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] Rob Bryngelson, 

El Paso's Rule 3.33 representative, confirmed that El Paso has already pre-qualified Technigaz 

for its LNG projects in Altamira and Rosarito, that Technigaz has sufficient financial stability 

and technical ability to satisfy its requirements, and that El Paso would pre-qualify Technigaz for 

LNG projects in the U.S. (Bryngelson, Tr. 6125-26, 6128, 6131-32) (FOF 3.180).

9. Testimony regarding BSL does not support claims of entry barriers.

In yet another strained attempt to support its claim of entry barriers, Complaint 

Counsel cites to Joseph Hilgar of Air Products and Chung Fan of Linde in arguing that a foreign 

firm -- BSL -- "could not compete on price." (CC Br. at 24). This evidence is not relevant to the 

LNG, LPG, or TVC markets, and is of questionable relevance in the LIN/LOX market. 

Complaint Counsel has produced no evidence regarding BSL's location, experience in the U.S. 

market, its access to qualified workers in the U.S., or when BSL allegedly bid on these projects. 

One or two bid contest losses say nothing about whether a company can compete in a given 

market. In fact, the evidence shows that BSL and its American partner [xxxxxxxxxxxxxxxxxx 

 

37 The Cheniere project was purchased by Freeport LNG. Mr. Eyermann was involved with this project 

throughout his employment with Cheniere and Freeport LNG. (Eyermann, Tr. 6961-62).
-38-

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxx] Simply put, it is impossible to conclude on this record that BSL's experience can 

be generalized to other firms, foreign or domestic. 

10. Testimony from Black & Veatch does not support claims of entry 

barriers.

Of the dozens of misstatements and mischaracterizations made in Complaint 

Counsel's initial brief, one of the most egregious examples is its use of Brian Price to support its 

failed entry barrier argument. (CC Br. at 38-39). Mr. Price argued that foreign competitors may 

have higher costs than CB&I in the LNG markets. This testimony is unreliable on several fronts. 

First, Mr. Price bases his views primarily on the irrelevant 1994 Memphis project. (Price, Tr. 

644). Second, while Mr. Price professes to be part of the Dynegy project team and that he has 

concerns regarding competitiveness of Dynegy's foreign bid, the evidence contradicts his views. 

Mr. Puckett explained that Dynegy was satisfied with its choices of LNG contractors and prices 

provided by those contractors. (Puckett, Tr. 4587) (FOF 3.309). While Mr. Price expressed 

concerns before this Court, he failed to mention them to Mr. Puckett or others at Dynegy. (See

generally Puckett, Tr. 4533-4589). In fact, at the time he claims to have had "concerns" about 

Skanska/Whessoe, his company was touting itself as a partner of Skanska to Freeport LNG. 

(Eyermann, Tr. 6992; RX 935) (state of mind) (Opening Br. at. 22; FOF 3.65). Third, Mr. Price 

has no foundation for his speculation regarding pricing received by Dynegy relative to pricing 

that CB&I could have provided. Mr. Price admitted that he had not, unlike Mr. Puckett, seen 

pricing provided by foreign bidders. Finally, Mr. Price and his employer -- Black & Veatch --

are "head to head" competitors of CB&I. 
-39-

11. Testimony from Matrix does not support Complaint Counsel's claims 

regarding entry barriers.

To support its entry barrier argument, Complaint Counsel gives undue weight to 

the testimony of John Newmeister of Matrix. (CC Br. at 25). Mr. Newmeister simply testified 

that Matrix does not have in-house capability to blast and prime steel plate, and that this lack of 

equipment may present a cost disadvantage relative to other companies. (Newmeister, Tr. 1590-

91). Mr. Newmeister did not testify that his cost structure for LIN/LOX tanks was higher than 

CB&I's; this is not surprising, as Mr. Newmeister does not have access to CB&I's cost

information. The record evidence shows that Matrix is currently competing for LIN/LOX jobs 

and intends to be a "competitive force" in this market. [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] Evidence simply does not 

support the conclusion that Matrix is currently a higher-cost competitor to CB&I. If Matrix 

believed it was, it would certainly not compete in this market. If it were, it would certainly not 

be able to match CB&I's price on a job in CB&I's home state. 

12. Summary: Entry barriers do not exist in the relevant markets.

There are no significant barriers to entry in the relevant markets. (FOF 3.509-

3.570, 4.71-4.143, 5.219-5.223). Low entry barriers in the relevant markets have triggered new 

entry. New entrants have spent enormous resources to enter these markets, and have, in many 

instances, been successful. The fact that AT&V has beaten CB&I in three straight LIN/LOX 

bidding contests, and in one of two LPG bidding contests, demonstrates that AT&V's costs in the 

LIN/LOX market are lower than CB&I's. (See Opening Br. at 99-100). Skanska/Whessoe's 

victory over CB&I at Dynegy and TKK/AT&V's victory over CB&I in Trinidad demonstrate 

that CB&I has no cost advantage over these companies. (See Opening Br. at 31-32; FOF 3.122). 
-40-

The fact that "AT&V beat the socks off of CB&I" on the ITC project shows that CB&I is not the 

low-cost competitor in the LPG market. (Opening Br. at 95; FOF 4.56). In short, CB&I's 

competitors are not "higher-priced and less experienced firms," as Complaint Counsel alleges. 

(CC Br. at 25). CB&I faces an array of experienced, formidable competitors in the relevant 

markets with demonstrated cost advantages over CB&I. They are betting the future of their 

companies on their ability to compete with CB&I in these market. This evidence directly

contradicts Complaint Counsel's entry barrier arguments. They should be rejected out of hand.38 

III. ALLEGATIONS REGARDING POST-ACQUISITION ANTICOMPETITIVE

EFFECTS ARE FALSE.

Complaint Counsel implicitly recognizes that, in light of Respondents' extensive 

showing, it must produce additional evidence of anticompetitive effect. The burden of

persuasion, as Baker Hughes noted, "remains with the government at all times." 908 F.2d at 983. 

It is this burden that motivates Complaint Counsel to stretch the truth to find examples of anticompetitive effect. Complaint Counsel erroneously argues "Respondents have increased price" 

and that this "cements" their case. (CC Br. at 26) As discussed more fully below, Complaint 

Counsel's attempt to prove alleged "price increases" is nothing more than a collection of

misstatements, misrepresentations, and unfounded assumptions.39 

 

38 Complaint Counsel's cite to Eastman Kodak provides no support for its conclusions that entry barriers exist 

in the relevant markets. That court noted, in the context of a market definition analysis, only that "a seller that 

reduced output and raised prices -- always faces a highly elastic demand; its products are so overpriced that even 

inferior substitutes begin to look good to customers. United States v. Eastman Kodak , 63 F.3d 95, 103 (2d Cir. 

1995). This language is inapplicable to the case at bar, as the great weight of the evidence demonstrates that CB&I's 

competitors can provide good quality products at low prices in the relevant markets, and that customers are aware of 

this fact. (See Opening Br. at 20-45, 71-79, 95-96, 98-107).

39 Complaint Counsel cites the D.C. Circuit's opinion in Microsoft for the proposition that if Respondents 

have increased price, that fact cements its case. (CC Br. at 26). Respondents were unable to locate this holding in 

Microsoft. This is not surprising, as there are many legitimate reasons for prices to go up over time. Inflation, 

changes in scope, and increased risk are all reasons for price increases. 
-41-

Similarly, Complaint Counsel points to a few instances of alleged collusion, and 

jubilantly argues that "[a]ll that is required is a showing of likelihood of tacit or express 

collusion." (CC Br. at 28). This argument fails. As their own authority makes clear, Complaint 

must do more than present baseless allegations, it must present evidence of "reasonable

probability of anticompetitive effect." E.g., F.T.C. v. Warner Communications, Inc., 742 F.2d 

1156, 1160 (9th Cir. 1984).

40 As discussed below, Complaint Counsel's allegations regarding 

collusion are completely baseless. Moreover, Complaint Counsel ignores the fact that the 

characteristics of this industry make collusion unlikely. (See Opening Br. at 130-31). 

A. ARGUMENT THAT THE ACQUISITION HAS INCREASED MARKET

POWER IS BASED ON INAPPLICABLE AUTHORITY AND MISCITED 

EVIDENCE.

In attempting to carry its burden under Baker Hughes, Complaint Counsel

improperly argues that the elimination of PDM is evidence of anti-competitive conduct because 

CB&I and PDM were each other's closest competitors. (CC Br. at 28; see also CC Br. at 4). 

This argument is not "additional evidence," as Baker Hughes requires, but a rehash of Complaint 

Counsel's prima facie case which featured evidence of high market concentration. As discussed 

above, such evidence is unhelpful because it fails to account for the structural changes that have 

taken place in the relevant markets, including the entry evidence presented by Respondents. 

Authority cited by Complaint Counsel does not ameliorate this problem, as it did not address the 

effect of new entry in a market. For example, in Heinz (cited at CC Br. at 4-5), the court 

 

40 Complaint Counsel's citations lend no support to its arguments. General Dynamics does not stand for the 

proposition that Complaint Counsel "could base its entire case on just one of these instances." (CC Br. at 26-27). 

General Dynamics merely holds that "post-merger evidence showing a lessening of competition may constitute an 

'incipiency' on which to base a divestiture suit. . . ." United States v. General Dynamics Corp., 415 U.S. 486, 505 

n.15 (1974). Similarly, Tasty Baking Co. holds only that "[t]he most recent evidence of defendants' monopoly 

power is found in defendants' post-acquisition pricing decisions." Tasty Baking Co. v. Ralston Purina, Inc., 653 F. 

Supp. 1250, 1266 (E.D. Pa. 1987). Further, the Tasty Baking court found that the defendants had offered "no 

significant evidence of limits on their market power. Id. at 1267. As Respondents have explained in their Opening 
-42-

considered the potential effect of a merger between two low-cost sellers. However, it did not 

address the effect of entry or potential entry on the competitive situation at issue in that case. 

See 246 F.3d at 717-19.

B. ALLEGED EVIDENCE OF ACTUAL ANTICOMPETITIVE CONDUCT 

IS A COLLECTION OF FALSE STATEMENTS UNSUPPORTED BY THE 

EVIDENCE.

Again, Complaint Counsel ignores facts and instead uses innuendo, speculation, 

and inadmissible evidence to make its case.41 Facts show that competition in the relevant

markets has been unaffected by the Acquisition and that CB&I is forced to compete hard in the 

relevant product markets. While Complaint Counsel recklessly asserts that CB&I's postAcquisition "plan" was to achieve premiums and increase margins in the relevant products (CC 

Br. at 7-8), there is no evidence that this occurred. For example, CB&I has won only two of five 

post-Acquisition LIN/LOX projects. (Scorsone, Tr. 5015-16). It has not been able to command 

premiums or raise margins in connection with these bidding contests. For example, CB&I 

trimmed its margin to zero percent on a recent Air Liquide project order to remain competitive, 

yet it still lost to AT&V. (Scorsone, Tr. 5032-35; RX 627 at 2) (FOF 5.130). Similarly, on MG 

Industries' New Johnsonville project, CB&I was forced to cut its margin to less than 1 percent to 

beat the competition. (Scorsone, Tr. 5023-24). Finally, on a LIN/LOX project for Praxair in 

New Mexico, CB&I earned a 4 percent margin consistent with the terms of an alliance

agreement signed well before the Acquisition. (Scorsone, Tr. 5018-19; RX 87 at 4) (FOF 5.166). 

In sum, CB&I has won two LIN/LOX projects that have earned it a projected profit of

approximately $20,000. This is not the hallmark of anticompetitive behavior. Rather, it is the 

 

Brief, CB&I faces significant constraints on its market power in the relevant products from new entrants. (See 

Opening Br. at 71-78, 95-97, 115-118). 

41 Respondents note that Complaint Counsel, even under its expansive view of the definition of

"anticompetitive effects," has been unable to find any such effects in the LPG market.
-43-

sign of vibrant competition in a tiny market. The other markets at issue in this case having some 

level of demand enjoy similar levels of competition. (See FOF 3.451-3.459, 4.10-4.54). For 

example, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxx] (Scorsone, Tr. 5079) (FOF 3.485, 3.486). Similarly, CB&I cut its price 

on an LPG project for [xxxxxxxxxx] because it felt competition from [xxxxxx] and [xxxxx 

xxxxxxx] (Scorsone, Tr. 5041-42) (FOF 4.66-4.70). 

1. Complaint Counsel has shown no evidence of collusion. 42

a. The Spectrum Astro project provides no evidence of collusion.

