00a0371p.06

99-6312Court of Appeals for the Sixth CircuitOct 19, 2000

Full text

0XOOLVY8QLWHG6WDWHV 1R
FDVHV
)RUWXQDWHO\ DQRWKHU GHFLVLRQ E\ WKH )LIWK &LUFXLW LQ
>0F*LOO@ IRXQG WKDW FRQJUHVVLRQDO LQWHQW WR SURKLELW DQ\ )HGHUDO
UHOLHIHLWKHU WKURXJK $7) RU WKH FRXUWVLV FOHDU 7KH )LIWK
&LUFXLW FRQFOXGHG WKDW FRQYLFWHG IHORQV DUH WKHUHIRUH QRW HOLJLEOH
IRU MXGLFLDO UHYLHZ RI WKHLU UHOLHI DSSOLFDWLRQV
*LYHQ WKLV FRQIOLFW LQ WKH FLUFXLW FRXUWV LW LV LPSRUWDQW WKDW
ZH RQFH DJDLQ FODULI\ RXU RULJLQDO DQG VXVWDLQLQJ LQWHQWLRQ 7KH
JRDO RI WKLV SURYLVLRQ KDV DOZD\V EHHQ WR SURKLELW FRQYLFWHG
IHORQV IURP JHWWLQJ WKHLU JXQV EDFNZKHWKHU WKURXJK $7) RU WKH
FRXUWV ,W ZDV QHYHU RXU LQWHQWLRQ WR VKLIW WKH EXUGHQ WR WKH
FRXUWV
&RQJUHVV LQWHQGHG WKDW IHGHUDO FRXUWV GHYRWH WKHLU MXGLFLDO
UHVRXUFHV WR FRQVLGHU²RQ D PRUH OLPLWHG UHFRUG WKDQ WKDW
EHIRUHWKH$7)²WKHZHLJKW\TXHVWLRQRIZKHWKHUDIHORQ¶V
ILUHDUPULJKWVVKRXOGEHUHVWRUHG$FFRUGLQJO\ZHMRLQZLWK
WKH6HFRQG)LIWK1LQWKDQG7HQWK&LUFXLWVLQFRQFOXGLQJ
WKDW&RQJUHVVWKURXJKLWVDSSURSULDWLRQVDFWKDVFKRVHQWRDW
OHDVW WHPSRUDULO\ VXVSHQG WKH RSHUDWLRQ RI † F LQ LWV
HQWLUHW\WKHUHE\UHPRYLQJVXEMHFWPDWWHUMXULVGLFWLRQIURPWKH
GLVWULFWFRXUW
,,,
)RUWKHIRUHJRLQJUHDVRQVZH5(9(56(WKHGLVWULFWFRXUW¶V
FRQFOXVLRQWKDWLWKDGVXEMHFWPDWWHUMXULVGLFWLRQWRFRQVLGHU
SODLQWLII¶VSHWLWLRQWRKDYHKLVILUHDUPULJKWVUHVWRUHGSXUVXDQW
WR † F :KLOH SODLQWLII¶V FRPSODLQW DOVR UHIHUV WR
UHVWRUDWLRQRIKLVFLYLOULJKWVLWLVFOHDUWKDWKLVULJKWWREHDU
DUPVLVWKHRQO\ULJKWVRXJKW7KHFDVHLVGLVPLVVHGIRUODFN
RIVXEMHFWPDWWHUMXULVGLFWLRQ
7KH +RQRUDEOH 'DYLG $ .DW] 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
1RUWKHUQ 'LVWULFW RI 2KLR 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
-$0(6 0,&+$(/ 08//,6
3ODLQWLII$SSHOOHH
Y
81,7(' 67$7(6 2) $0(5,&$
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV
1R²-RQ3KLSSV0F&DOOD'LVWULFW-XGJH
$UJXHG$XJXVW
'HFLGHGDQG)LOHG2FWREHU
%HIRUH.(11('<DQG1255,6&LUFXLW-XGJHV.$7=
'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 7KRPDV 0 %RQG\ 81,7(' 67$7(6
'(3$570(17 2) -867,&( &,9,/ ',9,6,21
:DVKLQJWRQ '& IRU $SSHOODQW /HV -RQHV %85&+

