Court Opinion

ID: 2970623
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:17:54.986137+00
Date Added: 2024-06-11T11:43:30.879713
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                    
                                    !
                                   
 '$9,' (8*(1( 5,&.(776             
 '21$/' /((             
 6:$&.+$00(5            
         'HIHQGDQWV$SSHOODQWV 
                                   
                                  1
        $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
   IRUWKH:HVWHUQ'LVWULFWRI0LFKLJDQDW*UDQG5DSLGV
    1Rn5LFKDUG$(QVOHQ'LVWULFWsXGJH
                $UJXHG2FWREHU
           'HFLGHGDQG)LOHGsDQXDU\
  %HIRUH0$57,1&KLHI&LUFXLWsXGJH1(/621DQG
              *,/0$1&LUFXLWsXGJHV
                   BBBBBBBBBBBBBBBBB
                        &2816(/
$5*8('  &KULVWRSKHU 3 <DWHV )('(5$/ 38%/,&
'()(1'(562)),&(*UDQG5DSLGV0LFKLJDQ0DUWLQs
%HUHV6W&ODLU6KRUHV0LFKLJDQIRU$SSHOODQWVsRKQ&
%UXKD$66,67$1781,7('67$7(6$77251(<*UDQG

                             
    8QLWHG6WDWHVY5LFNHWWVHWDO     1RV

5DSLGV0LFKLJDQIRU$SSHOOHH21%5,()&KULVWRSKHU3
<DWHV)('(5$/38%/,&'()(1'(562)),&(*UDQG
5DSLGV 0LFKLJDQ 0DUWLQ s %HUHV 6W &ODLU 6KRUHV
0LFKLJDQ IRU $SSHOODQWV  sRKQ & %UXKD $66,67$17
81,7('67$7(6$77251(<*UDQG5DSLGV0LFKLJDQ
IRU$SSHOOHH
                    BBBBBBBBBBBBBBBBB
                        23,1,21
                    BBBBBBBBBBBBBBBBB
  %2<&( ) 0$57,1 s5 &KLHI &LUFXLW sXGJH
'HIHQGDQWV 'DYLG 5LFNHWWV DQG 'RQDOG 6ZDFNKDPPHU
FKDOOHQJHWKHLUFRQYLFWLRQVJURZLQJRXWRIDGUXJFRQVSLUDF\
LQYROYLQJDPXUGHUZLWKDILUHDUP7KRXJKWKH\ZHUHWULHG
LQGHSHQGHQWO\DQGDWVHSDUDWHWLPHVWKHFOHUNRIFRXUWMRLQHG
WKHLUDSSHDOVWRJHWKHU2QDSSHDO5LFNHWWVDQG6ZDFNKDPPHU
UDLVHEHWZHHQWKHPVHYHUDOLVVXHVIRUUHYLHZUDQJLQJIURP
WKHFRQVWLWXWLRQDOLW\RI86&FWRWKHDGPLVVLRQRI
HYLGHQFH)RUWKHUHDVRQVWKDWIROORZZHDIILUPWKHGLVWULFW
FRXUW
  2QWKHHYHQLQJRI$SULO'DYLG5LFNHWWV'RQDOG
6ZDFNKDPPHUDQG0LFKDHO0F.LQQH\GURYHWRDGXSOH[QHDU
GRZQWRZQ *UDQG 5DSLGV WR FROOHFW PRQH\ IRU GUXJV
