Court Opinion

ID: 2970462
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:13:55.192321+00
Date Added: 2024-06-11T15:01:59.149921
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

$/%(57621j6 ,1&              ;
                 3HWLWLRQHU    
          &URVV5HVSRQGHQW     
                                   1RV
                                   
          Y                     !
                                
                                
1$7,21$/ /$%25 5(/$7,216 
%2$5'                          
                 5HVSRQGHQW 
             &URVV3HWLWLRQHU 
                                
                                
81,7(' )22' $1'                 
&200(5&,$/ :25.(56              
81,21 /2&$/                 
                  ,QWHUYHQRU 
                               1
    2Q3HWLWLRQIRU5HYLHZDQG&URVV$SSOLFDWLRQ
          IRU(QIRUFHPHQWRIDQ2UGHURIWKH
           1DWLRQDO/DERU5HODWLRQV%RDUG
    1RV&$&$&$
                $UJXHGsXQH
         'HFLGHGDQG)LOHG$XJXVW

                           
       $OEHUWVRQjV,QFY1/5%            1RV

 %HIRUH&/$<DQG*,/0$1&LUFXLWsXGJHV+$<1(6
                    'LVWULFWsXGJH
                       BBBBBBBBBBBBBBBBB
                             &2816(/
$5*8('  3HWHU 0 $QGHUVRQ 35(6721 *$7(6 	
(//,6 6HDWWOH :DVKLQJWRQ IRU 3HWLWLRQHU  sRKQ $UEDE
1$7,21$//$%255(/$7,216%2$5':DVKLQJWRQ
'& IRU 5HVSRQGHQW  *LOHV + *LEVRQ *2/'%(5*
0(&+$1,&678$57	*,%6213RUWODQG2UHJRQIRU
,QWHUYHQRU21%5,()3HWHU0$QGHUVRQ3DWULFN0LFKDHO
0DGGHQ35(6721*$7(6	(//,66HDWWOH:DVKLQJWRQ
sDPHV ( %XUNH ,,, 5DFKDHO $ 5RZH .($7,1*
08(7+,1*	./(.$03&LQFLQQDWL2KLRIRU3HWLWLRQHU
sRKQ$UEDE$LOHHQ$$UPVWURQJ&KDUOHV3'RQQHOO\sU
sXOLH0DUFXV1$7,21$//$%255(/$7,216%2$5'
:DVKLQJWRQ'&IRU5HVSRQGHQW*LOHV+*LEVRQ*HQH%
0HFKDQLF *2/'%(5* 0(&+$1,& 678$57 	
*,%621 3RUWODQG 2UHJRQ IRU ,QWHUYHQRU  :D\QH +
+RHFNHU/$7+523	*$*(/&.DQVDV&LW\0LVVRXUL
0LFKDHO * 'RODQ &$':$/$'(5 :,&.(56+$0 	
7$)71HZ<RUN1HZ<RUN1HOVRQ'$WNLQ,,%$55$1
/,(%0$1//33RUWODQG2UHJRQIRU$PLFL&XULDH
                       BBBBBBBBBBBBBBBBB
                           23,1,21
                       BBBBBBBBBBBBBBBBB
  &/$<&LUFXLWsXGJH$OEHUWVRQjV,QFm$OEHUWVRQjVlD
UHWDLOJURFHUVHHNVUHYLHZRIDGHFLVLRQE\WKH1DWLRQDO/DERU
5HODWLRQV %RDUG m%RDUGl LQ ZKLFK WKH %RDUG KHOG WKDW
$OEHUWVRQjVFRPPLWWHGDQXQIDLUODERUSUDFWLFHDJDLQVWWZR
XQLRQVZKHQ$OEHUWVRQjVDOORZHGFKDULWDEOHJURXSVWRVROLFLW
RQ LQ DQG DURXQG LWV SURSHUW\ RQ YDULRXV RFFDVLRQV EXW

    
     7KH +RQRUDEOH :LOOLDP s +D\QHV sU 8QLWHG 6WDWHV 'LVWULFW sXGJH
IRU WKH 0LGGOH 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ
1RV           $OEHUWVRQjV,QFY1/5%        

GHQLHGQRQHPSOR\HHXQLRQUHSUHVHQWDWLYHVWKHVDPHULJKW
7KH%RDUGKHOGWKDWWKLVSUDFWLFHYLRODWHG6HFWLRQDRI
WKH 1DWLRQDO /DERU 5HODWLRQV $FW m1/5$l LQ WKDW
$OEHUWVRQjV GLVFULPLQDWHG DJDLQVW WKH XQLRQ VROLFLWDWLRQ
$OEHUWVRQjVFRQWHQGVWKDWHPSOR\HUVGRQRWYLRODWHWKH1/5$
E\DOORZLQJFKDULWLHVWRVROLFLWRQWKHLUSURSHUW\ZKLOHGHQ\LQJ
WKHVDPHULJKWWRXQLRQVXQGHUWKHFLUFXPVWDQFHVSUHVHQWKHUH
7KH%RDUGZKLFKFURVVSHWLWLRQVIRUHQIRUFHPHQWRILWVRUGHU
FRQWHQGVRQDSSHDOWKDWWKHDXWKRULW\UHOLHGRQE\$OEHUWVRQjV
RQO\ DSSOLHV LQ VLWXDWLRQV ZKHUH WKH XQLRQ LV HQJDJHG LQ
DFWLYLW\ WKDW ZRXOG KDUP WKH HPSOR\HU VXFK DV ER\FRWWLQJ
DFWLYLW\DQGWKDWRQHRIWKHXQLRQVLQWKHLQVWDQWFDVHZDVQRW
HQJDJHGLQVXFKDFWLYLW\EXWUDWKHULQRUJDQL]DWLRQDODFWLYLW\
)RUWKHUHDVRQVWKDWIROORZZH'(1<HQIRUFHPHQWRIWKH
%RDUGjV RUGHU DQG *5$17 WKH SHWLWLRQ IRU UHYLHZ E\
$OEHUWVRQjV
                      %$&.*5281'
                     3URFHGXUDO+LVWRU\
   2Q1RYHPEHU'ULYHU6DOHVPHQ:DUHKRXVHPHQ
)RRG+DQGOHUV&OHULFDODQG,QGXVWULDO3URGXFWLRQ/RFDO
DIILOLDWHGZLWK,QWHUQDWLRQDO%URWKHUKRRGRI7HDPVWHUV$)/
&,2m/RFDOlDXQLRQORFDWHGLQ6SRNDQH:DVKLQJWRQ
ILOHGDQXQIDLUODERUSUDFWLFHFKDUJHDJDLQVW$OEHUWVRQjVLQ
&DVH1R&$DOOHJLQJWKDW$OEHUWVRQjVVRXJKWWR
UHPRYH UHSUHVHQWDWLYHV RI WKH XQLRQ IURP WKH IURQW RI LWV
VWRUHV/RFDOUHSUHVHQWDWLYHVKDGFRQYHQHGLQIURQWRI
$OEHUWVRQjV VWRUHV LQ RUGHU WR GLVWULEXWH KDQGELOOV DVNLQJ
FXVWRPHUVQRW WR SXUFKDVHSURGXFWVRI%URDGYLHZ'DLU\D
PDQXIDFWXUHUZLWKZKRPWKHXQLRQZDVRQVWULNH
  2Q'HFHPEHUDGLIIHUHQWXQLRQ8QLWHG)RRGDQG
&RPPHUFLDO :RUNHUV 8QLRQ /RFDO  DIILOLDWHG ZLWK
8QLWHG)RRGDQG&RPPHUFLDO:RUNHUV,QWHUQDWLRQDO8QLRQ
$)/&,2m/RFDOlILOHGDFKDUJHDJDLQVW$OEHUWVRQjVLQ
&DVH1R&$7KHFKDUJHDOOHJHGWKDW$OEHUWVRQjV
KDGWKUHDWHQHG/RFDOUHSUHVHQWDWLYHVZLWKDUUHVWDQGFLYLO
DFWLRQIRUDWWHPSWLQJWRJDLQDFFHVVWRVWRUHVDQGLQ
&ODUN&RXQW\:DVKLQJWRQLQRUGHUWRREWDLQDXWKRUL]DWLRQ
     $OEHUWVRQjV,QFY1/5%          1RV        1RV              $OEHUWVRQjV,QFY1/5%          

FDUGVIURPHPSOR\HHV7KHXQLRQDOOHJHGWKDWDFFHVVVKRXOG          EHIRUHXVLQWKHLQVWDQWFDVHZHKROGWKDWWKHGHILQLWLRQRI
KDYH EHHQ DOORZHG SXUVXDQW WR D &ROOHFWLYH %DUJDLQLQJ         GLVFULPLQDWLRQSURYLGHGLQ&5(3DQG6DQGXVN\FRQWUROV
$JUHHPHQW m&%$l EHWZHHQ /RFDO  DQG $OEHUWVRQjV
FRYHULQJ DOO SUHVHQW DQG IXWXUH VWRUHV LQ &ODUN &RXQW\                                &21&/86,21
:DVKLQJWRQ  2Q $SULO   WKH XQLRQ DPHQGHG WKH
FKDUJHWRDOOHJHWKDW/RFDOKDGEHHQWUHDWHGGLIIHUHQWO\           )RUWKHIRUHJRLQJUHDVRQVZH'(1<HQIRUFHPHQWRIWKH
WKDQ RWKHU RUJDQL]DWLRQV ZKLFK ZHUH DOORZHG DFFHVV WR         %RDUGjV RUGHU DQG *5$17 WKH SHWLWLRQ IRU UHYLHZ E\
$OEHUWVRQjVVWRUHV                                                  $OEHUWVRQjV

   2Q0DUFK/RFDOILOHGDVHFRQGFKDUJHDJDLQVW
$OEHUWVRQjV &$ DOOHJLQJ WKDW $OEHUWVRQjV KDG
UHIXVHGWRDOORZXQLRQUHSUHVHQWDWLYHVDFFHVVWR$OEHUWVRQjV
VWRUHVLQ2UHJRQDOVRLQRUGHUWRREWDLQDXWKRUL]DWLRQFDUGV
IURPHPSOR\HHVZKLFKWKHXQLRQFODLPHGZDVDOORZHGXQGHU
WKH&%$/RFDODPHQGHGWKLVFKDUJHRQ$SULO
DOOHJLQJWKDW$OEHUWVRQjVKDGUHIXVHGLWDFFHVVWRLWVVWRUHVj
SUHPLVHVZKLOHDOORZLQJVXFKDFFHVVWRRWKHURUJDQL]DWLRQV
   7KH5HJLRQDO'LUHFWRUFRQVROLGDWHG&DVH1RV&$
DQG&$RQ0D\6XEVHTXHQWO\&DVH1R
&$ZDVFRQVROLGDWHGZLWKWKHRWKHUWZRFDVHV7KH
SDUWLHV PRYHG WR WUDQVIHU WKH PDWWHU WR WKH %RDUG ZDLYH
DUJXPHQW EHIRUH DQ DGPLQLVWUDWLYH ODZ MXGJH m$/sl DQG
VWLSXODWHWRWKHIDFWV7KH%RDUGFRQVLGHUHGWKHPDWWHUIRU
DOPRVW IRXU \HDUV DQG LQ D VKDUSO\ GLYLGHG GHFLVLRQ WKH
%RDUGPDMRULW\IRXQGWKDW$OEHUWVRQjVFRPPLWWHGDQXQIDLU
ODERU SUDFWLFH DQG YLRODWHG WKH 1/5$ E\ H[FOXGLQJ
UHSUHVHQWDWLYHVRI/RFDODQGIURPLWVVWRUHV
  $OEHUWVRQjV ILOHG WKLV WLPHO\ QRWLFH RI DSSHDO RQ
1RYHPEHU    $OWKRXJK QRQH RI WKH DFWLRQV
FRPSODLQHGRIRFFXUUHGLQWKLVFLUFXLWMXULVGLFWLRQLVSURSHU
SXUVXDQWWR86&IZKLFKSURYLGHVWKDWDSDUW\
PD\VHHNUHYLHZRID%RDUGGHFLVLRQLQWKHFRXUWRIDSSHDOV
LQ D MXGLFLDO FLUFXLW ZKHUH WKH SDUW\ WUDQVDFWV EXVLQHVV         
$OEHUWVRQjVFRQWHQGVWKDWLWKDVZHOORYHUHPSOR\HHVLQ             :H DOVR UHMHFW WKH %RDUGjV DUJXPHQW WKDW RXU KROGLQJV LQ &5(3 DQG

7HQQHVVHH DQG 0LFKLJDQ DQG WKXV UHYLHZ E\ WKLV &RXUW LV     6DQGXVN\ UHJDUGLQJ WKH WHUP mGLVFULPLQDWLRQl ZHUH PHUHO\ GLFWD DV VXFK