-- 1 of 6 --

0XOOLVY8QLWHG6WDWHV 1R
3257(5 -2+16210HPSKLV7HQQHVVHHIRU$SSHOOHH
21 %5,() 7KRPDV 0 %RQG\ 81,7(' 67$7(6
'(3$570(17 2) -867,&( &,9,/ ',9,6,21
:DVKLQJWRQ'&IRU$SSHOODQW/HV-RQHV:-0LFKDHO
&RG\6XVDQ0&ODUN%85&+3257(5 -2+1621
0HPSKLV7HQQHVVHHIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
.(11('<&LUFXLW-XGJH7KH8QLWHG6WDWHVDSSHDOVWKH
GLVWULFW FRXUW¶V RUGHU JUDQWLQJ SODLQWLII¶V SHWLWLRQ IRU WKH
UHPRYDORIWKHILUHDUPVGLVDELOLWLHVLPSRVHGRQKLPE\
86& † J 7KH %XUHDX RI $OFRKRO 7REDFFR
)LUHDUPV ³$7)´ LVWKHRQO\DJHQF\DXWKRUL]HGWRJUDQWUHOLHI
IURPILUHDUPVGLVDELOLWLHVXQGHU† F &RQJUHVVLQLWVODVW
HLJKW DSSURSULDWLRQV DFWV KDV SURKLELWHG WKH $7) IURP
H[SHQGLQJIXQGVWRSURFHVVDSSOLFDWLRQVIRUWKHUHPRYDORI
ILUHDUPGLVDELOLWLHV7KHGLVWULFWFRXUWKHOGWKDWGXHWRWKH
LQDELOLW\RIWKH$7)WRDFWLWKDGVXEMHFWPDWWHUMXULVGLFWLRQ
XQGHU† F WRJUDQWUHOLHIIURPWKHGLVDELOLW\DQGUHVWRUHG
SODLQWLII¶V ULJKW WR SRVVHVV ILUHDUPV DQG DPPXQLWLRQ 7KH
JRYHUQPHQW DVVHUWV WKDW WKH GLVWULFW FRXUW ODFNHG VXEMHFW
PDWWHU MXULVGLFWLRQ WR FRQVLGHU SODLQWLII¶V SHWLWLRQ IRU WKH
UHVWRUDWLRQRIILUHDUPULJKWVXQGHU86&† F )RU
WKHUHDVRQVGHWDLOHGEHORZZHDJUHHDQGUHYHUVHWKHMXGJPHQW
RIWKHGLVWULFWFRXUWDQGGLVPLVVWKHFDVH
,
,Q-DPHV0LFKDHO0XOOLV ³SODLQWLII´ SOHGJXLOW\WR
IDOVLI\LQJWUDYHOH[SHQVHVLQFRQQHFWLRQZLWKKLVEXVLQHVVLQ
YLRODWLRQRI86&†ZKLFKFDUULHVDPD[LPXPWHUP
RILPSULVRQPHQWRIILYH\HDUV$VDFRQVHTXHQFHSODLQWLII
ZDVSURKLELWHGIURPSRVVHVVLQJILUHDUPVE\86&†
J ZKLFK SURYLGHV LQ UHOHYDQW SDUW WKDW ³>L@W VKDOO EH
XQODZIXOIRUDQ\SHUVRQZKRKDVEHHQFRQYLFWHGLQDQ\
FRXUW RI D FULPH SXQLVKDEOH E\ LPSULVRQPHQW IRU D WHUP
H[FHHGLQJ RQH \HDU WR SRVVHVV DQ\ ILUHDUP RU
1R 0XOOLVY8QLWHG6WDWHV
6HH DOVR &RQJ 5HF 6 2FW VWDWHPHQW RI 6HQ
6LPRQ ,Q WKH FRQWH[W RI WKH YHUVLRQ RI WKH $SSURSULDWLRQV $FW
6HQDWRU 6LPRQ ZKR DORQJ ZLWK 6HQDWRU /DXWHQEHUJ SURSRVHG WKH
SURYLVLRQ EDUULQJ WKH $7) IURP SURFHVVLQJ DSSOLFDWLRQV IRU WKH UHPRYDO
RI ILUHDUPV GLVDELOLWLHV LQ DQG DGYRFDWHG LWV LQFOXVLRQ LQ HDFK
IROORZLQJ \HDU VWDWHG DV IROORZV
,Q >5LFH @ WKH 7KLUG &LUFXLW &RXUW RI $SSHDOV IRXQG WKDW WKH
FXUUHQW IXQGLQJ SURKLELWLRQ GRHV QRW PDNH FOHDU FRQJUHVVLRQDO
LQWHQW WR EDU DOO DYHQXHV RI UHOLHI IRU FRQYLFWHG IHORQV %\ WKHLU
UHDVRQLQJ VLQFH $7) LV XQDEOH WR FRQVLGHU DSSOLFDWLRQV IRU
UHOLHI IHORQV DUH HQWLWOHG WR DVN WKH FRXUWV WR UHYLHZ WKHLU
DSSOLFDWLRQV
7KLV PLVJXLGHG GHFLVLRQ FRXOG IORRG WKH FRXUWV ZLWK IHORQV
VHHNLQJ WKH UHVWRUDWLRQ RI WKHLU JXQ ULJKWV HIIHFWLYHO\ VKLIWLQJ
IURP $7) WR WKH FRXUWV WKH EXUGHQ RI FRQVLGHULQJ WKHVH
DSSOLFDWLRQV ,QVWHDG RI ZDVWLQJ WD[SD\HU PRQH\ DQG WKH WLPH RI
$7) DJHQWV ZKLFK FRXOG EH PXFK EHWWHU VSHQW RQ LPSRUWDQW ODZ
HQIRUFHPHQW HIIRUWV ZH ZRXOG QRZ EH ZDVWLQJ FRXUW UHVRXUFHV
DQG GLVWUDFWLQJ WKH FRXUWV IURP FRQVLGHUDWLRQ RI VHULRXV FULPLQDO
YLROHQWFULPH7KHUHIRUHWKH&RPPLWWHHKDVLQFOXGHG
ODQJXDJHLQWKHELOOZKLFKSURKLELWVWKHXVHRIIXQGVIRU
$7)WRLQYHVWLJDWHDQGDFWXSRQDSSOLFDWLRQVIURPUHOLHI
IURP)HGHUDOILUHDUPVGLVDELOLWLHV
65HS1RQG&RQJG6HVV DFFRUG6
5HS 1R G &RQJ VW 6HVV
H[SODLQLQJWKDWLWZDVLPSRVLQJDEDQRQ$7)LQYHVWLJDWLRQV
EHFDXVH D GHFLVLRQ WR JUDQW UHOLHI ³FRXOG KDYH GHYDVWDWLQJ
FRQVHTXHQFHVIRULQQRFHQWFLWL]HQVLIWKHZURQJGHFLVLRQLV
PDGH´ ,QVWHDG&RQJUHVVGHWHUPLQHGWKDWWKH$7)¶VVFDUFH
UHVRXUFHV³ZRXOGEHEHWWHUXWLOL]HG´RQPRUHSUHVVLQJPDWWHUV
VXFKDV³FUDFN>LQJ@GRZQRQYLROHQWFULPH´65HS1R
G&RQJVW6HVV 65HS1R
G&RQJG6HVV± ,QUHHQDFWLQJWKHEDQIRU
WKH IRXUWK FRQVHFXWLYH \HDU &RQJUHVV UHHPSKDVL]HG WKLV
SRLQW VWDWLQJ ³WKRVH ZKR FRPPLW IHORQLHV VKRXOG QRW EH
DOORZHG WR KDYH WKHLU ULJKW WR RZQ D ILUHDUP UHVWRUHG
7KHUH LV QR UHDVRQ WR VSHQG WKH *RYHUQPHQW¶V WLPH RU
WD[SD\HU¶VPRQH\WRUHVWRUHDFRQYLFWHGIHORQ¶VULJKWWRRZQ
DILUHDUP´+55HS1RWK&RQJVW6HVV
*LYHQWKLVKLVWRU\LWLVXQUHDVRQDEOHWREHOLHYHWKDW

