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)
99-5613; 99-5687•02a0004p.06
7KH +RQRUDEOH -RKQ )HLNHQV 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
(DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
81,7(' 67$7(6 2) $0(5,&$
3ODLQWLII$SSHOOHH
Y
&$5/ %52:1
&$5/ 6&58**6
'HIHQGDQWV$SSHOODQWV
;!
1
1RV
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV
1R²-RQ3KLSSV0F&DOOD'LVWULFW-XGJH
$UJXHGDQG6XEPLWWHG$SULO
'HFLGHGDQG)LOHG-DQXDU\
%HIRUH1(/621DQG%$7&+(/'(5&LUFXLW-XGJHV
)(,.(16'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('.HYLQ06FKDG6&+$' &22.&LQFLQQDWL
2KLR IRU $SSHOODQW 7KRPDV / 3DUNHU $66,67$17
-- 1 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
81,7('67$7(6$77251(<0HPSKLV7HQQHVVHHIRU
$SSHOOHH21%5,().HYLQ06FKDG6&+$' &22.
&LQFLQQDWL 2KLR IRU $SSHOODQW 7KRPDV / 3DUNHU
$66,67$17 81,7(' 67$7(6 $77251(< 0HPSKLV
7HQQHVVHHIRU$SSHOOHH&DUO6FUXJJV0HPSKLV7HQQHVVHH
SURVH
%$7&+(/'(5-GHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQ
ZKLFK 1(/621 - MRLQHG )(,.(16 ' - SS
GHOLYHUHGDVHSDUDWHGLVVHQWLQJRSLQLRQ
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
$/,&( 0 %$7&+(/'(5 &LUFXLW -XGJH ,Q WKHLU
VHSDUDWHDSSHDOV'HIHQGDQWV&DUO%URZQDQG&DUO6FUXJJV
UDLVH LGHQWLFDO FKDOOHQJHV WR WKHLU FRQYLFWLRQV RQ D VLQJOH
FRXQWRIDLGLQJDQGDEHWWLQJLQWKHDWWHPSWWRSRVVHVVFRFDLQH
ZLWKWKHLQWHQWWRGLVWULEXWHLWDQGZHZLOOWKHUHIRUHGLVSRVH
RIWKHWZRDSSHDOVLQRQHRSLQLRQ%RWKGHIHQGDQWVFODLPWKDW
WKHGLVWULFWFRXUWZDVZLWKRXWMXULVGLFWLRQWRKHDUWKHFDVHDQG
IXUWKHU HUUHG E\ UHIXVLQJ WR DOORZ LQWR HYLGHQFH WHVWLPRQ\
IURPDVLPLODUVWDWHSURFHHGLQJIDLOLQJWRKROGDKHDULQJWR
LQYHVWLJDWHFODLPVRISURVHFXWRULDOPLVFRQGXFWSHUPLWWLQJWKH
JRYHUQPHQWWRSUHVHQWWKHWHVWLPRQ\RIDZLWQHVVZKRDJUHHG
WRWHVWLI\LQH[FKDQJHIRUDVHQWHQFHUHGXFWLRQSHUPLWWLQJWKH
VFRSHRIUHGLUHFWH[DPLQDWLRQWRH[FHHGPDWWHUVUDLVHGRQ
FURVVH[DPLQDWLRQ DQG SURYLGLQJ D MXU\ LQVWUXFWLRQ WKDW
UHTXLUHGDILQGLQJRIJXLOW'HIHQGDQW6FUXJJVDOVRDSSHDOV
KLV VHQWHQFH FODLPLQJ WKDW WKH FRXUW HUUHG E\ DSSO\LQJ
VHQWHQFLQJHQKDQFHPHQWV:HZLOODIILUPWKHMXGJPHQWRIWKH
GLVWULFWFRXUW
,
$IHGHUDOJUDQGMXU\LQGLFWHG&DUO6FUXJJVDQG&DUO%URZQ
RQRQHFRXQWRIDLGLQJDQGDEHWWLQJLQWKHDWWHPSWWRSRVVHVV
FRFDLQH ZLWK WKH LQWHQW WR GLVWULEXWH LW LQ YLRODWLRQ RI
86& DQG 86& 6KRUWO\
-- 2 of 10 --
1RV 8QLWHG6WDWHVY%URZQHWDO
WKHUHDIWHUWKHJUDQGMXU\UHWXUQHGDVXSHUFHGLQJLQGLFWPHQW
DGGLQJ<RODQGD)UDQNOLQ ³)UDQNOLQ´ DVDWKLUGFRGHIHQGDQW
)UDQNOLQDJUHHGWRSOHDGJXLOW\6FUXJJVDQG%URZQHDFKSOHG
QRW JXLOW\ 7KH JRYHUQPHQW ILOHG D PRWLRQ LQ OLPLQH WR
SUHYHQW6FUXJJVDQG%URZQIURPDWWHPSWLQJWRUDLVHEHIRUH
WKHMXU\DQ\PHQWLRQRIWKHFKDUJHVSHQGLQJDJDLQVWWKHPLQ
VWDWH FRXUW DULVLQJ RXW RI WKH VDPH VHW RI IDFWV 7KH FRXUW
JUDQWHG WKLV PRWLRQ %URZQ ILOHG D PRWLRQ LQ OLPLQH WR
H[FOXGH )UDQNOLQ¶V WHVWLPRQ\ RQ WKH JURXQG WKDW VKH KDG
UHFHLYHGVRPHWKLQJRIYDOXHQDPHO\DVHQWHQFHUHGXFWLRQLQ
H[FKDQJHIRULW7KHFRXUWGHQLHGWKLVPRWLRQ%URZQDQG
6FUXJJV ZHQW WR WULDO DQG ZHUH IRXQG JXLOW\ E\ WKH MXU\
6FUXJJVPRYHGIRUDQHZWULDOWKLVPRWLRQZDVGHQLHG3ULRU
WRVHQWHQFLQJ6FUXJJVGLVFKDUJHGKLVFRXQVHODQGSURFHHGHG
SURVH7KHFRXUWVHQWHQFHGKLPWRPRQWKVLQSULVRQWR
EHIROORZHGE\HLJKW\HDUVRIVXSHUYLVHGUHOHDVH%URZQZDV
VHQWHQFHGWRPRQWKVLQSULVRQWREHIROORZHGE\HLJKW
\HDUV RI VXSHUYLVHG UHOHDVH %RWK GHIHQGDQWV ILOHG WLPHO\
DSSHDOV