Complaint Counsel alleges that CB&I and PDM agreed to coordinate pricing to 

Spectrum Astro. (CC Br. at 5, 31). This allegation is false and is flatly contradicted by the 

evidence. Complaint Counsel first points to a handwritten internal note reflecting a conversation 

between a CB&I and PDM executive calling this project "D.O.A.," a comment related to 

Spectrum Astro's financial condition, not to project pricing.43 The evidence shows that issues of 

pricing, profit margins, costs or anything else related to this project were never discussed 

between PDM and CB&I. (Scorsone, Tr. 4796-97, 5045-46) (FOF 6.141).44

While Complaint Counsel points to an internal CB&I memorandum from a lowlevel line salesman (Dave Lacey) to support their argument (CC Br. at 31) (citing CX 242), the 

evidence establishes that no plan to coordinate bidding was ever created or executed. (Scorsone, 

 

42 In fact, Complaint Counsel has not shown that collusion is possible in the industrial tank industry. This 

industry is not susceptible to collusive behavior because of product heterogeneity, inability to access incomplete 

information about rivals' businesses, and differences in vertical integration. (See Opening Br. at 144). 

43 Complaint Counsel self-righteously asserts that "[t]he fact that they saw nothing wrong with it, and indeed 

laughed about the fact that the customer was going to suffer as a result of their collusion is shocking." (CC Br. at 

32). As discussed herein, no such collusion has occurred. What is shocking is Complaint Counsel's willingness to 

blatantly misrepresent the record on this issue.

44 Complaint Counsel makes much of the fact that both CB&I and PDM bid on this project. The evidence is 

uncontroverted that both companies did so because they were contractually bound to do so. (FOF 6.171). 
-44-

Tr. 5045; Scully, Tr. 1217) (FOF 6.138-6.153). Mr. Scorsone testified that he did not collude, 

coordinate or do anything improper with regard to PDM's pricing to Spectrum Astro. (Scorsone, 

Tr. 5045-46) (FOF 6.141). In fact, PDM competed especially hard for the Spectrum Astro job 

because it was having a bad year and needed the business. To get this work, PDM submitted a 

firm, fixed price bid with a zero percent margin. (Scorsone, Tr. 5046) (FOF 6.142-6.144).45 

The uncontradicted testimony of other bid participants establishes that CB&I and 

PDM did not engage in collusion. The customer testified that CB&I and PDM were fighting 

pretty hard to get his business and that he "thought they had a pretty good competition going." 

(Thompson, Tr. 2114-15). Ron Scully of XL thought that this project was "very" competitively 

priced, and that he saw no evidence of collusion between CB&I and PDM. (Scully, Tr. 1221-22) 

(FOF 6.141). In fact, Mr. Scully is familiar with Mr. Lacey, and characterized him as someone 

who sometimes threw extreme ideas on the table and is regularly ignored. (See Scully, Tr. 1218-

21; CX 242) (FOF 6.151-6.152). 

b. The TRW project provides no evidence of collusion.

Complaint Counsel wrongly accuses CB&I of coordinating with Howard

Fabrication on a bid to TRW. (CC Br. at 5, 32-33).46 CB&I and its employees did nothing 

unlawful. Mike Miles, a low-level CB&I line salesman, met with John Gill of Howard

Fabrication to discuss the possibility of Howard serving as a subcontractor to CB&I on an 

undisclosed TVC project. (CC Br. at 32). Such an arrangement was nothing new. Pre-

 

45 To support its allegation that CB&I and PDM "quoted high prices" on this job, Complaint Counsel relies on 

testimony by Mr. Scully of XL suggesting that competition was not as fractious as what he had seen on a prior 

project. (CC Br. at 31). However, Mr. Scully did not know that PDM submitted a bid at a zero percent margin. 

(Scully, Tr. 1194; Scorsone, Tr. 5044) (FOF 6.144). 

46 Complaint Counsel recklessly asserts that the evidence "demonstrates that their strategy is to dominate the 

market anyway they can [sic] . . . . " (CC Br. at 33). This is false. Even market share statistics belie Complaint 

Counsel's assertions, as CB&I has not even built a TVC since 1984. (Scorsone, Tr. 5055-56) (FOF 6.26). 
-45-

Acquisition, Howard had acted as a subcontractor to PDM on prior TVC projects. (Scorsone, Tr. 

5060-61) (FOF 6.136).47 In mid-meeting, Mr. Gill learned that Mr. Miles was discussing the 

TRW project. At that point, Mr. Gill told Mr. Miles that he had provided ROM pricing to TRW. 

(Gill, Tr. 274) (FOF 6.130). Contrary to Complaint Counsel's allegations (CC Br. at 5, 32-33), 

CB&I and Howard did not know they had separately provided pricing to TRW until this meeting. 

(Gill, Tr. 274). Additionally, Mr. Miles' actions were not authorized by Luke Scorsone (who 

would be responsible for deciding whether to subcontract with Howard) or anyone else at CB&I. 

Further, Mr. Scorsone would approach TRW for permission to subcontract to Howard before 

actually doing so. (Scorsone, Tr. 5060) (FOF 6.137).48

Complaint Counsel's accusation flies in the face of its own position. On one 

hand, it accuses CB&I of colluding with a "potential competitor" -- Howard Fabrication. (CC 

Br. at 32). On the other, it vehemently argues that Howard is not (nor could it be) a competitor 

to CB&I. In support, it cites Mr. Gill's admission that Howard is not a competitor of CB&I, and 

that this fact is known by CB&I and throughout the industry. (Gill, Tr. 195).49 Complaint 

Counsel disingenuously tries to have it both ways. 

 

47 All witnesses involved in this project acknowledged that such an arrangement could result in lower prices 

to TRW. (Gill, Tr. 254-55; Neary, Tr. 1480) (FOF 6.134-6.136). 

48 Ironically, Complaint Counsel argued that Respondents, in their opening statement, promised to show that 

Howard Fabrication was a competitor and that CB&I later "ran from their story as fast as they could by attempting 

to prove that Howard wasn't even a competitor at all." (CC Br. at 3). The fact of the matter is that Mr. Gill of 

Howard Fabrication testified on direct examination that he was not a competitor of CB&I in the TVC market. In the 

face of this evidence, Respondents dropped its argument that Howard Fabrication was a competitor in this market. 

There is nothing wrong with tailoring legal arguments to the evidence, yet Complaint Counsel refuses to recognize 

this fact. As is apparent from their opening brief, it continues to pursue unsupported legal theories by continually 

misciting and mischaracterizing the evidence.

49 Complaint Counsel misrepresents the testimony of Mr. Neary. (CC Br. at 5-6). Mr. Neary testified in 

response to a hypothetical question on direct examination. He did not comment on the facts at issue in this case. 

(Neary, Tr. 1451).
-46-

2. Complaint Counsel has not shown any evidence of price increases.

Complaint Counsel has attempted to show that CB&I has raised its prices on 

relevant products since the Acquisition. This effort relies chiefly on "budget pricing" submitted 

to customers by CB&I in the past two years. As discussed extensively in Respondents' Opening 

Brief, use of budget pricing for this purpose is analytically improper, as budget pricing is often 

rough in nature. It is not an offer to sell, nor do customers interpret it as such. (See Opening Br. 

at 126-29) (FOF 7.1-7.38). In addition to its reliance on budget pricing, Complaint Counsel 

depends on miscited evidence and carefully selected testimony that ignores the weight of the 

evidence. Each such effort is discussed below.

a. The Spectrum Astro project presents no evidence of price

increases.

Complaint Counsel argues that "[a]fter the merger, CB&I raised the bid and the 

margin way above any pre-merger levels (margins increased from [xxxxxxxxxxxxxxx]," and that 

increase stemmed from PDM's exit from the TVC market. (CC Br. at 5, 31-32) (citing CX 

1489). This is a conclusion that ignores the facts, which are as follows: 

CB&I's post-Acquisition pricing to Spectrum Astro was not, as Complaint 

Counsel called it, a "bid." CB&I originally won the Spectrum Astro job in December of 2000 --

two months before the Acquisition. (Thompson, Tr. 2061-62; Scorsone, Tr. 5115-16) (FOF 

6.169-6.170). CB&I submitted new pricing to Spectrum Astro after the Acquisition because, as 

is typical in this industry, CB&I's pricing was valid for only 90 days (because costs are expected 

to escalate or fluctuate beyond the 90-day period.) (Scorsone, Tr. 5047) (FOF 6.176). After the 

pricing expired, Spectrum Astro did not rebid the job. Rather, it asked CB&I to update its price 

in November 2001, approximately one year after receiving the original price. (Thompson, Tr. 
-47-

2069; Scorsone, Tr. 5047) (FOF 6.176). In response to this request, CB&I submitted a price that 

was higher than its winning bid price. (Thompson, Tr. 2074; Scorsone, Tr. 5116) (FOF 6.179).50

The fact that the project has already been awarded is significant because Spectrum 

Astro would have had to re-bid the job if it was unhappy with CB&I's new price. In other words, 

this was a business dispute. (Scorsone, Tr. 4834-37, 5048-49; Thompson, Tr. 2117; Scully, Tr. 

1223-24) (FOF 6.188, 6.193-6.194). Both parties knew that such an outcome was unlikely 

because of the time and expense associated with such a process. For this reason, change orders 

in the construction industry are frequently priced with a higher profit margin than the originally 

bid job. (Scorsone, Tr. 5116-17) (FOF 6.182, 6.194). CB&I's business strategies implemented 

on a project after it was awarded provides no information about the state of competition postAcquisition.

Further, testimony from Complaint Counsel's witnesses undercuts its argument. 

The customer did not testify that he believed CB&I raised its price because of the Acquisition 

and instead viewed the revised pricing as a "pretty common business dispute." (Thompson, Tr. 

2117) (FOF 6.193). CB&I viewed the submission of new pricing long after the expiration of the 

original pricing as a chance to negotiate. (Scorsone, Tr. 4836) (FOF 6.178, 6.193-6.194). No 

witness tied the repricing to the Acquisition. 

b. The Cove Point project presents no evidence of price increases.

Complaint Counsel argues, without evidentiary support, that PDM increased its 

price on the Cove Point expansion in November 2000 in anticipation of the Acquisition. (E.g., 

CC Br. at 33-34). Complaint Counsel bases its theory entirely on CX 1160, the so-called "fat 

 

50 The evidence is uncontradicted that CB&I raised its price for three reasons: to recover pre-contract costs 

that were not originally included in the initial bid, to account for increased risk, and to address changes in scope 

made by Spectrum Astro. (Scorsone, Tr. 5049, 5117, 5235; Scully, Tr. 1172-73, 1222; Thompson, Tr. 2071, 2121-
-48-

estimate" document, which shows an "as reviewed" price on November 1, 2000, and a slightly 

higher "as submitted" price on November 2, 2000. (See CC Br. at 33-34). The undisputed 

evidence shows that this document was created for purposes of evaluating an estimate from the 

estimating department in a formal bid review meeting. (Scorsone, Tr. 4971) (FOF 3.626). 

Representatives from each relevant department attended this meeting to review each line item 

and reach consensus as to whether the estimating department's number should be adjusted. 

(Scorsone, Tr. 4968-72) (FOF 3.622-3.624). Decisions made at the meeting resulted in the 

November 2, 2000 "as submitted" price. (CX 1160; Scorsone, Tr. 4971) (FOF 3.626). The fact 

that CX 1160 shows a different price on November 2 as compared to the estimated price on 

November 1 is irrelevant to this litigation.

Complaint Counsel relies extensively on comments of Jeff Steimer, a CB&I 

salesperson, who complained that several line items in the November 2 estimate were too high or 

"fat." (CX 1160). However, Mr. Steimer was the dissenting voice at the bid review meeting; his 

views were almost always overruled by group consensus. (Scorsone, Tr. 4976-80) (FOF

3.630).51

Complaint Counsel also points to CB&I's actual post-Acquisition profit margin 

for performing the Cove Point project. (E.g., CC Br. at 34). The evidence is undisputed that 

CB&I will earn a greater than expected margin not because of market power, but instead because 

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

22) (FOF 6.180-6.184). CB&I also had valid reasons for its November 2001 repricing. Complaint Counsel presents 

no evidence that this repricing was not justified by these expenses. 

51 The uncontradicted evidence shows that Mr. Steimer is a salesperson and lacked foundation as to whether 

the numbers reached by group consensus in the bid review meeting were too high or too low. (Scorsone, Tr. 4974). 

Further, evidence indicates that sales persons always believe that pricing is too high at bid review meetings because 

their focus is entirely sales oriented and not focused on executing and implementing the project. (Scorsone, Tr. 

4973) (FOF 3.628). 
-49-

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] (Scorsone, Tr. 5336) (FOF 3.635). [xxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxx] (Scorsone, Tr. 5336) (FOF 3.635).52 

c. MLGW budget pricing does not present evidence of price 

increases.