-- 2 of 6 --

0XOOLVY8QLWHG6WDWHV 1R
7KH 8QLWHG 6WDWHV HPSKDVL]HG WKLV SRLQW LQ LWV 0RWLRQ IRU
5HFRQVLGHUDWLRQ EHIRUH WKH GLVWULFW FRXUW SRLQWLQJ RXW WKDW LQ FRQQHFWLRQ
ZLWK LWV LQYHVWLJDWLRQ $7) ZRXOG LQWHUYLHZ WKH DSSOLFDQW WKH OLVWHG
FKDUDFWHU UHIHUHQFHV LQGHSHQGHQWO\ GHYHORSHG UHIHUHQFHV HPSOR\HUV
PHPEHUV RI WKH FRPPXQLW\ DQG QHLJKERUKRRG ZKHUH WKH DSSOLFDQW OLYHV
WKH DSSOLFDQW¶V SUREDWLRQ RIILFHUV DQG RWKHU ODZ HQIRUFHPHQW RIILFHUV
7KH $7) ZRXOG DOVR FRQGXFW D ODZ HQIRUFHPHQW UHFRUGV FKHFN %DVHG RQ
DOO RI WKLV DFFXPXODWHG LQIRUPDWLRQ WKH $7) ZRXOG GHWHUPLQH ZKHWKHU RU
QRW UHOLHI VKRXOG EH JUDQWHG EDVHG RQ SXEOLF VDIHW\ DQG SXEOLF LQWHUHVW
FRQFHUQV 6HH HJ 6PLWK Y %UDG\ ) 6XSS ± ('
:LV GHVFULELQJ WKH LQYHVWLJDWLRQV WKH $7) FRQGXFWHG SXUVXDQW WR
† F &OHDUO\ WKLV PD\ UHVXOW LQ D YHU\ GLIIHUHQW SLFWXUH WKDQ WKDW
JOHDQHG VROHO\ IURP LQIRUPDWLRQ KDQG VHOHFWHG E\ DQ DSSOLFDQW
WHQGHQF\WRZDUGYLROHQFHRUXVHRIGUXJVDQGDOFRKRO7KHVH
LQVWLWXWLRQDO GLVDGYDQWDJHV PDNH LW KLJKO\ XQOLNHO\ WKDW
&RQJUHVV LQWHQGHG GLVWULFW FRXUW WR UHYLHZ DQ DSSOLFDQWV
GDQJHURXVQHVVWRVRFLHW\LQWKHILUVWLQVWDQFH1RUZRXOGWKH
FRVWVWRWKHFRXUWVLQPDNLQJDQLQYHVWLJDWLRQEHOHVVWKDQWKH
FRVWV WR WKH $7) 7KH\ PLJKW ZHOO EH JUHDWHU VLQFH WKHUH
ZRXOGEHQRLQYHVWLJDWLRQRUWHVWLPRQ\E\WUDLQHGDJHQWVIRU
WKHFRXUWWRUHO\RQ
)LQDOO\ WKH OHJLVODWLYH KLVWRU\ RQO\ VHUYHV WR IXUWKHU
UHLQIRUFH WKH FRQFOXVLRQ WKDW &RQJUHVV GLG QRW LQWHQG WR
PRGLI\ † F WR SHUPLW GH QRYR MXGLFLDO UHYLHZ RI
DSSOLFDWLRQVIRUWKHUHLQVWDWHPHQWRIILUHDUPSULYLOHJHV$V
REVHUYHGLQ0F*LOO)GDWLQDUHSRUWWRWKH6HQDWH
WKH$SSURSULDWLRQV&RPPLWWHHH[SODLQHGZK\LWILUVWZLWKKHOG
IXQGV LQ WKH $SSURSULDWLRQV $FW IRU $7) DFWLRQ RQ
DSSOLFDWLRQVIRU† F UHOLHI
$IWHU$7)DJHQWVVSHQGPDQ\KRXUVLQYHVWLJDWLQJD
SDUWLFXODUDSSOLFDQW>@WKH\PXVWGHWHUPLQHZKHWKHURU
QRWWKDWDSSOLFDQWLVVWLOODGDQJHUWRSXEOLFVDIHW\7KLV
LVDYHU\GLIILFXOWDQGVXEMHFWLYHWDVNZKLFKFRXOGKDYH
GHYDVWDWLQJ FRQVHTXHQFHV IRU LQQRFHQW FLWL]HQV LI WKH
ZURQJGHFLVLRQLVPDGH7KH&RPPLWWHHEHOLHYHVWKDW
WKH DSSUR[LPDWHO\ PDQ\HDUV VSHQW DQQXDOO\ WR
