02a0298p.06

7KH +RQRUDEOH *HUDOG ( 5RVHQ 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
(DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

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 DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
81,7(' 67$7(6 2) $0(5,&$
3ODLQWLII$SSHOODQW
Y
&+$5/(6 '$/( %$,/(<
'HIHQGDQW$SSHOOHH
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW*UHHQHYLOOH
1R²7KRPDV*+XOO'LVWULFW-XGJH
$UJXHG$XJXVW
'HFLGHGDQG)LOHG6HSWHPEHU
%HIRUH0225(DQG*,/0$1&LUFXLW-XGJHV526(1
'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(''DQ56PLWK$66,67$1781,7('67$7(6
$77251(<-RKQVRQ&LW\7HQQHVVHHIRU$SSHOODQW0DUN
' (GPRQGV ($675,'*( ('021'6 -RKQVRQ &LW\

-- 1 of 6 --

8QLWHG6WDWHVY%DLOH\ 1R
7HQQHVVHH IRU $SSHOOHH 21 %5,() 'DQ 5 6PLWK
$66,67$1781,7('67$7(6$77251(<-RKQVRQ&LW\
7HQQHVVHHIRU$SSHOODQW0DUN'(GPRQGV($675,'*(
('021'6-RKQVRQ&LW\7HQQHVVHH5-DFNVRQ5RVH
+DUURJDWH7HQQHVVHHIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
.$5(1 1(/621 0225( &LUFXLW -XGJH $SSHOODQW
8QLWHG6WDWHVDSSHDOVWKHGLVWULFWFRXUW¶VJUDQWRI$SSHOOHH¶V
PRWLRQWRVXSSUHVV$SSHOOHH&KDUOHV'DOH%DLOH\ ³%DLOH\´
ZDV LQGLFWHG IRU FDUU\LQJ FHUWDLQ ILUHDUPV GXULQJ DQG LQ
UHODWLRQWRDGUXJWUDIILFNLQJRIIHQVHLQYLRODWLRQRI86&
† F % L DQGIRUSRVVHVVLQJILUHDUPVDVDFRQYLFWHG
IHORQLQYLRODWLRQRI86&† J %DLOH\ZDVDUUHVWHG
IROORZLQJVHDUFKHVRIERWKKLVSHUVRQDQGKLVFDU+HPRYHG
WRVXSSUHVVWKHHYLGHQFHREWDLQHGLQWKHVHDUFKHVFODLPLQJ
WKDWWKH LQLWLDOVWRSRIKLVFDUDQGWKHVXEVHTXHQWVHDUFKHV
YLRODWHGKLV)RXUWK$PHQGPHQWULJKWV$PDJLVWUDWHMXGJH
UHFRPPHQGHGWKDW%DLOH\¶VPRWLRQEHGHQLHGEXWWKHGLVWULFW
FRXUW JUDQWHG WKH PRWLRQ )RU WKH IROORZLQJ UHDVRQV ZH
5(9(56(WKHGLVWULFWFRXUW¶VJUDQWRI%DLOH\¶VPRWLRQWR
VXSSUHVVDQGZH5(0$1'IRUSURFHHGLQJVFRQVLVWHQWZLWK
WKLVRSLQLRQ
,%$&.*5281'
,Q WKH ODWH HYHQLQJ DQG HDUO\ PRUQLQJ RI 6HSWHPEHU
DQG3ROLFH2IILFHU7RGG'DYLGVRQ ³'DYLGVRQ´ DQG
3ROLFH&DSWDLQ-HUU\*UDKDP ³*UDKDP´ RIWKH0RUULVWRZQ
7HQQHVVHH3ROLFH'HSDUWPHQWZHUHLQYHVWLJDWLQJFRPSODLQWV
RIGUXJWUDIILFNLQJDWWKH5R\DO0RELOH+RPH7UDLOHU3DUNLQ
0RUULVWRZQ$FFRUGLQJWR*UDKDPWKHSROLFHZHUH³PDNLQJ
WUDIILFVWRSVZKHUHZH¶GJHWVRPHSUREDEOHFDXVHWRPDNHWKH
VWRSLIDWUDIILFYLRODWLRQRIYHKLFOHVOHDYLQJWKHVFHQHZKHUH
WKH\ ZHUH >VLF@ KDG WKH WUDLOHU XQGHU VXUYHLOODQFH´ -RLQW
$SSHQGL[ ³-$´ DW *UDKDP 7HVW 'DYLGVRQ DQG