One of the most egregious misstatements made by Complaint Counsel involves 

recent pricing provided to Memphis Light, Water, and Gas ("MLGW") for an LNG planning 

exercise in 2002. Complaint Counsel attempts to compare the competitively bid and negotiated 

8 percent margin projected by CB&I on the 1994 MLGW project to a 30 percent margin

included as part of a budget price given to MLGW in 2002. (CC Br. at 6, 35). This argument is 

misleading, because it is based entirely on a comparison of apples and oranges. It is undisputed 

that the 1994 price was a fixed, firm price bid that was competitively bid and negotiated, while 

the 2002 number was a budget price. As discussed extensively in Respondents' Opening Brief, 

this comparison is inappropriate because budget prices are preliminary in nature and are often 

based on broad assumptions of many unknown variables. (See Opening Br. at 126-29) (FOF 7.1-

7.38). 

Testimony from Complaint Counsel's own witness confirms that such a

comparison is improper. With respect to the 2002 budget price, Clay Hall of MLGW testified 

that he was seeking a budgetary estimate for a tank that might not be constructed for ten to fifty 

years, that there was "no work at stake," and that CB&I provided this estimate out of courtesy in 

 

52 Complaint Counsel notes that CB&I "increased the price of the Cove Point tank to [xxxxxxxxxxx]" without 

noting why. (CC Br. at 34). The undisputed evidence indicates the price was increased because [xxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxx] (Scorsone, Tr. 5334). There is no evidence associating the increased price with the

Acquisition.
-50-

an effort to assist MLGW. (Hall, Tr. 1864-65) (FOF 3.608). Consistent with the inaccurate 

nature of budget pricing, Mr. Hall provided CB&I very little information regarding the proposed 

project. In fact, Mr. Hall would have needed to give CB&I "volumes more" information for it to 

provide an accurate price. (Hall, Tr. 1866-67) (FOF 3.609). Importantly, Mr. Hall expected that 

CB&I's budget price was higher than the pricing he would receive during a bidding process: 

The reason we were expecting [the CBI budget price] to be higher 

was for several reasons. We would assume it to be higher because 

we would assume that CBI might assume that we were making our 

budget based on the numbers, number one. Number two, we 

would assume that in that essentially we're not in a really

competitive-type situation. It's really the same reason. 

(Hall, Tr. 1869) (FOF 3.610). All of this uncertainty led Mr. Hall to characterize the 2002 

budget price as a "scientific wild assed guess." (Hall, Tr. 1865-66) (FOF 3.609). CB&I's own 

witnesses corroborate Mr. Hall; Luke Scorsone testified that CB&I provided a budget estimate 

with a 30 percent margin because the project involved enormous contingencies, including a ten 

to fifty-year time horizon. (Scorsone, Tr. 5251) (FOF 3.611).53

Ignoring the evidence, Complaint Counsel speciously argues that "the customer 

believes that it is stuck and cannot get a better deal from any of the alleged foreign competitors" 

and that "[t]he custome r, who is obviously aware of foreign suppliers, has chosen not to pursue 

any of them, calling CB&I the 'only qualified supplier.'" (CC Br. at 34-35). Remarkably, 

Complaint Counsel failed to cite Mr. Hall's extensive trial testimony rejecting this argument. 

Instead, it chose instead to cite an e-mail (never discussed during trial) that provides virtually no 

information regarding its subject matter or its context. (See CC Br. at 6, 34-35) (citing CX 

1157). Doubtless, this is because Mr. Hall's testimony flatly contradicts this argument. Mr. Hall 

 

53 To the extent Complaint Counsel is interested in analyzing margins, they would be better served to review 

margins on firm, fixed pricing submitted by CB&I post-Acquisition. See Part II, supra. 
-51-

acknowledged that, apart from his 1994 experience, he was not familiar with the current 

capabilities of Skanska/Whessoe, Technigaz/Zachry, TKK/AT&V, or any other foreign tank 

builder. (Hall, Tr. 1843-54) (FOF 3.653-3.657). He also acknowledged that he had made no 

effort to search for an LNG tank builder since 1994, that competition in the LNG market could 

have increased since that time, and that he had no idea whether he could get a better deal from a 

foreign tank supplier than he could from CB&I. (See Hall, Tr. 1843-57) (FOF 3.653). 

d. Budget pricing provided to Linde does not present evidence of 

price increases.

In a similarly strained attempt to find anticompetitive effects, Complaint Counsel 

argues that "C B&I has raised prices approximately 8.7% to both Linde and for two different 

tanks for Praxair." (CC Br. at 35; see also CC Br. at 6). This argument relies primarily on 

Chung Fan's economic analysis of budget pricing and firm, fixed price bids received from CB&I 

and/or PDM over the past three years. This argument ignores the fact that this Court admitted 

Mr. Fan's testimony for a limited purpose; to show that Linde acted based on Mr. Fan's analysis. 

It did not, as Complaint Counsel implies, permit Mr. Fan to offer lay expert opinions:

He's not going to provide statistical analysis opinion because he 

was not designated expert. I'm allow this because you're telling me 

he got these bids, he looked at this, he acted on it. I'm allowing it 

for that purpose only. I am not allowing it for proof that he was 

right about any of this. That's the only way it's coming in.

(Court, Tr. 1012) (emphasis added).54 Further, Mr. Fan's actual observations regarding CB&I's 

pricing directly contradicts Complaint Counsel's argument. He acknowledged that CB&I's "price 

has been consistent and has not changed" since prior to the Acquisition. (Fan, Tr. 1006) 

 

54 This Court correctly refused to permit Mr. Fan to testify as an expert. As the Court observed,

Complaint Counsel did not designate Mr. Fan as an expert. Further, unlike a true expert witness testifying under the 

procedural safeguards of Daubert and its progeny, Mr. Fan himself is not confident enough in his analysis to offer it 

to this Court. He acknowledges that he is "not sure" regarding his conclusions and that his "personal opinion" does 

not have "much value." (E.g., Fan, Tr. 1004) (FOF 5.185). 
-52-

(emphasis added) (FOF 5.185). Accordingly, any argument attempting to use Mr. Fan's 

statistical analysis as evidence of price increases should be stricken.

e. Pricing provided to [xxxxxx] does not present evidence of price 

increases driven by anticompetitive conduct.

Complaint Counsel points to recent rough order of magnitude ("ROM") pricing 

given to [xxxxxx] by CB&I as evidence of anticompetitive effects. (CC Br. at 35). Specifically, 

it points out that PDM provided a [xxxxxxxxxxx] price to [xxxxxx] for a TVC [xxxxxxxxxxxxxx 

xxxxxxxxxx] in 1999, and that CB&I provided a [xxxxxxxxxxx] for this project after the 

Acquisition. It essentially argues that this increase in price is an anticompetitive effect stemming 

from the Acquisition. (CC Br. at 36; see also CC Br. at 6). This argument is specious, as it is 

based on yet another improper comparison between a firm, fixed price bid and a budget price. 

The $15,955,069 figure provided by PDM pre-Acquisition was a firm, fixed price. (Scorsone, 

Tr. 5082-82) (FOF 6.154). By contrast, CB&I's price was an ROM price. These prices were 

provided three years apart. [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxx] CB&I needed this information to produce a firm, fixed price bid. (See

Scorsone, Tr. 5000-20) (FOF 6.159). Because it lacked this information, CB&I did not want to 

expend necessary resources to create a firm price. (Scorsone, Tr. 5084) (FOF 6.159). CB&I 

made this clear to [xxxxxx] in its transmittal letter, in which it explained that "[t]he ROM pricing 

accuracy can be improved with a more detailed assessment of your needs and resulting work 

scope." (CX 1573) (FOF 6.160). Further, Complaint Counsel neglects to mention that [xxxxxx]

never paid the ROM price quoted by CB&I, as it subsequently cancelled the project. In fact, 

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxx]
-53-

f. Budget pricing provided to Fairbanks Natural Gas does not 

present evidence of price increases. 

Complaint Counsel contends that budget pricing provided to Fairbanks Natural 

Gas in 2002 is evidence of the Acquisition's anticompetitive effects. (CC Br. at 36; see also CC 

Br. at 6). This argument lacks evidentiary support, as it is based primarily on the deposition of 

Dan Britton, which is not in evidence.55 Even worse, the consultant to which it refers is Zoher 

Meratla. Complaint Counsel unsuccessfully attempted to introduce Dr. Meratla's affidavit three 

separate times. (Tr. 3039-40, 3112-12, 5348-52). Complaint Counsel is attempting to skirt that 

ruling by citing to another inadmissible document. For this reason alone, Complaint Counsel's 

arguments regarding the Fairbanks project should be stricken in toto.

Other evidence cited by Complaint Counsel does not assist its argument Pricing 

provided to Fairbanks in 2002 was a rough budget price. (See FOF 3.615). In this case, the 

budget price provided contained a very high margin figure to account for lack of information and 

contingencies associated with an Alaska project, such as a cold climate, a short construction 

seasons, and burdensome labor regulations. (See Scorsone, Tr. 5004-06; RX 626) (FOF 3.615).

Complaint Counsel improperly attempts to compare the Fairbanks budget price to 

six-year-old budget pricing for BC Gas. Yet, the two estimates had different histories and 

derivations. The BC Gas budget estimate was prepared in 1996 by Jeff Steimer, a PDM 

salesman without training in estimating; Mr. Steimer derived this estimate by extrapolating from 

a prior estimate to a different client. (See CX 791). By contrast, CB&I derived the Fairbanks 

estimate in 2002 using a formal budgetary exercise. (Compare RX 626 to CX 791). Further, 

Complaint Counsel has not shown that the costs for the BC Gas job (such as material or shipping 

 

55 Via a letter agreement, the parties agreed that Complaint Counsel could introduce certain portions of 

Mr. Britton's deposition into evidence. However, Complaint Counsel never moved those portions into evidence. 
-54-

costs) would be the same as those on the Fairbanks job located deep in interior Alaska. In fact, 

Dr. Simpson -- acknowledged that these factors would be relevant in any comparison of the two 

projects. (Simpson, Tr. 5385). Yet, Complaint Counsel failed to discuss them in its allegations 

regarding anticompetitive effects. (CC Br. at 36). 

3. Complaint Counsel's other attempts to show anticompetitive conduct 

have failed.

Other than its failed evidence regarding collusion and price increases, Complaint 

Counsel relies on a collection of cavalier assertions, liberally sprinkled with misstatements and 

unsupported accusations. In fact, Complaint Counsel's attempts in this regard contain some of 

the most egregious examples of such argument. Each attempt is discussed below. 

a. Negotiations be tween CB&I and [xxxxxxxxxxxxxx] do not 

present evidence of anticompetitive effect.

In a throwaway sentence devoid of explanation, Complaint Counsel asserts that 

customers are unable to force CB&I to negotiate lower prices post-Acquisition. (CC Br. at 35). 

As sole support for this statement, Complaint Counsel cites the testimony of [xxxxxxxxxxxxxx 

xxxxxxxxxx] As an initial matter, this argument is wrong. As discussed extensively in

Respondents' Opening Brief, customers in the relevant markets, [xxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxx] have been able to force CB&I to lower its prices. (See Opening Br. at 74-76, 

78; 113; FOF 3.468-3.486, 5.122-5.130). Further, Complaint Counsel's cite to [xxxxxxxxxxxxx]

testimony is simply wrong, as the evidence shows that [xxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

 

Further, the document cited by Complaint Counsel -- CX 370 - does not comport with the terms of the letter 

agreement. 
-55-

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]

Notably, Complaint Counsel's own witness squarely contradicts Complaint

Counsel's argument. The only post-Acquisition project that CB&I bid to [xxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxx] To classify this as an "anti-competitive" effect strains the outer 

bounds of reason and common sense.

b. CB&I's negotiating efforts regarding the Yankee Gas job 

present no evidence of anticompetitive effects.

In connection with the Yankee Gas peakshaving job, Complaint Counsel accuses 

CB&I of using "strong arm" tactics to limit competition. (CC Br. at 37; see also CC Br. at 6). 

There is zero evidence that CB&I used "strong arm" tactics of any type with Yankee Gas. Marc 

Andrukiewicz, of Yankee Gas, testified in Respondents' case. He did not testify to any such 

tactics, nor did he suggest that CB&I made any effort to "limit its choice of potential builders of 

the project." (CC Br. at 37). In fact, he testified that Yankee Gas was considering

Skanska/Whessoe and Technigaz as alternatives to CB&I for this project. (Andrukiewicz, Tr. 

6445; see also [xxxxxxxxxxxxx]) (FOF 3.69, 3.177).

