Court Opinion

ID: 2970529
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:15:31.205374+00
Date Added: 2024-06-11T11:43:30.468498
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
            3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

    (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6
              )257+(6,;7+&,5&8,7
                BBBBBBBBBBBBBBBBB

 81,7(' 67$7(6 2) $0(5,&$    ;
          3ODLQWLII$SSHOOHH  
                               
                                     1RV
            Y                       
                                !
                               
 s26(3+ s(686 /23(=            
 0$57,1 628=$       
                     
       'HIHQGDQWV$SSHOODQWV 1

      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
       IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ
     1RnsDPHV6*ZLQ'LVWULFWsXGJH
               $UJXHGsDQXDU\
          'HFLGHGDQG)LOHG2FWREHU
%HIRUH68+5+(,15,&+6,/(5DQG%$7&+(/'(5
                 &LUFXLWsXGJHV
                  BBBBBBBBBBBBBBBBB
                       &2816(/
$5*8('  5LFKDUG $ &OLQH 0,7&+(// $//(1
&$7$/$12	%2'$&ROXPEXV2KLR5REHUW$5DWOLII
52%(576 6+,(/'6 *5((1 /$1'5< 	 5$7/,))

                            
     8QLWHG6WDWHVY/RSH]HWDO    1RV

0RELOH $ODEDPD IRU $SSHOODQWV  %ODV ( 6HUUDQR
$66,67$1781,7('67$7(6$77251(<&OHYHODQG
2KLR IRU $SSHOOHH  21 %5,()  5LFKDUG $ &OLQH
0,7&+(//$//(1&$7$/$12	%2'$&ROXPEXV
2KLR 5REHUW $ 5DWOLII 52%(576 6+,(/'6 *5((1
/$1'5<	5$7/,))0RELOH$ODEDPDIRU$SSHOODQWV
%ODV ( 6HUUDQR $66,67$17 81,7(' 67$7(6
$77251(<&OHYHODQG2KLRIRU$SSHOOHH
                     BBBBBBBBBBBBBBBBB
                         23,1,21
                     BBBBBBBBBBBBBBBBB
   6,/(5&LUFXLWsXGJH'HIHQGDQWVsRVHSKsHVXV/RSH]DQG
0DUWLQ6RX]DDSSHDOWKHLUFRQYLFWLRQVDQGVHQWHQFHVDULVLQJ
RXWRIDFRQVSLUDF\WRGLVWULEXWHFRFDLQH%RWK/RSH]DQG
6RX]D DVVHUW WKDW WKHLU VHQWHQFHV YLRODWH $SSUHQGL Y 1HZ
sHUVH\86EHFDXVHWKHTXDQWLW\RIFRFDLQH
LQYROYHG LQ WKH FRQVSLUDF\ ZDV QHLWKHU DOOHJHG LQ WKH
LQGLFWPHQW QRU VXEPLWWHG WR WKH MXU\  ,Q DGGLWLRQ /RSH]
DSSHDOVWKHGLVWULFWFRXUWjVGHQLDORIKLVPRWLRQWRVHYHUDQG
LWVGHWHUPLQDWLRQRIWKHDPRXQWRIFRFDLQHDWWULEXWDEOHWRKLP
$V VHW IRUWK EHORZ ZH $)),50 WKH FRQYLFWLRQV DQG
VHQWHQFHVIRUERWK/RSH]DQG6RXVD
                      %$&.*5281'
  ,Q/RSH]DQG6RX]DZHUHLQGLFWHGRQIHGHUDOGUXJ
FKDUJHV  &RXQW  FKDUJHG ERWK /RSH] DQG 6RX]D ZLWK
FRQVSLULQJWRGLVWULEXWHFRFDLQHDQGWRSRVVHVVFRFDLQHZLWK
LQWHQWWRGLVWULEXWHLQYLRODWLRQRI86&&RXQW
FKDUJHG/RSH]ZLWKGLVWULEXWLQJDSSUR[LPDWHO\WHQNLORJUDPV
RIFRFDLQHLQYLRODWLRQRI86&D
  'XULQJWKHWULDO5RJHU:LOOLDPVDQLQPDWHDWWKH6XPPLW
&RXQW\ sDLO WHVWLILHG WKDW 6RX]D WDONHG DERXW WKH FKDUJHV
SHQGLQJDJDLQVWKLPZKLOHWKH\ZHUHLQMDLOWRJHWKHU6RX]D
WROG:LOOLDPVWKDWKHZDVFKDUJHGZLWKWUDQVSRUWLQJWR
 NLORJUDPV RI FRFDLQH IURP /RV $QJHOHV WR &OHYHODQG
6RX]DVDLGWKDWWRZDVmWKHULJKWEDOOSDUNILJXUHlEXW
    8QLWHG6WDWHVY/RSH]HWDO   1RV        1RV            8QLWHG6WDWHVY/RSH]HWDO            