SUHYLRXVO\VROG:KLOHWKHPRQH\LQYROYHGZDVUHODWLYHO\
LQVLJQLILFDQW0F.LQQH\DQG6ZDFNKDPPHUEURXJKWVDZHG
RIIVKRWJXQV$V'DYLG5LFNHWWVZDLWHGRXWVLGHLQWKHYDQ
0F.LQQH\ DQG 6ZDFNKDPPHU HQWHUHG DQ DSDUWPHQW ZKHUH
WKH\ IRXQG 'DYLG %URFN DQG /DXULH %ULJJV  $FFRUGLQJ WR
0F.LQQH\jVWHVWLPRQ\6ZDFNKDPPHUILUVWDVNHG%URFNIRU
WKH PRQH\  2Q %URFNjV IDLOLQJ WR SURGXFH WKH PRQH\
6ZDFNKDPPHU LPPHGLDWHO\ EHJDQ VKRRWLQJ :KHQ
6ZDFNKDPPHUEHJDQILULQJKLVVKRWJXQ0F.LQQH\IOHG$V
KH UDQ KH KHDUG /DXULH %ULJJV VFUHDPLQJ DQG WKHQ PRUH
VKRWV%URFNVXUYLYHGWKHVKRRWLQJEXW/DXULH%ULJJVGLHG
$OOWKHVKRWVILUHGZHUHIURP6ZDFNKDPPHUjVVKRWJXQ
  ,Q1RYHPEHURIDIHGHUDOJUDQGMXU\UHWXUQHGDILYH
FRXQWLQGLFWPHQWDJDLQVW5LFNHWWVDQG6ZDFNKDPPHU7KH
1RV         8QLWHG6WDWHVY5LFNHWWVHWDO      

GHIHQGDQWVZHUHFKDUJHGZLWKFRQVSLULQJWRGLVWULEXWHYDULRXV
FRQWUROOHGVXEVWDQFHVLQYLRODWLRQRI86&DQG
DWKHXVHRIDVDZHGRIIVKRWJXQLQUHODWLRQWRDGUXJ
FRQVSLUDF\LQYLRODWLRQRI86&FWKHPXUGHURI
/DXULH %ULJJV LQ FRQQHFWLRQ ZLWK D GUXJ FRQVSLUDF\ LQ
YLRODWLRQRI86&L>QRZFRGLILHGDVM@DQG
SRVVHVVLRQRIVDZHGRIIVKRWJXQVLQYLRODWLRQRI86&
 G  7KH\ ZHUH DOVR FKDUJHG ZLWK EHLQJ IHORQV LQ
SRVVHVVLRQRIILUHDUPVLQYLRODWLRQRI86&J
   $IWHUWZRVHSDUDWHWULDOVLQYROYLQJPXOWLSOHZLWQHVVHVHDFK
MXU\ IRXQG 6ZDFNKDPPHU DQG 5LFNHWWV JXLOW\ RQ DOO ILYH
FRXQWV7KHWULDOFRXUWVHQWHQFHG5LFNHWWVWRWZRFRQVHFXWLYH
OLIHWHUPVSOXVWHQ\HDUVDORQJZLWKWZRFRQFXUUHQWWHQ\HDU
VHQWHQFHV  6ZDFNKDPPHU ZDV VXEVHTXHQWO\ VHQWHQFHG WR
IRUW\ \HDUV IRU FRXQW RQH WHQ \HDUV IRU FRXQW WZR D
FRQVHFXWLYH VHQWHQFH RI OLIH LQ SULVRQ RQ FRXQW WKUHH DQG
FRQFXUUHQWWHUPVRIWHQ\HDUVHDFKRQFRXQWVIRXUDQGILYH
   2QDSSHDO6ZDFNKDPPHUDQG5LFNHWWVUDLVHVHYHUDOLVVXHV
IRUUHYLHZ)LUVWWKH\MRLQWO\DUJXHWKDWFRXQWVWZRDQGWKUHH
GRQRWVXEVWDQWLDOO\DIIHFWLQWHUVWDWHFRPPHUFHDQGWKXVIDOO
RXWVLGHWKH&RPPHUFH&ODXVH6HH8QLWHG6WDWHVY/RSH]
866HHDOVR8QLWHG6WDWHVY0RUULVRQ
86    5HO\LQJ RQ WKH UHFHQW 6XSUHPH &RXUW
RSLQLRQV RI 8QLWHG 6WDWHV Y /RSH] DQG 8QLWHG 6WDWHV Y
0RUULVRQWKH\DUJXHWKDWXVHRIDILUHDUPDQGFRPPLWWLQJD
ILUHDUP PXUGHU LQ FRQQHFWLRQ ZLWK D GUXJ FRQVSLUDF\
YLRODWLRQV RI  86&  F 	 L RQO\ DIIHFW
