UNITED STATES OF AMERICA 


FEDERAL TRADE COMMISSION 


OFFICE OF ADMINISTRATIVE LAW JUDGES 


) 

In the Matter of ) 

) 

McWANE, INC., ) 

a corporation, and ) DOCKET NO. 9351 

) 

STAR PIPE PRODUCTS, LTD., ) 

a limited partnership, ) 

Respondents. ) 

--------------------------------~) 

ORDER ON SIP INDUSTRIES' MOTION TO QUASH SUBPOENA 

I. Background 

On March 9, 2012, non-party Serampore Industries Private (Ltd.), Inc., d/b/a SIP 

Industries (SIP), filed a Motion to Quash Subpoena Duces Tecum ("Motion") served on it 

by Respondent McWane, Inc. ("McWane" or "Respondent"). By agreement ofthe 

parties, Respondent requested and obtained two separate extensions oftime to respond to 

the Motion so that the parties could continue negotiating SIP's objections to the Motion. 

See Orders dated March 20, 2012 and April 2, 2012. In accordance with the deadline set 

by the last extension Order, Respondent filed its-opposition to the Motion on April 9, 

2012 ("Opposition"). 

SIP objects to subpoena requests 2,3,5 and 6 in their entirety, and objects to part 

ofrequest 4. According to the Opposition, negotiations between the parties conducted 

after the Motion was filed resulted in agreement as to request 6 and request 4. 

Respondent's representations in this regard are accepted, and the Motion with respect to 

those requests is DENIED WITHOUT PREJUDICE to re-filing in the event that an 

agreement has not, in fact, been reached. As to SIP's remaining objections, the Motion is 

GRANTED IN PART and DENIED IN PART, as further explained below. 

II. Arguments of the parties 

Subpoena requests 2, 3, and 5 ask SIP to produce documents as follows: 

Request No.2: Documents sufficient to identify your purchases of all DIWF 

[ductile iron waterworks fittings] products from any Person from January 1, 2003 

to the present including, but not limited to the Person from whom you purchased 
DIWF and the volume units, SKU number, diameter, size, configuration, coating, 

finishing, price, discount, or rebates attributable to your purchases. 

Request No.3: Documents sufficient to identify your sales of all DIWF products 

from January 1, 2003 to present including, but not limited to, the Person whom 

you sold DIWF, the volume, units, SKU number, diameter, size, configuration, 

coating, finish, price, discount, and rebates of your sales. 

Request No.5: All documents constituting or relating to communications 

between you and any person relating to proposed or actual sales prices for DIWF, 

including any discounts or rebates, from January 2, 2003 to the present. 

SIP contends that the foregoing requests are overbroad and unduly burdensome 

because SIP does not organize its data by customer or product, and that SIP does not have 

the ability or available resources to locate and organize the documents requested. SIP 

further argues that the requests reach every communication during a nine-year period. In 

addition, SIP contends that the requested documents contain highly confidential and 

proprietary information that it should not be required to share with competitors, such as 

McWane, and that the Protective Order issued in this case is insufficient to protect SIP. 

In support ofthe Motion, SIP offers the affidavit ofits Vice President ofBusiness 

Development, Mr. Bharat Agarwal (hereafter, "Agarwal Aff."). 

Respondent states that, as a result of negotiations between the parties, Respondent 

has offered to narrow requests 2 and 3 to only seek "summary level" sales and purchase 

data, from January 1, 2007 to the present, and to narrow request 5 to only seek emails 

from one individual, SIP's Vice President of Business Development, from January 2007 

to the present. Opposition at 2. According to Respondent, SIP continues to object on the 

grounds that the requests are unreasonable, unduly burdensome, and request proprietary 

and confidential information which the Protective Order issued in this case is insufficient 

to protect. Id. 

III. Analysis 

Discovery sought in a proceeding before the Commission must be "reasonably 

expected to yield information relevant to the allegations ofthe complaint, to the proposed 

relief, or to the defense of any respondent." 16 C.F .R. § 3.31 (c )(1). However, discovery 

shall be limited ifthe Administrative Law Judge determines that the discovery sought is 

unreasonably cumulative or duplicative, or is obtainable from some other source that is 

more convenient, less burdensome, or less expensive. 16 C.F .R. § 3.31 (c )(2)(i). 

A. Relevance 

Although SIP asserts that the requested information is not relevant, it fails to 

explain this assertion. SIP is a competitor to McWane, purchasing and selling ductile 

iron pipe fittings ("DIPF"), including the waterworks fittings (DIWF) that are the subject 

ofrequests 2, 3 and 5; Agarwal Aff. ,-r,-r 2, 3. The Complaint alleges, among other things, 

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that McWane engaged in anti competitive and exclusionary acts to enhance or maintain its 

monopoly power in the relevant domestic ductile iron pipe fittings (DIPF) market. 