RIFRFDLQH'XUDQ%DQQHUWHVWLILHGWKDWKHUHFHLYHGDWRWDORI      FODLPHGWKDWKHmZDVMXVWKDQGOLQJWKHPRQH\lDQGmGLGQjW
DW OHDVW WKLUW\ NLORJUDPV IURP /RSH]  )XUWKHU WHVWLPRQ\    NQRZKRZWKH\FRXOGLQGLFWKLPRQWKDWl
HVWDEOLVKHG WKDW LQ 2FWREHU  /DVWHU UHFHLYHG WHQ
NLORJUDPVRIFRFDLQHIURP/RSH]ZKLFKKHWXUQHGRYHUWR              7KHMXU\UHWXUQHGYHUGLFWVILQGLQJERWKGHIHQGDQWVJXLOW\RI
JRYHUQPHQW DJHQWV  %DVHG RQ WKLV WHVWLPRQ\ WKH GLVWULFW   WKH FRQVSLUDF\ FRXQW DQG /RSH] JXLOW\ RI WKH GLVWULEXWLRQ
FRXUWjVIDFWXDOILQGLQJVDWWULEXWLQJLQH[FHVVRINLORJUDPV     FRXQW  ,W PDGH QR ILQGLQJV DV WR WKH TXDQWLW\ RI FRFDLQH
RIFRFDLQHWR/RSH]ZHUHQRWFOHDUO\HUURQHRXV                    LQYROYHGLQHLWKHUFKDUJH
  $)),50('                                                           $WVHQWHQFLQJWKHGLVWULFWFRXUWIRXQGE\DSUHSRQGHUDQFH
                                                                    RIWKHHYLGHQFHWKDWDQDPRXQWLQH[FHVVRINLORJUDPVRI
                                                                    FRFDLQH ZDV DWWULEXWDEOH WR HDFK GHIHQGDQW  :LWK D WRWDO
                                                                    RIIHQVH OHYHO RI  DQG D FULPLQDO KLVWRU\ FDWHJRU\ RI ,,
                                                                    /RSH]jV JXLGHOLQHV UDQJH ZDV  PRQWKV WR OLIH
                                                                    LPSULVRQPHQW  7KH GLVWULFW FRXUW VHQWHQFHG KLP WR 
                                                                    PRQWKVj LPSULVRQPHQW RQ &RXQWV  DQG  WR EH VHUYHG
                                                                    FRQFXUUHQWO\'XHWRWKHDPRXQWRIFRFDLQHLQYROYHGDQGKLV
                                                                    WZRSULRUIHORQ\GUXJFRQYLFWLRQV6RX]DZDVVHQWHQFHGWRD
                                                                    PDQGDWRU\WHUPRIOLIHLPSULVRQPHQWSXUVXDQWWR86&
                                                                    E$
                                                                                                ',6&866,21
                                                                    $ $SSUHQGL&KDOOHQJHV
                                                                       %RWK/RSH]DQG6RX]DDVVHUWWKDWEHFDXVHWKHTXDQWLW\RI
                                                                    FRFDLQH LQYROYHG LQ WKH FRFDLQH FRQVSLUDF\ ZDV QHLWKHU
                                                                    DOOHJHG LQ WKH LQGLFWPHQW QRU VXEPLWWHG WR WKH MXU\ WKHLU
                                                                    VHQWHQFHV PXVW EH YDFDWHG SXUVXDQW WR $SSUHQGL   ,Q
                                                                    $SSUHQGLWKH6XSUHPH&RXUWKHOGWKDWm>R@WKHUWKDQWKHIDFW
                                                                    RIDSULRUFRQYLFWLRQDQ\IDFWWKDWLQFUHDVHVWKHSHQDOW\IRUD
                                                                    FULPH EH\RQG WKH SUHVFULEHG VWDWXWRU\ PD[LPXP PXVW EH
                                                                    VXEPLWWHGWRDMXU\DQGSURYHGEH\RQGDUHDVRQDEOHGRXEWl
                                                                    $SSUHQGL86DW

