STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

In the Matter of

MCWANE, INC.,

a corporation, and

STAR PIPE PRODUCTS, LTD.,

a limited partnership.

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PUBLIC

DOCKET NO. 9351

REPLY BRIEF IN SUPPORT OF RESPONDENT McWANE, INC.'S MOTION FOR

SUMMARY DECISION

REDACTED M4TERIAL

PROTECTED PURSUANT TO JANUARY 5,2012 PROTECTIVE ORDER ENTERED BY

THIS COURT

06 28 2012 
PUBLIC
 

TABLE OF CONTENTS
 

SUMMARY OF UNDISPUTED FACTS 1
 

ARGUMENT 7
 

I.	 CC DID NOT PRESENT EVIDENCE SUFFICIENT TO OVERCOME
 

THE SWORN DENIALS 7
 

II. 

.	 10
 

III.	 ...........................•...............................11
 

CONCLUSION	 13
 

ii 
PUBLIC
 

TABLE OF AUTHORITIES 

CASES 

Page(s) 

Alvord-Polk, Inc. v. F Schumacher & Co., 

37 F.3d 996 (3d Cir. 1994) 14 

Brooke Group Ltd v. Brown & Williamson Tobacco Corp., 

509 U.S. 209 (1993) 16 

Celotex Corp. v. Catrett, 

477 U.S. 317 (1986) 10 

City ofMoundridge v. Exxon Mobil Corp., 

409 Fed.Appx. 362 (D.C. Cir. 2011) 13 

City ofMoundridge v. Exxon Mobil Corp., 

429 F. Supp. 2d 117 (D.D.C. 2006) 10 

FTC v. Texaco, Inc., 

393 U.S. 23 (1968) 14 

Gas Utils. Co. ofAlabama, Inc. v. Southern Natural Gas Co., 

996 F.2d 282 (11 th Cir. 1993) 17 

Jefferson Parish Hosp. Dist. No.2 v. Hyde, 

466 U.S. 2 (1984) 16 

Tampa Elec. Co. v. Nashville Coal Co., 

365 U.S. 320 (1961) 16 

OTHER AUTHORITIES 

FTC Act. However 14 

Rule 56(c) 10 

III 
PUBLIC
 

Respondent McWane, Inc. ("MeWane"), submits this reply brief, and the accompanying 

Supplemental Statement of Material Facts ("SSOF"), in support of its Motion for Summary 

Decision. 

SUMMARY OF UNDISPUTED FACTS 

Complaint Counsel's Opposition brief ("Opp.") fails to establish a genuine dispute over 

any material fact in this case. To the contrary, Complaint Counsel ("CC") concedes that the key 

1 As noted in McWane's opening Memorandum, at 15 n. 4 and 19 n. 9, certain transcripts were unavailable at the 

time and citations are now provided in the attached Supplemental Statement of Uncontested Facts ("SSOF") ~~ 5, 6, 

12, 13, 15. These facts are direct quotations from witness testimony and CC did not dispute them in its Opposition. 

1 

FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

Indeed, the Complaint itself concedes the point. (AC 30 ("rising input costs").) 

In the face of this undisputed evidence, CC attempts to prop up its conspiracy and 

invitation to collude Counts with a few, scattered documents and its own strained (and, at times, 

downright fictitious) reading of them - ­

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FTC Docket No. 935 I
 

Reply Brief in Support of
 

McWane, Inc.'s Motion for Summary Decision
 
PUBLIC
 

that argument, too, is not only unsupported, it is contradicted by the undisputed facts. CC's 

"fact" citation for that paragraph says only that 

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FTC Docket No. 935 I
 

Reply Brief in Support of
 

McWane, Inc.'s Motion for Summary Decision
 
PUBLIC
 

Undisputed testimony, likewise, disproves 

CC cannot manufacture a fact question by cutting and pasting its argument into its CCS.
 

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FTC Docket No. 9351
 

Reply Brief in Support of
 

McWane, 1nc.'s Motion for Summary Decision
 
PUBLIC
 

Again, CC cannot 

. FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 

5 
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FTC Docket No. 9351
 

Reply Brief in Support of
 

McWane, Inc. 's Motion for Summary Decision
 

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PUBLIC
 

ARGUMENT 

Where, as here the critical facts are undisputed, summary judgment is "mandate[d]." 

