The AI workspace for legal professionals
- Legal research with access to more than 1 million sources
- Document automation
- Matter management
- Hosted in the EU and Switzerland
Try it free for 14 days (10 questions/day during trial)
The AI workspace for legal professionals
Try it free for 14 days (10 questions/day during trial)
99-3970•01a0207p.06
7KH +RQRUDEOH 1DQF\ * (GPXQGV 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
/<1(77( &+$30$1
3ODLQWLII$SSHOODQW
Y
7+( +,*%(( &203$1<GED
',//$5' '(3$570(17
6725(6 ,1&
'HIHQGDQW$SSHOOHH
;!
1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
1R²3DWULFLD$+HPDQQ0DJLVWUDWH-XGJH
$UJXHG2FWREHU
'HFLGHGDQG)LOHG-XO\
%HIRUH68+5+(,15,&+DQG0225(&LUFXLW-XGJHV
('081'6'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 'DYLG 5 *UDQW 60,7+ &21'(1,
&OHYHODQG2KLRIRU$SSHOODQW-RKQ%/HZLV$57(5
-- 1 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
7KH $PHULFDQ &LYLO /LEHUWLHV 8QLRQ )RXQGDWLRQ RI 2KLR ,QF
ILOHG DQ DPLFXV EULHI LQ IDYRU RI &KDSPDQ 7KH IROORZLQJ PHUFKDQWV¶
DVVRFLDWLRQV IURP WKH VWDWHV FRPSULVLQJ WKH 6L[WK &LUFXLW ILOHG D MRLQW
DPLFXV EULHI RQ EHKDOI RI 'LOODUG 2KLR &RXQFLO RI 5HWDLO 0HUFKDQWV
.HQWXFN\ 5HWDLO )HGHUDWLRQ ,QF 0LFKLJDQ 5HWDLOHUV $VVRFLDWLRQ DQG
+$''(1 &OHYHODQG 2KLR IRU $SSHOOHH 21 %5,()
'DYLG5*UDQW60,7+ &21'(1,&OHYHODQG2KLRIRU
$SSHOODQW -RKQ % /HZLV 7KRPDV - 3LDWDN $57(5
+$''(1&OHYHODQG2KLR*UHJRU\(2¶%ULHQ7LPRWK\'
-RKQVRQ :(6721 +85' )$//21 3$,6/(<
+2:/(<&OHYHODQG2KLRIRU$SSHOOHH*LQR-6FDUVHOOL
&OHYHODQG2KLR0LFKDHO:'RQDOGVRQ925<66$7(5
6(<0285 3($6(&ROXPEXV2KLRIRU$PLFL&XULDH
('081'6 ' - GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW
68+5+(,15,&+ - SS GHOLYHUHG D VHSDUDWH
FRQFXUULQJ RSLQLRQ 0225( - SS GHOLYHUHG D
VHSDUDWHGLVVHQWLQJRSLQLRQ
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
('081'6'LVWULFW-XGJH3ODLQWLII$SSHOODQW/\QHWWH
&KDSPDQEURXJKWVXLWDJDLQVW'HIHQGDQW$SSHOOHH'LOODUG
'HSDUWPHQW6WRUHDOOHJLQJWKDWKHUULJKWVZHUHYLRODWHGZKHQ
DGHSDUWPHQWVWRUHVHFXULW\RIILFHUVWRSSHGDQGVHDUFKHGKHU
GXHWRDVXVSLFLRQRIVKRSOLIWLQJ&KDSPDQDOOHJHVWKDWWKH
VWRSDQGVHDUFKZHUHUDFLDOO\PRWLYDWHGDQGYLRODWHGKHUULJKW
WRWKH³IXOODQGHTXDOEHQHILWRIWKHODZ´XQGHU86&
DQGKHUULJKWWREHIUHHIURPXQUHDVRQDEOHVHDUFKDQG
VHL]XUHXQGHUWKH)RXUWK$PHQGPHQWSXUVXDQWWR86&
7KLVFDVHUDLVHVWZRLVVXHV ZKHWKHUVHFWLRQ
SURYLGHVDFDXVHRIDFWLRQDJDLQVWDSULYDWHSDUW\XQGHUWKH
HTXDOEHQHILWFODXVHDQG ZKHWKHUWKHVHFXULW\JXDUGLQWKLV
FDVHDFWHG³XQGHUFRORURIODZ´7KHGLVWULFWFRXUWJUDQWHG
VXPPDU\MXGJPHQWLQIDYRURI'LOODUGRQWKHVHLVVXHVDQG
&KDSPDQQRZDSSHDOV:H$)),50
-- 2 of 28 --
1R &KDSPDQY7KH+LJEHH&RPSDQ\
7HQQHVVHH &RXQFLO RI 5HWDLO 0HUFKDQWV 7KH $&/8 DUJXHV WKDW WKH HTXDO
EHQHILW FODXVH RI VHFWLRQ VKRXOG EH LQWHUSUHWHG WR EURDGO\ SURKLELW
UDFHEDVHG GLVFULPLQDWLRQ DQG WKDW LW DSSOLHV WR SULYDWH DFWLRQ 7KH
PHUFKDQWV¶ DVVRFLDWLRQV DUJXH WKDW WKH\ VKRXOG EH IUHH WR HPSOR\ DQ\
ODZIXO PHDQV WR SURWHFW WKHPVHOYHV DJDLQVW VKRSOLIWLQJ DQG WKDW
GRHV QRW DSSO\ WR SULYDWH DFWLRQ 6HH LQIUD
,
/\QHWWH&KDSPDQLVDQ$IULFDQ$PHULFDQ2Q)HEUXDU\
&KDSPDQZDVVKRSSLQJDW'LOODUG'HSDUWPHQW6WRUHLQ
&OHYHODQG2KLR6KHFKRVHVRPHFORWKLQJWRWU\RQDQGD
VDOHVDVVLVWDQWSRLQWHGRXWDILWWLQJURRPIRUKHUXVH$ZKLWH
ZRPDQKDGMXVWH[LWHGWKHILWWLQJURRPDQGZKHQ&KDSPDQ
HQWHUHG VKH QRWLFHG D VHQVRU WDJ FDOOHG D ³NQRJR´ RQ WKH
IORRU$IWHUWU\LQJRQVRPHFORWKLQJ&KDSPDQGHFLGHGQRWWR
SXUFKDVHDQ\WKLQJDQGKXQJLWEDFNRQWKHKDQJHUV6KHOHIW
WKHILWWLQJURRPWRUHWXUQWKHFORWKLQJWRWKHUDFNV$VDOHV
DVVLVWDQWWKHQHQWHUHGWKHILWWLQJURRPDQGQRWLFHGWKHVHQVRU
RQWKHIORRU%HOLHYLQJWKDWWKHVHQVRUKDGQRWEHHQRQWKH
IORRU SULRU WR &KDSPDQ¶V XVH RI WKH ILWWLQJ URRP DQG
VXVSHFWLQJ&KDSPDQRIVKRSOLIWLQJWKHVDOHVDVVLVWDQWQRWLILHG
VHFXULW\$'LOODUGVHFXULW\JXDUGWKHQVWRSSHG&KDSPDQDQG
GLUHFWHG KHU EDFN WR WKH ILWWLQJ URRP +H DQG D IHPDOH
PDQDJHUFKHFNHG&KDSPDQ¶VSXUVH1RWKLQJZDVIRXQG7KH
IHPDOHPDQDJHUWKHQDFFRPSDQLHG&KDSPDQLQWRWKHILWWLQJ
URRPDQGVHDUFKHG&KDSPDQ¶VFORWKLQJ7KHPDQDJHUIRXQG
QRWKLQJ&KDSPDQSRLQWHGRXWWKHZKLWHZRPDQZKRPVKH
KDG VHHQ H[LW WKH ILWWLQJ URRP EHIRUH VKH HQWHUHG EXW WKH
VHFXULW\JXDUGGLGQRWGHWDLQWKHZKLWHZRPDQ6DWLVILHGWKDW
&KDSPDQKDGQRWVWROHQDQ\WKLQJWKHPDQDJHUDSRORJL]HGWR
KHUDQG&KDSPDQOHIWWKHVWRUH
7KH'LOODUGVHFXULW\JXDUGZDVDQRIIGXW\VKHULII¶VGHSXW\
+HZRUHKLVRIILFLDOVKHULII¶VGHSDUWPHQWXQLIRUPEDGJHDQG
JXQZKLOHZRUNLQJDW'LOODUG:KLOHKHVWRSSHGDQGVHDUFKHG
&KDSPDQKHGLGQRWWKUHDWHQWRRUDWWHPSWWRDUUHVWKHU
$VDUHVXOWRIWKLVLQFLGHQW&KDSPDQEURXJKWVXLWDJDLQVW
7KH+LJEHH&RPSDQ\GRLQJEXVLQHVVDV'LOODUG'HSDUWPHQW
-- 3 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
6WRUHV ,QF DOOHJLQJ D YLRODWLRQ RI WKH IXOO DQG HTXDO
EHQHILW FODXVH RI 86& DQG YLRODWLRQV RI
&KDSPDQ¶V ULJKW WR EH IUHH IURP XQUHDVRQDEOH VHDUFK DQG
VHL]XUH XQGHU WKH )RXUWK $PHQGPHQW DQG KHU ULJKW WR GXH
SURFHVVXQGHUWKH)LIWK$PHQGPHQWZKLFKULJKWV&KDSPDQ
PD\ HQIRUFH YLD 86& 'LOODUG PRYHG IRU
VXPPDU\MXGJPHQW$PDJLVWUDWHMXGJHDFWLQJSXUVXDQWWR
WKH FRQVHQW RI WKH SDUWLHV JUDQWHG 'LOODUG¶V PRWLRQ IRU
VXPPDU\ MXGJPHQW ILQGLQJ &KDSPDQ GRHV QRW KDYH D
FODLP XQGHU WKH IXOO DQG HTXDO EHQHILW FODXVH RI
EHFDXVH WKH FODXVH GRHV QRW DSSO\ WR SULYDWH DFWLRQ DQG
&KDSPDQGRHVQRWKDYHDFODLPXQGHUEHFDXVHWKH
'LOODUGVHFXULW\RIILFHUZDVQRWDFWLQJ³XQGHUFRORURIVWDWH
ODZ´ &KDSPDQ PRYHG IRU UHFRQVLGHUDWLRQ DQG WKH
PDJLVWUDWHGHQLHGWKHPRWLRQDQGUHDIILUPHGLWVSULRUUXOLQJ
&KDSPDQQRZDSSHDOV
,,
7KHVWDQGDUGRIUHYLHZIRUDSSHDORIDVXPPDU\MXGJPHQW
LVGHQRYR6HH:RORWVN\Y+XKQ)G WK
&LU 6XPPDU\ MXGJPHQW LV DSSURSULDWH RQO\ ZKHQ
WKHUH LV QR JHQXLQH LVVXH DV WR DQ\ PDWHULDO IDFW DQG WKH
PRYLQJSDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG
5&LY3 F 7KHFHQWUDOLQTXLU\LVZKHWKHUWKHHYLGHQFH
SUHVHQWVDVXIILFLHQWGLVDJUHHPHQWWRUHTXLUHVXEPLVVLRQWRD
MXU\RUZKHWKHULWLVVRRQHVLGHGWKDWRQHSDUW\PXVWSUHYDLO
DVDPDWWHURIODZ$QGHUVRQY/LEHUW\/REE\,QF
86 $IWHUDGHTXDWHWLPHIRUGLVFRYHU\
DQGXSRQPRWLRQ5XOH F PDQGDWHVVXPPDU\MXGJPHQW
DJDLQVW D SDUW\ ZKR IDLOV ³WR HVWDEOLVK WKH H[LVWHQFH RI DQ
HOHPHQWHVVHQWLDOWRWKDWSDUW\ VFDVHDQGRQZKLFKWKDWSDUW\
EHDUVWKHEXUGHQRISURRIDWWULDO´&HORWH[&RUSY&DWUHWW
86
1R &KDSPDQY7KH+LJEHH&RPSDQ\
$OWKRXJKWKHPDMRULW\VWDWHVWKDW³WKHVHFXULW\JXDUGLQWKLV
FDVHGLGQRWSHUIRUPRUVHHNWRSHUIRUPKLVRIILFLDOGXWLHVDV
DVKHULII¶VGHSXW\´VXSUDDW,EHOLHYHWKHUHLVDJHQXLQH
LVVXH RI PDWHULDO IDFW DV WR ZKHWKHU DW WKH PRPHQW WKH
VHFXULW\ JXDUG ZDV UHTXLUHG WR VHHN WKH DVVLVWDQFH RI WKH
SROLFHWKDWLVZKHQWKHJXDUGDVNHG&KDSPDQWRHQWHUWKH
ILWWLQJURRPZLWKWKHVDOHVPDQDJHUVRWKDW&KDSPDQ¶VFORWKHV
DQGSHUVRQFRXOGEHVHDUFKHGWKHVHFXULW\JXDUGEHFDPHD
VWDWHDFWRUXQGHUWKHFRUSRUDWHSROLF\%HFDXVHWKHPDMRULW\
IDLOHG WR FRQVLGHU WKHVH IDFWV , EHOLHYH WKDW WKH PDMRULW\¶V
DQDO\VLV LV IODZHG DQG WKDW VXPPDU\ MXGJPHQW LV
LQDSSURSULDWH,ZRXOGUHYHUVHWKHGLVWULFWFRXUW¶VMXGJPHQW
RQWKLVLVVXHDVZHOO
-- 4 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
)RU WKH SXUSRVHV RI H[SODLQLQJ WKH UHODWLRQVKLS EHWZHHQ WKH
VWRUH¶V SROLF\ DQG &KDSPDQ¶V FODLP , PXVW HODERUDWH XSRQ WKH PDMRULW\¶V
UHFLWDWLRQ RI WKH IDFWV 7KH PDMRULW\ VWDWHV RQO\ WKDW WKH IHPDOH PDQDJHU
³VHDUFKHG &KDSPDQ¶V FORWKLQJ´ 6HH VXSUD DW &KDSPDQ DOOHJHV
KRZHYHU DQG LW LV QRW GLVSXWHG WKDW VKH ZDV DVNHG WR UHPRYH KHU FRDW DQG
KHU VXLW MDFNHW DQG WR SXOO KHU EORXVH XS RYHU KHU KHDG EHIRUH WKH PDQDJHU
ZDV VDWLVILHG WKDW VKH KDG QRW VWROHQ DQ\ PHUFKDQGLVH $OWKRXJK 'LOODUG¶V
SROLF\ GRHV QRW GHILQH VWULSVHDUFKLQJ , EHOLHYH WKDW EHFDXVH &KDSPDQ
ZDV IRUFHG WR UHPRYH FORWKLQJ VKH ZDV VWULSVHDUFKHG E\ WKH 'LOODUG¶V
VWRUH PDQDJHU DW WKH GLUHFWLRQ RI WKH VHFXULW\ JXDUG
SROLF\ RQ VWULSVHDUFKLQJ FXVWRPHUV VXVSHFWHG RI
VKRSOLIWLQJSURYLGHV³6WULSVHDUFKHVDUHSURKLELWHG,I\RX
VXVSHFW WKDW VWROHQ REMHFWV DUH KLGGHQ RQ >WKH VKRSSHU¶V@
SHUVRQFDOOWKHSROLFH´-$DW
$FFRUGLQJWRWKHGHSRVLWLRQWHVWLPRQ\RI$QJHOR0DOHQD
VHQLRUVHFXULW\RIILFHUDW'LOODUGDQGDSROLFHRIILFHUIRUWKH
FLW\RI&OHYHODQGDVHFXULW\JXDUGZRUNLQJDWWKH'LOODUGDW
LVVXHLQWKLVFDVHFDQQRWVWULFWO\FRPSO\ZLWKWKLVFRUSRUDWH
SROLF\ EHFDXVH DV KH REVHUYHG ³, JXHVV ZH JRW WR FDOO
RXUVHOYHVEHFDXVHZHDUHWKHSROLFH´-$DW 0DOHQD
7HVW 0DOHQD WHVWLILHG WKDW KH LQIRUPHG 'LOODUG¶V
PDQDJHPHQWRIWKHFRQIOLFWLQWKHSURYLVLRQEXW³WKH\VDLG
ZHOOWKLVFDPHIURPWKHFRUSRUDWHVRLWLVDJHQHUDOL]DWLRQRI
'LOODUG¶VSROLF\WKURXJKRXWWKHFRXQWU\´-$DW
$VWKHPDMRULW\FRUUHFWO\QRWHGWKH'LOODUGVHFXULW\JXDUG
GLGQRWUHSUHVHQWKLPVHOIDVDSROLFHRIILFHUWKUHDWHQWRDUUHVW
&KDSPDQ ZDYH KLV EDGJH RU ZHDSRQV RU HVWDEOLVK DQ\
FRQWDFWZLWKWKHVKHULII¶VGHSDUWPHQWGXULQJWKHLQFLGHQW7KH
LQFLGHQW DW LVVXH LQ WKLV FDVH GRHV KRZHYHU LQFOXGH WKH
PRPHQWZKHQ&KDSPDQZDVDVNHGE\WKHVHFXULW\JXDUGWR
HQWHU D ILWWLQJ URRP ZLWK WKH VDOHV PDQDJHU WR LQVSHFW KHU
FORWKLQJ$FFRUGLQJWR'LOODUG¶VRIILFLDOFRUSRUDWHSROLF\WKH
VHFXULW\ JXDUG VKRXOG KDYH FDOOHG WKH SROLFH DW WKLV SRLQW
EHFDXVH KH NQHZ WKDW WKH VHDUFK LQYROYHG WKH UHPRYDO RI
&KDSPDQ¶VFORWKLQJ+RZHYHUDV0DOHQDQRWHGWKHVHFXULW\
RIILFHUFDQQRWFDOOWKHSROLFHSXUVXDQWWRWKHSROLF\EHFDXVH
WKHVHFXULW\JXDUGLVWKHSROLFH
1R &KDSPDQY7KH+LJEHH&RPSDQ\
6HFWLRQ ZDV RULJLQDOO\ SDVVHG SXUVXDQW WR WKH 7KLUWHHQWK
DQG )RXUWHHQWK $PHQGPHQWV LQ RUGHU WR HUDGLFDWH WKH YHVWLJHV RI VODYHU\
6HH +DZN Y 3HULOOR ) 6XSS 1' ,OO 3URYLVLRQDO
*RY¶W RI WKH 5HSXEOLF RI 1HZ $IULND Y $PHULFDQ %URDG &RV )
6XSS ''&
,,,
$
&KDSPDQDUJXHVWKDWWKH0DJLVWUDWHHUUHGLQILQGLQJWKDW
WKHIXOODQGHTXDOEHQHILWFODXVHRIGRHVQRWDSSO\WR
SULYDWHDFWLRQ6HFWLRQSURYLGHV
D 6WDWHPHQWRIHTXDOULJKWV
$OOSHUVRQVZLWKLQWKHMXULVGLFWLRQRIWKH8QLWHG6WDWHV
VKDOOKDYHWKHVDPHULJKWLQHYHU\6WDWHDQG7HUULWRU\WR
PDNH DQG HQIRUFH FRQWUDFWV WR VXH EH SDUWLHV JLYH
HYLGHQFHDQGWRWKHIXOODQGHTXDOEHQHILWRIDOOODZVDQG
SURFHHGLQJVIRUWKHVHFXULW\RISHUVRQVDQGSURSHUW\DV
LVHQMR\HGE\ZKLWHFLWL]HQVDQGVKDOOEHVXEMHFWWROLNH
SXQLVKPHQW SDLQV SHQDOWLHV WD[HV OLFHQVHV DQG
H[DFWLRQVRIHYHU\NLQGDQGWRQRRWKHU
E ³0DNHDQGHQIRUFHFRQWUDFWV´GHILQHG
)RUSXUSRVHVRIWKLVVHFWLRQWKHWHUP³PDNHDQGHQIRUFH
FRQWUDFWV´ LQFOXGHV WKH PDNLQJ SHUIRUPDQFH
PRGLILFDWLRQ DQG WHUPLQDWLRQ RI FRQWUDFWV DQG WKH
HQMR\PHQW RI DOO EHQHILWV SULYLOHJHV WHUPV DQG
FRQGLWLRQVRIWKHFRQWUDFWXDOUHODWLRQVKLS
F 3URWHFWLRQDJDLQVWLPSDLUPHQW
7KHULJKWVSURWHFWHGE\WKLVVHFWLRQDUHSURWHFWHGDJDLQVW
LPSDLUPHQW E\ QRQJRYHUQPHQWDO GLVFULPLQDWLRQ DQG
LPSDLUPHQWXQGHUFRORURI6WDWHODZ
86& HPSKDVLVDGGHG
-- 5 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
&RQJUHVV DPHQGHG LQ E\ GHVLJQDWLQJ WKH
RULJLQDOVHFWLRQDVVXEVHFWLRQ³ D ´DQGE\DGGLQJVXEVHFWLRQV
E DQG F 3XE/
&KDSPDQFODLPVWKDWWKHDGGLWLRQRIVXEVHFWLRQ F WRWKH
VWDWXWHPDNHVLWFOHDUWKDWWKHIXOODQGHTXDOEHQHILWFODXVH
DSSOLHVWRSULYDWHDFWLRQ&KDSPDQDUJXHVWKDWVXEVHFWLRQ F
LV XQDPELJXRXV DQG WKXV WKH &RXUW VKRXOG QRW ORRN WR
OHJLVODWLYHKLVWRU\LQRUGHUWRLQWHUSUHWWKHVWDWXWH)XUWKHU
&KDSPDQFRQWHQGVWKDWVXEVHFWLRQ F UHIHUVWR³WKHULJKWV
SURWHFWHGE\WKLVVHFWLRQ´DQGWKDWWKHSOXUDOZRUG³ULJKWV´
PXVWPHDQDOORIWKHULJKWVSURWHFWHGE\VXEVHFWLRQ D WKH
ULJKWWRWKHIXOODQGHTXDOEHQHILWRIWKHODZVDVZHOODVWKH
ULJKW WR PDNH DQG HQIRUFH FRQWUDFWV 0RUHRYHU &KDSPDQ
DUJXHVWKDWWKHDEVHQFHRIOLPLWLQJODQJXDJHGLVWLQJXLVKHVWKLV
SURYLVLRQ IURP RWKHU FLYLO ULJKWV ODZV )RU H[DPSOH
86& DSSOLHV WR SHUVRQV ZKR DFW ³XQGHU FRORU RI
ODZ´%HFDXVH&RQJUHVVFKRVHQRWWROLPLWWKHDSSOLFDWLRQRI
VXEVHFWLRQ F &KDSPDQ DUJXHV WKDW VXEVHFWLRQ F PXVW
DSSO\WRDOORIWKHULJKWVSURWHFWHGE\
,W LV D[LRPDWLF WKDW D FRXUW PD\ QRW ORRN WR OHJLVODWLYH
KLVWRU\LQRUGHUWRLQWHUSUHWDVWDWXWHWKDWLVFOHDURQLWVIDFH
³7KHUH FDQ EH QR FRQVWUXFWLRQ ZKHUH WKHUH LV QRWKLQJ WR
FRQVWUXH´8QLWHG6WDWHVY+DUWZHOO86 :DOO
0DKRQHY:DGGOHV)G G
&LU ,I ³WKH VWDWXWH¶V ODQJXDJH LV SODLQ WKH VROH
IXQFWLRQRIWKHFRXUWVLVWRHQIRUFHLWDFFRUGLQJWRLWVWHUPV´
9HUJRVY*UHJJ¶V(QWHUV,QF)G WK&LU
LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQVRPLWWHG
:HDJUHHZLWK&KDSPDQWKDWWKHVWDWXWHLVXQDPELJXRXV
DQGWKDWLWLVQRWQHFHVVDU\WRORRNWROHJLVODWLYHKLVWRU\LQ
