Court Opinion

ID: 2969842
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:58:27.84579+00
Date Added: 2024-06-11T11:43:26.423760
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
     8QLWHG6WDWHVY           1RV                      3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

      3HWHUPDQHWDO                                                    (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                                                                                      )LOH 1DPH DS

*UDQW Y 8QLWHG 6WDWHV  )G   WK &LU 
GHFOLQLQJ WR JUDQW   UHOLHI RQ D GHIDXOWHG FODLP RI    81,7('67$7(6&28572)$33($/6
VHQWHQFLQJHUURUEHFDXVHWKHUHZDVQRmEUHDNGRZQRIWKHWULDO
SURFHVVl6FRWWY8QLWHG6WDWHV)GWK&LU                        )257+(6,;7+&,5&8,7
 KROGLQJ WKDW WKH GLVWULFW FRXUW VKRXOG QRW KDYH                          BBBBBBBBBBBBBBBBB
FRQVLGHUHG D   SHWLWLRQ EDVHG RQ DQ DOOHJHG
PLVDSSOLFDWLRQRIWKHVHQWHQFLQJJXLGHOLQHV
  )RUWKHVHUHDVRQVZHKROGWKDWGHIHQGDQWVKDYHIDLOHGWR                                     ;
VKRZWKDWZDVmLQDGHTXDWHRULQHIIHFWLYHlIRUWKHLU             81,7(' 67$7(6 2) $0(5,&$        
FODLPVDQGWKHUHIRUHWKHGLVWULFWFRXUWODFNHGMXULVGLFWLRQWR                 3ODLQWLII$SSHOODQW    
JUDQW UHOLHI XQGHU    :H GR QRW UHDFK %HOOjV FURVV                                        1RV
DSSHDOUHJDUGLQJDIXUWKHUVHQWHQFLQJUHGXFWLRQ                                                           
                                                                                 Y                      !
                                                                                                        
                               ,,,                                                                     
                                                                       '$55(// 3(7(50$1                
  $FFRUGLQJO\ ZH UHYHUVH WKH JUDQWV RI KDEHDV UHOLHI DQG             'HIHQGDQW$SSHOOHH      
UHPDQGWKHVHFDXVHVWRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQVWR                                          
YDFDWHWKHQHZVHQWHQFHVDQGUHLQVWDWHWKHRULJLQDOVHQWHQFHV                                         
                                                                                
                                                                                                        
                                                                       81,7(' 67$7(6 2) $0(5,&$        
                                                                                3ODLQWLII$SSHOODQW    
                                                                                                        
                                                                                 Y                     
                                                                                                        
                                                                       &5$,* )25(67                    
                                                                                                        
                                                                               'HIHQGDQW$SSHOOHH      
                                                                                                        
                                                                                            
                                                                       81,7(' 67$7(6 2) $0(5,&$        
                                                                                3ODLQWLII$SSHOODQW    
                                                                                   &URVV$SSHOOHH      
                                                                                                        
                                                                                                        
                                                                                 Y                     
                                                                                                        
                                                                                                        
                                                                                                        

                                                                                                  
         8QLWHG6WDWHVY          1RV          1RV              8QLWHG6WDWHVY      
          3HWHUPDQHWDO                                                                                        3HWHUPDQHWDO