%URZQDQG6FUXJJVZHUHDSSUHKHQGHGZKLOHDWWHPSWLQJWR
UHPRYHNLORJUDPVRIFRFDLQHIURPDKRPHLQ0HPSKLV
7HQQHVVHH <RODQGD )UDQNOLQ KDG LQIRUPHG %URZQ WKDW
)UDQNOLQ¶V VLVWHU .DURQ :KLWH ZKR KDG DOOHJHGO\ EHHQ
URPDQWLFDOO\LQYROYHGZLWK%URZQ KDGFRFDLQHKLGGHQLQKHU
KRPH7KHFRFDLQHKDGEHHQVWDVKHGWKHUHE\5HQDUG5LFHD
FRQYLFWHG GUXJGHDOHU DQG DFTXDLQWDQFH RI .DURQ :KLWH
%URZQDQG6FUXJJVDJUHHGWRDWWHPSWWRURE:KLWH¶VKRPH
DQGVSOLWWKHSURFHHGVIURPWKHVDOHRIDQ\FRFDLQHWKH\PLJKW
ILQG :KLOH YLVLWLQJ :KLWH¶V UHVLGHQFH²DW D WLPH ZKHQ
:KLWHDSSDUHQWO\ZDVQRWDWKRPH²)UDQNOLQORDQHGKHUFDU
WR:KLWH¶V\HDUROGGDXJKWHU1DVWDVVLD&UXPS&UXPS
WRRNKHU\RXQJHUVLVWHUVDQGKHUDXQW 7ULWRELD:KLWH WRWKH
VWRUHOHDYLQJ)UDQNOLQDORQHLQWKHKRXVHWRVHDUFKIRUWKH
FRFDLQH6KHIRXQGLWLQDSODVWLFJDUEDJHEDJKLGGHQLQDQ
DWWLF DFFHVV SDQHO LQ WKH KDOOZD\ 6KH GLG QRW GLVWXUE WKH
FRFDLQHEXWUHSRUWHGKHUILQGLQJVWR%URZQ
7KDWDIWHUQRRQ%URZQDQG6FUXJJVZHDULQJVNLPDVNVDQG
JORYHVDQGFDUU\LQJJXQVHQWHUHGWKH:KLWHUHVLGHQFH7KH\
-- 3 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
IRXQGIRXUFKLOGUHQRQHRIZKRPKDGEHHQDEOHWRGLDO
SULRUWREHLQJGLVFRYHUHGDQG7ULWRELD:KLWHWKH\UHVWUDLQHG
DOO ILYH ZLWK GXFW WDSH :KHQ WKH SROLFH DUULYHG WKH\
DSSUHKHQGHG%URZQDVKHZDVOHDYLQJWKURXJKWKHEDFNGRRU
RIWKHKRPH$IWHUIUHHLQJWKHFKLOGUHQDQGOHDUQLQJIURP
WKHP WKDW WKH UREEHU\ KDG EHHQ FRPPLWWHG E\ WZR PHQ
FDUU\LQJ JXQV WKH RIILFHUV IRXQG 6FUXJJV KLGLQJ LQ WKH
EDVHPHQWEHKLQGDZDVKHUGU\HU7KHRIILFHUVDVNHG6FUXJJV
ZKHUHWKHZHDSRQVZHUHDQGKHLQGLFDWHGDER[IURPZKLFK
WKHRIILFHUVUHFRYHUHGWZRKDQGJXQV%URZQDGPLWWHGWRD
'UXJ (QIRUFHPHQW $JHQF\ DJHQW WKDW KH DQG 6FUXJJV KDG
KHDUGDERXWWKHFRFDLQHIURP)UDQNOLQDQGKDGJRQHWRWKH
:KLWHUHVLGHQFHWRVWHDOWKHGUXJV
,,-XULVGLFWLRQ
%RWK6FUXJJVDQG%URZQDUJXHWKDWWKHIHGHUDOJRYHUQPHQW
ODFNVMXULVGLFWLRQWRSURVHFXWHWKHP:HUHYLHZTXHVWLRQVRI
MXULVGLFWLRQGHQRYR8QLWHG6WDWHVY1DVK)G
WK&LU
7KHGHIHQGDQWVFODLPWKDWWKH6XSUHPH&RXUW¶VGHFLVLRQLQ
8QLWHG 6WDWHV Y /RSH] 86 SURKLELWV
&RQJUHVVIURPH[WHQGLQJWKHUHDFKRILWVDXWKRULW\WRGUXJ
FULPHV WKDW RFFXU VROHO\ LQWUDVWDWH 7KLV YLHZ KDV EHHQ
VRXQGO\UHMHFWHGE\WKLVFLUFXLWDVZHOODVHYHU\RWKHUFLUFXLW
WRDGGUHVVWKHLVVXH8QLWHG6WDWHVY7XFNHU)G
WK&LU 6HH8QLWHG6WDWHVY%URZQ1R
:/ DW WK &LU -XQH
³,QGHHGHYHU\FLUFXLWWRFRQVLGHUSRVW/RSH]FKDOOHQJHVWR
WKH&RPSUHKHQVLYH'UXJ$EXVH3UHYHQWLRQDQG&RQWURO$FW
KDVXSKHOGWKH$FWDVDYDOLGH[HUFLVHRI&RQJUHVV VDXWKRULW\
XQGHUWKH&RPPHUFH&ODXVH´ VHHDOVRHJ8QLWHG6WDWHV
Y3DWWHUVRQ)G WK&LU FHUWGHQLHG
86 8QLWHG6WDWHVY:HVWEURRN)G
WK&LU 8QLWHG6WDWHVY(GZDUGV)G
'&&LU 8QLWHG6WDWHVY2UR]FR)G
G &LU 8QLWHG 6WDWHV Y .LP )G
WK &LU 8QLWHG 6WDWHV Y 5RJHUV )G
WK&LU 8QLWHG6WDWHVY/HUHERXUV
1RV 8QLWHG6WDWHVY%URZQHWDO
ZKRVH IRUHPDQ UHSRUWHG WKDW WKH\ ZHUH ³KRSHOHVVO\
GHDGORFNHG´DIWHUWKH\KDGEHHQRXWVHYHQKRXUV³,QD
WULDOE\MXU\LQDIHGHUDOFRXUWWKHMXGJHLVQRWDPHUH
PRGHUDWRUEXWLVWKHJRYHUQRURIWKHWULDOIRUWKHSXUSRVH
RI DVVXULQJ LWV SURSHU FRQGXFW DQG RI GHWHUPLQLQJ
TXHVWLRQVRIODZ´4XHUFLDY8QLWHG6WDWHV86
6 &W /(G ³7KH
LQIOXHQFHRIDWULDOMXGJHRQWKHMXU\LVQHFHVVDULO\DQG
SURSHUO\ RI JUHDW ZHLJKW´ 6WDUU Y 8QLWHG 6WDWHV
86 6&W /(G DQG
MXURUVDUHHYHUZDWFKIXORIWKHZRUGVWKDWIDOOIURPKLP
3DUWLFXODUO\LQDFULPLQDOWULDOWKHMXGJH¶VODVWZRUGLVDSW
WREHWKHGHFLVLYHZRUG,ILWLVDVSHFLILFUXOLQJRQDYLWDO
LVVXHDQGPLVOHDGLQJWKHHUURULVQRWFXUHGE\DSULRU
XQH[FHSWLRQDODQGXQLOOXPLQDWLQJDEVWUDFWFKDUJH