Further, Complaint Counsel asserted that "Yankee Gas had its contractor, CHI, 

solicit bids for the LNG tank alone." (CC Br. at 37) (citing CX 1507). This is false. According 

to Mr. Andrukiewicz, Yankee Gas has not yet begun its pre-qualification process. 
-56-

(Andrukiewicz, Tr. 6451-52). It plans to pre-qualify firms in January of 2003 and receive bids in 

spring of 2003. (Scorsone, Tr. 4989). As Complaint Counsel's own cited exhibit notes, CHI has 

solicited budget prices from CB&I, Skanska/Whessoe, and Technigaz. (CX 1507 at CBI 

0590483).56 

Complaint Counsel also falsely argues that CB&I "refused to bid on the LNG tank 

alone," and that "CB&I then agreed to offer a bid if it did not have to go through the contractor." 

(CC Br. at 37). As noted above, neither Yankee Gas nor CHI has solicited bids to this point. 

Further, even if the terms "budget price" and "bid" were synonymous, Complaint Counsel's 

argument would still fail. Contrary to Complaint Counsel's argument, CB&I provided pricing to 

CHI at Yankee Gas's request. (Andrukiewicz, Tr. 6445-46) (FOF 3.34-3.342). CB&I believed 

that CHI was a potential EPC competitor for the Yankee Gas job -- a fear confirmed by Yankee 

Gas itself. (Andrukiewicz, Tr. 6450) (FOF 3.354-3.355). [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]

Finally, any suggestion that CB&I has the ability to "strong arm" Yankee Gas is 

ludicrous. CHI has recommended to Yankee Gas that it build an all concrete, doublecontainment LNG tank for its peakshaving facility. (See Andrukiewicz, Tr. 6447) (FOF 3.344). 

The evidence has shown that CB&I would be at a tremendous disadvantage if Yankee Gas 

selects this option. In fact, there is some doubt as to whether CB&I would be able to compete 

for this project if it is, in fact, an all concrete LNG tank. (See Glenn, Tr. 4141; Scorsone, Tr. 

4989) (FOF 3.346). 

 

56 As set forth in Respondents' Opening Brief, a budget price is completely different than a firm, fixed price 

bid. (See Opening Br. at 126-29; FOF 7.1-7.38). 
-57-

c. CB&I's relationship with [xxxx] presents no evidence of 

anticompetitive effects.

In a further failed attempt to eke out a story of anticompetitive effects, Complaint 

Counsel points to the business relationship between CB&I and [xxx] arguing that [xx] "has no 

choice but to acquiesce to CBI's demand that [xx] work exclusively with CBI" and that

"[w]ithout PDM to turn to, [xx] could encourage competition only by turning to untested, higherpriced alternatives." (CC Br. at 37; see also CC Br. at 6). This argument is specious at best. 

Complaint Counsel relies heavily on a [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx] 

The document contains no evidence regarding whether this pricing was provided in the U.S. or 

overseas, when the pricing was received,57 what assumptions were given to the vendors for

purposes of making their estimates, or for what purpose the estimates were submitted. 

Undaunted, Complaint Counsel forges ahead with conclusions regarding the document, devoid 

of evidentiary support.58

 

57 Complaint Counsel has presented no evidence that [xx] was considering LNG tanks in the U.S. in 1998.

58 Rather than relying upon this dated, unexplained, document, one need not go very far to look at how 

Whessoe's ability to price tanks looks today. For example, after the date of the estimates contained in RX 157, 

Whessoe beat CB&I and PDM on a firm, final price bid (as opposed to the budgetary estimates involved in RX 157) 

and projects in Dabhol, India and in Trinidad. Whessoe has also won the Dynegy project, providing a price that 

"satisfied" the customer. (Puckett, Tr. 4557) (FOF 3.288). Further accuracy of Whessoe's pricing is demonstrated 

by [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxx]
-58-

Further, Complaint Counsel's allegations should be seriously questioned because 

they are devoid of evidence from [xx] witnesses. If [xx] truly believed that its only alternative to 

CB&I was an inferior, higher-priced contractor, it would be reasonable to expect [xx] to testify 

on behalf of Complaint Counsel. It did not do so. To the contrary, [xxxxxxxxxxxxxxxxxxxxxx

xx] testified in Respondents' case. His testimony directly contradicts Complaint Counsel's 

unfounded allegations; he testified that [xx] believes it has several options available to it for 

LNG tank contractors and that [xx] is not concerned that the Acquisition has affected its ability 

to obtain LNG tanks in the U.S. [xxxxxxxxxxxxxxxxxx] (FOF 3.427). 

d. The Dynegy project presents no evidence of anticompetitive 

effects.

The Dynegy bidding process is the keystone of this case. It conclusively shows 

that foreign competitors can enter the U.S. market and provide pricing and quality that satisfy 

customers. Complaint Counsel devotes less than a page to argue that the Dynegy project 

constitutes evidence of anticompetitive effect. (CC Br. at 37). There is no rational reading of the 

facts that could support such an argument. Complaint Counsel argues that CB&I initially 

refused to bid on the Dynegy LNG tanks because they were competitively bid. (CC Br. at 37). 

This is a false statement. As discussed extensively in Respondents' Opening Brief, CB&I 

initially refused to bid on this project because its bid was to go to Black & Veatch -- a competitor 

of CB&I's on peakshaving facilities. Further, Black & Veatch was Skanska/Whessoe's partner in 

the Dynegy bidding process. (Price, Tr. 600; (Opening Br. at 86; FOF 3.273). CB&I's refusal 

was designed to protect its proprietary information from strong competitors, not to exercise 

"market power" that it did not have.

Perhaps the most misleading sentence in Complaint Counsel's entire brief is "the 

customer is still concerned that the remaining foreign competitors cannot give it a 'competitive 
-59-

price.'" (CC Br. at 38) (citing Price, Tr. 635). Brian Price is an employee of Black & Veatch 

which is, as discussed above, an alliance partner of Skanska, the winning EPC contractor on the 

project. In fact, Black & Veatch has touted this alliance to its U.S. LNG customers. (See

Eyermann, Tr. 6986-87; RX 935) (FOF 3.65). Mr. Price is not an employee of Dynegy. William 

Puckett is an employee of Dynegy who was directly involved in this project. Further, Mr. 

Puckett testified in this case. Complaint Counsel fails to cite his testimony because it directly 

contradicts the claim that foreign competitors cannot provide competitive pricing. Specifically, 

Mr. Puckett explained that all three foreign bidders provided firm, fixed price bids that were "in 

the expected price range," and that Dynegy was "satisfied" with the bids. (Puckett, Tr. 4540, 

4557, 4587-88) (FOF 3.248, 3.288). In fact, Dynegy was so satisfied with the bids that it 

rejected CB&I's subsequent attempt to bid on the LNG tanks. (Puckett, Tr. 4559-60; Glenn, Tr. 

4137) (FOF 3.304). Further, during Complaint Counsel's cross-examination of Mr. Puckett, he 

never voiced any "concerns" regarding the ability of foreign bidders to compete in the U.S. (See

Puckett, Tr. 4561-89). With respect to Mr. Price's testimony, Respondents submit that it lacks 

any credibility for the reasons stated in Part II, supra. 

IV. THE EXITING ASSETS DEFENSE IS APPLICABLE, AND UNDISPUTED 

EVIDENCE SUPPORTS IT.

Respondents have shown that the exiting assets defense is applicable here. (See 

Opening Br. at 138-58). In response, Complaint Counsel tries to fit this square evidence into the 

round holes of a test developed to assess mergers involving failing firms, and a test suggested by 

two academics to address assets that would have exited the market absent the Acquisition. This 

approach simply ignores the evidence and the inevitable fact that PDM would have been

liquidated absent the Acquisition. Under such circumstances, it follows logically that

competition has not been substantially lessened by the Acquisition.
-60-

A. THE EXITING ASSETS DEFENSE EXISTS IN THIS CASE.

Complaint Counsel attacks the evidence that PDM EC would have exited the 

market by asserting that the evidence could not be considered because it is "not based on any 

accepted law" and that the evidence of the liquidation of PDM EC does not meet the

requirements of something called "the failing firm" defense. (CC Br. at 39). Complaint Counsel 

ignores the evidence of the likely liquidation of PDM EC because it does not fit neatly within a 

pre-packaged defense. Respondents have already addressed the legal issues associated with this 

defense. (Opening Br. at 152-55; FOF 7.255, 8.20, 8.38, 8.55, 8.106). It is critical to note that 

the basis for considering whether PDM EC would be liquidated comes not from law but from 

evidence in this case. It is undisputed that in order to determine whether competition has been 

substantially lessened, one must compare competition as it exists today to competition as it 

would have existed absent the acquisition. (Simpson, Tr. 5677; Harris, Tr. 7186-87) (FOF 

7.255). The overwhelming evidence reveals a very high likelihood that liquidation of PDM EC 

would have occurred absent the Acquisition. (Opening Br. at 138-152; FOF 8.115-8.126).

At least one court, in the context of applying the failing firm defense, has held 

that "we reject rigid obeisance to technical labels and look to the substance of a given

transaction." U.S. v. M.P.M., Inc., 397 F. Supp. 78, 98 (D. Colo. 1975). It is the substance of 

evidence, rather than technical labels, that is relevant in this unique case. The evidence shows 

that PDM was not casually considering the idea of liquidation. Rather, PDM went to the 

marketplace, announced its intention to liquidate the entire company for cash, and gave itself a 

time limit dictated by market conditions. (Opening Br. at 141-43) (FOF 8.47-8.55). To ignore 

these facts would be to ignore reality, and would result in a comparison of competition as it 

exists today to a fantasy -- a post-acquisition world in which PDM EC would have been sold to 

and operated by someone else. 
-61-

B. THERE IS A SUBSTANTIAL PROBABILITY THAT PDM EC WOULD 

HAVE BEEN LIQUIDATED ABSENT THE ACQUISITION.

Complaint Counsel argues that Respondents have not shown that the "assets are 

actually exiting the market," and attempts to persuade this Court that PDM might not have exited 

the market absent the Acquisition. (CC Br. at 42). This argument ignores the evidence. PDM 

was prepared to liquidate the PDM EC and Water Divisions if the CB&I deal fell through. This 

is based on the uncontradicted testimony of PDM's CFO -- Rich Byers. (Opening Br. at 138-39; 

FOF 8.115-8.126). Complaint Counsel suggests that Mr. Byers' testimony is “pure speculation." 

(CC Br. at 43). Yet, the evidence shows that Mr. Byers' testimony was far from pure

speculation. He had, in December 2000, already reached the decision to recommend liquidation 

after reviewing Tanner & Co's actual liquidation analysis, after consulting with Mr. Scheman, 

and after vetting the idea with PDM's CEO -- Bill McKee. (Opening Br. at 143-45)59 60

Complaint Counsel also argues that "if Byers had convinced the board to liquidate 

the EC division, his plan was to sell the current contracts, the plant, and the engineering and 

intellectual property assets to another competitor who would carry out the current business." 

(CC Br. 43) This statement is blatantly false. Mr. Byers simply testified that he would try to 

assign the ongoing contracts to third parties who would finish the work that PDM was

 

59 Complaint Counsel incorrectly claims that "PDM promised the board that they would contact other

purchasers if the CB&I deal fell through." (CC Br. at 42). First, Mr. McKee never promised to undertake such a 

search. (See Opening Br. at 143-45). Second, Mr. McKee made the statement quoted by Complaint Counsel in a 

November 29, 2000 board meeting. This was before he met with Tanner & Co. in December of 2000, at which point 

Tanner informed Messrs. Byers and McKee that there were no other purchasers and put together a liquidation plan 

for the EC division. (Opening Br. at 144) (FOF 8.118-8.119). After the December meetings with Tanner, Mr. 

McKee told the board on December 19, 2000 that there were likely no other purchasers for the EC division. 

(Opening Br. at 144-45; FOF 8.122)

60 Complaint Counsel argues that Gerald Glenn "admitted that PDM could have sold the EC and Water 

divisions to 'any number of competitors.'" (CC Br. at 40). This is simply wrong and takes his testimony out of 

context. Further, Mr. Glenn had no knowledge as to which companies PDM was talking to, the financial abilities of 

those companies, or any of the other factors that were taken into account by Mr. Scheman and PDM executives. 

(Glenn, Tr. 4262). 
-62-

contractually obligated to perform at their own facilities. (Byers, Tr. 6803-05). Complaint 

Counsel is adding words to Mr. Byers testimony that simply are not present.

C. PDM CONDUCTED A GOOD FAITH EFFORT TO SEEK OFFERS 

FROM OTHER POTENTIAL PURCHASERS.

While Complaint Counsel argues that PDM did not engage in a sufficiently

detailed search for alternative buyers, its argument is inconsistent with the uncontradicted

testimony of PDM's professional investment banker. (Opening Br. at 138-44; FOF 8.45-8.82). 

