PUBLIC REDACTED VERSION 

No. 14-11363 

 

IN THE UNITED STATES COURT OF APPEALS 

FOR THE ELEVENTH CIRCUIT 

 

MCWANE, INC., 

Petitioner, 

v. 

FEDERAL TRADE COMMISSION, 

Respondent. 

 

ON PETITION FOR REVIEW OF AN ORDER 

OF THE FEDERAL TRADE COMMISSION

(FTC DOCKET NO. 9351) 

 

BRIEF OF THE FEDERAL TRADE COMMISSION 

 

Of Counsel:

GEOFFREY M. GREEN

LINDA HOLLERAN KOPP

 Attorneys 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

JONATHAN E. NUECHTERLEIN

 General Counsel 

WILLIAM E. COHEN

 Deputy General Counsel 

JOEL MARCUS

 Assistant General Counsel 

THEODORE (JACK) METZLER

 Attorney 

FEDERAL TRADE COMMISSION

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 

 

 AUGUST 29, 2014

Case: 14-11363 Date Filed: 08/29/2014 Page: 1 of 73 
No. 14-11363 McWane, Inc. v. FTC (11th Cir.) 

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Eleventh Circuit Rule 26.1 Certificate of Interested Persons 

Pursuant to 11th Cir. R. 26.1-2, Respondent Federal Trade 

Commission (“FTC”) certifies that the following persons or entities are known to 

have an interest in the outcome of this appeal: 

Ansaldo, J. Alexander – FTC attorney 

Armstrong, Norman A. – FTC attorney 

Baker Botts, LLP – McWane attorneys 

Baker, Joseph R. – FTC attorney 

Balbach, Jeanine – FTC attorney 

Bloom, Michael – FTC attorney 

Brill, Julie – Commissioner, FTC 

Brock, Thomas H. – FTC attorney 

Castillo, Monica M. – FTC attorney 

Chappell, Hon. D. Michael – Chief Administrative Law Judge 

Choi, Heather Souder – McWane attorney 

Cohen, William E. – FTC attorney 

Daly, John F. – former FTC attorney 

Federal Trade Commission 

Feinstein, Deborah L. – FTC attorney 

Green, Geoffrey M. – FTC attorney 

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No. 14-11363 McWane, Inc. v. FTC (11th Cir.) 

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Hassi, Edward D. – FTC attorney 

Holleran Kopp, Linda – FTC attorney 

Ikeda, Mika – FTC attorney 

Koons, Erik T. – McWane attorney 

Lavery, William C. – McWane attorney 

Liebowitz, Jonathan D. – Former Chairman, FTC 

Mann, Andrew K. – former FTC attorney 

Marcus, Joel – FTC attorney 

Maynard Cooper and Gale PC – McWane attorneys 

McSweeny, Terrell – Commissioner, FTC 

McWane, Inc. 

Metzler, Theodore (Jack) – FTC attorney 

Normann, Parker – McWane expert 

Nuechterlein, Jonathan – FTC attorney 

Ohlhausen, Maureen – Commissioner, FTC 

Ostoyich, Joseph A. – McWane attorney 

Ramirez, Edith – Chairwoman, FTC 

Rosch, J. Thomas – Former Commissioner, FTC 

Schumann, Laurence – FTC expert 

Sigma Corporation 

Case: 14-11363 Date Filed: 08/29/2014 Page: 3 of 73 
No. 14-11363 McWane, Inc. v. FTC (11th Cir.) 

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Star Pipe Products, Inc. 

Thagard, Thomas – McWane attorney 

Truitt, J. Alan – McWane attorney 

Wright, Joshua – Commissioner, FTC 

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- iSTATEMENT REGARDING ORAL ARGUMENT 

The Federal Trade Commission (“FTC” or “Commission”) believes oral 

argument will assist the Court and thus requests it. 

Case: 14-11363 Date Filed: 08/29/2014 Page: 5 of 73 
- iiTABLE OF CONTENTS 

STATEMENT REGARDING ORAL ARGUMENT ............................................... i

TABLE OF CONTENTS .......................................................................................... ii

TABLE OF AUTHORITIES ................................................................................... iv

ISSUE PRESENTED FOR REVIEW ....................................................................... 1

STATEMENT OF THE CASE .................................................................................. 2

A. Statement of Facts ............................................................................................ 4

1. The Domestic Pipe Fittings Market ............................................................ 4

2. Star’s Entry Prompts McWane’s Exclusivity Mandate ............................. 7

B. Procedural History ......................................................................................... 15

STANDARD OF REVIEW ..................................................................................... 18

SUMMARY OF ARGUMENT ............................................................................... 19

ARGUMENT ........................................................................................................... 22

I. MCWANE HAS MONOPOLY POWER IN THE RELEVANT MARKET ........................ 23

A. The Relevant Market Consists of Domestically Manufactured Fittings ....... 24

B. McWane Monopolized the Domestic-Only Market ...................................... 28

II. MCWANE UNLAWFULLY MAINTAINED ITS MONOPOLY ...................................... 31

A. McWane Used Exclusivity To Impede Competition .................................... 32

B. McWane Demonstrates No Procompetitive Justification ............................. 41

C. McWane’s Legal Arguments Contradict Governing Antitrust 

Precedent Concerning Exclusive Dealing By Monopolists .......................... 45

1. Monopolists Are Subject To Stricter Limits On Exclusivity Than 

Non-Monopolists ...................................................................................... 46

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- iii2. Anticompetitive Exclusivity Does Not Require Formal Long-Term 

Contracts ................................................................................................... 49

3. A Monopolist Can Be Liable For Impeding A New Entrant’s 

Growth Even If The Entrant Makes Some Sales ...................................... 52

4. Antitrust Law Does Not Require The Government To Prove How 

New Competitors Would Have Developed Absent Anticompetitive 

Conduct ..................................................................................................... 54

CONCLUSION ........................................................................................................ 61

Case: 14-11363 Date Filed: 08/29/2014 Page: 7 of 73 
- ivTABLE OF AUTHORITIES 

Page(s) 

Cases 

American Tobacco Co. v. United States, 328 U.S. 781, 

66 S.Ct. 1125 (1946) .......................................................................................... 29 

Brooke Group v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 

113 S. Ct. 2578 (1993). ....................................................................................... 28 

Chicago Bd. of Trade v. United States, 246 U.S. 231, 

38 S. Ct. 242 (1918) ............................................................................................ 57

Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768 (6th Cir. 2002) .......................... 52 

Eastman Kodak Co. v. Image Technical Servs., Inc., 

504 U.S. 451, 112 S. Ct. 2072 (1992) ................................................................. 47 

Florida Gas Transmission Co. v. FERC, 604 F.3d 636 

(D.C. Cir. 2010) .................................................................................................. 18 

FTC v. Actavis, Inc., 133 S.Ct. 2223 (2013) ............................................................ 56 

FTC v. Indiana Fed’n of Dentists, 476 U.S. 447, 

106 S.Ct. 2009 (1986) ......................................................................................... 19 

FTC v. Whole Foods Market, Inc., 548 F.3d 1028 (D.C. Cir. 2008) ....................... 25 

Gulf States Reorganization Group, Inc. v. Nucor Corp., 466 F.3d 961 

(11th Cir. 2006) ................................................................................................... 39 

In re Beltone, 100 F.T.C. 68 (1982) ......................................................................... 48 

In re Polygram Holding, Inc., 136 F.T.C. 310 (2003) ............................................. 43 

In re Polypore Int’l, 2010 WL 9933413 (FTC Dec. 13, 2010) ............................... 25 

Levine v. Cent. Fla. Med. Affiliates, 72 F.3d 1538 (11th Cir. 1996) ........... 24, 38, 55 

Lorain Journal Co. v. United States, 342 U.S. 143, 

72 S. Ct. 181 (1951) ............................................................................................ 49 

Morris Commc’ns Corp. v. PGA Tour, Inc., 364 F.3d 1288 

(11th Cir. 2004) ............................................................................................. 22, 31 

National Soc’y of Prof’l Eng’rs, v. United States, 435 U.S. 679, 

95 S.Ct. 1355 (1978) ........................................................................................... 45 

Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157 (9thCir. 1997) ...................... 48

Polypore Int’l, Inc. v. FTC, 686 F.3d 1208 (11th Cir. 2012) ............................ 24, 39 

Case: 14-11363 Date Filed: 08/29/2014 Page: 8 of 73 
- vRealcomp II, Ltd. v. FTC, 635 F.3d 815 (6th Cir. 2011) ......................................... 56 

Roland Mach. Co. v. Dresser Indus., 749 F.2d 380 (7th Cir. 1984) ................. 48, 53 

Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555 

(11th Cir. 1991) ................................................................................................... 39

Schering-Plough Corp. v. FTC, 402 F.3d 1056 (11th Cir. 2005) ...................... 18, 19 

Spirit Airlines, Inc. v. Northwest Airlines, Inc., 

431 F.3d 917 (6th Cir. 2005) .............................................................................. 38 

Sterling Merchandising, Inc. v. Nestle, S.A., 

656 F.3d 112 (1st Cir. 2011) ............................................................................... 55 

* U.S. Anchor Mfg. v. Rule Indus., 7 F.3d 986 (11th Cir. 1993) .........................passim 

*United States v. Dentsply Int’l, Inc., 399 F.3d 181 (3d Cir. 2005) ...................passim 

United States v. General Dynamics Corp., 415 U.S. 486, 

94 S. Ct. 1186 (1974) .......................................................................................... 54 

United States v. Grinnell Corp., 384 U.S. 563, 86 S. Ct. 1698 (1966) ....... 23, 29, 31 

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

ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254 (3d Cir. 2012) .................. 47, 49, 52 

* Cases primarily relied upon (11th Cir. R. 28-1(e)). 

Statutes and Regulatory Materials 

15 U.S.C. § 2 ............................................................................................................ 15 

15 U.S.C. § 45 ...................................................................................................... 3, 18 

American Recovery and Reinvestment Act of 2009, 

Pub. L. No. 111-5, 123 Stat. 115 .......................................................................... 5 

Other 

ABA Section of Antitrust Law, Mergers & Acquisitions (3d ed. 2008) ................. 28 

DOJ & FTC, Horizontal Merger Guidelines (2010) .......................................... 25, 43 

Phillip E. Areeda, Herbert Hovenkamp, et al., Antitrust Law 

(2d & 3d eds. 1996-2011) .................................................... 25, 32, 46, 53, 56, 57 

Richard A. Posner, Antitrust Law (2d ed. 2001) ..................................................... 53 

Case: 14-11363 Date Filed: 08/29/2014 Page: 9 of 73 
- viSteven C. Salop, Sharis A. Pozen, and John R. Seward, The Appropriate 

Legal Standard and Sufficient Economic Evidence for Exclusive 

Dealing Under Section 2: the FTC’s McWane Case, 

http://ssrn.com/abstract=2477448 (Geo. L. Ctr. 2014) ........................... 47, 53, 58 

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ISSUE PRESENTED FOR REVIEW 

Whether substantial evidence supported the FTC’s adjudicatory ruling that 

an incumbent monopolist used an exclusivity mandate to impede market entry and 

expansion by its sole competitor, unlawfully maintaining its monopoly. 

 

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STATEMENT OF THE CASE 

In mid-2009, McWane was the only supplier in the market for domestically 

manufactured ductile iron pipe fittings. Like many monopolists, it charged high 

prices with large profit margins. Star Pipe Products then announced it would enter 

the market. McWane responded not by competing more vigorously, but by threatening to cut off any customer that dealt with Star, with only limited exceptions. 

McWane knew its customers would be reluctant to move all their business to a new 

entrant and could not risk losing access to McWane’s full line of fittings, including 

those that Star could not yet produce. McWane’s strategy worked. It reduced 

Star’s sales opportunities, raised its costs, and deprived it of the scale necessary to 

operate efficiently and compete effectively with McWane. Star therefore remained 

a fringe supplier of domestic fittings, and McWane faced no need to lower its 

monopoly prices. 

McWane’s internal documents described this exclusivity mandate for what it 

was: an anticompetitive strategy to preserve McWane’s monopoly profits by 

impeding new competition. As the architect of McWane’s strategy explained: 

 “[w]hether we end up with Star as a complete or incomplete domestic 

supplier my chief concern is that the domestic market gets creamed from a 

pricing standpoint just like the non-domestic market has been driven down 

in the past”; 

 “we need to make sure that they [Star] don’t reach any critical market mass 

that w[ould] allow them to continue to invest and receive a profitable 

return”; and 

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 McWane’s exclusivity mandate thus “[f]orce[d]” Star “to absorb the costs 

associated with having a more full line before they can secure major 

distribution.” 