    52%(57 %(//                                                        QRWDQDGGLWLRQDODOWHUQDWLYHRUVXSSOHPHQWDOUHPHG\WRWKDW
                                                                        SUHVFULEHGXQGHUl&KDUOHV)GDWFLWDWLRQV
            'HIHQGDQW$SSHOOHH                                          RPLWWHG
               &URVV$SSHOODQW            
                                          1                                 :HLQYRNHGWKHSUHYDLOLQJVWDQGDUGWKDWLVVDLGWRZDUUDQW
                                                                         WKHEULQJLQJRIVXFKSHWLWLRQVLQRXU&KDUOHVRSLQLRQ
        $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW                     ZKHQZHQRWHGWKDWm>Q@RFLUFXLWFRXUWKDVWRGDWHSHUPLWWHG
IRUWKH1RUWKHUQ'LVWULFWVRI2KLRDW&OHYHODQGDQG$NURQ               DSRVW$('3$SHWLWLRQHUZKRZDVQRWHIIHFWLYHO\PDNLQJD
   1Rn3DWULFLD$*DXJKDQsDPHV6*ZLQ                      FODLPRIµDFWXDOLQQRFHQFHjWRXWLOL]HYLDjV
             'DQ$3ROVWHU'LVWULFWsXGJHV                            µVDYLQJV FODXVHj DV D ZD\ RI FLUFXPYHQWLQJ  jV
                                                                         UHVWULFWLRQV RQ WKH ILOLQJ RI VHFRQG RU VXFFHVVLYH KDEHDV
                   $UJXHG1RYHPEHU                            SHWLWLRQVl,GDW7KHVHmDFWXDOLQQRFHQFHlFDVHVKDYH
                                                                         DULVHQ IURP D FRPPRQ IDFWXDO VFHQDULR VRPH SULVRQHUV
                'HFLGHGDQG)LOHG$SULO                       FRQYLFWHGRImXVLQJlDILUHDUPGXULQJDGUXJFULPHRUYLROHQW
                                                                         FULPHIRXQGWKHPVHOYHVLQQRFHQWZKHQWKH6XSUHPH&RXUW
    %HIRUH5<$1DQG1255,6&LUFXLWsXGJHV('*$5                     VXEVHTXHQWO\GHILQHGmXVHlLQDUHVWULFWLYHPDQQHULQ%DLOH\
                   &KLHI'LVWULFWsXGJH
                                Y 8QLWHG 6WDWHV  86    6HH  86&
                       BBBBBBBBBBBBBBBBB                                 F7KHVHSULVRQHUVZKRFRXOGQRWHVWDEOLVKWKHLU
                                                                         LQQRFHQFHEHIRUH%DLOH\ZHUHEDUUHGIURPUHOLHIDIWHU
                             &2816(/                                     %DLOH\ EHFDXVH VXFFHVVLYH   SHWLWLRQV DUH OLPLWHG WR
                                                                         QHZO\GLVFRYHUHGHYLGHQFHRUDQHZDQGUHWURDFWLYHUXOHRI
$5*8('  (OL]DEHWK ' &ROOHU\ 81,7(' 67$7(6                       FRQVWLWXWLRQDOODZ6HH86&,QUH'DYHQSRUW
'(3$570(17 2) s867,&( &5,0,1$/ ',9,6,21                            )GWK&LU7ULHVWPDQY8QLWHG6WDWHV
$33(//$7(6(&7,21:DVKLQJWRQ'&IRU$SSHOODQW                      )GG&LU,QUH'RUVDLQYLO)GG
'HQQLV * 7HUH] $66,67$17 )('(5$/ 38%/,&                           &LUVHHDOVR%RXVOH\Y8QLWHG6WDWHV86
'()(1'(5 &OHYHODQG 2KLR +HQU\ ) 'H%DJJLV                       KROGLQJLQDFDVHWKDWWKHIDLOXUHWR
&OHYHODQG2KLRsRVHSK70F*LQQHVV&OHYHODQG2KLRIRU               UDLVHD%DLOH\FODLPRQGLUHFWUHYLHZFDQEHRYHUFRPHE\D
$SSHOOHHV21%5,()(OL]DEHWK'&ROOHU\'DYLG6.ULV              VKRZLQJRImDFWXDOLQQRFHQFHl
/LQGD 0 %HW]HU 81,7(' 67$7(6 '(3$570(17 2)
s867,&(&5,0,1$/',9,6,21$33(//$7(6(&7,21                             :LWKRXWGHWHUPLQLQJWKHH[DFWVFRSHRIWKHVDYLQJVFODXVH
:DVKLQJWRQ '& IRU $SSHOODQW  'HQQLV * 7HUH]                ZHFRQFOXGHWKDWGHIHQGDQWVjFODLPVGRQRWIDOOZLWKLQDQ\
$66,67$17)('(5$/38%/,&'()(1'(5&OHYHODQG                            DUJXDEOH FRQVWUXFWLRQ RI LW EHFDXVH GHIHQGDQWV KDYH QRW
2KLR +HQU\ ) 'H%DJJLV &OHYHODQG 2KLR sRVHSK 7               VKRZQDQLQWHUYHQLQJFKDQJHLQWKHODZWKDWHVWDEOLVKHVWKHLU
0F*LQQHVV&OHYHODQG2KLRIRU$SSHOOHHV                               DFWXDOLQQRFHQFH8QGHU&KDUOHVLISHWLWLRQHUVGRQRWPDNH
                                                                         DFODLPIRUDFWXDOLQQRFHQFHWKH\DUHQRWHQWLWOHG WRUHOLHI
                                                                         WKURXJKjVVDYLQJVFODXVH%HOO3HWHUPDQDQG)RUHVW
                                                                         GRQRWDUJXHLQQRFHQFHEXWLQVWHDGFKDOOHQJHWKHLUVHQWHQFHV
      