%ROOHQEDFKY8QLWHG6WDWHV866&W
1RWRQO\GLGWKHGLVWULFWMXGJHLQWKLVFDVHLQYDGH
WKHMXU\¶VSURYLQFHEXWKHGLGVRDWDVLJQLILFDQWWLPHLQWKH
MXU\¶V GHOLEHUDWLRQV +H JDYH WKH MXU\ LWV VXSSOHPHQWDO
LQVWUXFWLRQ DW SP $W SP WKH MXU\ HQWHUHG LWV
YHUGLFW7KHVKRUWVSDQRIWLPHLWWRRNIRUWKHMXU\WRFRQYLFW
LVDQLQGLFDWLRQRIWKHLQIOXHQFHRIWKHMXGJH¶VLQVWUXFWLRQ
,WKHUHIRUHPXVWUHFRPPHQGWKLVFDVHEHUHPDQGHGIRUD
QHZWULDO
-- 4 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
FRQVWLWXWLRQDODGMXGLFDWLRQ7KHWULDOMXGJHLQVWUXFWVWKH
MXU\ RQ WKH ODZ DSSOLFDEOH WR WKH LVVXHV UDLVHG DQG LQ
DSSURSULDWH FLUFXPVWDQFHV PD\ FRPPHQW RQ WKH
HYLGHQFH8QLWHG6WDWHVY:KLWH+RUVH)G
WK&LU 8QLWHG6WDWHVY-RKQVRQ)G
WK &LU HQ EDQF $ -
0RRUH : 7DJJDUW - :LFNHU 0RRUH¶V )HGHUDO
3UDFWLFH DW 7KH MXU\ WKHQ
LQGHSHQGHQWO\GHWHUPLQHVWKHIDFWVDQGDSSOLHVWKHODZ
WR WKRVH IDFWV LQ UHDFKLQJ LWV IDWHIXO GHFLVLRQ :KLWH
+RUVH)GDW-RKQVRQ)GDW6HH
DOVR&:ULJKW)HGHUDO3UDFWLFH 3URFHGXUHDW
+RZHYHUWKHWULDOMXGJHLQYDGHVWKHMXU\¶V
SURYLQFHZKHQLQVWHDGRIVLPSO\LQVWUXFWLQJRQWKHODZ
KHDSSOLHVWKHODZWRIDFWVKHKDVGHWHUPLQHG6HH:KLWH
+RUVH)GDW ³ZKHQWKHMXGJHLVQRORQJHU
GHFLGLQJWKHODZWKDWDSSOLHVWRWKHHYLGHQFHEXWUDWKHU
LVDSSO\LQJWKHODZWRWKHIDFWV±IDFWVWKDWDUHGHWHUPLQHG
DIWHU DVVHVVLQJ WKH SUREDWLYH YDOXH RI HYLGHQFH
LQWURGXFHG DW WULDO ± WKH MXGJH KDV LQYDGHG WKH MXU\¶V
SURYLQFH´
,GDW,QWKHFDVHEHIRUHXVWKHGLVWULFWFRXUWMXGJH
DSSOLHGWKHODZWRWKHIDFWVWKDWKHGHWHUPLQHGZKHQKHVWDWHG
DIWHUJLYLQJKLVWURXEOLQJH[DPSOH³1RZWKHSHUVRQHQWHUHG
WKHZDUHKRXVHZLWKRXWWKHLQWHQWQHFHVVDU\WRFRQVWLWXWHWKH
DWWHPSW EXW KH IRUPHG RU DSSHDUV WR KDYH IRUPHG RU
FHUWDLQO\EHSURRIWKDWKHIRUPHGWKHUHTXLVLWHLQWHQWRQFHKH
GHWHUPLQHGWKLVWKHUHZDVPDULMXDQDWKHUHDQGKHGHWHUPLQHG
WR UHPRYH WKH PDULMXDQD DQG WUDQVSRUW LW WR VRPH RWKHU
ORFDWLRQIRUGLVWULEXWLRQ´
,QXSKROGLQJDSSHOODQWV¶FRQYLFWLRQVLQWKHIDFHRIVXFKD
FOHDUO\HUURQHRXVLQVWUXFWLRQWKHFRXUWIDLOVWRUHFRJQL]HWKH
SRZHU ZHLJKW DQG DXWKRULW\ D MXGJH¶V RSLQLRQ KDV XSRQ D
MXU\
%XWSUHFLVHO\EHFDXVHLWZDVD³ODVWPLQXWHLQVWUXFWLRQ´
WKHGXW\RIVSHFLDOFDUHZDVLQGLFDWHGLQUHSO\LQJWRD
ZULWWHQUHTXHVWIRUIXUWKHUOLJKWRQDYLWDOLVVXHE\DMXU\
1RV 8QLWHG6WDWHVY%URZQHWDO
)G VW&LU 8QLWHG6WDWHVY*HQDR
)G G&LU 8QLWHG6WDWHVY:DFNHU
)G WK&LU 8QLWHG6WDWHVY&ODUN
)G WK&LU YDFDWHGRQRWKHUJURXQGV
86 8QLWHG6WDWHVY/HVKXN)G
WK&LU
7KH GHIHQGDQWV DOVR FODLP WKDW IHGHUDO MXULVGLFWLRQ LV
ODFNLQJEHFDXVHWKHJRYHUQPHQWIDLOHGWRSURYHWKDW%URZQ
DQG 6FUXJJV LQWHQGHG WR SRVVHVV WKH FRFDLQH DQG WKDW WKH
FKLHIJRYHUQPHQWZLWQHVV )UDQNOLQ ODFNHGFUHGLELOLW\7KHVH
DUH QRW FKDOOHQJHV WR MXULVGLFWLRQ EXW UDWKHU FKDOOHQJHV WR
VXIILFLHQF\RIWKHHYLGHQFHDQGWKHFUHGLELOLW\RI)UDQNOLQDQG
WKHJRYHUQPHQW¶VDELOLW\WRSURYHGHIHQGDQWV¶LQWHQWGRHVQRW
FDOOLQWRGRXEWIHGHUDOMXULVGLFWLRQ
7UHDWLQJWKHVHDUJXPHQWVDVFKDOOHQJHVWRWKHVXIILFLHQF\RI
WKHHYLGHQFHZHQRWHWKDWWKH\VWLOOIDLO7KHUHFRUGLVUHSOHWH
ZLWK HYLGHQFH WKDW %URZQ DQG 6FUXJJV LQWHQGHG WR VWHDO
FRFDLQHIURP.DURQ :KLWH¶VKRXVHDQGGLVWULEXWHLW7KLV
HYLGHQFHLQFOXGHV)UDQNOLQ¶VWHVWLPRQ\WKDWVKHHQWHUHGLQWR
DQDJUHHPHQWZLWK%URZQWRVWHDOWKHFRFDLQHDQGWKDW%URZQ
DQG 6FUXJJV ZHQW WR WKH KRPH DW KHU GLUHFWLRQ ZLWK WKH
LQWHQWLRQRIILQGLQJWKHFRFDLQHVHOOLQJLWDQGVSOLWWLQJWKH
SURFHHGV ZLWK KHU 7KH MXU\ ZHLJKHG WKLV HYLGHQFH DQG
GHWHUPLQHGWKDWWKHGHIHQGDQWVKDGLQWHQGHGWRSRVVHVVWKH
