Full Commission of the FTC Overrules FTC Administrative Law Judge, Largely Dismissing An Action Against McWane


On February 6, 2014, the Federal Trade Commission (FTC) dismissed the majority of its claims against McWane, Inc., the leading domestic supplier of ductile iron pipe fittings used in water distribution systems in the United States. In its 2012 complaint, the FTC alleged seven counts of unfair competition under Section 5 of the FTC Act. Three counts alleged collusive conduct between McWane and its two primary competitors — Star Pipe Products Ltd. and Sigma Corp — to fix prices and improperly exchange information through an industry association. The remaining four counts charged McWane with acting unlawfully to maintain its monopoly in the domestic fittings market, alleging both exclusionary conduct and unfair restraint of trade.

Unlike the Antitrust Division of the Department of Justice (DOJ), which brings antitrust suits in federal court, the FTC typically litigates in its administrative court before an FTC Administrative Law Judge (“ALJ”). The ALJ tries the case and issues an initial opinion that, if appealed, is reviewed by the full Commission, which currently consists of four Commissioners, as one position is vacant. Defendants can then appeal the full Commission’s final decision to a federal circuit court.

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