                                                                         &RXUWV KDYH JHQHUDOO\ GHFOLQHG WR FROODWHUDOO\ UHYLHZ
      7KH +RQRUDEOH 5 $OODQ (GJDU &KLHI 8QLWHG 6WDWHV 'LVWULFW sXGJH   VHQWHQFHVWKDWIDOOZLWKLQWKHVWDWXWRU\PD[LPXP6HHHJ
IRU WKH (DVWHUQ 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ
      8QLWHG6WDWHVY           1RV            1RV               8QLWHG6WDWHVY      
       3HWHUPDQHWDO                                                                                            3HWHUPDQHWDO

    UHPHG\E\PRWLRQLVLQDGHTXDWHRULQHIIHFWLYHWRWHVWWKH                                 BBBBBBBBBBBBBBBBB
    OHJDOLW\RIKLVGHWHQWLRQ
                                                                                                  23,1,21
      $\HDUSHULRGRIOLPLWDWLRQVKDOODSSO\WRDPRWLRQ                                   BBBBBBBBBBBBBBBBB
    XQGHUWKLVVHFWLRQ
                                                                            $/$1(1255,6&LUFXLWsXGJH'DUUHOO3HWHUPDQ&UDLJ
86&                                                        )RUHVW DQG 5REHUW %HOO SOHDGHG JXLOW\ WR FRQVSLULQJ WR
                                                                         SRVVHVV DQG GLVWULEXWH FRFDLQH LQ YLRODWLRQ RI  86&
   'HIHQGDQWVLQWKHLQVWDQWFDVHVFDQQRWUDLVHWKHLUFODLPVLQ          3HWHUPDQDQG%HOOHDFKILOHGDQXQVXFFHVVIXODSSHDO
DPRWLRQIRUVHYHUDOUHDVRQV)LUVWWKHRQH\HDUOLPLW          DQG VHYHUDO FROODWHUDO DWWDFNV FKDOOHQJLQJ WKHLU VHQWHQFHV
EDUVWKHLUPRWLRQV,QDGGLWLRQDVHFRQGRUVXFFHVVLYHPRWLRQ          3HWHUPDQ%HOODQG)RUHVWWKHQILOHGWKHLQVWDQWKDEHDVFRUSXV
LV RQO\ SHUPLWWHG LI WKH FRXUW RI DSSHDOV FHUWLILHV WKDW WKH   SHWLWLRQVXQGHU86&7KHGLVWULFWFRXUWJUDQWHG
GHIHQGDQWKDVSUHVHQWHGQHZO\GLVFRYHUHGHYLGHQFHRUDQHZ               WKH SHWLWLRQV DQG GHIHQGDQWV ZHUH UHVHQWHQFHG WR VKRUWHU
DQGUHWURDFWLYHUXOHRIFRQVWLWXWLRQDOODZWKDWZDVSUHYLRXVO\           WHUPV7KHJRYHUQPHQWDSSHDOVDUJXLQJWKDWWKHGLVWULFWFRXUW
XQDYDLODEOH   86&    %HOO DQG 3HWHUPDQ DUH         GLG QRW KDYH MXULVGLFWLRQ RYHU WKH   SHWLWLRQV  :H
SUHFOXGHG IURP SUHVHQWLQJ DQRWKHU   PRWLRQ EHFDXVH           UHYHUVHWKHGLVWULFWFRXUWDQGUHLQVWDWHWKHRULJLQDOVHQWHQFHV
WKH\DUHQRWDVVHUWLQJDQHZUXOHRIFRQVWLWXWLRQDOODZRUQHZ
HYLGHQFH6LQFH)RUHVWGLGQRWILOHSUHYLRXVPRWLRQV                                           ,
KHZRXOGQRWKDYHWRPHHWWKLVVWDQGDUGEXWKLVFODLPOLNH