FRFDLQH7KHGHIHQGDQWVZHUHIUHHWRDWWDFNWKHFUHGLELOLW\RI
WKHJRYHUQPHQW¶VZLWQHVVHVDQGLQIDFWGLGVR8QIRUWXQDWHO\
IRU%URZQDQG6FUXJJVWKHMXU\EHOLHYHG)UDQNOLQ
7KHGHIHQGDQWV¶FODLPWKDWWKHIHGHUDOJRYHUQPHQWODFNV
MXULVGLFWLRQWRSURVHFXWHWKLVFDVHLVZKROO\ZLWKRXWPHULW
)XUWKHUHYHQDGGUHVVLQJWKHVHFODLPVDVDUJXPHQWVDJDLQVW
WKHVXIILFLHQF\RIWKHHYLGHQFHZHKROGWKDWWKH\DUHHQWLUHO\
ZLWKRXWPHULW
,,,([FOXVLRQRIHYLGHQFHIURP6WDWHSURFHHGLQJV
7KH GHIHQGDQWV FODLP WKDW WKH GLVWULFW FRXUW HUUHG E\
JUDQWLQJWKHJRYHUQPHQW¶VPRWLRQLQOLPLQHZKLFKSUHYHQWHG
WKHPIURPXVLQJWKHWHVWLPRQ\RIWKHJRYHUQPHQW¶VZLWQHVVHV
-- 5 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
IURP WKH VWDWH FRXUW DJJUDYDWHG UREEHU\ SURFHHGLQJV WR
LPSHDFKWKHWHVWLPRQ\RIWKRVHVDPHZLWQHVVHVLQWKHWULDOLQ
IHGHUDOFRXUW7KH\FODLPDVZHOOWKDWWKHWULDOFRXUWSUHYHQWHG
WKHPIURPLQWURGXFLQJDWDSHRIWKHVWDWHFRXUWSUHOLPLQDU\
KHDULQJZKLFKWKH\DUJXHZRXOGKDYHGHPRQVWUDWHGWKDWWKH
WHVWLPRQ\ RI JRYHUQPHQW ZLWQHVVHV DW WKHLU WULDO ZDV
LQFRQVLVWHQWZLWKVWDWHPHQWVPDGHE\ZLWQHVVHVGXULQJWKH
VWDWHSURFHHGLQJV:HUHYLHZHYLGHQWLDU\UXOLQJVIRUDQDEXVH
RIGLVFUHWLRQDQGZHPXVWVXVWDLQWKRVHUXOLQJVXQOHVVWKH\
DUHPDQLIHVWO\HUURQHRXV8QLWHG6WDWHVY%RQGV)G
WK&LU
7KH GLVWULFW FRXUW IRXQG WKDW WKH VWDWH FKDUJHV ZHUH
LUUHOHYDQWWRWKHIHGHUDOSURVHFXWLRQ7KHGHIHQGDQWVSRLQWWR
QRVSHFLILFWHVWLPRQ\IURPWKHVWDWHFRXUWSURFHHGLQJVWKDW
ZRXOGVXSSRUWWKHLUFODLPWKDWWKHSULRUVWDWHPHQWVRIWKHVH
ZLWQHVVHVZHUHLQFRQVLVWHQWZLWKWKHLUWHVWLPRQ\LQWKLVWULDO
1HLWKHU KDYH WKH GHIHQGDQWV GHPRQVWUDWHG KRZ WKH SULRU
WHVWLPRQ\ ZRXOG KDYH EHHQ UHOHYDQW )LQDOO\ WKH UHFRUG
UHIOHFWVWKDWWKHJRYHUQPHQWWLPHO\SURYLGHGWKHWDSHIURPWKH
VWDWH FRXUW SUHOLPLQDU\ KHDULQJ WR WKH GHIHQGDQWV EXW WKH
GHIHQGDQWVQHLWKHUVRXJKWWRLQWURGXFHLWDWWULDOQRUWRREWDLQ
DQ\ UXOLQJ IURP WKH FRXUW RQ LWV DGPLVVLELOLW\ RU XVH IRU
LPSHDFKPHQW SXUSRVHV :H GR QRW ILQG WKDW WKH GLVWULFW
MXGJH¶V JUDQWLQJ RI WKH PRWLRQ LQ OLPLQH ZDV PDQLIHVWO\
HUURQHRXV
,97KHFRXUW¶VVXSSOHPHQWDOMXU\LQVWUXFWLRQV
7KH GHIHQGDQWV QH[W FODLP WKDW WKH FRXUW HUUHG LQ
UHVSRQGLQJWRDOHJDOTXHVWLRQSRVHGE\WKHMXU\7KHWULDO
FRXUWLVHQWLWOHGWRH[HUFLVHLWVVRXQGGLVFUHWLRQLQGHFLGLQJ
KRZEHVWWRUHVSRQGWRLQTXLULHVPDGHE\WKHMXU\GXULQJLWV
GHOLEHUDWLRQV8QLWHG6WDWHVY1XQH])G
WK&LU ³,QUHVSRQVHWRDMXU\ VTXHVWLRQDIWHULWKDV
EHJXQGHOLEHUDWLQJKRZHYHUDWULDOMXGJHPD\DQGVKRXOG
PDNHFOHDUWKHODZWKHMXU\LVERXQGWRDSSO\WKRXJKLWLVQRW
KLV SURYLQFH WR DGYLVH WKH MXU\ RI FROODWHUDO DVSHFWV RI LWV
GHFLVLRQ´,G TXRWLQJ8QLWHG6WDWHVY5RZDQ)G
WK&LU
1RV 8QLWHG6WDWHVY%URZQHWDO
SUHMXGLFH RQFH FUHDWHG FRXOG EH UHPRYHG E\ D PHUH
ZLWKGUDZDORIWKHZRUGV´,G FLWLQJ5XGGY8QLWHG6WDWHV
) WK&LU ,Q8QLWHG6WDWHVY6FKXOW]
)G WK&LU WKH6HYHQWK&LUFXLWKHOGVLPLODUO\
7KHWULDOMXGJHLQWKDWFDVHZKHQUXOLQJRQDQREMHFWLRQWR
ZLWQHVVWHVWLPRQ\VDLG³μ>6@XSSRVHDPDQZHUHFKDUJHGZLWK
FRPPLWWLQJDUREEHU\DQGWKHQWKHQH[WGD\KHZDQW>VLF@DQG
WRRNWKHPRQH\EDFNHYHU\FHQWRILW+HPLJKWVWLOOEHIRXQG
JXLOW\LQVXFKDQLQVWDQFHHYHQWKRXJKKHUHWXUQHGHYHU\FHQW
RILW¶´,GDW7KHMXGJHODWHUUHSXGLDWHGKLVVWDWHPHQW
+RZHYHU KH WKHQ DWWHPSWHG DQRWKHU H[DPSOH $IWHU
LQVWUXFWLQJWKHMXU\WRGLVUHJDUGWKHH[DPSOHKHZHQWRQWR
VD\ ³μ,W ZRXOG EH PRUH SURSHU SUREDEO\ WR VD\ VXSSRVH ,
ZHUHWRJRRYHUWR3HDFRFN¶VVRPHZKHUHDQGVOLSP\KDQGLQ
DQGJRWDELJGLDPRQGULQJDQGWRRNLWKRPHDQGWKHQDIWHU
WKLQNLQJLWRYHUWKHQH[WGD\,WRRNLWEDFN¶´,GDW7KH