                                                                        
                                                                          &RXQW  DOOHJHG WKDW /RSH] GLVWULEXWHG DSSUR[LPDWHO\ WHQ NLORJUDPV
                                                                    RI FRFDLQH KRZHYHU WKH GLVWULFW FRXUW LQVWUXFWHG WKH MXU\ WKDW WKH HYLGHQFH
                                                                    mQHHG QRW HVWDEOLVK WKDW WKH DPRXQW RU TXDQWLW\ RI FRFDLQH ZDV DV DOOHJHG
                                                                    LQl &RXQW    &RXQW  GLG QRW DOOHJH D VSHFLILF DPRXQW RI FRFDLQH
     8QLWHG6WDWHVY/RSH]HWDO      1RV         1RV        8QLWHG6WDWHVY/RSH]HWDO       

   7KH JRYHUQPHQW FRQWHQGV WKDW GHIHQGDQWVj $SSUHQGL               WR UHSUHVHQW KLPVHOI  /RSH] DVVHUWV WKDW LQ 6RX]DjV FURVV
FKDOOHQJHVPXVWEHUHYLHZHGIRUSODLQHUURUEHFDXVHWKH\GLG            H[DPLQDWLRQRIZLWQHVVHV6RX]DDWWHPSWHGWRWHVWLI\DVWRKLV
QRW UHTXHVW DQ LQVWUXFWLRQ UHTXLULQJ WKH MXU\ WR GHWHUPLQH      LQQRFHQFH DQG WKH ZURQJV SHUSHWUDWHG DJDLQVW KLP E\
ZKHWKHUWKHRIIHQVHLQYROYHGDVSHFLILFRUWKUHVKROGTXDQWLW\           JRYHUQPHQW DJHQWV  6RX]DjV TXHVWLRQLQJ ZDV IUHTXHQWO\
RIGUXJV$OWKRXJK/RSH]DQG6RX]DGLGQRWUHTXHVWVXFKDQ             LQWHUUXSWHGE\REMHFWLRQVIURPWKHJRYHUQPHQWGLVUXSWLQJWKH
LQVWUXFWLRQWKH\ILOHGZULWWHQREMHFWLRQVWRWKHGUXJTXDQWLW\         IORZ RI WKH WULDO  'XULQJ /RSH]jV FURVVH[DPLQDWLRQ RI
UHFRPPHQGHGE\WKHLUSUHVHQWHQFHLQYHVWLJDWLRQUHSRUWVDQG              9LFWRULD :HEVWHU 6RX]D LQWHUUXSWHG WR UHTXHVW KHDGDFKH
PDGH RUDO REMHFWLRQV WR WKH GUXJ TXDQWLW\ GHWHUPLQDWLRQ DW      PHGLFDWLRQ$OWKRXJK6RX]DjVVHOIUHSUHVHQWDWLRQPD\KDYH
WKHLUVHQWHQFLQJKHDULQJV:HIRUPHUO\KHOGWKDWDGHIHQGDQW           GLVUXSWHGWKHIORZRIWKHSURFHHGLQJV/RSH]IDLOVWRVKRZ
DGHTXDWHO\SUHVHUYHGKLV$SSUHQGLFKDOOHQJHE\REMHFWLQJWR             KRZ 6RX]DjV VHOIUHSUHVHQWDWLRQ VSHFLILFDOO\ DIIHFWHG KLP
WKH GUXJ TXDQWLW\ GHWHUPLQDWLRQ  6HH 8QLWHG 6WDWHV Y          $FFRUGLQJO\KHKDVQRWGHPRQVWUDWHGSODLQHUURU
6WUD\KRUQ)GWK&LUm>:@HEHOLHYH
WKHUHFRUGPDNHVSODLQWKDW6WUD\KRUQSUHVHUYHGKLVFKDOOHQJH           & 'UXJ4XDQWLW\
E\UHSHDWHGO\REMHFWLQJWRWKHGUXJTXDQWLW\GHWHUPLQDWLRQDW
KLVSOHDKHDULQJDQGDWKLVVHQWHQFLQJKHDULQJDVZHOODVLQD            /RSH]FRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQDWWULEXWLQJLQ
ZULWWHQREMHFWLRQWRWKHFDOFXODWLRQRIKLVEDVHRIIHQVHOHYHO          H[FHVVRINLORJUDPVRIFRFDLQHWRKLPDVVHUWLQJWKDWWKH
LQKLVSUHVHQWHQFHUHSRUW$OWKRXJKKHGLGQRWXWWHUWKHZRUGV         FRUUHFW DPRXQW RI FRFDLQH UHOLDEO\ DWWULEXWDEOH WR KLP ZDV