LQWUDVWDWHFRPPHUFH7KHUHIRUHWKH\FRQWHQGWKDWWKHVHDFWV
IDOORXWVLGHWKH&RPPHUFH&ODXVHRIWKH&RQVWLWXWLRQ%RWK
DGPLW KRZHYHU WKDW WKH XQGHUO\LQJ FULPH RI D GUXJ
FRQVSLUDF\GRHVVXEVWDQWLDOO\DIIHFWLQWHUVWDWHFRPPHUFH7KH
XVHRIDILUHDUPDQGWKHFRPPLVVLRQRIDILUHDUPPXUGHULQD
GUXJFRQVSLUDF\DUHQRWIUHHVWDQGLQJVWDWXWHVEXWDUHWLHGWR
WKHXQGHUO\LQJGUXJFRQVSLUDF\RIIHQVHZKLFKXQTXHVWLRQLQJO\
VXEVWDQWLDOO\DIIHFWVLQWHUVWDWHFRPPHUFH
 )XUWKHUPRUH6ZDFNKDPPHUjV DQG5LFNHWWVjVDFWLRQVDUH
PDUNHGO\GLIIHUHQWIURPWKRVHLQ/RSH]DQG0RUULVRQ0HUH
     8QLWHG6WDWHVY5LFNHWWVHWDO       1RV         1RV         8QLWHG6WDWHVY5LFNHWWVHWDO     

SRVVHVVLRQRIDJXQLQDVFKRRO]RQHRUFRPPLWWLQJDJHQGHU            FRQFOXVLRQRIKLVWULDO5LFNHWWVDVNHGWKHFRXUWWRDGPLWLQWR
PRWLYDWHGFULPHRIYLROHQFHDUHVXEVWDQWLDOO\GLIIHUHQWIURP            HYLGHQFH D FHUWLILHG FRS\ RI WKH GRFNHW VKHHW IURP %HQQLH
DILUHDUPPXUGHULQDGUXJFRQVSLUDF\RUSRVVHVVLQJDJXQLQ            5LFKjVFDVH5LFNHWWVZDQWHGWRHVWDEOLVKWKHGDWH5LFKZDV
DGUXJFRQVSLUDF\6HH/RSH]86DW8QLWHG              FKDUJHG KLV ILUVW DSSHDUDQFH LQ FRXUW WKH WLPH RI WKH
6WDWHVY0RUULVRQ86DW:HEHOLHYHWKDW            LQGLFWPHQWDQGWKDW5LFKZDVLQFXVWRG\DZDLWLQJWULDODWWKH
86&FIDOOVVTXDUHO\ZLWKLQ&RQJUHVVj&RPPHUFH                WLPHRIWKHVKRRWLQJ7KHGLVWULFWFRXUWUHDVRQHGWKDWWKHUH
3RZHU6HH8QLWHG6WDWHVY1JX\HQ)GWK                ZDV QR UHODWLRQVKLS EHWZHHQ WKHVH IDFWV DQG WKH HYLGHQFH
&LUVHHDOVR8QLWHG6WDWHVY&UXPS)G              DOUHDG\KHDUGLQWKHFRXUWURRP7KHRQO\HYLGHQFHKHDUGLQ
WK&LU8QLWHG6WDWHVY:DONHU)GG             WKH FRXUWURRP FRQFHUQLQJ 5LFK ZDV WKDW KH FDOOHG WKH
&LU8QLWHG6WDWHVY+DUULV)GWK&LU            DSDUWPHQWZKLFK%ULJJVRFFXSLHGDVNLQJIRUOHJDOKHOS7KH
1RWRQO\GRHVWKHXVHRIDILUHDUPLQFDUU\LQJRXWD            GRFNHW VKHHW ZDV HLWKHU LUUHOHYDQW RU UHGXQGDQW DQG
GUXJFRQVSLUDF\VXEVWDQWLDOO\DIIHFWLQWHUVWDWHFRPPHUFHEXW           FXPXODWLYH$IWHUUHYLHZLQJWKHUHFRUGWKHGLVWULFWFRXUWGLG
DILUHDUPPXUGHUFRPPLWWHGLQFDUU\LQJRXWDGUXJFRQVSLUDF\            QRWDEXVHLWVGLVFUHWLRQLQUHIXVLQJWRDGPLWWKHGRFNHWVKHHW
DOVRVXEVWDQWLDOO\DIIHFWVLQWHUVWDWHFRPPHUFH6HH1JX\HQ