6HYHQWK &LUFXLW KHOG WKDW WKLV DWWHPSW WR FXUH ZDV DOVR
XQVXFFHVVIXO³7KH>ILUVW@LOOXVWUDWLRQXVHGE\WKHFRXUWZDV
XQIRUWXQDWHDQGSUHMXGLFLDO,QIDFWLQWKHFKDUJHWRWKHMXU\
WKHFRXUWWHUPHGLWμLQHSW¶7KHVHFRQGLOOXVWUDWLRQZDVYHU\
OLWWOHLPSURYHPHQWRQWKHILUVW,WLVOLNHO\WKHFRXUW¶VUHPDUNV
PDGH D GUDPDWLF LPSUHVVLRQ RQ WKH MXU\ :H WKLQN WKH
LOOXVWUDWLRQVXVHGE\WKHFRXUWZHUHSUHMXGLFLDOO\HUURQHRXV´
,G
³7KHVWDQGDUGRQDSSHDOIRUDFRXUW¶VFKDUJHWRWKHMXU\LV
ZKHWKHUWKHFKDUJHWDNHQDVDZKROHIDLUO\DQGDGHTXDWHO\
VXEPLWVWKHLVVXHVDQGDSSOLFDEOHODZWRWKHMXU\´8QLWHG
6WDWHV Y 0DUWLQ )G WK &LU
UHKHDULQJ DQG UHKHDULQJ HQ EDQF GHQLHG ,W LV ZHOO
HVWDEOLVKHG WKDW ³>U@HJDUGOHVV RI KRZ RYHUZKHOPLQJ WKH
HYLGHQFHPD\EHWKH&RQVWLWXWLRQGHOHJDWHVWRWKHMXU\QRWWR
WKH WULDO MXGJH WKH LPSRUWDQW WDVN RI GHFLGLQJ JXLOW RU
LQQRFHQFH´8QLWHG6WDWHVY0HQW])G WK
&LU 7KHUHIRUHLQLQVWUXFWLQJWKHMXU\DMXGJHPD\QRW
LQYDGHWKHMXU\¶VSURYLQFHE\XQHTXLYRFDOO\LPSO\LQJWKDWD
GHIHQGDQW¶VJXLOWKDVEHHQHVWDEOLVKHG
,Q D FULPLQDO WULDO WKH WULDO MXGJH DQG WKH MXU\ KDYH
ZHOOGHILQHG UROHV UHILQHG RYHU PDQ\ \HDUV RI
-- 6 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
LQIRUP WKH MXU\ RI D SRLQW RI ODZ WKH MXGJH FDQQRW LQ
DQVZHULQJDMXU\¶VTXHU\PHUHO\UHLWHUDWHKLVRUKHUSUHYLRXV
LQVWUXFWLRQ6HHLG³,Q8QLWHG6WDWHVY*LDFDORQH)G
WK&LU FHUWGHQLHG866&W
/(GG ZH PDGH FOHDU WKDW D
VXSSOHPHQWDOLQVWUXFWLRQLVRQHWKDWJRHVEH\RQGUHFLWLQJZKDW
KDV SUHYLRXVO\ EHHQ JLYHQ LW LV QRW PHUHO\ UHSHWLWLYH
5HLWHUDWLQJWKHUXOHVWDWHGLQ5RZDQWKDWDWULDOFRXUWKDVD
GXW\μWRFOHDUXSXQFHUWDLQWLHVZKLFKWKHMXU\EULQJVWRWKH
FRXUW¶V DWWHQWLRQ¶ ZH VWDWHG WKDW WKH SURSULHW\ RI D
VXSSOHPHQWDO LQVWUXFWLRQ PXVW EH PHDVXUHG μE\ ZKHWKHU LW
IDLUO\ UHVSRQGV WR WKH MXU\¶V LQTXLU\ ZLWKRXW LQFUHDVLQJ
SUHMXGLFH¶*LDFDORQH)GDW´,GDW,W
IROORZVWKHUHIRUHWKDWDQHUURQHRXVVXSSOHPHQWDOLQVWUXFWLRQ
FDQQRW EH VDYHG E\ UHIHUHQFH WR D SUHYLRXV DPELJXRXV
LQVWUXFWLRQ
(YHQKDGWKHMXGJHDFNQRZOHGJHGKLVHUURUDQGUHWUDFWHG
KLVH[DPSOHVXFKUHWUDFWLRQFRXOGQRWKDYHFXUHGWKHHUURU
,Q6XQGHUODQGY8QLWHG6WDWHV)G WK&LU
WKHGHIHQGDQWVZHUHFKDUJHGZLWKFRQVSLUDF\DQGXVHRIPDLOV
WRGHIUDXGE\VDOHRIFRUSRUDWHVHFXULWLHV7KHMXGJHLQKLV
FKDUJHWRWKHMXU\LQRUGHUWRLOOXVWUDWH³WKHSULQFLSOHVRIODZ
WKDWDUHPRVWGLUHFWO\LQYROYHG´WROGWKHVWRU\RIWKH³ROGJROG
EULFNVZLQGOH´SODFLQJKLPVHOILQWKHVWRU\6XQGHUODQG
)GDW,QWKHH[DPSOHKHDQGDQRWKHUPDQPDNHDQROG
FOD\EULFNDSSHDUWREHDJROGEULFNE\ILOOLQJLWZLWKOHDGDQG
FRYHULQJLWLQJROGOHDI$WKLUGPDQDUUDQJHVIRUWKHVDOHRI
WKHEULFNDJUHHLQJWRVSOLW WKHSURFHHGVRIWKHVDOH/DWHU
KRZHYHUDIWHUWKHGHIHQVHFRXQVHOREMHFWHGWRWKHFKDUJHWKH
MXGJHUHVFLQGHGKLVLOOXVWUDWLRQ³*HQWOHPHQRIWKHMXU\,DP
SHUVXDGHGWKDW,PDGHDVHULRXVHUURULQXVLQJEHIRUH\RXDQG
SLFNLQJRXWWKHFRPPRQROGVZLQGOHWKHJROGEULFNVZLQGOH
DQGXVLQJWKDWWRLOOXVWUDWHWKHSRLQWVRIODZDSSOLFDEOHWRWKH
FRQVSLUDF\DQGVZLQGOLQJVFKHPH´,GDW+RZHYHUWKH
(LJKWK&LUFXLWKHOGWKDWWKLVFRXOGQRWVDYHVXFKDQHUURQHRXV
LQVWUXFWLRQ³,WUHTXLUHVQRDUJXPHQWWRFRQYLQFHWKDWWKLV
μJROGEULFN¶LOOXVWUDWLRQZDVXQIRUWXQDWHDQGSUHMXGLFLDO7KLV
ZDV ILQDOO\ FRQFHGHG E\ WKH FRXUW DQG WKH LOOXVWUDWLRQ
ZLWKGUDZQ EXW ZH HQWHUWDLQ JUDYH GRXEW ZKHWKHU WKH
1RV 8QLWHG6WDWHVY%URZQHWDO
,QWKLVFDVHWKHMXU\DVNHGZKHWKHULQRUGHUWRKDYHKDGWKH
LQWHQWWRSRVVHVVWKHGUXJVWKHGHIHQGDQWVKDGWRNQRZEHIRUH
WKH\DUULYHGDW:KLWH¶VKRXVHWKDWFRFDLQHZDVLQWKHKRXVH
7KHFRXUWDQVZHUHG
,WLVQRWQHFHVVDU\IRUDGHIHQGDQWWRNQRZLQDGYDQFHRI