SURSHU  7KH %RDUG KDV FURVVSHWLWLRQHG DQG VHHNV             DQ DUJXPHQW LV EHOLHG E\ WKH ODQJXDJH LQ WKRVH RSLQLRQV 6HH HJ &5(3
                                                                        )G DW  m>:@H KROG WKDW WKH WHUP µGLVFULPLQDWLRQj DV XVHG LQ
HQIRUFHPHQWRILWVRUGHU                                           
                                                                     %DEFRFN PHDQV IDYRULQJ RQH XQLRQ RYHU DQRWKHU RU DOORZLQJ HPSOR\HU
                                                                     UHODWHG LQIRUPDWLRQ ZKLOH EDUULQJ VLPLODU XQLRQUHODWHG LQIRUPDWLRQl
                                                                     HPSKDVLV DGGHG
    $OEHUWVRQjV,QFY1/5%              1RV           1RV             $OEHUWVRQjV,QFY1/5%          

   :H RI FRXUVH DOVR DUH ERXQG E\ WKLV &RXUWjV KROGLQJ LQ                                        )DFWV
0HLMHUEXWDVZHKDYHH[SODLQHGWKDWFDVHGRHVQRWUHTXLUH
WKDWZHUHMHFWWKHGHILQLWLRQRIGLVFULPLQDWLRQDVVHWIRUWKLQ                7KHIDFWVDUHHVVHQWLDOO\XQGLVSXWHGLQDVPXFKDVWKHSDUWLHV
6DQGXVN\DQG&5(37KLV&RXUWKDVUHFRJQL]HGWKDWWKHUHLV                 VWLSXODWHGWRWKHPEHORZ$OEHUWVRQjVKDVDIRUPDOZULWWHQ
DQKLHUDUFK\RIULJKWVXQGHU6HFWLRQRIWKH1/5$1/5%Y                SROLF\RQDFFHVVDQGVROLFLWDWLRQVZKLFKDSSOLHVWRDOOVWRUHV
*UHDW6FRW,QF)GWK&LU:KLOH               DQGZKLFKEDQVDQ\DQGDOOVROLFLWDWLRQV
WKH FRUH DFWLYLW\ SURWHFWHG E\ 6HFWLRQ  LV WKH ULJKW RI
HPSOR\HHV WR VHOIRUJDQL]H DV SUHYLRXVO\ VWDWHG mQRQ                                           /RFDO
HPSOR\HHV KDYH D µGHULYDWLYH ULJKWj WR HQJDJH LQ
RUJDQL]DWLRQDO DFWLYLWLHVl  ,G  )DUWKHVW UHPRYHG IURP                %HWZHHQ1RYHPEHUDQGsDQXDU\/RFDO
SURWHFWLRQ XQGHU 6HFWLRQ  RI WKH 1/5$ LV WKH DFWLYLW\             HQJDJHGLQDQHFRQRPLFVWULNHDJDLQVW%URDGYLHZ'DLU\
HQJDJHGLQE\WKHQRQHPSOR\HHVLQ&5(3DQG6DQGXVN\                      ORFDWHG LQ 6SRNDQH :DVKLQJWRQ  /RFDO  DWWHPSWHG WR
SLFNHWLQJDFWLYLW\6HH*UHDW6FRW)GDWH[SODLQLQJ             GLVWULEXWHKDQGELOOVDWVL[RI$OEHUWVRQjVUHWDLODQGJURFHU\
WKDW QRQHPSOR\HH SLFNHWLQJ ZDUUDQWV HYHQ OHVV SURWHFWLRQ             VWRUHVLQWKH6SRNDQHDUHD7KHKDQGELOOVXUJHGFXVWRPHUVWR
WKDQ QRQHPSOR\HH RUJDQL]DWLRQDO DFWLYLW\  :KLOH QRQ               UHIUDLQ IURP EX\LQJ %URDGYLHZ 'DLU\ SURGXFWV ZKLFK
HPSOR\HHRUJDQL]HUVPD\ZDUUDQWJUHDWHUSURWHFWLRQXQGHUWKH                $OEHUWVRQjVVROGLQDVPXFKDV%URDGYLHZRIIHUHGmZDJHVDQG
1/5$WKDQQRQHPSOR\HHVZKRHQJDJHLQQRQRUJDQL]DWLRQDO                    EHQHILWVIDUEHORZWKHLQGXVWU\VWDQGDUGVl7KHKDQGELOOVDOVR
DFWLYLW\ERWKVLWXDWLRQVVWLOOLPSOLFDWHWUHVSDVVDFWLYLW\$V            PDGHFOHDUWKDWWKHXQLRQjVGLVSXWHZDVQRWZLWK$OEHUWVRQjV
WKLV&RXUWLQ0HLMHUQRWHGmWUHVSDVVFDVHVFUHDWHDVLWXDWLRQ              EXW RQO\ ZLWK %URDGYLHZ  1RQH RI WKH LQGLYLGXDOV ZKR
ZKHUHWKHLQWHUHVWVRIWKHWUHVSDVVHUDUHDWWKHLUZHDNHVWDQG             VRXJKW WR GLVVHPLQDWH WKH KDQGELOOV ZHUH HPSOR\HHV RI
WKHUHIRUH WKH SURSHUW\ RZQHU KDV D SUHVXPSWLYH ULJKW WR            $OEHUWVRQjV$OEHUWVRQjVUHTXHVWHGSROLFHDVVLVWDQFHLQRUGHU
H[FOXGHQRQHPSOR\HHVIURPLWVSURSHUW\l)GDW                 WR UHPRYH KDQGELOOHUV IURP LWV SURSHUW\ DW VHYHUDO RI WKH
HPSKDVLVDGGHG7KXVZKLOHmµDQHPSOR\HUPD\QRWDOZD\V                 VWRUHV
EDUQRQHPSOR\HHXQLRQRUJDQL]HUVIURPKLVSURSHUW\jlWKH
EXUGHQWKHXQLRQEHDUVLQVKRZLQJWKDWWKHHPSOR\HUPD\QRW                    2Q YDULRXV RFFDVLRQV ZKLOH WKH KDQGELOOHUV DWWHPSWHG WR
GR VR LV D mµKHDY\ RQH    HYLGHQFHG E\ WKH IDFW WKDW WKH   SDVVRXWWKHLUKDQGELOOV$OEHUWVRQjVDOORZHGRWKHUJURXSVRQ
EDODQFHVWUXFNE\WKH%RDUGDQGWKHFRXUWVXQGHUWKH%DEFRFN                LWVSURSHUW\WRVROLFLWGRQDWLRQV7KHVHLQFOXGHGWKH&DPS
DFFRPPRGDWLRQSULQFLSOHKDVUDUHO\EHHQLQIDYRURIWUHVSDVV                )LUH *LUOV DQG %R\V %R\ 6FRXWV *LUO 6FRXWV DQG DUHD
RUJDQL]DWLRQDODFWLYLW\jl/HFKPHUH86DWTXRWLQJ              VFKRROV  )XUWKHU WKH 6DOYDWLRQ $UP\ ZDV DOORZHG WR ULQJ
6HDUV5RHEXFN	&RY&DUSHQWHUV86                   EHOOVGXULQJ7KDQNVJLYLQJDQG&KULVWPDVDWWKHVWRUHVHDFK
,QFRQWUDVWZKHUHHPSOR\HHVULJKWVDUHDWLVVXHmQRUHVWULFWLRQ            \HDU
RQHPSOR\HHVULJKWVWRVHOIRUJDQL]DWLRQLVSHUPLVVLEOHXQOHVV                                          /RFDO
WKH HPSOR\HU VKRZV WKDW VXFK UHVWULFWLRQ LV QHFHVVDU\ WR
PDLQWDLQRUGHUDQGGLVFLSOLQHl/HFKPHUH86DW                    'XULQJ 0D\  WR )HEUXDU\  $OEHUWVRQjV DOVR
%HFDXVHDPRQJRWKHUWKLQJVWKH&RXUWLQ0HLMHUDGGUHVVHG                  GHQLHGQRQHPSOR\HHEXVLQHVVUHSUHVHQWDWLYHVRI/RFDO
FRQFHUQV UHJDUGLQJ VHOIRUJDQL]DWLRQDO ULJKWV RI HPSOR\HHV             WR WKH LQWHULRU DQG LPPHGLDWH H[WHULRU RI ILYH RI LWV VWRUHV
WKHPVHOYHV DQG WKH ULJKWV WKDW WKH\ DUH JUDQWHG XQGHU WKH          ORFDWHGLQ&ODUN&RXQW\:DVKLQJWRQVWRUHVDQG
1/5$WKH&RXUWKHOGWKDWLWZDVQRWERXQGE\&5(3DQG                      %HQG2UHJRQVWRUHVDQGDQG5HGPRQG2UHJRQ
6DQGXVN\  %HFDXVH ZH GR QRW KDYH VXFK FRQVLGHUDWLRQV               VWRUH/RFDOUHSUHVHQWDWLYHVVRXJKWDFFHVVWRWKHVH
       $OEHUWVRQjV,QFY1/5%           1RV          1RV           $OEHUWVRQjV,QFY1/5%        