Comm’n 8-9, 31 (internal quotation marks omitted).1

 

As those documents and the rest of the trial record confirm, “the domestic 

market”—the market for domestically manufactured fittings—is the relevant 

market and is separate from “the non-domestic market.” They also confirm that 

McWane maintained its monopoly not by competing on the merits, but by raising 

Star’s costs and keeping it from “reach[ing] any critical market mass that will 

allow [it] to continue to invest and receive a profitable return.” And McWane did 

not even compete for exclusivity. It offered customers no new discounts or other 

procompetitive inducements; it simply mandated exclusivity as a unilateral 

condition on continued access to its full line of fittings. That mandate was all stick 

and no carrot. It inflicted competitive harm with no procompetitive benefits. 

After a two-month trial, an ALJ found McWane liable for unlawful 

monopoly maintenance under Section 5 of the FTC Act, 15 U.S.C. § 45. The 

Commission affirmed in the decision now under review. 

 

1

 “Comm’n __” identifies pages in the Commission’s opinion. “ALJ pp. __” 

identifies page numbers in the opinion of the Administrative Law Judge, whereas 

“ALJ ¶ __” identifies his numbered factual findings. 

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A. Statement of Facts

1. The Domestic Pipe Fittings Market 

Ductile iron pipe fittings connect the pipes in large-scale water distribution 

systems to valves, hydrants, or other pipes, and split, join, and direct water flow.2

 

Comm’n 5; ALJ ¶¶ 5, 278. They come in a range of sizes, configurations, and 

finishes. ALJ ¶¶ 286-88. About 100 fittings varieties can fulfill most project 

needs, but a full line includes many less-commonly used pieces that are 

nonetheless essential in some projects. ALJ ¶¶ 306-08. 

The typical fittings end users are municipal and other governmental water 

authorities and their contractors. ALJ ¶ 509. McWane and other manufacturers 

almost never sell fittings directly to end users. Instead, they sell them to 

middleman distributors, who in turn sell them to end users. ALJ ¶¶ 367, 373-74, 

508. Distributors maintain relationships with end users by providing services that 

manufacturers cannot replicate. ALJ ¶¶ 400-412. Because manufacturers cannot 

sell directly to end users, and there is no viable alternative sales channel, access to 

distributors is critical to manufacturers’ business success. Comm’n 22-23, ALJ 

¶¶ 381, 400-402. 

A waterworks project typically begins when a water authority issues a 

“specification” of the pipes, fittings, and other products required for the project. 

 

2

 In this brief, “fittings” refers to small- and medium-diameter (24 inches and 

under) ductile iron pipe fittings. 

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ALJ ¶¶ 332-33. Competing contractors solicit bids for the specified products from 

distributors, who in turn seek quotes from manufacturers like McWane. ALJ 

¶¶ 333, 368. Most end users issue “open specifications,” which permit the use of 

products manufactured anywhere in the world. Other end users issue “domesticonly specifications” that require the use of U.S.-made products. Since 2003, such 

domestic-only projects have accounted for approximately 15%-20% of all U.S. 

fittings sales. ALJ ¶¶ 517-19, 1029-31; see Comm’n 16. 

Domestic-only specifications often, but not always, arise from “Buy 

American” legal obligations. For example, Pennsylvania and New Jersey law 

requires the use of domestic materials in public projects. Comm’n 14; ALJ ¶¶ 520-

21. So do Air Force bases, certain federal programs, and various municipalities. 

Comm’n 14; ALJ ¶¶ 522-23. The demand for American-made fittings increased 

when Congress enacted the American Recovery and Reinvestment Act of 2009 

(“ARRA”), Pub. L. No. 111-5, 123 Stat. 115. As part of its larger stimulus package, ARRA provided more than $6 billion to fund water infrastructure products, 

conditioned on the use of U.S.-made products. Comm’n 7-8; ALJ ¶¶ 524-29. 

Because waivers of the Buy-American requirement were rarely granted, “neither 

McWane nor Star sold any imported fittings for use in any ARRA-funded 

projects.” Comm’n 8 n.4, 16; see also ALJ p. 249; ALJ ¶¶ 527, 531-34, 537-46. 

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Given these end-user requirements, distributors “will not purchase” imported 

fittings for specifications that require domestic fittings, “[r]egardless of price.” 

ALJ ¶ 549; accord Comm’n 14. That is so even though domestic and imported 

fittings are functionally indistinguishable and imported fittings are much less 

expensive. ALJ ¶¶ 323, 547. In short, although domestic and imported fittings are 

physically identical, they are not economic substitutes for projects with domesticonly specifications. Comm’n 14; ALJ p. 249. 

The manufacture of ductile iron pipe fittings is a highly concentrated industry. 

Three companies supply nearly all the fittings (domestically manufactured or 

imported) used in U.S. waterworks projects. ALJ ¶ 355. McWane, by far the 

largest of the three, manufactures fittings both in the United States and in China 

and accounts for nearly half of total fittings sales. ALJ ¶¶ 15-16. Fittings are 

“about 5% of McWane’s overall business,” which includes pipe and other iron 

products. ALJ ¶¶ 12-15. Fittings are the primary product line of Sigma Corporation and Star, each of which supplies about a quarter of the fittings used in all 

U.S. waterworks projects (including open and domestic-only specifications). ALJ 

¶¶ 13, 356. 

During the relevant period, McWane owned the only U.S. foundry devoted 

to fittings production, and until 2009, both Star and Sigma sold only imported 

fittings. Thus, until 2009, McWane was the sole supplier of fittings for projects 

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with domestic-only specifications. Comm’n 5; ALJ ¶ 1040. Because it faced no 

competition for such projects, McWane charged high prices and enjoyed large 

profit margins. ALJ ¶¶ 547, 1075, 1091. McWane’s prices for fittings in domesticonly projects were { } higher than its prices for physically identical 

fittings sold for projects with open specifications. ALJ ¶ 1076 & RX410. The 

price difference did not simply reflect the higher costs of domestic manufacturing—

McWane’s profit margins were also substantially greater for domestic fittings. 

ALJ ¶ 1091. Moreover, McWane maintained and increased its monopoly-level 

prices after Star entered the domestic-only market. See Comm’n 18. 

2. Star’s Entry Prompts McWane’s Exclusivity Mandate 

In the wake of the 2009 stimulus legislation, Star decided to enter the market 

for supplying U.S.-made fittings to domestic-only projects. Comm’n 7-8; ALJ 

¶¶ 1094, 1421. It proceeded on two tracks. First, Star investigated building its 

own U.S. foundry or buying one and adapting it to manufacture fittings. ALJ 

¶ 1097. Second, Star jump-started its market entry by immediately contracting 

with six third-party “jobber” foundries located in the United States, which 

produced raw fittings to Star’s specifications and sent them to Star’s Houston 

facility for finishing. ALJ ¶¶ 1098-1118. As McWane concedes, this outsourcing 

arrangement was much less operationally efficient in the long run than owning a 

foundry tailored to fittings production. See id.; Comm’n 10-11; McWane Br. 2, 

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29, 52-53. But because stimulus-related procurement had begun, Star proceeded 

with this plan in the short term while investigating options for acquiring its own 

foundry.3

 

Star entered the market in the second half of 2009 with the ability to sell the 

most commonly used domestic fittings and a plan to expand its offerings over time. 

ALJ ¶¶ 1120, 1130-31. Because Star’s initial domestic product line was limited, 

most major distributors were willing to give Star some of their domestic fittings 

business, but few could do without McWane’s fuller line. ALJ pp. 390-97. Some 

were also “reluctant to rely on a supplier without its own foundry.” Comm’n 25. 

McWane recognized that effective competition from Star would lead to 

lower prices and narrower margins. In its words, McWane’s “chief concern” was 

that such competition would cause “the domestic market” (i.e., the market for U.S.-

made fittings used in domestic-only projects) to “get[] creamed from a pricing 

standpoint just like the non-domestic market has been driven down in the past,” in 

part because of Star’s aggressive pricing in the latter market. ALJ ¶ 1149 (quoting 

CX0074 at 1); see ALJ ¶¶ 568-70.4

 McWane believed that if Star emerged as a 

 

3

 Sigma also considered manufacturing fittings domestically, but ultimately agreed 

with McWane to purchase and resell McWane domestic fittings—to customers that 

purchased McWane domestic fittings exclusively. Comm’n 12; ALJ ¶¶ 1423, 

1425-26, 1537-41. 

4

 In this brief, “domestic-only market” means the market for domestically 

manufactured fittings for projects with domestic-only specifications, and 

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“legitimate competitor” in the domestic-only market, McWane would “take a hit 

for decades” because “our distributors will continually pressure us to ‘do 

something’ (lower prices),” and the company would “always see downward 

[pricing] pressure in the future.” ALJ ¶¶ 1151-52 (quoting CX0102, CX2192 

(hyphens omitted)). 

McWane also knew that a new competitor would face, in its words, 

“significant blocking issues” if, like Star, it could not immediately supply a “full 

line” of domestic fittings. ALJ ¶ 1155 (quoting CX0067 at 2). As Richard 

Tatman, the head of McWane’s fittings business, explained: “we need to make 

sure that they don’t reach any critical market mass that will allow them to continue 

to invest and receive a profitable return.” ALJ ¶ 1150 (quoting CX0074 at 1). 

To that end, McWane imposed the exclusivity mandate at issue here, which 

was originally described as a “full line or no line” approach, ALJ ¶ 1157 (quoting 

CX0076 at 1), and ultimately became known as the Full Support Program. 

McWane formally announced this new policy in a letter to its distributors on 

September 22, 2009. Unless distributors “fully support McWane branded products 

for their domestic fitting and accessory requirements,” McWane declared, they 

“may forgo participation in any unpaid rebates [they had accrued] for domestic 

 

“nondomestic-fittings market” means the market for fittings (now mostly imports) 

for open-specification projects. 

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fittings and accessories or shipment of their domestic fitting and accessory order of 

[McWane] products for up to 12 weeks.” ALJ ¶ 1173 (quoting CX0010) 

(emphasis added). The policy provided for only two narrow exceptions; the only 

material one here concerned circumstances where McWane products were not 

readily available (e.g., out of stock).5

 McWane offered no additional discounts, 

rebates, or other consideration in exchange. ALJ p. 407. The mandate was simply 

a new condition on continued access to McWane’s products and previouslyaccrued rebates. 

McWane made sure distributors understood “that they would no longer be 

able to buy domestic fittings from McWane if they purchased domestic fittings 

from Star.” Comm’n 21 (citing ALJ ¶ 1180). For example, McWane’s national 

sales manager explained the new policy to his sales force as follows: 

 “What are we going to do if a customer [i.e., a distributor] buys Star 

domestic? We are not going to sell them our domestic .... This means the 

customer will no longer have access to our domestic.” 

 “Once [distributors] use Star, they can’t EVER buy domestic from us ....” 

 “For [distributors] with multiple branches ... if one branch uses Star, every 

branch is cut off.” 

 

5

 McWane provided a separate exception where customers bought domestic fittings 

and accessories in a package with another manufacturer’s ductile iron pipe. ALJ 

¶ 1173. Except in limited resale contexts, that exception did not apply to Star 

because Star did not manufacture pipe. See ALJ ¶¶ 110, 1325. 

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ALJ ¶ 1179 (quoting CX0710 at 1-2). The national sales manager exhorted: 

“Make sure you are discussing our stance with all customers, every day.” Id. 

This message was highly effective. Mr. Tatman recognized that “[a]lthough 

the words ‘may’ and ‘or’ were specifically used [in the September 22 letter], the 

market has interpreted the communication in the more hard line ‘will’ sense. ... 

Access to McWane ... requires distributors to exclusively support McWane where 

products are available within normal lead times.” ALJ ¶ 1183 (quoting CX0119 at 

2, 4). He concluded: “[v]iolations will result in” not only “loss of accrued 

rebates,” but also “[l]oss of access” to McWane products altogether. Id. (emphasis 

added); see also ALJ ¶ 1167 (“To protect our domestic brands and market position 

... we won’t provide domestic product to distributors who are not fully supporting 

our domestic product lines.”) (quoting CX0113 (Tatman email)). McWane drove 

this point home in the fall of 2009 by making an example of one distributor, 

Hajoca Corporation, for dealing with Star. Comm’n 9. After a single Hajoca 

branch purchased fittings from Star, McWane cut off sales of domestic fittings to 

all Hajoca branches. Comm’n 9; ALJ ¶¶ 1206-23.6

 

6

 In April 2010, after the FTC notified McWane that it was investigating the 

company’s exclusionary policy, McWane allowed some (but not all) Hajoca 

branches to resume purchasing from McWane. See ALJ ¶ 1220 (before a March 

2010 negotiation with Hajoca, a senior McWane executive asked his colleagues to 

consider “[h]ow our potential FTC action might [a]ffect how we do business with 

[Hajoca]”). 