RUGHUWRLQWHUSUHWWKHVWDWXWH¶VODQJXDJH:HGLVDJUHHZLWK
&KDSPDQ¶VFRQFOXVLRQWKDWWKHHTXDOEHQHILWFODXVHDSSOLHVWR
SULYDWH DFWLRQ &KDSPDQ¶V UHDGLQJ RI VXEVHFWLRQ F LV
SODXVLEOHRQO\LIVXEVHFWLRQ F LVUHDGLQLVRODWLRQ<HWWKH
VWDWXWHPXVWEHUHDGDVDZKROH,PSOLFLWLQWKHFRQFHSWRI
³IXOODQGHTXDOEHQHILWRIDOOODZVDQGSURFHHGLQJVIRUWKH
VHFXULW\RISHUVRQVDQGSURSHUW\´LVVWDWHDFWLRQ,QRWKHU
1R &KDSPDQY7KH+LJEHH&RPSDQ\
, DJUHH ZLWK WKH PDMRULW\ WKDW &KDSPDQ KDV DOOHJHG QR IDFWV WR
VXSSRUW D ILQGLQJ RI VWDWH DFWLRQ XQGHU WKH SXEOLF IXQFWLRQ WHVW 6HH
:RORWVN\ )G DW QRWLQJ WKDW SXEOLF IXQFWLRQV WUDGLWLRQDOO\
UHVHUYHG WR WKH VWDWH LQFOXGH KROGLQJ HOHFWLRQV RU SRZHU RI HPLQHQW
GRPDLQ
VLGHDUP+HEULHIO\VWRSSHGDQGVHDUFKHG&KDSPDQEXW
GLGQRWDUUHVWRUWKUHDWHQWRDUUHVWKHUQRUGLGKHFRQWDFW
WKHVKHULII¶VGHSDUWPHQW8QGHUWKHFLUFXPVWDQFHVRIWKLV
FDVH WKH RIIGXW\ GHSXW\ GLG QRW DFW SXUVXDQW WR KLV
RIILFLDOGXWLHVDQGWKXVGLGQRWHQJDJHLQVWDWHDFWLRQ
6XSUDDW
$OWKRXJK LQ FHUWDLQ FLUFXPVWDQFHV ³LW LV SRVVLEOH WR
GHWHUPLQHWKHTXHVWLRQZKHWKHUDSHUVRQDFWHGXQGHUFRORURI
VWDWH ODZ DV D PDWWHU RI ODZ WKHUH PD\ UHPDLQ LQ VRPH
LQVWDQFHVXQDQVZHUHGTXHVWLRQVRIIDFWUHJDUGLQJWKHSURSHU
FKDUDFWHUL]DWLRQRIWKHDFWLRQVIRUWKHMXU\WRGHFLGH´/D\QH
)G DW LQWHUQDO FLWDWLRQV DQG TXRWDWLRQV RPLWWHG
%DVHG RQ P\ UHYLHZ RI WKH UHFRUG , DP FRQYLQFHG WKDW
&KDSPDQKDVDOOHJHGVXIILFLHQWIDFWVWRHVWDEOLVKDJHQXLQH
LVVXH DV WR ZKHWKHUWKHVHFXULW\JXDUG¶VDFWLRQVVDWLVI\WKH
QH[XV WHVW 7KH QH[XV WHVW UHTXLUHV D VXIILFLHQWO\ FORVH
UHODWLRQVKLSEHWZHHQWKHVWDWHDQGWKHSULYDWHDFWRUVRWKDWWKH
DFWLRQWDNHQE\WKHODWWHUPD\EHIDLUO\DWWULEXWHGWRWKHVWDWH
LWVHOI6HH:RORWVN\)GDWVHHDOVR%UHQWZRRG
$FDGY7HQQHVVHH6HFRQGDU\6FK$WKOHWLF$VV¶Q86
BBB6&W QRWLQJWKDWDFKDOOHQJHG
DFWLYLW\ PD\ EH VWDWH DFWLRQ ³ZKHQ LW LV HQWZLQHG ZLWK
JRYHUQPHQWDO SROLFLHV RU ZKHQ JRYHUQPHQW LV HQWZLQHG LQ
>LWV@PDQDJHPHQWRUFRQWURO´ LQWHUQDOTXRWDWLRQRPLWWHG
,Q WKLV FDVH WKH 'LOODUG VHFXULW\ JXDUG ZDV REOLJDWHG WR
REH\'LOODUG¶VSROLFLHVDQGUHJXODWLRQVZKLFKDUHGHYHORSHG
E\WKHFRUSRUDWLRQZKLOHKHZDVRQGXW\DWWKHVWRUH-$DW
'LOODUG¶V5XOHVDQG3URFHGXUHVIRU6HFXULW\3HUVRQQHO
7KHVWDWHSOD\HGQRSDUWLQWKHSURPXOJDWLRQRIWKHVHSROLFLHV
7KHSROLF\GRHVKRZHYHUGLUHFWO\LPSOLFDWHWKHVWDWHLQRQH
RI LWV SURYLVLRQV 7KLV SURYLVLRQ ZKLFK RIIHUV WKH VWRUH¶V
-- 6 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
YLRODWHGXQGHUFRORURIVWDWHODZ6HH86&7KH
PDMRULW\ DIILUPHG WKH GLVWULFW FRXUW¶V JUDQW RI VXPPDU\
MXGJPHQWRQWKLVFODLPWR'LOODUG,EHOLHYHWKDWWKHUHLVD
JHQXLQH LVVXH RI PDWHULDO IDFW DV WR ZKHWKHU WKH 'LOODUG
VHFXULW\JXDUG¶VDFWLRQVPD\³EHIDLUO\DWWULEXWHGWRWKHVWDWH´
/DQVLQJ Y &LW\ RI 0HPSKLV )G WK &LU
:RORWVN\ Y +XKQ )G WK &LU
7KHUHIRUH,UHVSHFWIXOO\GLVVHQWIURP3DUW,,,%RIWKH
PDMRULW\¶VRSLQLRQDVZHOO
7KHPDMRULW\KDVFRUUHFWO\LGHQWLILHGWKHOHJDOVWDQGDUGIRU
HYDOXDWLQJ ZKHWKHU WKH DFWV RI DQ RIIGXW\ SROLFH RIILFHU
VHUYLQJDVDVHFXULW\JXDUGPD\EHGHHPHGVWDWHDFWLRQ$V
ZHKDYHQRWHG³>W@KHIDFWWKDWDSROLFHRIILFHULVRQRURII
GXW\RULQRURXWRIXQLIRUPLVQRWFRQWUROOLQJ,WLVWKHQDWXUH
RIWKHDFWSHUIRUPHGZKLFKGHWHUPLQHVZKHWKHUWKHRIILFHU
KDVDFWHGXQGHUFRORURIODZ´6WHQJHOY%HOFKHU)G
WK&LU LQWHUQDOTXRWDWLRQRPLWWHG 7KXV
P\DQDO\VLVWXUQVSULPDULO\RQZKHWKHUWKHRIILFHUZDVDFWLQJ
SXUVXDQWWRKLVRIILFLDOGXW\RUDSROLFHGHSDUWPHQWSROLF\
6HH /D\QH Y 6DPSOH\ )G WK &LU
KROGLQJWKDWRIILFHUZKRVKRWSODLQWLIIZKLOHRIILFHUZDVRII
GXW\DFWHGXQGHUFRORURIVWDWHODZEHFDXVHRIILFHU¶VDXWKRULW\
WR FDUU\ ZHDSRQ GHULYHG IURP KLV VWDWXV DV SROLFH RIILFHU
FRQIOLFWEHWZHHQRIILFHUDQGSODLQWLIIDURVHRXWRIRIILFHU¶V
RIILFLDO GXWLHV DQG SODLQWLII WKUHDWHQHG RIILFHU LQ RIILFHU¶V
RIILFLDOFDSDFLW\ 6WHQJHO)GDW FRQFOXGLQJWKDW
RIIGXW\ SROLFH RIILFHU ZKR VKRW DQG NLOOHG WZR PHQ DQG
SDUDO\]HGDWKLUGLQDEDUURRPEUDZODFWHGXQGHUFRORURIODZ
EHFDXVH PDFH VSUD\ XVHG E\ RIILFHU ZDV LVVXHG E\ SROLFH
GHSDUWPHQWDQGRIILFHUFDUULHGKLVSLVWRODQGLQWHUYHQHGLQ
GLVSXWHSXUVXDQWWRGHSDUWPHQWUHJXODWLRQV 7KHPDMRULW\KDV
IDLOHGKRZHYHUWRH[DPLQHFORVHO\WKHUHFRUGLQWKLVFDVHWR
DQDO\]HZKHWKHUWKHUHLVDJHQXLQHLVVXHRIPDWHULDOIDFWWR
VXSSRUW&KDSPDQ¶VFODLP,QVWHDGWKHPDMRULW\¶VDQDO\VLV
PHUHO\DVVHUWV
>7@KH'LOODUGVHFXULW\JXDUGZKRVWRSSHGDQGVHDUFKHG
&KDSPDQZDVDQRIIGXW\VKHULII¶VGHSXW\ZHDULQJKLV
RIILFLDO VKHULII¶V GHSDUWPHQW XQLIRUP EDGJH DQG
1R &KDSPDQY7KH+LJEHH&RPSDQ\
ZRUGVEHFDXVHWKHVWDWHLVWKHVROHVRXUFHRIWKHODZLWLV
RQO\WKHVWDWHWKDWFDQGHQ\WKHIXOODQGHTXDOEHQHILWRIWKH
ODZ6HH0DKRQH)GDW7KXVWKHIXOODQGHTXDO
EHQHILWFODXVHRIVXEVHFWLRQ D FDQRQO\UHIHUWRVWDWHDFWLRQ
:LWKWKLVXQGHUVWDQGLQJRIWKHIXOODQGHTXDOEHQHILWFODXVH
VXEVHFWLRQ F LVSURSHUO\XQGHUVWRRGDVFODULI\LQJWKHQDWXUH
RIWKHYDULRXV³ULJKWV´HQXPHUDWHGLQVXEVHFWLRQ D 7KDWLV
WKH ³ULJKWV SURWHFWHG DJDLQVW LPSDLUPHQW E\
QRQJRYHUQPHQWDOGLVFULPLQDWLRQ´DSSOLHVWRWKH³PDNHDQG
HQIRUFH FRQWUDFWV´ FODXVH ZKLOH WKH ³ULJKWV SURWHFWHG
DJDLQVWLPSDLUPHQWXQGHUFRORURI6WDWHODZ´UHIHUVWR
VXFK FODXVHV DV WKH ³IXOO DQG HTXDO EHQHILW´ FODXVH RI
VXEVHFWLRQ D %HFDXVH&KDSPDQ¶VUHDGLQJSODFHVVXEVHFWLRQ
D DQG F LQFRQIOLFWZHUHMHFWLW
(YHQLI&KDSPDQ¶VLQWHUSUHWDWLRQZHUHFRUUHFWZHFRXOG
VWLOO ORRN EH\RQG WKH ODQJXDJH RI WKH VWDWXWH LI D OLWHUDO
LQWHUSUHWDWLRQZRXOGOHDGWR LQWHUQDOLQFRQVLVWHQFLHV DQ
DEVXUG UHVXOW RU DQ LQWHUSUHWDWLRQ LQFRQVLVWHQW ZLWK WKH
LQWHQW RI &RQJUHVV 6HH 9HUJRV )G DW )LUVW
&KDSPDQ¶V UHDGLQJ RI VXEVHFWLRQ F OHDGV WR DQ LQWHUQDO
LQFRQVLVWHQF\$VGLVFXVVHGVXEVHFWLRQ F FDQQRWSURWHFWWKH
ULJKW WR HTXDO EHQHILW RI DOO ODZV DQG SURFHHGLQJV IURP
QRQJRYHUQPHQWDOGLVFULPLQDWLRQZKHQRQO\WKHJRYHUQPHQW
FDQGHQ\HTXDOEHQHILWRIDOOODZVDQGSURFHHGLQJV
6HFRQGLQWHUSUHWLQJWKHHTXDOEHQHILWFODXVHDVDSSO\LQJWR
SULYDWHDFWLRQFUHDWHVWKHDEVXUGUHVXOWRIIHGHUDOL]LQJVWDWH
WRUW ODZ 7KH 6XSUHPH &RXUW KDV FDXWLRQHG DJDLQVW WKH
FUHDWLRQRIDJHQHUDOIHGHUDOWRUWODZ³>$@VDUXOHZHVKRXOG
EH DQG DUH μUHOXFWDQW WR IHGHUDOL]H¶ PDWWHUV WUDGLWLRQDOO\
FRYHUHGE\VWDWHFRPPRQODZ´3DWWHUVRQY0F/HDQ&UHGLW
8QLRQ 86 $V RWKHU FRXUWV KDYH
REVHUYHGZDVGHVLJQHGWRUHPRYHREVWDFOHVWRIXOO
SDUWLFLSDWLRQLQWKHOHJDOV\VWHPDQGWRSURYLGHEODFNVHTXDO
DFFHVV WR OHJDO UHPHGLHV DQG SURFHVVHV QRW WR IHGHUDOL]H
SULYDWHWRUWV6HH6WHUOLQJY.D]PLHUF]DN)6XSS
1',OO
-- 7 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
7KH OHJLVODWLYH KLVWRU\ RI WKH DPHQGPHQWV RQO\ EULHIO\
PHQWLRQV VXEVHFWLRQ F ,W ODUJHO\ IRFXVHV XSRQ VXEVHFWLRQ E ZKLFK
ZDV HQDFWHG LQ RUGHU WR RYHUUXOH SDUW RI WKH 6XSUHPH &RXUW¶V RSLQLRQ LQ
3DWWHUVRQ Y 0F/HDQ &UHGLW 8QLRQ 86 ,Q 3DWWHUVRQ
WKH 6XSUHPH &RXUW KHOG WKDW V SURKLELWLRQ DJDLQVW GLVFULPLQDWLRQ
LQ FRQWUDFWLQJ DSSOLHG RQO\ WR WKH IRUPDWLRQ RI FRQWUDFWV DQG QRW WR SRVW
FRQWUDFW GLVFULPLQDWLRQ 6HFWLRQ E ZDV DGGHG WR SURKLELW SRVW
FRQWUDFW GLVFULPLQDWLRQ DV ZHOO
)LQDOO\&KDSPDQ¶VLQWHUSUHWDWLRQLVLQFRQVLVWHQWZLWKWKH
LQWHQWRI&RQJUHVV&KDSPDQFRQWHQGVWKDWWKHOHJLVODWLYH
KLVWRU\HVWDEOLVKHVWKDWWKHSXUSRVHRIWKHDPHQGPHQWV
ZDVWRUHVSRQGWRUHFHQWGHFLVLRQVRIWKH6XSUHPH&RXUWE\
EURDGO\H[SDQGLQJWKHVFRSHRIUHOHYDQWFLYLOULJKWVVWDWXWHV
7KH&RQJUHVVLRQDOUHFRUGKRZHYHUGRHVQRWVXSSRUWVXFKD
EURDGLQWHQW7KHOHJLVODWLYHKLVWRU\UHIOHFWVWKDWLQDGGLQJ
VXEVHFWLRQ F WR WKH VWDWXWH &RQJUHVV PHUHO\ FRGLILHG
5XQ\RQY0F&UDU\86 ZKLFKKHOGWKDW
VFRQWUDFWFODXVHDSSOLHGWRSULYDWHHQWLWLHV+5HS
1R G &RQJ VW 6HVV 3W ,, DW WKLV
VXEVHFWLRQLVLQWHQGHGWRFRGLI\5XQ\RQ 6HH3KLOLSSHDX[
Y1RUWK&HQ%URQ[+RVS)6XSS 6'1<
DFFRUG(EUDKLPLY&LW\RI+XQWVYLOOH%GRI(GXF
)6XSSQ 1'$OD 6HHDOVR'HQQLV
Y &RXQW\ RI )DLUID[ )G WK &LU
DPHQGPHQWVGRQRWRYHUUXOH-HWWY'DOODV,QGHS6FK'LVW
86 ZKLFKKHOGWKDW86&LV
H[FOXVLYH UHPHG\ IRU YLRODWLRQ RI E\ VWDWH DFWLRQ
)XUWKHULI&RQJUHVVKDGLQWHQGHGWRFUHDWHDWRUWUHPHG\IRU
YLFWLPV RI SULYDWH UDFLDOO\PRWLYDWHG GLVFULPLQDWLRQ
³&RQJUHVVZRXOGQRWKDYHGHSDUWHGVRDEUXSWO\IURPFXUUHQW
GHFLVLRQDOODZZLWKRXWVWDWLQJH[SOLFLWO\WKDWLWZDVGRLQJVR´
6SHQFHUY&DVDYLOOD)6XSSQ 6'1<
DII¶GLQSDUWDSSHDOGLVPLVVHGLQSDUW)G G
&LU ³,I WKH μHTXDO EHQHILW¶ FODXVH RI ZHUH
H[WHQGHGWRUHDFKSULYDWHDFWLRQWKHFRXUWVHHVQROLPLWLQJ
SULQFLSOHWRSUHYHQWLWVEHFRPLQJWKHμJHQHUDOIHGHUDOWRUWODZ¶
WKH6XSUHPH&RXUWKDVH[SUHVVO\UHMHFWHG´,GDW
1R &KDSPDQY7KH+LJEHH&RPSDQ\
7R DSSUHFLDWH IXOO\ KRZ LPSODXVLEOH WKH PDMRULW\ DQG WKH
FRQFXUUHQFH¶V UHDVRQLQJ LV RQH QHHG RQO\ WXUQ WR WKH RULJLQDO ODQJXDJH RI
WKH $FW RQ WKHLU UHDGLQJ ZH ZRXOG KDYH WR EHOLHYH WKDW WKH ILUVW
FODXVH WKH ULJKW WR ³PDNH DQG HQIRUFH FRQWUDFWV´ DQG WKH ILIWK FODXVH WKH
ULJKW WR LQKHULW SXUFKDVH OHDVH VHOO KROG DQG FRQYH\ UHDO DQG SHUVRQDO
SURSHUW\ ZRXOG DSSO\ WR SULYDWH FRQGXFW ZKLOH WKH VHFRQG WKLUG IRXUWK
VL[WK DQG VHYHQWK FODXVHV ZRXOG QRW 6HH VXSUD QRWH IRU WH[W RI $FW ,
FDQQRW EHOLHYH WKDW WKH &RQJUHVV WKDW HQDFWHG WKH $FW PHDQW WR FUHDWH
VXFK DQ LQWHUSUHWLYH ODE\ULQWK
WKH$FWKDGEHIRUHLWDPSOHHYLGHQFHRISULYDWHDFWVRIUDFLDO
GLVFULPLQDWLRQDJDLQVWWKHQHZO\HPDQFLSDWHGVODYHV
&RQVLVWHQWZLWKP\XQGHUVWDQGLQJRI¶VKLVWRU\,
EHOLHYHWKHVWDWXWHGHVHUYHVDEURDGLQWHUSUHWDWLRQEHFDXVHLW
LVSDUWRIDUHPHGLDOVWDWXWH7KHPDMRULW\¶VUHDGLQJSDWHQWO\
YLRODWHVWKHFDQRQRIVWDWXWRU\FRQVWUXFWLRQWKDWFRPPDQGV
FRXUWVWRLQWHUSUHWUHPHGLDOVWDWXWHVEURDGO\,WGRHVVRLQWKH
QDPH RI D FRPSHWLQJ FDQRQ WKDW RI LQWHUSUHWLQJ IHGHUDO
VWDWXWHVQDUURZO\VRDVQRWWRLQYDGHXSRQDUHDVRIWUDGLWLRQDO
VWDWHFRQFHUQ$V,KDYHDOUHDG\GHPRQVWUDWHGKRZHYHUWKH
PDMRULW\¶VRYHUUHOLDQFHRQWKLVSULQFLSOHLVLQHUURUDVWKHUH
LVQROLNHOLKRRGWKDWP\UHDGLQJRIWKHVWDWXWHZLOOUHVXOWLQD
IORRGRIOLWLJDWLRQLQIHGHUDOFRXUWVWKDWSURSHUO\EHORQJVLQ
VWDWHFRXUW%HFDXVH,DPILUPO\FRQYLQFHGWKDWWKHPDMRULW\¶V
UHDVRQLQJLVIDLWKIXOQHLWKHUWRWKHVWDWXWH¶VODQJXDJHQRUWRLWV
GHHSO\URRWHGFRQVWLWXWLRQDORULJLQV,GLVVHQWIURP3DUW,,,$
RIWKHPDMRULW\¶VRSLQLRQUHTXLULQJVWDWHDFWLRQIRUDFDXVHRI
DFWLRQ XQGHU WKH ³IXOO DQG HTXDO EHQHILW´ FODXVH , ZRXOG
UHYHUVH WKH GLVWULFW FRXUW¶V JUDQW RI VXPPDU\ MXGJPHQW WR
'LOODUGRQWKLVLVVXH
,,67$7($&7,21
$VDQDOWHUQDWLYHWRKHUFODLPWKDW'LOODUGGHQLHG
KHU WKH ³IXOO DQG HTXDO EHQHILW´ RI WKH ODZ &KDSPDQ DOVR
VHHNVUHOLHIXQGHU86&IRUDOOHJHGYLRODWLRQVRI
KHUULJKWWREHIUHHIURPXQUHDVRQDEOHVHDUFKHVDQGVHL]XUHV
XQGHU WKH )RXUWK $PHQGPHQW DQG KHU GXH SURFHVV ULJKWV
XQGHUWKH)LIWK$PHQGPHQW$VWKHPDMRULW\QRWHGDOLWLJDQW
EULQJLQJDFODLPXQGHUPXVWVKRZWKDWKHUULJKWVZHUH
-- 8 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
RIWKH$FWWKH&RXUWLQ5XQ\RQGHWHUPLQHGWKDWWKHUH
ZDVQRUHDVRQWRFRQVWUXHWKHOHJLVODWLYHKLVWRU\GLIIHUHQWO\
IRUWKDQLWKDGIRUFRQVHTXHQWO\WKH&RXUW
KHOGWKDWWKH³PDNHDQGHQIRUFHFRQWUDFWV´FODXVHRI
PXVWDSSO\WRSULYDWHDVZHOODVSXEOLFFRQWUDFWV6HH5XQ\RQ
86DW
5HYLHZLQJWKHKLVWRU\RIWKH$FWLQ*HQHUDO%OGJ
&RQWUDFWRUV&KLHI-XVWLFH5HKQTXLVWQRWHG
>7@KLV&RXUWKDVIRXQGLQWKHOHJLVODWLYHKLVWRU\RIWKH
$FWHYLGHQFHWKDW&RQJUHVVVRXJKWWRDFFRPSOLVK
PRUH WKDQ WKH GHVWUXFWLRQ RI VWDWHLPSRVHG FLYLO
GLVDELOLWLHVDQGGLVFULPLQDWRU\SXQLVKPHQWV:HKDYH
KHOG WKDW ERWK DQG μSURKLELW DOO UDFLDO
GLVFULPLQDWLRQZKHWKHURUQRWXQGHUFRORURIODZZLWK
UHVSHFWWRWKHULJKWVHQXPHUDWHGWKHUHLQ¶
*HQHUDO%OGJ&RQWUDFWRUV86DW TXRWLQJ-RQHV
86DW ,QGHHGWKH&KLHI-XVWLFHREVHUYHGWKDWLQ
SDVVLQJWKH$FW&RQJUHVV³DFWHGWRSURWHFWWKH>QHZO\@
IUHHGPHQ IURP LQWHQWLRQDO GLVFULPLQDWLRQ E\ WKRVH ZKRVH
REMHFW ZDV μWR PDNH WKHLU IRUPHU VODYHV GHSHQGHQW VHUIV
YLFWLPVRIXQMXVWODZVDQGGHEDUUHGIURPDOOSURJUHVVDQG
HOHYDWLRQ E\ RUJDQL]HG VRFLDO SUHMXGLFHV¶´ ,G DW
TXRWLQJ &RQJ *OREH WK &RQJ VW 6HVV
5HS&ODUNH &OHDUO\WKHQWKHGUDIWHUVRIWKH$FWKDG
SULYDWHDVZHOODVVWDWHLQIOLFWHGGLVFULPLQDWLRQLQPLQGZKHQ
WKH\SDVVHGWKH$FWIURPZKLFKWKH³IXOODQGHTXDOEHQHILW´
FODXVHGHULYHVYHUEDWLP
,EHOLHYHWKDWWKHKLVWRU\RIDVH[SOLFDWHGE\WKH
6XSUHPH &RXUW LQ QXPHURXV GHFLVLRQV JLYHV ULVH WR WKH
LQHVFDSDEOH FRQFOXVLRQ WKDW WKH ³IXOO DQG HTXDO EHQHILW´
FODXVHOLNHWKH³PDNHDQGHQIRUFHFRQWUDFWV´FODXVHDQGWKH
RWKHUSURWHFWLRQVRIIHUHGE\WKHVWDWXWHGRHVQRWUHTXLUHVWDWH
DFWLRQ , FDQQRW LJQRUH DV GR WKH PDMRULW\ DQG WKH
FRQFXUUHQFHWKDWWKH$FWZDVSDVVHGSXUVXDQWWRWKH
7KLUWHHQWK$PHQGPHQWDQGWKH&RQJUHVVZKLFKFRQVLGHUHG
1R &KDSPDQY7KH+LJEHH&RPSDQ\
&KDSPDQ GLG QRW DOOHJH D FDXVH RI DFWLRQ XQGHU WKH ³PDNH DQG
HQIRUFH FRQWUDFWV´ FODXVH RI &RXUWV KDYH UHMHFWHG VXFK D FODLP