VWRUHVLQRUGHUWRVROLFLWWKHFRPSDQ\jVHPSOR\HHVWREHFRPH              LQVWDQWFDVH7KLVFDVHLPSOLFDWHVWKHSUHVXPSWLYHULJKWRI
PHPEHUVRIDQGRUWRUHTXHVWUHSUHVHQWDWLRQE\/RFDO                 $OEHUWVRQjVWRH[FOXGHGLVWULEXWLRQRIXQLRQOLWHUDWXUHRQLWV
                                                                          SURSHUW\  )XUWKHU WKLV FDVH LQYROYHV QRQ$OEHUWVRQjV
  ,QHDUO\sXO\DQGRQ2FWREHUVXSHUYLVRUVDW             HPSOR\HHVVHHNLQJDFFHVVWRWKHFRPSDQ\jVSURSHUW\)LQDOO\
VWRUHV  DQGRU  GHQLHG DFFHVV WR /RFDO                   QRUHOHYDQWODERUSROLFLHVDUHDGYDQFHGLQEDQQLQJFKDULWDEOH
UHSUHVHQWDWLYHVDQGWROGWKHPWROHDYHWKHSUHPLVHV                     VROLFLWDWLRQVLQWKLVFDVHZKHUHWKHUHKDVEHHQQRFODLPWKDW
                                                                          WKH WDUJHW DXGLHQFH ZDV RWKHUZLVH LQDFFHVVLEOH  7KH RQO\
   /RFDOEHJDQLWVRUJDQL]LQJFDPSDLJQLQ$SULODQG             IDFWRUWKDWGLVWLQJXLVKHVWKLVFDVHIURP&5(3RU6DQGXVN\LV
DVSDUWRIWKDWFDPSDLJQUHSUHVHQWDWLYHVHQWHUHGLQWRVWRUHVWR          WKHIDFWWKDWWKRVHFDVHVLQYROYHGQRQRUJDQL]DWLRQDODFWLYLW\
WDON WR HPSOR\HHV DQG GLVWULEXWH OLWHUDWXUH DQG SODFHG            7KH%RDUGXUJHVWKDWZHGLVWLQJXLVKWKRVHFDVHVIURPWKLVRQH
OLWHUDWXUHRQFDUZLQGVKLHOGVLQWKHSDUNLQJORW2Q0D\              RQWKDWRQHJURXQG+RZHYHUWKH%RDUGKDVSUHVHQWHGQR
$OEHUWVRQjVQRWLILHG/RFDOE\OHWWHUWKDWLWVFRQGXFW           UHDVRQHGEDVLVWRMXVWLI\RXUGRLQJVR,QUHDFKLQJLWVKROGLQJ
YLRODWHG WKH VWRUHjV QRVROLFLWDWLRQ SROLF\  /RFDO             DVWRWKHPHDQLQJRIWKHWHUPmGLVFULPLQDWLRQlWKH&RXUWLQ
UHSUHVHQWDWLYHVDJDLQDWWHPSWHGWRGLVWULEXWHPDWHULDOVLQsXO\           &5(3 ZDV LQWHUSUHWLQJ WKDW WHUP DV XVHG LQ %DEFRFN 	
 DQG ZHUH WROG WR OHDYH  ,Q D sXO\   OHWWHU      :LOFR[DQG%DEFRFN	:LOFR[ZDVDQRUJDQL]DWLRQDOFDVH
$OEHUWVRQjVDJDLQDGYLVHGWKHXQLRQWKDWLWVFRQGXFWYLRODWHG             6HH%DEFRFN	:LOFR[86DWH[SODLQLQJWKDWWKH
WKHVWRUHjVQRVROLFLWDWLRQSROLF\6LPLODUOHWWHUVZHUHVHQWWR         HPSOR\HU KDG UHIXVHG WR DOORZ QRQHPSOR\HH XQLRQ
WKHXQLRQLQ1RYHPEHUDQG)HEUXDU\DIWHU/RFDO                  RUJDQL]HUV RQ FRPSDQ\ SURSHUW\ WR GLVWULEXWH XQLRQ
 UHSUHVHQWDWLYHV KDG DJDLQ DWWHPSWHG WR GLVWULEXWH LWV          LQIRUPDWLRQWDUJHWHGDWFRPSDQ\HPSOR\HHV7KXVWKHRQO\
PDWHULDOV DQG VROLFLW PHPEHUV DW VRPH RI WKH FRPSDQ\jV            EDVLV RQ ZKLFK WR GLVWLQJXLVK WKLV FDVH IURP &5(3 RU
VWRUHV                                                                  6DQGXVN\ LV WKDW WKRVH FDVHV LQYROYHG QRQRUJDQL]DWLRQDO
                                                                          DFWLYLW\\HWLQUHDFKLQJWKHKROGLQJUHJDUGLQJGLVFULPLQDWLRQ
   /RFDODOUHDG\KDVD&%$ZLWKDSSUR[LPDWHO\RIWKH               WKH\ ZHUH LQWHUSUHWLQJ DQ RUJDQL]DWLRQDO FDVH  :H EHOLHYH
FRPSDQ\jVVWRUHVLQ2UHJRQDQGLQWZRVWRUHVLQ:DVKLQJWRQ               XQGHUWKHVHFLUFXPVWDQFHVWKRVHFDVHVFDQQRWPHDQLQJIXOO\
$WYDULRXVWLPHVLQWKHSDVW$OEHUWVRQjVDSSDUHQWO\DOORZHG              EHGLVWLQJXLVKHGIURPWKHLQVWDQWFDVHDQGZHDUHWKHUHIRUH
/RFDOUHSUHVHQWDWLYHVRUUHSUHVHQWDWLYHVRISUHGHFHVVRU               ERXQGE\WKHLUKROGLQJV6HH8QLWHG6WDWHVY+XPSKUH\
XQLRQVDFFHVVWRWKHLQWHULRURUH[WHULRURILWVQHZVWRUHVLQ            )GWK&LUH[SODLQLQJWKDWDSDQHOLV
RUGHUWRLQIRUPHPSOR\HHVDERXWWKHXQLRQ$FFRUGLQJWRWKH              ERXQGWRIROORZSUHFHGHQWLDODXWKRULW\IURPDQRWKHUSDQHORI
&%$ FRYHULQJ VWRUHV   DQG  /RFDO  ZDV            WKLVFRXUWXQOHVVVXFKDXWKRULW\FDQEHGLVWLQJXLVKHGHYHQLI
DOORZHG VWRUH DFFHVV WR LQYHVWLJDWH WKH XQLRQ VWDQGLQJ RI         FXUUHQW SDQHO LV LQFOLQHG WR GLVDJUHH ZLWK SULRU GHFLVLRQ
UHSUHVHQWHGPHDWGHSDUWPHQWHPSOR\HHV$FFRUGLQJWR/RFDO                6DQGXVN\)GDWH[SODLQLQJWKDWmILUPIL[HGUXOHl
WKHFODXVHVLQWKH&%$DOVRSURYLGHGWKDW$OEHUWVRQjV                LQWKLVFLUFXLWLVWKDWRQHSDQHOFDQQRWRYHUUXOHDSULRUSDQHOjV
DJUHHGWRUHFRJQL]H/RFDODVWKHUHSUHVHQWDWLYHRILWVQRQ           KROGLQJ,QWjO,QV&RY6WRQHZDOO,QV&R)G
H[HPSWJURFHU\HPSOR\HHVLQVWRUHVDQGEDVHG                WK&LUKROGLQJWKDWDOWKRXJKRQWKHLUIDFHWZR
XSRQ D PDMRULW\ RI WKH HPSOR\HHV DXWKRUL]LQJ         VXFK          SULRU FDVHV IURP GLIIHUHQW SDQHOV DSSHDU WR FRQWUDGLFW WKH
UHSUHVHQWDWLRQZLWKRXWKDYLQJDQ1/5%HOHFWLRQ                         LVVXHLQYROYHGZDVKHDYLO\IDFWGULYHQDQGFRXUWZRXOGDSSO\
                                                                          WKHKROGLQJRIWKHRQHSULRUFDVHZLWKIDFWVPRVWDQDORJRXVWR
                                                                          WKHLVVXHEHIRUHWKHFRXUW
    
       'XULQJ RUDO DUJXPHQW WKH %RDUG H[SUHVVO\ VWDWHG WKDW /RFDO 
GRHV QRW FODLP WKDW $OEHUWVRQjV VKRXOG KDYH DOORZHG WKH XQLRQ DFFHVV WR
LWV VWRUHV XQGHU DQ\ ULJKWV JUDQWHG E\ WKH &%$ 5DWKHU RQ DSSHDO WKH
    $OEHUWVRQjV,QFY1/5%           1RV        1RV             $OEHUWVRQjV,QFY1/5%          

GLVWLQJXLVKHG&5(3DQGH[SODLQHGWKDWWKHSDQHOLQWKDWFDVH             7KH %RDUG SRLQWV RXW WKDW $OEHUWVRQjV KDV DOORZHG
DGRSWHGDQDUURZGHILQLWLRQRImGLVFULPLQDWLRQlDVDUHVXOWRI       FKDULWDEOH DQGRU FLYLFHGXFDWLRQDO JURXSV WR VROLFLW LWV
WKHJHQHUDOUXOHWKDWDQRZQHURISULYDWHSURSHUW\LVXQGHU       FXVWRPHUVLQWKHDUHDVLPPHGLDWHO\VXUURXQGLQJWKHHQWUDQFH
QRREOLJDWLRQWRSHUPLWWKHGLVWULEXWLRQRIXQLRQOLWHUDWXUHRQ       WRWKHVWRUHV)RULQVWDQFHGXULQJWKH&KULVWPDVVHDVRQDOO
LWVSURSHUW\WKHVXEVWDQWLDOGLIIHUHQFHEHWZHHQWKHULJKWV       ILYH VWRUHV DOORZ 6DOYDWLRQ $UP\ EHOOULQJHUV WR VROLFLW WKH
RI HPSOR\HHV DQG QRQHPSOR\HHV ZLWK UHVSHFW WR WKH             FRPSDQ\jVFXVWRPHUV6WRUHVDQGKDYHDOORZHGWKH
GLVWULEXWLRQRIXQLRQOLWHUDWXUHRQSULYDWHO\RZQHGSURSHUW\         *LUO 6FRXWV %R\ 6FRXWV %URZQLHV DQG \RXWK DQG VFKRRO
DQG  WKH IDFW WKDW &5(3 LQYROYHG QRQHPSOR\HH XQLRQ        JURXSVWRVROLFLWLWVFXVWRPHUV6WRUHVDQGDOVR
UHSUHVHQWDWLYHVHQJDJLQJLQQRQRUJDQL]DWLRQDODFWLYLW\,GDW      KDYHDOORZHGWKH*LUO6FRXWV&DPSILUH*URXSVWKH9HWHUDQV
,QDGGLWLRQWKH&RXUWLQ0HLMHUDOVRQRWHGWKDW&5(3jV        RI)RUHLJQ:DUV'LVDEOHG9HWHUDQVRI$PHULFDDQG\RXWK
KROGLQJUHOLHGRQDSROLF\FRQVLGHUDWLRQQRWSUHVHQWLQ0HLMHU       DQGVFKRROJURXSVWRVROLFLW
m>7@KH &RXUW ZDV    LQIOXHQFHG E\ WKH IDFW WKDW µ>Q@R
UHOHYDQWODERUSROLFLHVDUHDGYDQFHGE\UHTXLULQJHPSOR\HUV              *HQHUDOO\WKHVHJURXSVDUHDOORZHGWRVHWXSLQWKHDUHD
WRSURKLELWFKDULWDEOHVROLFLWDWLRQVLQRUGHUWRSUHVHUYHWKH         DGMDFHQW WR WKH VWRUH HQWUDQFHV DQG H[LWV  +RZHYHU
ULJKWWRH[FOXGHQRQHPSOR\HHGLVWULEXWLRQRIXQLRQOLWHUDWXUH        $OEHUWVRQjV DGPLWV WKDW GXULQJ LQFOHPHQW ZHDWKHU LW KDV
ZKHQDFFHVVWRWKHWDUJHWDXGLHQFHLVRWKHUZLVHDYDLODEOHjl          SHUPLWWHG WKH *LUO 6FRXWV DQG 6DOYDWLRQ $UP\ EHOOULQJHUV
,GHPSKDVLVDGGHGTXRWLQJ&5(3)GDW                 DFFHVV WR WKH LPPHGLDWH LQWHULRU RI WKH VWRUH  7KH &ODUN
                                                                      &RXQW\DQG%HQG5HGPRQG6DOYDWLRQ$UP\EHOOULQJHUVVROLFLW
    7KH&RXUWLQ0HLMHUGLVWLQJXLVKHGWKHFDVHEHIRUHLWIRUDOO      RQVWRUHSURSHUW\WKURXJKRXWWKHPRQWKSULRUWR&KULVWPDV
WKHUHDVRQVQRWHGDERYHDQGQRWDVWKH%RDUGFODLPVVROHO\         7KH &ODUN &RXQW\ *LUO 6FRXWV DUH JUDQWHG DFFHVV WR VWRUH
EHFDXVH&5(3LQYROYHGQRQRUJDQL]DWLRQDODFWLYLW\)XUWKHU          SURSHUW\WZLFHD\HDUGXULQJDWZRZHHNSHULRGHDFKWLPH
LW LV HYLGHQW WKDW WKH &RXUW GLVWLQJXLVKHG 0HLMHU SULPDULO\   %HQG5HGPRQG DUHD *LUO 6FRXWV DUH JUDQWHG DFFHVV WR VHOO
EHFDXVH WKDW FDVH LQYROYHG 0HLMHUjV HPSOR\HHV  6HH HJ     WKHLUFRRNLHVRQFHD\HDUIRUVL[WHHQFRQWLQXRXVGD\V7KH
0HLMHU  )G DW  m7KH PDMRULW\ EHOLHYHV WKDW WKH    &ODUN&RXQW\%R\6FRXWVDUHJUDQWHGDFFHVVWRVWRUHSURSHUW\
>&5(3@GHILQLWLRQRIGLVFULPLQDWLRQVKRXOGEHQRWEHDSSOLHG          WRVHOOSURGXFWVWZLFHD\HDUGXULQJRQHPRQWKLQWKHIDOODQG
LQ WKH LQVWDQW FDVH VLQFH >WKH IRUPHU FDVH@ LQYROYHG QRQ   DQRWKHUPRQWKLQWKHVSULQJ7KHRWKHUJURXSVDUHJUDQWHG
HPSOR\HH VROLFLWRUV DQG WKLV FDVH LQYROYHV HPSOR\HHVl         DFFHVVWRSURSHUW\RQHWRWKUHHGD\VGXULQJWKHFRXUVHRIWKH
1RUULVsGLVVHQWLQJ$VWKHPDMRULW\LQ0HLMHUSRLQWHGRXW     \HDU  $W HDFK RI WKH ILYH VWRUHV $OEHUWVRQjV KDV QHYHU
WKLVGLVWLQFWLRQLVRQHRIVXEVWDQFH,GDWQRWLQJWKDW       DOORZHGDQRWKHUODERURUJDQL]DWLRQWRGLVWULEXWHOLWHUDWXUHWR
m>H@PSOR\HHVDUHDFFRUGHGJUHDWHUSURWHFWLRQXQGHUWKH$FW            KDQGELOORUWRVROLFLWFXVWRPHUVRQWKHLQWHULRURUH[WHULRURI
WKDQQRQHPSOR\HHVEXWWKH\>HPSOR\HHV@DUHDFFRUGHGHYHQ            WKHSUHPLVHV
JUHDWHU SURWHFWLRQXQGHUWKH$FWZKHQWKH\DUHHQJDJHGLQ
RUJDQL]DWLRQDODFWLYLW\lVHHDOVR%DEFRFN86DW           $OEHUWVRQjV KDV UHMHFWHG UHTXHVWV WR VROLFLW GRQDWLRQV E\
H[SODLQLQJWKDWWKHGLVWLQFWLRQEHWZHHQHPSOR\HHjVULJKWWR          RWKHU RUJDQL]DWLRQV DVLGH IURP WKH FKDULWDEOH JURXSV
GLVFXVV VHOIRUJDQL]LQJ DQG WKH ULJKW RI QRQHPSOR\HH           PHQWLRQHG DERYH VXFK DV SROLWLFDO JURXSV FKDULWDEOH
RUJDQL]HUV LV RQH RI mVXEVWDQFHl &5(3  )G DW 
VDPH
   (YHU\IDFWRUH[FHSWRQHWKDWWKH&RXUWLQ0HLMHUSRLQWHGWR        %RDUG FRQWHQGV WKDW $OEHUWVRQjV VKRXOG KDYH SHUPLWWHG /RFDO  DFFHVV
LQRUGHUWRGLVWLQJXLVKWKDWFDVHIURP&5(3LVUHOHYDQWWRWKH        WR LWV VWRUHV GHVSLWH $OEHUWVRQjV QRVROLFLWDWLRQ SROLF\ EHFDXVH
                                                                      $OEHUWVRQjV DOORZHG VXFK DFFHVV WR FKDULWLHV
     $OEHUWVRQjV,QFY1/5%           1RV         1RV             $OEHUWVRQjV,QFY1/5%         