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Other distributors acquiesced in McWane’s exclusivity mandate, later 

testifying that they were unwilling to risk purchasing from Star lest McWane cut 

them off too from domestic fittings then available only from McWane. ALJ 

pp. 405-06; ALJ ¶¶ 1238, 1301, 1317, 1358; see also Comm’n 9; ALJ ¶¶ 1184-92, 

1296, 1300-02. Distributors canceled orders with Star and withdrew quote 

requests, and Star thereafter saw a “dramatic reduction” in such requests. Comm’n 

10; see also id. at 23-24; ALJ ¶¶ 1381-95. Even when Star undercut McWane’s 

prices, customers still refused to deal with Star because they feared losing access to 

McWane’s full line of fittings. Comm’n 10. Apart from Hajoca, the major 

distributors generally purchased from McWane alone except where an exception 

applied. Comm’n 9, 21-25, 29-30; ALJ ¶¶ 1231-51, 1259-64, 1299-1304, 1313-18, 

1334-40, 1353-58, 1364. 

McWane never publicly withdrew the policy or notified distributors of any 

changes, and its effects persisted for several years. Comm’n 39-40. Some 

distributors learned in 2010 that the FTC had begun investigating McWane, and 

suspected the investigation would make McWane less likely to hold a hard line on 

its exclusivity policy. ALJ ¶ 1311. But other distributors testified at trial that they 

believed the policy was in effect even then and that they continued to buy only 

from McWane as a result. Comm’n 39-40. 

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McWane’s exclusivity mandate not only deprived Star of access to efficient 

distribution channels, but also—as McWane intended and expected—kept Star 

from “reach[ing] any critical market mass that w[ould] allow [it] to continue to 

invest and receive a profitable return.” ALJ ¶ 1150 (quoting CX0074 at 1). In 

mid-2009, Star believed it might promptly achieve the scale to justify the large 

fixed costs of procuring its own fittings foundry. See ALJ ¶¶ 1097, 1402-04. 

Because McWane had not yet announced its exclusivity policy, this was a 

reasonable expectation. Given its presence in the nondomestic-fittings market, 

Star had preexisting relationships with distributors, id. ¶ 1052, and it already had 

early orders and quote requests in hand for sales of U.S.-made fittings, id. ¶ 1395. 

By early fall, Star had also identified one foundry as a serious candidate for 

acquisition and specialization. ALJ ¶ 1404. As Star understood, this major capital 

investment would have reduced its production and shipping costs, improved its 

manufacturing efficiency, and allowed it to compete more effectively and 

profitably with McWane on price. ALJ ¶¶ 1099, 1409-14. 

McWane’s exclusivity policy destroyed Star’s justification for that 

investment. Comm’n 25, 27; see ALJ ¶¶ 1400-08. After distributors canceled 

orders and withdrew bid requests, Star reduced its sales projections and concluded 

that it no longer made economic sense to incur many millions of dollars in sunk 

costs to acquire the target foundry. ALJ ¶¶ 1381-95; see ALJ ¶ 1401; n.15, infra

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(discussing relevant figures). In short, once McWane issued its all-or-nothing 

mandate to distributors, “Star was not able to generate a sufficient volume of sales 

of Domestic Fittings to realize cost efficiencies or justify operating a foundry of its 

own.” ALJ ¶ 1401; see also Comm’n 10-11, 27; CX02260-A at 78 & 61 n.177. 

Star did sell some domestically manufactured fittings, albeit on a smaller and 

less efficient scale. First, it sold fittings to Hajoca, the distributor that McWane cut 

off as a warning to the rest. Second, Star met the limited demand of other 

distributors for fittings that McWane could not readily supply and thus fell within 

that narrow exception to its exclusivity mandate. Comm’n 10; ALJ ¶¶ 1137, 1142, 

1242, 1305. Third, Star sold small quantities—as little as a single fitting—to 

various small distributors with such limited demand for domestic fittings that they 

needed no relationship with McWane’s domestic-fittings business. See ALJ 

¶¶ 1141-42. 

Overall, though, Star remained a fringe player in the sale of domestically 

manufactured fittings. By comparison, it sold { } of fittings for all U.S. 

projects in 2011, and its specific share of the nondomestic-fittings market was thus 

even higher—more than { } of the market. See ALJ ¶ 356. But Star 

captured only { } of the domestic-only market in 2011; the remaining 

{ } remained with McWane. ALJ ¶¶ 356-57; Comm’n 1, 7. And Star did not 

attain even that limited market share until a full year after news of the FTC 

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investigation in early 2010 tempered McWane’s enforcement of its exclusivity 

requirement. See ALJ ¶¶ 1220, 1311. 

B. Procedural History

On January 4, 2012, the Commission issued a seven-count administrative 

complaint charging McWane with violating Section 5 of the FTC Act. Section 5 

prohibits “unfair methods of competition” and encompasses, inter alia, practices 

that violate Section 2 of the Sherman Act, 15 U.S.C. § 2; see Comm’n 13 n.7 

(incorporating Section 2 analysis). Count six—the only count on appeal—charged 

that McWane’s exclusivity mandate constituted unlawful monopoly maintenance. 

Compl. ¶ 69.7

 

After the Commission denied motions for summary judgment by McWane 

and FTC complaint counsel, the ALJ conducted a two-month trial.8

 On May 1, 

2013, he issued his 464-page decision. He found that the market for domestic 

 

7

 After splitting evenly on the merits, the Commission dismissed the first two 

counts, which alleged an earlier (2008) conspiracy among McWane, Sigma, and 

Star to stabilize prices in the nondomestic-fittings market. Count three, related to 

the same conspiracy allegations, was dismissed by the ALJ without appeal. The 

Commission dismissed counts four and five (reversing the ALJ), which alleged 

that the distribution agreement with Sigma (see n.3, supra) violated the antitrust 

laws. Comm’n 32-37. Lastly, the Commission dismissed count seven, attempted

monopolization. Having already found that McWane unlawfully monopolized the 

domestic fittings market, the Commission deemed it “unnecessary to ask whether 

McWane attempted to monopolize the market.” Comm’n 32 n.16. 

8

 FTC rules separate the Commission’s adjudicatory and prosecutorial roles by 

walling off the Commission from “complaint counsel” (enforcement staff) once an 

administrative complaint has been issued. 

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fittings is the relevant market, that McWane has monopoly power in that market, 

and that McWane’s exclusivity mandate—its Full Support Program—was 

anticompetitive and unlawful. 

The Commission affirmed. Like the ALJ, it found that the relevant market is 

the supply of domestically manufactured fittings, and that McWane had monopoly 

power. It explained that domestic-only specifications often arise from municipal, 

state, and federal laws and policies, and that, given end-user requirements, 

distributors will not purchase imported fittings for domestic-only projects. 

Imported fittings are thus not “reasonable substitutes for[] projects with domestic 

procurement specifications.” Comm’n 14. The Commission further found that 

McWane’s share of the domestic-only market “far exceed[ed] the levels that courts 

typically require to support a prima facie showing of monopoly power” and that 

there are “substantial barriers to entry[.]” Comm’n 16-17. The Commission also 

found direct evidence of McWane’s monopoly power in the higher prices and 

greater profit margins that McWane enjoyed in the market for domestic fittings 

than in the more competitive nondomestic-fittings market. Comm’n 17-18. 

The Commission next ruled that McWane’s exclusivity mandate unlawfully 

maintained its monopoly. While acknowledging that exclusive dealing has 

potential benefits, the Commission followed precedent holding that exclusivity 

poses special concerns in monopoly markets. Specifically, when a monopolist uses 

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exclusive dealing to “impair[] the ability of rivals to grow into effective competitors,” 

the monopolist can “maintain monopoly prices and thereby harm consumers.” Id. 

at 19 (citing, inter alia, United States v. Dentsply Int’l, Inc., 399 F.3d 181, 187 (3d 

Cir. 2005); United States v. Microsoft, 253 F.3d 34, 70-71 (D.C. Cir. 2001) 

(en banc)). 

The Commission found that McWane’s exclusivity requirement foreclosed 

Star “from accessing a substantial share of distributors,” prevented it from 

“achiev[ing] efficient scale,” and “thereby rais[ed] costs and slow[ed] or 

prevent[ed] effective entry.” Comm’n 22-23. Because of lost sales attributed to 

that requirement, Star continued to rely on inefficient outsourcing arrangements 

rather than acquiring its own specialized foundry. Id. at 25. Those arrangements 

raised Star’s costs and further eroded its sales because some distributors were 

reluctant to purchase from a supplier without its own foundry. Id. McWane’s 

policy thus “harmed competition by increasing barriers to entry and allowing 

McWane to maintain its monopoly position.” Id. at 22. Finally, the Commission 

found that McWane had failed to demonstrate that the policy had procompetitive 

efficiencies. Id. at 30-32. The Commission issued a cease-and-desist order 

directing McWane to stop requiring exclusivity from distributors. Id. at 39, 41. 

Commissioner Wright dissented. He assumed that McWane was a 

monopolist in the domestic-only market, and on several points he agreed with the 

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majority. He agreed that McWane’s Full Support Program was an “exclusive 

dealing arrangement” and rejected McWane’s contrary arguments. Dissent 28 

n.38; see also id. at 12. And he concluded that there was “ample record evidence” 

that the “[p]rogram harmed McWane’s rival Star.” Id. at 4. But he nonetheless 

found that complaint counsel had fallen short in proving harm to competition. See 

Section II.C.4, infra. 

STANDARD OF REVIEW 

This Court “review[s] issues of law de novo,” but “the FTC’s findings of 

fact and economic conclusions” are reviewed “under the substantial evidence 

standard,” which requires only “such relevant evidence as a reasonable mind might 

accept as adequate to support a conclusion.” Schering-Plough Corp. v. FTC, 402 

F.3d 1056, 1062-63 (11th Cir. 2005) (internal quotation marks omitted); see 15 

U.S.C. § 45(c). That standard “requires more than a scintilla, but ... less than a 

preponderance of the evidence.” Florida Gas Transmission Co. v. FERC, 604 F.3d 

636, 645 (D.C. Cir. 2010) (internal quotation marks omitted). It is thus not the 

Court’s task to “make its own appraisal of the testimony, picking and choosing for 

itself among uncertain and conflicting inferences.” FTC v. Indiana Fed’n of 

Dentists, 476 U.S. 447, 454, 106 S.Ct. 2009 (1986) (internal quotation marks 

omitted). 

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“This standard applies regardless whether the FTC agrees with the ALJ.” 

Schering-Plough, 402 F.3d at 1062. As McWane observes, this Court has stated 

that it will “examine the FTC’s findings more closely where they differ from those 

of the ALJ.” Id.; see Br. 26. But the Commission agreed with the ALJ on the 

critical facts relevant to this appeal and affirmed the ALJ’s finding of liability for 

monopoly maintenance. 

SUMMARY OF ARGUMENT 

McWane’s exclusionary strategy satisfies both elements of unlawful 

monopoly maintenance. First, McWane exercised monopoly power in the relevant 

market—the market to supply U.S.-made fittings for waterworks projects with 

domestic-only specifications. McWane argues that there was no such market, but 

that position contradicts overwhelming record evidence, including McWane’s own 

documents. Distributors will not buy imported fittings for domestic-only projects, 

which often reflect Buy-American legal requirements. They must and do buy 

domestically manufactured fittings instead, even though prices for those fittings are 

much higher than for equivalent imports. Domestic-only projects are thus a 

distinct fittings market, in which McWane, with its overwhelming market share, 

exercises monopoly power. 