PDGH E\ SODLQWLIIV ZKR ZHUH IDOVHO\ DFFXVHG RI VKRSOLIWLQJ 6HH HJ
/HZLV Y -& 3HQQH\ &R ) 6XSS ' 'HO QR
UHIXVDO WR FRQWUDFW ZKHUH SODLQWLII KDG FRPSOHWHG VKRSSLQJ DQG ZDV
OHDYLQJ VWRUH
7KLVUHVXOWLVDOVRVXSSRUWHGE\WKHFDVHODZ7KHPDMRULW\
RIFRXUWVERWKSUHDQGSRVWWKHDPHQGPHQWKDYHKHOG
WKDWWKHIXOODQGHTXDOEHQHILWFODXVHDSSOLHVWRVWDWHDFWLRQ
DQGQRWWRSULYDWHDFWLRQ,QRQHRIWKHILUVWFDVHVWRFRQVLGHU
WKH LVVXH 0DKRQH VXSUD WKH 7KLUG &LUFXLW GLVWLQJXLVKHG
EHWZHHQWKHWZRVXEVWDQWLYHSURYLVLRQVRIREVHUYLQJ
WKDWWKHULJKWWRPDNHDQGHQIRUFHFRQWUDFWVLVFRQFHUQHGZLWK
UHODWLRQV EHWZHHQ SULYDWH LQGLYLGXDOV DQG WKXV SULYDWH
LQGLYLGXDOVFDQEHKHOGOLDEOHIRUYLRODWLQJ VFRQWUDFW
FODXVH ZKHUHDV WKH HTXDO EHQHILW FODXVH FRQFHUQV WKH
UHODWLRQVEHWZHHQDQLQGLYLGXDODQGWKHVWDWHDQGWKXVRQO\
VWDWHDFWRUVFDQEHOLDEOHXQGHUWKHHTXDOEHQHILWFODXVH
7KHVWDWHQRWWKHLQGLYLGXDOLVWKHVROHVRXUFHRIWKHODZ
DQGLWLVRQO\WKHVWDWHDFWLQJWKURXJKLWVDJHQWVQRWWKH
SULYDWHLQGLYLGXDOZKLFKLVFDSDEOHRIGHQ\LQJWREODFNV
WKHIXOODQGHTXDOEHQHILWRIWKHODZ7KXVZKLOHSULYDWH
GLVFULPLQDWLRQPD\EHLPSOLFDWHGE\WKHFRQWUDFWFODXVH
RIVHFWLRQWKHFRQFHSWRIVWDWHDFWLRQLVLPSOLFLWLQ
WKHHTXDOEHQHILWVFODXVH
)GDW HPSKDVLVDGGHG $FFRUG6KDDUH7HILOD
&RQJUHJDWLRQY&REE)G WK&LU
UHY¶GLQSDUWRQRWKHUJURXQGV86 /HZLVY
-& 3HQQH\ &R ) 6XSS ' 'HO
6SHQFHU ) 6XSS DW %URRNV Y $%& )
6XSS 1'2KLR YDFDWHGLQSDUWRQRWKHU
JURXQGV)G WK&LU 5RFKRQY'LOORQ
)6XSS 1',OO 3URYLVLRQDO*RY¶WRIWKH
5HSXEOLF RI 1HZ $IULND Y $PHULFDQ %URDG &RV )
6XSS ''& (JJOHVWRQY3ULQFH(GZDUG
9ROXQWHHU5HVFXH6TXDG)6XSS ('9D
DII¶G ZLWKRXW RS )G WK &LU
-- 9 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
:LOOLDPV Y 1RUWKILHOG 0RXQW +HUPRQ 6FK ) 6XSS
'0DVV 6HHDOVR6WHUOLQJ)6XSS
DW HTXDO EHQHILW FODXVH GRHV QRW FUHDWH IHGHUDO WRUW
UHPHG\DJDLQVWSULYDWHSDUW\
7KHVHFRXUWVKDYHHPSKDVL]HGWKDWLQWHUSUHWLQJWKHFODXVH
WRDSSO\WRSULYDWHDFWLRQZRXOGJLYHULVHWRDIHGHUDOFDXVHRI
DFWLRQIRUHYHU\UDFLDOO\PRWLYDWHGSULYDWHWRUW6HH0DKRQH
)GDW
$OWKRXJKLWLVFRQFHSWXDOO\SRVVLEOHIRUDSULYDWHSDUW\WR
GHSULYHDQRWKHURIWKH³HTXDOEHQHILW´RIWKRVHODZVLWLV
GLIILFXOWWRLPDJLQHZKDWVXFKDGHSULYDWLRQZRXOGEH
RWKHU WKDQ WKH YLRODWLRQ RI WKH VWDWH ODZV WKHPVHOYHV
FRXSOHG ZLWK D UDFLDO DQLPXV 5HDGLQJ WKH FODXVH WR
HQFRPSDVVWKLVNLQGRIFRQGXFWKRZHYHUULVNVFUHDWLQJ
DDFWLRQ³ZKHQHYHUDZKLWHPDQVWULNHVDEODFN
>PDQ@LQDEDUURRPEUDZO´
6SHQFHU)6XSSDW
$PLQRULW\RIFRXUWVKDYHKHOGWKDWWKHHTXDOEHQHILWFODXVH
DSSOLHVWRSULYDWHDFWLRQ6HH)UDQFHVFKLY+\DWW&RUS
)6XSS '35 FDXVHRIDFWLRQXQGHUHTXDO
EHQHILW FODXVH DJDLQVW SULYDWH KRWHO IRU GHQLDO RI
DFFRPPRGDWLRQEDVHGRQUDFH &DUH\Y5XGHVHDO)
6XSSQ 1'*D FDXVHRIDFWLRQXQGHU
HTXDOEHQHILWFODXVHDJDLQVWPHPEHUVRI.X.OX[.ODQIRU
DVVDXOW +DZNY3HULOOR)6XSS 1',OO
FDXVH RI DFWLRQ XQGHU HTXDO EHQHILW FODXVH DJDLQVW
LQGLYLGXDOV ZKR FRPPLWWHG UDFLDOO\PRWLYDWHG DVVDXOW
&HQWUDO3UHVE\WHULDQ&KXUFKY%ODFN/LEHUDWLRQ)URQW
)6XSS ('0R FDXVHRIDFWLRQXQGHU
HTXDOEHQHILWFODXVHDJDLQVWLQGLYLGXDOVZKRLQWHUIHUHGZLWK
)LUVW$PHQGPHQWIUHHGRPWRZRUVKLSE\GLVUXSWLQJFKXUFK
VHUYLFH
1R &KDSPDQY7KH+LJEHH&RPSDQ\
SULYDWHLQGLYLGXDOVDQGXQRIILFLDOJURXSVPLVWUHDWPHQW
XQUHODWHGWRDQ\KRVWLOHVWDWHOHJLVODWLRQμ$FFRXQWVLQ
QHZVSDSHUV 1RUWK DQG 6RXWK )UHHGPHQ¶V %XUHDX DQG
RWKHU RIILFLDO GRFXPHQWV SULYDWH UHSRUWV DQG
FRUUHVSRQGHQFHZHUHDOODGGXFHG¶WRVKRZWKDWμSULYDWH
RXWUDJHDQGDWURFLW\¶ZHUHμGDLO\LQIOLFWHGRQIUHHGPHQ
¶ 7KH FRQJUHVVLRQDO GHEDWHV DUH UHSOHWH ZLWK
UHIHUHQFHV WR SULYDWH LQMXVWLFHV DJDLQVW 1HJURHV ²
UHIHUHQFHVWRZKLWHHPSOR\HUVZKRUHIXVHGWRSD\WKHLU
1HJUR ZRUNHUV ZKLWH SODQWHUV ZKR DJUHHG DPRQJ
WKHPVHOYHV QRW WR KLUH IUHHG VODYHV ZLWKRXW WKH
SHUPLVVLRQRIWKHLUIRUPHUPDVWHUVZKLWHFLWL]HQVZKR
DVVDXOWHG1HJURHVRUZKRFRPELQHGWRGULYHWKHPRXWRI
WKHLUFRPPXQLWLHV
-RQHV86DW LQWHUQDOFLWDWLRQVDQGIRRWQRWHV
RPLWWHG 7KH6XSUHPH&RXUWUHMHFWHGWKHVXJJHVWLRQWKDWWKH
$FWZDVSDVVHGH[FOXVLYHO\LQUHVSRQVHWRUHVWULFWLYH
VWDWHODZVQRWLQJWKDW³WKH&LYLO5LJKWV$FWZDVGUDIWHGWR
DSSO\ WKURXJKRXW WKH FRXQWU\ DQG LWV ODQJXDJH ZDV IDU
EURDGHU WKDQ ZRXOG KDYH EHHQ QHFHVVDU\ WR VWULNH GRZQ
GLVFULPLQDWRU\ VWDWXWHV´ ,G DW ,Q -RQHV WKH
6XSUHPH&RXUWKHOGWKDWEHFDXVH86&DVLVWHU
VWDWXWHWRZDVGHULYHGIURPRIWKH&LYLO5LJKWV
$FWRIDQGWKH$FWZDVSDVVHGSXUVXDQWWRWKH7KLUWHHQWK
$PHQGPHQW PXVW UHDFK SULYDWH DFWV RI UDFLDO
GLVFULPLQDWLRQ6HH-RQHV86DW QRWLQJWKDW³>L@Q
OLJKWRI WKH FRQFHUQVWKDWOHG&RQJUHVVWRDGRSWLWDQGWKH
FRQWHQWVRIWKHGHEDWHVWKDWSUHFHGHGLWVSDVVDJHLWLVFOHDU
WKDWWKH$FWZDVGHVLJQHGWRGRMXVWZKDWLWVWHUPVVXJJHVW
WR SURKLELW DOO UDFLDO GLVFULPLQDWLRQ ZKHWKHU RU QRW XQGHU
FRORURIODZZLWKUHVSHFWWRWKHULJKWVHQXPHUDWHGWKHUHLQ
´
7KHUHDIWHU LQ 5XQ\RQ Y 0F&UDU\ WKH 6XSUHPH &RXUW
DIILUPHG WKDW SURKLELWV UDFLDO GLVFULPLQDWLRQ LQ WKH
PDNLQJ DQG HQIRUFHPHQW RI SULYDWH FRQWUDFWV E\ SULYDWH
DFWRUV5XQ\RQY0F&UDU\86 7KH
&RXUW¶VKROGLQJLQ5XQ\RQZDVEDVHGXSRQLWVHDUOLHUGHFLVLRQ
LQ-RQHV1RWLQJWKDWERWKDQGGHULYHIURP
-- 10 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
7KH )RXUWHHQWK $PHQGPHQW ZDV VHQW WR WKH VWDWHV IRU
UDWLILFDWLRQ MXVW WZR PRQWKV DIWHU SDVVDJH RI WKH $FW DQG ZDV
UDWLILHG LQ 0DQ\ ZKR VXSSRUWHG SDVVDJH RI WKH )RXUWHHQWK
$PHQGPHQW YLHZHG LW DV WKH FRQVWLWXWLRQDOL]DWLRQ RI WKH $FW 6HH
-HWW 86 DW 7KH )RXUWHHQWK $PHQGPHQW SURYLGHV WKDW ³>Q@R
6WDWH VKDOO PDNH RU HQIRUFH DQ\ ODZ ZKLFK VKDOO DEULGJH WKH SULYLOHJHV RU
LPPXQLWLHV RI FLWL]HQV RI WKH 8QLWHG 6WDWHV QRU VKDOO DQ\ 6WDWH GHSULYH
DQ\ SHUVRQ RI OLIH OLEHUW\ RU SURSHUW\ ZLWKRXW GXH SURFHVV RI ODZ QRU
GHQ\ WR DQ\ SHUVRQ ZLWKLQ LWV MXULVGLFWLRQ WKH HTXDO SURWHFWLRQ RI WKH
ODZV´ 86 &2167 DPHQG ;,9
SXUVXDQWWRWKH)RXUWHHQWK$PHQGPHQWDQGDSSOLHVRQO\WR
VWDWHDFWLRQ6HFWLRQRIWKH$FWDQGRIWKH
$FWZHUHODWHUUHFRGLILHGLQRIWKH5HYLVHG6WDWXWHVRI
DQGXOWLPDWHO\UHFRGLILHGLQ86&,GDW
7KH$FWZKHQILUVWHQDFWHGFOHDUO\DSSOLHGWR
SULYDWHFRQGXFW
$FFRUGLQJWRWKH6XSUHPH&RXUWWKHVFRSHRIWKH$FW
ZDVQRWDOWHUHGZKHQLWZDVUHHQDFWHGLQSXUVXDQWWRWKH
)RXUWHHQWK$PHQGPHQWGHVSLWHWKHIDFWWKDW³VRPHPHPEHUV
RI&RQJUHVVVXSSRUWHGWKH)RXUWHHQWK$PHQGPHQWLQRUGHUWR
HOLPLQDWHGRXEWDVWRWKHFRQVWLWXWLRQDOYDOLGLW\RIWKH&LYLO
5LJKWV$FW>RI@DVDSSOLHGWRWKH6WDWHV´-RQHV
86DW LQWHUQDOTXRWDWLRQRPLWWHG 0RUHRYHUWKH&RXUW
KDV UHMHFWHG WKH LGHD WKDW WKH DGRSWLRQ RI WKH )RXUWHHQWK
$PHQGPHQWRUWKHUHHQDFWPHQWRIWKH$FW³ZHUHPHDQW
VRPHKRZWROLPLWWKHVWDWXWH¶VDSSOLFDWLRQWRVWDWHDFWLRQ´
,GDFFRUG*HQHUDO%OGJ&RQWUDFWRUV86DW
7KH 6XSUHPH &RXUW KDV UHSHDWHGO\ UHPDUNHG XSRQ WKH
HYLGHQFHRISULYDWHGLVFULPLQDWLRQWKDWPRWLYDWHGWKHRULJLQDO
VWDWXWH¶V GUDIWHUV ,Q -RQHV Y $OIUHG + 0D\HU &R WKH
6XSUHPH&RXUWLQGLVFXVVLQJZK\WKH$FWZDVSDVVHG
QRWHG WKDW &RQJUHVV KDG EHIRUH LW HYLGHQFH RI SHUYDVLYH
SULYDWHGLVFULPLQDWLRQDQGUDFLDOYLROHQFHDVZHOODVWKHIDFW
RIWKHVRXWKHUQVWDWHV¶UHFHQWO\HQDFWHG%ODFN&RGHV
>7@KHVDPH&RQJUHVVWKDWZDQWHGWRGRDZD\ZLWKWKH
%ODFN &RGHV DOVR KDG EHIRUH LW DQ LPSRVLQJ ERG\ RI
HYLGHQFH SRLQWLQJ WR WKH PLVWUHDWPHQW RI 1HJURHV E\
1R &KDSPDQY7KH+LJEHH&RPSDQ\
+DZN Y 3HULOOR KDV VLQFH EHHQ UHMHFWHG E\ DQRWKHU FRXUW LQ WKH
1RUWKHUQ 'LVWULFW RI ,OOLQRLV 6HH 5RFKRQY'LOORQ ) 6XSS
1' ,OO FRXUW HOHFWHG WR IROORZ0DKRQH
6HFWLRQ RI WKH &LYLO 5LJKWV $FW RI WKH SUHGHFHVVRU WR
86& SURYLGHG
7KDW DOO SHUVRQV ERUQ LQ WKH 8QLWHG 6WDWHV DQG QRW VXEMHFW WR DQ\
IRUHLJQ SRZHU DUH KHUHE\ GHFODUHG WR EH FLWL]HQV RI WKH
8QLWHG 6WDWHV DQG VXFK FLWL]HQV RI HYHU\ UDFH DQG FRORU ZLWKRXW
UHJDUG WR DQ\ SUHYLRXV FRQGLWLRQ RI VODYHU\ RU LQYROXQWDU\
VHUYLWXGH VKDOO KDYH WKH VDPH ULJKW LQ HYHU\ 6WDWH DQG
7HUULWRU\ LQ WKH 8QLWHG 6WDWHV WR PDNH DQG HQIRUFH FRQWUDFWV WR
VXH EH SDUWLHV DQG JLYH HYLGHQFH WR LQKHULW SXUFKDVH OHDVH
VHOO KROG DQG FRQYH\ UHDO DQG SHUVRQDO SURSHUW\ DQG WR IXOO DQG
HTXDO EHQHILW RI DOO ODZV DQG SURFHHGLQJV IRU WKH VHFXULW\ RI
SHUVRQ DQG SURSHUW\ DV LV HQMR\HG E\ ZKLWH FLWL]HQV DQG VKDOO
EH VXEMHFW WR OLNH SXQLVKPHQW SDLQV DQG SHQDOWLHV DQG WR QRQH
RWKHU DQ\ ODZ VWDWXWH RUGLQDQFH UHJXODWLRQ RU FXVWRP WR WKH
FRQWUDU\ QRWZLWKVWDQGLQJ
(PSKDVLV DGGHG
,Q+DZNY3HULOOR)6XSSWKHOHDGLQJRSLQLRQ
IRU WKH PLQRULW\ YLHZ WKH FRXUW H[DPLQHG WKH OHJLVODWLYH
KLVWRU\RIWKHVWDWXWHDQGIRXQGWKDWLWVKRXOGEHLQWHUSUHWHG
EURDGO\6HFWLRQRULJLQDWHGLQVHFWLRQRIWKH&LYLO
5LJKWV $FW RI :KHQ &RQJUHVV HQDFWHG WKH
VWDWXWHLWLQWHQGHGWRHOLPLQDWHDOOUDFHGLVFULPLQDWLRQERWK
SXEOLF DQG SULYDWH EHFDXVH ³>G@XULQJ WKH &RQJUHVVLRQDO
GHEDWHVDVVDXOWVRQEODFNVE\SULYDWHFLWL]HQVZHUHUHIHUUHG
WRRQVHYHUDORFFDVLRQV´+DZN)6XSSDW FLWLQJ
&RQJ*OREHWK&RQJVW6HVV
7KLVJHQHUDOUHIHUHQFHKRZHYHUGLGQRWPDQLIHVWLQWKH
ODQJXDJHRIWKHHTXDOEHQHILWFODXVHZKLFKUHIHUVRQO\WR³WKH
IXOO DQG HTXDO EHQHILW RI DOO ODZV DQG SURFHHGLQJV IRU WKH
VHFXULW\ RI SHUVRQV DQG SURSHUW\ ´ 7KXV +DZN¶V
UHDVRQLQJWKDW³>W@KHDEVHQFHRIDQ\ZRUGVH[SUHVVO\OLPLWLQJ
6HFWLRQWRRIILFLDODFWVRIGLVFULPLQDWLRQLQGLFDWHVWKDW
&RQJUHVV GLG QRW LQWHQG WR UHVWULFW WKH RSHUDWLRQ RI WKDW
6HFWLRQWRVXFKFRQGXFW´)6XSSDWLVLQHUURU
-- 11 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
6HFWLRQ RI WKH &LYLO 5LJKWV $FW RI SURYLGHG
7KDW DQ\ SHUVRQ ZKR XQGHU FRORU RI DQ\ ODZ VWDWXWH RUGLQDQFH
UHJXODWLRQ RU FXVWRP VKDOO VXEMHFW RU FDXVH WR EH VXEMHFWHG DQ\
LQKDELWDQW RI DQ\ 6WDWH RU 7HUULWRU\ WR WKH GHSULYDWLRQ RI DQ\
ULJKW VHFXUHG RU SURWHFWHG E\ WKLV DFW RU WR GLIIHUHQW SXQLVKPHQW
SDLQV RU SHQDOWLHV RQ DFFRXQW RI VXFK SHUVRQ KDYLQJ DW DQ\ WLPH
EHHQ KHOG LQ D FRQGLWLRQ RI VODYHU\ RU LQYROXQWDU\ VHUYLWXGH
H[FHSW DV D SXQLVKPHQW IRU FULPH ZKHUHRI WKH SDUW\ VKDOO KDYH
EHHQ GXO\ FRQYLFWHG RU E\ UHDVRQ RI KLV FRORU RU UDFH WKDQ LV
SUHVFULEHG IRU WKH SXQLVKPHQW RI ZKLWH SHUVRQV VKDOO EH GHHPHG
JXLOW\ RI D PLVGHPHDQRU DQG RQ FRQYLFWLRQ VKDOO EH SXQLVKHG
E\ ILQH QRW H[FHHGLQJ RQH WKRXVDQG GROODUV RU LPSULVRQPHQW QRW
H[FHHGLQJ RQH \HDU RU ERWK LQ WKH GLVFUHWLRQ RI WKH FRXUW
7KHHTXDOEHQHILWFODXVHRILVOLPLWHGWRVWDWHDFWLRQ
EHFDXVH LW LV XQGHUVWRRG WKDW RQO\ WKH VWDWH LV FDSDEOH RI
JUDQWLQJRUGHQ\LQJHTXDODFFHVVWRWKHODZ³>7@KHFRQFHSW
RI VWDWH DFWLRQ LV LPSOLFLW LQ WKH HTXDO EHQHILWV FODXVH´
0DKRQH)GDW
+DZNIRXQGIXUWKHUVXSSRUWIRULWVEURDGLQWHUSUHWDWLRQE\
ORRNLQJ WR WKUHH RWKHU VWDWXWHV VHFWLRQ RI WKH &LYLO
5LJKWV$FWRI 86&DQG 86&
)LUVWVHFWLRQRIWKH&LYLO5LJKWV$FWRI
SURYLGHGIRUFULPLQDOVDQFWLRQVDJDLQVWSHUVRQVZKRYLRODWHG
WKHULJKWVVHFXUHGE\VHFWLRQE\DFWLQJXQGHUFRORURIODZ
,QRWKHUZRUGVSULYDWHDFWVRIGLVFULPLQDWLRQZHUHH[HPSWHG
IURPFULPLQDOVDQFWLRQ+DZNLQIHUUHGIURPWKLVGLVWLQFWLRQ
WKDWWKHULJKWVVHFXUHGE\VHFWLRQPXVWKDYHEHHQULJKWVWR
EHIUHHRISULYDWHDVZHOODVSXEOLFGLVFULPLQDWLRQ6HH+DZN
)6XSSDW7KLVUHDVRQLQJKRZHYHUJRHVWRRIDU
7KH VHFWLRQ H[HPSWLRQ RI VRPH SULYDWH FRQGXFW IURP
FULPLQDO VDQFWLRQV GRHV QRW HVWDEOLVK WKDW DOO RI WKH ULJKWV
FRYHUHG LQ VHFWLRQ ZHUH ULJKWV SURWHFWHG IURP SULYDWH
GLVFULPLQDWLRQ
6HFRQG+DZNSRLQWHGRXWWKDWVHFWLRQRIWKH&LYLO5LJKWV
$FWRIZDVWKHSUHGHFHVVRUWR86&ZKLFK
1R &KDSPDQY7KH+LJEHH&RPSDQ\
GHULYHV IURP WKH &LYLO 5LJKWV $FW RI DQG ZDV UHFRGLILHG LQ RI
WKH (QIRUFHPHQW $FW RI FK 6WDW 7KH FXUUHQW
VWDWXWH SURYLGHV WKDW ³>D@OO FLWL]HQV RI WKH 8QLWHG 6WDWHV VKDOO KDYH WKH
VDPH ULJKW LQ HYHU\ 6WDWH DQG 7HUULWRU\ DV LV HQMR\HG E\ ZKLWH FLWL]HQV
WKHUHRI WR LQKHULW SXUFKDVH OHDVH VHOO KROG DQG FRQYH\ UHDO DQG SHUVRQDO
SURSHUW\´ 86&
7KH 7KLUWHHQWK $PHQGPHQW ZKLFK ZDV UDWLILHG RQ 'HF
SURYLGHV WKDW ³>Q@HLWKHU VODYHU\ QRU LQYROXQWDU\ VHUYLWXGH H[FHSW DV
D SXQLVKPHQW IRU FULPH ZKHUHRI WKH SDUW\ VKDOO KDYH EHHQ GXO\ FRQYLFWHG
VKDOO H[LVW ZLWKLQ WKH 8QLWHG 6WDWHV RU DQ\ SODFH VXEMHFW WR WKHLU
MXULVGLFWLRQ´ 86 &2167 DPHQG ;,,, 8QGHU WKH VHFRQG VHFWLRQ
RI WKH $PHQGPHQW &RQJUHVV LV JUDQWHG WKH ³SRZHU WR HQIRUFH WKLV DUWLFOH
E\ DSSURSULDWH OHJLVODWLRQ´ 86 &2167 DPHQG ;,,, /HVV WKDQ
WKUHH ZHHNV DIWHU WKH SDVVDJH RI WKH $PHQGPHQW WKH ELOO WKDW ZDV WR
EHFRPH WKH &LYLO 5LJKWV $FW RI ZDV LQWURGXFHG 6HH -HWW Y 'DOODV
,QGHS 6FK 'LVW 86
$FFRUGLQJ WR WKH 6XSUHPH &RXUW ³>V@HFWLRQ GLIIHUHG IURP
RI WKH $FW LQ DW OHDVW WZR UHVSHFWV )LUVW ZKHUH RI WKH