WKRVHRI%HOODQG3HWHUPDQZRXOGVWLOOEHEDUUHGE\WKHRQH              'HIHQGDQWV ZHUH SDUW RI D ODUJH FRFDLQH FRQVSLUDF\ LQ
\HDUUXOH                                                              <RXQJVWRZQ2KLRZKLFKRSHUDWHGIURP6HSWHPEHU
                                                                         WR sDQXDU\    3HWHUPDQ )RUHVW DQG %HOO SOHDGHG
   7KHXQDYDLODELOLW\RIUHOLHIGRHVQRWDORQHHVWDEOLVK          JXLOW\LQ1RYHPEHUWRGUXJFRQVSLUDF\FKDUJHVDQGWKH
LQDGHTXDF\RULQHIIHFWLYHQHVVXQGHUWKHVDYLQJVFODXVH7KLV            GLVWULFWFRXUWVHQWHQFHGWKHPEDVHGRQWKHHQWLUHWR
FRXUW KDV FOHDUO\ VWDWHG WKDW mWKH   UHPHG\ LV QRW        NLORJUDPVRIFRFDLQHLQYROYHGLQWKHFRQVSLUDF\3HWHUPDQ
FRQVLGHUHGLQDGHTXDWHRULQHIIHFWLYHVLPSO\EHFDXVH               DQG%HOOZHUHVHQWHQFHGWRPRQWKVDQG)RUHVWWR
UHOLHIKDVDOUHDG\EHHQGHQLHGRUEHFDXVHWKHSHWLWLRQHULV        PRQWKV  7KH HYLGHQFH DW VHQWHQFLQJ LQGLFDWHG WKDW WKHVH
SURFHGXUDOO\EDUUHGIURPSXUVXLQJUHOLHIXQGHURU           GHIHQGDQWVGLGQRWMRLQWKHFRQVSLUDF\XQWLO'HFHPEHU
EHFDXVHWKHSHWLWLRQHUKDVEHHQGHQLHGSHUPLVVLRQWRILOHD
VHFRQGRUVXFFHVVLYHPRWLRQWRYDFDWH>@l&KDUOHV)G                %HOODQG3HWHUPDQDSSHDOHGWKHLUVHQWHQFHVLQ%HOO
DWFLWDWLRQVRPLWWHG                                              DOOHJHGWKDWKHZDVQRWDFFRXQWDEOHIRUWKHZKROHDPRXQWRI
                                                                         FRFDLQHDQGWKDWWKHJRYHUQPHQWKDGQRWPHWLWVEXUGHQRI
  7KH FLUFXPVWDQFHV LQ ZKLFK   LV LQDGHTXDWH DQG            SURRIRQWKHGUXJDPRXQWDWWULEXWHGWRKLP3HWHUPDQDUJXHG
LQHIIHFWLYH DUH QDUURZ IRU WR FRQVWUXH   UHOLHI PXFK      WKDWWKHIXOOGUXJDPRXQWZDVQRWUHDVRQDEO\IRUHVHHDEOHLQ
PRUHOLEHUDOO\WKDQUHOLHIZRXOGGHIHDWWKHSXUSRVHRI            KLVFDVH7KLVFRXUWDIILUPHGWKHLUVHQWHQFHV8QLWHG6WDWHV
WKHUHVWULFWLRQV&RQJUHVVSODFHGRQWKHILOLQJRIVXFFHVVLYH             Y%HOO1RV:/WK&LU
SHWLWLRQVIRUFROODWHUDOUHOLHI6HH$QWLWHUURULVPDQG(IIHFWLYH        'HF%HOODQG3HWHUPDQHDFKSURFHHGHGWRILOH
'HDWK3HQDOW\$FWRI3XE/1R6WDW                VHYHUDOFROODWHUDODWWDFNVRQWKHLUVHQWHQFHVZKLFKWKHGLVWULFW
 DPHQGLQJ  86&   m$('3$l  $V ZH              FRXUWWUHDWHGDVPRWLRQVXQGHU86&DQGGHQLHG
H[SODLQHGLQ&KDUOHVm>W@KHUHPHG\DIIRUGHGXQGHULV             )RUHVWDWWHPSWHGWRDSSHDOEXWKLVDSSHDOZDVGLVPLVVHGDV
       8QLWHG6WDWHVY          1RV             1RV                 8QLWHG6WDWHVY          
        3HWHUPDQHWDO                                                                                              3HWHUPDQHWDO