Second, McWane’s exclusivity mandate was anticompetitive and meets the 

second element of the monopolization offense. A monopolist’s conduct is 

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anticompetitive if, “through something other than competition on the merits, [it] 

has the effect of significantly reducing usage of rivals’ products and hence 

protecting the ... monopoly.” Microsoft, 253 F.3d at 65. Here, McWane responded 

to Star’s entry not with “competition on the merits,” but by raising Star’s costs and 

making it a less efficient competitor. Because of McWane’s strategy, Star never 

achieved the scale economies it needed to justify a foundry acquisition and thereby 

lower its marginal costs. McWane’s exclusivity mandate thus kept Star from 

effectively competing with McWane and enabled McWane to continue charging 

monopoly prices. This is textbook anticompetitive conduct. It is irrelevant that 

Star managed to win some business (largely after McWane learned of this investigation). “The test is not total foreclosure,” but whether the conduct “slow[s] the 

rival’s expansion” and injures consumers by “delay[ing] ... [its] growth.” 

Dentsply, 399 F.3d at 191. 

Although McWane agrees that Star was inefficient because it relied on thirdparty foundries, it argues that such inefficiency insulates it from antitrust liability; 

harm to an inefficient competitor, McWane says, cannot constitute the requisite 

“harm to competition.” That argument illogically ignores McWane’s own role in 

making Star less efficient. By blocking Star’s access to the main distribution 

channels, McWane’s exclusivity mandate lowered Star’s sales volume and kept its 

cost structure inefficiently high. As governing antitrust precedent confirms, that 

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mandate harmed competition by keeping McWane’s only rival from disciplining 

its monopoly prices. In these circumstances, harm to a monopolist’s sole 

competitor is harm to competition. 

McWane also demonstrates no procompetitive justification for its conduct. 

Although exclusive dealing can have efficiency benefits in many contexts, it is 

hornbook law that exclusivity arrangements are more problematic when imposed 

by monopolists than by non-monopolists. McWane all but ignores key precedents 

(such as Dentsply and Microsoft) that address exclusivity arrangements imposed by 

monopolists and focuses instead on inapposite cases involving exclusive dealing in 

competitive markets. Also, McWane did not even compete for exclusivity by 

providing new discounts or other procompetitive inducements to its customers; 

instead, it unilaterally imposed an exclusivity requirement and threatened to cut off 

any customer that disobeyed. 

In addition, nothing in the record supports McWane’s suggestion that Star’s 

entry imperiled McWane’s U.S. foundry. In any event, preserving the industrial 

status quo does not qualify as a procompetitive justification, and the antitrust laws 

have no “industrial stability” exception. Similarly, McWane does not address the 

Commission’s conclusion that McWane’s “cherry-picking” argument was 

economically flawed and legally irrelevant. 

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Finally, well-established antitrust precedent undermines McWane’s 

argument that complaint counsel should have been required to prove in greater 

detail exactly how Star would have developed in the absence of McWane’s 

anticompetitive conduct. In Microsoft, the en banc D.C. Circuit unanimously 

adopted the position of the leading antitrust treatise and concluded that, “as to § 2 

liability in an equitable enforcement action,” the government need not “present 

direct proof that a defendant’s continued monopoly power is precisely attributable 

to its anticompetitive conduct.” 253 F.3d at 79. Instead, the government need only 

show that the monopolist’s conduct “reasonably appear[s] capable of making a 

significant contribution to maintaining monopoly power.” Id. (internal quotation 

marks and ellipsis omitted). Complaint counsel easily satisfied that standard. 

ARGUMENT 

The offense of “monopolization” under Section 2 of the Sherman Act has 

two elements: “(1) the possession of monopoly power in the relevant market and 

(2) the willful acquisition or maintenance of that power” through anticompetitive 

means. Morris Commc’ns Corp. v. PGA Tour, Inc., 364 F.3d 1288, 1293-94 (11th 

Cir. 2004) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct. 

1698 (1966)). Both elements are satisfied here. Throughout the applicable period, 

McWane monopolized the domestic-only market and charged monopoly prices. 

After Star announced its entry, McWane preserved its monopoly not by reducing 

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prices or providing better service, but by unilaterally imposing an exclusivity 

mandate calculated to raise Star’s cost structure and keep it from disciplining 

McWane’s prices. And so McWane ended just as it started, with a monopoly, 

charging monopoly prices. Section 2 of the Sherman Act was enacted to ban 

precisely such conduct. 

I. MCWANE HAS MONOPOLY POWER IN THE RELEVANT MARKET

McWane launched its exclusivity requirement when Star announced that it 

would enter the market for U.S.-made fittings used in domestic-specifications 

projects. McWane’s senior leadership expressed concerns that “the chance for 

profitable cohabitation with Star owning a [piece] of the Domestic market is slim,” 

ALJ ¶ 1150 (quoting CX0074 at 1) (emphasis added), and that Star’s entry would 

lead “the domestic market [to] get[] creamed from a pricing standpoint just like the

non-domestic market has been driven down in the past,” ALJ ¶ 1149 (quoting 

CX0074 at 1) (emphasis added). 

McWane was right then to distinguish between these two markets, and it is 

wrong now to insist that there is instead only a single market for both domestic and 

imported fittings. As the Commission found, the relevant market is the one that 

McWane monopolized: the market to supply fittings to projects with domesticonly specifications. McWane’s contrary argument is wrong and indeed implausible. 

In any event, “[d]efining a relevant product market ... is a factual question that [the 

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Court] review[s] for clear error,” Polypore Int’l, Inc. v. FTC, 686 F.3d 1208, 

1217 (11th Cir. 2012), and the Commission’s market definition here easily passes 

that test. 

A. The Relevant Market Consists of Domestically Manufactured 

Fittings 

 “To define a market is to identify producers that provide customers of a 

defendant firm (or firms) with alternative sources for the defendant’s products or 

services.” Levine v. Cent. Fla. Med. Affiliates, 72 F.3d 1538, 1552 (11th Cir. 

1996) (internal quotation marks omitted). Here, the relevant market consists of 

fittings sold for use in projects with domestic-only specifications—i.e., projects in 

which end users demand fittings manufactured in the United States, often to 

comply with Buy-American legal requirements. Comm’n 13-16. Because 

distributors must comply with that end-user demand, they will not buy imported 

fittings for domestic-specification projects, and suppliers such as McWane and Star 

therefore cannot sell imported fittings for such projects. ALJ ¶¶ 547-50. For 

example, “neither McWane nor Star sold any imported fittings for use in any 

ARRA-funded projects.” Comm’n 16. As the leading antitrust treatise recognizes, 

“[t]o the extent that regulation limits substitution, it may define the extent of the 

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market.” IIB Phillip E. Areeda, Herbert Hovenkamp, & John Solow, Antitrust Law

¶572b at 430 (3d ed. 2007).9

 

McWane contends (Br. 35) that there “was ample evidence” in the record 

that customers “flip” their demand from domestic to imported fittings in response 

to pricing pressures. That is incorrect. As the Commission found, flipping is 

exceedingly rare, and typically “occurs when domestic fittings are unavailable, 

rather than as the result of competition between domestic and imported fittings.” 

Comm’n 16. That fact alone is dispositive. Markets are defined principally by the 

sensitivity of customers to modest price variations (“cross-elasticity of demand”). 

See, e.g., FTC v. Whole Foods Market, Inc., 548 F.3d 1028, 1038 (D.C. Cir. 2008);

U.S. Anchor Mfg. v. Rule Indus., 7 F.3d 986 (11th Cir. 1993). They are not defined 

by whether customers can be forced to buy product X if product Y is completely 

unavailable. Here, the Commission and ALJ found that distributors are insensitive 

 

9

 When a substantial group of customers can be identified, segregated, and charged 

monopoly prices for a significant period, sales to that group constitute a relevant 

market. See IIB Areeda & Hovenkamp, Antitrust Law ¶534d.1, at 269-70. The 

federal enforcement agencies term this a “price discrimination” market. See

Comm’n 14; DOJ & FTC, Horizontal Merger Guidelines §4.1.4 (2010); see also In 

re Polypore Int’l, 2010 WL 9933413 at *14-15 (FTC Dec. 13, 2010), aff’d, 686 

F.3d 1208, 1217-18. Here, projects with domestic-only specifications can be 

targeted for higher pricing, and a hypothetical monopolist could raise prices by 

reducing its output because imported fittings cannot satisfy domestic-only 

specifications. See generally FTC v. Whole Foods Market, Inc., 548 F.3d 1028, 

1038 (D.C. Cir. 2008) (discussing the “hypothetical monopolist” construct for 

market-definition purposes). 

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to price variations because they simply will not buy imports for projects with 

domestic-only specifications when domestic fittings are available, “[r]egardless of 

price.” E.g., ALJ ¶¶ 547-50. That fact confirms the existence of a distinct 

domestic-only market. 

McWane’s appeal to history (Br. 10-12) cannot support its contrary argument. 

A few decades ago, nearly all fittings for U.S. waterworks projects were manufactured in the United States. Comm’n 5; ALJ ¶ 462. Less expensive imported fittings 

were introduced in the 1980s. Since the early 2000s, however, the percentage of 

waterworks projects with domestic-only specifications has held fairly steady in the 

range of 15%-20% (measured by sales volume). See Comm’n 16.10 Again, that 

market reality reflects the entrenched demand for American-made waterworks 

products. See ALJ ¶¶ 1029-1031. Distributors and suppliers must take that 

demand as they find it. ALJ ¶¶ 547-50. 

McWane also asserts that domestic fittings are “a small minority” of all 

fittings sales and that imported fittings “dominate” domestic fittings. Br. 32, 34. 

But that observation shows only that the nondomestic-fittings market is larger than 

the separate domestic-only market. Comm’n 16. That a given market is bigger 

 

10 McWane asserts that the share of domestically manufactured fittings as a 

percentage of fittings sold overall continued falling in the early 2000s. Br. 11. But 

“any growth in import sales likely came from the greater use of imports in openspecification jobs and not from a decline in domestic-only projects.” Comm’n 16 

(emphasis added). 

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than another does not somehow make them the same market. Neither does the fact 

that domestic and imported fittings are physically identical. See U.S. Anchor, 7 

F.3d at 995-96 (finding separate markets for “virtually identical,” “functionally 

interchangeable” anchors). 

Any remaining question would be resolved by the uncontradicted pricing 

and profitability evidence. McWane charged { } more for domesticspecification projects than for open-specifications projects, even though the fittings 

supplied were functionally indistinguishable. ALJ ¶ 1076 & RX410. McWane’s 

profits were also much higher in the domestic-only market. See Section I.B, infra. 

McWane can charge higher prices (and earn greater profits) for domestically 

manufactured fittings only because certain identifiable customers demand 

American-made products instead of imports and will pay significantly more for 

them. As discussed, McWane’s internal documents also confirm that its senior 

executives understood the obvious: that “the domestic market” is separate from 

“the non-domestic market” and is subject to much less price competition. ALJ 

¶ 1149 (quoting Tatman). 

Finally, McWane argues that the Commission’s market-definition analysis 

was insufficiently rigorous because it did not rest on expert econometric analysis. 

Br. 32-33. Given the overwhelming record evidence, the Commission needed no 

detailed econometric analysis to draw the economic conclusion that cross-elasticity 

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between domestic and imported fittings was very low because customers do not 

buy imports for waterworks projects with domestic-only specifications. Comm’n 

13-16. Complaint counsel’s expert testified about the economic basis for market 

definition and grounded his analysis on the demonstrated inability of distributors to 

substitute imports when domestically manufactured fittings are required. 

CX2260-A at 15-16. The Commission reasonably relied on that testimony and 

other market-based evidence to draw economic conclusions about market 

definition. Nothing more was required. Antitrust cases turn on “market facts,” not 

merely expert testimony, which is “useful as a guide to interpreting market facts, 

but ... is not a substitute for them.” Brooke Group v. Brown & Williamson 

Tobacco Corp., 509 U.S. 209, 242, 113 S. Ct. 2578 (1993).11

B. McWane Monopolized the Domestic-Only Market

Both before and after Star’s entry, McWane had monopoly power in the 

domestic-only market. McWane does not and cannot seriously dispute that this 

 

11 See also U.S. Anchor, 7 F.3d at 995 (reliance on “practical indicia” appropriate 

for market definition); ABA Section of Antitrust Law, Mergers & Acquisitions 55 

(3d ed. 2008) (“qualitative evidence of a buyer’s willingness to substitute one good 

or service for another often provides the principal evidence of the boundaries of a 

relevant market”). McWane’s citations for the proposition that expert testimony is 

required (Br. 31-34) are inapposite—not only because the Commission did rely on 

expert testimony here, but also because the cited cases involved more complex 

market-definition issues. The cases establish no one-size-fits-all evidentiary 

requirement. 

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conclusion follows once the relevant market is identified as the supply of fittings 

for domestic-only projects. 