LQYHVWLJDWH DQG DFW XSRQ WKHVH LQYHVWLJDWLRQV DQG
DSSOLFDWLRQVZRXOGEHEHWWHUXWLOL]HGWRFUDFNGRZQRQ
1R 0XOOLVY8QLWHG6WDWHV
DPPXQLWLRQ´ 3ODLQWLII ZKR LV DSSDUHQWO\ DQ DYLG KXQWHU
VRXJKWWRUHPRYHWKHILUHDUPUHVWULFWLRQVLPSRVHGRQKLPE\
† J $FFRUGLQJO\SODLQWLIIREWDLQHGOHJDOFRXQVHO
DQGLQ2FWREHURIUHTXHVWHGDQDSSOLFDWLRQIURPWKH
$7) IRU UHOLHI IURP KLV ILUHDUPV GLVDELOLWLHV SXUVXDQW WR
86&† F 7KH$7)UHVSRQGHGWKDWLWZDVXQDEOHWR
HYHQ SURYLGH SODLQWLII ZLWK DQ DSSOLFDWLRQ GXH WR ODQJXDJH
&RQJUHVVLQVHUWHGLQDQDSSURSULDWLRQVDFWZKLFKIRUEDGWKH
$7)IURPXVLQJDQ\DSSURSULDWHGIXQGVWRHYDOXDWHRUSURFHVV
VXFKDSSOLFDWLRQV
8QGHWHUUHG SODLQWLII ILOHG DQ DFWLRQ LQ WKH GLVWULFW FRXUW
VHHNLQJWKHUHVWRUDWLRQRIKLVFLYLOULJKWVRULQWKHDOWHUQDWLYH
WKHUHPRYDORIKLVIHGHUDOILUHDUPGLVDELOLW\XQGHU† F
7KHGLVWULFWFRXUWGHQLHGSODLQWLII¶VSHWLWLRQZLWKRXWSUHMXGLFH
VWDWLQJ WKDW SODLQWLII PXVW ILUVW H[KDXVW KLV DGPLQLVWUDWLYH
UHPHGLHV E\ VXEPLWWLQJ DQ DSSOLFDWLRQ PDGH SXUVXDQW WR
† F WRWKH$7)DWOHDVWWZR\HDUVDIWHUWKHWHUPLQDWLRQRI
KLVSUREDWLRQ3ODLQWLIIDJDLQZURWHWKH$7)RQ2FWREHU
DQGZDVDJDLQWROGWKDWWKHDJHQF\ZDVQRWDFFHSWLQJ
DSSOLFDWLRQV
,Q -DQXDU\ RI SODLQWLII ILOHG WKLV DFWLRQ IRU WKH
UHVWRUDWLRQRIKLVFLYLOULJKWVRULQWKHDOWHUQDWLYHIRUUHPRYDO
RIKLVIHGHUDOILUHDUPGLVDELOLW\7KH8QLWHG6WDWHVDUJXHG
WKDW WKH GLVWULFW FRXUW ZDV ZLWKRXW MXULVGLFWLRQ WR FRQVLGHU
SODLQWLII¶VUHTXHVW7KHGLVWULFWFRXUWGLVDJUHHGFRQFOXGLQJ
WKDW&RQJUHVV¶DSSURSULDWLRQVDFWVGLGQRWVXVSHQGWKHMXGLFLDO
UHOLHIDYDLODEOHXQGHU† F 7KHFRXUWUHIHUUHGWKHPHULWV
RI SODLQWLII¶V SHWLWLRQ WR D PDJLVWUDWH MXGJH ³WR GHYHORS D
UHFRUG PDNH DQ\ IDFWXDO ILQGLQJV DQG PDNH D
UHFRPPHQGDWLRQ UHJDUGLQJ WKH UHOLHI VRXJKW´ 7KH
PDJLVWUDWH MXGJH UHYLHZHG WKH 3UHVHQWHQFH ,QYHVWLJDWLRQ
5HSRUWSUHSDUHGLQDWWKHWLPHRISODLQWLII¶VFRQYLFWLRQ
OHWWHUV DQG UHFRPPHQGDWLRQV IURP ILYH XQUHODWHG SHUVRQV
VXSSOLHG E\ SODLQWLII DQG FRQVXOWHG ZLWK WKH SUREDWLRQ
GHSDUWPHQW WR GHWHUPLQH LI SODLQWLII KDG DQ\ LQWHUYHQLQJ
FULPLQDO DFWLYLW\ $IWHU FRQVLGHULQJ WKLV LQIRUPDWLRQ WKH
PDJLVWUDWH MXGJH FRQFOXGHG WKDW SODLQWLII ZDV QRW OLNHO\ WR