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (Rule 56 "mandates the entry of summary 

judgment ... against a party who fails to make a showing sufficient to establish the existence of 

an element essential to that party's case") Here, the undisputed testimony of every single 

witness 

interpretations of a few, scattered documents - ­

I. CC Did Not Present Evidence Sufficient To Overcome The Sworn Denials 

The law is clear that a plaintiff confronted with sworn denials of a conspiracy must 

"produce significant probative evidence by affidavit or deposition that conspiracy existed if 

summary judgment [is] to be avoided." City ofMoundridge v. Exxon Mobil Corp., 429 F. Supp. 

2d 117, 130 (D.D.C. 2006) (emphasis added) (citation omitted). CC's few scattered documents 

fall far short of "significant probative evidence" to overcome 

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FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

_ - - particularly since on their face, the documents do not say the things CC claims 

they say, and the witnesses flatly rejected CC's made-up interpretation. 

The Court should reject CC's attempt to manufacture a disputed issue of fact by 

roffering its own, strained (and, often, fictitious) reading of a few scattered documents. 

CC cannot manufacture evidence by positing 

Court after court has, like the Moundridge 

court, rejected efforts by plaintiffs to prop up an antitrust claim in the face of sworn denials, 

holding that strained interpretations of a "few scattered documents" that the witnesses flatly 

rejected "falls far short" of creating an genuine issue of material fact. (See also McWane 

Opening Br. at 24-26 (citing similar cases affirming summary judgment including from the 3rd, 

7th, 8th, 11th and DC Circuits).) 

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FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

- - and a mere opportunity to conspire is, of course, insufficient as a matter of law. 6 AlvordPolk, Inc. v. F Schumacher & Co., 37 F.3d 996,1013 (3d Cir. 1994) (affirming summary 

judgment because the "evidence tends to show only an opportunity to conspire, not an agreement 

to do SO,,).7 

6 The invitation to collude count fails for another reason: numerous courts have rejected antitrust liability premised 

on a one-way offer or invitation or attempt to collude and no court has affirmed liability in a litigated cases under 

Section 5 or otherwise. CC implicitly acknowledges this absence of caselaw by pointing only to consent orders. 

But consent order cannot create new law. FTC v. Texaco, Inc., 393 U.S. 23, 226 (1968). 

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FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

The case law McWane cited in its opening brief conclusively establishes that_ 

does not give rise to an inference of 

conspiracy -- on the contrary, it is well-settled that such data-gathering by a trade association is 

legitimate and, often, pro-competitive. (See McWane's Mem. Supp. at 25-30 (citing cases); see 

also Williamson Oil, 346 F.3d at 1313 (gathering volume data was entirely consistent with each 

II. 

10 

FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC 

is enough to grant summary decision here. Brooke Group Ltd. v. Brown & 

Williamson Tobacco Corp., 509 U.S. 209,226 (1993) ("[W]here new entry is easy ... summary 

dis osition of the case is appropriate"). Complaint Counsel contends the undisputed fact. 

but cites no caselaw to support that assertion. 8 

That is simply not enough to get around the undisputed facts and well-settled case 

law that makes clear are only problematic ifthey "foreclose 

competition in a substantial share ofthe line of commerce affected," Tampa Elec. Co. v. 

Nashville Coal Co., 365 U.S. 320, 327 (1961), and sellers are "frozen out ofa market by the 

exclusive deal." Jefferson Parish Hos . Dist. No.2 v. Hyde, 466 U.S. 2, 45 (1984). 

. As Commissioner Rosch stated from the start, McWane'spolicy 

was not exclusionary as 'a matter of law: "I do not think that the Part 3 Administrative Complaint 

... adequately allege exclusive dealing as a matter of law. In particular, there is case law in both 

the Eighth and Ninth Circuits blessing the conduct that the complaints charge as exclusive 

dealing." (Jan. 4, 2012 Statement of Commissioner 1. Thomas Rosch.) 

III. 

Undisputed evidence establishes that 

11 

FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

that a would-be supplier is not an "actual potential competitor" unless it has taken "affirmative 

steps to enter the business" and has shown a "preparedness" to do so. See also Gas Uti/s. Co. of 

Alabama, Inc. v. Southern Natural Gas Co., 996 F.2d 282, 283 (11 th Cir. 1993) ("Inquiry into 

procedures is insufficient to establish preparedness ...party must take some affirmative step to 

CC's effort to salvage its "exclusion" case by claiming that 

12 

FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc. 's Motion for Summary Decision 
PUBLIC
 

CONCLUSION
 

For the foregoing reasons, McWane's Motion for Summary Decision should be granted.
 