Monopoly power is “the power to raise prices to supra-competitive levels” 

or “to exclude competition in the relevant market either by restricting entry of new 

competitors or by driving existing competitors out of the market.” U.S. Anchor, 7 

F.3d at 994 (internal quotation marks omitted). Where, as here, there is direct 

evidence that a firm has profitably raised prices above competitive levels, “the 

existence of monopoly power is clear.” Microsoft, 253 F.3d at 51. Because cases 

with “direct proof” of the exercise of market power are rare, “courts more typically 

examine market structure in search of circumstantial evidence of monopoly 

power.” Id. Consequently, “[t]he principal measure of actual monopoly power is 

market share.” U.S. Anchor, 7 F.3d at 999. 

Here, both direct and indirect evidence confirm McWane’s monopoly 

power. First, McWane had 100% of the domestic-only market for more than three 

years before Star’s first sales in 2009, and its share never fell below { } during 

any relevant period. Comm’n 16. This is a monopoly by any standard. See, e.g., 

Dentsply, 399 F.3d at 188 (market share between 75% and 80% is “more than 

adequate to establish a prima facie case” of monopoly power); Grinnell, 384 U.S. 

at 571 (87% share); American Tobacco Co. v. United States, 328 U.S. 781, 797-98, 

66 S.Ct. 1125 (1946) (over two-thirds share). McWane’s market share is also 

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protected by substantial barriers to entry—another reliable indication of monopoly 

power. See, e.g., Microsoft, 253 F.3d at 54-55. As the Commission found, new 

competitors face numerous hurdles to entering this capital-intensive market. 

Comm’n 17 (citing ALJ pp. 375-77; ALJ ¶¶ 1044-55, 1119-26, 1130-32); see also 

Section II.A, infra (refuting McWane’s argument that Star’s entry was easy or 

successful). 

Second, direct evidence shows that McWane exercised monopoly power by 

controlling prices. Again, McWane commanded much higher prices on fittings for 

projects with domestic-only specifications than on fittings for projects with open 

specifications. Comm’n 18; ALJ ¶¶ 1075-76, 1091. Indeed, during the relevant 

period, McWane increased prices on domestic fittings and refused to negotiate 

prices. Comm’n 18; see also n.14, infra. And as McWane’s expert conceded, 

Star’s entry failed to constrain McWane’s pricing. ALJ ¶ 1090; see Comm’n 18. 

Third, McWane’s profit margins similarly reflect its monopoly power. 

Although domestic fittings cost more to produce than foreign ones, ALJ ¶ 1080, 

McWane also earned higher profits on them. For example, in 2009, McWane 

reported gross profits of { } on fittings for open-specifications projects, while 

its profits on fittings for domestic-only projects were { }, a { }

differential. ALJ ¶ 1091. The next year, after Star’s entry into the domestic-only 

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market, McWane’s gross profits in that market rose to { }, more than 

{ } the new, lower profit margin for nondomestic fittings, { }. Id. 

Fourth, McWane further manifested its monopoly power by exploiting its 

dominance to “restrict[] entry of new competitors.” U.S. Anchor, 7 F.3d at 994 

(internal quotation marks omitted). As discussed below, McWane did not respond 

to Star’s entry by offering customers better prices or other procompetitive inducements. Instead, McWane “unilaterally imposed” its all-or-nothing mandate on 

distributors and told them that, if they dealt with its competitors, they would lose 

access to McWane’s full line of fittings and forfeit their “accrued rebates under 

preexisting rebate agreements.” ALJ p. 407. Only a monopolist would anticipate 

that this uniform one-way edict would make customers more obedient rather than 

less. 

II. MCWANE UNLAWFULLY MAINTAINED ITS MONOPOLY 

McWane’s conduct also satisfies the second element of the two-part test for 

unlawful monopoly maintenance: “the willful acquisition or maintenance of 

[monopoly] power as distinguished from growth or development as a consequence 

of a superior product, business acumen, or historic accident.” Morris, 364 F.3d at 

1294 (quoting Grinnell, 384 U.S. at 570-71). This element “requires predatory or 

exclusionary acts or practices that have the effect of preventing or excluding 

competition within the relevant market.” Id. 

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A monopolist’s conduct is anticompetitive if, “through something other than 

competition on the merits, [it] has the effect of significantly reducing usage of 

rivals’ products and hence protecting [the] ... monopoly.” Microsoft, 253 F.3d at 

65. In particular, as the leading antitrust treatise summarizes, a monopolist’s 

conduct threatens harm to competition if it involves “(a) exclusive dealing or 

similar arrangements covering a significant portion of [distribution]; (b) entry 

barriers or equivalent impediments making it difficult for rivals or potential rivals 

... to obtain efficient access to [distribution]; and (c) resulting prolongation of the 

dominant firm’s ability to earn monopoly profits[.]” XI Areeda & Hovenkamp, 

Antitrust Law ¶1802b at 75-76 (footnote omitted); see also Comm’n 19 (citing 

additional authorities). These formulations exactly describe McWane’s conduct. 

A. McWane Used Exclusivity To Impede Competition 

When Star announced its imminent entry in mid-2009, McWane understood 

that, in its words, “any competitor” seeking to enter the domestic-only market 

would confront “significant blocking issues” if it could not initially produce a “full 

line” of fittings. ALJ ¶ 1155 (quoting CX0067 at 2). McWane thus searched for a 

way to force Star “to absorb the costs associated with having a more full line 

before they can secure major distribution.” ALJ ¶ 1162 (quoting CX0076 at 9). 

McWane wished to “make sure that they don’t reach any critical market mass that 

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will allow them to continue to invest and receive a profitable return.” ALJ ¶ 1150 

(quoting CX0074 at 1). 

The result was the exclusivity mandate at issue here. McWane required 

distributors, with narrow exceptions, to buy all of their domestic fittings from 

McWane as a condition for buying any domestic fittings from McWane. If 

distributors balked, McWane would deny them access to less common fittings that 

were initially available only from McWane. This was a highly effective threat. If 

McWane cut any distributor off from its full line of fittings, it would imperil the 

distributor’s ability to meet its own customers’ needs, and the end-user customers 

could take the entirety of their business to rival distributors, with “devastating” 

consequences for the cut-off distributor. See ALJ ¶ 366. This fear led many 

distributors to accede to McWane’s exclusivity demand. ALJ ¶¶ 1203, 1235, 1252, 

1301, 1316, 1358, 1393. 

McWane implausibly mischaracterizes this exclusivity mandate as a mere 

“rebate program,” e.g., Br. 27, as though it related only to the prices at which 

McWane would sell its goods rather than whether it would sell those goods on any 

terms to distributors who did business with Star. But McWane intended—and 

distributors understood—the exclusivity mandate as a “hard line” policy, under 

which “[v]iolations will result in” not only “loss of [previously] accrued rebates,” 

but also “[l]oss of access” to McWane products altogether. ALJ ¶ 1183 (quoting 

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CX0119 at 2, 4 (McWane document)) (emphasis added). As Mr. Tatman 

emphasized: “To protect our domestic brands and market position ... we won’t 

provide domestic product to distributors who are not fully supporting our domestic 

product lines.” ALJ ¶ 1167 (quoting CX0113). And McWane’s national sales 

manager likewise told his sales force to warn distributors “every day” that “[o]nce 

they use Star, they can’t EVER buy domestic from us[.]” ALJ ¶ 1179 (quoting 

CX0710 at 1-2). In sum, as the ALJ found, “the Full Support Program is not a mere 

rebate from which Distributors can walk away at any time, as argued by [McWane]”; 

instead, “overwhelmingly, Distributors viewed [it] as an all-or-nothing exclusive 

dealing arrangement and acted accordingly.” ALJ pp. 405-06. 

Just as McWane predicted, this exclusivity requirement kept Star from 

reaching “any critical market mass” that would “allow them to continue to invest” 

in becoming a more efficient competitor. ALJ ¶ 1150 (quoting CX0074 at 1). 

Although many distributors would have been willing to buy Star’s domestically 

manufactured fittings, and many solicited bids soon after Star announced it would 

enter the market, few could afford to bet their business on Star’s budding operation 

once McWane threatened to pull its entire domestic-fittings line if they did any 

prohibited business with another supplier. Comm’n 21-25, 29-30. The distributors 

thus cancelled orders from Star and withdrew bid requests. Id. at 10, 23, 25. With 

the exception of Hajoca—which McWane made a cautionary example of 

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disobedience—all major distributors fell in line and generally bought from Star 

only when McWane so permitted under the limited exceptions to its exclusivity 

mandate. Id. at 22-23.12

Star’s relationship with HD Supply exemplifies how McWane’s exclusive 

dealing marginalized Star and relegated it to fringe sales. HD Supply is the 

nation’s largest fittings distributor and accounts for 28% to 35% of fittings 

distribution overall. ALJ ¶¶ 222, 378. According to Star’s undisputed estimates at 

trial, it had { } of HD Supply’s business for fittings in projects with open 

specifications, but less than { } of HD Supply’s business for domestic fittings. 

ALJ ¶ 1258. That lopsided ratio is no accident. One day after McWane announced 

its exclusivity requirement, HD Supply instructed its district, branch, and 

operations managers not to buy from Star, lest the company lose access to all of 

McWane’s fittings. ALJ ¶¶ 1238-41. HD Supply thereafter cancelled pending 

orders it had with Star for domestic fittings. Comm’n 23; ALJ ¶ 1242. McWane’s 

exclusivity announcement likewise caused both the second and third largest 

distributors (Ferguson and WinWholesale) to cancel business that Star otherwise 

 

12 McWane contends that its decision to punish Hajoca “completely backfired” (Br. 

41), but that makes no sense: McWane cut off Hajoca, not the other way around, 

and Hajoca then had no choice but to buy Star’s domestic fittings and risk losing 

access to less-common fittings that only McWane could supply. That Hajoca was 

the only distributor McWane felt the need to cut off (Br. 41 n.114) suggests that 

the example effectively deterred other distributors. 

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would have won, and other major distributors reacted similarly. Comm’n 23-24.13 

Even when Star offered better pricing terms than McWane, distributors remained 

unwilling to buy from Star given “the ‘all-or-nothing domestic fitting policy from 

McWane.’” ALJ ¶ 1391; see Comm’n 10. 

As a result, Star’s share of the domestic-only market never { 

 }, culminating in a { } share for calendar year 2011. That 

figure pales in comparison to Star’s share of the market to supply fittings to 

projects with open specifications, which exceeded { }. See 

p. 14, supra. Moreover, even the { } figure does not fully reflect the 

anticompetitive impact of McWane’s exclusivity mandate as originally imposed: it 

describes Star’s sales volume a full year after the FTC notified McWane of this 

investigation in early 2010 and McWane tempered its enforcement efforts in 

response. See ALJ p. 405; ALJ ¶ 1311. And although McWane extols every sale 

captured by Star, McWane did not need to reduce prices to compete; it raised 

 

13 HD Supply and Ferguson alone handle 53-60% of fittings distribution. Comm’n 

7, 23; ALJ ¶¶ 378-79. Although there is some evidence that Ferguson would have 

favored McWane over Star even without McWane’s exclusivity requirement, that 

requirement “nonetheless cost Star some Ferguson business. A Ferguson Vice 

President called district managers after McWane’s policy was announced to ensure 

that [they] did not buy from Star, and at least one job Ferguson initially awarded to 

Star was canceled.” Comm’n 23. 

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prices and earned higher margins during the relevant period. Br. 25, 53; Comm’n 

18, 29; ALJ pp. 379-81; ALJ ¶¶ 1073, 1083, 1090.14 

McWane’s exclusivity requirement also kept Star from achieving operational efficiencies that would have made it a more effective competitor in the long 

run. Absent that requirement, Star likely would have achieved sales sufficient to 

justify a specific foundry acquisition that it began seriously considering in the early 

fall of 2009.15 Star then could have lowered its marginal costs and competed on 

prices more effectively. But once Star revised its projected sales figures downward 

in light of McWane’s exclusivity mandate, Star concluded that the purchase no 

longer made economic sense. See Comm’n 25; ALJ ¶¶ 1394-1408; see ALJ 

 

14 McWane cites the ALJ’s opinion for the proposition that prices did not rise 

during the relevant period. Br. 57 (citing ALJ ¶ 958). But the cited passage 

discusses evidence relating only to the competitive nondomestic-fittings market. 

See ALJ ¶ 957. The ALJ separately found that McWane did raise prices in the 

domestic-only market. ALJ pp. 380-81. 