RUJDQL]DWLRQV XQIDPLOLDU WR WKH FRPPXQLW\ DQG DOO QRQ         6DQGXVN\DVWKH%RDUGjVGHFLVLRQGLGQRWH[SUHVVO\UHO\RQ
FKDULWLHV                                                           DQ\VXFKGLVWLQFWLRQVLQUHDFKLQJLWVGHFLVLRQ$mUHYLHZLQJ
                                                                       FRXUW    PXVW MXGJH WKH SURSULHW\ RI >WKH DFWLRQV RI DQ
                         ',6&866,21                                    DGPLQLVWUDWLYHDJHQF\@VROHO\RQWKHJURXQGVLQYRNHGE\WKH
                                                                       DJHQF\l1/5%Y8QLWHG6WDWHV3RVWDO6HUY)G
                                 ,                                     WK &LU  TXRWLQJ 6(& Y &KHQHU\ &RUS 
                                                                       86     m$ FRXUW ZLOO QRW DIILUP WKH
   $OEHUWVRQjV VHHNV UHYLHZ RI WKH %RDUGjV GHFLVLRQ DQG         DGPLQLVWUDWLYH DFWLRQ E\ VXEVWLWXWLQJ D PRUH DGHTXDWH RU
FRQWHQGV WKDW $OEHUWVRQjV KDV D ULJKW WR H[FOXGH IURP LWV     SURSHUEDVLV>DQG@>W@KLV&RXUWZLOOQRWDIILUPWKH%RDUGjV
SURSHUW\QRQHPSOR\HHXQLRQUHSUHVHQWDWLYHVZKRHQJDJHLQ              DFWLRQVEDVHGRQUHDVRQVQRWUHOLHGXSRQE\WKH%RDUGLWVHOIl
HLWKHUQRQRUJDQL]LQJRURUJDQL]LQJDFWLYLWLHV$FFRUGLQJWR          ,G UHMHFWLQJ %RDUGjV DUJXPHQW EHIRUH WKLV &RXUW WKDW WKH
$OEHUWVRQjV WKH %RDUG HUUHG LQ ILQGLQJ WKDW $OEHUWVRQjV        %RDUGjV UHDGLQJ RI WKH 3RVWDO 5HRUJDQL]DWLRQ $FW ZDV
GLVFULPLQDWHGDJDLQVWWKHXQLRQE\DOORZLQJFHUWDLQFKDULWDEOH         VXSSRUWHGE\DWKHQUHFHQW6XSUHPH&RXUWFDVHZKHQFDVHGLG
JURXSVWRVROLFLWRQLWVSURSHUW\EXWGHQ\LQJWKHXQLRQVXFK           QRWOHQGVXFKVXSSRUWDQG%RDUGIDLOHGWRUHO\RQWKDWFDVHWR
ULJKWV$OEHUWVRQjVIXUWKHUFRQWHQGVWKDWWKLVILQGLQJE\WKH         MXVWLI\LWVUHDGLQJRIWKH$FWLQLWVGHFLVLRQEHORZVHHDOVR
%RDUGFRQIOLFWVZLWKWZRRSLQLRQVIURPWKLV&RXUW6DQGXVN\           1/5%Y.HQWXFN\5LYHU&PW\&DUH&R86
0DOO &R Y 1/5%  )G  WK &LU  DQG          Q  m:H GR QRW     VXEVWLWXWH FRXQVHOjV SRVW KRF
&OHYHODQG5HDO(VWDWH3DUWQHUV>m&5(3l@Y1/5%)G               UDWLRQDOH IRU WKH UHDVRQLQJ VXSSOLHG E\ WKH %RDUG LWVHOIl
WK&LU                                                   TXRWLQJ 1/5% Y <HVKLYD 8QLY  86   Q
                                                                         ,Q DQ\ HYHQW HYHQ LI ZH ZHUH WR FRQVLGHU WKH
   2QDSSHDOWKH%RDUGDUJXHVWKDW$OEHUWVRQjVGLVFULPLQDWHG          %RDUGjV DUJXPHQWV RQ DSSHDO DV WR ZK\ WKLV FDVH LV
DJDLQVW/RFDODQGYLRODWHG6HFWLRQDRIWKH1/5$            GLVWLQJXLVKDEOHIURP&5(3DQG6DQGXVN\ZHGRQRWEHOLHYH
 86&  D ZKHQ $OEHUWVRQjV H[FOXGHG XQLRQ          WKDWWKHDUJXPHQWVDGYDQFHGZLWKVWDQGVFUXWLQ\
UHSUHVHQWDWLYHVIURPLWVVWRUHV7KH%RDUGFRQWHQGVWKDWDQ
HPSOR\HUYLRODWHVWKH1/5$ZKHQLWGHQLHVDXQLRQDFFHVVWR               7KH%RDUGUHOLHVRQ0HLMHU,QFY1/5%)G
LWVSUHPLVHVIRURUJDQL]DWLRQDOSXUSRVHVEXWDOORZVFKDULWLHV          WK &LU  WR VXSSRUW LWV FRQWHQWLRQ WKDW WKH KROGLQJ
WR VROLFLW GRQDWLRQV RQ LWV SURSHUW\  ,W FRQWHQGV WKDW DQ   UHJDUGLQJWKHWHUPmGLVFULPLQDWLRQlVHWIRUWKLQ&5(3DVWKDW
HPSOR\HUjVWROHUDQFHRIQRQHPSOR\HHFKDULWDEOHVROLFLWDWLRQV          WHUPZDVXVHGLQ%DEFRFN	:LOFR[LVLQDSSOLFDEOHWRWKH
LVSUREDWLYHHYLGHQFHRIGLVFULPLQDWLRQDJDLQVWQRQHPSOR\HH           LQVWDQWFDVH,Q0HLMHUWKHHPSOR\HUFKDOOHQJHGD%RDUGjV
RUJDQL]LQJDFWLYLW\,WIXUWKHUDUJXHVWKDWWKHUHLVQREDVLVIRU     RUGHU UHTXLULQJ 0HLMHU D IRRG DQG JHQHUDO PHUFKDQGLVH
WUHDWLQJFKDULWLHVDQ\GLIIHUHQWO\WKDQXQLRQVFRQWHQGLQJWKDW        UHWDLOHUWRDOORZHPSOR\HHVDWRQHRILWVVWRUHVWRZHDUXQLRQ
WUHDWLQJWKHVHWZRJURXSVVLPLODUO\DYRLGVWKHWHPSWDWLRQRI           LQVLJQLDZKLOHRQWKHMRE,GDW7KHVWRUHPDQDJHUKDG
ODEHOLQJ mHPSOR\HHl RUJDQL]DWLRQDO DFWLYLW\ KDUPIXO WR DQ        HQIRUFHGDGUHVVFRGHWKDWEDQQHGHPSOR\HHVIURPZHDULQJ
HPSOR\HUjV EXVLQHVV ZKLOH ODEHOLQJ FKDULWDEOH VROLFLWDWLRQ       ZLWK WKHLU XQLIRUPV DQ\WKLQJ RWKHU WKDQ QDPH EDGJHV
KHOSIXORUDGYDQWDJHRXVWREXVLQHVV                                   FRPSDQ\ DSSURYHG EXWWRQV 8QLWHG :D\ SLQV DQG VHUYLFH
                                                                       UHFRJQLWLRQSLQV,GDW
  7KH%RDUGDOVRFRQWHQGVWKDWWKLV&RXUWVKRXOGGHIHUWRWKH
%RDUGjVGHILQLWLRQRImGLVFULPLQDWLRQlEHFDXVHE\GHILQLQJ               0HLMHU DUJXHG WKDW &5(3 ZDV FRQWUROOLQJ DQG WKDW WKH
WKDWWHUPWKH%RDUGZDVDOOHJHGO\LQWHUSUHWLQJWKH1/5$D            GHILQLWLRQ RI mGLVFULPLQDWLRQl HVSRXVHG LQ WKDW FDVH ZDV
UHVSRQVLELOLW\HQWUXVWHGWRLWE\&RQJUHVV:KLOHWKH%RDUG           GLVSRVLWLYH  ,G DW   7KLV &RXUW GLVDJUHHG  ,W
UHFRJQL]HV WKDW WKLV &RXUW KDV QDUURZO\ GHILQHG WKH WHUP
    $OEHUWVRQjV,QFY1/5%           1RV        1RV            $OEHUWVRQjV,QFY1/5%          