*UDKDPZHUHH[LWLQJWKHWUDLOHUSDUNZKHQWKH\HQFRXQWHUHG
1R 8QLWHG6WDWHVY%DLOH\
SRVLWLYH LQGLFDWLRQ E\ D SURSHUO\WUDLQHG GRJ LV VXIILFLHQW WR HVWDEOLVK
SUREDEOH FDXVH IRU WKH SUHVHQFH RI D FRQWUROOHG VXEVWDQFH´ FLWDWLRQ
RPLWWHG )XUWKHUPRUH RQFH *UDKDP VDZ WKH JXQ LQ %DLOH\¶V SRFNHW LW
LV FOHDU WKDW WKH RIILFHUV KDG SUREDEOH FDXVH WR VHDUFK %DLOH\¶V SHUVRQ 6HH
8QLWHG 6WDWHV Y 7KRPDV )G WK &LU FHUW GHQLHG
86 DQG 86 VHHLQJ JXQ KDQGOH XQGHU
GULYHU¶V VHDW SURYLGHG SUREDEOH FDXVH IRU SROLFH RIILFHUV WR DUUHVW
GHIHQGDQW RQ FKDUJHV RI FDUU\LQJ D FRQFHDOHG ZHDSRQ
,,,&21&/86,21
)RUWKHIRUHJRLQJUHDVRQVZH5(9(56(WKHRUGHURIWKH
GLVWULFW FRXUW JUDQWLQJ %DLOH\¶V PRWLRQ WR VXSSUHVV DQG ZH
5(0$1'IRUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ

-- 2 of 6 --

8QLWHG6WDWHVY%DLOH\ 1R
2QFH WKH GUXJVQLIILQJ GRJ DUULYHG DQG DOHUWHG WR DUHDV LQ %DLOH\¶V
FDU LW LV FOHDU WKDW WKH SROLFH RIILFHUV KDG SUREDEOH FDXVH WR VHDUFK WKH FDU
6HH 8QLWHG 6WDWHV Y 'LD] )G WK &LU ³$
DFWLYLW\%DLOH\WHVWLILHGWKDWZKHQ'DYLGVRQDSSURDFKHGKLV
FDUKHVLPSO\UHDFKHGWRJHWKLVGULYHU¶VOLFHQVH%HFDXVHWKH
GLVWULFWFRXUWJUDQWHG%DLOH\¶VPRWLRQWRVXSSUHVVWKLVFRXUW
PXVW YLHZ WKH IDFWV LQ WKH OLJKW PRVW IDYRUDEOH WR %DLOH\
6PLWK)GDW(YHQYLHZLQJWKHIDFWVLQWKHOLJKW
PRVWIDYRUDEOHWR%DLOH\ZHEHOLHYHWKDW%DLOH\¶V³UHDFKLQJ´
LQWKHFRQWH[WRIWKHVXUURXQGLQJFLUFXPVWDQFHVFRXOGKDYH
EHHQOHJLWLPDWHO\SHUFHLYHGDVWKUHDWHQLQJ:KHQ'DYLGVRQ
DSSURDFKHG%DLOH\¶VFDULWZDVGDUNFULPLQDODFWLYLW\KDG
EHHQJRLQJRQLQWKHDUHDDQG'DYLGVRQNQHZWKDW%DLOH\
PLJKW EH DUPHG DQG GDQJHURXV *LYHQ WKLV WRWDOLW\ RI
FLUFXPVWDQFHV ZH FRQFOXGH WKDW 'DYLGVRQ KDG VXIILFLHQW
UHDVRQDEOH VXVSLFLRQ WR GHWDLQ %DLOH\ IROORZLQJ WKH LQLWLDO
VWRSRI%DLOH\¶VFDU
$VVXPLQJWKDWWKHEDVLVIRUD7HUU\VWRSZDVSURSHUWKHQ
ZHPXVWGHWHUPLQH³ZKHWKHUWKHGHJUHHRILQWUXVLRQLQWRWKH
VXVSHFW¶VSHUVRQDOVHFXULW\ZDVUHDVRQDEO\UHODWHGLQVFRSHWR
WKH VLWXDWLRQ DW KDQG ZKLFK LV MXGJHG E\ H[DPLQLQJ WKH
UHDVRQDEOHQHVVRIWKHRIILFLDOV¶FRQGXFWJLYHQWKHLUVXVSLFLRQV
DQGWKHVXUURXQGLQJFLUFXPVWDQFHV´*DU]D)GDW
TXRWDWLRQ RPLWWHG ,Q UHVSRQVH WR %DLOH\¶V ³UHDFKLQJ´
'DYLGVRQRUGHUHG%DLOH\RXWRIWKHFDUDQGGHWDLQHGKLPIRU
OHVVWKDQWZRPLQXWHVXQWLOWKHDUULYDORIWKHGUXJVQLIILQJ
GRJ:HKDYHKHOGWKDW³>L@QDVLWXDWLRQZKHUHWKHRIILFHUV
KDYHUHDVRQWREHOLHYHWKHRFFXSDQWVRIDFDUDUHDUPHGDQG
GDQJHURXVRIILFHUVFHUWDLQO\PD\RUGHURFFXSDQWVRXWRI