)GDWVHHDOVR8QLWHG6WDWHVY0LOOHU)G             7KH MXGJPHQW DQG VHQWHQFH RI ERWK 5LFNHWWV DQG
WK&LU                                              6ZDFNKDPPHUDUHDIILUPHG
  'RQDOG 6ZDFNKDPPHU DUJXHV LQGHSHQGHQWO\ WKDW WKH
GLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQZKHQLWUHIXVHGWRJLYHKLV
SURSRVHGMXU\LQVWUXFWLRQFRQFHUQLQJLPSHDFKPHQWE\SULRU
LQFRQVLVWHQW VWDWHPHQWV  7KH LVVXH LV ZKHWKHU WKH MXU\
FRQVLGHUHG RXWRIFRXUW DVVHUWLRQV XVHG SURSHUO\ IRU
LPSHDFKPHQWSXUSRVHVPLVWDNHQO\DVVXEVWDQWLYHHYLGHQFH
5HYLHZLQWKLV&RXUWLVZKHWKHUWKHMXU\LQVWUXFWLRQVIDLUO\
DQGDGHTXDWHO\FRYHUWKHLVVXHVDQGVWDWHWKHDSSOLFDEOHODZ
IRUWKHMXU\8QLWHG6WDWHVY:LOOLDPV)G
WK&LU,Q8QLWHG6WDWHVY*LEEV)G
WK &LU  ZH KHOG WKDW D GLVWULFW FRXUWjV UHIXVDO WR
VXEPLWDSURSRVHGMXU\LQVWUXFWLRQDPRXQWVWRUHYHUVLEOHHUURU
RQO\LIWKHUHIXVHGLQVWUXFWLRQLVDFRUUHFWVWDWHPHQWRIWKH
ODZ  QRW VXEVWDQWLDOO\ FRYHUHG E\ RWKHU LQFOXGHG
LQVWUXFWLRQV DQG  FRQFHUQV DQ LPSRUWDQW SRLQW ZKLFK
LPSDLUVWKHGHIHQGDQWjVWKHRU\RIWKHFDVH
  7KH MXU\ LQVWUXFWLRQ XVHG E\ WKH GLVWULFW FRXUW LQ
6ZDFNKDPPHUjVFDVHLQVWUXFWHGWKHMXU\WRFRQVLGHUZKHWKHU
mWKH ZLWQHVVVDLGRUGLGVRPHWKLQJWKDWLVLQFRQVLVWHQW
ZLWKZKDWWKHZLWQHVVVDLGZKLOHWHVWLI\LQJLQWKHFRXUWURRPl
6ZDFNKDPPHUjVSURSRVHGLQVWUXFWLRQVWDWHVm\RXKDYHDOVR
KHDUGWKDWEHIRUHWKLVWULDO>WKHZLWQHVV@PDGHDVWDWHPHQWWKDW
     8QLWHG6WDWHVY5LFNHWWVHWDO       1RV         1RV          8QLWHG6WDWHVY5LFNHWWVHWDO        

VHQWHQFLQJ6ZDFNKDPPHUFRQVHFXWLYHO\WRWKHXQGLVFKDUJHG                PD\ KDYH EHHQ GLIIHUHQW IURP KLV WHVWLPRQ\ KHUH LQ FRXUW
VWDWHVHQWHQFH)XUWKHUPRUHWKHGLVWULFWFRXUWGLGQRWHUULQ         7KHHDUOLHUVWDWHPHQWZDVEURXJKWWR\RXUDWWHQWLRQRQO\WR
FKRRVLQJ WR PDNH WKH VHQWHQFH FRQVHFXWLYH WR WKH PRUH           KHOS \RX GHFLGH KRZ EHOLHYDEOH KLV WHVWLPRQ\ ZDV  <RX
VLJQLILFDQWVWDWHDUPHGEDQNUREEHU\VHQWHQFHDVRSSRVHGWR             FDQQRW XVH LW DV SURRI RI DQ\WKLQJ HOVHl  6ZDFNKDPPHUjV
WKHWZROHVVHUVWDWHVHQWHQFHV                                       SURSRVHGLQVWUXFWLRQZLWKLWVH[SOLFLWKHDUVD\OLPLWDWLRQLVQRW