$FW H[WHQGHG LWV JXDUDQWHHV WR μFLWL]HQV RI HYHU\ UDFH DQG FRORU¶ RI
WKH $FW ² DQG ² SURWHFWV μDOO SHUVRQV¶ 6HFRQG WKH
$FW RPLWWHG ODQJXDJH FRQWDLQHG LQ WKH $FW DQG HYHQWXDOO\ FRGLILHG
DV JXDUDQWHHLQJ SURSHUW\ ULJKWV HTXLYDOHQW WR WKRVH HQMR\HG E\
ZKLWH FLWL]HQV´ *HQHUDO %OGJ &RQWUDFWRUV 86 DW LQWHUQDO
FLWDWLRQ RPLWWHG 7KH HQWLUH $FW ZDV DOVR UHHQDFWHG LQ RI WKH
$FW RI FK 6WDW ,G DW Q
&RQJUHVVSDVVHGWKH$FWGXULQJWKH
5HFRQVWUXFWLRQ(UDSXUVXDQWWRLWVSRZHUXQGHURIWKHWKHQ
UHFHQWO\UDWLILHG7KLUWHHQWK$PHQGPHQWWRWKH&RQVWLWXWLRQ
ZKLFKGRHVQRWUHTXLUHVWDWHDFWLRQ³WRGHWHUPLQHZKDWDUH
WKHEDGJHVDQGWKHLQFLGHQWVRIVODYHU\DQGWRWUDQVODWH
WKDWGHWHUPLQDWLRQLQWRHIIHFWLYHOHJLVODWLRQ´5XQ\RQ
86DW TXRWLQJ-RQHVY$OIUHG+0D\HU&R86
DFFRUG :DWVRQ Y )UDWHUQDO 2UGHU RI
(DJOHV)G WK&LU ³&RQJUHVVHQDFWHG
SXUVXDQWWRWKH7KLUWHHQWK$PHQGPHQWWRHQVXUH
WKDWDOORIWKHEDGJHVDQGLQFLGHQWVRIVODYHU\IDGHGLQWRDQ
LJQRPLQLRXV SDVW´ 6HFWLRQ RI WKH $FW ZDV
VXEVWDQWLDOO\UHHQDFWHGDWRIWKH(QIRUFHPHQW$FWRI
FK 6WDW ZKLFK ZDV SDVVHG
-- 12 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
-XGJH 6XKUKHLQULFK EHOLHYHV WKDW ³&RQJUHVV GLG QRW QHHG WR
H[SODLQ WKDW WKH HTXDO EHQHILW DQG OLNH SXQLVKPHQW FODXVHV RI VXEVHFWLRQ
D GR QRW DSSO\ WR SULYDWH FRQGXFW EHFDXVH WKH\ ORJLFDOO\ FDQQRW´ 6XSUD
DW , KDYH DOUHDG\ H[SODLQHG ZK\ , EHOLHYH WKDW -XGJH 6XKUKHLQULFK¶V
ORJLF LV IODZHG ILUVW WKHUH LV QRWKLQJ LQ HLWKHU WKH ODQJXDJH RU VWDWXWRU\
KLVWRU\ RI WKDW UHVWULFWV WKH ³HTXDO EHQHILW´ FODXVH WR VWDWH DFWLRQ
QRWZLWKVWDQGLQJ -XGJH 6XKUKHLQULFK¶V FODLPV WR WKH FRQWUDU\ DQG VHFRQG
KLV DQDO\VLV RI WKH ³OLNH SXQLVKPHQW´ FODXVH LJQRUHV WKH KLVWRULFDO FRQWH[W
IURP ZKLFK GHULYHV
6HFWLRQ RI WKH &LYLO 5LJKWV $FW RI SURYLGHG
>&@LWL]HQV RI HYHU\ UDFH DQG FRORU ZLWKRXW UHJDUG WR DQ\
SUHYLRXV FRQGLWLRQ RI VODYHU\ RU LQYROXQWDU\ VHUYLWXGH VKDOO
KDYH WKH VDPH ULJKW LQ HYHU\ 6WDWH DQG 7HUULWRU\ LQ WKH 8QLWHG
6WDWHV WR PDNH DQG HQIRUFH FRQWUDFWV WR VXH EH SDUWLHV DQG JLYH
HYLGHQFH WR LQKHULW SXUFKDVH OHDVH VHOO KROG DQG FRQYH\ UHDO
DQG SHUVRQDO SURSHUW\ DQG WR IXOO DQG HTXDO EHQHILW RI DOO ODZV
DQG SURFHHGLQJV IRU WKH VHFXULW\ RI SHUVRQ DQG SURSHUW\ DV LV
HQMR\HG E\ ZKLWH FLWL]HQV DQG VKDOO EH VXEMHFW WR OLNH
SXQLVKPHQW SDLQV DQG SHQDOWLHV DQG WR QRQH RWKHU DQ\ ODZ
VWDWXWH RUGLQDQFH UHJXODWLRQ RU FXVWRP WR WKH FRQWUDU\
QRWZLWKVWDQGLQJ
$FW RI $SU FK 6WDW 86& DOVR
E\ WKH PDMRULW\ HVSHFLDOO\ LQ OLJKW RI WKH EURDG ODQJXDJH
&RQJUHVVHPSOR\HGLQVXEVHFWLRQ F &RQJUHVV¶VIDLOXUHWR
FRPPHQWXSRQVWDWXWRU\ODQJXDJHGRHVQRWRIIHUDUHYLHZLQJ
FRXUW FDUWH EODQFKH WR UHZULWH WKH VWDWXWH WR ILW LWV RZQ
VXEMHFWLYH XQGHUVWDQGLQJ RI &RQJUHVV¶V XQVWDWHG LQWHQW
0RUHRYHU,QRWHWKDWWKHPDMRULW\LJQRUHVWKHFRPPLWWHH¶V
VWDWHG SXUSRVH LQ GUDIWLQJ WKH DPHQGPHQW ³WR
VWUHQJWKHQH[LVWLQJSURWHFWLRQVDQGUHPHGLHVDYDLODEOHXQGHU
IHGHUDOFLYLOULJKWVODZVWRSURYLGHPRUHHIIHFWLYHGHWHUUHQFH
DQGDGHTXDWHFRPSHQVDWLRQIRUYLFWLPVRIGLVFULPLQDWLRQ´
+5 5(3 12 ,, DW UHSULQWHG LQ
86&&$1DW
)LQDOO\ , EHOLHYH WKDW WKH PDMRULW\¶V DQDO\VLV IDLOV WR
DFFRXQWIRU¶VFRQVWLWXWLRQDOOHJDF\3UHVHQWGD\FLYLO
ULJKWVVWDWXWH 86&LVGHULYHGIURPRIWKH
&LYLO5LJKWV$FWRI ³$FW´ FK6WDW
6HH*HQHUDO%OGJ&RQWUDFWRUV$VV¶QY3HQQ86
1R &KDSPDQY7KH+LJEHH&RPSDQ\
86& SURYLGHV
$OO FLWL]HQV RI WKH 8QLWHG 6WDWHV VKDOO KDYH WKH VDPH ULJKWV LQ
HYHU\ 6WDWH DQG 7HUULWRU\ DV LV HQMR\HG E\ ZKLWH FLWL]HQV WKHUHRI
WR LQKHULW SXUFKDVH OHDVH VHOO KROG DQG FRQYH\ UHDO DQG
SHUVRQDO SURSHUW\
SURKLELWVGLVFULPLQDWLRQLQSURSHUW\WUDQVDFWLRQV%HFDXVHRI
WKHLU FRPPRQ RULJLQ FRXUWV LQWHUSUHW DQG
VLPLODUO\ 6R LW IROORZV DFFRUGLQJ WR +DZN WKDW EHFDXVH
DSSOLHVWRSULYDWHDFWLRQPXVWDSSO\WRSULYDWH
DFWLRQ6HHLG$JDLQKRZHYHUWKHSURWHFWLRQIURPSULYDWH
GLVFULPLQDWLRQLQWKHFRQWH[WRISURSHUW\WUDQVIHUVZKLFKLV
DIIRUGHGE\GRHVQRWHVWDEOLVKWKDWWKHHTXDOEHQHILW
FODXVHRIH[WHQGVWRSULYDWHGLVFULPLQDWLRQ
)LQDOO\ WKH +DZN FRXUW FRPSDUHG WR 86&
DQGQRWHGWKDW FRQWDLQVVRPHODQJXDJH
VLPLODUWRWKHHTXDOEHQHILWFODXVH6HFWLRQ SURYLGHV
³,IWZRRUPRUHSHUVRQVFRQVSLUHRUJRLQGLVJXLVHRQ
WKHKLJKZD\RURQWKHSUHPLVHVRIDQRWKHUIRUWKHSXUSRVHRI
GHSULYLQJHLWKHUGLUHFWO\RULQGLUHFWO\DQ\SHUVRQRUFODVVRI
SHUVRQV RI WKH HTXDO SURWHFWLRQ RI WKH ODZV RU RI HTXDO
SULYLOHJHVDQGLPPXQLWLHVXQGHUWKHODZVWKHSDUW\VR
LQMXUHG RU GHSULYHG PD\ KDYH DQ DFWLRQ IRU UHFRYHU\ RI
GDPDJHV´7KH6XSUHPH&RXUWKDVLQWHUSUHWHG
DVDSSO\LQJWRSULYDWHDVZHOODVRIILFLDODFWLRQ6HH*ULIIHQ
Y%UHFNHQULGJH86 $FFRUGLQJO\WKH
FRXUWLQ +DZNIRXQGWKDWWKHHTXDOEHQHILWFODXVHRI
VLPLODUO\DSSOLHVWRSULYDWHDFWLRQ6HH+DZN)6XSS
6HFWLRQLVQRWDQDORJRXVWR HYHQWKRXJK
UHIHUVWR³WKHIXOODQGHTXDOEHQHILWRIDOOODZVDQG
SURFHHGLQJV´DQG UHIHUVWR³HTXDOSURWHFWLRQRIWKH
ODZV´8QOLNH H[SUHVVO\DSSOLHVWRSULYDWH
-- 13 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
,Q DGGLWLRQ WKH +DZN FRXUW LJQRUHG WKH QHHG UHFRJQL]HG LQ
*ULIIHQ WR FRQILQH WKH UHDFK RI WKH IHGHUDO FLYLO ULJKWV ODZV VR DV QRW WR
FUHDWH D JHQHUDO IHGHUDO WRUW ODZ 6HH *ULIIHQY%UHFNHQULGJH
86
:KLOH LW ZDV QRW DGGUHVVHG EHORZ &KDSPDQ GRHV QRW KDYH D
YLDEOH )LIWK $PHQGPHQW FODLP LQ WKLV FDVH 7KH )LIWK $PHQGPHQW DSSOLHV
WR IHGHUDO DFWLRQ QRW WR SULYDWH DFWLRQ RU VWDWH DFWLRQ 6HH %ROOLQJ Y
6KDUSH 86 %HFDXVH 'LOODUG LV QRW LQ DQ\ ZD\
DVVRFLDWHG ZLWK WKH IHGHUDO JRYHUQPHQW &KDSPDQ KDV QR FODLP XQGHU WKH
)LIWK $PHQGPHQW 6HH 7KUHH 5LYHUV &DEOHYLVLRQ ,QF Y &LW\ RI
3LWWVEXUJK ) 6XSS :' 3D 7KH &RXUW FRXOG
OLEHUDOO\ FRQVWUXH WKH &RPSODLQW DV DOOHJLQJ GXH SURFHVV FODLP XQGHU WKH
)RXUWHHQWK $PHQGPHQW +RZHYHU EHFDXVH &KDSPDQ¶V FODLP LV
VSHFLILFDOO\ FRYHUHG E\ WKH )RXUWK $PHQGPHQW VKH GRHV QRW KDYH D GXH
SURFHVV FODLP XQGHU WKH )RXUWHHQWK $PHQGPHQW 9LRODWLRQV RI
VXEVWDQWLYH GXH SURFHVV RULJLQDOO\ ZHUH GLYLGHG LQWR WZR NLQGV
GHSULYDWLRQ RI D SDUWLFXODU FRQVWLWXWLRQDO JXDUDQWHH DQG DFWLRQV WKDW
JRYHUQPHQW RIILFLDOV PD\ QRW WDNH QR PDWWHU ZKDW SURFHGXUDO SURWHFWLRQV
DFFRPSDQ\ WKHP DOWHUQDWLYHO\ NQRZQ DV DFWLRQV WKDW ³VKRFN WKH
FRQVFLHQFH 6HH %UDOH\ Y &LW\ RI 3RQWLDF )G WK
&LU FLWLQJ 5RFKLQ Y &DOLIRUQLD 86 $Q
XQUHDVRQDEOH VHDUFK RU VHL]XUH LV D YLRODWLRQ RI WKH )RXUWK $PHQGPHQW
PDGH DSSOLFDEOH WR WKH VWDWHV WKURXJK WKH )RXUWHHQWK $PHQGPHQW 7KXV
D )RXUWK $PHQGPHQW YLRODWLRQ JLYHV ULVH WR D VXEVWDQWLYH GXH SURFHVV
YLRODWLRQ RI WKH ILUVW W\SH 6HH :LOVRQ Y %HHEH )G WK &LU
7KH 6XSUHPH &RXUW KDV PDGH LW FOHDU WKDW D )RXUWK $PHQGPHQW
DFWLRQE\UHIHUULQJWR³WZRRUPRUHSHUVRQV´ZKRFRQVSLUH
6HFWLRQFRQWDLQVQRVXFKODQJXDJH
,QVXPZHKROGWKDW¶VHTXDOEHQHILWFODXVHDSSOLHV
RQO\ WR VWDWH DFWLRQ 7KXV WKH GLVWULFW FRXUW¶V JUDQW RI
VXPPDU\MXGJPHQWDQGGLVPLVVDORI&KDSPDQ¶VFODLP
LVDIILUPHG&KDSPDQ¶VUHPHG\OLHVLQVWDWHODZ
%
&KDSPDQDOOHJHVLQKHU&RPSODLQWWKDW'LOODUGYLRODWHGKHU
FRQVWLWXWLRQDOULJKWVXQGHU86&VSHFLILFDOO\KHU
)RXUWK$PHQGPHQWULJKWWREHIUHHIURPXQUHDVRQDEOHVHDUFK
DQGVHL]XUHDQGKHU)LIWK$PHQGPHQWULJKWQRWWREHGHSULYHG
RIOLIHOLEHUW\RUSURSHUW\ZLWKRXWGXHSURFHVV,QRUGHUWR
1R &KDSPDQY7KH+LJEHH&RPSDQ\
DQLPXV
0RUHRYHU , QRWH WKDW WKH DUJXPHQW WKDW &KDSPDQ¶V UHDGLQJ RI
WKH VWDWXWH ZRXOG LPSURSHUO\ IHGHUDOL]H VWDWH WRUW ODZ ZDV RQFH HPEUDFHG
E\ WKH 6XSUHPH &RXUW LQ 3DWWHUVRQ 86 DW DV VXSSRUW IRU WKH
&RXUW¶V GHFLVLRQ WKDW WKH ³PDNH DQG HQIRUFH FRQWUDFWV´ FODXVH GLG QRW
FRYHU FODLPV RI HPSOR\PHQW GLVFULPLQDWLRQ LQYROYLQJ DQ\WKLQJ PRUH WKDQ
WKH IRUPDWLRQ RI D FRQWUDFW D GHFLVLRQ ZKLFK ZDV WKHQ OHJLVODWLYHO\
RYHUUXOHG E\ &RQJUHVV LQ WKH &LYLO 5LJKWV $FW RI 6HH 86&
E
FODLPDOLWLJDQWPXVWSURYHLQWHQWLRQDOGLVFULPLQDWLRQRQWKH
EDVLV RI UDFH ZKLFK LQYROYHV D KLJK WKUHVKROG RI SURRI
%HFDXVHRIWKHVHVLJQLILFDQWOLPLWDWLRQV,GRQRWEHOLHYHWKDW
WKH SURSHU UHDGLQJ RI WKH VWDWXWH PDNHV DFWLRQDEOH D ZLGH
VZDWKRIFRQGXFWWUDGLWLRQDOO\FRYHUHGE\VWDWHFRPPRQODZ
QRUGR,IRUHVHHDIORRGRIOLWLJDWLRQLQWKHIHGHUDOFRXUWV
7KHPDMRULW\¶VDQDO\VLVLVQHLWKHUERUQHRXWE\WKHODQJXDJH
QRUWKHOHJLVODWLYHKLVWRU\RIWKLVVWDWXWH7KHUHLVQRWKLQJLQ
WKHOHJLVODWLYHKLVWRU\RIWKHDPHQGPHQWVWKDWJLYHVPH
UHDVRQWREHOLHYHWKDWWKHZRUG³ULJKWV´KDVDPHDQLQJOHVV
UREXVWWKDQDQDWXUDOUHDGLQJRIWKHZRUGZRXOGSHUPLW7KH
PDMRULW\DVVHUWVWKDW³>W@KHOHJLVODWLYHKLVWRU\UHIOHFWVWKDWLQ
DGGLQJVXEVHFWLRQ F WRWKHVWDWXWH&RQJUHVVPHUHO\FRGLILHG
5XQ\RQY0F&UDU\86 ZKLFKKHOGWKDW
¶VFRQWUDFWFODXVHDSSOLHGWRSULYDWHHQWLWLHV´6XSUDDW
, ILQG WKH OHJLVODWLYH KLVWRU\ UHPDUNDEOH RQO\ IRU WKH
SDXFLW\RIFRPPHQWDU\RQVXEVHFWLRQ F 2IWKHWZR+RXVH
&RPPLWWHH5HSRUWVRQWKH&LYLO5LJKWV$FWRIRQO\RQH
HYHQPHQWLRQVVXEVHFWLRQ F DQGWKDWGLVFXVVLRQLVWHUVH7KH
+RXVH-XGLFLDU\&RPPLWWHHDXWKRUHG+55HSRUW1R
,, ZKLFKVWDWHVQRWRQO\WKDW&RQJUHVVLQWHQGHGWRFRGLI\
5XQ\RQEXWDOVRWKDW&RQJUHVVLQWHQGHGVXEVHFWLRQ F ³WR
SURKLELWUDFLDOGLVFULPLQDWLRQLQDOOFRQWUDFWVERWKSXEOLFDQG
SULYDWH´+5 5(3 12 ,, DW UHSULQWHGLQ
86&&$1 , GR QRW EHOLHYH WKDW
&RQJUHVV¶VIDLOXUHWRGLVFXVVWKHDSSOLFDWLRQRIVXEVHFWLRQ F
WRWKHRWKHUULJKWVHQXPHUDWHGLQVXEVHFWLRQ D PD\SURSHUO\
JLYHULVHWRWKHQDUURZPHDQLQJDVFULEHGWRWKHZRUG³ULJKWV´
-- 14 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
6HYHUDO FDVHV WKDW KDYH DOORZHG ³IXOO DQG HTXDO EHQHILW´ FODLPV
WR JR IRUZDUG ZLWKRXW VWDWH DFWLRQ KDYH LQYROYHG VHULRXV WKUHDWV WR D
SHUVRQ¶V VHFXULW\ LQ WKH IRUP RI SK\VLFDO YLROHQFH 6HH HJ &DUH\ Y
5XGHVHDO ) 6XSS Q 1' *D QRWLQJ WKDW FRXUW
KDG DOORZHG ³IXOO DQG HTXDO EHQHILW´ FODLP DJDLQVW SULYDWH DFWRU LQYROYHG
LQ .X .OX[ .ODQ LQFLGHQW EHFDXVH ³SURYLGHV D FDXVH RI DFWLRQ
DJDLQVW SULYDWH LQGLYLGXDOV IRU UDFLDOO\PRWLYDWHG LQWHQWLRQDOO\LQIOLFWHG
LQMXU\ DQG GRHV QRW UHTXLUH VWDWH DFWLRQ LQ WKH GHSULYDWLRQ RI ULJKWV´
+DZN Y 3HULOOR ) 6XSS 1' ,OO
FRQVWUXLQJ ODQJXDJH DQG KLVWRU\ RI VWDWXWH WR DOORZ FODLP DJDLQVW SULYDWH
LQGLYLGXDO ZKR HQJDJHG LQ YLFLRXV EHDWLQJ RI SODLQWLIIV PRWLYDWHG E\ UDFLDO
ZKLFKWKHOLWHUDODSSOLFDWLRQRIDVWDWXWHZLOOSURGXFHDUHVXOW
GHPRQVWUDEO\DWRGGVZLWKWKHLQWHQWLRQVRILWVGUDIWHUV,Q
VXFKFDVHVWKHLQWHQWLRQRIWKHGUDIWHUVUDWKHUWKDQWKHVWULFW
ODQJXDJHFRQWUROV´ LQWHUQDOTXRWDWLRQRPLWWHG $UHVXOWLV
QRW DEVXUG PHUHO\ EHFDXVH LW GRHV QRW FRPSRUW ZLWK WKH
UHYLHZLQJFRXUW¶VQRWLRQRIZKDWFRQVWLWXWHVJRRGSROLF\:H
W\SLFDOO\ HPEDUN XSRQ WKH H[FHSWLRQDO WDVN RI GLYLQLQJ
&RQJUHVV¶VLQWHQWRXWVLGHWKHOLWHUDOODQJXDJHRIWKHVWDWXWH
RQO\ZKHQWKHVWDWXWHSURGXFHVDUHVXOWQRWZKLFKZHGLVOLNH
EXW ZKLFK LV SDWHQWO\ LOORJLFDO RU FRQWUDU\ WR &RQJUHVV¶V
LQWHQW
6HFRQGWKHPDMRULW\KDVIDLOHGWRFRQVLGHUDGHTXDWHO\WKH
OLPLWLQJ ODQJXDJH VXUURXQGLQJ WKH ³IXOO DQG HTXDO EHQHILW´
FODXVHZKLFKVHUYHVWRFDELQERWKWKHQXPEHUDQGQDWXUHRI
FODLPVWKDWPD\EHEURXJKWXQGHUWKLVFODXVH2IFRXUVH³ZH
VKRXOGEHDQGDUHμUHOXFWDQWWRIHGHUDOL]H¶PDWWHUVWUDGLWLRQDOO\
FRYHUHGE\VWDWHFRPPRQODZ´3DWWHUVRQY0F/HDQ&UHGLW
8QLRQ86 LQWHUQDOTXRWDWLRQRPLWWHG
7KHFODXVHDWLVVXHKRZHYHUPD\RQO\EHLQYRNHGZKHQRQH
SDUW\GHQLHVDQRWKHUWKH³IXOODQGHTXDOEHQHILWRIDOOODZVDQG
SURFHHGLQJV IRU WKH VHFXULW\ RI SHUVRQV DQG SURSHUW\ DV LV
HQMR\HGE\ZKLWHFLWL]HQV´86& D HPSKDVLV
DGGHG 7KH³VHFXULW\RISHUVRQVDQGSURSHUW\´FODXVHFOHDUO\
OLPLWVWKHSRWHQWLDOFODVVRIFDVHVZKLFKPD\EHEURXJKWXQGHU
WKLVVHFWLRQ$OLWLJDQWPXVWGHPRQVWUDWHWKDWKHRUVKHZDV
HLWKHUGHQLHGWKHEHQHILWRIDODZRUSURFHHGLQJWKDWSURWHFWHG
D FRJQL]DEOH SURSHUW\ ULJKW RU WKDW LQYROYHG D FODLP RI
SHUVRQDOVHFXULW\0RUHRYHUWREULQJVXFFHVVIXOO\D
1R &KDSPDQY7KH+LJEHH&RPSDQ\
FODLP RI XQUHDVRQDEOH VHDUFK DQG VHL]XUH FDQQRW EH D VXEVWDQWLYH GXH
SURFHVV YLRODWLRQ RI WKH VHFRQG W\SH DV LW PXVW EH DQDO\]HG XQGHU WKH
UHDVRQDEOHQHVV VWDQGDUG QRW WKH VKRFNV WKH FRQVFLHQFH VWDQGDUG 6HH
8QLWHG 6WDWHV Y /DQLHU 6 &W Q
VWDWHDFODLPXQGHU&KDSPDQPXVWVKRZWKDW'LOODUG
GHSULYHGKHURIKHUFRQVWLWXWLRQDOULJKWVXQGHUFRORURIVWDWH
ODZ3DUUDWWY7D\ORU86 RYHUUXOHG
LQSDUWRQRWKHUJURXQGV'DQLHOVY:LOOLDPV86
7KHUHTXLUHPHQWRIVWDWHDFWLRQVHUYHVWZRLPSRUWDQW
SXEOLF SROLFLHV )LUVW LW SUHVHUYHV LQGLYLGXDO IUHHGRP E\
OLPLWLQJ WKH UHDFK RI IHGHUDO SRZHU 6HFRQG LW DYRLGV
LPSRVLQJRQWKHVWDWHUHVSRQVLELOLW\IRUFRQGXFWIRUZKLFKLW
FDQQRWEHIDLUO\EODPHG6HH/XJDUY(GPRQGVRQ2LO&R
86