Further, contrary to Complaint Counsel's assertion that an "exhaustive marketing effort" must 

occur, this is not the applicable standard. The selling company need only make a "good faith 

effort to seek offers from other potential purchasers." California v. Sutter Health Sys., 130 F. 

Supp.2d 1109, 1136 (N.D. Cal. 2001)(emphasis added). See also Dr. Pepper/Seven-Up Cos. v. 

FTC, 991 F.2d 859, 865 (D.C. Cir. 1993) ("the proponent of the acquisition must demonstrate 

that it has made a reasonable, good faith attempt to locate an alternative buyer"). PDM's effort 

more than met the good faith requirement. PDM relied on a well-established investment banking 

strategy for the sale of EC and Water divisions which involved wide dissemination of a press 

release which led to a large list of interested purchasers contacting PDM and/or Tanner & Co. 

(Opening Br. at 141-42; FOF 8.49-8.54). Peter Scheman used his experience to analyze the list 

of interested purchasers to determine whether they could consummate a transaction. 61 (Opening 

Br. at 142; FOF 8.48). PDM did not ignore other interested purchasers; it simply evaluated their 

 

61 Complaint Counsel also distorts the record by claiming that "Byers admitted on cross-examination that 

other companies would have been interested in buying the divisions, and yet he has never seen any proof that 

anyone else was ever contacted." (CC Br. at 42). In reality, Mr. Byers testified that Tanner was the party tasked 

with contacting purchasers and that PDM was to refer any contacts made to PDM to Tanner. (Byers, Tr. 6758-59; 

FOF 8.40). Mr. Byers also testified that PDM relied on Tanner's assessment that there were no other viable 

purchasers. (See Byers, Tr. 6880). The la w does not require Mr. Byers to second guess his investment banker and 

to conduct his own search for purchasers. Investment bankers are hired to do that very task for a selling company. 

The record pages cited by Complaint Counsel simply do not support their rhetorical assertion.
-63-

financial abilities. Such an evaluation is essential, as it can be quite damaging to proceed with a 

buyer that turns out to be incapable of consummating a deal. (Opening Br. 151; FOF 8.54).62

PDM used a method that its experienced investment banker believed was most 

likely to turn up interested purchasers. This meets Respondents' burden to show that a good faith 

effort was made to sell these assets.63 The fact that Tanner spoke with many purchasers and 

analyzed their suitability as purchasers further establishes that PDM made reasonable efforts to 

sell the EC and Water divisions. It is not necessary that every potential lead be tracked down, 

especially when a "reasonable attempt to find an alternative purchaser . . . [was made] but that 

despite it being well known in the industry and investment circles that [the company] was 

available for purchase, no other offer was forthcoming." U.S. v. Culbro Corp., 504 F. Supp. 661, 

669 (S.D.N.Y. 1981).

64 The EC division's availability was well-known in the industry, and no 

other offer was made in the nearly eight months that passed between the announcement of the 

 

62 Complaint Counsel argues that CB&I paid a premium for the EC division. This argument is inconsistent 

with the record evidence. While CB&I's initial purchase offer of $93 million was a "premium" price in Tanner's 

estimation, the final purchase price was $72 million based entirely on the EC division's poor performance. (Opening 

Br. at 142-45) (FOF 8.112-8.114). In the end, CB&I purchased the EC division within the liquidation value, not at a 

premium price. (RX 163 at 7, 28).

63 Complaint Counsel notes that Tanner contacted directly 25 potential purchasers for the PDM Bridge 

division. (CC Br. at 42) This is irrelevant. Tanner spoke with nearly that many potential purchasers for the EC and 

Water divisions, although it determined that none of these purchasers were suitable. (Scheman, Tr. 2922, 6911; RX 

164-166) (FOF 8.53).

64 Complaint Counsel's authority is inapposite. FTC v. Warner Communications, 742 F.2d 1156 (9th Cir. 

1984) evaluated a mere intention to exit the market based on an assertion of "economic necessity" that did not rise to 

the level of a failing firm. Id. at 1164. In Citizen Publishing v. U.S., 394 U.S. 131 (1989), no effort had been made 

to sell the company to another purchaser. In FTC v. Harbour Group Invest L.P., No, 90-2525, 1990 WL 198819 

(D.D.C. Nov. 19, 1990), the investment banker deviated substantially from its normal business operations when 

selling a company, and thus made a minimal effort with minimal dissemination of the asset's availability. Further, 

the FTC had identified three alternative purchasers that the seller had not proven to be not viable, as well as a 

document from the purchaser's files indicating a concern that if it did not buy the challenged assets, another

purchaser would. Id. In U.S. v. Greater Buffalo Press, 902 U.S. 549 (1971) the court rejected the failing firm 

defense where the seller was actually pursuing expansion plans at the time of the acquisition. Id. at 554. In U.S. v. 

Phillips Petroleum, 367 F. Supp. 1226 (C.D. Cal. 1973) the court evaluated a mere stated intention to leave the 

business without any other supporting evidence.
-64-

EC division's availability and the closing of the Acquisition. (Scheman, Tr. 2921-22, 6910-11, 

6945-46; Byers, Tr. 6776-78, 6884-85) (FOF 8.50-8.52, 8.55). Complaint Counsel has put 

forward no witness other than Matrix65 who even expressed an interest in buying the EC

division, no witness who suggested another purchaser could have consummated a cash

transaction above liquidation value, and no witness who testified that PDM's marketing approach 

was unreasonable or less than exhaustive. Respondents' evidence is unrebutted and compelling. 

Complaint Counsel's argument, on the other hand, is devoid of support and should be rejected.

V. EVEN IF THIS COURT FINDS THAT THE ACQUISITION VIOLATED 

SECTION 7, A BREAKUP OF CB&I VIA DIVESTITURE IS NOT AN

APPROPRIATE REMEDY IN THIS CASE.

Alternatively, if this Court finds a Section 7 violation, the record evidence

indicates Complaint Counsel's proposed remedy will actually hurt the very customers it purports 

to protect. A remedy must not be punitive. A breakup by divestiture is not mandatory. Relief 

should be fashioned consistent with the evidence, and the evidence in this case does not support 

a breakup of CB&I. Respondents respectfully submit that this Court should, if at all, impose 

remedies aimed at fine-tuning the existing competitive process in the markets. 

A. A PUNITIVE REMEDY IS NOT APPROPRIATE.

Complaint Counsel reveals its punitive intentions by arguing that its proposed 

remedy must be imposed because "[a]bsent divestiture, any lesser relief would be a slap on the 

wrist." (CC Br. at 48). Punitive remedies are not appropriate in this case. As the Supreme Court 

noted long ago in DuPont, "[c]ourts are not authorized in civil proceedings to punish antitrust 

violators, and relief must not be punitive." 366 U.S. at 326 (emphasis added).

 

65 Matrix's tepid interest was extensively debunked in Respondents' Opening Brief (see Opening Br. at 

147-51) and is even less suitable than the proffered prospective purchaser in California v. Sutter Health Systems, 

130 F. Supp. 2d 1109, 1137 (N.D. Cal. 2001).
-65-

B. A BREAKUP BY DIVESTITURE IS NOT A MANDATORY REMEDY 

FOR A SECTION 7 VIOLATION.

Complaint Counsel argues that this Court has no discretion whatsoever to craft an 

appropriate remedy in this case, and that unnamed individuals in a "compliance division" --

individuals who were not present for a single day of the trial of this case and have no known 

expertise in this industry -- are the only ones able to craft an appropriate remedy. Complaint 

Counsel urges this Court to abandon its responsibility to create an equitable remedy based on 

record evidence, and to instead pass it to a group of government lawyers accountable to no one.

Complaint Counsel has not cited a single case holding breakup by divestiture to 

be an automatic remedy robbing this Court of equitable discretion. While it claims United States 

v. E.I. DuPont de Nemours, 366 U.S. 316 (1961) supports its position (CC Br. at 47), DuPont

actually reached a different conclusion, finding that "[t]he key to the whole question of an 

antitrust remedy is of course the discovery of measures effective to restore competition." 

DuPont explained that courts are authorized and required to decree relief "effective to redress the 

violations," whatever that remedy may be. Id. at 326 (emphasis added). The Court explained 

that the trier of fact has "large discretion to model their judgments to fit the exigencies of the 

particular case,” and that divestiture is appropriate "if other measures will not be effective to 

redress a violation." Id. The DuPont Court considered the very language in Section 11 

Complaint Counsel cites as support for its automatic remedy argument and explicitly rejected 

such a reading, holding that "Congress would not be deemed to have restricted the broad 

remedial powers of courts of equity without explicit language doing so in terms or some other 

strong indication of intent." Id. at 331 n.9. 

DuPont has been the undisturbed touchstone of Section 7 remedy law for over 

forty years. Other Supreme Court cases cited by Complaint Counsel do not abrogate Du Pont in 
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any way. Complaint Counsel incorrectly argues that Greater Buffalo Press, 402 U.S. 549 (1971)

identifies breakup by divestiture as a mandatory Section 7 remedy. (CC Br. at 46). In fact, the 

Greater Buffalo Press Court found that no violation occurred; it did not reach the question of 

divestiture. 402 U.S. at 556. Ford Motor Co. v. United States, 405 U.S. 562, 578 (1972) (CC 

Br. at 47) is similarly unhelpful to Complaint Counsel. In fact, Ford Motor reiterated Du Pont's

holding that courts have "large discretion to fit the decree to the special needs of the individual 

case" in order to create a remedy that will be "effective to redress the violations and to restore 

competition." 405 U.S. at 573 (citing United States v. E.I. DuPont de Nemours & Co., 353 U.S. 

586, 607) (internal quote marks omitted). Further, Ford Motor explained that courts must review 

record evidence and "consider[] all aspects of [the] case, including the nature of relief" when 

fashioning a remedy. 405 U.S. at 578.66 

Undaunted by such explicit contrary authority, Complaint Counsel seizes on 

language that suggests complete divestiture is a "natural remedy," and tries to equate the term to 

mean "mandatory remedy" -- a position roundly rejected by the courts. (See CC Br. at 48) (citing 

cases). Yet, none of the cases cited by Complaint Counsel holds or even suggests that complete 

divesture is mandatory, or that courts have no discretion in crafting an appropriate remedy. To 

the contrary, Complaint Counsel's cited authority reaffirms that trial courts have broad discretion 

in crafting an appropriate Section 7 remedy. While it cites to In re Olin Corporation, 113 F.T.C. 

400 (1990) to support its claim that complete divestiture is a mandatory remedy (CC Br. at 44), 

 

66 Complaint Counsel's reliance on California v. American Stores, 495 U.S. 271 (1990) (CC Br. at 44-45) is 

unavailing. There, the Court reviewed Section 16 of the Clayton Act, and only tangentially discussed Section 11 in 

order to determine if divestiture was a remedy contemplated by Congress in the definition of "injunctive relief" 

contained within Section 16. See 495 U.S. at 295. Further, American Stores is consistent with Du Pont and its 

progeny. It specifically noted that while "a district court has the power to order divestiture in appropriate cases 

. . .[it] does not, of course, mean that such power should be exercised in every situation in which the Government 

would be entitled to such relief . . ." Id. 
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that court never found that Section 11 required it to order a complete divestiture. In fact, it 

considered less restrictive measures, including partial divestiture. Olin Corp., 113 F.T.C. at 584. 

In the end, it held that complete divestiture was appropriate, not because it was mandated by 

Section 11, but because the evidence presented supported such a remedy. See id.

Further, the Commission itself has recognized that a violation of Section 7 does 

not automatically trigger a complete divestiture, stating, "[t]his is not to say that divestiture is an 

automatic sanction, mechanically invoked in merger cases." In re Retail Credit Company, No. 

8920, 92 F.T.C. 1, 88 (July 7, 1978). The Commission has also recognized that more narrow 

relief is especially appropriate in cases involving multiple product markets, when no relief is 

necessary in some of the markets at issue. In re The Grand Union Company, 102 F.T.C. 812, 

997 (1983) (cited in Opening Br. at 162). In Grand Union, the Commission explained: 

In multiple market cases, this may result in all elements being

proven as to all alleged markets, as to some markets but not others, 

or as to none of the alleged markets. A case falling in the second 

category may entail more narrow relief (e.g., partial rather than 

complete divestiture) than a case in the first category. Cases 

falling in the third category obviously involve no Section 7

violation under this theory.

Id.

Far from holding itself obligated to impose complete divesture in every case in 

which a violation is found, the Commission has recognized that "practical difficulties" may 

militate against divestiture or other types of structural relief in particular cases and that a court 

should not "minimize the practical difficulties." In the Matter of Ekco Prods. Co., 65 F.T.C. 