                                                                        D FRUUHFW VWDWHPHQW RI WKH ODZ IRU WKH IDFWV LQ WKLV FDVH
   'DYLG5LFNHWWVDUJXHVLQGHSHQGHQWO\WKDWWKHGLVWULFWFRXUW          6HYHUDO RXWRIFRXUW VWDWHPHQWV PDGH E\ 0F.LQQH\ ZHUH
HUUHGLQKLVWULDOZKHQWKHFRXUWSHUPLWWHGMXURUVWRVXEPLW           PDGH XQGHU RDWK DQG KHQFH FRXOG EH XVHG DV VXEVWDQWLYH
ILYH TXHVWLRQV WR ZLWQHVVHV ZLWKRXW FRXQVHO ILUVW EHLQJ          HYLGHQFH  )HG 5 (YLG G$  6SHFLILFDOO\ WKH
DOORZHGWRUHYLHZWKRVHTXHVWLRQV5HFHQWO\LQ8QLWHG6WDWHV          8QLWHG 6WDWHV DGPLWWHG 0LFKDHO 0F.LQQH\jV VZRUQ
Y&ROOLQV)GWK&LUZHGLVFRXUDJHG          VWDWHPHQWVDWKLVJXLOW\SOHDKHDULQJRQ1RYHPEHU
WKHXVHRIMXURUTXHVWLRQV:HKHOGKRZHYHUWKDWLIDGLVWULFW       DQGKLVVZRUQJUDQGMXU\WHVWLPRQ\RQ'HFHPEHU
FRXUW DOORZV WKLV SUDFWLFH VLJQLILFDQW FDXWLRQDU\ PHDVXUHV       6ZDFNKDPPHUjV SURSRVHG MXU\ LQVWUXFWLRQ IDLOHG WR
PXVWEHXVHG,GDW+HUHQRFDXWLRQDU\PHDVXUHVZHUH            GLVWLQJXLVKEHWZHHQVZRUQVWDWHPHQWVWKDWFRXOGEHXVHGDV
XVHG:KHQMXURUTXHVWLRQVDUHSRVHGWRWKHZLWQHVVFRXQVHO           VXEVWDQWLYHHYLGHQFHDQGXQVZRUQVWDWHPHQWVWKDWFRXOGQRW
PXVWEHJLYHQWKHRSSRUWXQLW\WRUHYLHZWKHPDQGKDYHWKHLU             7KHGLVWULFWFRXUWWKHUHIRUHGLGQRWDEXVHLWVGLVFUHWLRQLQ
REMHFWLRQV SODFHG LQ WKH UHFRUG EHIRUH WKH TXHVWLRQV DUH        UHIXVLQJWRJLYHKLVSURSRVHGLQVWUXFWLRQ
VXEPLWWHGWRWKHMXU\7KLVSURFHGXUHZDVQRWIROORZHGLQWKLV
FDVH                                                                     6ZDFNKDPPHU DOVR DUJXHV WKDW WKH 8QLWHG 6WDWHV ZDV
                                                                        UHTXLUHG WR SURYH SUHPHGLWDWLRQ IRU WKH FKDUJH RI ILUHDUP
   7KHTXHVWLRQWKHQEHFRPHVLIWKLVLVDQHUURULVLWKDUPOHVV      PXUGHUVHWIRUWKLQFRXQWWKUHH)XUWKHUPRUH6ZDFNKDPPHU
+HUH ZKLOH ZH EHOLHYH LW ZDV HUURU D UHYLHZ RI WKH WRWDO   DUJXHV WKH IDLOXUH WR GR VR LQ WKLV FDVH UHVXOWHG LQ D
UHFRUGOHDGVWRWKHFRQFOXVLRQWKDWLWZDVKDUPOHVV'XULQJ            FRQVWUXFWLYHDPHQGPHQWRIWKHLQGLFWPHQWZKLFKYLRODWHVWKH
WKHVHYHUDOGD\VRIWHVWLPRQ\5LFNHWWVjVFRXQVHOUHYLHZHGDOO          )LIWK$PHQGPHQWEHFDXVHWKHmDFFXVHG>ZDVQRW@WULHGRQO\