15 Star’s sales of domestically manufactured fittings were { } million in 2010. 

Comm’n 25. Star testified without contradiction that, based on refinements of 

earlier estimates, sales of { } were necessary to support the acquisition 

of the foundry. ALJ ¶¶ 1400, 1405. Star further estimated that, absent McWane’s 

exclusivity mandate, it would have had { } in sales of domestic 

fittings in 2010, rising to { } in 2011—figures it based in part on 

quotes distributors made to Star and later withdrew after McWane issued its 

exclusivity mandate. ALJ ¶¶ 1394-95. McWane criticizes Star’s evidence as 

“self-serving” (Br. 47), but that is no basis for impeaching it. McWane could have 

responded with its own evidence; it did not. In any event, as discussed in Section 

II.C.4 below, antitrust law places no burden on the government, for liability 

purposes, “to reconstruct the hypothetical marketplace absent a defendant’s 

anticompetitive conduct.” Microsoft, 253 F.3d at 79. 

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pp. 400, 411. Star thus continued using a less efficient manufacturing process that 

imposed higher logistical costs, relied on jobber foundries, entailed middleman 

markups, and gave Star less control over inventory and production. In short, 

McWane’s exclusivity mandate raised Star’s costs and made it less capable of 

profitably underselling McWane in the domestic-only market. Comm’n 28.16

McWane objects that the harm it did to Star is somehow irrelevant because 

“[t]the antitrust laws are intended to protect competition, not competitors[.]” Br. 

48 (quoting Levine, 72 F.3d at 1551). But it makes no sense to invoke that 

distinction on these facts. “[I]n a concentrated market with very high barriers to 

entry, competition will not exist without competitors,” Spirit Airlines, Inc. v. 

Northwest Airlines, Inc., 431 F.3d 917, 951 (6th Cir. 2005), and Star was 

McWane’s only potential rival. McWane’s exclusivity mandate kept Star from 

achieving the efficiency and scale it needed to discipline McWane’s monopoly 

prices, so McWane went on charging those prices, with accompanying injury to 

consumers. That is classic harm to competition: McWane “denie[d] consumers 

the benefit of the pressure to lower prices that would likely accompany [the 

 

16 McWane contends that the ALJ “f[ou]nd that Star had the resources to purchase 

a foundry ... but simply made a business decision not to make an investment that 

could have improved its efficiency.” Br. 58 (citing ALJ ¶ 1406) (emphasis 

omitted). That is a mischaracterization. The ALJ found only that “Star had the 

financial reserves and borrowing ability” to obtain a foundry, ALJ ¶ 1406, not that 

it would have made business sense to do so after McWane’s exclusivity mandate 

undermined Star’s cost justification for that major capital investment. 

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excluded firm] becoming a viable competitor.” Gulf States Reorganization Group, 

Inc. v. Nucor Corp., 466 F.3d 961, 967-68 (11th Cir. 2006).17 

McWane also repeatedly suggests that its exclusivity mandate was 

ineffective and widely ignored. The Commission’s contrary factual findings are 

correct and, in any event, subject to the deferential substantial-evidence standard. 

See Polypore, 686 F.3d at 1213, 1217. McWane cannot meet the burden imposed 

by that standard. 

First, McWane misrepresents that “the ALJ found” that “McWane had little 

or no ability to dictate terms to the Distributors, who held significant market power 

over it.” Br. 21. The ALJ found no such thing; indeed, he found the opposite. 

E.g., ALJ p. 383 (“Star’s access to Distributors was impeded by McWane’s Full 

Support Program” to the point that it “limited Star’s ability to constrain McWane’s 

monopoly power”). In the passage cited by McWane, the ALJ simply recounted 

Mr. Tatman’s trial testimony that “he believed” his threats to distributors would be 

unavailing because he supposedly thought of McWane, the gatekeeper of essential 

 

17 Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555 (11th Cir. 1991), on 

which McWane relies (Br. 59), is inapposite. The defendant there—not a 

monopolist—had entered into a distribution agreement with one of many 

distributors, and the ensuing arrangement was efficient because the defendant had 

achieved scale economies. The Court rejected an attempt by the defendant’s rivals 

to “free ride” on the defendant’s greater “size and [existing] capital outlays” by 

joining the same distribution arrangement. Id. at 1572. Here, Star never sought to 

“free-ride” on McWane’s operations; it simply wished to avoid anticompetitive 

interference in the development of its own operations. 

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inputs, as “a Chihuahua barking at [a] Rottweiler.” ALJ ¶ 1178. This self-serving 

characterization was also implausible. When McWane issued its exclusivity 

mandate, it was the sole supplier of the full line of fittings for domestic-only 

specifications, including otherwise unavailable fittings, and these distributors 

could disregard that mandate only at their peril—which is why they generally 

acquiesced. See generally Dentsply, 399 F.3d at 195-96 (monopolist supplier can 

induce even large multi-product distributors to cooperate in excluding 

monopolist’s rivals).18

McWane also claims that “dozens and dozens of McWane’s customers did 

in fact purchase domestic fittings from Star,” in supposed disobedience to 

McWane’s exclusivity demand. Br. 21. That mischaracterizes the record: those 

customer purchases were a byproduct of McWane’s limited exception for fittings 

that McWane did not have in stock. The marginal sales that Star made under that 

exception were substantially smaller than the sales Star otherwise could have made 

absent McWane’s exclusivity mandate. See Comm’n 22-24, 29. Again, Star’s 

relationship with HD Supply—which accounted for nearly one-third of fittings 

 

18 McWane implies that the ALJ found that “the FTC’s own expert failed to 

identify a single distributor ... who wanted to purchase Star domestic Fittings but 

could not because of McWane’s rebate policy.” Br. 44-45 (citing ALJ ¶ 375). The 

ALJ made no such finding and, to the contrary, indicated that numerous 

distributors likely would have given Star more business but for McWane’s 

exclusivity mandate. See Statement of Facts, Section A.2, supra (citing findings). 

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distribution—illustrates that effect. Star had { } of HD Supply’s business for 

nondomestic fittings, but less than { } of its business for domestic fittings. ALJ 

¶ 1258. 

Finally, contrary to McWane’s repeated suggestion (Br. 4, 27, 43), Star had 

no exclusive agreements with any distributor. The fact that some distributors who 

bought in small volumes from Star never purchased domestic fittings from McWane 

suggests only that those distributors were insignificant market participants with 

negligible demand for domestically manufactured fittings. 

B. McWane Demonstrates No Procompetitive Justification 

Once the government “demonstrate[s] a harm to competition, the burden 

falls upon [the defendant] to defend its exclusive dealing ... by providing a procompetitive justification[.]” Microsoft, 253 F.3d at 71. McWane demonstrates no 

such justification. 

Although McWane devotes an entire section of its brief to the supposed 

“[p]rocompetitive [e]ffects” of its exclusivity mandate (Br. 54), its argument on 

that point is simply illogical. McWane argues that (1) it was more efficient than 

Star because it owned a foundry, whereas Star made a “business decision” not to 

buy one; (2) Star’s resulting higher cost structure kept it from competing on the 

basis of price; (3) “[c]ompetition is not injured by the ‘exclusion’ of a less 

efficient, higher priced competitor”; and (4) because Star was excluded, 

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“customers could continue to benefit from the lower prices offered by the most 

efficient domestic foundry” (i.e., McWane’s). Br. 54-55, 58. 

This argument ignores McWane’s role in depriving Star of the scale needed 

for efficient operations. Having prevented Star from achieving the sales volume 

needed to justify a foundry investment, McWane may not seek refuge in the very 

fact that its anticompetitive conduct succeeded in making Star less efficient. “The 

fundamental concern with monopoly maintenance is that dominant firms may 

adopt policies that prevent the development of effective competition.” Comm’n 

30. As the D.C. Circuit has explained, “it would be inimical to the purpose of the 

Sherman Act to allow monopolists free reign to squash nascent, albeit unproven, 

competitors” before they can become effective rivals. Microsoft, 253 F.3d at 79; 

accord Dentsply, 399 F.3d at 191. Such “free reign to squash” entrants is precisely 

what McWane seeks here. 

Of course, sales retention—McWane’s proffered justification—“is not an 

unlawful end” for a monopolist to pursue. Microsoft, 253 F.3d at 71. But “neither 

is it a procompetitive justification ... for [anticompetitive] exclusive dealing.” Id.; 

see also id. at 72. As the Commission explained, “[c]ognizable justifications are 

typically those that reduce cost, increase output or improve product quality, 

service, or innovation.” Comm’n 30 (collecting cases). Instead of preserving its 

sales volume by reducing prices, however, McWane simply took sales from Star 

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by increasing Star’s costs and reducing its efficiency. Comm’n 30-31. That is the 

antithesis of pro-competitive conduct, and it is not a cognizable efficiency 

justification. See Horizontal Merger Guidelines § 10 (“Cognizable efficiencies ... 

do not arise from anticompetitive reductions in output or service.”); In re Polygram 

Holding, Inc., 136 F.T.C. 310, 345-46 (2003) (antitrust tribunal may “reject 

proffered justifications ... incompatible with the goal of antitrust law to further 

competition”), aff’d, 416 F.3d 29 (D.C. Cir. 2005); see also Section II.C.1, infra 

(refuting McWane’s reliance on the general observation that exclusive dealing can 

have efficiency benefits, particularly in competitive markets). 

McWane also argues that it had to keep Star from becoming a serious 

competitor lest Star “‘cherrypick’ the core of [the] domestic fittings business by 

making only the top few dozen fittings that account for roughly 80% of all fittings 

sold,” while leaving McWane alone to sell the less common 20% of fittings. 

Br. 16. The premise is that, as a monopolist, McWane uses extra-high profit 

margins on the more common fittings to cross-subsidize its prices (and, presumably, 

somewhat lower profit margins) for the less common fittings. Comm’n 31-32. But 

McWane has never explained how protecting this cross-subsidy scheme could 

qualify as a pro-competitive justification for excluding competition. As the 

Commission observed, “If a limited supplier undersells a full-line supplier for 

more common products, there is no reason in principle why the full-line supplier 

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could not compete for that business by lowering its price for those products and 

increasing its price for the less common products,” and “McWane offers no reason 

why ... consumers are necessarily worse off” under that outcome. Comm’n 32. 

McWane still offers no reason. Indeed, it does not even address, let alone 

challenge, the Commission’s reasoning on this point.19 

Finally, McWane intimates that effective competition by even one rival 

would imperil McWane’s efforts to “keep [its] foundry open (and its workforce 

employed).” Br. 55. Even if this were a pro-competitive justification, which it is 

not, see Comm’n 32, it lacks any factual foundation. McWane cites no record 

evidence that its foundry was in danger of closing. And McWane’s internal 

planning documents likewise voiced no concern that successful entry by Star 

would force McWane to close its foundry. Instead, the documents simply warned 

that, if Star “stay[s] in the business,” McWane’s “distributors will continually 

pressure us to ‘do something’ (lower prices),” and “we will always see downward 

pressure in the future.” ALJ ¶ 1152. Of course, competition-induced “downward 

pressure” in the face of monopoly pricing is the central aim of the antitrust laws, 

 

19 Although the amicus brief filed by McWane’s supporting professors (at 27 n.13) 

speculates in passing about theoretical conditions that might explain a hypothetical 

cross-subsidization strategy, it relies on a string of assumptions that have no basis 

in this record and have never been asserted by McWane. 

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and anticompetitive measures to eliminate such downward pressure are the key evil 

that the antitrust laws target.20

C. McWane’s Legal Arguments Contradict Governing Antitrust 

Precedent Concerning Exclusive Dealing By Monopolists

The Commission broke no new doctrinal ground in holding McWane liable 

for unlawful monopoly maintenance on this record. In contending otherwise, 

McWane props up and knocks down various straw men, implying that the 

Commission resorted to expansive views of antitrust liability at odds with the last 

fifty years of antitrust precedent. But it is McWane, not the Commission, that 

ignores the governing law of exclusive dealing in the monopoly-maintenance 

context. Of the two leading precedents in that area most relevant here, McWane 

cites one of them (Dentsply) only once, and the other (Microsoft) not at all. By 

themselves, Microsoft and Dentsply refute most of the legal arguments that 

McWane presses on appeal. 