XQWLPHO\  +H GLG QRW ILOH DQ\ FROODWHUDO DWWDFNV EHIRUH WKH    1'2KLR6HSW7KHFRXUWRUGHUHGDKHDULQJRQ
LQVWDQWSHWLWLRQ                                                  WKHVH GHIHQGDQWVj SDUWLFLSDWLRQ LQ WKH FRQVSLUDF\ DQG WKH
                                                                          WKUHH ZHUH UHVHQWHQFHG EDVHG RQ OHVVHU DPRXQWV  %HOO
   ,QWKHPHDQWLPHDQRWKHUFRQVSLUDWRULQWKHVDPHGUXJULQJ            UHFHLYHG  PRQWKV 3HWHUPDQ  PRQWKV DQG )RUHVW 
9LFWRU0LOOHGJHDFKLHYHGDVHQWHQFHUHGXFWLRQLQIURP               PRQWKV DQG HDFK ZDV DOVR VHQWHQFHG WR ILYH \HDUV RI
KLVRULJLQDOVHQWHQFHRIPRQWKVIRUWKHFRQVSLUDF\FKDUJH            VXSHUYLVHG UHOHDVH ZLWK FUHGLW IRU WLPH VHUYHG  7KH\ DUH
7KHGLVWULFWFRXUWDOORZHGKLPWRWDNHDODWHDSSHDOIURPKLV             FXUUHQWO\RQVXSHUYLVHGUHOHDVH
 FRQYLFWLRQ DQG VHQWHQFH VLQFH WKH FRXUW KDG QRW
LQIRUPHG 0LOOHGJH    RI KLV ULJKW WR DSSHDO DIWHU WKH LQLWLDO      7KHJRYHUQPHQWDSSHDOVIURPWKHJUDQWVRIKDEHDVUHOLHI
VHQWHQFLQJ/LNH3HWHUPDQ%HOODQG)RUHVW0LOOHGJHKDG               DUJXLQJWKDWWKHGLVWULFWFRXUWGLGQRWKDYHMXULVGLFWLRQRYHU
RULJLQDOO\ EHHQ VHQWHQFHG EDVHG RQ WKH IXOO  WR             WKHSHWLWLRQVEHFDXVHSULVRQHUVPXVWVHHNFROODWHUDO
NLORJUDPV LQYROYHGLQWKHFRQVSLUDF\7KLVFRXUWUHYHUVHG               UHOLHI XQGHU  86&   XQOHVV WKH\ FDQ VKRZ WKDW
0LOOHGJHjV VHQWHQFH RQ GLUHFW DSSHDO FRQFOXGLQJ WKDW WKH          LVmLQDGHTXDWHRULQHIIHFWLYHlZKLFKWKHJRYHUQPHQW
GLVWULFW FRXUW KDG QRW PDGH DGHTXDWH IDFWXDO ILQGLQJV WR          FODLPVGHIHQGDQWVKDYHQRWGHPRQVWUDWHG%HOOFURVVDSSHDOV
VXSSRUWWKHGUXJDPRXQWDWWULEXWHGWR0LOOHGJH8QLWHG6WDWHV            DUJXLQJWKDWLQWKHUHVHQWHQFLQJKHDULQJKHZDVGHQLHG
Y0LOOHGJH)GWK&LU2QUHPDQG               DQHYLGHQWLDU\KHDULQJWKDWVKRXOGKDYHUHVXOWHGLQDUHGXFWLRQ
0LOOHGJHZDVUHVHQWHQFHGWRPRQWKVRILPSULVRQPHQW                   RIKLVRIIHQVHOHYHO
EDVHGRQNLORJUDPVRIFRFDLQH
                                                                                                           ,,
   :KHQ 3HWHUPDQ )RUHVW DQG %HOO OHDUQHG RI WKHLU