EXW WKHVH ILYH MXURU TXHVWLRQV  7KHVH ILYH TXHVWLRQV WKDW     RQWKRVHRIIHQVHVSUHVHQWHGLQDQLQGLFWPHQWDQGUHWXUQHGE\
VOLSSHG SDVW UHYLHZ RQ WKH WKLUG GD\ RI WULDO ZHUH QRW LQ    DJUDQGMXU\l8QLWHG6WDWHVY0DQQLQJ)G
WKHPVHOYHV KLJKO\ SUHMXGLFLDO WR 5LFNHWWV  2I WKH ILYH         WK&LUFLWLQJ6WLURQHY8QLWHG6WDWHV86
TXHVWLRQV RQO\ WZR FRXOG SRVVLEO\ EH FRQVWUXHG DV               
SUHMXGLFLDO'LG%HQQLH5LFKDZDLWLQJWULDORQGUXJDQG
JXQFKDUJHVKDYH/DXULH%ULJJVNLOOHGEHFDXVHVKHVQLWFKHG"              7KHWKLUGFRXQWFKDUJHV6ZDFNKDPPHUZLWKILUHDUPPXUGHU
DQG  'LG WKH ZLWQHVV VHH WKH PXUGHU ZHDSRQ LQ DQRWKHU       LQIXUWKHUDQFHRIDGUXJFRQVSLUDF\LQYLRODWLRQRI86&
SHUVRQjV KRXVH"  1HLWKHU RI WKHVH TXHVWLRQV VLJQLILFDQWO\         L >QRZ FRGLILHG DV M@  7KLV VWDWXWH VWDWHV m$
LPSDLUVWKHWKHRU\RIIHUHGE\WKHGHIHQVHWKDWVRPHRQHHOVH             SHUVRQZKRLQWKHFRXUVHRIDYLRODWLRQRI>F@FDXVHV
NLOOHG/DXULH%ULJJV                                                  WKHGHDWKRIDSHUVRQWKURXJKWKHXVHRIDILUHDUPVKDOOo
                                                                        LI WKH NLOOLQJ LV D PXUGHU DV GHILQHG LQ VHFWLRQ  EH
   7KHODVWLVVXHIRUUHYLHZLVZKHWKHUWKHGLVWULFWFRXUWDEXVHG       SXQLVKHGE\GHDWKRUE\LPSULVRQPHQWIRUDQ\WHUPRI\HDUV
LWVGLVFUHWLRQLQIDLOLQJWRDGPLWLQWRHYLGHQFHDGRFNHWVKHHW         RUIRUOLIHl86&M
RI DQRWKHU FDVH  'XULQJ WKH WULDO 5LFNHWWV DGYDQFHG WKH
WKHRU\WKDW%HQQLH5LFKWKHQDZDLWLQJWULDOIRUGUXJDQGJXQ             7KLVVWDWXWHLQFRUSRUDWHVWKHGHILQLWLRQRIPXUGHUIRXQGLQ
FKDUJHV RUGHUHG WKH PXUGHU RI /DXULH %ULJJV  $W WKH          86&7KHSODLQODQJXDJHRI86&
      8QLWHG6WDWHVY5LFNHWWVHWDO       1RV      1RV         8QLWHG6WDWHVY5LFNHWWVHWDO       

EURDGO\GHILQHVPXUGHULQFRUSRUDWLQJERWKILUVWDQGVHFRQG           6KH DOVR WHVWLILHG WKDW VKH VDZ WKH GHIHQGDQW PDQXIDFWXUH
GHJUHH PXUGHU ZLWKLQ LWV GHILQLWLRQ   86&  D    VTXDUHVRIFUDFNFRFDLQHDQGEUHDNHDFKVTXDUHLQWRDVPDQ\
VWDWHV                                                               DV ILIW\ WR RQH KXQGUHG URFNV  $SSUR[LPDWHO\ ILIW\ URFNV