 :KLOH DFNQRZOHGJLQJ WKDW WKH GHILQLWLRQ RIWKHWHUP           mGLVFULPLQDWLRQlLQ6DQGXVN\DQG&5(3WKH%RDUGDUJXHV
GLVFULPLQDWLRQDVVHWIRUWKLQ&5(3DQG6DQGXVN\LVDQDUURZ          WKDW WKH\ DUH GLVWLQJXLVKDEOH LQ WKDW WKRVH FDVHV LQYROYHG
RQHWKH%RDUGFRQWHQGVWKDWWKLV&RXUWLVQRWERXQGE\WKRVH         XQLRQVXUJLQJDFRQVXPHUER\FRWWDQGQRWRUJDQL]LQJDFWLYLW\
FDVHV EHFDXVH WKLV &RXUW VXEVHTXHQWO\ KDV OLPLWHG WKHLU        ,QWKDWYHLQWKH%RDUGKDVDEDQGRQHGLWVFODLPVDVWR/RFDO
KROGLQJVWRVLWXDWLRQVLQYROYLQJD XQLRQjVHFRQRPLFDWWDFN           ZKLFKXQGLVSXWHGO\ZDVLQYROYHGLQER\FRWWLQJDFWLYLW\
DJDLQVW DQ HPSOR\HU DQG QRW DV KHUH ZKHUH WKH XQLRQ LV   DQGVHHNVHQIRUFHPHQWRILWV2UGHURQO\ZLWKUHVSHFWWR/RFDO
HQJDJLQJLQRUJDQL]LQJDFWLYLW\)XUWKHUWKH%RDUGFRQWHQGV         
WKDWWKHGLVFXVVLRQUHJDUGLQJWKHGHILQLWLRQRIGLVFULPLQDWLRQ
LQ6DQGXVN\DQG&5(3ZDVPHUHO\GLFWD:KLOHWKH%RDUGLV             $WWKHRXWVHWZHQRWHWKDWWKH%RDUGGLGQRWUHO\RQDQ\
FRUUHFWWKDWDSDQHORIWKLV&RXUWGLVWLQJXLVKHG&5(3LQDFDVH       GLVWLQFWLRQ EHWZHHQ RUJDQL]LQJ DQG ER\FRWWLQJ DFWLYLW\ LQ
GHFLGHG VXEVHTXHQW WR &5(3 DV H[SODLQHG EHORZ WKH            UHDFKLQJLWVGHFLVLRQEHORZ$VH[SODLQHG/RFDOFOHDUO\
GLVWLQFWLRQLVQRWDVIDUVZHHSLQJDVWKH%RDUGFRQWHQGV             ZDVHQJDJHGLQER\FRWWLQJDFWLYLW\DQGWKH%RDUGGHFLGHG
                                                                      WKDW FDVH DQG WKH FDVH LQYROYLQJ /RFDO  WRJHWKHU DQG
  %/LPLWDWLRQRI&5(3DQG6DQGXVN\                                  DSSOLHG D JHQHUDOO\ DSSOLFDEOH UXOH WR DOO VXFK FDVHV
                                                                      $FFRUGLQJWRWKH%RDUGjVRSLQLRQWKHJHQHUDOUXOHLVWKDWmDQ
   $VZHH[SODLQHGHDUOLHUWKH%RDUGjVGHFLVLRQLQWKLVFDVH         HPSOR\HU>WKDW@GHQLHVDXQLRQDFFHVVWRLWVSURSHUW\ZKLOH
IDLOVWRGLVWLQJXLVKEHWZHHQWKHDFWLYLW\HQJDJHGLQE\/RFDO         UHJXODUO\ DOORZLQJ RWKHU LQGLYLGXDOV JURXSV DQG
DQG/RFDO,QGHHGWKH%RDUGDQDO\]HGWKHFODLPV             RUJDQL]DWLRQV WR XVH LWV SUHPLVHV IRU YDULRXV DFWLYLWLHV
UHJDUGLQJ/RFDOLQYROYLQJQRQRUJDQL]DWLRQDOER\FRWWLQJ          XQODZIXOO\GLVFULPLQDWHVDJDLQVWWKHXQLRQVROLFLWDWLRQl7KH
DFWLYLWLHVDQG/RFDOLQYROYLQJRUJDQL]DWLRQDODFWLYLW\         %RDUGH[SODLQHGWKDWLWZRXOGQRWDOORZDQHPSOR\HUWRMXVWLI\
WRJHWKHU7KH%RDUGjVGHFLVLRQJHQHUDOO\KHOGWKDWDQ\DQGDOO       WKH UHVWULFWLRQ RI XQLRQ VROLFLWDWLRQ RQ WKH JURXQGV WKDW LW
H[FOXVLRQ RI WKH XQLRQ IURP DQ HPSOR\HUjV SUHPLVHV LV         SHUPLWVRQO\FKDULWDEOHVROLFLWDWLRQ,G7KH%RDUGH[SODLQHG
GLVFULPLQDWRU\ ZKHUH WKH HPSOR\HU DOORZV RWKHUV VXFK DV       WKDW mZKHUH RWKHU QRQHPSOR\HH VROLFLWDWLRQ LV IUHTXHQWO\
FKDULWLHVWKHULJKWWRVROLFLWRQLWVSUHPLVHV7KXVWKH%RDUG     DOORZHGWKHIDFWWKDWPXFKRIWKDWVROLFLWDWLRQLVFKDULWDEOHRU
GHWHUPLQHG WKDW LW GLG QRW PDWWHU ZKHWKHU WKH DFWLYLWLHV      RWKHUZLVH QRQFRQWURYHUVLDO GRHV QRW SUHFOXGH D ILQGLQJ RI
HQJDJHGLQEHWZHHQ/RFDODQG/RFDODQGWKHFKDULWLHV          GLVFULPLQDWLRQ DJDLQVW XQLRQ VROLFLWDWLRQl  ,G  7KH %RDUG
ZHUHVLPLODURUZKHWKHUFKDULWLHVDQGXQLRQVDUHFRPSDUDEOH           IRXQGWKDWWKHVROLFLWDWLRQSHUPLWWHGE\$OEHUWVRQjVH[FHHGHG
JURXSV%XWVHH6DQGXVN\)GDWKROGLQJWKDWWKH          WKHVPDOOQXPEHURILVRODWHGEHQHILFHQWDFWVWKDWWKH%RDUG
DOOHJHGGLVFULPLQDWRU\FRQGXFWLQDOORZLQJVROLFLWDWLRQE\RQH        KDVLQWKHSDVWUHJDUGHGDVDSHUPLVVLEOHQDUURZH[FHSWLRQWR
JURXSZKLOHEDUULQJVXFKVROLFLWDWLRQE\DQRWKHUUHTXLUHVWKDW        DQHPSOR\HUjV JHQHUDOQRVROLFLWDWLRQUXOHVXFKDVWKHRQH
WKHGLVFULPLQDWLRQEHDPRQJFRPSDUDEOHJURXSVRUDFWLYLWLHV         HPSOR\HG E\ $OEHUWVRQjV LQ WKH LQVWDQW FDVH  7KH %RDUG
,WLVRQO\RQDSSHDOWKDWWKH%RDUGDUJXHVWKDWFKDULWLHVDQG         H[SODLQHGWKDWLWVSRVLWLRQZDVFRQVLVWHQWZLWKWKH6XSUHPH
XQLRQVDUHLQGLVWLQJXLVKDEOHIRUSXUSRVHVRIDGLVFULPLQDWLRQ         &RXUWjVGHFLVLRQLQ1/5%Y%DEFRFN	:LOFR[&R
DQDO\VLVDQGWKDWXQLRQVHQJDJLQJLQRUJDQL]DWLRQDODFWLYLW\          86   LQ ZKLFK WKH &RXUW ILUVW GLVFXVVHG WKH
VSHFLILFDOO\DQGFKDULW\VROLFLWDWLRQVDUHFRPSDUDEOHDFWLYLWLHV     mGLVFULPLQDWLRQH[FHSWLRQlWRWKHJHQHUDOUXOHWKDWHPSOR\HUV
7KH DUJXPHQWV WKH %RDUG QRZ VHHNV WR UDLVH DUH FOHDUO\       DUH QRW ERXQG WR SHUPLW XQLRQV RQ WKHLU SURSHUW\ WR VROLFLW
FUDIWHG IRU DSSHDO EHFDXVH RI RXU KROGLQJV LQ &5(3 DQG       PHPEHUV
                                                                       2QHPHPEHURIWKH%RDUGSDQHOGLVVHQWHG7KHGLVVHQWLQJ
                                                                      PHPEHUVWDWHGWKDWWKH1/5$SURKLELWVGLVFULPLQDWLRQDJDLQVW
WR FRPPXQLFDWH ZLWK $OEHUWVRQjV HPSOR\HHV
       $OEHUWVRQjV,QFY1/5%              1RV            1RV                      $OEHUWVRQjV,QFY1/5%            

XQLRQVROLFLWDWLRQEXWWKDWDQHPSOR\HUPD\DOORZRQHW\SHRI                  &RXUWLQ&5(3DQGUHDIILUPHGLQ6DQGXVN\QRGLVFULPLQDWLRQ
VROLFLWDWLRQRQLWVSURSHUW\ZKLOHQRWSHUPLWWLQJRWKHUW\SHVRI                RFFXUUHGLQWKLVFDVH
VROLFLWDWLRQ)RULQVWDQFHWKHGLVVHQWLQJPHPEHUVWDWHGWKDW
DQHPSOR\HUPD\SHUPLWVROLFLWDWLRQVE\FKDULWLHVIRUFDQFHU
ZKLOHGHQ\LQJWKRVHE\RUJDQL]DWLRQVWKDWFRPEDW$,'67KH                         
                                                                                      7KH SDUWLHV SUHVHQW QXPHURXV DUJXPHQWV SHUWDLQLQJ WR ZKHWKHU
GLVVHQWLQJ PHPEHU FKDUDFWHUL]HG WKH FRPSDQ\jV SROLF\ DV                   XQLRQV DQG FKDULWLHV DUH FRPSDUDEOH IRU SXUSRVHV RI D GLVFULPLQDWLRQ
SHUPLWWLQJVROLFLWDWLRQVE\FKDULWDEOHJURXSVZHOONQRZQWR                     DQDO\VLV 7KH DPLFL DOVR KDYH VXEPLWWHG EULHIV SULPDULO\ DGGUHVVLQJ WKLV
WKH FRPPXQLW\ ZKLOH EDQQLQJ VXFK VROLFLWDWLRQV IURP                       VDPH LVVXH %HFDXVH RI RXU GLVSRVLWLRQ LQ WKLV FDVH ZH QHHG QRW UHDFK WKH
FKDULWDEOH JURXSV WKDW DUH QRW ZHOO NQRZQ RU E\ SROLWLFDO              YDULRXV LVVXHV UDLVHG E\ WKH DPLFL RU WKH SDUWLHV SHUWDLQLQJ WR WKH VLPLODULW\

JURXSVRUFRPPHUFLDOJURXSVVHOOLQJJRRGVDQGVHUYLFHV7KH                    RU GLVVLPLODULW\ EHWZHHQ FKDULWLHV DQG XQLRQV :H DGKHUH WR RXU GHFLVLRQ
                                                                                LQ &5(3    WKDW m>Q@R UHOHYDQW ODERU SROLFLHV DUH DGYDQFHG E\ UHTXLULQJ
GLVVHQWLQJ PHPEHU VDZ QR SUREOHP ZLWK VXFK D SROLF\                     HPSOR\HUV WR SURKLELW FKDULWDEOH VROLFLWDWLRQV LQ RUGHU WR SUHVHUYH WKH ULJKW
LQDVPXFK DV WKH OLQH $OEHUWVRQjV GUHZ UHJDUGLQJ WKH                      WR H[FOXGH QRQHPSOR\HH GLVWULEXWLRQ ZKHQ DFFHVV WR WKH WDUJHW DXGLHQFH
RUJDQL]DWLRQVWKDWFRXOGDQGFRXOGQRWVROLFLWZDVQRWDQDQWL                 LV RWKHUZLVH DYDLODEOHl  )G DW  7KH %RDUG FRQWHQGV KRZHYHU
XQLRQOLQH7KHGLVVHQWLQJPHPEHUUHDVRQHGWKDWWKHXQLRQV                     WKDW GHVSLWH WKH KROGLQJV LQ&5(3 6DQGXVN\
                                                                                                                      DQG             WKH 6XSUHPH &RXUWjV

LQWKLVFDVHZHUHQRWVROLFLWLQJFKDULWDEOHFRQWULEXWLRQVEXW                  KROGLQJ LQ   1/5% Y 6WRZH 6SLQQLQJ &R      86   VXSSRUWV

UDWKHUZHUHDWWHPSWLQJDPRQJRWKHUWKLQJVWRSHUVXDGHWKH                     WKH %RDUGjV YLHZ WKDW GLVFULPLQDWLRQ RFFXUV XQGHU       %DEFRFN 	 :LOFR[
                                                                                ZKHUH DQ HPSOR\HU DOORZV DFFHVV WR LWV SURSHUW\ WR FKDULWLHV EXW GHQLHV
FRPSDQ\jVHPSOR\HHVWRmEX\lLWVUHSUHVHQWDWLRQDOVHUYLFHV                     VLPLODU DFFHVV WR XQLRQV $V D SUHOLPLQDU\ PDWWHU 6WRZH 6SLQQLQJ ZDV QRW
ZKLFK WKH VWRUHjV QRVROLFLWDWLRQ SROLF\ SURKLELWHG  7KH                LQWHUSUHWLQJ WKH mGLVFULPLQDWLRQ H[FHSWLRQl DQQRXQFHG LQ %DEFRFN 	
GLVVHQWLQJPHPEHUSRLQWHGRXWWKDWLIRQHRIWKHFKDULWLHVWKDW                 :LOFR[ DV 6WRZH 6SLQQLQJ ZDV GHFLGHG VHYHUDO \HDUV SULRU WR WKDW FDVH
ZDV SHUPLWWHG WR VROLFLW RQ WKH FRPSDQ\jV SURSHUW\ VRXJKW               )XUWKHU 6WRZH 6SLQQLQJ LV GLVWLQJXLVKDEOH RQ LWV IDFWV ,Q WKDW FDVH WKH
GRQDWLRQVIRUDSROLWLFDOFDPSDLJQVXFKVROLFLWDWLRQZRXOGEH                  %RDUG IRXQG WKDW IRXU HPSOR\HUV LQ D VPDOO WRZQ KDG FRPPLWWHG DQ XQIDLU
                                                                                ODERU SUDFWLFH ZKHUH WKH HPSOR\HUV KDG UHIXVHG WR DOORZ D XQLRQ WR PHHW
SURKLELWHG XQGHU WKH FRPSDQ\jV QRVROLFLWDWLRQ SROLF\                     LQ WKH RQO\ PHHWLQJ KDOO LQ WKH WRZQ DOWKRXJK WKH HPSOR\HUV KDG DOORZHG
+RZHYHULIDXQLRQVRXJKWWRUDLVHPRQH\IRUWKH$PHULFDQ                      RWKHU JURXSV LQFOXGLQJ VRPH RI D FKDULWDEOH QDWXUH WR GR VR 6WRZH
&DQFHU)RXQGDWLRQLWZRXOGEHSHUPLWWHGWRGRVRXQGHUWKH                     6SLQQLQJ  86 DW  VHH DOVR 1/5% Y 6WRZH 6SLQQLQJ &R 
SROLF\7KHGLVVHQWLQJPHPEHUH[SODLQHGWKDWVXFKDSROLF\                     )G   WK &LU  QRWLQJ WKDW PHHWLQJ KDOO KDG EHHQ XVHG IRU
ZDVSHUPLWWHGXQGHUWKH1/5$EHFDXVHLWZDVQRWEDVHGRQ                        VXFK SXUSRVHV DV FKXUFK EDQTXHWV /DGLHV $LG 6RFLHW\ PHHWLQJV DQG D
                                                                                &KULVWPDV SDUW\ IRU VFKRRO FKLOGUHQ +RZHYHU LQ UHIXVLQJ WR XSVHW WKH
XQLRQ FRQVLGHUDWLRQV  7KH GLVVHQWLQJ PHPEHU IXUWKHU                      %RDUGjV ILQGLQJ WKDW WKH HPSOR\HUVj DFWLRQV FRQVWLWXWHG DQ XQIDLU ODERU
EHOLHYHGUHTXLULQJHPSOR\HUVWRRSHQWKHLUGRRUVWRXQLRQV                      SUDFWLFH WKH 6XSUHPH &RXUW H[SODLQHG WKDW WKHUH ZDV HYLGHQFH WKDW WKH
ZKHQHYHU WKH\ FKRVH WR GR VR IRU FKDULWLHV ZRXOG OHDG WR              VROH UHDVRQ WKDW WKH HPSOR\HUV GLVDOORZHG WKH XQLRQ PHHWLQJ ZDV WKH
HPSOR\HUVFORVLQJWKHLUGRRUVRQFKDULWLHVDOWRJHWKHUDQGWKDW                 UHVXOW RI DQWLXQLRQ ELDV 6HYHUDO HPSOR\HHV IRU H[DPSOH KDG EHHQ ILUHG
WKH%RDUGVKRXOGHQFRXUDJHHPSOR\HUVWREHDVJHQHURXVDV                       IRU WKHLU XQLRQ DFWLYLW\ DQG WKH HPSOR\HUV WKHPVHOYHV IDLOHG WR GLVSXWH
SRVVLEOHLQDOORZLQJDFFHVVWRWKHLUSUHPLVHVIRUEHQHILFHQW
                                                                                WKDW WKH\ UHIXVHG DFFHVV RI WKH KDOO WR WKH XQLRQ EHFDXVH RI WKHLU GLVGDLQ
                                                                                IRU XQLRQV  86 DW  	 Q ,Q DGGLWLRQ WKH &RXUW HPSKDVL]HG WKDW
DFWV                                                                          LW FRXOG QRW FRPSDUH WKH DFFHVV WR WKH PHHWLQJ KDOO LQ WKH VPDOO mFRPSDQ\
                                                                                GRPLQDWHGl WRZQ ZLWK mWKH YDVW PHWURSROLWDQ FHQWHUV ZKHUH D QXPEHU RI
                                                                                KDOOV DUH DYDLODEOH ZLWKLQ HDV\ UHDFK RI SURVSHFWLYH XQLRQ PHPEHUVl ,G
                                                                                7KXV LQ DGGLWLRQ WR DQWLXQLRQ ELDV WKHUH ZDV HYLGHQFH WKDW WKHUH ZDV QR
     