HQWHULQJWKHSUHPLVHVWKDWGUXJVDUHRQWKHSUHPLVHVLQ
RUGHUIRUWKHRIIHQVHRIDWWHPSWWRSRVVHVVFRFDLQHZLWK
LQWHQWWRGLVWULEXWHWRRFFXU,WLVRQO\QHFHVVDU\WKDWWKH
GHIHQGDQWIRUPWKHUHTXLVLWHLQWHQWEHIRUHWKHGHIHQGDQW
ZDV DSSUHKHQGHG RU EHIRUH WKH SROLFH DUULYHG RQ WKH
VFHQH 6R DQ LQGLYLGXDO ± DQG OHW PH JLYH \RX DQ
H[DPSOH/HW¶VVD\WKDWDGHIHQGDQWGHFLGHGWREXUJODUL]H
DZDUHKRXVHZLWKWKHLQWHQWLRQRIWDNLQJWKHJRRGVWKDW
WKH\ ILQG LQ WKH ZDUHKRXVH DQG VHOOLQJ WKHP RU GRLQJ
ZKDWHYHU7KHSHUVRQJHWVLQWKHZDUHKRXVHDQGILQGV
WKDWLQIDFWWKHZDUHKRXVHLVVWRULQJEDOHVRIPDULMXDQD
DVZHOODVDORWRIRWKHUVWXII7KHGHIHQGDQWSLFNVXSWKH
EDOHRIPDULMXDQDDQGDWWHPSWVWROHDYHZLWKWKHEDOHRI
PDULMXDQD,¶PWDONLQJDERXWDODUJHTXDQWLW\1RZWKH
SHUVRQ HQWHUHG WKH ZDUHKRXVH ZLWKRXW WKH LQWHQW
QHFHVVDU\WRFRQVWLWXWHWKHDWWHPSW±WKHFULPHRIDWWHPSW
WR SRVVHVV ZLWK LQWHQW WR GLVWULEXWH PDULMXDQD EXW KH
IRUPHG RU DSSHDUV WR KDYH IRUPHG WKH UHTXLVLWH LQWHQW
RQFHKHGHWHUPLQHGWKLV>VLF@WKHUHZDVPDULMXDQDWKHUH
DQGKHGHWHUPLQHGWRUHPRYHWKHPDULMXDQDDQGWUDQVSRUW
LWWRVRPHRWKHUORFDWLRQIRUGLVWULEXWLRQ
-$:HDUHWURXEOHGE\WKHVLPLODULW\EHWZHHQWKH
GLVWULFWFRXUW¶VH[DPSOHDQGWKHHYLGHQFHSUHVHQWHGDWWULDO
DQGZHWKLQNWKDWWKHVXSSOHPHQWDOLQVWUXFWLRQZLWKRXWWKH
H[DPSOHZRXOGKDYHFRUUHFWO\DQVZHUHGWKHOHJDOTXHVWLRQ
SRVHG E\ WKH MXU\ :H UHFRJQL]H KRZHYHU WKDW WKH FRXUW
PDGHDVSHFLDOHIIRUWWRSUHYHQWDQ\HUURUIURPRFFXUULQJE\
UHPLQGLQJWKHMXU\WRFRQVLGHUWKHLQVWUXFWLRQVDVDZKROHDQG
IXUWKHUHPSKDVL]LQJWKDW
$QGWKHMXU\KDVWRIURPWKHHYLGHQFHWKDWLVSUHVHQWHG
LQWKLVFDVHGHWHUPLQHDVWRHDFKGHIHQGDQWZKHWKHUWKDW
LQGLYLGXDO GHIHQGDQW IRUPHG DW DQ\ WLPH EHIRUH
-- 7 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
DSSUHKHQVLRQWKHUHTXLVLWHLQWHQW'LGWKH\NQRZWKHUH
ZDVFRFDLQHDQGGLGWKH\RUKHLW¶VLQGLYLGXDORQHDWD
WLPHGHWHUPLQHWRFRQWUROWKHFRFDLQHSRVVHVVLWUHPRYH
LWZKDWHYHUZLWKWKHLQWHQWWRGLVWULEXWHLW
-$2QEDODQFHZHFRQFOXGHWKDWWKHGLVWULFWFRXUW¶V
UHVSRQVHGLGQRWFRQVWLWXWHDQDEXVHRIGLVFUHWLRQ
9)DLOXUHWRKROGDKHDULQJRQSURVHFXWRULDO
PLVFRQGXFW
7KHGHIHQGDQWVDVVLJQDVHUURUWKHGLVWULFWFRXUW¶VIDLOXUHWR
KROGDKHDULQJRQWKHLUDOOHJDWLRQVRIJRYHUQPHQWPLVFRQGXFW
WKDWWKH\EHOLHYHHQWLWOHVWKHPWRDQHZWULDO:HUHYLHZWKH
GLVWULFWFRXUW¶VGHWHUPLQDWLRQVRQWKHPRWLRQIRUDQHZWULDO
IRUDQDEXVHRIGLVFUHWLRQ8QLWHG6WDWHVY6HDJR)G
WK &LU 7KH GHIHQGDQWV FODLP WKDW WKH
SURVHFXWLRQ ³KLG DQG GLVWRUWHG HYLGHQFH´ ³WDPSHUHG ZLWK
ZLWQHVVHVWKUHDWHQHGZLWQHVVHV´LQFOXGLQJ%URZQ¶VPRWKHU
7KHGHIHQGDQWVDOVRDOOHJHWKDWWKH$VVLVWDQW8QLWHG6WDWHV
$WWRUQH\FRPPLWWHGDQGVXERUQHGSHUMXU\%URZQ¶VDWWRUQH\
FLWHVWKLVFLUFXLW¶VGHFLVLRQLQ8QLWHG6WDWHVY)RVWHU
)G WK&LU IRUWKHSURSRVLWLRQWKDWWKHGLVWULFW
FRXUW HUUHG E\ QRW KROGLQJ D KHDULQJ RQ SURVHFXWRULDO
PLVFRQGXFW,Q)RVWHUZKLFKGHIHQVHFRXQVHO PLVFLWHVDV
³)URVW´LWZDVXQGLVSXWHGWKDWWKHSURVHFXWLRQKDGWKUHDWHQHG
DGHIHQVHZLWQHVVZLWKUHYRFDWLRQRILPPXQLW\LIWKHZLWQHVV
WHVWLILHGDWWKHGHIHQGDQW¶VWULDO7KLVFRXUWQRWHGWKDWWKLV
SURVHFXWRULDO PLVFRQGXFW ZDV VXEMHFW WR D KDUPOHVV HUURU
DQDO\VLVDQGRSLQHGWKDWWKHWULDOFRXUWVKRXOGKDYHFRQGXFWHG
DKHDULQJWRGHWHUPLQHZKHWKHUWKHPLVFRQGXFWZDVKDUPOHVV
,G DW +RZHYHU WR UHTXLUH WKH FRXUW WR XQGHUWDNH D
KDUPOHVVHUURULQTXLU\WKHGHIHQVHPXVWILUVWSUHVHQWVRPH
HYLGHQFH WKDW WKH SURVHFXWRU HQJDJHG LQ VRPH NLQG RI
PLVFRQGXFW
,QWKHFDVHEHIRUHXVQHLWKHUGHIHQGDQWKDVSRLQWHGWRDQ\