                                                                      FRQWDLQ WKH ILYH JUDPV QHFHVVDU\ WR PHHW WKH GUXJ
      D0XUGHULVWKHXQODZIXONLOOLQJRIDKXPDQEHLQJ             VSHFLILFDWLRQV LQ WKH LQGLFWPHQW  7KH GLVWULFW FRXUW FDQQRW
    ZLWKPDOLFHDIRUHWKRXJKW(YHU\PXUGHUSHUSHWUDWHGE\            LJQRUHWKHMXU\jVILQGLQJVDVWRGUXJTXDQWLW\XQOHVVWKHUHLV
    SRLVRQ O\LQJ LQ ZDLW RU DQ\ RWKHU NLQG RI ZLOOIXO       LQVXIILFLHQWHYLGHQFHWRVXSSRUWWKRVHILQGLQJV6HH8QLWHG
    GHOLEHUDWH PDOLFLRXV DQG SUHPHGLWDWHG NLOOLQJ    LV   6WDWHV Y )ORZDO  )G   WK &LU  MXU\
    PXUGHULQWKHILUVWGHJUHH                                       GHWHUPLQHV PLQLPXP GUXJ DPRXQW 8QLWHG 6WDWHV Y
      $Q\RWKHUPXUGHULVPXUGHULQWKHVHFRQGGHJUHH               &RQQHU\)GWK&LUFRXUWPD\QRWLJQRUH
                                                                      MXU\YHUGLFWLIWKHUHLVVXIILFLHQWHYLGHQFHWRVXSSRUWLW2Q
  7KLVSURYLVLRQGRHVWZRWKLQJVLWGHILQHVPXUGHUmDVWKH           UHYLHZLQJWKHWHVWLPRQ\ZHFRQFOXGHWKHUHLVDPSOHHYLGHQFH
XQODZIXONLOOLQJRIDKXPDQEHLQJZLWKPDOLFHDIRUHWKRXJKWl           WR VXSSRUW  WKH MXU\jV ILQGLQJV WKDW WKH GUXJ FRQVSLUDF\
DQGGLYLGHVPXUGHULQWRILUVWDQGVHFRQGGHJUHHV$OOWKDWLV        LQYROYHGDWOHDVWILYHKXQGUHGJUDPVRIFRFDLQHSRZGHUDQG
QHFHVVDU\ WR SURYH WKDW D GHDWK LV D PXUGHU XQGHU VHFWLRQ   ILYHJUDPVRIFUDFNFRFDLQH
MWKHQLVWRVKRZWKDWLWZDVDQmXQODZIXONLOOLQJRID
KXPDQEHLQJZLWKPDOLFHDIRUHWKRXJKWl7KXVSURRIRIRQO\               0RUHRYHUWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ
VHFRQGGHJUHHPXUGHULVVXIILFLHQWIRUSURYLQJPXUGHUXQGHU           PDNLQJ6ZDFNKDPPHUjVIHGHUDOVHQWHQFHVFRQVHFXWLYHWRWKH
VHFWLRQDQGJDLQLQJDFRQYLFWLRQXQGHUVHFWLRQM          VWDWHVHQWHQFHKHZDVDOUHDG\VHUYLQJIRUDUPHGEDQNUREEHU\
                                                                      DQGWZROHVVHUVWDWHVHQWHQFHV,Q6ZDFNKDPPHUZDV
   %HFDXVH WKH 8QLWHG 6WDWHV ZDV QRW UHTXLUHG WR SURYH        FRQYLFWHGLQVWDWHFRXUWRIEDQNUREEHU\DQGIHORQ\ILUHDUP