-- 3 of 6 --

0XOOLVY8QLWHG6WDWHV 1R
HQGDQJHUSXEOLFVDIHW\DQGWKDWJUDQWLQJSODLQWLII¶VUHTXHVWHG
UHOLHIZDVQRWFRQWUDU\WRSXEOLFLQWHUHVW
7KHGLVWULFWFRXUWUHYLHZHGWKHPDJLVWUDWHMXGJH¶V5HSRUW
DQG5HFRPPHQGDWLRQDQGIRXQGWKDWWKHPDJLVWUDWHMXGJHKDG
DGHTXDWHO\FRQVLGHUHGDOOIDFWRUVRWKHUWKDQSODLQWLII¶VPHQWDO
KHDOWK$FFRUGLQJO\WKHGLVWULFWFRXUWUHTXLUHGSODLQWLIIWR
VXEPLW WR DQ H[DPLQDWLRQ E\ D SV\FKRORJLVW 7KH GLVWULFW
FRXUW WKHQ UHIHUUHG FRQVLGHUDWLRQ RI WKH UHVXOWLQJ PHQWDO
KHDOWKUHSRUWWRWKHPDJLVWUDWHMXGJHZKRDJDLQFRQFOXGHG
WKDW SODLQWLII¶V ILUHDUP GLVDELOLW\ VKRXOG EH UHPRYHG 7KH
GLVWULFW FRXUW DFFHSWHG WKH PDJLVWUDWH MXGJH¶V 5HSRUW DQG
5HFRPPHQGDWLRQ DQG RUGHUHG WKH UHPRYDO RI SODLQWLII¶V
ILUHDUPGLVDELOLWLHVSXUVXDQWWR† F 7KH8QLWHG6WDWHV
EURXJKWWKLVWLPHO\DSSHDO
,,
7KH 8QLWHG 6WDWHV FRQWHQGV WKDW WKH ODQJXDJH DQG
OHJLVODWLYHKLVWRU\RI† F DQG&RQJUHVV¶VDSSURSULDWLRQV
DFWV VKRZ WKDW LQ ZLWKGUDZLQJ IXQGLQJ IURP $7)
LQYHVWLJDWLRQVXQGHU† F &RQJUHVVPHDQWWRVXVSHQGWKH
SURYLVLRQ¶VRSHUDWLRQLQLWVHQWLUHW\:HUHYLHZWKHGLVWULFW
FRXUW¶V GHWHUPLQDWLRQ RI LWV VXEMHFW PDWWHU MXULVGLFWLRQ GH
QRYR6HHHJ0LFKLJDQ3HDWY(QYLURQPHQWDO3URWHFWLRQ
$JHQF\)G WK&LU
:HEHJLQDVLQDOOFDVHVRIVWDWXWRU\LQWHUSUHWDWLRQZLWKWKH
ODQJXDJH RI WKH VWDWXWH LWVHOI 6HFWLRQ F DOORZV WKH
6HFUHWDU\ RI WKH 7UHDVXU\ WR JUDQW UHOLHI IURP WKH ILUHDUP
GLVDELOLWLHVLPSRVHGE\† J VWDWLQJ
$SHUVRQZKRLVSURKLELWHGIURPSRVVHVVLQJILUHDUPV
RUDPPXQLWLRQPD\PDNHDSSOLFDWLRQWRWKH6HFUHWDU\IRU
UHOLHIIURPWKHGLVDELOLWLHVLPSRVHGE\)HGHUDOODZV
DQGWKH6HFUHWDU\PD\JUDQWVXFKUHOLHILILWLVHVWDEOLVKHG
WRKLVVDWLVIDFWLRQWKDWWKHFLUFXPVWDQFHVUHJDUGLQJWKH
GLVDELOLW\DQGWKHDSSOLFDQW VUHFRUGDQGUHSXWDWLRQDUH
VXFK WKDW WKH DSSOLFDQW ZLOO QRW EH OLNHO\ WR DFW LQ D
PDQQHUGDQJHURXVWRSXEOLFVDIHW\DQGWKDWWKHJUDQWLQJ
RIWKHUHOLHIZRXOGQRWEHFRQWUDU\WRWKHSXEOLFLQWHUHVW
1R 0XOOLVY8QLWHG6WDWHV
PLVFDUULDJHRIMXVWLFHLWGRHVQRWSHUPLWDGLVWULFWFRXUWWR
FRQGXFWDGHQRYRUHYLHZRIDQ$7)GHQLDO,QIDFWHYHU\
FLUFXLWWRDGGUHVVWKHPDWWHUKDVFRQFOXGHGWKDWDGLVWULFWFRXUW
VKRXOGRQO\UHYLHZ$7)GHQLDOVWRGHWHUPLQHLIWKHGHFLVLRQ
ZDVDUELWUDU\DQGFDSULFLRXV6HH%DJDGRQDVY$7))G
WK &LU %UDGOH\Y$7))G
WK&LU .LWFKHQVY$7))G
WK&LU VHHDOVR'XQODSY$7)1R
:/ WK &LU 0DU XQSXEOLVKHG
7KXV ZH FRQFOXGH IURP WKH SODLQ WH[W RI † F WKDW
&RQJUHVV VXVSHQGHG WKH SURYLVLRQ LQ LWV HQWLUHW\ ZKHQ LW
SURKLELWHGWKH$7)IURPWDNLQJDQ\DFWLRQRQDSSOLFDWLRQV
PDGHSXUVXDQWWR† F DVWKHVWDWXWHPDNHVQRSURYLVLRQ
IRUGHQRYRUHYLHZE\DGLVWULFWFRXUW6HH0F+XJKY5XELQ
1R :/ DW ± G &LU -XO\
%XUWFK)GDW
(YHQLIWKHUHZHUHDQ\GRXEWFRQFHUQLQJ&RQJUHVV¶LQWHQW
WKHSUDFWLFDOLWLHVRIFRQGXFWLQJWKHUHTXLVLWHLQYHVWLJDWLRQRQO\
VHUYHWRUHLQIRUFHWKHFRQFOXVLRQWKDW&RQJUHVVLQWHQGHGWR
VXVSHQG† F ¶VRSHUDWLRQ$VWKH8QLWHG6WDWHVDUJXHV
WKHRQO\ZD\WRUHOLDEO\GHWHUPLQHZKHWKHUDFRQYLFWHGIHORQ
PD\VDIHO\EHHQWUXVWHGZLWKDILUHDUPSXUVXDQWWR† F LV
WRFRQGXFWH[WHQVLYHILHOGLQYHVWLJDWLRQVLQFOXGLQJLQWHUYLHZV
RIIDPLO\IULHQGVQHLJKERUVDQGFRZRUNHUV:KLOHGLVWULFW
FRXUWVDUHZHOOHTXLSSHGWRPDNHFUHGLELOLW\MXGJPHQWVDQG
IDFWXDOGHWHUPLQDWLRQVWKH\DUHZLWKRXWWKHWRROVQHFHVVDU\WR
FRQGXFWDV\VWHPDWLFLQTXLU\LQWRDQDSSOLFDQW¶VEDFNJURXQG
$QDSSOLFDQWZLOOOLNHO\SURYLGHWKHGLVWULFWFRXUWRQO\ZLWK
FRQWDFWVZKRZLOOVXSSO\SRVLWLYHLQIRUPDWLRQFRQFHUQLQJWKH
DSSOLFDQW¶VUHFRUGDQGUHSXWDWLRQ7KXVDVLQWKHFDVHDWEDU
WKH FRXUW ZRXOG RQO\ EH DEOH WR FRQGXFW D YHU\ RQH VLGHG
LQTXLU\ UHO\LQJ ODUJHO\ RQ OHWWHUV RI UHFRPPHQGDWLRQ DQG
WHVWLPRQ\ IURP LQGLYLGXDOV KDQG VHOHFWHG E\ DQ DSSOLFDQW
8QOLNH WKH $7) WKH FRXUW FDQQRW FDQYDV WKH FLUFOH RI
QHLJKERUV DQG DFTXDLQWDQFHV ZKR PD\ KDYH QHJDWLYH
LQIRUPDWLRQ FRQFHUQLQJ VXFK WKLQJV DV WKH DSSOLFDQW¶V