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FTC Docket No. 9351 

Reply Brief in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

/s/ J. Alan Truitt 

1. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

Phone: 205.254.1000 

Fax: 205.254.1999 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

Dated: June 28, 2012 

/s/ Joseph A. Ostoyich 

Joseph A. Ostoyich 

William Lavery 

Baker Botts L.L.P. 

The Warner 

1299 Pennsylvania Ave., N.W. 

Washington, D.C. 20004-2420 

Phone: 202.639.7700 

Fax: 202.639.7890 

joseph.ostoyich@bakerbotts.com 

william.lavery@bakerbotts.com 

Attorneys/or Respondent McWane, Inc. 

14 

FTC Docket No. 9351 

Reply Briefin Support of 

McWane, Inc.'s Motion for Summary Decision 
CERTIFICATE OF SERVICE 

I hereby certify that on June 28, 2012, I filed the foregoing document electronically using 

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

Donald S. Clark
 

Secretary
 

Federal Trade Commission
 

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

Washington, DC 20580
 

I also certify that I delivered via hand delivery a copy of the foregoing document to: 

The Honorable D. Michael Chappell
 

Administrative Law Judge
 

Federal Trade Commission
 

600 Pennsylvania Ave., NW, Rm. H-II0
 

Washington, DC 20580
 

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

Edward Hassi, Esq.
 

Geoffrey M. Green, Esq.
 

Linda Holleran, Esq.
 

Thomas H. Brock, Esq.
 

Michael L. Bloom, Esq.
 

Jeanine K. Balbach, Esq.
 

1. Alexander Ansaldo, Esq.
 

Andrew K. Mann, Esq.
 

Devon Kelly
 

Terri Martin
 

By: lsi William C. Lavery 

One of the Attorneys for McWane 
PUBLIC 

UNITED STATES OF AMERICA 

BEFORE THE FEDERAL TRADE COMMISSION 

In the Matter of 

MCWANE, INC., 

a corporation, and 

STAR PIPE PRODUCTS, LTD., 

a limited partnership. 

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PUBLIC
 

DOCKET NO. 9351
 

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SUPPLEMENTAL STATEMENT OF MATERIAL FACTS AS TO WHICH THERE IS
 

NO GENUINE DISPUTE IN SUPPORT OF RESPONDENT MCWANE, INC.'S
 

MOTION FOR SUMMARY DECISION
 

REDACTED MATERIAL
 

PROTECTED PURSUANT TO JANUARY 5,2012 PROTECTIVE ORDER ENTERED BY
 

THIS COURT 

FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 

1 
PUBLIC
 

TABLE OF CONTENTS
 

I. Supplemental Facts As To Which There Is No Genuine Dispute 3 

II. Respondent McWane, Inc.'s Response To Complaint Counsel's Statement of 

Facts 9 

2 

FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC 

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

McWane, Inc. ("McWane"), submits this Supplemental Statement of Material Facts as to Which 

there is no Genuine Dispute ("SOF"), and Response to Complaint Counsel's Statement of 

Material Facts, in support ofits Motion for Partial Summary Decision. 

There is no genuine dispute as to the following facts: 

I. Supplemental Facts As To Which There Is No Genuine Dispute 

1. 

2. 

3. 

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FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
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4.
 

5. 

6. 

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FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

7.
 

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FTC Docket No. 9351
 

Supplemental Statement of Material Facts in Support of
 

McWane, Inc.'s Motion for Summary Decision
 
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8.
 

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9. Complaint Counsel relies on 

10. Complaint Counsel has not pointed to any evidence that 

11. Evidence also makes clear that 

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FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

12.
 

13. 

14. The Administrative Complaint alleges in conclusory fashion that SIP's attempt to 

expand into domestic fittings was somehow thwarted by McWane. (AC ~~ 44 ("Federal 

stimulus gave Sigma, Star and Serampore Industries Private, Ltd. ("SIP"), another imported 

DIPF supplier, an incentive to enter the domestic DIPF market"), 45 ("Sigma, Star and SIP all 

attempted to enter the relevant domestic DIPF market in response to the ARRA"), 61 

("McWane's exclusive dealing policies have also raised barriers to entry into the relevant 

domestic DIPF market by other potential entrants, including SIP.").) 