1163, 1202 (June 30, 1964) (cited at CC Br. at 51). Because of these difficulties, the

Commission recognized that "while divestiture is normally the appropriate remedy in a Section 7 

proceeding, on occasion it may possibly be impracticable or inadequate, or impose unjustifiable 
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hardship." Id. It also made clear that it "would not attempt to apply remedies so drastic, or 

inequitable, that the cure would be worse than the disease," and that as a result, it was important 

that the Commission have "a range of alternatives in its arsenal of remedies." Id. (emphasis 

added).

In short, the Supreme Court and the Commission have directly and repeatedly 

rejected Complaint Counsel's overreaching claim that complete divestiture is a mandatory

remedy for a Section 7 violation. DuPont and its progeny have explicitly given this Court 

discretion to craft a remedy "effective to redress the violations," as well as the discretion to avoid 

remedies that have too many "practical difficulties," would impose "unjustifiable hardships," or 

would be a cure "worse than the disease" -- the very types of evidence this Court finds squarely 

before it. In their Opening Brief, Respondents have outlined in detail "important benefits to the 

consumer" associated with a less restrictive remedy. (See Opening Br. at 171-72). This Court 

has not only the discretion, but the equitable duty, to consider these issues in crafting a remedy 

as the Commission has suggested it should do.

C. ANY REMEDY IMPOSED SHOULD BE BASED ON THE WEIGHT OF 

THE EVIDENCE.

Since divestiture is not a mandatory remedy, it is axiomatic that the parties must 

present evidence on the issue. See U.S. v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001). In Microsoft,

the D.C. Circuit discussed the types of evidence relevant to analyzing the effectiveness of any 

remedy. Complaint Counsel weakly argues that Microsoft is entirely irrelevant because it "was 

not a merger case. . . . " (CC Br. at 45). This argument misses the mark. While Microsoft was a 

Sherman Act and not a Clayton Act case, this does not change the fact that the D.C. Circuit 

engaged in a thoughtful analysis of the types of evidence that courts should consider in crafting 

antitrust remedies. See 253 F.3d at 100-05. It relied on many cases where equitable relief is 
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sometimes needed in ruling that the district court was required to examine "remedy evidence" in 

order to properly order divestiture. 253 F. 3d at 101. For example, the Microsoft court relied on 

United States v. McGee, 714 F. 2d 607, 613 (6th Cir. 1983) (requiring remedy evidence in a land 

annexation case), Charlton v. Estate of Charlton, 841 F.2d 988, 989 (9th Cir. 1988) (requiring 

remedy evidence in a Chapter 11 bankruptcy case), and United States v. Ward Baking Co., 376 

U.S. 327, 330-31 (1964) (requiring remedy evidence in a Section 1 Sherman Act case). Notably, 

the Microsoft court relied on Ford Motor Co. v. United States, 405 U.S. 562, 578 (1972), cited 

by Complaint Counsel, in directing the district court to consider remedy evidence.67

D. THERE IS NO EVIDENCE THAT A COMPLETE DIVESTITURE IS AN 

APPROPRIATE REMEDY. 

While Complaint Counsel argues that divestiture must be complete, it cites

virtually no evidence to support its argument. (See CC Br. at 48-51). Instead, it relies on general 

statements regarding the scope of divestiture from authors of antitrust treatises, none of whom

reviewed a shred of evidence in this litigation. For example, it cites a commentator in arguing 

that "[f]or divestiture to be successful, a complete divestiture that reestablishes the acquired firm 

as a viable competitor is necessary." (CC Br. at 49). Yet, it has presented no evidence on this 

issue other than the unsupported views of its expert economist. (See Opening Br. at 162-65; FOF 

9.3-9.5). As Respondents have set forth in their Opening Brief, it is extremely unlikely that a 

complete divestiture could actually accomplish this goal. In fact, as customers have testified, 

 

67 Like the cases cited by Complaint Counsel, Microsoft recognized that divestiture was "traditionally" the 

remedy used for the violations of the antitrust statute at issue in that case -- the Sherman Act. 253 F.2d at 105. The 

fact that divestiture was a "traditional" remedy did not prevent the Microsoft court from requiring the trial court to 

consider evidence regarding a proposed divestiture. See id. at 105. This Court has, just as the Microsoft court had, 

the ability to hear evidence regarding remedy and use that evidence to craft a remedy that redresses whatever 

violation (if any) it believes needs to be redressed. 
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such a divestiture could actually have a negative impact on competition. (See Opening Br. at 

165-71; FOF 9.8-9.10; 9.22-9.31). 

Similarly, citing a speech by Chairman Muris, Complaint Counsel argues that the 

Commission "will require a divestiture that will likely create a viable business entity. . . . " (CC 

Br. at 49).68 Chairman Muris was not discussing this case, and Complaint Counsel has not

presented a single piece of evidence showing that complete divestiture would actually create 

such an entity in this case. It has not presented a single expert or fact witness, report, or 

document supporting their claim that a divestiture could have the effect it desires.69 

E. RESPONDENTS' PROPOSED TVC REMEDY IS SUPPORTED BY THE 

EVIDENCE.

Respondents have suggested a remedy for this TVC market, should the Court find 

that it has been substantially affected by the Acquisition. (See Opening Br. at 122-25; FOF 6.91-

6.121). Complaint Counsel takes aim at this proposed remedy, incorrectly stating that the "only" 

remedy suggested "is a mentoring program together with an agreement not to compete." (CC Br. 

at 50; see also CC Br. at 3). As Complaint Counsel well knows, and as discussed in its Opening 

Brief, Respondents have proposed a remedy far broader than Complaint Counsel suggests. (See

Opening Br. at 122-25). Further, this proposal has met with approval by customers and

 

68 Complaint Counsel cites Ford Motor for a similar purpose. (CC Br. at 49-50) (citing Ford Motor, 405 U.S. 

at 574, 576). Yet, Complaint Counsel has presented no evidence establishing a "viable, independent competitor" 

can be created in this case, or whether doing so would restore the "pre-acquisition competitive structure of the 

market." (CC Br. at 50) (citing Ford Motor, 405 U.S. at 576). Unlike here, the Ford Motor court has such evidence 

following nine days of remedy evidence. Id.

69 As further support for its argument that a divestiture should create an ongoing, viable entity, Complaint 

Counsel -- somewhat amu singly -- cites itself. The cited website, entitled Frequently Asked Questions About 

Merger Consent Order Provisions, states that the materials within it "reflect the views of the staff, and not of the 

Commission or of any Commissioner." Further, the document itself is internally inconsistent with Complaint 

Counsel's insistence on a complete divestiture remedy, as it states that "[t]he Commission has issued orders that 

require divestiture of less than the entire business operating in, or producing for, the relevant market." Id.
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competitors; the evidence in this case demonstrates that this package would stimulate

competition in the TVC market. (See Opening Br. at 122-25; FOF 6.106-6.121). 

Complaint Counsel cites In the Matter of Diamond Alkali Co., 72 F.T.C. 700, 

744-45) (1967) (CC Br. at 50). However, Diamond Alkali actually contradicts its position. 

There, the Commission explained that it was "necessary to inquire (1) whether divestiture is 

necessary as the only effective remedy . . . or (2) whether alternatively a less harsh order may not 

be equally effective." 72 F.T.C. at *29. The Commission reviewed the record to determine 

"whether some remedy can be found which will permit Diamond Alkali to retain the [assets from 

the] acquisition virtually intact and yet restore a measure of competition." Id. at *30. Only after 

"explor[ing] the possibility that a solution may be found whereby Diamond Alkali might retain 

the [assets]," did the Commission find that divestiture to be appropriate. The Commission

determined that "for reasons amply stated in the record," the proposal offered by Respondents 

was inadequate. Id. (emphasis added).

United States v. United Tote, Inc., 768 F. Supp. 1064 (D. Del. 1991), cited by 

Complaint Counsel (CC Br. at 50), also helps Respondents because it holds that remedies must 

be supported by the record evidence. Id. at 1086. There, the court determined that the alternate 

remedy proposed by the respondents was not an alternative remedy at all, but rather a suggestion 

to leave the merger alone. In that case, the respondents -- like Complaint Counsel here -- offered 

no credible evidence in support of their proposed remedy. The court stated that "United Tote

offers no reasonable alternative to the Court other than to allow an unlawful merger to proceed." 

Id. It arrived at its decision to impose divestiture after reviewing "the evidence offered by 

United Tote, consisting solely of the unsubstantiated and somewhat speculative testimony"

offered by Respondents. Id. 
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The instant case presents the flip side of Diamond Alkali and United Tote. Here, 

there is substantial evidence showing that complete divestiture would not materially assist 

competition. Evidence also supports Respondents' contention that their proposed TVC remedy 

would be workable, desirable, and effective. (See Opening Br. at 122-25; FOF 6.91-6.121). By 

contrast, Complaint Counsel can cite no credible evidence in support of their proposed remedy; it 

is supported only by the "unsubstantiated and somewhat speculative testimony" of Complaint 

Counsel's expert -- the type of testimony rejected by the United Tote court. 768 F. Supp. at 1086

Complaint Counsel cites other cases, such as Olin, in arguing that "an effective 

divestiture must be sufficiently broad to ensure that an acquirer can be a viable competitor." (CC 

Br. at 50). This reliance is misplaced, as the Olin ordered divestiture after reviewing the

evidence to determine if such a remedy was supported. 113 F.T.C. 400 (1990). Notably, the 

court considered less restrictive remedies, including a partial divestiture. Id. After reviewing the 

evidence, the court found that it did not support a lesser remedy. In particular, the court noted 

that "there is no indication in this record that a divestiture order may bring about a loss of 

substantial efficiencies or other important benefits to the consumer." Id. In contrast to the 

situation in Olin, the instant case contains a significant amount of evidence indicating that harm 

that would come from a breakup of CB&I. Further, the record shows that CB&I's proposed 

Consent Decree in the TVC market is a viable, desirable, and workable solution to any

competitive problem that may exist in that market. (See Opening Br. at 122-25; FOF 6.91-

6.121).

Respondents have presented evidence regarding potential remedies that would 

assist competition. By contrast, Complaint Counsel has not presented any evidence that would 

assist this Court in determining what assets should be divested and which products the divested 
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company could make. Complaint Counsel is essentially asking this Court to build a new

company without any blueprint, any plans, or any suggestions, other than that it must be done. 

This Court should reject Complaint Counsel's invitation to undertake such a task. 

F. THERE IS NO CREDIBLE EVIDENCE THAT COMPLAINT COUNSEL'S 

PROPOSED REMEDY WILL BE WORKABLE, DESIRABLE, OR

EFFECTIVE.

As discussed above, Complaint Counsel has presented no credible evidence in 

support of its proposed remedy. This section discusses the various facets of its proposed remedy 

and explains why the evidence does not support them. 

1. Complaint Counsel incorrectly argues that it has presented evidence 

regarding its proposed remedy.

Complaint Counsel has presented no evidence showing that its remedy will be 

workable, desirable or effective. Yet, it falsely argues that there is ample evidence in the record 

to support the need for complete divestiture. (See CC Br. at 51-53). There is no such "ample" 

evidence; it cites only two witnesses in support of this argument. Complaint Counsel cites to 

Patrick Neary in support of "the desirability of Complaint Counsel's proposed remedy." (CC Br. 

at 52). Mr. Neary merely testified that he believed there was good competition in the TVC 

market prior to the Acquisition. (Neary, Tr. 1502). He neither testified as to whether a 

divestiture of CB&I would be possible, nor whether a company divested from CB&I would have 

the technology, experience, personnel, and equipment necessary for TRW to consider it as a 

viable competition. (See generally Neary, Tr. 1418-1503).70 Similarly, Complaint Counsel's 

citation to its own expert witness lends no support to its argument. (CC Br. at 52). While Dr. 

Simpson testified that a reconstituted firm would "have to possess similar assets like the

 

70 As further support for its conclusion, Complaint Counsel cites the deposition of Dan Britton. (CC Br. at 

52). As mentioned earlier, this document is not even in evidence.
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fabrication plants . . . , its work force, its engineering staff and its intangible assets," he could 

offer no opinions or insight as to whether a complete divestiture of CB&I could create a new 

entity that actually possesses the assets on his wish list. (See Simpson, Tr. 5715-18).71

Complaint Counsel also argues that "substantial support" for an "effective

divestiture remedy" exists in the record, including evidence regarding the structure, composition, 

and competitive viability of PDM and CB&I pre-Acquisition, the PDM assets and personnel 

acquired by CB&I, and the disposition of those assets and personnel. (CC Br. at 53). This 

argument is absurd. Complaint Counsel offers zero guidance to the Court on how such evidence 

would aid it in crafting a divestiture order that would create two, low-cost viable entities able to 

compete for the relevant products. The evidence demonstrates that many employees of PDM 

and CB&I left the companies as part of the merger process, that much equipment was sold to 

eliminate redundancy, and that the markets for the relevant products have changed significantly 

in the past two years -- particularly in the LNG markets. Past records of PDM's business are of 

no probative value in developing a divestiture plan. 