DFDU´,GDW TXRWDWLRQRPLWWHG $QGDOWKRXJKDVWKH
GLVWULFWFRXUWQRWHG'DYLGVRQGLGQRWUHVWUDLQ%DLOH\RUSDW
KLPGRZQDIWHUKHJRWRXWRIWKHFDUWKHGHWHQWLRQRIOHVVWKDQ
WZRPLQXWHVGRHVQRWDSSHDUWREHDQXQUHDVRQDEOHLQWUXVLRQ
FRQVLGHULQJ%DLOH\¶VSRWHQWLDOO\WKUHDWHQLQJEHKDYLRULQWKH
FDU 7KHUHIRUH ZH FRQFOXGH WKDW 'DYLGVRQ KDG VXIILFLHQW
UHDVRQDEOHVXVSLFLRQXQGHU7HUU\WRGHWDLQ%DLOH\IROORZLQJ
WKHLQLWLDOWUDIILFVWRSDQGXQWLOWKHDUULYDORIWKHGUXJVQLIILQJ
GRJ
1R 8QLWHG6WDWHVY%DLOH\
*UDKDP DOVR WHVWLILHG WKDW ZKHQ 'DYLGVRQ UHFRJQL]HG %DLOH\ KH
³KROOHUHG \RX NQRZ WKDW¶V KLP ´ -$ DW *UDKDP 7HVW
'DYLGVRQ DOVR WHVWLILHG WKDW ³ZH KDG DQ LQIRUPDQW FDPH >VLF@ WR XV
SHUVRQDOO\ WDONHG WR PH DQG 0U &R[ WROG XV WKDW KH 0U %DLOH\ KDG
PDGH WKUHDWV RQ RXU OLIH >VLF@´ -$ DW 'DYLGVRQ 7HVW
%DLOH\'DYLGVRQWHVWLILHGWKDW%DLOH\¶VFDUHQWHUHGWKHWUDLOHU
SDUNRQWKHZURQJVLGHRIWKHURDGDQG*UDKDPZKRZDV
GULYLQJWKHFDUWHVWLILHGWKDW%DLOH\¶VFDU³DERXWKLWPHKHDG
RQ´-$DW%DLOH\WHVWLILHGWKDWDOWKRXJKWKHSROLFHFDU
ZDV ³KRJJLQJ´ PRVW RI WKH QDUURZ HQWUDQFH URDG LQWR WKH
WUDLOHUSDUN³WKHUHZDVVWLOOHQRXJKURRPIRUPHWRJRE\´
-$DW %DLOH\7HVW $IWHUWKHFDUVSDVVHGHDFKRWKHU
'DYLGVRQVKRXWHGDW%DLOH\WRVWRSKLVFDUDQGZKHQ%DLOH\
GLG QRW LPPHGLDWHO\ VWRS KLV FDU 'DYLGVRQ JRW RXW RI WKH
SROLFH FDU DQG SXUVXHG %DLOH\¶V FDU RQ IRRW 'DYLGVRQ
WHVWLILHGWKDWKHVWRSSHGWKHFDU³>E@HFDXVHLWKDGWXUQHGLQRQ
RXU VLGH RI WKH URDG DQG , ZDVQ¶W VXUH LI >%DLOH\@ ZDV
LQWR[LFDWHGRUQRW´-$DW 'DYLGVRQ7HVW
%DLOH\ HYHQWXDOO\ VWRSSHG KLV FDU DQG 'DYLGVRQ
DSSURDFKHG WKH GULYHU¶V VLGH RI WKH FDU WR WDON WR %DLOH\
$FFRUGLQJ WR 'DYLGVRQ ³%DLOH\ NHSW UHDFKLQJ LQWR WKH
IORRUERDUGZKHUHKHZDVVHDWHGLQWKHYHKLFOHZKLFK>VLF@KH
ZDVWKHGULYHU´-$DW 'DYLGVRQ7HVW 'DYLGVRQILUVW
DVNHG%DLOH\WRNHHSKLVKDQGVWRKLPVHOIDQGODWHU'DYLGVRQ
DVNHG%DLOH\WRVWHSRXWRIWKHFDU-$DW ³,DVNHGKLP
WRVWHSRXWRIWKHYHKLFOHEHFDXVH,ZDVUHDOO\QHUYRXVDQG
DQG , ZDV DZDUH WKDW KH \RX NQRZ ZDV NQRZQ WR FDUU\
ZHDSRQVDQGZKLFKKHGLGKHVWHSSHGRXWRIWKHYHKLFOH´
*UDKDP DQG 3ROLFH 2IILFHU 'DQ &R[ ³&R[´ UHDFKHG WKH
VFHQH VRRQ WKHUHDIWHU DQG ZLWK 'DYLGVRQ DQG %DLOH\ WKH\
ZDLWHGIRU3ROLFH2IILFHU&KULV:LVHFUDFNHU ³:LVHFUDFNHU´
WREULQJLQDGUXJGRJ:LVHFUDFNHUDUULYHGLQOHVVWKDQWZR
PLQXWHVDQGSURFHHGHGWR³UXQWKHGRJRQWKHYHKLFOH´-$
DW:KLOHWKHGRJVQLIIHGIRUGUXJVLQWKHFDU*UDKDP
QRWLFHGWKDW%DLOH\KDGSXWKLVKDQGLQKLVSRFNHW*UDKDP
DVNHG%DLOH\WRUHPRYHKLVKDQGDQGZKHQ%DLOH\GLGUHPRYH