µGXH SURFHVVj DW HLWKHU RI WKHVH KHDULQJV KH PDGH LW ZHOO    NLORJUDPV:HUHYLHZIRUFOHDUHUURUWKHGLVWULFWFRXUWjV
NQRZQ WKDW KH GLVSXWHG WKH GLVWULFW FRXUWjV IDFWXDO ILQGLQJ     ILQGLQJVRIIDFWUHJDUGLQJWKHDPRXQWRIFRFDLQHIRUZKLFKD
ZLWK UHVSHFW WR GUXJ TXDQWLW\l VHH DOVR 8QLWHG 6WDWHV Y    GHIHQGDQWLVWREHKHOGDFFRXQWDEOH8QLWHG6WDWHVY:DOWRQ
+XPSKUH\  )G   WK &LU  m7KH               )GWK&LU7KHGLVWULFWFRXUWjV
SUHVHUYDWLRQRIDFRQVWLWXWLRQDOREMHFWLRQVKRXOGQRWUHVWRQ           ILQGLQJV PXVW EH VXSSRUWHG E\ D SUHSRQGHUDQFH RI WKH
PDJLFZRUGVLWVXIILFHVWKDWWKHGLVWULFWFRXUWEHDSSULVHGRI         HYLGHQFH8QLWHG6WDWHVY%DUR)GWK&LU
WKHREMHFWLRQDQGRIIHUHGDQRSSRUWXQLW\WRFRUUHFWLWl             :KHUHWKHDPRXQWLVXQFHUWDLQWKHGLVWULFWFRXUWLVWR
                                                                        mHUU RQ WKH VLGH RI FDXWLRQl DQG RQO\ KROG WKH GHIHQGDQW
   6LQFH WKH WLPH WKLV FDVH ZDV DUJXHG WZR VLJQLILFDQW         UHVSRQVLEOH IRU WKDW TXDQWLW\ RI GUXJV IRU ZKLFK mWKH
GHFLVLRQV8QLWHG6WDWHVY&RWWRQ6&W           GHIHQGDQW LV PRUH OLNHO\ WKDQ QRW DFWXDOO\ UHVSRQVLEOHl
DQG8QLWHG6WDWHVY6WHZDUW:/WK&LU                :DOWRQ)GDW
6HSWKDYHH[SODLQHGWKHODZDVDSSOLHGWRWKHVH
GHIHQGDQWV,Q6WHZDUWZHKHOGWKDWDQ$SSUHQGLFKDOOHQJH                7KH WHVWLPRQ\ DW WULDO HVWDEOLVKHG WKDW /RSH] EHJDQ WR
ZLOO EH UHYLHZHG IRU SODLQ HUURU ZKHUH DOWKRXJK WKH            VXSSO\FRFDLQHWR'RQDOG/DVWHULQ1RYHPEHU2QWKH
GHIHQGDQWV REMHFWHG LQ WKH GLVWULFW FRXUW WR WKH TXDQWLW\ RI   ILUVWWZRRFFDVLRQV/DVWHUUHFHLYHGILYHNLORJUDPVRIFRFDLQH
GUXJVDWWULEXWHGWRWKHPIRUVHQWHQFLQJWKH\IDLOHGWRUDLVHLQ        7KHUHDIWHU/DVWHUUHFHLYHGWHQNLORJUDPVKLSPHQWVRIFRFDLQH
WKHGLVWULFWFRXUWREMHFWLRQVEDVHGRQ$SSUHQGLRUsRQHVY             IURP/RSH]5REHUW0DUVKDOOWHVWLILHGWKDWKHPDGHEHWZHHQ
8QLWHG6WDWHV86:HGLVWLQJXLVKHGWKH               WHQ DQG WZHOYH  WULSV WR WUDQVSRUW FRFDLQH IURP /RSH] WR
VLWXDWLRQ LQ 6WHZDUW IURP 6WUD\KRUQ RQ WKH JURXQGV WKDW         /DVWHUDQG9LFWRULD:HEVWHUWHVWLILHGWKDWVKHPDGHEHWZHHQ
QHLWKHU sRQHV QRU $SSUHQGL KDG EHHQ GHFLGHG ZKHQ WKH            WHQ DQG WZHQW\ WULSV  $ FRQVHUYDWLYH FRXQW RI WKH FRFDLQH
6WUD\KRUQGHIHQGDQWVZHUHWULHGDQGVHQWHQFHG2QWKHRWKHU            WUDQVSRUWHGE\0DUVKDOODQG:HEVWHULVNLORJUDPV,Q
KDQGWKH6WHZDUWGHIHQGDQWVZHUHVHQWHQFHGDIWHUsRQHVZDV             DGGLWLRQ0DUNsHIIHUVRQWHVWLILHGWKDWKHWUDYHOHGZLWK/RSH]
GHFLGHGEXWEHIRUH$SSUHQGLZDVGHFLGHG:HKHOGWKDWWKRVH            IURP&KLFDJRWR&LQFLQQDWLDQG&ROXPEXVZLWKWHQNLORJUDPV
     8QLWHG6WDWHVY/RSH]HWDO   1RV        1RV         8QLWHG6WDWHVY/RSH]HWDO         