       ,Q DGGLWLRQ WR WKH SDUWLHV VHYHUDO DPLFL DOVR KDYH VXEPLWWHG EULHIV     RWKHU UHDVRQDEO\ DYDLODEOH IRUXP IRU WKH XQLRQ PHHWLQJ LQ WKH WRZQ &I
LQ WKLV DSSHDO 7KH DPLFL DUH WKH 6DOYDWLRQ $UP\ %L0DUW D ORFDO UHWDLOHU    &5(3  )G DW  m:KHUH UHDVRQDEOH DOWHUQDWLYH PHDQV RI DFFHVV
DQG WKH &DPSILUH %R\V DQG *LUOV :KLOH WKH %RDUG PDMRULW\ VWDWHG WKDW           H[LVW     
V   JXDUDQWHHV   GR    QRW   DXWKRUL]H   WUHVSDVV   E\   QRQHPSOR\HH

WKHUH LV QR HYLGHQFH WKDW HPSOR\HUV KDG FORVHG WKHLU GRRUV RQ FKDULWDEOH        RUJDQL]HUV HYHQ    µXQGHU    UHDVRQDEOH UHJXODWLRQVj HVWDEOLVKHG E\ WKH

VROLFLWDWLRQV VHYHUDO RI WKH DPLFL FRQWHQG RQ DSSHDO WKDW WKLV VLWXDWLRQ KDV   %RDUGl TXRWLQJ     /HFKPHUH        86 DW     ,Q WKH LQVWDQW FDVH

RFFXUUHG                                                                       WKHUH LV QR FODLP WKDW /RFDO  ODFNHG RWKHU UHDVRQDEOH PHDQV E\ ZKLFK
    $OEHUWVRQjV,QFY1/5%            1RV         1RV            $OEHUWVRQjV,QFY1/5%         

7KH XQLRQ ILOHG DQ XQIDLU ODERU SUDFWLFH FKDUJH DJDLQVW           $VH[SODLQHGEHORZZHEHOLHYHWKDW6DQGXVN\DQG&5(3
6DQGXVN\DQGWKH%RDUGIRXQGWKDW6DQGXVN\KDGYLRODWHG                FRQWURO WKH GLVSRVLWLRQ RI WKLV FDVH  7KRVH FDVHV QDUURZO\
WKH1/5$,G                                                        GHILQHGWKHWHUPmGLVFULPLQDWLRQlDVWKH6XSUHPH&RXUWXVHG
                                                                        WKDWWHUPLQ%DEFRFN	:LOFR[DQGSUHFOXGHDILQGLQJRID
  2Q DSSHDO WKH &RXUW DGGUHVVHG WKH VSHFLILF LVVXH RI          GLVFULPLQDWLRQ LQ WKH LQVWDQW FDVH RQ WKH FRPSDQ\jV SDUW
ZKHWKHUm6DQGXVN\PD\EHFRPSHOOHGWRSHUPLWQRQXQLRQ                  $OWKRXJKDVWKH%RDUGQRWHV6DQGXVN\DQG&5(3GHDOWZLWK
HPSOR\HHXQLRQPHPEHUVWRWUHVSDVVRQWKHPDOOjVSURSHUW\               ER\FRWWLQJ DFWLYLW\ ZKHQ LQWHUSUHWLQJ WKH WHUP
IRU WKH SXUSRVH RI GLVWULEXWLQJ KDQGELOOV XUJLQJ PDOO            mGLVFULPLQDWLRQlWKLV&RXUWORRNHGWR%DEFRFN	:LOFR[IRU
FXVWRPHUV QRW WR SDWURQL]H QRQXQLRQ HPSOR\HUVl  ,G            JXLGDQFHZKLFKLWVHOIZDVDFDVHWKDWGHDOWZLWKRUJDQL]LQJ
5HO\LQJ RQ &5(3 WKH &RXUW LQ 6DQGXVN\ DQVZHUHG WKH             DFWLYLW\  7KXV WKH %RDUG KDV IDLOHG WR SUHVHQW D UHDVRQHG
TXHVWLRQLQWKHDIILUPDWLYH$FFRUG5LHVEHFN)RRG0DUNHWV             EDVLVWRGLVWLQJXLVK6DQGXVN\DQG&5(3IURPWKHLQVWDQWFDVH
,QFY1/5%1R:/DW

WK &LU sXO\   KROGLQJ WKDW HPSOR\HU GLG QRW                                        ,,
GLVFULPLQDWHDJDLQVWXQLRQZKHQLWDOORZHGFKDULWLHVRQLWV
SURSHUW\WRVROLFLWFRQWULEXWLRQVEXWZRXOGQRWDOORZQRQ                7KHSDUWLHVFRQWHVWWKHDSSOLFDEOHVWDQGDUGRIUHYLHZ7KH
HPSOR\HHXQLRQUHSUHVHQWDWLYHVWRHQJDJHLQmGRQRWSDWURQL]H           %RDUG DUJXHV DW OHQJWK WKDW WKLV &RXUW PXVW GHIHU WR LWV
VROLFLWDWLRQl WDUJHWHG DW WKH HPSOR\HU 1/5% Y 3D\ /HVV       GHILQLWLRQRIWKHWHUPmGLVFULPLQDWLRQlEHFDXVHLQRUGHUWR
'UXJ 6WRUHV 1RUWKZHVW ,QF 1R   :/              UHDFK WKDW GHILQLWLRQ WKH %RDUG KDG WR FRQVWUXH FHUWDLQ
WK&LU0D\KROGLQJWKDWPDOOGLGQRW               VWDWXWRU\SURYLVLRQVXQGHUWKH1/5$6HH+ROO\)DUPV&RUS
GLVFULPLQDWHDJDLQVWXQLRQZKHQLWDOORZHG*LUO6FRXWVDQG              Y1DWjO/DERU5HODWLRQV%G86
EORRGPRELOHRQPDOOSURSHUW\ZKLOHQRWDOORZLQJSLFNHWLQJ               KROGLQJWKDWZKHUHVWDWXWHjVPHDQLQJLVREYLRXVFRXUWVDQG
QRQHPSOR\HHUHSUHVHQWDWLYHV                                          %RDUG PXVW GHIHU WR &RQJUHVVjV XQDPELJXRXV LQWHQW EXW
                                                                        ZKHUH DPELJXLW\ H[LVWV FRXUWV PXVW GHIHU WR DQ DJHQF\jV
   7KHKROGLQJVLQ&5(3DQG6DQGXVN\WKDWDQHPSOR\HUGRHV              UHDVRQDEOH LQWHUSUHWDWLRQ RI WKH VWDWXWH FLWLQJ &KHYURQ Y
QRWGLVFULPLQDWHDJDLQVWDXQLRQZKHUHWKHHPSOR\HUDOORZV              86$,QFY1DWXUDO5HV'HIHQVH&RXQFLO,QF86
FKDULWLHV WR GLVVHPLQDWH LQIRUPDWLRQ RQ WKH HPSOR\HUjV            $FFRUGLQJWRWKH%RDUGWKH 1/5$VWDWHVLQ
SURSHUW\ZKLOHLWEDUVXQLRQVIURPGRLQJWKHVDPHZLWKRXW              JHQHUDO WHUPV WKDW DQ HPSOR\HU FRPPLWV DQ XQIDLU ODERU
PRUH DSSHDUV WR IRUHFORVH WKH %RDUGjV DUJXPHQW WKDW             SUDFWLFHE\DPRQJRWKHUWKLQJVUHVWUDLQLQJRULQWHUIHULQJZLWK
GLVFULPLQDWLRQRFFXUUHGLQWKLVFDVH,WLVXQFRQWHVWHGWKDW           FHUWDLQULJKWVJXDUDQWHHGE\WKH1/5$VXFKDVWKHULJKWRI
$OEHUWVRQjVRQO\DOORZHGFHUWDLQFKDULWLHVWRVROLFLWGRQDWLRQV         HPSOR\HHVWRVHOIRUJDQL]HRUWRMRLQDXQLRQ6HH86&
DURXQG WKH H[WHULRU RI LWV SURSHUW\ H[FHSW LQ LQFOHPHQW          D  7KH %RDUG HVVHQWLDOO\ FRQWHQGV WKDW
ZHDWKHUZKHQLWDOORZHGWKH*LUO6FRXWVDQG6DOYDWLRQ$UP\              EHFDXVH&RQJUHVVKDVQRWVSRNHQWRWKHSUHFLVHLVVXHRIZKHQ
EHOOULQJHUVDFFHVVWRWKHLQVLGHRIVRPHLWVVWRUHV7KHUHLVQR      DQHPSOR\HUmGLVFULPLQDWHVlDJDLQVWDXQLRQE\UHIXVLQJWR
HYLGHQFHLQWKLVFDVHWKDWGXULQJWKHWLPH$OEHUWVRQjVUHIXVHG          DOORZ QRQHPSOR\HH XQLRQ RUJDQL]HUV WR GLVWULEXWH XQLRQ
WR DOORZ /RFDO  QRQHPSOR\HH RUJDQL]HUV WR GLVWULEXWH         OLWHUDWXUHRQLWVSURSHUW\DOWKRXJKLWDOORZVRWKHUJURXSVWRGR
OLWHUDWXUHRQLWVSURSHUW\$OEHUWVRQjVDOORZHGGLVWULEXWLRQE\         VRWKHQWKLV&RXUWPXVWDFFHSWWKHPHDQLQJWKDWWKH%RDUG
DQRWKHU XQLRQ RU WKDW $OEHUWVRQjV LWVHOI GLVVHPLQDWHG           DWWULEXWHVWRWKHWHUPGLVFULPLQDWLRQ:HGLVDJUHH
LQIRUPDWLRQ VLPLODU WR WKDW LW EDQQHG /RFDO  IURP
GLVVHPLQDWLQJ&5(3)GDW7KHUHIRUHXQGHUWKH                7KLV&RXUWKDVDGGUHVVHGDQGUHMHFWHGDVLPLODUDUJXPHQW
GHILQLWLRQ RI WKH WHUP mGLVFULPLQDWLRQl DV VHW IRUWK E\ WKLV   E\WKH%RDUGLQ6DQGXVN\ZKHUHZHUHDIILUPHGWKHVWDQGDUG
    $OEHUWVRQjV,QFY1/5%            1RV         1RV           $OEHUWVRQjV,QFY1/5%        