2. There is no evidence that CB&I could assign contracts to a divested 

entity. 

Complaint Counsel correctly notes that, in order to create a divested entity, CB&I 

would need to "assign customer contracts to the divested entity" and that "CB&I's existing

backlog of work at the time of the divestiture must be apportioned between CB&I and the 

divested entity." (CC Br. at 53-54). However, it offers no evidence or suggestions as to how this 

 

71 Complaint Counsel argues that it has introduced substantial evidence regarding the "intense competition" 

that existed between CB&I and PDM and post-Acquisition anticompetitive effects. (CC Br. at 52). As discussed in 

Parts I-III, supra, Complaint Counsel has failed to carry its burden of establishing liability. Even if they had been 

successful, Complaint Counsel cannot merely rehash the same evidence in support of its remedy arguments. 

Evidence that "intense competition" between CB&I and PDM or evidence of anticompetitive effect is not evidence 

that a divestiture would be workable, desirable, or even possible.
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would be done. Evidence shows that obtaining approval for contract assignment would be very 

difficult, as many customers insist on a non-assignability clause in their contracts. (E.g., Glenn, 

Tr. 4168-69) (FOF 9.16-9.17). Evidence also shows that customers would be reluctant to assign 

contracts to a newly-divested company from the ribs of CB&I because it would be unknown and 

unproven in terms of size and experience. (See, e.g., Izzo, Tr. 6511-12) (Opening Br. at. 165-71; 

FOF 9.22-9.26).

In response to this argument, Complaint Counsel noted that CB&I "was obviously 

successful in convincing customers to assign PDM contracts to itself. . . . " (CC Br. at 53). This 

argument is off-base. CB&I was able to show customers that it had experience in the relevant 

areas and the financial capability (which was greater as a result of the Acquisition) to handle the 

work. Further, customers had no choice but to accept reassignment because PDM was going out 

of business. In this case, absent agreement from the customer, the only way for CB&I to assign 

contracts to a divested entity would be to break a contractual agreement. Further, even if doing 

so were possible (and there is no evidence to suggest that it is), Complaint Counsel has not given 

this Court any guidance as to which customers will be assigned to work with the divested entity. 

3. There is no evidence to support the conclusion that the divested entity 

could have a sufficient revenue base and scale. 

 Complaint Counsel correctly notes that, in order to create a workable divestiture 

plan, the divested company must have a "sufficient revenue base and scale of operations to 

compete for large projects." (CC Br. at 54). Yet, it devotes only eight lines of argument to this 

point, without offering this Court any suggestions as to how this might be done. Complaint 

Counsel's lack of insight on this point is not surprising, as the record evidence is damning to its 

 
-76-

proposed relief. Customers for LNG import terminals have explained that the financial size of an 

LNG tank maker is a critical consideration, and that CB&I is barely large enough to compete for 

LNG projects. (See Opening Br. at 57; FOF 3.230). The evidence simply does not support the 

notion that a divestiture could create two companies large enough to compete. In fact, it is much 

more likely that a complete divestiture could actually reduce the number of available contractors 

to owners such as El Paso, Calpine, and Marathon. (See Opening Br. at 166-68; FOF 9.24, 9.26, 

9.9).

Complaint Counsel argues that its proposed breakup will be successful because 

"[t]he resulting company can then be sold to another company that has the capital and 

wherewithal to make the restored PDM the competitor it was before the merger." (CC Br. at 47, 

see also CC Br. at 56) (emphasis added). Yet, it has not identified a single potential purchaser 

for such an "acquired entity." In fact, the evidence suggests that finding such a purchaser will be 

extremely difficult. When PDM attempted to sell the Water and EC Divisions in 2001, its 

investment banker -- Peter Scheman -- could only find one company willing to purchase and 

capable of purchasing these assets-- CB&I. (See Opening Br. at 153; FOF 8.55, 8.106).72 

4. There is no evidence that the assets of the PDM EC and Water

divisions exist, or that they are sufficient to create a new company. 

 Complaint Counsel argues that "the divestiture order must include all the former 

PDM EC and Water assets and personnel." (CC Br. at 54). Yet, it offers no evidence as to 

whether this is possible. There is no evidence in the record regarding the extent to which CB&I 

still owns the PDM EC and Water Divisions' assets or whether those assets would be sufficient 

 

72 Complaint Counsel also ignores the question of whether the acquiring company would incur so much debt 

in acquiring or operating Newco PDM that it would not be accepted as a bidder on LNG or TVC projects (See

Opening Br. at 157-58).
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to create a competitively viable company. Evidence shows that CB&I sold duplicative

equipment and personnel after the Acquisition. Further, there is no evidence in the record 

regarding the effect such a divesture would have on the Water division or its many customers.

5. There is no evidence to support the claim that divestiture of PDM's 

fabrication facilities would assist in creating a viable company.

Complaint Counsel argues that "[t]he divested entity must include PDM's

fabrication facilities." (CC Br. at 55). There is no credible evidence in the record that addresses 

why the fabrication facilities must be divested, or whether anyone would be willing to purchase 

them. Complaint Counsel cites its own expert witness, Dr. Simpson, in arguing that "a divested 

entity would need the fabrication facilities in order to replace PDM." (CC Br. at 55). Yet, Dr. 

Simpson could not offer any ideas regarding why the divested entity would need three

fabrication facilities (CB&I had only one prior to the Acquisition) and who would purchase or 

operate them. The record evidence shows that fabrication facilities are not necessary to build 

LNG tanks in the U.S., as fabrication of nine percent nickel steel takes place overseas. The 

record also shows that current and potential competitors in the LIN/LOX and LPG markets 

already own fabrication facilities. (FOF 5.22-5.78).

Complaint Counsel cites the testimony of Brad Vetal to argue that "[p]ossessing 

multiple fabrication facilities is advantageous because it allows a competitor to rationalize its 

freight costs." (CC Br. at 55). Mr. Vetal did not testify that he lacked the necessary fabrication 

facilities to participate in the relevant market or that an additional fabrication facility would 

allow him to cut manufacturing costs. Indeed, adding a fabrication facility may well raise costs 

by increasing overhead expenses, making the acquisition of such a facility less attractive.
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6. There is no evidence showing that it is possible to provide a divested 

company with intangible assets that will assist in competing.

Complaint Counsel argues that Respondents must divest their intangible assets to 

the divested company, including "the PDM name."73 Yet, it has presented no evidence that

required intangible assets could be supplied to a divested company. In arguing that a divested 

company would require such intangible assets, Complaint Counsel cites W.T. Cutts of AT&V, 

who testified regarding his "wish list" of assets. (CC Br. at 55-56). Yet, Mr. Cutts' testimony 

actually contradicts Complaint Counsel's argument. He acknowledged that AT&V already had 

access to customer lists for the LIN/LOX market, and that CB&I's lists would not assist AT&V. 

(See Cutts, Tr. 2559-60). He also acknowledged that AT&V could market LIN/LOX products 

without CB&I sales personnel, and that it could hire former CB&I salespeople if it desired to 

obtain such an individual's services. (Cutts, Tr. 2558-61). With respect to technical expertise, 

Mr. Cutts acknowledged that AT&V developed technical specifications and welding procedures 

for LIN/LOX tanks without assistance from CB&I. (Cutts, Tr. 2563-64) (FOF 5.29). In short, 

there is no evidence to suggest that Complaint Counsel's proposed remedy would assist

competition in any way. 

7. Without evidence as a guide, the appointment of a trustee and the 

efforts of the Compliance Division will be wasted gestures.

Complaint Counsel argues that a divestiture "will require the appointment of a 

monitor trustee to oversee its effective implementation" and that the FTC's Compliance Division 

"will be able to work with the trustee to ensure a restoration of competition." (CC Br. at 56). 

Complaint Counsel is merely attempting to shift its burden to present evidence of a workable 

 

73 This argument borders on the absurd. It assumes that customers will blindly accept that a "new PDM" 

would be a viable company because of its name. As discussed in Respondents' Opening Brief, customers in the 

relevant markets are sophisticated consumers. (See Opening Br. at 109-10). It is unlikely that they could be tricked 

in the manner suggested by Complaint Counsel.
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divestiture plan to the Compliance Division and whichever person is unlucky enough to serve as 

a monitor trustee. Complaint Counsel has presented no evidence and no theory regarding how a 

divestiture should look; it must do more than simply argue that "someone else will figure it out." 

A trial was held in part to figure out a remedy (if needed), and Complaint Counsel chose not to 

introduce any such evidence.

G. COMPLAINT COUNSEL'S PROPOSED ORDER IS COMPLETELY

LACKING IN EVIDENTIARY SUPPORT.

In its brief and Proposed Order, Complaint Counsel seek a remedy devoid of 

evidentiary support. As discussed extensively above, Complaint Counsel had the burden of 

proving that its Proposed Order constituted a workable, desirable, and effective remedy. The 

evidence suggests that this proposed remedy would do nothing to assist competition and would, 

in some markets, risk reducing available competition. Complaint Counsel's Proposed Order 

contains literally dozens of deficiencies, several of which are discussed below.

First, the Proposed Order would threaten consumer welfare by eliminating

CB&I's ability to function as a low-cost competitor. Complaint Counsel has essentially

acknowledged all of the practical difficulties identified by Respondents by including them as 

matters that are directly addressed in their Proposed Order. Complaint Counsel's solution in 

every instance is to force CB&I to spend what is likely to be substantial sums of money to 

overcome the identified problems. The Proposed Order imposes significant costs on CB&I by 

forcing it to: 1) incent its customers to assign their projects to New PDM by paying their 

customers to do so; 2) incent current CB&I employees through cash payments to go work for 

New PDM; 3) pay customers in order to incent them to waive their key personnel clauses; 4) 

purchase substantial quantities of new equipment for New PDM; and 5) expend substantial 
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monies for training of New PDM personnel. (Prop. Order at II.C, II.D, V.B.5, VI.C.6).74 In 

short, the Proposed Order creates a substantial risk of turning CB&I from a low-cost supplier to a 

high-cost supplier. Under either scenario -- CB&I being compelled to pay to overcome

implementation difficulties or not -- the result will not be two low-cost competitors which is 

required by remedy law and by economics. (E.g., Harris, Tr. 7393-94). While Complaint 

Counsel has presented no evidence that a divested company could be such a low-cost competitor, 

it is apparent that its Proposed Order could create the worst of both worlds by failing to create a 

new low-cost competitor in the form of New PDM while at the same time substantially reducing 

CB&I's ability to be such a competitor.75

Second, the Proposed Order attempts to govern assets and contracts that are not in 

the United States. The Proposed Order contemplates that CB&I will divest itself of assets and 

contracts that are located outside the U.S. For example, it would require CB&I to "transfer and 

assign to [New PDM] . . . Customer Contracts . . . at least 50% of which shall be for work to be 

performed in the United States." (Prop. Order II.C.(b)). Yet, Complaint Counsel has no 

jurisdiction to effect divestiture of contracts or assets outside the U.S. Even if it did, it has not 

presented any evidence regarding the potential effect of such a remedy on foreign customers or 

CB&I's competitive abilities overseas.

Third, the Proposed Order imposed unreasonably short timelines on CB&I. It 

decrees that "Respondents shall divest New PDM" within 180 days from the date of a final order. 

 

74 Not only does the Proposed Order force CB&I to spend all of this money, it forces it to do so in 180 days. 

This short time period will only exacerbate the cost disadvantage created by the Proposed Order.

75 A brief review of the Proposed Order shows it would further weaken CB&I by permitting the potential 

Acquiror to review the terms of CB&I's customer contracts, and to select which customer contracts it wishes to 

perform. (Prop. Order II.C). This would allow a powerful international competitor, such as Skanska/Whessoe, to 

gain competitively sensitive information and to possibly limit CB&I's ability to compete in the LNG markets. 
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(Prop. Order II.A) and that CB&I shall have 60 days to develop a report that identifies the 

"Customer Contracts Contribution, the CB&I Assets Contribution, and the Transferred

Employees." (Prop. Order II.H.). There is no evidence to suggest that either of these tasks could 

be completed within 180 days. PDM and its investment banker, Tanner & Co., spent months 

locating a potential buyer for PDM's assets. Only one suitable buyer was located. In light of the 

current economic situation, finding an adequate buyer could take years. (See Part IV, supra).