Complaint ,-r,-r 69-70. Competitor information is relevant to these monopolization 

allegations. See In re North Texas Specialty Physicians, 2004 FTC LEXIS 14, at *5 (Jan. 

30,2004 (noting that competitor information can be crucial in antitrust cases). 

In support ofits contention that the requested competitor information is irrelevant 

in this case, Respondent cites Spiegel Inc. v. FTC, 494 F.2d 59 (7th Cir. 1973) and 

Independent Directory Corp. v. FTC, 188 F.2d 468 (2d Cir. 1951). However, neither 

Spiegel nor Independent Directory Corp. involved anti competitive practices in violation 

of antitrust laws. Spiegel was a false advertising case in which Spiegel sought competitor 

information to show that, compared to its competitors, Spiegel's advertising conduct was 

exemplary. The court held that the fact that "[t]hat Spiegel's competitors were worse" 

was not material to whether Spiegel's advertising was deceptive. Id. at 64. See also 

Independent Directory Corp., in which the petitioner was found to have induced new 

customer listings by misrepresenting its order forms to be those of competitors with 

whom the customer was already doing business. In that case, it was not error to deny 

discovery of competitors' order forms to allow petitioner to show that competitors' forms 

were so different from petitioner's that customers could not actually have confused the 

forms, where the "test as to the likelihood of deception in these cases [was] not what 

would be apparent from comparison." Independent Directory, 188 F.2d at 471. Thus, 

both Spiegel and Independent Directory are readily distinguishable. 

SIP has failed to demonstrate that the requests, as limited by this Order, are 

irrelevant. SIP's remaining objections are addressed below. 

B. Overbreadth 

SIP objects that the requests seek a "vast amount" ofinformation, going back over 

nine years. Motion at 6. However, Respondent has agreed to modify the relevant time 

period to require documents from January 1, 2007, instead of from January 1, 2003, and 

to limit the request for "all [SIP's] communications" to only emails from one individual, 

SIP's Vice President of Business Development. The requests will be limited as proposed 

by Respondent. As so limited, the requests are not overbroad. 

c. Burden 

SIP contends that even ifrelevant, locating and organizing all the requested 

documents "would be an enormous undertaking" that would "unduly disrupt or seriously 

hinder" SIP's normal business operations. Motion at 6. In agency actions, "[s]ome 

burden on subpoenaed parties is to be expected and is necessary in furtherance ofthe 

agency's legitimate inquiry and the public interest." In re Polypore, 2009 FTC LEXIS 

41, at *10 (Jan. 15,2009); Federal Trade Commission v. Dresser Indus., 1977 u.S. Dist. 

LEXIS 16178, at *13 (D.D.C. 1977). '''Inconvenience to third parties may be 

outweighed by the public interest in seeking the truth in every litigated case. '" In re 

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North Texas Specialty Physicians, 2004 FTC LEXIS 14, at *2 (quoting Covey Oil Co. v. 

Continental Oil Co., 340 F.2d 993,999 (10th Cir. 1965)). 

According to the Agarwal Affidavit, SIP is an importer and distributor of a wide 

range of cast iron products, fittings and other industrial products including fittings and 

accessories for water works and soil pipes. Agarwal Aff. ,-r 2. A SIP purchase order will 

often include DIPF products and other products. Agarwal Aff. ,-r 6. SIP has 

approximately thirty-five employees and contractors, including approximately twenty 

salesmen and office personnel handling DIPF purchases and sales. Agarwal Aff. ,-r 3. 

Prior to 2007, SIP maintained its purchase and sales records in a combination of 

paper files and computer files, which are not easily accessed. Agarwal Aff. ,-r 4. In 2007, 

SIP overhauled and updated its computer system. Id. SIP's methods of communicating 

with suppliers and customers include mail, email, text messages, and telephone calls, 

which are not organized by product or customer. Agarwal Aff. ,-r 5. Therefore, according 

to the Agarwal Affidavit, "there is no index or other means to access materials related 

solely to DIPF purchases and sales or regarding individual customers." Id. Mr. Argawal 

states: "I cannot imagine how we could identify business records, emails and other 

materials involving only DIPF" without individually reviewing "many tens ofthousands" 

of documents and striking out information related to other products. Agarwal Aff. ,-r 7. 

SIP maintains that it does not have a team of employees that could be dedicated such a 

task. Id. 

As noted above, Respondent has agreed to limit requests 2 and 3 to only summary 

level sales and purchase data, from January 1, 2007 to the present, and to limit request 5 

to only emailsfromoneindividual.SIP.sVice President ofBusiness Development, from 

January 2007 to the present, and the requests will be limited in this manner. Applying the 

foregoing legal principles and having fully considered the Agarwal Affidavit, requests 2, 

3 and 5, as so limited, do not present such a heavy burden as would outweigh the 

relevance ofthe inquiry and the public interest. In re North Texas Specialty Physicians, 

2004 FTC LEXIS 14, at *6. "The burden of showing that the request is unreasonable is 

on the subpoenaed party." In re Polypore, 2009 FTC LEXIS 41, at *10 (Jan. 15,2009); 

FTC v. Dresser Indus., 1977 U.S. Dist. LEXIS 16178, at *13 (D.D.C. 1977). SIP has not 

met this burden. 