$ SULYDWH SDUW\¶V DFWLRQV FRQVWLWXWH VWDWHDFWLRQXQGHU
ZKHUH WKH SULYDWH HQWLW\¶V DFWLRQV PD\ EH ³IDLUO\
DWWULEXWDEOHWRWKHVWDWH´/XJDU86DW,QRUGHUWR
GHWHUPLQHZKHWKHUWKHUHZDVVWDWHDFWLRQLQDSDUWLFXODUFDVH
WKH6XSUHPH&RXUWKDVGHYHORSHGWKUHHWHVWV WKHSXEOLF
IXQFWLRQ WHVW WKH VWDWH FRPSXOVLRQ WHVW DQG WKH
V\PELRWLFUHODWLRQVKLSRUQH[XVWHVW6HH:RORWVN\Y+XKQ
)G WK&LU ,QKHUEULHIRQDSSHDO
&KDSPDQDUJXHVWKDWVXPPDU\MXGJPHQWVKRXOGKDYHEHHQ
GHQLHG EHFDXVH WKHUH ZDV D JHQXLQH LVVXH RI PDWHULDO IDFW
UHJDUGLQJ ZKHWKHU WKHUH ZDV VWDWH DFWLRQ XQGHU HLWKHU WKH
SXEOLFIXQFWLRQWHVWRUWKHQH[XVWHVW
3XEOLF)XQFWLRQ7HVW
8QGHUWKHSXEOLFIXQFWLRQWHVWDSULYDWHSDUW\LVGHHPHGWR
EH D VWDWH DFWRU LI KH H[HUFLVHG SRZHUV WUDGLWLRQDOO\
H[FOXVLYHO\UHVHUYHGWRWKHVWDWH7KLVKDVEHHQLQWHUSUHWHG
QDUURZO\2QO\IXQFWLRQVOLNHKROGLQJHOHFWLRQVVHH)ODJJ
%URV Y %URRNV 86 H[HUFLVLQJ HPLQHQW
GRPDLQVHH-DFNVRQY0HWURSROLWDQ(GLVRQ&R86
DQGRSHUDWLQJDFRPSDQ\RZQHGWRZQVHH0DUVK
Y $ODEDPD 86 IDOO XQGHU WKLV
FDWHJRU\RIVWDWHDFWLRQ&RXUWVKDYHFRQVLVWHQWO\KHOGWKDW
-- 15 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
WKH PHUH IDFW WKDW WKH SHUIRUPDQFH RI SULYDWH VHFXULW\
IXQFWLRQV PD\ HQWDLO WKH LQYHVWLJDWLRQ RI D FULPH GRHV QRW
WUDQVIRUPWKHDFWLRQVRIDSULYDWHVHFXULW\RIILFHULQWRVWDWH
DFWLRQ6HH:DGHY%\OHV)G WK&LU
*DOODJKHUY1HLO<RXQJ)UHHGRP&RQFHUW)G
WK&LU :KLWHY6FULYQHU&RUS)G
WK&LU
,Q :KLWH WKH )LIWK &LUFXLW KHOG WKDW WKH GHWHQWLRQ RI D
VXVSHFWHGVKRSOLIWHULVQRWDQH[FOXVLYHVWDWHIXQFWLRQ
$PHUFKDQW¶VGHWHQWLRQRISHUVRQVVXVSHFWHGRIVWHDOLQJ
VWRUH SURSHUW\ VLPSO\ LV QRW DQ DFWLRQ H[FOXVLYHO\
DVVRFLDWHG ZLWK WKH VWDWH ([SHULHQFH WHDFKHV WKDW WKH
SULPHUHVSRQVLELOLW\IRUSURWHFWLRQRISHUVRQDOSURSHUW\
UHPDLQV ZLWK WKH LQGLYLGXDO $ VWRUHNHHSHU¶V FHQWUDO
PRWLYDWLRQLQGHWDLQLQJDSHUVRQZKRPKHEHOLHYHVWREH
LQWKHDFWRIVWHDOLQJKLVSURSHUW\LVVHOISURWHFWLRQQRW
DOWUXLVP6XFKDFWLRQFDQQRWORJLFDOO\EHDWWULEXWHGWR
WKHVWDWH
)GDW FLWDWLRQRPLWWHG $SSO\LQJWKHVHSULQFLSOHV
WR WKH FDVH DW KDQG WKH &RXUW LV VDWLVILHG WKDW WKH 'LOODUG
VHFXULW\ RIILFHU ZDV QRW SHUIRUPLQJ D IXQFWLRQ H[FOXVLYHO\
UHVHUYHGWRWKH6WDWHZKHQKHVWRSSHGDQGVHDUFKHG&KDSPDQ
8QGHUWKHSXEOLFIXQFWLRQWHVWWKHUHZDVQRVWDWHDFWLRQ
6\PELRWLF5HODWLRQVKLS1H[XV7HVW
8QGHU WKH V\PELRWLF RU QH[XV WHVW D SODLQWLII PXVW
GHPRQVWUDWHWKDWWKHUHLVDVXIILFLHQWO\FORVHQH[XVEHWZHHQ
WKHJRYHUQPHQWDQGWKHSULYDWHSDUW\¶VFRQGXFWVRWKDWWKH
FRQGXFWPD\EHWUHDWHGDVWKDWRIWKHVWDWHLWVHOI6HH-DFNVRQ
86DW7KXVDVWDWHFDQEHKHOGUHVSRQVLEOHIRUD
SULYDWHDFWLRQZKHQLWKDV³H[HUFLVHGFRHUFLYHSRZHURUKDV
SURYLGHG VXFK VLJQLILFDQW HQFRXUDJHPHQW HLWKHU RYHUW RU
FRYHUWWKDWWKHFKRLFHPXVWLQODZEHGHHPHGWREHWKDWRIWKH
6WDWH´6LPHVFXY(PPHW&RXQW\'HSWRI6RF6HUYLFHV
)G WK&LU TXRWLQJ%OXPY<DUHWVN\
86 7KH VWDWH PXVW EH LQWLPDWHO\
1R &KDSPDQY7KH+LJEHH&RPSDQ\
WKH FRQFXUUHQFH¶V TXRWLGLDQ SUHPLVH EXW , UHMHFW LWV
FRQFOXVLRQDVORJLFDOO\IODZHG$OWKRXJKWKHVWDWHGRHVPDNH
WKHODZRQHSULYDWHDFWRUPD\GHSULYHDQRWKHURIWKHIXOODQG
HTXDOEHQHILWRIWKRVHODZVMXVWDVUHDGLO\DVDVWDWHDFWRUDV
ZKHQWKHVWDWHSURYLGHVIRUHTXDODFFHVVWRSXEOLFIDFLOLWLHVE\
ODZ DQG SULYDWH SHUVRQV GHVLJQ WR GHQ\ UDFLDO PLQRULWLHV
DFFHVVWRVXFKSODFHVWKURXJKLQWLPLGDWLRQRUZKHQDSULYDWH
DFWRUVXEMHFWVDQRWKHUWRDSK\VLFDODWWDFNZKLFKZDVUDFLDOO\
LQVSLUHG
7HOOLQJO\WKHRQO\VXSSRUWWKHPDMRULW\FDQPXVWHUIRULWV
DVVHVVPHQW WKDW ³WKH IXOO DQG HTXDO EHQHILW FODXVH RI
VXEVHFWLRQ D FDQRQO\UHIHUWRVWDWHDFWLRQ´VXSUDDWLVD
7KLUG&LUFXLWGHFLVLRQ0DKRQHY:DGGOH)G G
&LU DXWKRUHGEHIRUHWKHDPHQGPHQWVDGGLQJWKH
ODQJXDJHLQVXEVHFWLRQ F /HIWXQVWDWHGE\WKHPDMRULW\LV
WKHIDFWWKDWQHLWKHUWKH6XSUHPH&RXUWQRUWKLVFRXUWKDVHYHU
OLPLWHG WKH DSSOLFDWLRQ RI VXEVHFWLRQ F WR WKH ³PDNH DQG
HQIRUFHFRQWUDFWV´FODXVHLQVXEVHFWLRQ D :KLOHLWLVWUXH
WKDW WKH ³PDNH DQG HQIRUFH FRQWUDFWV´ FODXVH LV WKH PRVW
OLWLJDWHGFODXVHRIWKHVWDWXWHQRQHRIWKHRWKHUHQXPHUDWHG
ULJKWVKDYHEHHQUHDGRXWRIWKHVWDWXWHE\WKH6XSUHPH&RXUW
:LWKQROHJDODXWKRULW\WRJXLGHLWWKHPDMRULW\ZRXOGKDYH
GRQHZHOOWRHUURQWKHVLGHRIFDXWLRQE\JLYLQJWKHZRUGVRI
VXEVHFWLRQ F WKHLU ³RUGLQDU\ FRQWHPSRUDU\ FRPPRQ
PHDQLQJ´+XGVRQ)GDW FLWLQJ3HUULQY8QLWHG
6WDWHV 86 ,QVWHDG WKH PDMRULW\¶V
FRQFOXVLRQWKDWWKHZRUG³ULJKWV´LQVXEVHFWLRQ F UHIHUVRQO\
WRWKHULJKWVWRPDNHDQGHQIRUFHDFRQWUDFWSODFHVDQXQGXH
UHVWULFWLRQ XSRQ WKH ODQJXDJH RI WKH VWDWXWH ZKLFK LV QRW
GLFWDWHGRUHYHQVXJJHVWHGE\RXUSUHFHGHQW
7KH PDMRULW\ DOVR FODLPV WKDW &KDSPDQ¶V UHDGLQJ RI WKH
VWDWXWHSURGXFHV³WKHDEVXUGUHVXOWRIIHGHUDOL]LQJVWDWHWRUW
ODZ´6XSUDDW)LUVW,EHOLHYHWKHPDMRULW\PLVXVHVWKH
GRFWULQHRIVWDWXWRU\LQWHUSUHWDWLRQZKLFKREOLJHVDUHYLHZLQJ
FRXUW WR HVFKHZ WKH OLWHUDO ODQJXDJH RI D VWDWXWH ZKHQ LW
SURGXFHV DQ DEVXUG UHVXOW 6HH 8QLWHG 6WDWHV Y 5RQ 3DLU
(QWHUV,QF86 ³7KHSODLQPHDQLQJ
RIOHJLVODWLRQVKRXOGEHFRQFOXVLYHH[FHSWLQWKHUDUHFDVHVLQ
-- 16 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
7KHPDMRULW\FRQWHQGVWKDWWKHVWDWXWHLVXQDPELJXRXVDQG
WKDWLWLVFOHDUWKDWWKHZRUG³ULJKWV´PHDQVRQO\FHUWDLQULJKWV
$FFRUGLQJWRWKHPDMRULW\³>L@PSOLFLWLQWKHFRQFHSWRIμIXOO
DQGHTXDOEHQHILWRIDOOODZVDQGSURFHHGLQJVIRUWKHVHFXULW\
RISHUVRQVDQGSURSHUW\¶LVVWDWHDFWLRQ´6XSUDDW,EHOLHYH
WKH PDMRULW\¶V DQDO\VLV LV LQKHUHQWO\ IODZHG )LUVW WKH
PDMRULW\GRHVQRWLQWHUSUHWWKHSODLQODQJXDJHRIWKHVWDWXWH
DVLWVKRXOGLQVWHDGWKHPDMRULW\DGPLWWHGO\LPSXWHVPHDQLQJ
WR WKH ODQJXDJH ZKHQ LW ORRNV WR ZKDW LV ³LPSOLFLW´ LQ WKH
SKUDVH ³IXOO DQG HTXDO EHQHILW RI DOO ODZV´ 7KH PDMRULW\
VWDWHVWKDW³EHFDXVHWKHVWDWHLVWKHVROHVRXUFHRIWKHODZLW
LVRQO\WKHVWDWHWKDWFDQGHQ\WKHIXOODQGHTXDOEHQHILWRIWKH
ODZ´6XSUDDW%HFDXVHWKHPDMRULW\LQVLVWVRQDVVLJQLQJ
LWV RZQ PHDQLQJ WR WKH VWDWXWH¶V ODQJXDJH WKH PDMRULW\ LV
FRPSHOOHG WR VHJUHJDWH DZNZDUGO\ FHUWDLQ SKUDVHV LQ
VXEVHFWLRQ D IURP WKH DSSOLFDWLRQ RI WKH ODQJXDJH LQ
VXEVHFWLRQ F 7KXVRQWKHPDMRULW\¶VUHDGLQJRQO\RQHRI
WKHHQXPHUDWHGULJKWVLQVXEVHFWLRQ D WKHULJKWWRPDNHDQG
HQIRUFH FRQWUDFWV PD\ EH YLRODWHG E\ D SULYDWH DFW RI
GLVFULPLQDWLRQZKLOHWKHRWKHUHQXPHUDWHGULJKWVPD\QRW,
GLVFHUQQREDVLVLQWKHVWDWXWH¶VODQJXDJHIRUVXFKDVWUDLQHG
XQQDWXUDO UHDGLQJ RI WKH VWDWXWH &I )UDQFHVFKL Y +\DWW
&RUS ) 6XSS ' 35 ³:H ZLOO QRW
DGKHUHWRWKHGXELRXVDQGLOORJLFDOSRVLWLRQWKDWWKHILUVWKDOI
RIGRHVQRWKDYHDVWDWHDFWLRQUHTXLUHPHQWZKLOHWKH
VHFRQGGRHV´ ,QGHHG,EHOLHYHWKDWKDG&RQJUHVVLQWHQGHG
WRFUDPSWKHPHDQLQJRIWKHZRUG³ULJKWV´LWHDVLO\FRXOG
KDYH GRQH VR ZKHQ LW DPHQGHG WKH VWDWXWH DQG DGGHG
VXEVHFWLRQ F $VQRWHGDERYHKRZHYHU&RQJUHVVLQFOXGHG
QRVXFKOLPLWLQJODQJXDJHLQWKHVWDWXWH7KHPDMRULW\FODLPV
WKDW &KDSPDQ¶V UHDGLQJ RI WKH VWDWXWH LV LQWHUQDOO\
LQFRQVLVWHQW$VWKHSUHFHGLQJGLVFXVVLRQUHYHDOV,EHOLHYHLW
LVWKHPDMRULW\WKDWPXVWHQJDJHLQLQWHUSUHWLYHFRQWRUWLRQVWR
DUULYHDWLWVGHVLUHGUHVXOW
6HFRQG,GLVDJUHHZLWKWKHVXEVWDQFHRIWKHPDMRULW\DQG
WKH FRQFXUUHQFH¶V DVVHUWLRQ WKDW WKH IXOO DQG HTXDO EHQHILW
FODXVH UHTXLUHV VWDWH DFWLRQ EHFDXVH ³>R@QO\ WKH VWDWH FDQ
SUHVFULEHODZVDQG>WKHUHIRUH@RQO\WKHVWDWHFDQGHSULYHDQ
LQGLYLGXDORIWKHEHQHILWRIWKRVHODZV´6XSUDDW,DFFHSW
1R &KDSPDQY7KH+LJEHH&RPSDQ\
LQYROYHGLQWKHFKDOOHQJHGFRQGXFW6HH:RORWVN\)G
DW
7KHLQTXLU\LVIDFWVSHFLILFDQGWKHSUHVHQFHRIVWDWHDFWLRQ
LV GHWHUPLQHG RQ D FDVH E\ FDVH EDVLV 6HH %XUWRQ Y
:LOPLQJWRQ 3DUNLQJ $XWK 86 )DFWRUV
WHQGLQJWRVKRZVWDWHDFWLRQPXVWEHH[DPLQHGLQGLYLGXDOO\
DQGLQWKHDJJUHJDWH6LPHVFX)GDW$SSO\LQJWKH
VWDWHDFWLRQGRFWULQHKRZHYHULV³VOLSSHU\DQGWURXEOHVRPH´
,QWHUQDWLRQDO6RF¶\IRU.ULVKQD&RQVFLRXVQHVV,QFY$LU
&DQDGD )G G &LU ,W KDV EHHQ
UHIHUUHGWRDVWKH³SDUDJRQRIXQFODULW\´*DOODJKHU)G
DW7KLVLVSDUWLFXODUO\WUXHLQWKHDUHDRIRIIGXW\SROLFH
RIILFHUVDFWLQJDVVHFXULW\JXDUGV
7KHDFWVRIDQRQGXW\SROLFHRIILFHUDUHDFWVGRQH³XQGHU
FRORU RI ODZ´ ZKHWKHU GRQH LQ WKH SURSHU SHUIRUPDQFH RI
RIILFLDO GXWLHV RU ZKHWKHU GRQH RXWVLGH RI WKH RIILFHU¶V
DXWKRULW\ ³$FWV RI >SROLFH@ RIILFHUV ZKR XQGHUWDNH WR
SHUIRUPWKHLURIILFLDOGXWLHVDUHLQFOXGHGZKHWKHUWKH\KHZWR
WKHOLQHRIWKHLUDXWKRULW\RURYHUVWHSLW´6FUHZVY8QLWHG
6WDWHV 86 )XUWKHU FRXUWV KDYH
FRQVLVWHQWO\KHOGWKDWDQRIIGXW\SROLFHRIILFHUZKRZRUNVDV
D VHFXULW\ JXDUG HQJDJHV LQ VWDWH DFWLRQ ZKHQ KH VHHNV WR
SHUIRUPRIILFLDOSROLFHGXWLHVDQGSUHVHQWVKLPVHOIDVDSROLFH
RIILFHUYLDDVWDWHPHQWLGHQWLI\LQJKLPVHOIDXQLIRUPRUD
EDGJH)RUH[DPSOHLQ$EUDKDPY5DVR)G G
&LU WKHFRXUWIRXQGVWDWHDFWLRQLQWKHFDVHRIDQRII
GXW\RIILFHUZKRZRUNHGDVDVHFXULW\JXDUGLQDVKRSSLQJ
PDOO7KHFRXUWH[SODLQHGWKDWVKHDFWHGXQGHUFRORURIODZ
ZKHQVKHVKRWDVKRSOLIWHUEHFDXVHVKHZDVZHDULQJDSROLFH
XQLIRUPVKHUHSHDWHGO\RUGHUHGWKHVXVSHFWWRVWRSDQGVKH
VRXJKWWRDUUHVWWKHVXVSHFW6HHLGDW$FFRUG/XVE\Y
7* <6WRUHV,QF)G WK&LU RII
GXW\RXWRIXQLIRUPSROLFHRIILFHUHPSOR\HGDVVWRUHVHFXULW\
JXDUG ZKR VKRZHG EDGJH DQG LGHQWLILHG KLPVHOI DV SROLFH
DFWHGXQGHUFRORURIODZ %HQVFKRWHUY%URZQ1R
-:/86'LVW/H[LV '.DQ-XQH
VHFXULW\JXDUGVZKRLGHQWLILHGWKHPVHOYHVDVSROLFHDQGWROG
SODLQWLIIKHFRXOGEHDUUHVWHGIRUXQVDIHGULYLQJZHUHQRWVWDWH
-- 17 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
DFWRUVEHFDXVHWKH\GLGQRWWDNHSROLFHDFWLRQ E\ DUUHVWLQJ
SODLQWLIILQVWHDGWKH\FDOOHGWKHLUSULYDWHHPSOR\HU +HUUHUD
Y&KLVR[&RUS1R&86'LVW/H[LV
1',OO2FW ZKHQRIIGXW\RXWRIXQLIRUPSROLFH
RIILFHUV HPSOR\HG DV VWDGLXP VHFXULW\ JXDUGV GHWDLQHG
VXVSHFWHGWLFNHWVFDOSHULQVWDGLXPRIILFHWKH\GLGQRWDFW
XQGHU FRORU RI ODZ EHFDXVH WKH\ GLG QRW WDNH DQ\ DFWLRQ
UHODWHGWRWKHLUGXWLHVDVSROLFH (ZLQJY%XGJHW5HQW$&DU
1R&86'LVW/H[LV 1',OO6HSW
QR VWDWH DFWLRQ ZKHUH RIIGXW\ RXW RI XQLIRUP
SROLFHZRPDQLGHQWLILHGKHUVHOIDVRIIGXW\RIILFHUDQGFDOOHG
SROLFHWRPDNHDUUHVW
7KH 6L[WK &LUFXLW KDV JRQH HYHQ IXUWKHU E\ KROGLQJ WKDW
ZKHQ DQ RIILFHU DFWV SXUVXDQW WR KLV RIILFLDO GXW\ HYHQ
ZLWKRXW LGHQWLI\LQJ KLPVHOI DV D SROLFHPDQ DQG ZLWKRXW D
XQLIRUPRUEDGJHKHHQJDJHVLQVWDWHDFWLRQ6HH6WHQJHOY
%HOFKHU)G WK&LU 7KHIDFWWKDWDSROLFH
RIILFHULVRQRURIIGXW\RULQRURXWRIXQLIRUPGRHVQRW
GHWHUPLQHZKHWKHUKLVDFWLRQVDUHVWDWHDFWLRQV&RXUWVPXVW
H[DPLQHWKHQDWXUHRIWKHDFWSHUIRUPHG6HHLGDW,Q
6WHQJHODQRIIGXW\SROLFHRIILFHULQWHUYHQHGLQDEDUURRP
GLVSXWH7KHRIILFHUPDFHGVKRWDQGNLOOHGWZRLQGLYLGXDOV
DQGSDUDO\]HGDWKLUGGXULQJWKHDOWHUFDWLRQ7KHLQGLYLGXDOV
EURXJKWDFLYLOULJKWVVXLWDQGWKHRIILFHUGHIHQGHGFODLPLQJ
WKDWKHZDVQRWOLDEOHXQGHUEHFDXVHKLVDFWLRQVZHUH
QRWWDNHQXQGHUFRORURIODZ7KHRIILFHUFODLPHGWKDWDWWKH
WLPHKHZDVHQJDJHGLQSULYDWHVRFLDODFWLYLW\DQGZDVDFWLQJ
DVDSULYDWHFLWL]HQ$OWKRXJKWKHRIILFHUZDVQRWRQGXW\DQG
QRWLQXQLIRUPDQGKHGLGQRWLGHQWLI\KLPVHOIDVDQRIILFHUDW
DQ\WLPHGXULQJWKHDOWHUFDWLRQWKHFRXUWKHOGWKDWKHZDVLQ
IDFWDVWDWHDFWRU+HXVHGPDFHDQGDSLVWROWKDWWKHSROLFH
GHSDUWPHQW UHTXLUHG KLP WR FDUU\ DW DOO WLPHV DQG PRVW
LPSRUWDQWO\SROLFHGHSDUWPHQWSROLF\UHTXLUHGKLPWRWDNH
DFWLRQWRLQWHUYHQHLQDQ\FULPLQDODFWLYLW\HYHQZKHQKHZDV
RIIGXW\7KHRIILFHUDFWHGSXUVXDQWWRKLVRIILFLDOGXW\
,QFRQWUDVWZKHQDSROLFHRIILFHUDFWVDVDSULYDWHFLWL]HQ
QRW SXUVXDQW WR SROLFH GHSDUWPHQW SROLF\ DQG ZLWKRXW
LGHQWLI\LQJ KLPVHOI DV DQ RIILFHU KLV DFWLRQV DUH SULYDWH
1R &KDSPDQY7KH+LJEHH&RPSDQ\
,Q KLV FRQFXUULQJ RSLQLRQ -XGJH 6XKUKHLQULFK VWDWHV WKDW P\
DQDO\VLV RI PXVW EH LQFRUUHFW EHFDXVH ³>Q@R RQH FDQ VHULRXVO\
DUJXH WKDW DQ LQGLYLGXDO FDQ VXEMHFW DQRWKHU LQGLYLGXDO WR XQHTXDO
SXQLVKPHQW RU WD[HV´ DQG WKDW WKHUHIRUH WKH ³OLNH SXQLVKPHQW´ FODXVH PXVW
UHTXLUH VWDWH DFWLRQ 6XSUD DW +H DUJXHV WKDW ³>W@KH RQO\ ZD\ WKH
GLVVHQW¶V DUJXPHQW ZRUNV LV LI RQH VWULSV WKH ODQJXDJH RI WKH VHFRQG DQG
WKLUG VXEFODXVHV RI VXEVHFWLRQ D RI WKHLU SODLQ PHDQLQJ´ 6XSUD DW
-XGJH 6XKUKHLQULFK¶V DQDO\VLV KDV VXSHUILFLDO DSSHDO EHFDXVH RXU SUHVHQW
GD\ XQGHUVWDQGLQJ RI WKH WHUPV ³SXQLVKPHQW´ ³SDLQV´ ³SHQDOWLHV´ HWF
FDOOV WR PLQG VWDWH LQYROYHPHQW ,Q RXU H[SHULHQFH LW LV WKH VWDWH WKDW
XVXDOO\ LPSRVHV SXQLVKPHQW HWF XSRQ LWV FLWL]HQV 6XFK ZDV QRW WKH FDVH
KRZHYHU ZKHQ WKH $FW RI WKH SUHFXUVRU WR ZDV SDVVHG $W
WKDW WLPH &RQJUHVV ZDV HVSHFLDOO\ FRQFHUQHG ZLWK SURKLELWLQJ WKRVH
LQFLGHQWV RI SULYDWH UDFLDOO\ PRWLYDWHG YLROHQFH ² WKH SXQLVKPHQW SDLQV
RU SHQDOWLHV ² ZKLFK ZHUH FRPPRQSODFH LQ WKH 6RXWK 7KH &RQJUHVV WKDW
GHEDWHG WKH $FW KDG EHIRUH LW UHSRUWV WKDW ³GHVFULEHG D SDWWHUQ RI