HYLGHQFH LQ WKH UHFRUG²RU IRU WKDW PDWWHU RXWVLGH WKH
UHFRUG²WR VXSSRUW D FODLP RI SURVHFXWRULDO PLVFRQGXFW
%URZQFODLPVWKDWFHUWDLQSLFWXUHVSUHVHQWHGDWWULDOVKRZLQJ
WKHFRFDLQHLQWZRGLIIHUHQWORFDWLRQVDWWKHFULPHVFHQHFDOO
1RV 8QLWHG6WDWHVY%URZQHWDO
BBBBBBBBBBBBBBBB
',66(17
BBBBBBBBBBBBBBBB
)(,.(16'LVWULFW-XGJHGLVVHQWLQJ,UHVSHFWIXOO\GLVVHQW
IURPWKHPDMRULW\¶VRSLQLRQ:LWKGXHUHVSHFWWKHFRXUWWULHV
WR SDSHU RYHU WKH VLPLODULW\ EHWZHHQ WKH GLVWULFW FRXUW¶V
H[DPSOHDQGWKHTXHVWLRQDVNHGE\WKHMXU\±ZKHWKHULQRUGHU
WRKDYHWKHLQWHQWWRSRVVHVVWKHGUXJVWKHGHIHQGDQWVKDGWR
NQRZEHIRUHWKH\DUULYHGDW:KLWH¶VKRPHWKDWFRFDLQHZDVLQ
WKHKRXVH
:HPXVWWDNHWKHVLWXDWLRQWKDWWKHMXGJHIDFHGRQHVWHSDW
DWLPH7KHMXU\DVNHGZKHWKHUWKHGHIHQGDQWVKDGWRNQRZ
EHIRUHWKH\DUULYHGDW:KLWH¶VKRXVHWKDWWKHUHZDVFRFDLQH
WKHUHLQRUGHUWRKDYHWKHQHFHVVDU\LQWHQW7RWKLVWKHMXGJH
VDLGQREXWKHUHDOL]HGWKDWWKLVZRXOGQRWDQVZHUWKHMXU\¶V
TXHVWLRQ+HFRUUHFWO\LQIHUUHGWKDWWKH\ZDQWHGWRNQRZDW
ZKDWSRLQWFRXOGLQWHQWEHIRXQG%XWLQWU\LQJWRKHOSWKHP
DVWRWKLVTXHVWLRQKHHUUHG,IDWWKDWSRLQWKHGLGQRWJLYH
WKHH[DPSOHWRWKHMXU\WKDWKHGLGDQGKDGVLPSO\VDLGWKDW
WKH\KDGWRGHFLGHZKHWKHUDQLQGLYLGXDOGHIHQGDQWDWDQ\
WLPH EHIRUH KH ZDV DSSUHKHQGHG KDG WR KDYH IRUPHG WKH
UHTXLVLWHLQWHQWWKLVZRXOGKDYHEHHQDSURSHUUHVSRQVHWRWKH
MXU\TXHVWLRQ%XWKHPRYHGRQDQGJDYHWKHPDQH[DPSOH
ZKLFKH[DFWO\ILWWKHHYLGHQFHLQWKHFDVH,QGRLQJWKLVKH
WRRNIURPWKHPWKHWDVNRIILQGLQJQHFHVVDU\LQWHQWIURPWKH
HYLGHQFHLQWKHFDVH
7KH FRXUW WDNHV FRPIRUW LQ WKH MXGJH¶V UHOLDQFH RQ KLV
SUHYLRXVLQVWUXFWLRQWRVDYHLWIURPHUURU7KHFRXUWFRUUHFWO\
FLWHVWR86Y1XQH]IRUWKHSURSRVLWLRQWKDW³,QUHVSRQVHWR
DMXU\¶VTXHVWLRQDIWHULWKDVEHJXQGHOLEHUDWLQJ>@DWULDOMXGJH
PD\DQGVKRXOGPDNHFOHDUWKHODZWKHMXU\LVERXQGWRDSSO\
WKRXJKLWLVQRWKLVSURYLQFHWRDGYLVHWKHMXU\RIFROODWHUDO
DVSHFWVRILWVGHFLVLRQ´8QLWHG6WDWHVY1XQH])G
WK&LU TXRWLQJ8QLWHG6WDWHVY5RZDQ
)G WK&LU 1XQH]KRZHYHUDOVR
WHDFKHVWKDWZKHUHDSUHYLRXVLQVWUXFWLRQGRHVQRWVXIILFLHQWO\
-- 8 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
KH KDG KLGGHQ WKHP 7KH YLFWLPV KDG WHVWLILHG WKDW ERWK
6FUXJJVDQG%URZQZHUHDUPHGZKHQWKH\HQWHUHGWKHKRPH
DQGWKDWWKHGHIHQGDQWVUHVWUDLQHGWKHPZLWKGXFWWDSH$IWHU
UHYLHZLQJWKHUHFRUGZHKROGWKDWWKHGLVWULFWFRXUW¶VILQGLQJV
RIIDFWDUHQRWFOHDUO\HUURQHRXVDQGWKDWLWVDSSOLFDWLRQRIWKH
*XLGHOLQHVWRWKRVHIDFWVLVFOHDUO\FRUUHFW
7KH*XLGHOLQHVSURYLGHIRUDWZROHYHOLQFUHDVHIRUDGUXJ
WUDIILFNLQJ RIIHQVH ³>L@I D GDQJHURXV ZHDSRQ LQFOXGLQJ D
ILUHDUP ZDVSRVVHVVHG´866HQWHQFLQJ*XLGHOLQHV0DQXDO
866* ' E 7KLV HQKDQFHPHQW LV
DSSOLFDEOHXQOHVVLWLV³FOHDUO\LPSUREDEOH´WKDWWKHZHDSRQ
ZDVFRQQHFWHGWRWKHRIIHQVH866*'FPWQ:H
KDYHKHOGWKDWRQFHWKHJRYHUQPHQWKDVHVWDEOLVKHGWKDWWKH
GHIHQGDQWDFWXDOO\RUFRQVWUXFWLYHO\SRVVHVVHGWKHZHDSRQ
WKHEXUGHQVKLIWVWRWKHGHIHQGDQWWRVKRZWKDWLWLVFOHDUO\
LPSUREDEOHWKDWWKHSRVVHVVLRQRIWKHZHDSRQZDVFRQQHFWHG
WRWKHRIIHQVH8QLWHG6WDWHVY+LOO)G WK
&LU 6FUXJJVXWWHUO\IDLOHGWRFDUU\WKDWEXUGHQ
7KH *XLGHOLQHV DOVR FDOO IRU D WZROHYHO LQFUHDVH LI WKH
GHIHQGDQWNQHZRUVKRXOGKDYHNQRZQWKDWDYLFWLPRIWKH
RIIHQVHZDVDYXOQHUDEOHYLFWLPGHILQHGE\WKH&RPPHQWDU\
DV VRPHRQH ³XQXVXDOO\ YXOQHUDEOH GXH WR DJH SK\VLFDO RU
PHQWDOFRQGLWLRQ´866*$ E DQG$FPW
Q)LQDOO\WKH*XLGHOLQHVFDOOIRUDWZROHYHOLQFUHDVHLID
YLFWLPZDVSK\VLFDOO\UHVWUDLQHGLQWKHFRXUVHRIWKHRIIHQVH
866*$7KHGLVWULFWFRXUWFRUUHFWO\FRQFOXGHGWKDW
ELQGLQJ FKLOGUHQ ZLWK GXFW WDSH LQYRNHV ERWK RI WKHVH