SUHPHGLWDWLRQLQRUGHUWRFRQYLFW6ZDFNKDPPHUIRUPXUGHU              FKDUJHV+HHVFDSHGZKLOHDZDLWLQJWULDORQWKRVHFKDUJHVDQG
DVGHILQHGLQVHFWLRQ6ZDFNKDPPHUjVDUJXPHQWWKDW              ZDVVXEVHTXHQWO\FRQYLFWHGIRUWKLVHVFDSH7KHVHQWHQFLQJ
WKHUH ZDV D FRQVWUXFWLYH DPHQGPHQW RI FRXQW WKUHH RI WKH     PHPRUDQGXP XUJHG WKH GLVWULFW FRXUW WR PDNH
LQGLFWPHQW DOVR IDLOV  &RXQW WKUHH FKDUJHG 6ZDFNKDPPHU        6ZDFNKDPPHUjV IHGHUDO VHQWHQFHV FRQVHFXWLYH WR KLV VWDWH
ZLWK D ILUHDUP PXUGHU GXULQJ RU LQ UHODWLRQ WR D GUXJ       VHQWHQFHEHFDXVHDPRQJRWKHUWKLQJV6ZDFNKDPPHUGLGQRW
WUDIILFNLQJ FULPH  86&  M  $Q\ DGGLWLRQDO        DFFHSWUHVSRQVLELOLW\IRUWKHEDQNUREEHU\DVHYLGHQFHGE\KLV
ODQJXDJH LQ FRXQW WKUHH LQGLFDWLQJ WKDW 6ZDFNKDPPHU             HVFDSH
FRPPLWWHG SUHPHGLWDWHG PXUGHU LV FOHDUO\ H[WUDQHRXV DQG
XQQHFHVVDU\ WR FRQYLFW WKH GHIHQGDQW XQGHU VHFWLRQ M       7KHFRQWUROOLQJ6HQWHQFLQJ*XLGHOLQH*FVWDWHVmWKH
8QLWHG6WDWHVY0LOOHU86                   VHQWHQFH IRU WKH LQVWDQW RIIHQVH PD\ EH LPSRVHG WR UXQ
                                                                      FRQFXUUHQWO\ SDUWLDOO\ FRQFXUUHQWO\ RU FRQVHFXWLYHO\ WR WKH
  6ZDFNKDPPHUQH[WDUJXHVWKDWWKHGLVWULFWFRXUWDEXVHGLWV          SULRU XQGLVFKDUJHG WHUP RI LPSULVRQPHQW WR DFKLHYH D
GLVFUHWLRQLQKLVVHQWHQFLQJ6ZDFNKDPPHUDVVHUWVWKDWWKH           UHDVRQDEOHSXQLVKPHQWIRUWKHLQVWDQWRIIHQVHl6XEVHFWLRQ
WHVWLPRQ\RIWKH8QLWHG6WDWHVjVNH\ZLWQHVVIRUHVWDEOLVKLQJ        F JLYHV GLVWULFW FRXUWV GLVFUHWLRQ WR IDVKLRQ VHQWHQFHV
GUXJTXDQWLWLHVZDVHTXLYRFDO7KHZLWQHVV5DFKHO:HVW             DSSURSULDWH IRU FRPSOH[ VLWXDWLRQV  866* *F
WHVWLILHGWKDW6ZDFNKDPPHUVROGDFRXSOHRXQFHVRIFRFDLQH            FRPPHQWDU\ RQ VXEVHFWLRQ F  +HUH 6ZDFNKDPPHU KDG
SRZGHUHDFKZHHNIRUDWKUHHPRQWKSHULRG7KLVDPRXQW               VHYHUDO XQGLVFKDUJHG WHUPV RI LPSULVRQPHQW ZKLOH DOVR
DORQHLVZHOORYHUILYHKXQGUHGJUDPV5HJDUGLQJWKHDPRXQW          KDYLQJHVFDSHGIURPSULVRQ1RWLQJDQGEHLQJDZDUHRIWKLV
RIFUDFNFRFDLQHWKHZLWQHVVWHVWLILHGWKDWVKHREWDLQHGIRXU        GLVFUHWLRQ WKH GLVWULFW FRXUW GLG QRW FRPPLW HUURU LQ
WZHQW\GROODUURFNVIURP6ZDFNKDPPHUDQ\GD\VKHFRXOG