SULYDWH YLROHQFH μE\ PHQ ZKR DQQRXQFH WKHLU GHWHUPLQDWLRQ WR WDNH WKH
ODZ LQWR WKHLU RZQ KDQGV ¶ 7KLV YLROHQFH ZDV QRW UDQGRP EDVHG RQ
PHUH UDFLDO DQLPRVLW\ EXW IUHTXHQWO\ ZDV DLPHG DW SUHYHQWLQJ WKH
)UHHGPHQ IURP H[HUFLVLQJ WKHLU QHZ ULJKWV ´ %DUU\ 6XOOLYDQ
+LVWRULFDO 5HFRQVWUXFWLRQ 5HFRQVWUXFWLRQ +LVWRU\ DQG WKH 3URSHU 6FRSH
RI 6HFWLRQ <$/( /- IRRWQRWH RPLWWHG
,QGHHG WKH $FW ³ZDV SURSRVHG DQG ILQDOO\ DGRSWHG DJDLQVW >D@
EDFNJURXQG RI UHVWULFWLYH ODZV SULYDWH GLVFULPLQDWLRQ DQG YLROHQFH´
%DUU\ / 5HIVLQ 7KH /RVW &ODXVHV RI 6HFWLRQ $ 6RXUFH RI *UHDWHU
3URWHFWLRQ $IWHU 3DWWHUVRQ Y 0F/HDQ &UHGLW 8QLRQ 8 3$ / 5(9
$V P\ GLVFXVVLRQ LQIUD RI WKH KLVWRU\ VXUURXQGLQJ WKH SDVVDJH
RI WKH $FW UHYHDOV WKH VWDWXWH¶V RULJLQDO SKUDVLQJ ZKLFK LQFOXGHG WKH
ODQJXDJH ³SXQLVKPHQW SDLQV DQG SHQDOWLHV´ ZDV GLUHFWHG WR SULYDWH
FRQGXFW :KLOH ODWHU ODQJXDJH LQFOXGLQJ WKH SKUDVH ³WD[HV OLFHQVHV DQG
H[DFWLRQV´ ZKLFK ZDV DGGHG LQ PD\ LQGHHG UHIHU SULPDULO\ WR VWDWH
DFWLRQ WKLV ZRXOG RQO\ PHDQ WKDW WKH ³OLNH SXQLVKPHQW´ FODXVH PD\ EH
LQYRNHG E\ HLWKHU SULYDWH RU VWDWH DFWLRQ GHSHQGLQJ RQ ZKLFK H[SOLFLW
JXDUDQWHH RI HTXDO WUHDWPHQW LV LPSOLFDWHG ,QGHHG , EHOLHYH WKH
ODQJXDJH ZDV DGGHG WR H[SDQG WKH SURWHFWLRQV RI WKH ³OLNH SXQLVKPHQW´
FODXVH QRW WR PLQLPL]H WKHP ,Q DQ\ FDVH , GR QRW EHOLHYH WKDW SRVVLEOH
DPELJXLW\ VXUURXQGLQJ WKH ³OLNH SXQLVKPHQW´ FODXVH GHWUDFWV IURP P\
DUJXPHQW WKDW WKH ³IXOO DQG HTXDO EHQHILW´ FODXVH PD\ EH LQYRNHG E\
SXEOLF DQG SULYDWH FRQGXFW DV LW LV LQFRQWHVWLEOH WKDW WKLV ODQJXDJH KDV
EHHQ SUHVHQW LQ WKH VWDWXWH VLQFH LWV LQFHSWLRQ
HQXPHUDWHG ULJKWV LQ VXEVHFWLRQ D 7KH ³IXOO DQG HTXDO
EHQHILW´FODXVHLVRQHRIWKRVHULJKWV
-- 18 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
F 3URWHFWLRQDJDLQVWLPSDLUPHQW
7KHULJKWVSURWHFWHGE\WKLVVHFWLRQDUHSURWHFWHGDJDLQVW
LPSDLUPHQW E\ QRQJRYHUQPHQWDO GLVFULPLQDWLRQ DQG
LPSDLUPHQWXQGHUFRORURI6WDWHODZ
86& D F
,EHOLHYHWKDWWKHODQJXDJHRIWKLVVWDWXWHLVSHUIHFWO\FOHDU
DFFRUGLQJWRVXEVHFWLRQ F WKHULJKWVSURWHFWHGE\VXEVHFWLRQ
D LHWKHULJKWV³WRPDNHDQGHQIRUFHFRQWUDFWVWRVXHEH
SDUWLHVJLYHHYLGHQFHDQGWRWKHIXOODQGHTXDOEHQHILWRIDOO
ODZV DQG SURFHHGLQJV IRU WKH VHFXULW\ RI SHUVRQV DQG
SURSHUW\´DUHSURWHFWHGDJDLQVWLPSDLUPHQWE\SULYDWHDFWVRI
GLVFULPLQDWLRQ6XEVHFWLRQ F GRHVQRWVWDWHWKDWVRPHULJKWV
LQ WKH VHFWLRQ DUH SURWHFWHG EXW RWKHUV DUH QRW WKHUH LV QR
PRGLILHUOLPLWLQJWKHZRUG³ULJKWV´WRRQO\FHUWDLQSKUDVHVLQ
VXEVHFWLRQ D 2QP\UHDGLQJRIWKHOLWHUDOODQJXDJHRIWKH
WZRVHFWLRQVDVZULWWHQDQGWKHQSXUSRVHIXOO\DPHQGHGE\
&RQJUHVV WKH ³ULJKWV SURWHFWHG E\ WKLV VHFWLRQ´ PXVW
DFFRUGLQJ WR WKDW SKUDVH¶V QDWXUDO PHDQLQJ PHDQ DOO
1R &KDSPDQY7KH+LJEHH&RPSDQ\
DFWLRQV ZKLFK GR QRW IDOO XQGHU )RU H[DPSOH LQ
%DUQDY&LW\RI3HUWK$PER\)G G&LU
RIIGXW\RIILFHUVZKRZHUHRXWRIWKHLUMXULVGLFWLRQDVVDXOWHG
DQLQGLYLGXDOGXULQJDSHUVRQDODOWHUFDWLRQ7KHFRXUWKHOG
WKDWWKHRIILFHUVGLGQRWDFWXQGHUFRORURIODZHYHQWKRXJK
WKH\XVHGDQRIILFLDOQLJKWVWLFNGXULQJWKHDVVDXOW7KHFRXUW
HPSKDVL]HG WKDW ZKLOH WKH XVH RI WKH RIILFLDO ZHDSRQ
³IXUWKHUHG´ WKH FRQVWLWXWLRQDO YLRODWLRQ FRXUWV JHQHUDOO\
UHTXLUH DGGLWLRQDO LQGLFLD RI VWDWH DXWKRULW\ EHIRUH ILQGLQJ
VWDWHDFWLRQ6HHLGDW
6LPLODUO\LQ5RELQVRQY'DYLV)G WK
&LU WKHFRXUWKHOGWKDWWRZQSROLFHHPSOR\HGDVSDUW
WLPHFROOHJHVHFXULW\RIILFHUVGLGQRWDFWXQGHUFRORURIODZLQ
WKHFRXUVHRITXHVWLRQLQJVWXGHQWVGXULQJDFROOHJHLQLWLDWHG
GUXJ LQYHVWLJDWLRQ $OWKRXJK WKH RIILFHUV ZRUH WKHLU WRZQ
SROLFHXQLIRUPVDQGVLGHDUPVWKH\GLGQRWSHUIRUPDQ\GXW\
LPSRVHGRQWKHPE\WKHVWDWHDQGWKH\GLGQRWSXUSRUWWRDFW
DV WRZQ SROLFH GXULQJ WKH LQYHVWLJDWLRQ 7KH FROOHJH KDG
LQVWUXFWHG WKHP QRW WR PDNH DQ\ DUUHVWV GXULQJ WKH
LQYHVWLJDWLRQ
-XVW DV DQ RIIGXW\ SROLFH RIILFHU ZKR DFWV ZLWK DFWXDO
DXWKRULW\VHH6WHQJHOVXSUDLVGHHPHGWREHDVWDWHDFWRUD
SULYDWHSDUW\ZKRSXUSRUWVWRH[HUFLVHRIILFLDODXWKRULW\FDQEH
D VWDWH DFWRU ³,W LV >DOVR@ FOHDU WKDW XQGHU μFRORU¶ RI ODZ
PHDQVXQGHUμSUHWHQVH¶RIODZ´6FUHZV86DW,Q
*ULIIHQ Y 0DU\ODQG 86 D SULYDWH SDUN
HPSOR\HGDVHFXULW\JXDUGZKRZDVGHSXWL]HGDVDFRXQW\
VKHULII$OWKRXJKWKHJXDUGZDVDQDJHQWRIWKHSULYDWHSDUN
RZQHUDQGDFWHGDVDSULYDWHVHFXULW\JXDUGWKH&RXUWKHOG
WKDW KH DFWHG XQGHU FRORU RI ODZ :KHQ KH RUGHUHG WKH
SODLQWLIIWROHDYHWKHSDUNHVFRUWHGKLPRXWDQGDUUHVWHGKLP
WKHJXDUGZRUHDFRXQW\VKHULII¶VEDGJHLGHQWLILHGKLPVHOIDV
DGHSXW\VKHULIIDQGSXUSRUWHGWRH[HUFLVHWKHDXWKRULW\RID
GHSXW\VKHULII6HHLGDW
,I DQ LQGLYLGXDO LV SRVVHVVHG RI VWDWH DXWKRULW\ DQG
SXUSRUWVWRDFWXQGHUWKDW DXWKRULW\KLVDFWLRQLVVWDWH
DFWLRQ,WLVLUUHOHYDQWWKDWKHPLJKWKDYHWDNHQWKHVDPH
-- 19 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
DFWLRQKDGKHDFWHGLQDSXUHO\SULYDWHFDSDFLW\RUWKDWWKH
SDUWLFXODUDFWLRQZKLFKKHWRRNZDVQRWDXWKRUL]HGE\
VWDWHODZ
,G
,QWKHFRQWH[WRIVWRUHVHFXULW\RIILFHUVFRXUWVDOVRKDYH
IRXQG VWDWH DFWLRQ ZKHUH WKHUH ZDV D SUHDUUDQJHG SODQ
EHWZHHQ WKH SROLFH DQG WKH PHUFKDQW 7KXV LQ 6PLWK Y
%URRNVKLUH%URV)G WK&LU WKHFRXUWKHOG
WKDW WKHUH ZDV VWDWH DFWLRQ EHFDXVH WKH SROLFH URXWLQHO\
DUUHVWHGVXVSHFWHGVKRSOLIWHUVVROHO\EDVHGRQWKHLQIRUPDWLRQ
SURYLGHG E\ WKH PHUFKDQW ZLWKRXW DQ\ LQGHSHQGHQW
LQYHVWLJDWLRQ &I &UX] Y 'RQQHOO\ )G G &LU
ZKHUH QR SUHH[LVWLQJ SODQ EHWZHHQ PHUFKDQW DQG
SROLFH DQG SROLFH FRQGXFWHG LQGHSHQGHQW LQYHVWLJDWLRQ
PHUFKDQW¶V GHWHQWLRQ RI VXVSHFWHG VKRSOLIWHU ZDV QRW VWDWH
DFWLRQ :KLWH)GDW VDPH :KHUHDVWDWHVWDWXWH
DXWKRUL]HVDPHUFKDQWWRGHWDLQDVXVSHFWHGVKRSOLIWHUIRUWKH
SXUSRVHRIFDOOLQJWKHSROLFHDPHUFKDQWZKRDFWVSXUVXDQWWR
WKHVWDWXWHLVHQJDJHGLQSULYDWHDFWLRQVRORQJDVWKHSROLFH
PDNHWKHDUUHVWEDVHGRQWKHLURZQMXGJPHQWDQGQRWEDVHGRQ
D SUHH[LVWLQJ SODQ RU EDVHG VROHO\ RQ WKH PHUFKDQW¶V
MXGJPHQW 6HH /HZLV ) 6XSS DW $QGHUVRQ Y
5DQGDOO3DUN0DOO&RUS)6XSS 1'
2KLR ³>6@WDWHDFWLRQFDQQRWEHIRXQGZKHUHWKH
>VWDWH@ VWDWXWHV GR QRW FRPSHO GHWHQWLRQ RI WUHVSDVVHUV RU
VKRSOLIWHUV EXW PHUHO\ DXWKRUL]H DQG DFTXLHVFH LQ FHUWDLQ
SURFHGXUHVIRUGHWHQWLRQLIDSULYDWHSDUW\HOHFWVWRGRVR´,G
DW
&RXUWV KDYH DOVR ORRNHG WR RWKHU IDFWRUV WR GHWHUPLQH
ZKHWKHU WKHUH ZDV VWDWH DFWLRQ VXFK DV JRYHUQPHQW
UHJXODWLRQWKHH[LVWHQFHRIDJRYHUQPHQWFRQWUDFWDQGGXDO
HPSOR\PHQW(DFKRIWKHVHVWDQGLQJDORQHKDVEHHQGHHPHG
LQVXIILFLHQWWRFRQVWLWXWHVWDWHDFWLRQ6HH-DFNVRQ86
DW H[WHQVLYHJRYHUQPHQWDOUHJXODWLRQVWDQGLQJDORQH
LVQRWVXIILFLHQWWRHVWDEOLVKVWDWHDFWLRQ 5HQGHOO%DNHUY
.RKQ86 PHUHIDFWWKDWSULYDWH
HQWLW\ FRQWUDFWHG ZLWK JRYHUQPHQW GRHV QRW FRQYHUW WKH
1R &KDSPDQY7KH+LJEHH&RPSDQ\
BBBBBBBBBBBBBB
',66(17
BBBBBBBBBBBBBB
.$5(11(/6210225(&LUFXLW-XGJHGLVVHQWLQJ,
UHVSHFWIXOO\GLVVHQWIURPERWKWKHPDMRULW\¶VGHWHUPLQDWLRQ
WKDWWKH³IXOODQGHTXDOEHQHILW´FODXVHLQ86&
GRHV QRW DSSO\ WR SULYDWH FRQGXFW DQG LWV FRQFOXVLRQ ZLWK
UHVSHFWWRWKHFODLPWKDWWKHUHLVQRJHQXLQHLVVXHRI
PDWHULDOIDFWDVWRZKHWKHUWKH'LOODUGVHFXULW\JXDUG¶VDFWLRQV
ZHUHIDLUO\DWWULEXWDEOHWRWKHVWDWH
,³)8//$1'(48$/%(1(),7´&/$86(
,EHJLQDV,PXVWE\H[DPLQLQJWKHODQJXDJHRIWKHVWDWXWH
+XGVRQY5HQR)G WK&LU ³$
IDPLOLDUFDQRQRIVWDWXWRU\FRQVWUXFWLRQ LVWKDWWKHVWDUWLQJ
SRLQWIRULQWHUSUHWLQJDVWDWXWHLVWKHODQJXDJHRIWKHVWDWXWH
LWVHOI´ 6HFWLRQVWDWHV
D 6WDWHPHQWRIHTXDOULJKWV
$OOSHUVRQVZLWKLQWKHMXULVGLFWLRQRIWKH8QLWHG6WDWHV
VKDOOKDYHWKHVDPHULJKWLQHYHU\6WDWHDQG7HUULWRU\WR
PDNH DQG HQIRUFH FRQWUDFWV WR VXH EH SDUWLHV JLYH
HYLGHQFHDQGWRWKHIXOODQGHTXDOEHQHILWRIDOOODZVDQG
SURFHHGLQJVIRUWKHVHFXULW\RISHUVRQVDQGSURSHUW\DVLV
HQMR\HGE\ZKLWHFLWL]HQVDQGVKDOOEHVXEMHFWWROLNH
SXQLVKPHQW SDLQV SHQDOWLHV WD[HV OLFHQVHV DQG
H[DFWLRQVRIHYHU\NLQGDQGWRQRRWKHU
-- 20 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
,GDW7KH5XQ\RQ&RXUWUHOLHGRQLWVHDUOLHUGHFLVLRQLQ
-RQHVWRKROGWKDWWKH³PDNHDQGHQIRUFHFRQWUDFWV´FODXVHRI
DSSOLHVWRSULYDWHDVZHOODVSXEOLFFRQWUDFWV,GDW
7KH5XQ\RQFRXUWHPSKDVL]HGWKHFRPPRQKHULWDJHRI
DQG,G$JDLQKRZHYHUWKHLVVXHEHIRUHWKH
FRXUWWKHPDNLQJDQGHQIRUFLQJRIDFRQWUDFWOLNHWKHVDOHRU
OHDVHRISURSHUW\LVWKHNLQGRIXQGHUWDNLQJWKDWSULYDWHDV
ZHOO DV VWDWH DFWRUV DUH FDSDEOH RI SHUIRUPLQJ 7KXV WKH
5XQ\RQ &RXUW¶V UHPDUNV VKRXOG QRW EH VWUHWFKHG WR ILW D
GLVVLPLODUFDWHJRU\RIFRQGXFW
)LQDOO\ WKH GLVVHQW XUJHV D EURDG LQWHUSUHWDWLRQ EHFDXVH
LVSDUWRIDUHPHGLDOVWDWXWH+RZHYHUDVZHKDYH
VWDWHG LQ WKH SDVW WKH PHUH IDFW WKDW D VWDWXWH KDV D EURDG
UHPHGLDOSXUSRVHLVQRWDFDUWHEODQFKHIRUDFRXUWWRH[SDQG
WKHVWDWXWHWRLQFOXGHSURWHFWLRQVQRWGHVFULEHGLQWKHVWDWXWH
&I1L[RQY.HQW&RXQW\)G WK&LU
HQEDQF KROGLQJWKDWWKHDPHQGPHQWVWRWKH9RWLQJ5LJKWV
$FW GLG ³QRW UHIOHFW D EURDG DQG ERXQGOHVV μWUHQG¶ WR
H[SDQGWKH$FWWRSURWHFWFODVVHVQRWGHVFULEHGLQWKH$FWRU
WRSURWHFWFRPELQDWLRQVRIFODVVHVQRWGHVFULEHGLQWKH$FW´
,QVKRUWWKHGLVVHQW¶VLQWHUSUHWDWLRQPXVWEHUHMHFWHGDVD
IDFLOH DWWHPSW DW DQDO\]LQJ D FRPSOH[ DQG PXOWLIDFHWHG
VWDWXWH WKDW VHHNV WR HOLPLQDWH YDULRXV IRUPV RI SULYDWH
GLVFULPLQDWLRQ DQG YDULRXV IRUPV RI GLVFULPLQDWRU\ VWDWH
DFWLRQ
1R &KDSPDQY7KH+LJEHH&RPSDQ\
SULYDWHDFWLRQVLQWRVWDWHDFWLRQV :RORWVN\)GDW
³$FWVRISULYDWHFRQWUDFWRUVGRQRWEHFRPHWKHDFWVRIWKH
JRYHUQPHQW E\ UHDVRQ RI WKHLU VLJQLILFDQW RU HYHQ WRWDO
HQJDJHPHQWLQSHUIRUPLQJSXEOLFFRQWUDFWV´ 6LPHVFX
)GDW IDFWWKDWLQGLYLGXDOLVGXDOHPSOR\HHRISULYDWH
VHFWRU DQG RI JRYHUQPHQW IRU SXUSRVHV RI ZRUNHUV¶
FRPSHQVDWLRQLVQRWUHOHYDQW
+HUHWKH'LOODUGVHFXULW\JXDUGZKRVWRSSHGDQGVHDUFKHG
&KDSPDQ ZDV DQ RIIGXW\ VKHULII¶V GHSXW\ ZHDULQJ KLV
RIILFLDOVKHULII¶VGHSDUWPHQWXQLIRUPEDGJHDQGVLGHDUP+H
EULHIO\VWRSSHGDQGVHDUFKHG&KDSPDQEXWGLGQRWDUUHVWRU
WKUHDWHQ WR DUUHVW KHU QRU GLG KH FRQWDFW WKH VKHULII¶V
GHSDUWPHQW8QGHUWKHFLUFXPVWDQFHVRIWKLVFDVHWKHRII
GXW\GHSXW\GLGQRWDFWSXUVXDQWWRKLVRIILFLDOGXWLHVDQGWKXV
GLGQRWHQJDJHLQVWDWHDFWLRQ
&KDSPDQDUJXHVWKDWWKHVHFXULW\JXDUGZDVDVWDWHDFWRU
EHFDXVHDVDQRIIGXW\VKHULII¶VGHSXW\KHKDGWKHSRZHUWR
DUUHVWDQGWRWUDQVSRUWVXVSHFWVWRWKHSROLFHVWDWLRQKHFRXOG
VLJQDQDUUHVWZDUUDQWZLWKKLVUDQNDQGEDGJHQXPEHUDQGKH
FRXOGUXQDQRXWVWDQGLQJZDUUDQWFKHFNRQGHWDLQHGVXVSHFWV
DQGDUUHVWRQDQ\RXWVWDQGLQJZDUUDQW:KLOHWKHRIIGXW\
RIILFHUVHFXULW\JXDUGUHWDLQHGWKHSRZHUWRDFWDVDVKHULII¶V
GHSXW\LQWKLVFDVHKHGLGQRWH[HUFLVHWKDWSRZHU+HGLGQRW
DUUHVWRUWKUHDWHQWRDUUHVW&KDSPDQQRUGLGKHFRQWDFWWKH
VKHULII¶VGHSDUWPHQW7KHQDWXUHRIKLVDFWLRQVZHUHQRWVWDWH
DFWLRQV
&KDSPDQDOVRDUJXHVWKDWWKHUHZDVVWDWHDFWLRQEHFDXVHWKH
VKHULII¶VGHSDUWPHQWUHWDLQVFRQWURORYHUWKHGHSXWLHVZKLOH
WKH\ZRUNDW'LOODUG7KHVKHULII¶VGHSDUWPHQWUHTXLUHVRII
GXW\RIILFHUVWRIROORZGHSDUWPHQWUXOHVDQGSURFHGXUHVWKH
GHSDUWPHQWKDVWRDSSURYHRIDGHSXW\ZRUNLQJDW'LOODUGDQG
WKHGHSDUWPHQWFDQWHUPLQDWHDQRIILFHU¶VRIIGXW\ZRUNDW
'LOODUG$OVRWKHGHSDUWPHQWSRVWVMRERSHQLQJVDW'LOODUG
,QDGGLWLRQXQWLO$SULORIWKHUHZDVDQDQQXDOZULWWHQ
LQGHPQLW\DQGKROGKDUPOHVVDJUHHPHQWEHWZHHQ'LOODUGDQG
WKH VKHULII GHSDUWPHQW &KDSPDQ¶V DUJXPHQW ODFNV PHULW
EHFDXVHQRQHRIWKHIRUHJRLQJIDFWVDPRXQWVWRHYLGHQFHRID
-- 21 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
SUHDUUDQJHGSODQEHWZHHQWKHVKHULII¶VGHSDUWPHQWDQG'LOODUG
FRQFHUQLQJWKHH[HFXWLRQ RUVFRSHRIWKHVHFXULW\RIILFHU¶V
GXWLHVQRUGRHVLWFRQVWLWXWHHYLGHQFHRIDVWDWHODZZKLFK
FRPSHOOHGWKHVHFXULW\JXDUGWRDFW6HH/HZLV)6XSS
DW$QGHUVRQ)6XSSDW0RUHRYHUDV
H[SODLQHG DERYH WKH VHFXULW\ JXDUG LQ WKLV FDVH GLG QRW
SHUIRUPRUVHHNWRSHUIRUPKLVRIILFLDOGXWLHVDVDVKHULII¶V
GHSXW\LQVWHDGKHDFWHGSXUVXDQWWRKLVGXWLHVDVDSULYDWH
VHFXULW\ JXDUG $FFRUGLQJO\ WKH GLVWULFW FRXUW¶V UXOLQJ
JUDQWLQJ VXPPDU\ MXGJPHQW LQ IDYRU RI 'LOODUG DQG
GLVPLVVLQJWKHFODLPLVDIILUPHG
,9
7KHHTXDOEHQHILWFODXVHRI86&UHTXLUHVVWDWH
DFWLRQDVGRHV86&%HFDXVHWKHDFWLRQVRIWKH
RIIGXW\VKHULII¶VGHSXW\'LOODUGHPSOR\HGDVDVHFXULW\JXDUG
LQWKLVFDVHZHUHSULYDWHDFWLRQVWKHGLVWULFWFRXUW¶VGLVPLVVDO
RI&KDSPDQ¶VFODLPVDJDLQVW'LOODUGXQGHUDQG
LV$)),50('
1R &KDSPDQY7KH+LJEHH&RPSDQ\
$JDLQVWWKLVOHJDOODQGVFDSHWKH6XSUHPH&RXUWZDVDVNHG
WRGHFLGHZKHWKHUUHDFKHGDFWVRISULYDWHSDUWLHVLQ
WKH VHPLQDO FDVH RI -RQHV Y $OIUHG + 0D\HU &R VXSUD
7KHUHDSULYDWHUHDOHVWDWHGHYHORSHUUHIXVHGWRVHOORUOHDVH
ODQGRUKRXVLQJWR$IULFDQ$PHULFDQV7KHLVVXHLQWKH-RQHV
FDVHZDVIUDPHGDVZKHWKHU³SXUHO\SULYDWHGLVFULPLQDWLRQ
XQDLGHGE\DQ\DFWLRQRQWKHSDUWRIWKHJRYHUQPHQWZRXOG