KLVKDQG*UDKDPVDZWKHEXWWRIDJXQ7KHSROLFHRIILFHUV

-- 3 of 6 --

8QLWHG6WDWHVY%DLOH\ 1R
7KH JXQ RQ %DLOH\¶V SHUVRQ WXUQHG RXW WR EH XQORDGHG
RQ WKH VFHQH WKHQ KDQGFXIIHG DQG DUUHVWHG %DLOH\
,PPHGLDWHO\DIWHU%DLOH\ZDVDUUHVWHG&R[LQDQHIIRUWWR
FDOP %DLOH\ GRZQ WROG %DLOH\ WKDW ³HYHU\WKLQJ ZRXOG EH
RND\´ -$ DW &R[ 7HVW 7R WKLV VWDWHPHQW %DLOH\
DOOHJHGO\UHVSRQGHG³QRHYHU\WKLQJZRQ¶WEHRND\7KHUH¶V
WKUHHRXQFHVRIFRFDLQHLQWKHFDU´-$DW7KHVHDUFKRI
WKHFDUIROORZLQJWKHGUXJGRJ¶VDOHUWLQWZRDUHDVGLGLQIDFW
\LHOGWZRPRUHJXQVDQGWKUHHRXQFHVRIFRFDLQH
%DLOH\ZDVLQGLFWHGE\DJUDQGMXU\LQWKH(DVWHUQ'LVWULFW
RI 7HQQHVVHH RQ )HEUXDU\ DQG D 6XSHUVHGLQJ
,QGLFWPHQWZDVHQWHUHGDJDLQVWKLPE\WKHVDPHJUDQGMXU\RQ
6HSWHPEHU7KHLQGLFWPHQWFKDUJHG%DLOH\ZLWKWZR
FRXQWV NQRZLQJO\ DQG LQWHQWLRQDOO\ FDUU\LQJ FHUWDLQ
ILUHDUPVGXULQJDQGLQUHODWLRQWRDGUXJWUDIILFNLQJRIIHQVH
LQYLRODWLRQRI86&† F % L DQG SRVVHVVLQJ
ILUHDUPV DV D FRQYLFWHG IHORQ LQ YLRODWLRQ RI 86&
† J 2Q'HFHPEHU%DLOH\PRYHGWRVXSSUHVV
WKHHYLGHQFHREWDLQHGLQWKHVHDUFKRIWKHFDUDQGWKHVHDUFK
RIKLVSHUVRQ+HDOOHJHGWKDWWKHLQLWLDOVWRSRIKLVFDUKLV
DUUHVWDQGWKHVHDUFKHVZHUHDOO LQ YLRODWLRQRIKLV)RXUWK
$PHQGPHQW ULJKWV 2Q 'HFHPEHU D PDJLVWUDWH
MXGJHKHOGDKHDULQJRQWKHPRWLRQDQGRQ'HFHPEHU
KH LVVXHG D UHSRUW DQG UHFRPPHQGDWLRQ WR GHQ\ WKH
PRWLRQWRVXSSUHVV2Q0DUFKKRZHYHUWKHGLVWULFW
FRXUWJUDQWHG%DLOH\¶VPRWLRQWRVXSSUHVV7KHFRXUWIRXQG
WKDW³WKHRIILFHUV¶DFWLRQV>LQVWRSSLQJDQGVHDUFKLQJ%DLOH\@
ZHUHQRWMXVWLILHGDWWKHLULQFHSWLRQDQGWKHLUDFWLRQVZHUHQRW
UHDVRQDEO\ UHODWHG LQ VFRSH WR WKH FLUFXPVWDQFHV ZKLFK
MXVWLILHGWKHLQWHUIHUHQFHLQWKHILUVWSODFH´-$DW
0HP 7KHUHIRUH WKH FRXUW FRQFOXGHG WKDW ³WKH VHDUFK
LQFLGHQW WR >WKH LQLWLDO@ VWRS ZDV LQ YLRODWLRQ RI WKH
GHIHQGDQW¶V )RXUWK $PHQGPHQW ULJKWV´ -$ DW 7KH
JRYHUQPHQWWLPHO\DSSHDOV
1R 8QLWHG6WDWHVY%DLOH\
:H HPSKDVL]H WKDW ³FRXUWV PXVW FDUHIXOO\ VFUXWLQL]H DQ
RIILFHU¶VVWDWHGUHDVRQVIRUGHWDLQLQJ>DQ@LQGLYLGXDOEH\RQG
WKHSXUSRVHRI>DWUDIILF@VWRSWRLQVXUHWKDWWKHUHDVRQVULVHWR
WKHOHYHORIUHDVRQDEOHVXVSLFLRQVRWKDWWKHRIILFHUGRHVQRW
DEXVH KLV DXWKRULW\ XQGHU :KUHQ´ +LOO )G DW
+RZHYHUZHFRQFOXGHWKDW%DLOH\¶VEHKDYLRULPPHGLDWHO\
IROORZLQJWKHWUDIILFVWRSLQFRQMXQFWLRQZLWKWKHVXUURXQGLQJ
FLUFXPVWDQFHVLQGHSHQGHQWO\JDYHULVHWRVXIILFLHQWUHDVRQDEOH
VXVSLFLRQXQGHU7HUU\WRMXVWLI\%DLOH\¶VGHWHQWLRQEH\RQGWKH
HIIHFWXDWLRQRIKLVWUDIILFVWRS