RIUHYLHZDSSOLFDEOHWR%RDUGGHFLVLRQVDVHDUOLHUVHWIRUWKE\         JHQHUDOO\VKRXOGEHUHVSHFWIXORIWKH%RDUGjVLQWHUSUHWDWLRQRI
WKLV&RXUWLQ&5(3:HSRLQWHGRXWLQ6DQGXVN\WKDWmZH                WKHWHUPmGLVFULPLQDWLRQlWKLV&RXUWDOVRH[SODLQHGWKDWWKH
UHYLHZ WKH %RDUGjV IDFWXDO DSSOLFDWLRQ DQG VWDWXWRU\              %RDUGjV GHFLVLRQ LV RZHG QR GHIHUHQFH ZKHUH LW mUHVWV RQ
FRQVWUXFWLRQ XQGHU D VXEVWDQWLDO HYLGHQFH VWDQGDUG D             HUURQHRXVOHJDOIRXQGDWLRQVl,G,QWKDWYHLQWKLV&RXUWKHOG
GHIHUHQFH WKDW LV ZDUUDQWHG LI WKH %RDUGjV FRQFOXVLRQV DUH      WKDWm>Q@RUHOHYDQWODERUSROLFLHVDUHDGYDQFHGE\UHTXLULQJ
EDVHGXSRQDUHDVRQDEO\GHIHQVLEOHFRQVWUXFWLRQRIWKH$FWl            HPSOR\HUV WR SURKLELW FKDULWDEOH VROLFLWDWLRQV LQ RUGHU WR
)GDWTXRWLQJ&5(3)GDW6XEVWDQWLDO            SUHVHUYH WKH ULJKW WR H[FOXGH QRQHPSOR\HH GLVWULEXWLRQ RI
HYLGHQFHPHDQVmVXFKUHOHYDQWHYLGHQFHDVDUHDVRQDEOHPLQG             XQLRQ OLWHUDWXUH ZKHQ DFFHVV WR WKH WDUJHW DXGLHQFH LV
PLJKWDFFHSWDVDGHTXDWHWRVXSSRUWDFRQFOXVLRQl'XSRQW              RWKHUZLVHDYDLODEOHl,G7KH&RXUWQRWHGWKDWWKHSXUSRVHRI
'RZ(ODVWRPHUV//&Y1/5%)G1RV             6HFWLRQDRIWKH1/5$LVWRSUHYHQWHPSOR\HUVIURP
:/DW
WK&LUsXO\               LQWHUIHULQJ ZLWK HPSOR\HHVj 6HFWLRQ  ULJKWV ,G  %HDULQJ
                                                                        VXFKFRQVLGHUDWLRQVLQPLQGWKH&RXUWUHDVRQHGWKDW
   +RZHYHUWKLV&RXUWJLYHVQRGHIHUHQFHWRWKH%RDUGZKHUH
WKH%RDUGjVGHFLVLRQmUHVW>V@RQHUURQHRXVOHJDOIRXQGDWLRQVl            $QRZQHURIDSULYDWHFRPPHUFLDOSURSHUW\ZKRSHUPLWV
/HFKPHUH,QFY1/5%86KROGLQJ                 D FKDULWDEOH RUJDQL]DWLRQ WR GLVWULEXWH LQIRUPDWLRQ RU
WKDW%RDUGHUUHGLQILQGLQJWKDWHPSOR\HUVKRXOGKDYHDOORZHG             FRQGXFW VROLFLWDWLRQV RQ LWV SURSHUW\ VLPSO\ GRHV QRW
XQLRQRQLWVSUHPLVHVEHFDXVHLWKDGQRRWKHUZD\WRUHDFKLWV            LPSOLFDWHWKHSROLFLHVRIWKH1/5$DQGGRHVQRWZLWKRXW
WDUJHW DXGLHQFH LQDVPXFK DV LQ UHDFKLQJ LWV GHFLVLRQ WKH         PRUH UHQGHU DQ HPSOR\HU JXLOW\ RI DQ XQIDLU ODERU
%RDUGPLVFRQVWUXHGSULRU6XSUHPH&RXUWSUHFHGHQW)XUWKHU              SUDFWLFHZKHQODWHULWFKRRVHVWRIROORZWKHJHQHUDOUXOH
ZKHUH WKH %RDUGjV FRQFOXVLRQV RI ODZ GR QRW LQWHUSUHW WKH        RImYDOLGO\SRVW>LQJ LWV@SURSHUW\DJDLQVWQRQHPSOR\HH
1/5$ZHUHYLHZWKRVHFRQFOXVLRQVGHQRYR0HLMHU,QFY               GLVWULEXWLRQRIXQLRQOLWHUDWXUHl
1/5%)GWK&LU,QWKDWYHLQZHUHYLHZ
GH QRYR WKH %RDUGjV LQWHUSUHWDWLRQ RI 6XSUHPH &RXUW DQG         ,GFLWLQJ%DEFRFN86DW
6L[WK &LUFXLW GHFLVLRQV DQG JLYH WKH %RDUG QR GHIHUHQFH
mZLWK UHVSHFW WR WKH LQWHUSUHWDWLRQ RI MXGLFLDO SUHFHGHQWl        6XFK FRQVLGHUDWLRQV OHG WKLV &RXUW WR KROG WKDW WKH WHUP
6DQGXVN\  )G DW  VHH DOVR 1/5% Y :HEFRU             GLVFULPLQDWLRQ DV XVHG LQ %DEFRFN 	 :LOFR[ PHDQV
3DFNDJLQJ ,QF  )G   Q WK &LU        mIDYRULQJ RQH XQLRQ RYHU DQRWKHU RU DOORZLQJ HPSOR\HU
GHIHUULQJWRWKH%RDUGjVGHILQLWLRQRImODERURUJDQL]DWLRQl           UHODWHG LQIRUPDWLRQ ZKLOH EDUULQJ VLPLODU XQLRQUHODWHG
EXWQRWLQJGLIIHUHQFHLQGHIHUHQFHJLYHQWR%RDUGjVUHDVRQDEOH          LQIRUPDWLRQl,G
LQWHUSUHWDWLRQRIWKH1/5$DVRSSRVHGWRLWVLQWHUSUHWDWLRQRI
6XSUHPH&RXUWSUHFHGHQWFRQVWUXLQJWKH$FW                              ,Q6DQGXVN\WKLV&RXUWDJDLQDGGUHVVHGWKHGLVFULPLQDWLRQ
                                                                        H[FHSWLRQ LQ %DEFRFN 	 :LOFR[  7KH XQLRQ LQ 6DQGXVN\
   ,Q WKH LQVWDQW FDVH WKH %RDUGjV GHFLVLRQ WXUQHG RQ LWV     EHJDQDSLFNHWLQJFDPSDLJQDIWHUDVWRUHLQDPDOOKLUHGDQRQ
ILQGLQJWKDW$OEHUWVRQjVGLVFULPLQDWHGDJDLQVW/RFDODQG            XQLRQ FRQVWUXFWLRQ FRQWUDFWRU DQG WKUHDWHQHG WR KDQGELOO
/RFDOE\UHIXVLQJWRDOORZWKHVHWZRXQLRQVWRGLVWULEXWH           DQRWKHUPDOOWHQDQWIRUWKHVDPHUHDVRQ)GDW
WKHLU OLWHUDWXUH RU RWKHUZLVH VROLFLW RQ WKH SUHPLVHV RI WKH   6DQGXVN\ZKLFKRZQHGDQGRSHUDWHGWKHPDOOQRWLILHGWKH
FRPSDQ\jVVWRUHVZKLOHDOORZLQJFHUWDLQFKDULWLHVWRGRVR             XQLRQWKDWKDQGELOOHUVZRXOGEHFRQVLGHUHGWUHVSDVVHUVDQG
7KHLVVXHRIZKHWKHUDQHPSOR\HUmGLVFULPLQDWHVlDJDLQVWD              WKDW WKH\ ZRXOG EH DVNHG WR OHDYH  ,G  7KH KDQGELOOHUV
XQLRQXQGHUVXFKFLUFXPVWDQFHVLVQRWRQHRIILUVWLPSUHVVLRQ           GLVWULEXWHG KDQGELOOV LQ WKH PDOO RQ VHYHUDO RFFDVLRQV DQG
LQ WKLV FLUFXLW DV ZH DGGUHVVHG WKLV LVVXH LQ 6DQGXVN\ DQG   ZHUH DVNHG WR OHDYH HDFK WLPH  )LQDOO\ WKH PDOO PDQDJHU
                                                                        FDOOHGWKHSROLFHDQGKDGWKHKDQGELOOHUVDUUHVWHG,GDW
       $OEHUWVRQjV,QFY1/5%            1RV           1RV            $OEHUWVRQjV,QFY1/5%        

UHWDLOHU LQ WKH PDOO ZKLOH SHUPLWWLQJ QRQODERU UHODWHG              &5(3)XUWKHULQUHDFKLQJLWVGHFLVLRQEHORZWKH%RDUG
KDQGELOOLQJ DQG VROLFLWDWLRQV E\ RWKHUV LQ WKH PDOO ZLWKRXW          ZDVLQWHUSUHWLQJmGLVFULPLQDWLRQlDVWKDWWHUPZDVXVHGLQWKH
YLRODWLQJVHFWLRQDRIWKH1/5$l,GDW7KH                 6XSUHPH&RXUWFDVH%DEFRFN	:LOFR[&RQVHTXHQWO\RXU
&RXUW DQVZHUHG WKH TXHVWLRQ LQ WKH DIILUPDWLYH  ,G  7KH          VWDQGDUG RI UHYLHZ RI WKH %RDUGjV LQWHUSUHWDWLRQ RI WKDW
&RXUW KHOG WKDW WKH RZQHU RI SULYDWH FRPPHUFLDO SUHPLVHV             6XSUHPH&RXUWDXWKRULW\LVGHQRYR6DQGXVN\)GDW
PD\ IRUELG KDQGELOOLQJ E\ mQRQHPSOR\HH XQLRQ RUJDQL]HUV                
HQJDJHGLQQRQRUJDQL]DWLRQDOLQIRUPDWLRQDODFWLYLW\GLUHFWHG
DWWKHJHQHUDOSXEOLFl,GDW5HO\LQJRQ/HFKPHUH                                           ,,,
WKH&RXUWKHOGWKDWWKHRQO\H[FHSWLRQWRWKLVUXOHLVZKHUHWKH
XQLRQ VKRZV WKDW mLW LV HQWLWOHG WR WUHVSDVV RQ WKH RZQHUjV          6HFWLRQDRIWKH1/5$SURYLGHVWKDWm>L@WVKDOOEHDQ
SULYDWH SURSHUW\ EHFDXVH WKH LQDFFHVVLELOLW\ WR WKH JHQHUDO           XQIDLU ODERU SUDFWLFH IRU DQ HPSOR\HUWR LQWHUIHUH ZLWK
SXEOLFWRZKLFKWKHKDQGELOOLQJLVGLUHFWHGPDNHVLQHIIHFWLYH                UHVWUDLQ RU FRHUFH HPSOR\HHV LQ WKH H[HUFLVH RI WKH ULJKWV
WKHUHDVRQDEOHDWWHPSWVE\QRQHPSOR\HHVWRFRPPXQLFDWH                      JXDUDQWHHG LQ VHFWLRQ > RI WKH 1/5$@l   86&
ZLWK >WKH SXEOLF@ WKURXJK WKH XVXDO FKDQQHOVl  ,G FLWLQJ         D6HFWLRQRIWKH1/5$SURYLGHVLQSHUWLQHQWSDUW
/HFKPHUH86DW                                                  WKDWm>H@PSOR\HHVVKDOOKDYHWKHULJKWWRVHOIRUJDQL]DWLRQWR
                                                                             IRUP MRLQ RU DVVLVW ODERU RUJDQL]DWLRQV WR EDUJDLQ
  ,Q&5(3WKH%RDUGDUJXHGWKDW/HFKPHUHZDVQRWUHOHYDQW                   FROOHFWLYHO\WKURXJKUHSUHVHQWDWLYHVRIWKHLURZQFKRRVLQJ
LQDVPXFKDV/HFKPHUHIDLOHGWRDQDO\]H%DEFRFN	:LOFR[jV                    DQGWRHQJDJHLQRWKHUFRQFHUWHGDFWLYLWLHVIRUWKHSXUSRVHRI
GLVFULPLQDWLRQ H[FHSWLRQ EHFDXVH &5(3 mGLVFULPLQDWHG                    FROOHFWLYHEDUJDLQLQJRURWKHUPXWXDODLGRUSURWHFWLRQl
DJDLQVW WKH    XQLRQ E\ SHUPLWWLQJ RWKHU VROLFLWDWLRQ E\               86&    $Q HPSOR\HU PD\ WKHUHIRUH YLRODWH WKH
FKDULWLHVl,GDW7KLV&RXUWGLVDJUHHGWKDW/HFKPHUH                1/5$DQGFRPPLWDQXQIDLUODERUSUDFWLFHZKHUHLWUHVWUDLQV
GLGQRWDSSO\EXWPRUHLPSRUWDQWO\IRUSXUSRVHVRIWKHLQVWDQW              RULQWHUIHUHVZLWKWKHULJKWRIHPSOR\HHVWRRUJDQL]HSXUVXDQW
FDVHLWKHOGWKDWXQGHU%DEFRFN	:LOFR[DQGLWVSURJHQ\                   WR6HFWLRQ/HFKPHUH86DW
VXFKDV/HFKPHUHmZKLFKZHLJKKHDYLO\LQIDYRURISULYDWH
SURSHUW\ULJKWVlWKHZRUGmGLVFULPLQDWLRQlGRHVQRWFDUU\WKH                  m%\LWVSODLQWHUPVWKXVWKH1/5$FRQIHUVULJKWVRQO\RQ
ZHLJKW WKH %RDUG DVFULEHV WR LW  ,G DW   7KH &RXUW         HPSOR\HHVQRWRQXQLRQVRUWKHLUQRQHPSOR\HHRUJDQL]HUVl
H[SODLQHGWKDWm>W@RGLVFULPLQDWHLQWKHHQIRUFHPHQWRI>DQ                  ,GDWm1RUHVWULFWLRQPD\EHSODFHGRQWKHHPSOR\HHVj
HPSOR\HUjV@ QRVROLFLWDWLRQ SROLF\ FDQQRW PHDQ WKDW DQ                 ULJKWWRGLVFXVVVHOIRUJDQL]DWLRQDPRQJWKHPVHOYHVXQOHVV
HPSOR\HUFRPPLWVDQXQIDLUODERUSUDFWLFHLILWDOORZVWKH*LUO              WKHHPSOR\HUFDQGHPRQVWUDWHWKDWDUHVWULFWLRQLVQHFHVVDU\WR
6FRXWVWRVHOOFRRNLHVEXWLVVKLHOGHGIURPWKHHIIHFWRIWKH               PDLQWDLQSURGXFWLRQRUGLVFLSOLQHEXWQRVXFKREOLJDWLRQLV
$FW LI LW SURKLELWV WKHP IURP GRLQJ VRl  ,G  7KH &RXUW         RZHGWRQRQHPSOR\HHRUJDQL]HUVl,GDWHPSKDVLVLQ
UHFRJQL]HG WKDW VLQFH %DEFRFN 	 :LOFR[ ZDV GHFLGHG WKH              WKHRULJLQDOTXRWLQJ1/5%Y6WRZH6SLQQLQJ&R86
6XSUHPH&RXUWKDGQHYHUmFODULILHGlWKHWHUPGLVFULPLQDWH                   6HFWLRQ
VRUJDQL]DWLRQULJKWVWKHUHIRUH
,G)XUWKHUZKLOHWKLV&RXUWLQ&5(3DFNQRZOHGJHGWKDWZH                  DSSO\RQO\mGHULYDWLYHO\lWRQRQHPSOR\HHXQLRQRUJDQL]HUV
                                                                             ,G DW  VHH DOVR 6HDUV 5RHEXFN 	 &R Y 6DQ 'LHJR
                                                                             &RXQW\'LVW&RXQFLORI&DUSHQWHUV86Q
                                                                             H[SODLQLQJ WKDW mµQR    REOLJDWLRQ LV RZHG
     7KH &RXUW LQ   /HFKPHUH   IRFXVHG RQO\ RQ WKH ILUVW H[FHSWLRQ WR WKH
                                                                             QRQHPSOR\HHRUJDQL]HUVjDQ\ULJKWWKH\PD\KDYHWRVROLFLW
mJHQHUDO UXOHl WKDW DQ HPSOR\HU mFDQ EDU QRQHPSOR\HH XQLRQ RUJDQL]HUV
IURP KLV SURSHUW\l EHFDXVH LQ WKDW FDVH LW ZDV XQGLVSXWHG WKDW WKH
                                                                             RQDQHPSOR\HU
VSURSHUW\LVDGHULYDWLYHRIWKHULJKWRIWKDW
HPSOR\HU KDG QRW SHUPLWWHG DQ\ RWKHU JURXS WR GLVWULEXWH OLWHUDWXUH RQ LWV
SURSHUW\  /HFKPHUH    86 DW  Q
        $OEHUWVRQjV,QFY1/5%                1RV                1RV                 $OEHUWVRQjV,QFY1/5%           