-- 4 of 6 --

0XOOLVY8QLWHG6WDWHV 1R
GHFLVLRQVSHUPLWWHGE\86&† $ DQGWKHUHOHYDQW
OHJLVODWLYH KLVWRU\ FRQFOXGLQJ WKDW LW ZDV ³DZDUH RI QR
DOFKHP\ FDSDEOH RI WUDQVIRUPLQJ UHYLHZ RI WKH $7)¶V
GHFLVLRQ XQGHU † LQWR WKH UHOLHI WKH SODLQWLII
VHHNV²SOHQDU\DGMXGLFDWLRQRIKLVDSSOLFDWLRQE\WKHGLVWULFW
FRXUW´,GDW
:H DJUHH ZLWK WKH 6HFRQG &LUFXLW WKDW WKH VWDWXH
FRQWHPSODWHVMXGLFLDOUHYLHZRIWKHGLVFUHWLRQH[HUFLVHGE\WKH
6HFUHWDU\LQGHQ\LQJDQDSSOLFDWLRQQRWLQGHSHQGHQWMXGLFLDO
GLVFUHWLRQH[HUFLVHGLQDGHQRYRUHYLHZRIDQDSSOLFDWLRQ$V
WKH 0F+XJK FRXUW HPSKDVL]HG † F VWDWHV WKDW ³>D@Q\
SHUVRQZKRVHDSSOLFDWLRQIRUUHOLHIIURPGLVDELOLWLHVLVGHQLHG
E\WKH6HFUHWDU\PD\ILOHDSHWLWLRQZLWKWKH8QLWHG6WDWHV
GLVWULFWFRXUWIRUWKHGLVWULFWLQZKLFKKHUHVLGHVIRUDMXGLFLDO
UHYLHZRIVXFKGHQLDO´86&† F HPSKDVLVDGGHG
,W LV WUXH WKDW &RQJUHVV KDV QRW VSHFLILFDOO\ DGGUHVVHG WKH
MXGLFLDU\ LQ DQ\ RI WKH DSSURSULDWLRQV DFWV GHDOLQJ ZLWK
† F +RZHYHU E\ SURKLELWLQJ WKH $7) IURP XVLQJ
DSSURSULDWHG IXQGV WR SURFHVV DSSOLFDWLRQV &RQJUHVV KDV
FRQVWUDLQHG WKH $7) IURP LVVXLQJ WKH W\SH RI GHQLDOV
PHQWLRQHGLQWKHVWDWXWH2QHFRXOGDUJXHWKDWE\UHIXVLQJWR
SURFHVVDSSOLFDWLRQVWKH$7)LVHIIHFWLYHO\GHQ\LQJUHOLHI
KRZHYHUWKHUHPHG\LQVXFKDVLWXDWLRQLVQRWUHYLHZE\D
IHGHUDOFRXUW5DWKHUDVWKH8QLWHG6WDWHVSRLQWVRXWXQGHU
86& † D FRXUW UHYLHZLQJ DJHQF\ DFWLRQV LV RQO\
DXWKRUL]HGWR FRPSHODJHQF\DFWLRQXQODZIXOO\ZLWKKHOG
RUXQUHDVRQDEO\GHOD\HGRU LQYDOLGDWHDJHQF\DFWLRQVDQG
ILQGLQJV WKDW DUH XQODZIXO *LYHQ &RQJUHVV¶V H[SOLFLW
LQVWUXFWLRQWKDWWKH$7)VKRXOGQRWVSHQGDQ\DSSURSULDWHG
IXQGV WR SURFHVV DSSOLFDWLRQV IRU WKH UHPRYDO RU ILUHDUP
GLVDELOLWLHV SODLQWLII FRXOG KDUGO\ DUJXH WKDW WKH $7) KDV
DFWHG XQODZIXOO\ RU XQUHDVRQDEO\ LQ IDLOLQJ WR SURFHVV KLV
DSSOLFDWLRQ %HFDXVH &RQJUHVV FOHDUO\ KDV WKH SRZHU WR
SUHYHQW WKH $7) IURP DFWLQJ RQ DQ\ DSSOLFDWLRQV PDGH
SXUVXDQWWR† F LILWFKRRVHVWKHUHLVQRDJHQF\DFWLRQ
IRUDIHGHUDOFRXUWWRFRPSHORUUHYLHZ
)XUWKHU ZKLOH WKH VWDWXWH SHUPLWV GLVWULFW FRXUWV WR
VXSSOHPHQW WKH UHFRUG EHIRUH LW LI QHFHVVDU\ WR SUHYHQW D
1R 0XOOLVY8QLWHG6WDWHV
6HH 7UHDVXU\ 3RVWDO 6HUYLFH DQG *HQHUDO *RYHUQPHQW
$SSURSULDWLRQV $FW 3XE / 1R 6WDW
7UHDVXU\ 3RVWDO 6HUYLFH DQG *HQHUDO *RYHUQPHQW $SSURSULDWLRQV $FW
3XE / 1R 6WDW 7UHDVXU\ 3RVWDO
6HUYLFH DQG *HQHUDO *RYHUQPHQW $SSURSULDWLRQV $FW 3XE / 1R
6WDW 7UHDVXU\ 3RVWDO 6HUYLFH DQG
*HQHUDO *RYHUQPHQW $SSURSULDWLRQV $FW 3XE / 1R
6WDW 7UHDVXU\ 3RVWDO 6HUYLFH DQG *HQHUDO
*RYHUQPHQW $SSURSULDWLRQV $FW 3XE / 1R 6WDW
7UHDVXU\ 3RVWDO 6HUYLFH DQG *HQHUDO *RYHUQPHQW
$SSURSULDWLRQV $FW 3XE / 1R 6WDW
7UHDVXU\ 3RVWDO 6HUYLFH DQG *HQHUDO *RYHUQPHQW
$SSURSULDWLRQV $FW 3XE / 1R 6WDW
7UHDVXU\ 3RVWDO 6HUYLFH DQG *HQHUDO *RYHUQPHQW
$SSURSULDWLRQV $FW 3XE / 1R 6WDW