8QGHU7HUU\DODZHQIRUFHPHQWRIILFHUPD\EULHIO\VWRS
DQGGHWDLQDQLQGLYLGXDOIRULQYHVWLJDWLYHSXUSRVHVLIKHKDV
D UHDVRQDEOH VXVSLFLRQ VXSSRUWHG E\ DUWLFXODEOH IDFWV WKDW
³FULPLQDODFWLYLW\PD\EHDIRRW´HYHQLIKHODFNVSUREDEOH
FDXVH (UZLQ )G DW TXRWLQJ 8QLWHG 6WDWHV Y
6RNRORZ86 :HHYDOXDWHWKHOHJLWLPDF\
RI 7HUU\ VWRSV E\ HQJDJLQJ LQ D WZRSDUW DQDO\VLV RI WKH
UHDVRQDEOHQHVV RI WKH VWRS )LUVW ZH PXVW GHWHUPLQH
³ZKHWKHU WKHUH ZDV D SURSHU EDVLV IRU WKH VWRS ZKLFK LV
MXGJHGE\H[DPLQLQJZKHWKHUWKHODZHQIRUFHPHQWRIILFLDOV
ZHUHDZDUHRIVSHFLILFDQGDUWLFXODEOHIDFWVZKLFKJDYHULVH
WRUHDVRQDEOHVXVSLFLRQ´8QLWHG6WDWHVY*DU]D)G
WK&LU TXRWDWLRQRPLWWHG 7KH6XSUHPH
&RXUW KDV UHFHQWO\ UHLWHUDWHG WKDW FRXUWV PXVW ORRN DW WKH
³WRWDOLW\ RI WKH FLUFXPVWDQFHV´ LQ PDNLQJ UHDVRQDEOH
VXVSLFLRQGHWHUPLQDWLRQV8QLWHG6WDWHVY$UYL]X6&W
+RZHYHU³DQRIILFHU¶VUHOLDQFHRQDPHUH
μKXQFK¶LVLQVXIILFLHQWWRMXVWLI\DVWRS´,GDW TXRWLQJ
7HUU\86DW
'DYLGVRQ WHVWLILHG WKDW %DLOH\ ³NHSW UHDFKLQJ LQWR WKH
IORRUERDUG´ ZKHQ 'DYLGVRQ DSSURDFKHG %DLOH\¶V FDU
LPPHGLDWHO\IROORZLQJWKHLQLWLDOVWRS-$DW 'DYLGVRQ
7HVW 7KLVEHKDYLRURQWKHSDUWRI%DLOH\PDGH'DYLGVRQ
³UHDOO\ QHUYRXV´ EHFDXVH 'DYLGVRQ NQHZ WKDW %DLOH\ ZDV
³NQRZQWRFDUU\ZHDSRQV´DQGWKDW%DLOH\KDGPDGHWKUHDWV
RQ'DYLGVRQ¶VOLIH-$DW,QDGGLWLRQWKHLQLWLDOVWRS
RI%DLOH\¶VFDUWRRNSODFHDWRQHR¶FORFNLQWKHPRUQLQJDWWKH
5R\DO0RELOH+RPH7UDLOHU3DUN²DNQRZQDUHDRIFULPLQDO

-- 4 of 6 --

8QLWHG6WDWHVY%DLOH\ 1R
7KLV VWDQGDUG DSSOLHV HYHQ LI D GUXJVQLIILQJ GRJ DUULYHV ZLWKLQ D
IHZ PLQXWHV RI WKH FRPSOHWLRQ RI WKH WUDIILF VWRS 6HH +LOO )G DW
DVNLQJ ³ZKHWKHU 'HSXW\ :KLWORFN KDG D UHDVRQDEOH VXVSLFLRQ WKDW
'HIHQGDQWV ZHUH HQJDJHG LQ FULPLQDO DFWLYLW\ VR DV WR GHWDLQ WKHP EH\RQG
WKH SXUSRVH RI WKH WUDIILF VWRS ² LH VR DV WR DOORZ 'HSXW\ :KLWORFN WR
GHWDLQ 'HIHQGDQWV IRU WKH DSSUR[LPDWHO\ RQH RU WZR PLQXWHV LW WRRN
6SDQN\ >WKH GUXJVQLIILQJ GRJ@ WR UXQ WKH VHDUFK RI WKH YHKLFOH´ HPSKDVLV
DGGHG
LQLWLDOLQWHUIHUHQFH´,G FLWLQJ8QLWHG6WDWHVY3DORPLQR
)G WK&LU TXRWLQJ7HUU\86DW
³2QFH WKH SXUSRVHV RI WKH LQLWLDO WUDIILF VWRS >DUH@
FRPSOHWHGWKHUHLVQRGRXEWWKDWWKHRIILFHU>FDQ@QRWIXUWKHU
GHWDLQ WKH YHKLFOH RU LWV RFFXSDQWV XQOHVV VRPHWKLQJ WKDW
RFFXUUHG GXULQJ WKH WUDIILF VWRS JHQHUDWHG WKH QHFHVVDU\
UHDVRQDEOHVXVSLFLRQWRMXVWLI\DIXUWKHUGHWHQWLRQ´8QLWHG
6WDWHVY0HVD)G WK&LU VHHDOVR
8QLWHG6WDWHVY(UZLQ)G WK&LU HQ
EDQF FHUW GHQLHG 86 ³ZKHQ D ODZ