FRFRQVSLUDWRUjV UHVHQWHQFLQJ WKH\ ILOHG WKH LQVWDQW             :HUHYLHZDGLVWULFWFRXUWjVOHJDOFRQFOXVLRQVLQDKDEHDV
SHWLWLRQV  7KH\ DUJXHG WKDW WKHUH KDG EHHQ DQ LQWHUYHQLQJ       FRUSXVGHFLVLRQGHQRYR&KDUOHVY&KDQGOHU)G
FKDQJH LQ WKH ODZ DQG WKDW   ZKRVH VWDWXWH RI              WK  &LU  SHU FXULDP  6HFWLRQ  LV WKH
OLPLWDWLRQV DQG UHVWULFWLRQV RQ VXFFHVVLYH SHWLWLRQV EDUUHG         SULPDU\DYHQXHIRUUHOLHIIRUIHGHUDOSULVRQHUVSURWHVWLQJWKH
WKHLU FODLPV ZDV LQDGHTXDWH DQG LQHIIHFWLYH WR UHGUHVV WKH       OHJDOLW\ RI WKHLU VHQWHQFH ZKLOH   LV DSSURSULDWH IRU
ZURQJ7KHGLVWULFWFRXUWJUDQWHGWKHSHWLWLRQV,WIRXQGWKDW          FODLPV FKDOOHQJLQJ WKH H[HFXWLRQ RU PDQQHU LQ ZKLFK WKH
WKHODZKDGFKDQJHGVLQFHWKHRULJLQDOVHQWHQFLQJWRUHTXLUH              VHQWHQFH LV VHUYHG  +RZHYHU D IHGHUDO SULVRQHU PD\ DOVR
LQGLYLGXDOL]HGILQGLQJVIRUGUXJFRQVSLUDWRUVjVHQWHQFHV7R             FKDOOHQJH WKH YDOLGLW\ RI KLV FRQYLFWLRQ RU VHQWHQFH XQGHU
GHQ\ D ZULW RI KDEHDV FRUSXV LQ VXFK FLUFXPVWDQFHV                 LI   LV mLQDGHTXDWH RU LQHIIHFWLYH WR WHVW WKH
FRQFOXGHGWKHFRXUWmZRXOGEHDPLVFDUULDJHRIMXVWLFHLQWKDW           OHJDOLW\RIKLVGHWHQWLRQlDFFRUGLQJWRWKHmVDYLQJVFODXVHlRI
>GHIHQGDQWV KDYH@ D GXH SURFHVV ULJKW WR EH VHQWHQFHG RQ         86&ZKLFKVWDWHV
DFFXUDWH LQIRUPDWLRQl  3HWHUPDQ Y /DPDQQD 1R
&9VOLSRSDW1'2KLR6HSW)RUHVW                   $QDSSOLFDWLRQIRUDZULWRIKDEHDVFRUSXVLQEHKDOIRI
Y/DPDQQD1R&9VOLSRSDW1'2KLR6HSW                  DSULVRQHUZKRLVDXWKRUL]HGWRDSSO\IRUUHOLHIE\PRWLRQ
%HOOY/DPDQQD1R&9VOLSRSDW                   SXUVXDQW WR WKLV VHFWLRQ VKDOO QRW EH HQWHUWDLQHG LI LW
                                                                            DSSHDUVWKDWWKHDSSOLFDQWKDVIDLOHGWRDSSO\IRUUHOLHIE\
                                                                            PRWLRQWRWKHFRXUWZKLFKVHQWHQFHGKLPRUWKDWVXFK
                                                                            FRXUWKDVGHQLHGKLPUHOLHIXQOHVVLWDOVRDSSHDUVWKDWWKH
    
     7KH GLVWULFW FRXUW GHQLHG 0LOOHGJHjV   SHWLWLRQ EXW UHHQWHUHG
MXGJPHQW ZKLFK SHUPLWWHG 0LOOHGJH WR WDNH D GLUHFW DSSHDO