YLRODWHLILWVHIIHFWZHUHWRGHQ\DFLWL]HQWKHULJKWWR
UHQWRUEX\SURSHUW\VROHO\EHFDXVHRIKLVUDFHRUFRORU´,G
DW HPSKDVLVDGGHG
7KH UHVSRQGHQWV LQ -RQHV DUJXHG WKDW ³WKH RQO\ HYLO
&RQJUHVV VRXJKW WR HOLPLQDWH ZDV WKDW RI UDFLDOO\
GLVFULPLQDWRU\ODZVLQWKHIRUPHU&RQIHGHUDWH6WDWHV>LHWKH
%ODFN&RGHV@´,GDW+RZHYHUDPDMRULW\RIWKH&RXUW
IRXQGWKDWWKH7KLUW\QLQWK&RQJUHVVLQWHQGHGWRVHFXUHWKH
ULJKWWRSXUFKDVHDQGOHDVHSURSHUW\DJDLQVWLQWHUIHUHQFHIURP
DQ\VRXUFHZKDWHYHU³ZKHWKHUJRYHUQPHQWDORUSULYDWH´
86 DW 7KH &RXUW KHOG ³WKDW EDUV DOO UDFLDO
GLVFULPLQDWLRQSULYDWHDVZHOODVSXEOLFLQWKHVDOHRUUHQWDO
RISURSHUW\DQGWKDWWKHVWDWXWHWKXVFRQVWUXHGLVDYDOLG
H[HUFLVHRIWKHSRZHURI&RQJUHVVWRHQIRUFHWKH7KLUWHHQWK
$PHQGPHQW´,GDW7KH&RXUWDOVRRYHUUXOHG+RGJHV¶
KROGLQJ WKDW WKH 7KLUWHHQWK $PHQGPHQW ZDV LQWHQGHG WR
SURKLELWRQO\VODYHU\,GDWQ
7KXVWKHFHQWUDOLVVXHLQ-RQHVZDVZKHWKHUFRXOG
EH DSSOLHG WR SULYDWH GLVFULPLQDWLRQ DW DOO EHFDXVH WKH
6XSUHPH &RXUW KDG XS WR WKDW WLPH OLPLWHG FLYLO ULJKWV
HQIRUFHPHQWWRHOLPLQDWLQJVODYHU\DQGWRGLVFULPLQDWRU\VWDWH
DFWLRQ)XUWKHUWKHFRQGXFWDWLVVXHLQWKHVDOHRU
OHDVLQJRISURSHUW\LVWKHW\SHRIEHKDYLRULQZKLFKERWKVWDWH
DQGSULYDWHDFWRUVDUHFDSDEOHRIHQJDJLQJ,QGHHGDVWKH
6XSUHPH &RXUW REVHUYHG WKH ULJKW WR SXUFKDVH DQG OHDVH
SURSHUW\³FDQEHLPSDLUHGDVHIIHFWLYHO\E\μWKRVHZKRSODFH
SURSHUW\RQWKHPDUNHW¶DVE\WKH6WDWHLWVHOI´,GDW
,Q5XQ\RQWKHSULQFLSDOLVVXHZDV³ZKHWKHUDIHGHUDOODZ
QDPHO\ 86& SURKLELWV SULYDWH VFKRROV IURP
H[FOXGLQJTXDOLILHGFKLOGUHQVROHO\EHFDXVHWKH\DUH1HJURHV´
-- 22 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
$PHQGPHQWDVFRQIHUULQJXSRQDOO$PHULFDQVQRWMXVWIRUPHU
VODYHVWKHVWDWXVDQGULJKWVRIFLWL]HQVKLS ,QUH7XUQHU
&DV &&'0G 1R KROGLQJWKDWD
EODFNFKLOGDSSUHQWLFHVKLSWRKHUIRUPHURZQHUDIWHUVODYHU\
ZDVGHFODUHGLOOHJDOLQ0DU\ODQGYLRODWHGWKHIXOODQGHTXDO
EHQHILWFODXVHRIWKH$FW 8QLWHG6WDWHVY&UXLNVKDQN
&DV &&'/D 1R DII¶G86
-XVWLFH%UDGOH\VWDWLQJLQGLFWXPWKDWWKH
$FWZDVDQH[DPSOHRI&RQJUHVV¶VSRZHUWR³JLYHIXOOHIIHFW´
WRWKH7KLUWHHQWK$PHQGPHQW¶V³EHVWRZPHQWRIOLEHUW\´ VHH
JHQHUDOO\&RPPHQW6RQGUD+HPHU\FNHG&DVVDQGUD%XWWV
HW DO 5HFRQVWUXFWLRQ 'HFRQVWUXFWLRQ DQG /HJLVODWLYH
5HVSRQVH 7KH 6XSUHPH &RXUW 7HUP DQG WKH &LYLO
5LJKWV$FWRI+DUY&5&//5HY
7KH/RVW&DXVHVRI6HFWLRQ83D/5HY
DW WKLV SHUFHSWLRQ IDGHG DV WKH 6XSUHPH &RXUW
OLPLWHG &RQJUHVV¶V DXWKRULW\ XQGHU WKH 7KLUWHHQWK DQG
)RXUWHHQWK$PHQGPHQWVWRUHJXODWHSULYDWHEHKDYLRU6HH
(UZLQ&KHPHULQVN\&RQVWLWXWLRQDO/DZDW GHG
5HFRQVWUXFWLRQ 'HFRQVWUXFWLRQ DQG /HJLVODWLYH
5HVSRQVH+DUY&5&//5HYDW7KH/RVW
&DXVHVRI6HFWLRQ83D/5HYDW
,QWKHODQGPDUN&LYLO5LJKWV&DVHV86 WKH
6XSUHPH&RXUWKHOGWKDWXQGHUWKH7KLUWHHQWK$PHQGPHQW
&RQJUHVV¶VSRZHUZDVOLPLWHGWREDQQLQJVODYHU\DQGFRXOG
QRWEHXVHGWRHOLPLQDWHGLVFULPLQDWLRQ,G7KH&RXUWDOVR
KHOG WKDW WKH )RXUWHHQWK $PHQGPHQW RQO\ DSSOLHV WR
JRYHUQPHQWDFWLRQDQGFRXOGQRWEHDVRXUFHIRU&RQJUHVVWR
UHJXODWHSULYDWHEHKDYLRU,GVHHDOVR7KH6ODXJKWHU+RXVH
&DVHV86 :DOO VWDWLQJWKDWWKHSXUSRVH
RIWKH7KLUWHHQWKDQG)RXUWHHQWK$PHQGPHQWVZDVVROHO\WR
SURWHFW IRUPHU VODYHV 7KLV YLHZ SHUVLVWHG IRU QHDUO\ D
FHQWXU\6HH&KHPHULQVN\VHHDOVR+RGJHVY8QLWHG
6WDWHV86 KROGLQJWKDWGLGQRW
DXWKRUL]H D FDXVH RI DFWLRQ IRU FRQVSLUDF\ E\ ZKLWHV WR
SUHYHQWEODFNVIURPZRUNLQJLQDVDZPLOOEHFDXVH³LWZDVQRW
WKHLQWHQWRIWKH>7KLUWHHQWK@$PHQGPHQWWRGHQRXQFHHYHU\
DFWGRQHWRDQLQGLYLGXDOWKDWZDVZURQJLIGRQHWRDIUHHPDQ
DQG\HWMXVWLILHGLQDFRQGLWLRQRIVODYHU\´
1R &KDSPDQY7KH+LJEHH&RPSDQ\
7KH GLVVHQW DOVR DUJXHV WKDW ³WKH OLPLWLQJ ODQJXDJH VXUURXQGLQJ
WKH μIXOO DQG HTXDO EHQHILW¶ FODXVH VHUYHV WR FDELQ ERWK WKH QXPEHU DQG
QDWXUH RI FODLPV WKDW PD\ EH EURXJKW XQGHU WKLV FODXVH´ $QWH DW ,Q
RWKHU ZRUGV WKH GLVVHQW FODLPV WKDW LWV LQWHUSUHWDWLRQ RI ZRXOG QRW
KDYH WKH ³DEVXUG UHVXOW RI IHGHUDOL]LQJ WRUW ODZ´ EHFDXVH ³WKH IXOO DQG
HTXDO EHQHILW RI DOO ODZV DQG SURFHHGLQJV´ LV OLPLWHG WR WKRVH ³IRU WKH
VHFXULW\ RI SHUVRQV DQG SURSHUW\ DV LV HQMR\HG E\ ZKLWH FLWL]HQV´
86& D HPSKDVLV DGGHG
+RZHYHU RQH QHHG ORRN QR IXUWKHU WKDQ WKH RSHQLQJ SDJHV RI
3URVVHU RQ 7RUWV WR XQGHUVWDQG WKDW WKH OLPLWLQJ SKUDVH ³IRU WKH VHFXULW\
RI SHUVRQV DQG SURSHUW\´ HQFRPSDVVHV WRUW ODZ
,QFOXGHG XQGHU WKH KHDG RI WRUWV DUH
PLVFHOODQHRXV FLYLO ZURQJV UDQJLQJ IURP VLPSOH GLUHFW
LQWHUIHUHQFHV ZLWK WKH SHUVRQ VXFK DV DVVDXOW EDWWHU\
DQG IDOVH LPSULVRQPHQW RU ZLWK SURSHUW\ DV LQ WKH FDVH
RI WUHVSDVV RU FRQYHUVLRQ XS WKURXJK YDULRXV IRUPV RI
QHJOLJHQFH WR GLVWXUEDQFHV RI LQWDQJLEOH LQWHUHVWV VXFK
DV WKRVH LQ JRRG UHSXWDWLRQ RU FRPPHUFLDO RU VRFLDO
DGYDQWDJH >,@W LV QRW HDV\ WR GLVFRYHU DQ\ JHQHUDO
SULQFLSOH XSRQ ZKLFK WKH\ PD\ DOO EH EDVHG XQOHVV LW LV
WKH REYLRXV RQH WKDW LQMXULHV DUH WR EH FRPSHQVDWHG
BBBBBBBBBBBBBBBBBBBBB
&21&855(1&(
BBBBBBBBBBBBBBBBBBBBB
68+5+(,15,&+ &LUFXLW -XGJH FRQFXUULQJ , IXOO\
FRQFXU LQ WKH PDMRULW\¶V UHDVRQLQJ , ZULWH VHSDUDWHO\ WR
UHVSRQGWRWKHGLVVHQW
7KHGLVVHQWEHOLHYHVWKDWWKHODQJXDJHRILVSHUIHFWO\
FOHDU ³DFFRUGLQJ WR VXEVHFWLRQ F WKH ULJKWV SURWHFWHG E\
VXEVHFWLRQ D LHWKHULJKWVμWRPDNHDQGHQIRUFHFRQWUDFWV
WRVXHEHSDUWLHVJLYHHYLGHQFHDQGWRWKH IXOODQGHTXDO
EHQHILWRIDOOODZVDQGSURFHHGLQJVIRUWKHVHFXULW\RISHUVRQV
DQG SURSHUW\¶ DUH SURWHFWHG DJDLQVW LPSDLUPHQW E\ SULYDWH
DFWVRIGLVFULPLQDWLRQ´$QWHDW7KHGLVVHQWIHHOVWKDW
EHFDXVHWKHUHLVQRPRGLILHUOLPLWLQJWKHZRUG³ULJKWV´WRRQO\
FHUWDLQFODXVHVLQVXEVHFWLRQ D WKHSKUDVH³ULJKWVSURWHFWHG
E\ WKLV VHFWLRQ´ PXVW PHDQ DOO HQXPHUDWHG ULJKWV LQ
VXEVHFWLRQ D
-- 23 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
DQG DQWLVRFLDO EHKDYLRU LV WR EH GLVFRXUDJHG
7KHUH UHPDLQV D ERG\ RI ODZ ZKFK >VLF@ LV GLUHFWHG
WRZDUG WKH FRPSHQVDWLRQ RI LQGLYLGXDOV UDWKHU WKDQ WKH
SXEOLF IRU ORVVHV ZKLFK WKH\ KDYH VXIIHUHG ZLWKLQ WKH
VFRSH RI WKHLU OHJDOO\ UHFRJQL]HG LQWHUHVWV JHQHUDOO\
UDWKHU WKDQ RQH LQWHUHVW RQO\ ZKHUH WKH ODZ FRQVLGHUV
WKDW FRPSHQVDWLRQ LV UHTXLUHG 7KLV LV WKH ODZ RI WRUWV
7KH ODZ RI WRUWV WKHQ LV FRQFHUQHG ZLWK WKH
DOORFDWLRQV RI ORVVHV DULVLQJ RXW RI KXPDQ DFWLYLWLHV
DQG VLQFH WKH\ FRYHU D ZLGH VFRSH VR GRHV WKLV EUDQFK
RI ODZ ³$ULVLQJ RXW RI WKH YDULRXV DQG HYHULQFUHDVLQJ
FODVKHV RI WKH DFWLYLWLHV RI SHUVRQV OLYLQJ LQ D FRPPRQ
VRFLHW\ FDUU\LQJ RQ EXVLQHVV LQ FRPSHWLWLRQ ZLWK
IHOORZ PHPEHUV RI WKDW VRFLHW\ RZQLQJ SURSHUW\ ZKLFK
PD\ LQ DQ\ RI D WKRXVDQG ZD\V DIIHFW WKH SHUVRQV RI
SURSHUW\ RI RWKHUV ± LQ VKRUW GRLQJ DOO WKH WKLQJV WKDW
FRQVWLWXWH PRGHUQ OLYLQJ ± WKHUH PXVW RI QHFHVVLW\ EH
ORVVHV RU LQMXULHV RI PDQ\ NLQGV VXVWDLQHG DV D UHVXOW RI
WKH DFWLYLWLHV RI RWKHUV 7KH SXUSRVH RI WKH ODZ RI WRUWV
LV WR DGMXVW WKHVH ORVVHV DQG WR DIIRUG FRPSHQVDWLRQ IRU
LQMXULHV VXVWDLQHG E\ RQH SHUVRQ DV WKH UHVXOW RI WKH
FRQGXFW RI DQRWKHU
3URVVHU .HHWRQ RQ 7RUWV S WK HG
,Q VKRUW XQGHU WKH GLVVHQW¶V LQWHUSUHWDWLRQ WKH HTXDO EHQHILW
FODXVH FRXOG EH DSSOLHG WR HYHU\ JDUGHQYDULHW\ VWDWH WRUW FODLP ZLWK D
UDFLDO FRPSRQHQW ,I WKLV LV QRW IHGHUDOL]DWLRQ RI WRUW ODZ , GR QRW NQRZ
ZKDW LV
+RZHYHUWRUHDGWKHVWDWXWHWKLVZD\UHTXLUHVRQHWRQRW
UHDG WKH SKUDVH ³IXOO DQG HTXDO EHQHILW RI DOO ODZV DQG
SURFHHGLQJV´DFFRUGLQJWRLWVRUGLQDU\DQGFRPPRQPHDQLQJ
$V WKH GLFWLRQDU\ GHILQLWLRQ HVWDEOLVKHV LPSOLFLW LQ WKH
FRQFHSW RI ³ODZ´ LV VWDWH DFWLRQ ³D ELQGLQJ FXVWRP RU
SUDFWLFHRIDFRPPXQLW\DUXOHRUPRGHRIFRQGXFWRUDFWLRQ
WKDW LV SUHVFULEHG RU IRUPDOO\ UHFRJQL]HG DV ELQGLQJ E\ D
VXSUHPH FRQWUROOLQJ DXWKRULW\ RU LV PDGH REOLJDWRU\ E\ D
VDQFWLRQ DV DQ HGLFW GHFUHH UHVFULSW RUGHU RUGLQDQFH
VWDWXWH UHVROXWLRQ UXOH MXGLFLDO GHFLVLRQ RU XVDJH PDGH
UHFRJQL]HG RU HQIRUFHG E\ WKH FRQWUROOLQJ DXWKRULW\´
:(%67(5¶6 7+,5' ,17(51$7,21$/ ',&7,21$5<
1R &KDSPDQY7KH+LJEHH&RPSDQ\
UHVSHFWWRWKHULJKWVHQXPHUDWHGWKHUHLQ´-RQHVY$OIUHG
+0D\HU&R86DW
*HQ%OGJ&RQWUDFWRUV86DW HPSKDVHVDGGHG
IRRWQRWHV RPLWWHG ,Q OLJKW RI WKH 8QLWHG 6WDWHV 6XSUHPH
&RXUW¶VLQWHUSUHWDWLRQRIWKHOHJLVODWLYHKLVWRU\RIWKH
GLVVHQW¶VSRVLWLRQLVXQWHQDEOH
(TXDOO\LQYDOLGLVWKHUDWLRQDOL]DWLRQWKDWWKHHTXDOEHQHILW
DQG OLNH SXQLVKPHQW FODXVHV RI D DSSO\ WR SULYDWH
FRQGXFWEHFDXVHWKH$FWUHVWHGRQO\RQWKH7KLUWHHQWK
$PHQGPHQW DQG ZDV HQDFWHG EHIRUH WKH )RXUWHHQWK
$PHQGPHQWZDVIRUPDOO\SURSRVHG$OOWKLVSURYHVLVWKDW
WKH 7KLUWHHQWK $PHQGPHQW ZDV WKH VRXUFH RI &RQJUHVV¶V
DXWKRULW\IRUGRLQJZKDWLWVHWRXWWRGRLQWKH$FW6HH
86&RQVWDPHQG;,,,7KH&LYLO5LJKWV&DVHV
86 QRWLQJ WKDW WKH 7KLUWHHQWK $PHQGPHQW
DXWKRUL]HG &RQJUHVV WR HQDFW OHJLVODWLRQ DEROLVKLQJ WKH
³EDGJHVDQGLQFLGHQWVRIVODYHU\´ )XUWKHUPRUHWKHFXUUHQW
VWDWXWHKDVDVKDUHGKLVWRU\LQWKH7KLUWHHQWKDQG)RXUWHHQWK
$PHQGPHQWV7KH$FWZDVUHHQDFWHGLQSXUVXDQW
WRWKH)RXUWHHQWK$PHQGPHQW6HH*HQ%OGJ&RQWUDFWRUV
86DW ³>D@OWKRXJKWKH$FWUHVWHGRQO\RQWKH
7KLUWHHQWK$PHQGPHQWDQGLQGHHGZDVHQDFWHGEHIRUH
WKH)RXUWHHQWK$PHQGPHQWZDVIRUPDOO\SURSRVHGWKH
$FWZDVSDVVHGSXUVXDQWWRWKH)RXUWHHQWKDQGFKDQJHV
LQZRUGLQJPD\KDYHUHIOHFWHGWKHODQJXDJHRIWKH)RXUWHHQWK
$PHQGPHQW´ LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
7KH GLVVHQW DOVR FREEOHV WRJHWKHU VHOHFW SDVVDJHV IURP
-RQHV Y $OIUHG + 0D\HU &R 86 DQG
5XQ\RQ Y 0F&UDU\ 86 7KH GLVVHQW¶V
DQDO\VLVZRUNVRQO\LIWKHVHTXRWDWLRQVDUHGLYRUFHGIURPWKHLU
KLVWRULFDO DQG LPPHGLDWH FRQWH[W $OWKRXJK HDUO\
LQWHUSUHWDWLRQV RI WKH $FW WRRN D EURDG YLHZ RI WKH
SURWHFWLRQVSURYLGHGE\WKHVWDWXWHVHHHJ8QLWHG6WDWHVY
5KRGHV &DV &&' .\ 1R
6XSUHPH &RXUW -XVWLFH 6ZD\QH VLWWLQJ E\ GHVLJQDWLRQ RQ
.HQWXFN\&LUFXLW&RXUWXSKROGLQJWKHFRQVWLWXWLRQDOLW\RIWKH
&LYLO 5LJKWV $FW RI LQWHUSUHWLQJ WKH 7KLUWHHQWK
-- 24 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
3ULFH86 7KH&LYLO:DUKDG
HQGHGLQ$SULO7KH)LUVW6HVVLRQRIWKH7KLUW\
QLQWK &RQJUHVV PHW RQ 'HFHPEHU VRPH VL[
PRQWKV DIWHU WKH SUHFHGLQJ &RQJUHVV KDG VHQW WR WKH
6WDWHV WKH 7KLUWHHQWK $PHQGPHQW DQG MXVW WZR ZHHNV
EHIRUHWKH6HFUHWDU\RI6WDWHFHUWLILHGWKH$PHQGPHQW¶V
UDWLILFDWLRQ 2Q -DQXDU\ 6HQDWRU 7UXPEXOO
LQWURGXFHGWKHELOOWKDWZRXOGEHFRPHWKH$FW
7KHSULQFLSDOREMHFWRIWKHOHJLVODWLRQZDVWRHUDGLFDWH
WKH%ODFN&RGHVODZVHQDFWHGE\6RXWKHUQOHJLVODWXUHV
LPSRVLQJDUDQJHRIFLYLOGLVDELOLWLHVRQIUHHGPHQ0RVW
RIWKHVHODZVHPERGLHGH[SUHVVUDFLDOFODVVLILFDWLRQVDQG
DOWKRXJKRWKHUVVXFKDVWKRVHSHQDOL]LQJYDJUDQF\ZHUH
IDFLDOO\QHXWUDO&RQJUHVVSODLQO\SHUFHLYHGDOORIWKHP
DV FRQVFLRXVO\ FRQFHLYHG PHWKRGV RI UHVXUUHFWLQJ WKH
LQFLGHQWVRIVODYHU\6HQDWRU7UXPEXOOVXPPDUL]HGWKH
SDUDPRXQWDLPVRIKLVELOO
³6LQFH WKH DEROLWLRQ RI VODYHU\ WKH /HJLVODWXUHV
ZKLFKKDYHDVVHPEOHGLQWKHLQVXUUHFWLRQDU\6WDWHV
KDYHSDVVHGQHZODZVUHODWLQJWRWKHIUHHGPHQDQG
LQ QHDUO\ DOO WKH 6WDWHV WKH\ KDYH GLVFULPLQDWHG
DJDLQVWWKHP7KH\GHQ\WKHPFHUWDLQULJKWVVXEMHFW
WKHPWRVHYHUHSHQDOWLHVDQGVWLOOLPSRVHXSRQWKHP
WKHYHU\UHVWULFWLRQVZKLFKZHUHLPSRVHGXSRQWKHP
LQ FRQVHTXHQFH >RI@ WKH H[LVWHQFH RI VODYHU\ DQG
EHIRUH LW ZDV DEROLVKHG 7KH SXUSRVH RI WKH ELOO
XQGHU FRQVLGHUDWLRQ LV WR GHVWUR\ DOO WKHVH
GLVFULPLQDWLRQV DQG WR FDUU\ LQWR HIIHFW WKH
>7KLUWHHQWK@DPHQGPHQW´&RQJ*OREHWK&RQJ
VW6HVV
2I FRXUVH WKLV &RXUW KDV IRXQG LQ WKH OHJLVODWLYH
KLVWRU\RIWKH$FWHYLGHQFHWKDW&RQJUHVVVRXJKWWR
DFFRPSOLVKPRUHWKDQWKHGHVWUXFWLRQRIVWDWHLPSRVHG
FLYLOGLVDELOLWLHVDQGSXQLVKPHQWV:HKDYHKHOGWKDW
ERWK DQG ³SURKLELW DOO UDFLDO
GLVFULPLQDWLRQZKHWKHURUQRWXQGHUFRORURIODZZLWK
1R &KDSPDQY7KH+LJEHH&RPSDQ\
%\ FRQWUDVW DQ LQGLYLGXDO YLRODWHV ODZV $Q LQGLYLGXDO PD\
FDXVH LQMXU\ WR DQRWKHU LQ WKH SURFHVV RI YLRODWLQJ D ODZ EXW WKLV FDQQRW
ULJKWO\ EH YLHZHG DV D GHSULYDWLRQ RI ³WKH IXOO DQG HTXDO EHQHILW RI DOO ODZ
DQG SURFHHGLQJV IRU WKH VHFXULW\ RI SHUVRQV DQG SURSHUW\´ 7KDW LV
EHFDXVH D SULYDWH DFWRU GRHV QRW JLYH SURWHFWLRQV XQGHU WKH ODZ DQG
WKHUHIRUH FDQQRW WDNH WKHP DZD\ 3ULYDWH LQMXU\ FDQ EH UHGUHVVHG E\ ODZ
KRZHYHU
7KLVSHUFHSWLRQRIWKHWHUP³ODZ´ZRXOGKDYH
EHHQVKDUHGE\PHPEHUVRIWKH7KLUW\QLQWK&RQJUHVV
/DZ
$UXOHSDUWLFXODUO\DQHVWDEOLVKHGRUSHUPDQHQWUXOH
SUHVFULEHGE\WKHVXSUHPHSRZHURIDVWDWHWRLWVVXEMHFWV
IRU UHJXODWLQJ WKHLU DFWLRQV SDUWLFXODUO\ WKHLU VRFLDO
DFWLRQV /DZV DUH LPSHUDWLYH RU PDQGDWRU\
FRPPDQGLQJZKDWVKDOOEHGRQHSURKLELWRU\UHVWUDLQLQJ