DVHULRXVULVNWKDWDMRLQWWULDOZRXOGFRPSURPLVHDVSHFLILF       6WHZDUWGHIHQGDQWVZKRKDGVXEPLWWHGZULWWHQREMHFWLRQVWR
WULDOULJKWRIRQHRIWKHGHIHQGDQWVRUSUHYHQWWKHMXU\IURP      WKHTXDQWLWLHVRIGUXJVDWWULEXWHGWRWKHPIRUVHQWHQFLQJEXW
PDNLQJDUHOLDEOHMXGJPHQWDERXWJXLOWRULQQRFHQFHl=DILUR       KDGQRWFKDOOHQJHGWKHFRQVWLWXWLRQDOLW\RIWKHGLVWULFWFRXUWjV
Y8QLWHG6WDWHV86m7KHIDFWWKDWD       ILQGLQJ WKH TXDQWLW\ RI GUXJV E\ D SUHSRQGHUDQFH RI WKH
GHIHQGDQWPD\KDYHDEHWWHUFKDQFHDWDFTXLWWDO LIKLVWULDO       HYLGHQFHKDGIRUIHLWHGWKHULJKWWRDFRQVWLWXWLRQDOFKDOOHQJH
ZHUHVHYHUHGGRHVQRWUHTXLUHWKHMXGJHWRJUDQWKLVPRWLRQ        EDVHG RQ sRQHV RU $SSUHQGL  6HH 6WHZDUW  :/
WKH GHIHQGDQW PXVW VKRZ µVXEVWDQWLDOj µXQGXHj RU            DW