$Q\SHUVRQZKRVHDSSOLFDWLRQIRUUHOLHIIURPGLVDELOLWLHV
LVGHQLHGE\WKH6HFUHWDU\PD\ILOHDSHWLWLRQZLWKWKH
8QLWHG6WDWHVGLVWULFWFRXUWIRUWKHGLVWULFWLQZKLFKKH
UHVLGHVIRUDMXGLFLDOUHYLHZRIVXFKGHQLDO7KHFRXUW
PD\ LQ LWV GLVFUHWLRQ DGPLW DGGLWLRQDO HYLGHQFH ZKHUH
IDLOXUHWRGRVRZRXOGUHVXOWLQDPLVFDUULDJHRIMXVWLFH

86&† F 7KH6HFUHWDU\RIWKH7UHDVXU\GHOHJDWHG
DXWKRULW\WRGHWHUPLQHZKHWKHUWKHJUDQWLQJRIUHOLHIZRXOGEH
FRQWUDU\WRWKHSXEOLFLQWHUHVWWRWKH$7)ZKLFKFRQGXFWHG
WKHQHFHVVDU\EDFNJURXQGFKHFNVDQGLQYHVWLJDWLRQV6HH
&)5†+RZHYHUIRUHDFKILVFDO\HDUVLQFH
&RQJUHVVKDVHQDFWHGDQDSSURSULDWLRQVELOOZKLFKVWDWHVWKDW
³QRQHRIWKHIXQGVDSSURSULDWHGKHUHLQVKDOOEHDYDLODEOHWR
LQYHVWLJDWHRUDFWXSRQDSSOLFDWLRQVIRUUHOLHIIURP)HGHUDO
ILUHDUPV GLVDELOLWLHV XQGHU 86& † F ´ $V D
FRQVHTXHQFH WKH $7) LV HIIHFWLYHO\ SURKLELWHG IURP
SURFHVVLQJDSSOLFDWLRQVIRUUHOLHIXQGHU† F
&RQJUHVV WKURXJK DSSURSULDWLRQV DFWV KDV WKH SRZHU WR
VXVSHQG DPHQG RU UHSHDO D VWDWXWH VR ORQJ DV LW GRHV VR
FOHDUO\6HH5REHUWVRQY6HDWWOH$XGXERQ6RF86
6&W/(GG 8QLWHG
6WDWHVY'LFNHUVRQ866&W