 

20 In an amicus brief, the labor union for McWane’s employees suggests, in effect, 

that labor’s interests in industrial stability should outweigh the antitrust laws’ 

emphasis on competition. E.g., United Steelworkers Br. 14. But the antitrust laws 

are not subject to this proposed weighing of policy interests. See, e.g., National 

Soc’y of Prof’l Eng’rs, v. United States, 435 U.S. 679, 689, 695, 95 S.Ct. 1355 

(1978) (“the statutory policy precludes inquiry into the question whether competition is good or bad” and forecloses any argument that “monopolistic arrangements 

will better promote” social welfare “because of the special characteristics of a 

particular industry”). In any event, any concern for employment seems misplaced 

here. By definition, domestic fittings production will always require U.S.-based 

workers, whether employed by McWane, Star, or some other entrant. 

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1. Monopolists Are Subject To Stricter Limits On Exclusivity Than 

Non-Monopolists 

In both Microsoft and Dentsply, the courts condemned exclusive-dealing 

strategies by monopolists even though, in each case, the strategy marginalized the 

monopolist’s rivals rather than excluding them altogether. See Microsoft, 253 F.3d 

at 64; Dentsply, 399 F.3d at 191. As the courts explained, exclusive dealing has a 

“significant effect in preserving [a] monopoly” if it keeps competitors “below the 

critical level necessary ... to pose a real threat” to the monopoly. Microsoft, 253 

F.3d at 71. Similarly, exclusive dealing can harm competition by “slow[ing] the 

rival’s expansion by requiring it to ... rely at least temporarily on inferior or more 

expensive outlets.” Dentsply, 399 F.3d at 191.21 In such circumstances, 

“[c]onsumer injury results from the delay that the dominant firm imposes on the 

smaller rival’s growth.” Id. (quoting XI Areeda & Hovenkamp, Antitrust Law

¶1802c, at 64 (2d ed. 2002)). 

Dentsply and Microsoft likewise undermine McWane’s reliance, in this 

monopoly context, on arguments concerning the general efficiency benefits of 

exclusive dealing. It is undisputed that exclusive dealing can have procompetitive 

benefits, particularly in non-monopoly markets. See Comm’n 18. Also, exclusive 

 

21 Although McWane dismisses Dentsply on the ground that “the competitors 

[there] held ‘minuscule’ market shares” (Br. 46), their collective market share was 

in fact greater than Star’s ever became, and the Dentsply defendant’s market share 

(67% to 80%) was much lower than McWane’s. See 399 F.3d at 184. 

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dealing generally presents limited potential for harm in competitive markets 

because “the loss of a single rival or constraints on its expansion may have little 

impact if there is sufficient continued competition by other rivals that prevents the 

excluding firm from gaining the power to raise or maintain supra-competitive 

prices.”22 

In contrast, exclusivity requirements trigger special antitrust concerns in 

monopoly markets where a monopolist imposes them to hobble new rivals and 

thereby maintain its monopoly. See Salop, Pozen & Seward at 40. As the 

Dentsply court explained, “[b]ehavior that otherwise might comply with antitrust 

law may be impermissibly exclusionary when practiced by a monopolist.” 399 

F.3d at 187 (internal quotation marks omitted). “[A] monopolist is not free to take 

certain actions that a company in a competitive (or even oligopolistic) market may 

take, because there is no market constraint on a monopolist’s behavior.” Id.; 

accord ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 271 (3d Cir. 2012);

Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 488, 112 S. Ct. 

2072 (1992) (Scalia, J., dissenting on other grounds) (“Behavior that might 

otherwise not be of concern to the antitrust laws—or that might be viewed as 

 

22 See Steven C. Salop, Sharis A. Pozen, and John R. Seward, The Appropriate 

Legal Standard and Sufficient Economic Evidence for Exclusive Dealing Under 

Section 2: the FTC’s McWane Case, at 40, http://ssrn.com/abstract=2477448 (Geo. 

L. Ctr. 2014) (“Salop, Pozen & Seward”). 

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procompetitive—can take on exclusionary connotations when practiced by a 

monopolist.”). The Microsoft court further noted that exclusive dealing by a 

monopolist “may give rise to a § 2 violation even though the contracts foreclose 

less than the roughly 40% or 50% share usually required in order to establish a § 1 

violation” for agreements between non-monopolists. Microsoft, 253 F.3d at 70.

Tellingly, the key exclusive-dealing decisions on which McWane relies are 

inapposite because—unlike Microsoft, Dentsply, and this case—they involved 

defendants that lacked monopoly power. For example, McWane asserts (Br. 51) 

that the Commission’s decision here conflicts with its prior decision in In re 

Beltone, 100 F.T.C. 68 (1982). Beltone, however, was not a monopoly-maintenance 

case; indeed, the respondent’s market share during the period at issue dropped 

from 21% to 16%, entry was “not especially difficult,” manufacturers had “many 

outlets,” and there was “vigorous” competition from foreign manufacturers. Id. at 

185, 211. McWane’s other cases—e.g., Omega Environmental, Inc. v. Gilbarco, 

Inc., 127 F.3d 1157 (9thCir. 1997), and Roland Machinery Co. v. Dresser 

Industries, 749 F.2d 380 (7th Cir. 1984)—likewise did not involve monopoly 

maintenance. Omega and Roland are also inapposite because the defendants’ 

rivals did not need independent distributors to reach customers. See Omega, 127 

F.3d at 1163 (“direct sales to end-users” were “an alternative” to distributors); 

Roland, 749 F.2d at 395 (rival supplier could “establish its own dealership” and 

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bypass existing distribution channels). Here, distributors are essential; 

manufacturers cannot effectively sell directly to end users. Comm’n 22-23. 

In short, McWane violated the antitrust laws not simply because it engaged 

in exclusive dealing, and not simply because it harmed a rival. It violated the 

antitrust laws because it was a monopolist that harmed its only rival by unilaterally 

imposing an exclusivity requirement that diminished competition and perpetuated 

McWane’s monopoly power with no countervailing efficiency justification. 

2. Anticompetitive Exclusivity Does Not Require Formal Long-Term 

Contracts 

Well-established precedent similarly undermines McWane’s argument (Br. 

40) that its exclusivity mandate “lacked the hallmarks of impermissible exclusive 

dealing” found by antitrust courts, such as long-term contractual obligations that 

bind the defendant’s customers. All four Commissioners (including Commissioner 

Wright at 28 n.38) rejected McWane’s arguments on this point, and for good 

reason. As the Dentsply court explained, non-contractual exclusivity mandates can 

constitute unlawful monopoly maintenance if, as here, “the economic elements 

involved” in the monopolist-distributor relationship “make the arrangements ... as 

effective as those in written contracts.” Dentsply, 399 F.3d at 193; accord ZF 

Meritor, 696 F.3d at 270 (“de facto exclusive dealing claims are cognizable under 

the antitrust laws”); see also Lorain Journal Co. v. United States, 342 U.S. 143, 

149-50, 72 S.Ct. 181 (1951) (unilateral conduct of indefinite duration by a 

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monopolist with a “practically indispensable” service “forced numerous [customers] 

to refrain from” dealing with a rival). 

Indeed, McWane’s unilateral threat to deprive any errant distributor of 

access to its products was more anticompetitive than conventional exclusive 

contracts. In such contracts, a company typically competes for exclusivity for a 

defined period in exchange for some pro-competitive inducement that moves 

prices closer to cost. McWane cites various cases for the proposition that such 

“competition to become an exclusive supplier should actually be encouraged, as it 

can result in lower prices[.]” Br. 39 n.111 (internal citation, emphasis, and 

quotation marks omitted). But that proposition is irrelevant here because McWane 

“unilaterally imposed” its exclusivity mandate, engaged in “no competition to 

become the exclusive supplier,” and offered no “additional discount, rebate or 

other considerations” in exchange for exclusivity. ALJ p. 407. Indeed, McWane 

threatened to revoke benefits under existing rebate agreements with any distributor 

who bought from another supplier. Id. In short, this exclusivity program came 

without any benefits for McWane’s customers; it was simply a threat to line up 

with McWane in opposition to Star. 

There is likewise no merit to McWane’s assertion that its exclusive dealing 

mandate was “easily terminable by [a] distributor at any time.” Br. 40. A 

distributor could not opt out of (let alone “terminate”) that unilateral mandate, 

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other than by ceasing to do business with McWane—the very sanction that 

McWane used to enforce the program. Thereafter, the distributor could not do 

business with McWane again unless, implausibly, it stopped buying domestically 

manufactured fittings from any other source—i.e., stopped buying them 

altogether—for another “12 weeks.” ALJ ¶ 1173. As McWane’s national sales 

manager aptly remarked, when instructing his sales force how to describe this 

policy to distributors, “[o]nce [distributors] use Star, they can’t EVER buy 

domestic from us[.]” ALJ ¶ 1179 (quoting CX0710 at 1-2). In short, the 

Commission reasonably concluded that “the practical effect of [McWane’s 

mandate] was to make it economically infeasible for distributors to drop 

McWane’s full line of domestic fittings and switch to Star.” Comm’n 24. That 

finding was correct, and it easily withstands substantial-evidence review. 

Finally, contrary to its suggestion (Br. 40), McWane never placed any time 

horizon on its exclusivity mandate (let alone “four months”), and it never withdrew 

that mandate. Indeed, some distributors testified that they believed it was still in 

effect at the time of trial. Comm’n 39-40. McWane does appear to have begun 

enforcing that mandate less rigidly in early 2010, once it learned that the 

Commission had begun this investigation. See ALJ p. 405; ALJ ¶¶ 1220, 1311. 

But McWane cannot plausibly cite the promptness of that antitrust intervention as 

a basis for claiming that its exclusive-dealing mandate was short-term in nature. 

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McWane required exclusivity and thereby impeded competition “for as long as 

McWane desired.” Comm’n 24. It warrants an antitrust remedy no less today 

because prompt antitrust intervention mitigated some of the intended harm. 

3. A Monopolist Can Be Liable For Impeding A New Entrant’s 

Growth Even If The Entrant Makes Some Sales 

In a similar vein, McWane suggests that it could not possibly have violated 

the antitrust laws because Star managed to win some business after starting from a 

market share of zero in mid-2009. Br. 42. As Microsoft and Dentsply make clear, 

however, a monopolist’s anticompetitive exclusion of a new rival violates Section 2 

even if the rival is not “completely blocked from distributing its products.” 

Microsoft, 253 F.3d at 64. “The test is not total foreclosure, but whether the challenged practices bar a substantial number of rivals or severely restrict the market’s 

ambit.” Dentsply, 399 F.3d at 191; accord ZF Meritor, 696 F.3d at 271. Courts 

have likewise found monopolists liable for anticompetitive conduct even where the 

disadvantaged entrant gained some market share during the relevant period, but 

less than it likely would have gained absent the conduct. E.g., Conwood Co. v. 

U.S. Tobacco Co., 290 F.3d 768, 789-90 (6th Cir. 2002). Courts reject the contrary 

position taken by McWane here because a monopolist can harm competition and 

consumer welfare by implementing “‘strategically planned exclusive-dealing’” 

measures that do not altogether exclude a rival from the market but “‘slow the 

rival’s expansion,’” producing “‘[c]onsumer injury [that] results from the delay 

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that the dominant firm imposes on the smaller rival’s growth.’” Dentsply, 399 

F.3d at 191 (quoting XI Areeda & Hovenkamp, Antitrust Law ¶1802c, at 76); see 

also Salop, Pozen & Seward at 13 (courts properly find liability where “the entrant 

remains viable but with limited output”).23 

McWane’s reliance on Star’s ability to “double” its market share between 

2010 and 2011—but still not { }—is particularly 

untenable given the timing of antitrust intervention. Again, the FTC notified 

McWane in January 2010 that it had opened an investigation into whether 

McWane’s exclusivity requirement violated the antitrust laws. McWane promptly 

considered “[h]ow our potential FTC action might [a]ffect how we do business” 

with distributors that purchased from Star—i.e., whether to soften enforcement of 

the exclusivity mandate to avoid antitrust liability. See ALJ p. 405. McWane did 

soften its approach immediately thereafter by resuming some previously discontinued business with Hajoca. ALJ ¶¶ 1221-23. And some other distributors 

 

23 McWane relies for its contrary proposition on Judge Posner’s 1984 opinion in 

Roland, see Br. 42, but that case is inapposite. The defendant was not a monopolist and was not accused of excluding new rivals. Indeed, the only rival supplier 

in the picture was “four times” larger than the defendant in sales of the relevant 

product, had ample alternative distribution channels, and—tellingly—“[wa]s not 

even a party to th[e] case.” 749 F.2d at 394-95. As Judge Posner’s own antitrust 

scholarship confirms, exclusivity mandates imposed by monopolists to exclude 

new rivals pose much more serious antitrust concerns. Richard A. Posner, 

Antitrust Law 229 (2d ed. 2001) (exclusive dealing may “increase the scale 

necessary for new entry” and “increase the time required for entry and hence the 

opportunity for monopoly pricing”). 