HQIRUFHPHQWRIILFHUQRORQJHUKDVDQ\UHDVRQDEOHVXVSLFLRQRI
FULPLQDODFWLYLW\WKHGHWDLQHGLQGLYLGXDOLVFRQVWLWXWLRQDOO\
IUHHWROHDYH´
,Q WKLV FDVH WKH SXUSRVHV RI WKH WUDIILF VWRS ZHUH QHYHU
DFFRPSOLVKHG7KHGLVWULFWFRXUWIRXQG³LWXQGLVSXWHGWKDWWKH
RIILFHUV DW WKH VFHQH GLG QRW SXUVXH WKH LQLWLDO VWRS LQ DQ\
PDQQHU´ -$ DW 0HP 7KH RIILFHUV WKHPVHOYHV
WHVWLILHGWKDWWKH\ZHUHPDNLQJ³WUDIILFVWRSV´MXVWWRORRNIRU
RWKHULOOHJDODFWLYLW\6HHHJ-$DW *UDKDP7HVW
³:H ZHUH PDNLQJ WUDIILF VWRSV ZKHUH ZH¶G JHW VRPH
SUREDEOHFDXVHWRPDNHWKHVWRSLIDWUDIILFYLRODWLRQ´
DQG³>Z@HZHUHVWRSSLQJWKHRQHVWKDWZDV>VLF@FRPLQJEDFN
LQWR WRZQ IRU WDLOOLJKW YLRODWLRQV RU DQ\ \RX NQRZ 3&
>SUREDEOHFDXVH@ZHFRXOGFRPHXSZLWKILQG´ -$DW
0HP GHVFULSWLRQ RI :LVHFUDFNHU 7HVW ³, ZDV DVNHG WR
DVVLVWLQWKHQDUFRWLFVDQGYLFHGLYLVLRQWRPDNHWUDIILFVWRSV
7KH\ZHUHZDWFKLQJRUGRLQJVXUYHLOODQFHRQDQDUHDWKDWWKH\
KDG LQIRUPDWLRQ RQ IRU GUXJ WUDIILF , ZDV DVNHG WR VWRS
YHKLFOHVLI,IRXQGSUREDEOHFDXVHWRVWRSWKHPDVWKH\OHIW
WKHDUHD´
1R 8QLWHG6WDWHVY%DLOH\
,,$1$/<6,6
$6WDQGDUGRI5HYLHZ
:HUHYLHZGHQRYRWKHGLVWULFWFRXUW¶VOHJDOFRQFOXVLRQVLQ
D VXSSUHVVLRQ KHDULQJ DQG ZH UHYLHZ WKH GLVWULFW FRXUW¶V
ILQGLQJVRIIDFWIRUFOHDUHUURU8QLWHG6WDWHVY6PLWK
)G WK&LU ³$IDFWXDOILQGLQJLVFOHDUO\
HUURQHRXVZKHQWKHUHYLHZLQJFRXUWLVOHIWZLWKWKHGHILQLWH
DQG ILUP FRQYLFWLRQ WKDW D PLVWDNH KDV EHHQ PDGH´ ,G
FLWDWLRQRPLWWHG :KHUHWKHGLVWULFWFRXUWJUDQWVDPRWLRQWR
VXSSUHVV WKLV FRXUW YLHZV WKH HYLGHQFH LQ WKH OLJKW PRVW
IDYRUDEOHWRWKHGHIHQGDQW,G ³>7@KH&RXUWFRQVLGHUVWKH
HYLGHQFHLQWKHOLJKWPRVWOLNHO\WRVXSSRUWWKHGLVWULFWFRXUW¶V
GHFLVLRQ´ TXRWDWLRQRPLWWHG
%,QLWLDO6WRSRI%DLOH\¶V&DU
7KHGLVWULFWFRXUWFRQFOXGHGWKDWWKHLQLWLDOVWRSRI%DLOH\¶V
FDUE\'DYLGVRQDQG*UDKDPZDVQRWMXVWLILHGEHFDXVHLWZDV
³DSUHWH[W´-$DW 0HP %\WKLVWKHFRXUWVHHPVWR
KDYHPHDQWWKDWDOWKRXJK'DYLGVRQDQG*UDKDPRVWHQVLEO\
VWRSSHG%DLOH\IRUDWUDIILFYLRODWLRQ²GULYLQJRQWKHZURQJ
VLGH RI WKH URDG ZKLOH SRVVLEO\ LQWR[LFDWHG ² WKH\ UHDOO\
VWRSSHG%DLOH\IRURWKHUUHDVRQV7KHFRXUWHPSKDVL]HGWKH
SRUWLRQRI*UDKDP¶VWHVWLPRQ\LQZKLFKKHH[SODLQHGWKDWWKH
SROLFHZHUH³PDNLQJWUDIILFVWRSV´DWWKHWUDLOHUSDUNZKHUH
WKH\KDGSUREDEOHFDXVH 7KHFRXUWDOVRFLWHGWKLVFRXUW¶V
RSLQLRQLQ8QLWHG6WDWHVY+XJXHQLQ)GQ
WK&LU IRUWKHSURSRVLWLRQWKDW³>D@SUHWH[WXDOVWRS
RFFXUVZKHQWKHSROLFHXVHDOHJDOMXVWLILFDWLRQWRPDNHDVWRS
LQRUGHUWRVHDUFKDSHUVRQRUKLVYHKLFOHRULQWHUURJDWH