6LPLODUO\WKHGHIHQGDQWVLQWKLVFDVH
µFRPSHOOLQJjSUHMXGLFHl8QLWHG6WDWHVY'H)UDQFR)G        ZHUH VHQWHQFHG DIWHU WKH GHFLVLRQ LQ sRQHV EXW EHIRUH WKH
WK&LU                                      GHFLVLRQLQ$SSUHQGL7KHUHIRUHZHUHYLHZXQGHUWKHSODLQ
                                                                    HUURUVWDQGDUG
  /RSH]DUJXHVWKDWKHZDVSUHMXGLFHGE\WKHDGPLVVLRQRI
5RJHU :LOOLDPVjV WHVWLPRQ\ ZKLFK ZRXOG QRW KDYH EHHQ           $VVXPLQJWKDWWKHHUURUXQGHU$SSUHQGLZDVSODLQWKHFRXUW
DGPLVVLEOH DJDLQVW /RSH] LQ D VHSDUDWH WULDO  :LOOLDPV     PXVW WKHQ GHWHUPLQH ZKHWKHU WKH HUURU HIIHFWHG VXEVWDQWLDO
WHVWLILHGWKDWKHVSHQWWLPHLQMDLOZLWK6RX]DDQGWKDW6RX]D      ULJKWV&RWWRQ6&WDW0RUHRYHULIWKHHUURUGLG
WROG KLP DERXW KLV LQYROYHPHQW LQ WKH FRFDLQH FRQVSLUDF\   DIIHFW VXEVWDQWLDO ULJKWV LI LW mGLG QRW VHULRXVO\ DIIHFW WKH
/RSH] DUJXHV WKDW RWKHU WKDQ WKH WHVWLPRQ\ RI JRYHUQPHQW    IDLUQHVV LQWHJULW\ RU SXEOLF UHSXWDWLRQ RI MXGLFLDO
DJHQWV:LOOLDPVjVWHVWLPRQ\ZDVWKHRQO\GLUHFWWHVWLPRQ\DV       SURFHHGLQJVl WKHQ LW GRHV QRW FDOO IRU D UHYHUVDO RI WKH
WRWKHJXLOWRIHLWKHUGHIHQGDQWWKDWGLGQRWFRPHIURPVRPH        VHQWHQFH,G
RWKHUPHPEHURIWKHDOOHJHGFRQVSLUDF\VHHNLQJWRPLQLPL]H
KLV RU KHU FXOSDELOLW\ RU VHQWHQFH  /RSH] DVVHUWV WKDW      /LNHWKHGHIHQGDQWVLQ6WHZDUW/RSH]DQG6RXVDREMHFWHG
:LOOLDPVjVWHVWLPRQ\ZDVKLJKO\GDPDJLQJWR6RX]DjVFDVH            WR WKH VSHFLILF TXDQWLWLHV RI GUXJV  EXW GLG QRW UDLVH DQ\
DQGKDGDVSLOORYHUHIIHFWRQ/RSH]jVFDVHLPSO\LQJ/RSH]jV        FRQVWLWXWLRQDODUJXPHQWV7KHUHIRUHWKHLU$SSUHQGLFODLPV
JXLOWE\DVVRFLDWLRQ                                             ZHUHIRUIHLWHG,QWKHFDVHRI/RSH]WKHHUURUGLGQRWDIIHFW
                                                                    KLV VXEVWDQWLDO ULJKWV EHFDXVH KH FRXOG KDYH UHFHLYHG D
   :LOOLDPVGLGQRWPHQWLRQ/RSH]jVQDPHRUKLVLQYROYHPHQW         VHQWHQFH RI  PRQWKV EDVHG XSRQ FRQVHFXWLYH WHUPV DV
LQWKHFRQVSLUDF\6HH8QLWHG6WDWHVY*DOOR)G      H[SODLQHGKHUHDIWHU
 WK &LU  m0HUHO\ EHFDXVH LQIODPPDWRU\
HYLGHQFH LV DGPLWWHG DJDLQVW RQH GHIHQGDQW QRW GLUHFWO\          /RSH]
LQYROYLQJDQRWKHUFRGHIHQGDQWGRHVQRWLQDQGRILWVHOI
VKRZ VXEVWDQWLDO SUHMXGLFH LQ WKH ODWWHUjV WULDOl             %DVHGLQSDUWRQLWVILQGLQJWKDW/RSH]ZDVUHVSRQVLEOHIRU
)XUWKHUPRUHDVSLOORYHURIHYLGHQFHIURPRQHFDVHWRDQRWKHU       LQ H[FHVV RI  NLORJUDPV RI FRFDLQH WKH GLVWULFW FRXUW
JHQHUDOO\GRHVQRWUHTXLUHVHYHUDQFH$QGHUVRQ)GDW         VHQWHQFHG KLP WR D WHUP RI  PRQWKVj LPSULVRQPHQW RQ
/RSH]IDLOVWRGHPRQVWUDWHmVXEVWDQWLDOlmXQGXHlRU        &RXQWVDQG  WR EHVHUYHGFRQFXUUHQWO\:LWKRXWDMXU\
mFRPSHOOLQJlSUHMXGLFHGXHWRWKHDGPLVVLRQRI:LOOLDPVjV           ILQGLQJEH\RQGDUHDVRQDEOHGRXEWWKDWKLVRIIHQVHVLQYROYHG
WHVWLPRQ\                                                          WKHPLQLPXPDPRXQWVRIFRFDLQHUHTXLUHGE\E$
                                                                    DQGE%/RSH]VKRXOGKDYHEHHQVHQWHQFHGXQGHU
  ,QDGGLWLRQ/RSH]DUJXHVWKDWKHZDVSUHMXGLFHGEHFDXVH          E&ZKLFKVHWVIRUWKWKHSHQDOWLHVIRURIIHQVHVWKDW
6RX]DUHSUHVHQWHGKLPVHOIDWWULDO$FFRUGLQJWR/RSH]WKH        GRQRWVSHFLI\DTXDQWLW\RIGUXJVLQYROYHG6HH8QLWHG6WDWHV
GLVWULFWFRXUWZDVDZDUHRI6RX]DjVPHQWDOFRQGLWLRQKDYLQJ        Y5DPLUH])GWK&LU7KHPD[LPXP
RUGHUHGDSV\FKLDWULFHYDOXDWLRQRI6RX]D\HWDOORZHG6RX]D        SHQDOW\ XQGHU  E& LV WZHQW\ \HDUV  /RSH]jV
      8QLWHG6WDWHVY/RSH]HWDO     1RV          1RV         8QLWHG6WDWHVY/RSH]HWDO        