15. 

7 

FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC
 

16.
 

8 

FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC 

II.	 Respondent McWane, Inc.'s Response To Complaint Counsel's Statement of Facts1 

General Objections 

Respondent McWane, Inc. objects to Complaint Counsel's Statement of Facts on the 

ground that it is not required to specifically respond to each of Complaint Counsel's "facts" 

under Rule 3.24. McWane further objects on the ground that many of Complaint Counsel's 

statements are factually incorrect, misleading, vague, or merely repeat factual allegations in the 

Complaint that have been contradicted by the undisputed evidence in this case, as stated in 

McWane's Statement of Material Facts. Specifically, and without waiving its right to 

specifically object to the remaining paragraphs, McWane objects to the following paragraphs as 

factually incorrect: ~~ 4, 11, 13, 15, 17-19, 26(a)-(d), 27(a)-(d), 28-29, 30(a)-(g), 31, 32(a)-(d), 

33-34, 35(a)-(c), 36(a)-(d), 37-41, 42(a)-(d), 43-45, 47-50, 52-54, 56-57, 59, 60-68, 70-71, 73­

74, 77-90, 92-96, 98-101, 104-115, 118-122, 124, 126-27, 130-34, 135(a)-(g), 137, 140, 153-58, 

160-61, 164-65, 167, 175-203,205-207. 

1 Complaint Counsel's Response to McWane's Statement of Material Facts falls short of what is required to avoid 

summary judgment, as it often lumps together and incorporates by reference literally dozens of paragraphs of its 

own CCS - - and those paragraphs often simply repeat CC's Ie al ar urnents with no citation to the record, contain 

rank s eculation about the meaning of documents that 

Summary 

judgment case law makes clear that "A nonmovant's statement of genuine issues is intended to 'isolate [] the facts 

that the parties assert are material, distinguish[] disputed from undisputed facts, and identif[y] the pertinent parts 

of the record. '" City of Moundridge v. Exxon Mobil, 2009 WL 5385975 at *4 nA (D.D.C. 2009). Where nonmovant's counter-statement of facts incorporates legal arguments with factual assertions, and asserts "facts" with 

no proper citation to the record, the movant's statement of material facts is not properly rebutted and should be 

deemed as admitted. Id. 

9 

FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
PUBLIC 

Dated: June 28,2012 

lsi J. Alan Truitt 

1. Alan Truitt 

Thomas W. Thagard III 

Maynard Cooper and Gale PC 

1901 Sixth Avenue North 

2400 Regions Harbert Plaza 

Birmingham, AL 35203 

Phone: 205.254.1000 

Fax: 205.254.1999 

atruitt@maynardcooper.com 

tthagard@maynardcooper.com 

lsi Joseph A. Ostoyich 

Joseph A. Ostoyich 

William Lavery 

Baker Botts 1.1. P. 

The Warner 

1299 Pennsylvania Ave., N.W. 

Washington, D.C. 20004-2420 

Phone: 202.639.7700 

Fax: 202.639.7890 

joseph.ostoyich@bakerbotts.com 

william.lavery@bakerbotts.com 

Attorneysfor Respondent Me Wane, Inc. 

10 

FTC Docket No. 9351 

Supplemental Statement of Material Facts in Support of 

McWane, Inc.'s Motion for Summary Decision 
CERTIFICATE OF SERVICE 

I hereby certify that on June 28, 2012, I filed the foregoing document electronically using 

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

Donald S. Clark
 

Secretary
 

Federal Trade Commission
 

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

Washington, DC 20580
 

I also certify that I delivered via hand delivery a copy ofthe foregoing document to: 

The Honorable D. Michael Chappell
 

Administrative Law Judge
 

Federal Trade Commission
 

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

Washington, DC 20580
 

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

Edward Hassi, Esq.
 

Geoffrey M. Green, Esq.
 

Linda Holleran, Esq.
 

Thomas H. Brock, Esq.
 

Michael L. Bloom, Esq.
 

Jeanine K. Balbach, Esq.
 

J. Alexander Ansaldo, Esq.
 

Andrew K. Mann, Esq.
 

Devon Kelly
 

Terri Martin
 

By: /s/ William C. Lavery 

One ofthe Attorneys for McWane 
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