KLPIRUDQXQUHODWHGDQGPRUHVHULRXVFULPHIRUZKLFKWKH\
GRQRWKDYHWKHUHDVRQDEOHVXVSLFLRQQHFHVVDU\WRVXSSRUWD
VWRS´-$DW
,W LV ZHOO HVWDEOLVKHG KRZHYHU WKDW DQ RIILFHU¶V DFWXDO
PRWLYDWLRQ IRU PDNLQJ D WUDIILF VWRS LV LUUHOHYDQW WR WKH
FRQVWLWXWLRQDOLW\RIWKDWVWRS6HH:KUHQY8QLWHG6WDWHV
86 ³WKHVHFDVHVIRUHFORVHDQ\DUJXPHQW
WKDWWKHFRQVWLWXWLRQDOUHDVRQDEOHQHVVRIWUDIILFVWRSVGHSHQGV

-- 5 of 6 --

8QLWHG6WDWHVY%DLOH\ 1R
,Q WKH SRUWLRQ RI +XJXHQLQ FLWHG E\ WKH GLVWULFW FRXUW ³SUHWH[W´ LV
GHILQHG DV WKH XVH RI D OHJDO MXVWLILFDWLRQ E\ WKH SROLFH LQ SDUWLFXODU WKH
XVH RI D FKHFNSRLQW WR PDNH D VWRS IRU ZKLFK WKH SROLFH GR QRW RWKHUZLVH
KDYH WKH UHTXLVLWH UHDVRQDEOH VXVSLFLRQ 6HH +XJXHQLQ )G DW
Q 7KH +XJXHQLQ FRXUW H[SODLQHG WKDW ³ZLWKRXW D WUDIILF YLRODWLRQ RU
UHDVRQDEOH VXVSLFLRQ RI GUXJ WUDIILFNLQJ LW ZDV D YLRODWLRQ RI WKH )RXUWK
$PHQGPHQW IRU WKH SROLFH WR VHOHFWLYHO\ GHWDLQ PRWRULVWV ZLWK RXWRIVWDWH
WDJV ´ ,G DW HPSKDVLV DGGHG
RQ WKH DFWXDO PRWLYDWLRQV RI WKH LQGLYLGXDO RIILFHUV
LQYROYHG´ 8QLWHG6WDWHVY+LOO)G WK&LU
FHUWGHQLHG86 FLWLQJ:KUHQDQG
H[SODLQLQJWKDWSXUVXDQWWRWKDWGHFLVLRQ³DQRIILFHUPD\VWRS
DYHKLFOHIRUDWUDIILFYLRODWLRQZKHQKLVWUXHPRWLYDWLRQLVWR
VHDUFK IRU FRQWUDEDQG DV ORQJ DV WKH RIILFHU KDG SUREDEOH
FDXVHWRLQLWLDOO\VWRSWKHYHKLFOH´ VHHDOVR8QLWHG6WDWHVY
)HUJXVRQ)G WK&LU HQEDQF FHUW
GHQLHG86 7KHUHIRUHLWLVLUUHOHYDQWLQWKLV
FDVHZKHWKHU'DYLGVRQ¶VDQG*UDKDP¶VLQLWLDOVWRSRI%DLOH\
ZDV³SUHWH[WXDO´7KHUHOHYDQWTXHVWLRQRQWKLVDSSHDOLV
ZKHWKHU'DYLGVRQDQG*UDKDPKDGSUREDEOHFDXVHWRVWRS
%DLOH\IRUDWUDIILFYLRODWLRQ
:HFRQFOXGHWKDW'DYLGVRQDQG*UDKDPGLGKDYHSUREDEOH
FDXVH WR VWRS %DLOH\ IRU D WUDIILF YLRODWLRQ $OWKRXJK WKH
GLVWULFWFRXUW¶VILQGLQJVRIIDFWLQWKLVFDVHVLPSO\FRQVLVWHGRI
H[FHUSWVRIWHVWLPRQ\IURPWKHVXSSUHVVLRQKHDULQJWKHFRXUW
GLG ODEHO DV ³ILQGLQJV RI IDFW´ 'DYLGVRQ¶V DQG *UDKDP¶V
WHVWLPRQ\WKDWWKH\VWRSSHG%DLOH\EHFDXVHKHZDVGULYLQJRQ
WKH ZURQJ VLGH RI WKH URDG DQG 'DYLGVRQ¶V WHVWLPRQ\ WKDW
%DLOH\ DOVR VHHPHG WR EH LQWR[LFDWHG ,Q D VHFWLRQ RI WKH
RSLQLRQHQWLWOHG³DSSOLFDWLRQRIWKHODZWRWKHIDFWV´WKHFRXUW
ODWHUFRQFOXGHGWKDWFHUWDLQRWKHUIDFWV³XQGHUPLQHWKHDOOHJHG
UHDVRQ IRUWKHμWUDIILFVWRS¶´-$DW 0HP %XWWKH
FRXUWGRHVQRWDSSHDULQWKLVVHFWLRQWRTXHVWLRQWKHH[LVWHQFH
RI D WUDIILF YLRODWLRQ WKH FRXUW VLPSO\ FRQFOXGHG WKDW WKH
WUDIILF YLRODWLRQ ZDV QRW WKH UHDO UHDVRQ IRU WKH VWRS