IURP ZKDW LV WR EH IRUERUQH RU SHUPLVVLYH GHFODULQJ
ZKDWPD\EHGRQHZLWKRXWLQFXUULQJDSHQDOW\
1RDK:HEVWHU$1$0(5,&$1',&7,21$5<2)7+(
(1*/,6+/$1*8$*(DW UHY HQODUJHG6SULQJILHOG
0DVV*HRUJH &KDUOHV0HUULDP $QGLWLVWRWKH
GLFWLRQDU\WKDWZHORRNLQGHWHUPLQLQJWKHSODLQPHDQLQJRI
DZRUG6HHHJ:LOOLDPVY7D\ORU866
&W HPSOR\LQJGLFWLRQDU\GHILQLWLRQVWR
DVFHUWDLQWKHRUGLQDU\FRPPRQVHQVHPHDQLQJRIZRUGVLQ
VWDWXWH 8QLWHG6WDWHVY-RKQVRQ866&W
VDPH
2QO\WKHVWDWHFDQSUHVFULEHODZVDQGRQO\WKHVWDWHFDQ
GHSULYHDQLQGLYLGXDORIWKHEHQHILWRIWKRVHODZV$VWKH
7KLUG&LUFXLWREVHUYHGDQGDVWKHPDMRULW\QRWHG
7KHVWDWHQRWWKHLQGLYLGXDOLVWKHVROHVRXUFHRIODZ
DQGLWLVRQO\WKHVWDWHDFWLQJWKURXJKLWVDJHQWVQRWWKH
SULYDWHLQGLYLGXDOZKLFKLVFDSDEOHRIGHQ\LQJWREODFNV
WKHIXOODQGHTXDOEHQHILWRIWKHODZ7KXVZKLOHSULYDWH
GLVFULPLQDWLRQPD\EHLPSOLFDWHGE\WKHFRQWUDFWFODXVH
-- 25 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
7KH GLVVHQW ILQGV VLJQLILFDQFH LQ WKH IDFW WKDW ³QHLWKHU WKH
6XSUHPH &RXUW QRU WKLV FRXUW KDV HYHU OLPLWHG WKH DSSOLFDWLRQ RI
VXEVHFWLRQ F WR WKH μPDNH DQG HQIRUFH FRQWUDFWV¶ FODXVH LQ VXEVHFWLRQ
D ´ $QWH DW 7UXH $OVR WUXH LV WKH IDFW WKDW QHLWKHU WKLV &RXUW QRU
WKH 6XSUHPH &RXUW KDV HYHU EHHQ SUHVHQWHG ZLWK WKH TXHVWLRQ RI ZKHWKHU
WKH HTXDO EHQHILW RU OLNH SXQLVKPHQW FODXVH FRYHUV SULYDWH FRQGXFW $V WKH
GLVVHQW ZHOO NQRZV IHGHUDO FRXUWV DUH QRW DW OHLVXUH WR FRPPHQW RQ LVVXHV
QRW SURSHUO\ EHIRUH WKHP
RIVHFWLRQWKHFRQFHSWRIVWDWHDFWLRQLVLPSOLFLWLQ
WKHHTXDOEHQHILWFODXVH
0DKRQHY:DGGOH)G G&LU
,URQLFDOO\WKHGLVVHQWRPLWVUHIHUHQFHWRWKHWKLUGFODXVHLQ
VXEVHFWLRQ D WKHOLNHSXQLVKPHQWFODXVHZKLFKSURYLGHV
WKDW³>D@OOSHUVRQVVKDOOEHVXEMHFWWROLNHSXQLVKPHQW
SDLQVSHQDOWLHVWD[HVOLFHQVHDQGH[DFWLRQV´1RRQHFDQ
VHULRXVO\ DUJXH WKDW DQ LQGLYLGXDO FDQ VXEMHFW DQRWKHU
LQGLYLGXDO WR XQHTXDO SXQLVKPHQW RU WD[HV $V 0DKRQH
UHPDUNHG ³2QO\ WKH VWDWH LPSRVHV RU UHTXLUHV μWD[HV
OLFHQVHV DQG H[DFWLRQV¶ DQG WKH PD[LP QRVFLWXU D VRFLLV
VXJJHVWVWKDWWKHμSXQLVKPHQWSDLQV>DQG@SHQDOWLHV¶WRZKLFK
WKHFODXVHUHIHUVDUHWKRVHLPSRVHGE\WKHVWDWH´,G<HWWR
DFFHSWWKHGLVVHQW¶VDUJXPHQWRQHPXVWDJUHHWKDWWKHOLNH
SXQLVKPHQWFODXVHDSSOLHVWRSULYDWHFRQGXFWDVZHOO
7KHGLVVHQWUHVSRQGVWRWKLVDUJXPHQWZLWKWKHIROORZLQJ
UHPDUN³,QRXUH[SHULHQFHLWLVWKHVWDWHWKDWXVXDOO\LPSRVHV
SXQLVKPHQWHWFXSRQLWVFLWL]HQV6XFKZDVQRWWKHFDVH
KRZHYHUZKHQWKH$FWRIWKHSUHFXUVRUWRZDV
SDVVHG´ $QWH DW Q ,Q DGGLWLRQ WR EHLQJ D KLJKO\
VHOHFWLYHLQWHUSUHWDWLRQRIKLVWRU\VHHHJ%DUU\6XOOLYDQ
+LVWRULFDO5HFRQVWUXFWLRQ5HFRQVWUXFWLRQ+LVWRU\DQGWKH
3URSHU6FRSHRI6HFWLRQ<DOH/-
³7KH %ODFN &RGHV HQDFWHG E\ WKH 6RXWKHUQ VWDWHV XQGHU
3UHVLGHQWLDO 5HFRQVWUXFWLRQ DV ZHOO DV ZLGHVSUHDG DFWV RI
SULYDWH GLVFULPLQDWLRQ DQG YLROHQFH DJDLQVW )UHHGPHQ
FRQYLQFHG 5HSXEOLFDQ OHDGHUV WKDW OHJLVODWLYH DFWLRQ ZDV
1R &KDSPDQY7KH+LJEHH&RPSDQ\
%OGJ&RQWUDFWRUV$VV¶QY3HQQ86
³7KHSULQFLSDOREMHFWRIWKHOHJLVODWLRQZDVWRHUDGLFDWHWKH
%ODFN&RGHVODZVHQDFWHGE\6RXWKHUQOHJLVODWXUHVLPSRVLQJ
D UDQJH RI FLYLO GLVDELOLWLHV RQ IUHHGPHQ´ DV ZHOO DV
GLVFULPLQDWRU\SULYDWHFRQGXFWLHPLVWUHDWPHQWRI%ODFNVE\
SULYDWHLQGLYLGXDOVVHHLGDW ³2IFRXUVHWKLV&RXUWKDV
IRXQGLQWKHOHJLVODWLYHKLVWRU\RIWKH$FWHYLGHQFHWKDW
&RQJUHVVVRXJKWWRDFFRPSOLVKPRUHWKDQWKHGHVWUXFWLRQRI
VWDWHLPSRVHG FLYLO GLVDELOLWLHV DQG GLVFULPLQDWRU\
SXQLVKPHQWV´ 7KLVH[SODLQVZK\WKHWZRVWDWXWHVDGGUHVV
VXFK YDULHG FRQFHUQV VRPH RI ZKLFK GHDO ZLWK SULYDWH
FRQGXFWOLNHFRQWUDFWVDQGSURSHUW\ULJKWVDQGVRPHRIZKLFK
GHDOZLWKVWDWHDFWLRQOLNHSURWHFWLRQRIODZVDQGSURFHHGLQJV
DQGSXQLVKPHQWVDQGSHQDOWLHV
1RWZLWKVWDQGLQJWKHVHUDWKHUFOHDUSURQRXQFHPHQWVE\WKH
6XSUHPH&RXUWWKHGLVVHQWDVVHUWVWKDW
,Q RXU H[SHULHQFH LW LV WKH VWDWH WKDW XVXDOO\ LPSRVHV
SXQLVKPHQW HWF XSRQ LWV FLWL]HQV 6XFK ZDV QRW WKH
FDVHKRZHYHUZKHQWKH$FWRIWKHSUHFXUVRUWR
ZDV SDVVHG $W WKDW WLPH &RQJUHVV ZDV
HVSHFLDOO\FRQFHUQHGZLWKSURKLELWLQJWKRVHLQFLGHQWVRI
SULYDWH UDFLDOO\ PRWLYDWHG YLROHQFH ± WKH SXQLVKPHQW
SDLQV RU SHQDOWLHV ± ZKLFK ZHUH FRPPRQSODFH LQ WKH
6RXWK
$VP\GLVFXVVLRQLQIUDRIWKHKLVWRU\VXUURXQGLQJWKH
SDVVDJH RI WKH $FW UHYHDOV WKH VWDWXWH¶V RULJLQDO
SKUDVLQJ ZKLFK LQFOXGHG WKH ODQJXDJH ³SXQLVKPHQW
SDLQVRUSHQDOWLHV´ZDVGLUHFWHGWRSULYDWHFRQGXFW
$QWHDWQ
$OWKRXJKVKHTXRWHVIURPLW-XGJH0RRUHKDVQRWSURYLGHG
WKH 6XSUHPH &RXUW¶V HQWLUH H[SODQDWLRQ RI WKH KLVWRU\ RI
LQ*HQHUDO%XLOGLQJ&RQWUDFWRUV
>:@HPXVWEHPLQGIXORIWKH³HYHQWVDQGSDVVLRQVRIWKH
WLPH´ LQ ZKLFK WKH ODZ ZDV IRUJHG 8QLWHG 6WDWHV Y
-- 26 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
FRQWUDFWV DQG WKH HQMR\PHQW RI DOO EHQHILWV SULYLOHJHV WHUPV DQG
FRQGLWLRQV RI WKH FRQWUDFWXDO UHODWLRQVKLS´
,Q *HQHUDO %OGJ &RQWUDFWRUV $VV¶Q Y 3HQQ 86
WKH &RXUW H[SODLQHG
>7@KH RULJLQV RI WKH ODZ FDQ EH WUDFHG WR ERWK WKH &LYLO
5LJKWV $FW RI DQG WKH (QIRUFHPHQW $FW RI
%RWK RI WKHVH ODZV LQ WXUQ ZHUH OHJLVODWLYH FRXVLQV RI
WKH )RXUWHHQWK $PHQGPHQW 7KH $FW UHSUHVHQWHG
&RQJUHVV¶ ILUVW DWWHPSW WR HQVXUH HTXDO ULJKWV IRU WKH
IUHHGPHQ IROORZLQJ WKH IRUPDO DEROLWLRQ RI VODYHU\
HIIHFWHG E\ WKH 7KLUWHHQWK $PHQGPHQW $V VXFK LW
FRQVWLWXWHG DQ LQLWLDO EOXHSULQW RI WKH )RXUWHHQWK
$PHQGPHQW ZKLFK &RQJUHVV SURSRVHG LQ SDUW DV D
PHDQV RI ³LQFRUSRUDW>LQJ@ WKH JXDUDQWLHV RI WKH &LYLO
5LJKWV $FW LQ WKH RUJDQLF ODZ RI WKH ODQG´ +XUG Y
+RGJH 86 DW 7KH $FW ZKLFK
FRQWDLQHG WKH ODQJXDJH WKDW QRZ DSSHDUV LQ ZDV
HQDFWHG DV D PHDQV RI HQIRUFLQJ WKH UHFHQWO\ UDWLILHG
)RXUWHHQWK $PHQGPHQW ,Q OLJKW RI WKH FORVH
FRQQHFWLRQ EHWZHHQ WKHVH $FWV DQG WKH $PHQGPHQW LW
ZRXOG EH LQFRQJUXRXV WR FRQVWUXH WKH SULQFLSDO REMHFW
RI WKHLU VXFFHVVRU LQ D PDQQHU PDUNHGO\
GLIIHUHQW WKDQ WKDW RI WKH $PHQGPHQW LWVHOI
,G DW IRRWQRWHV RPLWWHG
H[SODLQ WKDW WKH HIIHFW RI VXEVHFWLRQ F RQ RWKHU ULJKWV
HQXPHUDWHGLQVXEVHFWLRQ D PHDQVWKDW³ULJKWV´PXVWPHDQ
WKDWVXEVHFWLRQ D UHIHUVWRWKHULJKWWRIXOODQGHTXDOEHQHILW
RIDOOODZVDQGSURFHHGLQJVOLNHSXQLVKPHQWDVZHOODVWKH
ULJKWWRPDNHDQGHQIRUFHFRQWUDFWV+RZHYHU&RQJUHVVGRHV
QRWQHHGWRVWDWHWKHREYLRXV7KDWLV&RQJUHVVGLGQRWQHHG
WRH[SODLQWKDWWKHHTXDOEHQHILWDQGOLNHSXQLVKPHQWFODXVHV
RIVXEVHFWLRQ D GRQRWDSSO\WRSULYDWHFRQGXFWEHFDXVHWKH\
ORJLFDOO\FDQQRW
7KH GLVVHQW DOVR GHULYHV VXSSRUW IURP ¶V
³FRQVWLWXWLRQDOOHJDF\´$QWHDW7KHGLVVHQWKDVDWRXJK
URZ WR KRH KHUH $V WKH GLVVHQW DFNQRZOHGJHV
HPDQDWHVQRWRQO\IURPWKH7KLUWHHQWK$PHQGPHQWEXWDOVR
WKH )RXUWHHQWK $PHQGPHQW $V WKH GLVVHQW DOVR
DFNQRZOHGJHV DQG ZHUH UHVSRQGLQJ WR
GLVFULPLQDWRU\VWDWHDFWLRQLHWKH%ODFN&RGHVVHH*HQ
1R &KDSPDQY7KH+LJEHH&RPSDQ\
7KH GLVVHQW UHOLHV RQ D SKUDVH LQ D FRQJUHVVLRQDO UHSRUW EHIRUH
WKH 7KLUW\QLQWK &RQJUHVV GHVFULELQJ ³D SDWWHUQ RI SULYDWH YLROHQFH μE\
PHQ ZKR DQQRXQFH WKHLU GHWHUPLQDWLRQ WR WDNH WKH ODZ LQWR WKHLU RZQ
KDQGV¶´ +LVWRULFDO 5HFRQVWUXFWLRQ <DOH /- DW TXRWLQJ 6
(;(& '2& 1R WK &RQJ VW 6HVV DW TXRWLQJ UHSRUW RI
%ULJDGLHU *HQHUDO )HVVHQGHQ 7KH GLVVHQW PDLQWDLQV WKDW WKLV
FROORTXLDOLVP VXSSRUWV WKH DUJXPHQW WKDW WKH WHUPV ³SXQLVKPHQW SDLQV
DQG SHQDOWLHV´ DV XVHG LQ D VHFWLRQ LQ WKH 8QLWHG 6WDWHV &RGH PHDQV
VRPHWKLQJ RWKHU WKDQ WKH GLFWLRQDU\ GHILQLWLRQV RI WKRVH WHUPV , GR QRW
WKLQN VXFK D ILJXUH RI VSHHFK VKRXOG FDUU\ PRUH ZHLJKW WKDQ WKH GLFWLRQDU\
GHILQLWLRQV LQ PDWWHUV RI VWDWXWRU\ LQWHUSUHWDWLRQ
QHHGHG´ %DUU\ / 5HIVLQ 7KH /RVW &ODXVHV RI 6HFWLRQ
$ 6RXUFH RI *UHDWHU 3URWHFWLRQ $IWHU 3DWWHUVRQ Y
0F/HDQ&UHGLW8QLRQ83D/5HY
QRWLQJWKDWWKH$FW³ZDVSURSRVHGDQGILQDOO\DGRSWHG
DJDLQVW >D@ EDFNJURXQG RI UHVWULFWLYH ODZV >DQG@ SULYDWH
GLVFULPLQDWLRQDQGYLROHQFH´ HPSKDVLVDGGHG WKHGLVVHQW¶V
UHPDUNLJQRUHVWKHFRPPRQXQGHUVWDQGLQJRIWKHVHWHUPVDW
WKHWLPHWKH$FWZDVSDVVHG7KHIROORZLQJGHILQLWLRQV
DUHIRXQGLQWKHHGLWLRQRI1RDK:HEVWHU¶V$0(5,&$1
',&7,21$5<2)7+((1*/,6+/$1*8$*(VXSUD
3XQLVKPHQW
Q$Q\SDLQRUVXIIHULQJLQIOLFWHGRQDSHUVRQIRUDFULPH
RU RIIHQVH E\ WKH DXWKRULW\ WR ZKLFK WKH RIIHQGHU LV
VXEMHFW HLWKHU E\ WKH FRQVWLWXWLRQ RI *RG RU RI FLYLO
VRFLHW\7KHSXQLVKPHQWRIWKHIDXOWVDQGRIIHQVHVRI
FKLOGUHQ E\ WKH SDUHQW LV E\ YLUWXH RI WKH ULJKW RI
JRYHUQPHQWZLWKZKLFKWKHSDUHQWLVLQYHVWHGE\*RG
KLPVHOI7KLVVSHFLHVRISXQLVKPHQWLVFKDVWLVHPHQWRU
FRUUHFWLRQ7KHSXQLVKPHQWRIFULPHVDJDLQVWWKHODZVLV
LQIOLFWHGE\WKHVXSUHPHSRZHURIWKHVWDWHLQYLUWXHRI
WKH ULJKW RI JRYHUQPHQW YHVWHG LQ WKH SULQFH RU
OHJLVODWXUH 7KH ULJKW RI SXQLVKPHQW EHORQJV RQO\ WR
SHUVRQV FORWKHG ZLWK DXWKRULW\ 3DLQ ORVV RU HYLO
ZLOOIXOO\LQIOLFWHGRQDQRWKHUIRUKLVFULPHVRURIIHQVHV
E\DSULYDWHXQDXWKRUL]HGSHUVRQLVUHYHQJHUDWKHUWKDQ
SXQLVKPHQW
DW
3HQDOW\
-- 27 of 28 --
&KDSPDQY7KH+LJEHH&RPSDQ\ 1R
)XUWKHUPRUH WKH DUJXPHQW VWUDLQV WKH OLPLWV RI FRPPRQ VHQVH
$V RQH WUHDWLVH KDV REVHUYHG ³:KHWKHU WKLV FODXVH RI VHFWLRQ LV
OLPLWHG WR VWDWH DFWLRQ LW LV YLUWXDOO\ LQHYLWDEOH WKDW DQ\ FODLP EDVHG XSRQ
μOLNH SXQLVKPHQW SDLQV SHQDOWLHV WD[HV OLFHQVH DQG H[DFWLRQV RI HYHU\
NLQG¶ ZLOO LQYROYH D JRYHUQPHQWDO HQWLW\ ³ &RRN 6RELHVNL
&,9,/ 5,*+76 $&7,216 ' 0DWWKHZ %HQGHU &R
7KHVXIIHULQJLQSHUVRQRUSURSHUW\ZKLFKLVDQQH[HG
E\ODZRUMXGLFLDOGHFLVLRQWRWKHFRPPLVVLRQRIDFULPH
RIIHQVH RU WUHVSDVV DV D SXQLVKPHQW $ ILQH LV D
SHFXQLDU\SHQDOW\7KHXVXVDOSHQDOWLHVLQIOLFWHGRQWKH
SHUVRQDUHZKLSSLQJFURSSLQJEUDQGLQJLPSULVRQPHQW
KDUGODERUWUDQVSRUWDWLRQRUGHDWK
DW
3DLQ
Q $QXQHDV\VHQVDWLRQLQDQLPDOERGLHVRIDQ\
GHJUHH IURP VOLJKW XQHDVLQHVV WR H[WUHPH GLVWUHVV RU
WRUWXUH SURFHHGLQJ IURP SUHVVXUH WHQVLRQ RU VSDVP
VHSDUDWLRQRISDUWVE\YLROHQFHRUDQ\GHUDQJHPHQWRI
IXQFWLRQV7KLVYLROHQWSUHVVXUHRUVWUHWFKLQJRIDOLPE
JLYHV SDLQ LQIODPPDWLRQ SURGXFHV SDLQ ZRXQGV
EUXLVHVDQGLQFLVLRQVJLYHSDLQ
3HQDOW\SXQLVKPHQWVXIIHUHGRUGHQRXQFHGVXIIHULQJ
RUHYLOLQIOLFWHGDVSXQLVKPHQWIRUDFULPHRUDQQH[HGWR
WKHFRPPLVVLRQRIDFULPH
DW
,QVKRUWWKHUHLVOLWWOHVXSSRUWIRUWKHGLVVHQW¶VVHPDQWLFDO
DUJXPHQW
7KHRQO\ZD\WKHGLVVHQW¶VDUJXPHQWZRUNVLVLIRQHVWULSV
WKHODQJXDJHRIWKHVHFRQGDQGWKLUGVXEFODXVHVRIVXEVHFWLRQ
D RIWKHLUSODLQPHDQLQJ7KLVDSSURDFKYLRODWHVDQRWKHU
HTXDOO\ IXQGDPHQWDO FDQRQ RI VWDWXWRU\ FRQVWUXFWLRQ ³WKH
ZRUGVRIDVWDWXWHPXVWEHUHDGLQWKHLUFRQWH[WDQGZLWKD
YLHZWRWKHLUSODFHLQWKHRYHUDOOVWDWXWRU\VFKHPH´)'$Y
%URZQ :LOOLDPVRQ 7REDFFR &RUS 86
)XUWKHUPRUHDVWDWXWHLVWREHUHDGLQLWVHQWLUHW\VHH
5DW]ODIY8QLWHG6WDWHV86 VRDVWR
DYRLGDQDEVXUGFRQVWUXFWLRQRIDVWDWXWRU\SURYLVLRQ6HH
1R &KDSPDQY7KH+LJEHH&RPSDQ\
7KLV DPHQGPHQW ZDV LQ GLUHFW UHVSRQVH WR WKH 6XSUHPH &RXUW¶V
RSLQLRQ LQ 3DWWHUVRQ Y 0F/HDQ &UHGLW 8QLRQ 86
3DWWHUVRQ KHOG WKDW SURKLELWHG GLVFULPLQDWLRQ RQO\ LQ WKH PDNLQJ
DQG HQIRUFHPHQW RI FRQWUDFWV DQG GLG QRW H[WHQG WR SUREOHPV DULVLQJ IURP
FRQGLWLRQV RI FRQWLQXLQJ HPSOR\PHQW ,Q WKH &LYLO 5LJKWV $FW RI
&RQJUHVV H[SOLFLWO\ UHYHUVHG WKLV DVSHFW RI 3DWWHUVRQ E\ DGGLQJ VXEVHFWLRQ
E WR ZKLFK VWDWHV WKDW ³WKH WHUP μPDNH DQG HQIRUFH FRQWUDFWV¶
LQFOXGHV WKH PDNLQJ SHUIRUPDQFH PRGLILFDWLRQ DQG WHUPLQDWLRQ RI
1HZ<RUN/LIH,QV&RY8QLWHG6WDWHV)G
)HG &LU 7KH GLVVHQW¶V UHDGLQJ RI WKH VWDWXWH
SURGXFHVDQDEVXUGUHVXOWEHFDXVHDSULYDWHLQGLYLGXDOVLPSO\
FDQQRW GHSULYH DQRWKHU RI WKH HTXDO EHQHILW RI WKH ODZV RU
VXEMHFWDQRWKHUWRDQ\SXQLVKPHQWRUWD[
7KHOHJLVODWLYHKLVWRU\EHKLQGVXEVHFWLRQ F GRHVQRWKHOS
WKHGLVVHQWHLWKHU,DJUHHZLWKWKHGLVVHQWWKDWWKHOHJLVODWLYH
KLVWRU\WRWKH$PHQGPHQWLVQRWOHQJWK\%XWWKDWLV
SHUKDSVEHFDXVH&RQJUHVVKDGDVLQJOHPLQGHGSXUSRVH
7KLV VHFWLRQ DPHQGV 86& FRPPRQO\
UHIHUUHGWRDV³6HFWLRQ´ WRRYHUWXUQ3DWWHUVRQY
0F/HDQ&UHGLW8QLRQDQGWRFRGLI\5XQ\RQY0F&UDU\
86
6XEVHFWLRQ F ±3URKLELWLQJGLVFULPLQDWLRQLQSULYDWH
FRQWUDFWLQJ ± 7KLV VXEVHFWLRQ LV LQWHQGHG WR FRGLI\
5XQ\RQ Y 0F&UDU\ ,Q 5XQ\RQ WKH &RXUW KHOG WKDW
6HFWLRQSURKLELWHGLQWHQWLRQDOUDFLDOGLVFULPLQDWLRQ
LQSULYDWHDVZHOODVSXEOLFFRQWUDFWLQJ7KH&RPPLWWHH
LQWHQGVWRSURKLELWUDFLDOGLVFULPLQDWLRQLQDOOFRQWUDFWV
ERWKSXEOLFDQGSULYDWH
+55HS1R ,, DW HPSKDVLVDGGHG
&RQJUHVV¶VLQWHQWLQHQDFWLQJVXEVHFWLRQ F FRXOGQRWKDYH
EHHQDQ\FOHDUHULWLQWHQGHGWRSURKLELWUDFLDOGLVFULPLQDWLRQ
³LQDOOFRQWUDFWV´EXWRQO\FRQWUDFWVEHFDXVHWKDWLVDOOLW
ZURWH <HW WKH GLVVHQW WKLQNV WKDW &RQJUHVV¶V IDLOXUH WR
-- 28 of 28 --
Connect Omnilex to search the legal corpus from your AI assistant.