-- 5 of 6 --

0XOOLVY8QLWHG6WDWHV 1R
/(G 7KHGLVWULFWFRXUWUHFRJQL]HGWKLVIDFW
DQGSODLQWLIIGRHVQRWDUJXHWRWKHFRQWUDU\7KHTXHVWLRQWKDW
PXVW EH DQVZHUHG WKHQ LV ZKDW ZDV &RQJUHVV¶ LQWHQW LQ
SUHFOXGLQJWKH$7)IURPVSHQGLQJIXQGVRQLQYHVWLJDWLQJRU
DFWLQJ XSRQ DSSOLFDWLRQV IRU UHOLHI XQGHU † F 6HH
'LFNHUVRQ86DW±6&W± UHYLHZLQJ
DQDSSURSULDWLRQVDFWDQGWKHUHOHYDQWOHJLVODWLYHKLVWRU\WR
DVFHUWDLQ&RQJUHVV¶VLQWHQW 8QLWHG6WDWHVY0LWFKHOO
86 6 &W / (G
DQDO\]LQJWKHHIIHFWVRIDQDSSURSULDWLRQVDFWDQGVWDWLQJWKDW
³>W@KHZKROHTXHVWLRQGHSHQGVRQWKHLQWHQWLRQRI&RQJUHVV
DVH[SUHVVHGLQWKHVWDWXWHV´
3ODLQWLIIGRHVQRWGLVSXWHWKDW WKURXJKLWVDSSURSULDWLRQV
PHDVXUHV&RQJUHVVLQWHQGHGWRVXVSHQGDOOUHOLHIDYDLODEOH
WKURXJKWKH$7)+RZHYHUSODLQWLIIDVVHUWVWKDWLQGRLQJVR
&RQJUHVV OHIW WKH MXGLFLDU\¶V UROH XQWRXFKHG 7KH GLVWULFW
FRXUW DJUHHG ZLWK SODLQWLII¶V DUJXPHQW DQG FRQFOXGHG WKDW
&RQJUHVVKDGIDLOHGWRVKRZDFOHDULQWHQWWRUHSHDO† F
LQ LWV HQWLUHW\ RU WR SUHFOXGH MXGLFLDO UHYLHZ RI WKH $7)¶V
³UHIXVDO´WRJUDQWUHOLHIIURPILUHDUPGLVDELOLWLHV
:KLOHLWLVDQLVVXHRIILUVWLPSUHVVLRQLQWKLVFLUFXLWWKH
TXHVWLRQ RI ZKHWKHU GLVWULFW FRXUWV UHWDLQ VXEMHFW PDWWHU
MXULVGLFWLRQWRFRQVLGHUDSODLQWLII¶VSHWLWLRQIRUUHOLHIXQGHU
† F KDVEHHQDGGUHVVHGE\VHYHUDORWKHUFLUFXLWV6HH
0F+XJKY5XELQ1R:/ G&LU
-XO\ 2ZHQY0DJDZ)G WK&LU
%XUWFK Y 8QLWHG 6WDWHV 'HSW RI WKH 7UHDVXU\
)G WK&LU 8QLWHG6WDWHVY0F*LOO)G
WK&LU 5LFHY8QLWHG6WDWHV)G G&LU
$OWKRXJK WKH FLUFXLWV KDYH XVHG VOLJKWO\ GLIIHUHQW
UHDVRQLQJWKHRQO\FRXUWWRFRQFOXGHWKDWWKHGLVWULFWFRXUW
UHWDLQVVXEMHFWPDWWHUMXULVGLFWLRQLVWKH7KLUG&LUFXLWLQ5LFH
WKHFDVHSULPDULO\UHOLHGRQE\WKHGLVWULFWFRXUWLQWKHFDVHDW
EDU
,Q5LFHWKHHDUOLHVWFLUFXLWFDVHWKHFRXUWUHFRJQL]HGWKDW
&RQJUHVVFRXOGXVHDSSURSULDWLRQVDFWVWRDPHQGRUUHSHDO
VXEVWDQWLYH OHJLVODWLRQ DQG IXUWKHU WKDW VXEMHFW WR
1R 0XOOLVY8QLWHG6WDWHV
FRQVWLWXWLRQDOUHVWUDLQWVLWFRXOGSUHFOXGHMXGLFLDOUHYLHZRI
DGPLQLVWUDWLYHDFWLRQ6HH5LFH)GDW+RZHYHUWKH
FRXUW REVHUYHG WKDW LQ RUGHU WR GR VR &RQJUHVV¶ LQWHQWLRQ
PXVWEHFOHDUO\VWDWHG6HHLG:LWKOLWWOHH[SODQDWLRQWKH
FRXUW VWDWHG WKDW LW GLG QRW EHOLHYH WKDW &RQJUHVV¶
DSSURSULDWLRQDFWVHYLQFHGDFOHDULQWHQWWRUHSHDO† F RU
WR SUHFOXGH IHGHUDO FRXUWV IURP H[HUFLVLQJ MXULVGLFWLRQ WR
UHYLHZ $7) GHQLDOV RI UHOLHI IURP IHGHUDO ILUHDUPV
GLVDELOLWLHV6HHLG
7KH RWKHU IRXU FLUFXLWV ZKLFK KDYH H[DPLQHG WKH LVVXH
FRQFOXGHGWKDW&RQJUHVV¶DSSURSULDWLRQDFWVUHQGHUHGIHGHUDO
FRXUWVZLWKRXWVXEMHFWPDWWHUMXULVGLFWLRQWRFRQVLGHUSHWLWLRQV
IRU WKH UHVWRUDWLRQ RI ILUHDUPV † F SHWLWLRQV 6HH
0F+XJK:/DW 2ZHQ)GDW%XUWFK
)GDW0F*LOO)GDW7KH6HFRQG&LUFXLW
LVWKHPRVWUHFHQWFRXUWRIDSSHDOVWRH[DPLQHWKHLVVXHRIWKH
VXEMHFWPDWWHUMXULVGLFWLRQFRQIHUUHGE\† F DGGUHVVLQJ
WKHTXHVWLRQLQ0F+XJKY5XELQ1RWLQJWKDWWKHSODLQWLII¶V
DSSOLFDWLRQ KDG QHYHU EHHQ GHQLHG E\ WKH $7) WKH FRXUW
REVHUYHG WKDW ³>W@KH IHGHUDO GLVWULFW FRXUWV DUH QR PRUH
HPSRZHUHG WKDQ LV WKH $7) WR UHYLHZ LQGLYLGXDOV¶
DSSOLFDWLRQV IRU UHOLHI IURP IHGHUDO ILUHDUPV GLVDELOLWLHV
6HFWLRQ F PDNHVDQDJHQF\μGHQLDO¶RIDQDSSOLFDWLRQD
SUHGLFDWHWRGLVWULFWFRXUWMXULVGLFWLRQDQGQRVXFKGHQLDOKDV
EHHQLVVXHGKHUH´,GDW $SSO\LQJWKHUXOHWKDW&RQJUHVV
KDVDOORFDWHGLQLWLDOUHYLHZWRDQDGPLQLVWUDWLYHERG\ZKHUH
VXFKLQWHQWLVIDLUO\GLVFHUQLEOHLQWKHVWDWXWRU\VFKHPHVHHLG
FLWLQJDQGTXRWLQJ7KXQGHU%DVLQ&RDO&RY5HLFK
866&W/(GG WKH
FRXUW KHOG WKDW &RQJUHVV KDG PDGH VXFK DQ DOORFDWLRQ ,W
SRLQWHG RXW WKDW VHFWLRQ F GRHV QRW JUDQW
IUHHVWDQGLQJUHOLHIEXWUDWKHUUHTXLUHVDSHUVRQWRDSSO\WRWKH
6HFUHWDU\ ZKR PD\ JUDQW VXFK UHOLHI WKH VWDQGDUG IRU
JUDQWLQJ UHOLHI LV ZRUGHG VR EURDGO\ DV WR FRQQRWH
DGPLQLVWUDWLYH DJHQF\ GHFLVLRQ PDNLQJ VHFWLRQ F
RQO\SHUPLWVGLVWULFWFRXUWVWRFRQVLGHUQHZHYLGHQFHZKHUH
IDLOXUHWRGRVRZRXOGUHVXOWLQDPLVFDUULDJHRIMXVWLFH7KH
FRXUW WKHQ FRQVLGHUHG WKH VWUXFWXUH RI WKH VWDWXWH DQG
DSSURSULDWLRQVDFWVWKHVFRSHRIMXGLFLDOUHYLHZRIDJHQF\

-- 6 of 6 --

Continue your research in ChatGPT or Claude

Connect Omnilex to search the legal corpus from your AI assistant.