0RUHRYHU WKH PDJLVWUDWH MXGJH ZKR SUHVLGHG RYHU WKH
VXSSUHVVLRQ KHDULQJ VSHFLILFDOO\ SURSRVHG D ILQGLQJ WKDW
'DYLGVRQ¶V DQG *UDKDP¶V WHVWLPRQ\ UHJDUGLQJ WKH WUDIILF
1R 8QLWHG6WDWHVY%DLOH\
:H QRWH WKDW LW LV DQ RSHQ TXHVWLRQ LQ WKLV FLUFXLW ZKHWKHU D GLVWULFW
FRXUW FDQ UHMHFW D PDJLVWUDWH MXGJH¶V FUHGLELOLW\ GHWHUPLQDWLRQV ZLWKRXW
KROGLQJ D QHZ KHDULQJ 7KH 6XSUHPH &RXUW KDV QRWHG LQ GLFWD WKDW
7KH LVVXH LV QRW EHIRUH XV EXW ZH DVVXPH LW XQOLNHO\ WKDW D
GLVWULFW MXGJH ZRXOG UHMHFW D PDJLVWUDWH¶V SURSRVHG ILQGLQJV RQ
FUHGLELOLW\ ZKHQ WKRVH ILQGLQJV DUH GLVSRVLWLYH DQG VXEVWLWXWH WKH
MXGJH¶V RZQ DSSUDLVDO WR GR VR ZLWKRXW VHHLQJ DQG KHDULQJ WKH
ZLWQHVV RU ZLWQHVVHV ZKRVH FUHGLELOLW\ LV LQ TXHVWLRQ FRXOG ZHOO
JLYH ULVH WR VHULRXV TXHVWLRQV ZKLFK ZH GR QRW UHDFK
8QLWHG 6WDWHV Y 5DGGDW] 86 Q HPSKDVLV LQ
RULJLQDO 2WKHU FLUFXLWV KDYH KHOG WKDW GLVWULFW FRXUWV PXVW KROG QHZ
KHDULQJV LQ RUGHU WR UHMHFW WKH SURSRVHG FUHGLELOLW\ ILQGLQJV RI D PDJLVWUDWH
MXGJH LI WKH ULJKWV RI FULPLQDO GHIHQGDQWV ZRXOG EH LPSOLFDWHG 6HH HJ
+LOO Y %H\HU )G G &LU *UDVVLD Y 6FXOO\
)G G &LU /RXLV Y %ODFNEXUQ )G
WK &LU
YLRODWLRQZDVFUHGLEOHDQGWKHGLVWULFWFRXUWGLGQRWUHMHFWWKLV
ILQGLQJ-$DW 5HSRUWDQG5HFRPPHQGDWLRQ ³$WWKLV
MXQFWXUHWKHLVVXHLVSXUHO\RQHRIFUHGLELOLW\ZKRLVWREH
EHOLHYHG²2IILFHUV*UDKDPDQG'DYLGVRQRUWKHGHIHQGDQW"
7R SXW LW VXFFLQFWO\ WKH RIILFHUV DUH EHOLHYHG DQG WKH
GHIHQGDQW LV QRW´ 7KLV FRXUW KDV KHOG WKDW ³>Z@H DUH
JHQHUDOO\ UHOXFWDQW WR VHW DVLGH FUHGLELOLW\ GHWHUPLQDWLRQV
PDGHE\WKHWULHURIIDFWZKRKDVKDGWKHRSSRUWXQLW\WRYLHZ
WKHZLWQHVVRQWKHVWDQGDQGDVVHVVKLVGHPHDQRU´3HYHOHU
Y8QLWHG6WDWHV)G WK&LU
&'HWHQWLRQRI%DLOH\$IWHUWKH,QLWLDO6WRS
+DYLQJFRQFOXGHGWKDW'DYLGVRQDQG*UDKDPKDGSUREDEOH
FDXVHLQLWLDOO\WRVWRS%DLOH\IRUDWUDIILFYLRODWLRQZHPXVW
WKHQ DVN ZKHWKHU WKH RIILFHUV KDG VXIILFLHQW UHDVRQDEOH
VXVSLFLRQWRGHWDLQ%DLOH\DIWHUWKHSXUSRVHVRIWKHWUDIILFVWRS
KDGEHHQDFFRPSOLVKHG:HKDYHKHOGWKDW³>D@QRUGLQDU\
WUDIILF VWRS LV PRUH DNLQ WR DQ LQYHVWLJDWLYH GHWHQWLRQ
UDWKHUWKDQDFXVWRGLDODUUHVWDQGWKHSULQFLSOHVDQQRXQFHGLQ
7HUU\Y2KLR86 DSSO\WRGHILQHWKHVFRSHRI
UHDVRQDEOHSROLFHFRQGXFW´+LOO)GDW7KHUHIRUH
³DQ\VXEVHTXHQWGHWHQWLRQDIWHUWKHLQLWLDOVWRSPXVWQRWEH
H[FHVVLYHO\ LQWUXVLYH LQ WKDW WKH RIILFHU¶V DFWLRQV PXVW EH
UHDVRQDEO\UHODWHGLQVFRSHWRFLUFXPVWDQFHVMXVWLI\LQJWKH

-- 6 of 6 --