HPSOR\HU
V HPSOR\HHV WR H[HUFLVH WKHLU RUJDQL]DWLRQ ULJKWV                         $ &5(3 DQG 6DQGXVN\ DQG WKH GHILQLWLRQ RI
HIIHFWLYHO\l                                                                              GLVFULPLQDWLRQ
   7KHJHQHUDOUXOHLVWKDWmDQHPSOR\HUFDQQRWEHFRPSHOOHG                              7KLV&RXUWKDVGLVFXVVHGWKH%DEFRFN	:LOFR[KROGLQJ
WR DOORZ GLVWULEXWLRQ RI XQLRQ OLWHUDWXUH E\ QRQHPSOR\HH                        UHJDUGLQJGLVFULPLQDWLRQLQ6DQGXVN\DQG&5(3,Q&5(3
RUJDQL]HUV RQ KLV SURSHUW\l /HFKPHUH  86 DW                          )G  WKH XQLRQ EHJDQ D KDQGELOO FDPSDLJQ DJDLQVW
+RZHYHUWKH6XSUHPH&RXUWKDVUHFRJQL]HGWKDWmWKHULJKWRI                           0DUFjVDUHWDLOVWRUHDQGRQHRIWKHWHQDQWVLQDVWULSPDOO
VHOIRUJDQL]DWLRQGHSHQGVLQVRPHPHDVXUHRQ>DQHPSOR\HUjV                            PDQDJHGE\&5(3,GDW7KHKDQGELOOVFRQYH\HGWKDW
HPSOR\HHVj@ DELOLW\     WR OHDUQ WKH DGYDQWDJHV RI VHOI                 0DUFjVKDGYLRODWHGFKLOGODERUODZVDQGWKDWZRUPVZHUH
RUJDQL]DWLRQIURPRWKHUVl,GDW7KHUHIRUH6HFWLRQ                     IRXQGLQER[HVRIUDLVLQVWKHVWRUHVROG,G7KHSXUSRVHRI
 PLJKW mLQ FHUWDLQ OLPLWHG FLUFXPVWDQFHV UHVWULFW DQ                          WKHKDQGELOOVZDVWRLQIRUPWKHSXEOLFWKDW0DUFjVZDVDQRQ
HPSOR\HUjVULJKWWRH[FOXGHQRQHPSOR\HHXQLRQRUJDQL]HUV                               XQLRQVWRUHDQGWRDVNWKHSXEOLFQRWWRVKRSWKHUH,GDW
IURP KLV SURSHUW\l  ,G DW   /HFKPHUH UHDIILUPHG WKH                     $IWHU0DUFjVFRPSODLQHGWRWKHSURSHUW\PDQDJHUVWHSVZHUH
6XSUHPH&RXUWjVHDUOLHUKROGLQJWKDWDQHPSOR\HUPD\mSRVW                             WDNHQWRKDYHWKHKDQGELOOHUVFHDVHWKHLUER\FRWWLQJDFWLYLWLHV
KLV SURSHUW\ DJDLQVW QRQHPSOR\HH GLVWULEXWLRQ RI XQLRQ                           (YHQWXDOO\WKHSURSHUW\PDQDJHUFDOOHGWKHSROLFHRQHGD\
OLWHUDWXUHLI>@UHDVRQDEOHHIIRUWVE\WKHXQLRQWKURXJKRWKHU                        ZKHQWKHKDQGELOOHUVKDGUHIXVHGWROHDYHEHFDXVHWKH\ZHUH
DYDLODEOHFKDQQHOVRIFRPPXQLFDWLRQZLOOHQDEOHLWWRUHDFK                            LQYLRODWLRQRIWKHFLW\RUGLQDQFHDJDLQVWORLWHULQJ,GDW
WKH HPSOR\HHV ZLWK LWV PHVVDJH DQG >@ LI WKH HPSOR\HUjV
QRWLFH RU RUGHU GRHV QRW GLVFULPLQDWH DJDLQVW WKH XQLRQ E\                      7KH XQLRQ ILOHG DQ XQIDLU ODERU SUDFWLFHV FKDUJH DJDLQVW
DOORZLQJRWKHUGLVWULEXWLRQ>WKHµGLVFULPLQDWLRQH[FHSWLRQj@l                         &5(3DQGDQ$/sIRXQGWKDWLQWKHSDVWWKH6DOYDWLRQ$UP\
%DEFRFN	:LOFR[86DW3DUWLFXODUO\DVWRWKH                            KDGEHHQDOORZHGWRGLVWULEXWHOHDIOHWVRQZLQGVKLHOGVRIFDUV
GLVFULPLQDWLRQH[FHSWLRQmWKHDOOHJHGGLVFULPLQDWRU\FRQGXFW                          SDUNHG DW WKH PDOO  7KH $/s IXUWKHU IRXQG WKDW SROLWLFDO
LQ DOORZLQJ VROLFLWDWLRQ >RU@ KDQGELOOLQJ UHTXLUH>V@ WKDW WKH                   FDQGLGDWHVKDGEHHQDOORZHGWRVROLFLWVLJQDWXUHVDQGWKH*LUO
GLVFULPLQDWLRQEHDPRQJFRPSDUDEOHJURXSVRUDFWLYLWLHVDQG                           6FRXWV KDG VROG FRRNLHV  2WKHU JURXSV DOORZHG WR VROLFLW
WKDW WKH DFWLYLWLHV WKHPVHOYHV XQGHU FRQVLGHUDWLRQ PXVW EH                      ZLWKRXW EHLQJ DVNHG WR OHDYH LQFOXGHG WKH .QLJKWV RI
FRPSDUDEOHl6DQGXVN\)GDWFLWDWLRQVLQWHUQDO                           &ROXPEXV WKH %R\ 6FRXWV YHWHUDQV DQG VFKRRO FKLOGUHQ
TXRWDWLRQPDUNVDQGDOWHUDWLRQVRPLWWHG                                            VHOOLQJFDQG\IRUYDULRXVVFKRROSURMHFWV,G7KH$/sIRXQG
                                                                                       WKDWWKHXQLRQRUJDQL]HUVZHUHHQJDJHGLQDSURWHFWHGDFWLYLW\
                                                                                       XQGHUWKH1/5$DQGIRXQGLWLUUHOHYDQWWKDWWKHKDQGELOOHUV
                                                                                      ZHUH QRW HPSOR\HG E\ 0DUFjV LQDVPXFK DV WKH\ ZHUH
      7KH %RDUG KDV KHOG WKDW WKH GLVFULPLQDWLRQ H[FHSWLRQ JHQHUDOO\ LV                HPSOR\HHVRIRWKHUXQLRQL]HGVWRUHVDWWKHPDOO,G
VXEMHFW WR WZR H[FHSWLRQV RI LWV RZQ $Q HPSOR\HU GRHV QRW GLVFULPLQDWH
 LI WKH HPSOR\HU DOORZV D IHZ LVRODWHG LQVWDQFHV RI FKDULWDEOH
VROLFLWDWLRQ mEHQHILFHQW DFWV H[FHSWLRQl RU  LI WKH VROLFLWDWLRQV
                                                                                         7KLV &RXUW IUDPHG WKH LVVXH DV IROORZV m>:@KHWKHU WKH
DSSURYHG E\ WKH HPSOR\HU UHODWH WR WKH HPSOR\HUjV EXVLQHVV IXQFWLRQV DQG
                                                                                       RZQHU RI D SULYDWH UHWDLO VKRSSLQJ PDOO PD\ IRUELG XQLRQ
SXUSRVHV     6HH/XFLOH 6DOWHU 3DFNDUG &KLOGUHQjV +RVS DW 6WDQIRUG Y                 UHSUHVHQWDWLYHV IURP GLVWULEXWLQJ KDQGELOOV GLUHFWHG DW
1/5%  )G   '& &LU  FLWDWLRQ RPLWWHG       ,Q WKH               VKRSSHUVWRGLVFRXUDJHWKHPIURPSDWURQL]LQJDQRQXQLRQ
LQVWDQW FDVH WKH %RDUG KHOG WKDW WKH IUHTXHQF\ ZLWK ZKLFK $OEHUWVRQjV
DOORZHG FKDULWLHV WR VROLFLW GRQDWLRQV RQ LWV VWRUHVj SUHPLVHV H[FHHGHG WKDW
SHUPLWWHG XQGHU WKH EHQHILFHQWDFWV H[FHSWLRQ            $OEHUWVRQjV GRHV QRW
FRQWHVW WKLV ILQGLQJ RQ DSSHDO    +RZHYHU $OEHUWVRQjV GRHV FRQWHQG WKDW              DV D UHVXOW RI WKHLU JHQHURVLW\ WR FKDULWLHV   $V IRU WKH VHFRQG H[FHSWLRQ
WKH   %RDUG   RIIHUV   QR   UHDVRQDEOH   MXVWLILFDWLRQ   IRU   LWV   EHQHILFHQWDFWV   $OEHUWVRQjV GRHV QRW FRQWHQG WKDW WKH FKDULWDEOH VROLFLWDWLRQV LW DOORZHG RQ
H[FHSWLRQ DQG DV WR ZK\ HPSOR\HUVj SURSHUW\ ULJKWV VKRXOG EH GLPLQLVKHG                LWV SUHPLVHV UHODWH WR LWV EXVLQHVV DV D UHWDLO JURFHU