D. Confidential and Proprietary Information 

SIP asserts that the Respondent's subpoena requests demand production of 

"highly confidential and proprietary" information, such as negotiations regarding SIP's 

capacity, outstanding orders, and pricing, which could be "highly damaging" to its 

business if disclosed to SIP's competitors. Agarwal Aff. ,-r 8. However, the fact that 

discovery "might result in the disclosure of sensitive competitive information is not a 

basis for denying" discovery. In re North Texas Specialty Physicians, 2004 FTC LEXIS 

14, at *5, citing, inter alia, FTC v. Rockefeller, 441 F. Supp. 234, 242 (S.D.N.Y. 1977), 

aff'd 591 F.2d 182 (2d Cir. 1979) (holding that an objection to a subpoena on grounds 

that it seeks confidential information "poses no obstacle to enforcement"). "In addition, 

4 

infonnation on competitors is frequently crucial in proceedings ... See Service Liquor 

Distributors, Inc. v. Calvert Distillers Corp., 16 F.R.D. 507, 509 (S.D.N.Y. 1954) ('In an 

action under the antitrust laws, based upon an alleged abuse of competition, a 

competitors' business records, where good cause has been shown are not only not 

immune from inquiry, but they are precisely the source ofthe most relevant evidence')." 

In re North Texas Specialty Physicians, 2004 FTC LEXIS 14, at *5. 

Moreover, the Protective Order issued in this case protects against disclosure of 

SIP's confidential infonnation to McWane or other competitors by limiting those to 

whom such materials may be disclosed. Paragraph 7 provides: 

Confidential material shall be disclosed only to: ... ( c) outside counsel of 

record for any respondent, their associated attorneys and other employees 

oftheir law finn( s), provided they are not employees of a respondent; 

[and] (d) anyone retained to assist outside counsel in the preparation or 

hearing ofthis proceeding including consultants, provided they are not 

affiliated in any way with a respondent and have signed an agreement to 

abide by the tenns of the protective order; and ( e) any witness or deponent 

who may have authored or received the infonnation in question. 

Protective Order ~ 7. 

SIP further contends that the Protective Order entered in this case is insufficient to 

protect SIP's interests because the requests are overbroad and McWane has not explained 

how the documents might be used in this litigation. In particular, SIP expresses concern 

over whether and how the documents may be used by retained experts. As noted above, 

as modified, the requests are not overbroad. Regardless of how the documents might be 

used, the Protective Order is sufficient to prevent disclosure to SIP's competitors. 

Protective Order, Para. 7. Moreover, if the documents are disclosed to consultants, such 

as experts, paragraph 12 ofthe Protective Order further provides in pertinent part: 

At the time that any consultant or other person retained to assist counsel in 

the preparation ofthis action concludes participation in the action, such 

person shall return to counsel all copies of documents or portions thereof 

designated confidential that are in the possession of such person, together 

with all notes, memoranda or other papers containing confidential 

information. At the conclusion ofthis proceeding, including the 

exhaustion ofjudicial review, the parties shall return documents obtained 

in this action to their submitters .... 

Contrary to SIP's assertions, the Protective Oider is sufficient to protect the 

confidentiality of SIP's documents. Accordingly, SIP cannot withhold documents in 

response to the requests 2, 3 and 5, as limited by this Order, on the grounds that they are 

confidential and proprietary. 

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IV. Conclusion and Order 

For the forgoing reasons, SIP's Motion to Quash is GRANTED, to the extent that 

requests 2 and 3 are hereby limited to "summary level" sales and purchase data, from 

January 1, 2007 to the present, and request 5 is hereby limited to emails from one 

individual, SIP's Vice President ofBusiness Development, from January 2007 to the 

present. 

Based upon an apparent agreement by the parties to limit requests 4 and 6, the 

Motion is DENIED WITHOUT PREJUDICE as to.those requests. 

Except as set forth herein, the remainder ofthe Motion is DENIED. 

It is hereby ORDERED that SIP shall respond to requests 2, 3 and 5 as limited by 

this Order on or before May 7,2012. 1 

ORDERED: 

D. Michael Chappel 

Chief Administrative Law Judge 

Date: April 23, 2012 

1 SIP contends that under Commission Rule ofPractice 3.37(b) it has thirty days to respond to a request for 

documents. 16 C.F.R. § 3.37(b). Rule 3.37 governs requests for production directed to "a party" by any 

other "party." Id. at § 3.37(a). Accordingly, Rule 3.37 does not govern the time for responding to a 

subpoena directed to a non-party under Rule 3.34. Under the circumstances presented, fourteen days is a 

reasonable time to respond to the modified requests 2, 3 and 5. 

6