Fourth, in its Proposed Order, Complaint Counsel seeks to establish two

companies that are roughly equal in size and market power. However, this should not be the 

goal of any remedy in this case. Dr. Simpson, Complaint Counsel's own expert, acknowledged 

that the purpose of any remedy would be to restore competition to the stage that it would have 

been at absent the Acquisition. (See Simpson, Tr. 5719). As discussed extensively in

Respondents' Opening Brief, a world absent the Acquisition would not have had two equal-sized 

competitors battling each other. PDM would have sold its assets to another entity. The only 

entity advanced by Complaint Counsel that could have purchased PDM's assets was Matrix. 

Matrix was a smaller company with limited ability to assume such a large debt. Assuming 

arguendo that it had been able to do so, it certainly could not have competed on a level equal to 

CB&I, as the total combined company would be much smaller. (See Opening Br. at 166-68). In 

short, the Proposed Order attempts to create a Mercedes-type company, when the company that 

would have existed after the Acquisition would have been a Chevrolet at best. 

Fifth, many of the provisions of the Proposed Order are extraordinarily vague. 

For example, if customers do not permit assignment of their contracts to New PDM, the 

Proposed Order directs CB&I to "enter into such agreements, contracts, or licenses as are 

necessary to realize the same effect as such transfer or assignment." (Prop. Order II.C). Yet, the 
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Proposed Order says nothing about how CB&I might do this. Similarly, the Proposed Order 

decrees that CB&I provide "sufficient" working capital to maintain its "Tank Business." (Prop. 

Order III.B.(4)). Yet, Complaint Counsel does not define the term "sufficient," nor is there any 

evidence in the record to assist this Court or the Compliance Division in determining what a 

sufficient level of working capital would be. 

VI. COMPLAINT COUNSEL'S FINDINGS OF FACT ARE A COMPENDIUM OF 

FALSE STATEMENTS, MISCITED EVIDENCE, AND UNSUPPORTED

CONCLUSIONS.

Complaint Counsel's findings of fact and conclusions of law are a remarkable 

amalgamation of incorrect statements, irrelevant evidence, mischaracterizations of testimony and 

documents, heavy reliance on witnesses that lack foundation, and statements lacking any 

evidentiary support. While Respondents have fully discussed the deficiencies in Complaint 

Counsel's findings in their Reply Findings of Fact, this Part addresses a few examples of the 

many deficiencies that exist throughout the document. 

A. COMPLAINT COUNSEL RELIES ON INADMISSIBLE EVIDENCE.

Contrary to this Court's order, Complaint Counsel has cited to documents and 

testimony that were never admitted into evidence. As set forth in its accompanying motion to 

strike, such evidence should be stricken. Most notably, Complaint Counsel cited extensively to 

the deposition of Dan Britton of Fairbanks Natural Gas. (E.g., CC Br. at 37) (citing CX 370). 

Complaint Counsel and Respondents conducted negotiations regarding the admissibility of Mr. 

Britton's deposition, and agreed that Complaint Counsel could introduce certain portions of this 

deposition into evidence. However, Complaint Counsel never moved this exhibit into evidence. 

Further, it has cited to portions of the deposition that were specifically excluded from the parties' 

agreement. (See CC Br. at 37) (citing CX 370 at 95). Similarly, Complaint Counsel cited to the 
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following unadmitted evidence in its findings of fact and conclusions of law: CX 105; CX 190; 

CX 370; CX 822; CX 823; CX 1572; CX 1591; CX 1682; and CX 1685. Complaint Counsel 

also cited unadmitted and unidentified "interviews with industry participants." (E.g., CCFF at 

177). For these reasons, all argument regarding these exhibits should be disregarded and stricken 

from the record.76

Further, in several of its findings, Complaint Counsel includes various charts and 

graphs. A close examination of these findings reveals that they are exact duplicates of charts and 

graphs that Complaint Counsel attempted to introduce as demonstrative exhibits before this 

Court. For example, in CCFF 826, Complaint Counsel presented a chart relating to the Cove 

Point project. Yet, Complaint Counsel neglects to mention that this chart had originally been 

marked as CX 1761, offered as a demonstrative exhibit, and rejected by the Court. (Tr. 8106-

09). The charts included in Complaint Counsel's findings were not admitted as demonstrative 

exhibits in the form in which they appear in the findings. Complaint Counsel attempted to 

introduce these exhibits during the cross-examination of Dr. Harris. Dr. Harris provided 

substantial written changes to these exhibits. Complaint Counsel is attempting to use these 

demonstrative exhibits for the truth of the matter asserted, and it is not even using the actual 

evidence that was admitted (that included Dr. Harris' comments). For these reasons alone, the 

findings encapsulating these demonstratives should be stricken. 77 

 

76 During a telephone conversation on March 3, Complaint Counsel represented to Respondents that it was 

aware that it had cited inadmissible evidence. It also indicated that it would make this clear to the Court in its reply 

brief, and ask that arguments related to these exhibits be disregarded. Respondents agree that this approach is 

appropriate. 

77 Other findings falling into this category include CCFF 882 and CCFF 913. CCFF 882 is a replica of CX 

1760, which was admitted into evidence as a demonstrative exhibit only after Dr. Harris made numerous changes to 

it. (Tr. 8035-42). Yet, Complaint Counsel did not bother to discuss Dr. Harris's changes in CCFF 882. CCFF 913 

is a reincarnation of CX 1763. Complaint Counsel questioned Dr. Harris regarding the substance of the exhibit; it 

did not discuss any of that testimony in CCFF 913. (Tr. 7977) 
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B. MANY OF COMPLAINT COUNSEL'S FINDINGS LACK ANY 

CITATION OR SUPPORT.

Many of Complaint Counsel's findings lack any citations whatsoever. 

Accordingly, it is very difficult to analyze the validity of these findings. To the extent possible, 

Respondents have attempted to analyze these findings to assist the Court in understanding

whether the evidence supports them. However, Respondents respectfully submit that findings 

completely devoid of proper citation are improper and request that they be stricken from the 

record. For example, findings falling into this category include: CCFF 29; CCFF 33; CCFF 50; 

CCFF 78; CCFF 260; CCFF 265; CCFF 384; CCFF 421; CCFF 449; CCFF 581; CCFF 589; 

CCFF 615; CCFF 642; CCFF 687; CCFF 749; CCFF 750; CCFF 752; CCFF 776-77; CCFF 810; 

CCFF 816; CCFF 822; CCFF 831; CCFF 849; CCFF 864; CCFF 868; CCFF 883; CCFF 885; 

CCFF 906; CCFF 912; CCFF 928; CCFF 929; CCFF 930; CCFF 942; CCFF 954; CCFF 955; 

CCFF 968; CCFF 977; CCFF 978; CCFF 981; CCFF 997; CCFF 1006; CCFF 1007; CCFF 

1012; CCFF 1053; CCFF 1056; CCFF 1057; CCFF 1075; CCFF 1076; CCFF 1085-1087; CCFF 

1091; CCFF 1099; CCFF 1165; CCFF 1180; CCFF 1181; CCFF 1220-21; CCFF 1223; CCFF 

1225; CCFF 1226; CCFF 1281; CCFF 1289; CCFF 1327; CCFF 1347; CCFF 1351. 

C. COMPLAINT COUNSEL RELIES ON ITS EXPERT WITNESS TO 

BUTTRESS ITS FINDINGS OF FACT.

In its findings of fact and conclusions of law, Complaint Counsel improperly cites 

the testimony of Dr. Simpson -- its expert witness -- to create findings of fact. Expert economic 

witnesses provide testimony regarding economic issues, and should not be used to shovel in 

factual evidence that is inadmissible by other means. Complaint Counsel repeatedly attempted to 

do just that. For example, it submits: "Prior to the Acquisition, CB&I and PDM had a 

competitive advantage over other firms because they had an efficient core group of workers for 
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projects, and other workers that repeatedly interacted with those other workers and were familiar 

with CB&I and PDM's procedures." (CCFF 372). The sole support for this statement is Dr. 

Simpson. Complaint Counsel presents no factual evidence to support this finding, yet it is a 

purely factual finding. Dr. Simpson is not an employee of CB&I, a customer of CB&I, or a 

competitor of CB&I. He is an economist who works for the FTC. He lacks the foundation 

necessary to address factual issues in this way. Accordingly, findings citing only to Dr. Simpson 

that do not set forth proper expert opinions should be rejected out of hand. Respondents have 

identified such findings in their Reply Findings of Fact.

D. COMPLAINT COUNSEL RELIES EXTENSIVELY ON WITNESSES 

LACKING FOUNDATION.

As discussed in Respondents' Opening Brief, Complaint Counsel's witnesses

lacked the foundation necessary to discuss the current LNG market. In many cases, Complaint 

Counsel's witnesses had not been involved in the LNG market for approximately ten years. Yet, 

they were permitted to testify regarding Complaint Counsel's alleged entry barriers. Complaint 

Counsel liberally cited from these witnesses in its findings. For example, in attempting to 

establish that the FERC application process is an entry barrier in the LNG market, Complaint 

Counsel relied heavily on the testimony of Eckhard Blaumueller, formerly of PERC. (CCFF 

381). Yet, Mr. Blaumueller has not been involved in an LNG project since the mid-1970s. 

Many other witnesses, such as Clay Hall of MLGW and Robert Davis of Air Products are relying 

primarily on their experiences on the Memphis LNG project in 1994 and have not participated in 

the market since this time. Reliance on the testimony of these witnesses is unwarranted.

Complaint Counsel cannot argue that its witnesses are the best available. 

Customers are currently participating in the LNG market, yet Complaint Counsel refused to 

bring any of these witnesses to trial. By contrast, Respondents brought many current customers 
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as witnesses in their case-in-chief. The significance of each witness' testimony is set forth in 

detail in Respondents' Opening Brief. Each of these witnesses is currently participating in the 

U.S. LNG market and has current knowledge regarding the market. The foundation for each 

witness' testimony is contained in Respondents' Findings of Fact. For the convenience of the 

Court, a list of witnesses and relevant citations are set forth below. 

• Nigel Carling (Chevron Phillips/Enron) -- (E.g., Carling, Tr. 4448, 4455, 4465, 4473-

74, 4477-82; FOF 3.571-3.573).

• Volker Eyermann (Freeport LNG) -- (E.g., Eyermann, Tr. 6960, 6963-68, 6981-83, 

6994-96, 6999-7001, 7008, 7015-16, 7030) (FOF 3.574-3.576).

• Robert Bryngelson (El Paso) -- (E.g., Bryngelson, Tr. 6121, 6124, 6129-30, 6161-62) 

(FOF 3.577-3.579).

• Jeffrey Sawchuck -- (E.g., Sawchuck, Tr. 6050-54, 6066) (FOF 3.580-3.582).

• William Puckett -- (E.g., Puckett, Tr. 4539-40, 4545, 4552, 4554) (FOF 3.583-3.586).

• Larry Izzo -- (E.g., Izzo, Tr. 6474, 6540, 6475-76, 6483) (FOF 3.587-3.589). 

• John Kelly -- (E.g., J. Kelly, Tr. 6258, 6260, 6284, 6290-91, 6296) (FOF 3.590-3.592).

• Jean Pierre Jolly -- (E.g., Jolly, Tr. 4434, 4436-37, 4684, 4691) (FOF 3.593-3.596).
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CONCLUSION

For all of the reasons fully set forth above, the Complaint as to all product 

markets should be dismissed with prejudice.

Dated: March 18, 2003 Respectfully submitted,

 

______________________________

Duane M. Kelley

Jeffrey A. Leon

Greg J. Miarecki

Christopher B. Essig

Michael P. Mayer

Andrew D. Shapiro

Danielle A. R. Coffman

David E. Dahlquist

James F. Herbison

Lance W. Lange

Winston & Strawn

35 West Wacker Drive

Chicago, IL 60601-9703

(312) 558-5600 (voice)

(312) 558-5700 (fax)

dkelley@winston.com

jleon@winston.com

gmiareck@winston.com

cessig@winston.com

mmayer@winston.com

ashapiro@winston.com

dcoffman@winston.com

ddahlqui@winston.com

jherbiso@winston.com

llange@winston.com

Counsel for Respondents

Chicago Bridge & Iron Company N.V.

 and Pitt Des-Moines, Inc.
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CERTIFICATE OF SERVICE

I, Greg J. Miarecki, hereby certify that on this 18th day of March, 2003, I served a 

true and correct copy of Respondents' Post-Trial Reply Brief and Memorandum in Support of 

Their Motion to Strike -- Public Version, by hand delivery upon:

The Honorable D. Michael Chappell

Administrative Law Judge

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Washington, D.C. 20580

(two copies)

Rhett R. Krulla

Assistant Director

Bureau of Competition

Federal Trade Commission

600 Pennsylvania Avenue, N.W.

Room S-3602

Washington, D.C. 20580

Steven L. Wilensky

Federal Trade Commission

601 Pennsylvania Avenue, N.W.

Room S-3618

Washington, D.C. 20580

________________________________