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(though by no means all) thereafter concluded that, “given the announced FTC 

investigation,” the “risk” of rigid enforcement of the exclusivity mandate was 

“significantly less.” ALJ ¶ 1311 (quoting distributor). Against that backdrop, the 

fact that Star’s domestic-fittings share rose from { } in 2010 to { } in 

2011, see ALJ ¶¶ 356-57, is more reasonably viewed as evidence that early 

antitrust intervention mitigated the full anticompetitive force of McWane’s 

exclusivity mandate than as evidence that the mandate was ineffectual as originally 

implemented. Cf. United States v. General Dynamics Corp., 415 U.S. 486, 504-05, 

94 S. Ct. 1186 (1974) (actions taken to improve antitrust defendant’s litigating 

position have “extremely limited” probative value). 

4. Antitrust Law Does Not Require The Government To Prove How 

New Competitors Would Have Developed Absent Anticompetitive 

Conduct 

As discussed in Section II.A, the Commission found strong evidence that 

McWane’s industry-wide exclusivity mandate worked just as McWane expected: 

it kept Star from “reach[ing] any critical market mass that w[ould] allow them to 

continue to invest and receive a profitable return.” ALJ ¶ 1150 (quoting CX0074 

at 1); see Comm’n 22-29. The Commission’s resolution of that evidentiary 

question was correct and, in any event, certainly supported by “substantial 

evidence.” Echoing the dissent, however, McWane argues that complaint counsel 

needed to prove with greater certainty exactly how much business Star would have 

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won in the absence of McWane’s exclusivity requirement and exactly how Star 

would then have improved its operational efficiency to challenge McWane’s 

monopoly power. See Br. 57-58 (criticizing the Commission for speculating about 

“what might have happened” had McWane not targeted Star).24 But complaint 

counsel had no such burden of proof, and McWane’s contrary assumption runs 

headlong into the D.C. Circuit’s unanimous en banc decision in Microsoft. 

In Microsoft, the D.C. Circuit rejected the proposition—essentially repeated 

here by McWane—“that, as to § 2 liability in an equitable enforcement action, 

plaintiffs must present direct proof that a defendant’s continued monopoly power is 

precisely attributable to its anticompetitive conduct.” Microsoft, 253 F.3d at 79 

(emphasis in original).25 The court explained: 

To require that § 2 liability turn on a plaintiff’s ability or inability to reconstruct the hypothetical marketplace absent a defendant’s anticompetitive 

conduct would only encourage monopolists to take more and earlier anti-

 

24 In one passage (Br. 47-50), McWane suggests that, so long as an entrant wins 

some business despite anticompetitive conduct, antitrust liability cannot rest even 

conceptually on “growth that would have occurred.” That proposition is wrong, as 

discussed in Section II.C.3, and the cases McWane cites do not support it. See 

Levine, 72 F.3d at 1550 (no liability because the plaintiff had not shown that the 

defendants possessed even market power, let alone monopoly power); Sterling 

Merch., Inc. v. Nestle, S.A., 656 F.3d 112, 122-23 & n.5 (1st Cir. 2011) (Clayton 

Act plaintiff lacked standing to challenge a merger because its theory of injury 

rested on an incorrectly conceived but-for world—“one without any exclusive 

agreements,” even “efficient and pro-competitive” ones). 

25 “[C]oncerns over causation have more purchase in connection with the appropriate remedy issue,” Microsoft, 253 F.3d at 80, such as where a private plaintiff 

seeks to establish damages. 

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competitive actions. ... [N]either plaintiffs nor the court can confidently 

reconstruct a product’s hypothetical ... development in a world absent the 

defendant’s exclusionary conduct. To some degree, ‘the defendant is made 

to suffer the uncertain consequences of its own undesirable conduct.’” 

Id. (emphasis added) (quoting III Areeda & Hovenkamp, Antitrust Law ¶651c, at 

78 (2d ed. 1996)). Thus, relying on the leading antitrust treatise, the D.C. Circuit 

identified the relevant inquiry as whether “a defendant has engaged in anticompetitive 

conduct that ‘reasonably appear[s] capable of making a significant contribution to 

maintaining monopoly power.’” Id. (quoting III Areeda & Hovenkamp, Antitrust 

Law ¶651c, at 78)(internal ellipsis omitted); accord Realcomp II, Ltd. v. FTC, 635 

F.3d 815, 830 (6th Cir. 2011); see also FTC v. Actavis, Inc., 133 S.Ct. 2223, 2236 

(2013) (firms may be liable for collusive conduct that merely “seeks to prevent the 

risk of competition,” even absent proof about how competition would have emerged 

but for that conduct) (emphasis added). 

 McWane’s conduct easily meets what the D.C. Circuit accepted as antitrust 

law’s “rather edentulous test for causation” for purposes of establishing Section 2 

liability. Microsoft, 253 F.3d at 79. As McWane’s internal documents confirm, 

the company viewed Star as a long-term threat to its profits in the domestic-only 

market, and it thus sought to tie up distributors to keep Star from “reach[ing] any 

critical market mass that w[ould] allow them to continue to invest and receive a 

profitable return,” because otherwise distributors “will continually pressure us to 

‘do something’ (lower prices).” ALJ ¶¶ 1149-54 (quoting internal McWane 

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documents). That strategy succeeded. The ensuing harm to competition was no 

“daisy chain of unsupported inferences,” as McWane suggests (Br. 49); it was the 

explicitly intended consequence of McWane’s strategy. See Microsoft, 253 F.3d at 

59 (“‘knowledge of intent may help the court to interpret facts and to predict 

consequences’”) (quoting Chicago Bd. of Trade v. United States, 246 U.S. 231, 

238, 38 S.Ct. 242 (1918)). In short, McWane’s conduct qualifies as 

“anticompetitive conduct that ‘reasonably appear[s] capable of making a 

significant contribution to maintaining monopoly power.’” Microsoft, 253 F.3d at 

79 (quoting III Areeda & Hovenkamp, Antitrust Law ¶651c, at 78). 

Microsoft’s holding likewise refutes the chief argument raised in the dissent 

below and repeated here in the amicus brief of McWane’s academic supporters—

that complaint counsel fell short in proving that “the Full Support Program actually 

increased prices and reduced output relative to what they would have been had ... 

McWane not implemented the Full Support Program.” Dissent 35. The dissent 

reasoned that, even though McWane’s exclusivity mandate did cause Star to lose 

substantial sales (Dissent 4), those lost sales might or might not have made any 

difference to Star’s ability to achieve “minimum efficient scale” (MES)—the scale 

necessary to minimize long-run average costs. Dissent 24-25 & 11 n.15. The 

dissent concluded that complaint counsel’s failure to prove that McWane would 

have reached MES in the absence of McWane’s conduct was “fatal to Complaint 

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Counsel’s case.” Id. at 31-32. But that position would impose on complaint 

counsel a burden that, as the Microsoft court held, no antitrust plaintiff need bear: 

the burden to “reconstruct the hypothetical marketplace absent a defendant’s 

anticompetitive conduct.” Microsoft, 253 F.3d at 79. 

Moreover, even if complaint counsel were required to shoulder that burden, 

the Commission majority properly concluded that the relevant question would be 

whether, absent McWane’s exclusionary conduct, Star could have more effectively 

disciplined McWane’s monopoly prices—not whether Star would have achieved 

MES in particular. Comm’n 27-28. The dissent’s focus on MES in this context 

has elicited criticism from, among others, Professor Steven Salop, who originated 

the analytical framework on which the dissent relied. Cf. Dissent 10-12, 34 n.41, 

38 n.45 (relying extensively on Prof. Salop’s “raising rivals’ costs” framework). 

As Professor Salop explains in a recent article, a new entrant in a monopolistic 

market can promote consumer welfare by disciplining the monopolist’s prices even 

if the entrant has not reached MES, and a monopolist’s measures to raise the 

entrant’s costs can reduce price competition and harm consumer welfare whether 

or not the entrant has reached or would otherwise reach MES. See Salop, Pozen & 

Seward at 28-31. The majority’s conclusion in this case thus “follows the modern 

approach to exclusive dealing with respect to both the economics and the law,” 

whereas the dissent’s proposed “limitations on the economic theories of exclusion 

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are not supported by modern economic analysis and [would] serve only to weaken 

antitrust enforcement.” Id. at 3, 23. 

In any event, this Court need not reach that abstract economic dispute. First, 

the MES dispute would arise only if complaint counsel had to prove exactly what 

efficiencies the entrant would have achieved but for the monopolist’s conduct. 

Microsoft confirms that complaint counsel bears no such burden. Second, 

McWane itself preserves no argument on appeal concerning MES; indeed, the term 

“minimum efficient scale” appears nowhere in McWane’s brief. For that matter, 

McWane’s brief affirmatively rejects the dissent’s MES logic. As discussed, 

McWane repeatedly asserts that Star’s decision “to contract fittings from six 

different [third-party] foundries,” rather than acquiring its own “dedicated fittings 

foundr[y],” “was very inefficient.” Br. 24. McWane explicitly endorses the ALJ’s 

finding that “‘[w]ithout its own foundry, Star’s costs were higher, and therefore its 

prices were higher,’ which ‘hindered Star’s ability to compete effectively.’” Id. at 

52-53 (quoting ALJ p. 411); see also id. at 29. That argument contradicts the 

dissent’s central premise that “an independent foundry [was] not necessary to 

achieving MES.” Dissent 31-32. 

Granted, after repeatedly attributing Star’s inefficiency to its decision not to 

buy a foundry, McWane does briefly contradict itself by musing, like the dissent, 

that “owning a foundry is not required to obtain viable scale or compete 

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effectively.” Br. 53-54. McWane notes that Star and Sigma “successfully grew 

their import fittings businesses” through a “virtual manufacturing” model “without 

owning a foundry anywhere in the world[.]” Br. 54 (emphasis added). But that 

argument makes no sense, as the Commission found. Comm’n 27 n.14. Import 

fittings are made in various foundries abroad and benefit from the efficiencies of 

low-cost, high-volume production. See ALJ ¶ 1077. Star and Sigma share in those 

efficiencies when they import such fittings. But an entrant cannot efficiently 

compete with McWane for domestic fittings production until it dispenses with 

inefficient reliance on generic U.S. “jobber” foundries and, like McWane, obtains 

the scale needed to cost-justify acquisition of a U.S.-based dedicated fittings 

foundry. Comm’n 27 n.14. McWane does not address, let alone challenge, the 

Commission’s factual conclusion on that point. 

In sum, McWane’s exclusivity mandate qualifies as “anticompetitive 

conduct that ‘reasonably appear[ed] capable of making a significant contribution to 

maintaining monopoly power.’” Microsoft, 253 F.3d at 79. That is more than 

sufficient to support the Commission’s liability finding and injunctive relief. 

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CONCLUSION 

The petition for review should be denied. 

August 29, 2014 

Respectfully submitted, 

 

Jonathan E. Nuechterlein 

 General Counsel 

William E. Cohen 

 Deputy General Counsel 

Joel Marcus 

 Assistant General Counsel 

s/Theodore (Jack) Metzler 

Theodore (Jack) Metzler 

 Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 

tmetzler@ftc.gov 

Of Counsel: 

Geoffrey M. Green 

 Attorney 

Linda Holleran Kopp 

 Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

Counsel for the Federal Trade Commission 

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13913‐R

CERTIFICATE OF COMPLIANCE 

 I, Theodore (Jack) Metzler, certify that the foregoing complies with the typevolume limitation of Federal Rule of Appellate Procedure 32(a)(7)(B) in that it 

contains 13,913 words. 

August 29, 2014 s/Theodore (Jack) Metzler 

Theodore (Jack) Metzler 

 Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 

tmetzler@ftc.gov 

 

Case: 14-11363 Date Filed: 08/29/2014 Page: 72 of 73 
13913‐R

CERTIFICATE OF SERVICE 

 I certify that I filed the foregoing with the Court’s Appellate CM-ECF 

System on this date, and that I caused the foregoing to be served through the CMECF system on counsel of record for Petitioner, who are registered ECF users. 

August 29, 2014 s/Theodore (Jack) Metzler 

Theodore (Jack) Metzler 

 Attorney 

Federal Trade Commission 

600 Pennsylvania Ave. N.W. 

Washington, D.C. 20580 

(202) 326-3502 

(202) 326-2477 (fax) 

tmetzler@ftc.gov 

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