VHQWHQFHRIPRQWKVH[FHHGVWKHWZHQW\\HDUPD[LPXP                   FRPELQHG VWDWXWRU\ PD[LPXP RI IRUW\ \HDUV  7KHUHIRUH
SHQDOW\XQGHUE&DQGWKXVYLRODWHV$SSUHQGL                 /RSH]ZDVQRWSUHMXGLFHGE\WKH$SSUHQGLYLRODWLRQDQGWKH
                                                                         HUURUZDVKDUPOHVV6HH)HG5&ULP3Dm$Q\HUURU
  7KH $SSUHQGL YLRODWLRQ KRZHYHU FRQVWLWXWHV KDUPOHVV             GHIHFW LUUHJXODULW\ RU YDULDQFH ZKLFK GRHV QRW DIIHFW
HUURU,Q8QLWHG6WDWHVY3DJH)GWK&LU          VXEVWDQWLDOULJKWVVKDOOEHGLVUHJDUGHGl
WKHGHIHQGDQWVZHUHFRQYLFWHGQRWRQO\RIFRQVSLUDF\EXWDOVR
RIRQHRUPRUHFRXQWVRIGLVWULEXWLRQDQGRUSRVVHVVLRQZLWK                  6RX]D
LQWHQW WR GLVWULEXWH HDFK RI ZKLFK FDUULHV D VWDWXWRU\
PD[LPXPSHQDOW\RIWZHQW\\HDUVXQGHUE&7KH                  'XHWRWKHDPRXQWRIFRFDLQHLQYROYHGDQGKLVWZRSULRU
FRXUWVWDWHGWKDW                                                       IHORQ\GUXJFRQYLFWLRQVWKHGLVWULFWFRXUWVHQWHQFHG6RX]DWR
                                                                         DPDQGDWRU\WHUPRIOLIHLPSULVRQPHQWSXUVXDQWWR86&
    WKH WRWDO VWDWXWRU\ PD[LPXP LV GUDPDWLFDOO\ LQFUHDVHG           E$  7KHUHIRUH WKH $SSUHQGL HUURU GLG DIIHFW
    GHSHQGLQJ RQ WKH QXPEHU RI FRXQWV RI ZKLFK HDFK              6RXVDjVVXEVWDQWLDOULJKWV1HYHUWKHOHVVOLNHWKHGHIHQGDQWLQ
    GHIHQGDQWZDVFRQYLFWHG7KHJRYHUQPHQWDUJXHVWKDW                 &RWWRQ WKH HUURU KHUH GLG QRW VHULRXVO\ DIIHFW WKH IDLUQHVV
    WKHUH ZRXOG EH QR FKDQJH LQ GHIHQGDQWVj VHQWHQFHV LI         LQWHJULW\RUSXEOLFUHSXWDWLRQRIMXGLFLDOSURFHHGLQJV7KH
    UHPDQGHG IRU UHVHQWHQFLQJ  5DWKHU WKDQ UXQQLQJ WKH           VWDWXWH XQGHU ZKLFK KH ZDV VHQWHQFHG  86&
    VHQWHQFHVFRQFXUUHQWO\WKH6HQWHQFLQJ*XLGHOLQHVZRXOG              E$JRYHUQVRIIHQVHVLQYROYLQJILYHNLORJUDPVRU
    UHTXLUHWKDWWKHVHQWHQFHLPSRVHGRQRQHRUPRUHRIWKH              PRUHRIFRFDLQH7KHHYLGHQFHDJDLQVWKLPZLWKUHJDUGWR
    VXEVWDQWLYHFRXQWVUXQFRQVHFXWLYHWRWKHVHQWHQFHRQWKH            GUXJ TXDQWLW\ ZDV RYHUZKHOPLQJ DQG DW OHDVW DV WR WHQ
    FRQVSLUDF\FRXQWWRWKHH[WHQWQHFHVVDU\WRSURGXFHD               NLORJUDPVRIFRFDLQHXQFRQWHVWHG$WWKHVHQWHQFLQJKHDULQJ
    FRPELQHGVHQWHQFHHTXDOWRWKHWRWDOSXQLVKPHQW                    KLVFRXQVHODUJXHGWKDWWKHTXDQWLW\ZLWKZKLFK6RXVDKDG
                                                                         EHHQLQYROYHGZDVVXEVWDQWLDOO\OHVVWKDQWKHWRWDOLQFOXGHGLQ
3DJH)GDWVHHDOVR866**Gm,IWKH                 WKHFRQVSLUDF\DQGWKDWWKHTXDQWLW\DWWULEXWDEOHWR6RXVDZDV
VHQWHQFHLPSRVHGRQWKHFRXQWFDUU\LQJWKHKLJKHVWVWDWXWRU\             mRQO\DERXWWHQNLORJUDPVl7KHUHIRUHKLVVHQWHQFHZLOOEH
PD[LPXPLVOHVVWKDQWKHWRWDOSXQLVKPHQWWKHQWKHVHQWHQFH             DIILUPHGXQGHUWKHDXWKRULW\RI&RWWRQ
LPSRVHG RQ RQH RU PRUH RI WKH RWKHU FRXQWV VKDOO UXQ
FRQVHFXWLYHO\EXWRQO\WRWKHH[WHQWQHFHVVDU\WRSURGXFHD             % 0RWLRQWR6HYHU
FRPELQHG VHQWHQFH HTXDO WR WKH WRWDO SXQLVKPHQWl
5HYLHZLQJIRUSODLQHUURUWKHFRXUWIRXQGWKDWWKHGHIHQGDQWV             /RSH]DOVRDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJKLV
mZHUHQRWSUHMXGLFHGDQGWKDWWKHIDLUQHVVRIWKHSURFHHGLQJV            SUHWULDO PRWLRQ WR VHYHU KLV WULDO IURP 6RX]DjV WULDO  7KH
ZDV QRW DIIHFWHG E\ WKH HUURU VLQFH DEVHQW WKH HUURU WKHLU   GHQLDO RI D PRWLRQ WR VHYHU LV UHYLHZHG IRU DEXVH RI
VHQWHQFHV ZRXOG KDYH EHHQ WKH VDPH DV WKRVH ZKLFK ZHUH          GLVFUHWLRQ8QLWHG6WDWHVY$QGHUVRQ)G
LPSRVHGl3DJH)GDW                                       WK&LU6LQFH/RSH]IDLOHGWRUHQHZKLVPRWLRQWR
                                                                         VHYHUDWWKHFORVHRIHYLGHQFHZHFDQUHYHUVHRQO\XSRQD
  /LNHWKHGHIHQGDQWVLQ3DJH/RSH]ZDVFRQYLFWHGRIRQH                VKRZLQJRISODLQHUURU,G
FRXQWRIFRQVSLUDF\DVZHOODVRQHFRXQWRIGLVWULEXWLRQ,I
/RSH] ZHUH UHVHQWHQFHG SURSHUO\ LQ OLJKW RI $SSUHQGL WKH           $VDJHQHUDOUXOHSHUVRQVMRLQWO\LQGLFWHGVKRXOGEHWULHG
VHQWHQFHV IRU HDFK FRXQW ERWK RI ZKLFK FDUU\ D VWDWXWRU\       WRJHWKHUEHFDXVHmWKHUHLVDOPRVWDOZD\VFRPPRQHYLGHQFH
PD[LPXP RI WZHQW\ \HDUV ZRXOG UXQ FRQVHFXWLYHO\ XQWLO            DJDLQVWWKHMRLQHGGHIHQGDQWVWKDWDOORZVIRUWKHHFRQRP\RI
UHDFKLQJPRQWKVPRQWKVRQWKHFRQVSLUDF\FRXQW                  DVLQJOHWULDOl8QLWHG6WDWHVY3KLEEV)G
DQG  PRQWKV RQ WKH GLVWULEXWLRQ FRXQW ZLWKLQ WKH            WK&LU6HYHUDQFHVKRXOGEHJUDQWHGmRQO\LIWKHUHLV