HQKDQFHPHQWV$FFRUGLQJO\ZHKROGWKDWWKHGLVWULFWFRXUWGLG
QRWHUULQDSSO\LQJWKHHQKDQFHPHQWV
;
)RUWKHIRUHJRLQJUHDVRQVWKHGLVWULFWFRXUW¶VMXGJPHQWRI
FRQYLFWLRQ DQG VHQWHQFH DV WR HDFK RI WKHVH GHIHQGDQWV LV
$)),50('
1RV 8QLWHG6WDWHVY%URZQHWDO
7KH JRYHUQPHQW¶V EULHIV IDLUO\ GHVFULEH WKH SUHVHQWDWLRQV E\ %URZQ
DQG 6FUXJJV DV ³GLDWULEHV´ :H ZRXOG RQO\ DGG WKDW WKH VXP DQG
VXEVWDQFH RI HDFK GHIHQGDQW¶V VWDWHPHQW ZDV WKDW KH ZDV QRW JXLOW\ DV
FKDUJHG DQG WKH GLVWULFW FRXUW SDWLHQWO\ UHYLHZHG WKH RYHUZKHOPLQJ
HYLGHQFH WR WKH FRQWUDU\ DQG GHFOLQHG WR JUDQW D QHZ WULDO RU DQ\ RWKHU
UHOLHI
LQWRTXHVWLRQWKHYHUDFLW\RIVWDWHPHQWVPDGHRQWKHVWDQG
:HILQGQRWKLQJLQWKHUHFRUGKRZHYHUWKDWOHQGVVXEVWDQFH
WR GHIHQGDQWV¶ DSSDUHQW FRQWHQWLRQ WKDW ZLWQHVVHV OLHG DQG
WKHLUIDOVHWHVWLPRQ\LVHYLGHQFHRISURVHFXWRULDOPLVFRQGXFW
7KHVHFODLPVVXUIDFHGIRUWKHILUVWWLPHGXULQJWKHVHQWHQFLQJ
KHDULQJ 7KH GLVWULFW FRXUW OLVWHQHG SDWLHQWO\ WR WKHVH
DOOHJDWLRQV ZKHQ WKH GHIHQGDQWV SUHVHQWHG WKHP 7KH
WUDQVFULSW VKRZV WKDW QHLWKHU GHIHQGDQW RIIHUHG D VKUHG RI
HYLGHQFH EH\RQG WKH EDUH DOOHJDWLRQV RI PLVFRQGXFW DQG
QHLWKHUGHIHQGDQWUHTXHVWHGDKHDULQJRQWKHVHPDWWHUVHLWKHU
WKURXJKDIRUPDOPRWLRQRUDQRUDOUHTXHVW(YHQLIZHZHUH
WRWUHDWWKHVHSURVHFXWRULDOPLVFRQGXFWFODLPVILUVWUDLVHGDW
VHQWHQFLQJDVDQRUDOPRWLRQIRUDQHZWULDOWKHPRWLRQZDV
QRWWLPHO\PDGH:HILQGQRDEXVHRIGLVFUHWLRQE\WKHWULDO
FRXUWLQIDLOLQJWRLQTXLUHIXUWKHU
9,,QHIIHFWLYHDVVLVWDQFHRIFRXQVHO
:HGRQRWDGGUHVVRQGLUHFWDSSHDOFODLPVRILQHIIHFWLYH
DVVLVWDQFHXQOHVVWKHUHFRUGKDVEHHQVXIILFLHQWO\GHYHORSHG
WRSURYLGHPHDQLQJIXOIDFWXDOUHYLHZ6HH8QLWHG6WDWHVY
$JXZD )G WK &LU ³*HQHUDOO\
WKRXJK WKLV FRXUW ZLOO QRW UHYLHZ >VXFK FODLPV@ RQ GLUHFW
DSSHDOEHFDXVHWKHUHFRUGKDVQRWEHHQVXIILFLHQWO\GHYHORSHG
IRUDVVHVVLQJWKHPHULWVRIWKHDOOHJDWLRQ´ LQWHUQDOTXRWDWLRQV
RPLWWHG ,Q WKLV FDVH ZH KDYH QR HYLGHQFH WR HYDOXDWH
FRXQVHO¶VSHUIRUPDQFHDWWULDO7KHRQO\LQGLFDWLRQRIGHIHQVH
FRXQVHO¶VHIIHFWLYHQHVVFRPHVIURPWKHGLVWULFWFRXUWMXGJH
ZKR ZKHQ WKH GHIHQGDQWV UDLVHG WKHVH FODLPV GXULQJ WKH
VHQWHQFLQJ KHDULQJ DSSODXGHG FRXQVHO¶V SHUIRUPDQFH
$FFRUGLQJO\ZHZLOOGHIHUUHYLHZRIWKHVHFODLPVWRDSRVW
FRQYLFWLRQ SURFHHGLQJ ZKHUH WKH UHFRUG PD\ EH IXOO\
GHYHORSHG6HHLG ³>2@XUFRXUWKDVURXWLQHO\FRQFOXGHGWKDW
-- 9 of 10 --
8QLWHG6WDWHVY%URZQHWDO 1RV
VXFK FODLPV DUH EHVW EURXJKW E\ D GHIHQGDQW LQ D SRVW
FRQYLFWLRQ SURFHHGLQJ XQGHU 86& VR WKDW WKH
SDUWLHVFDQGHYHORSDQDGHTXDWHUHFRUGRQWKHLVVXH´ LQWHUQDO
TXRWDWLRQVRPLWWHG
9,,6FRSHRIUHGLUHFWH[DPLQDWLRQ
'XULQJ FURVVH[DPLQDWLRQ RI D JRYHUQPHQW ZLWQHVV
6FUXJJV¶VFRXQVHOHOLFLWHGWKHLQIRUPDWLRQWKDWQRILQJHUSULQWV
ZHUH IRXQG RQ WKH JXQV RU WKH SDFNDJHV RI FRFDLQH 7KH
GHIHQGDQWV FODLP WKDW WKH FRXUW HUUHG E\ SHUPLWWLQJ WKH
SURVHFXWLRQ RQ UHGLUHFW H[DPLQDWLRQ WR DVN DERXW JORYHV
IRXQG DW WKH VFHQH RI WKH FULPH 7KH VFRSH RI UHGLUHFW
H[DPLQDWLRQLVFRPPLWWHGWRWKHVRXQGGLVFUHWLRQRIWKHFRXUW
8QLWHG6WDWHVY6HJLQHV)G WK&LU
$NH\VWRQHRIWKHGHIHQVH¶VFDVHLVWKDW6FUXJJVDQG%URZQ
FRXOG QRW KDYH SRVVHVVHG WKH JXQV RU WKH FRFDLQH EHFDXVH
WKHLUILQJHUSULQWVZHUHQRWRQHLWKHU7KHVXJJHVWLRQE\WKH
GHIHQGDQW¶V FRXQVHO WKDW WKH DEVHQFH RI ILQJHUSULQWV LV
HYLGHQFH WKDW WKH GHIHQGDQWV GLG QRW FRPPLW WKH FULPHV
DOOHJHGRSHQHGWKHGRRUWRWKHHQWLUHO\UHOHYDQWTXHVWLRQRI
ZKHWKHU JORYHV ZHUH IRXQG DW WKH FULPH VFHQH 7KLV
DVVLJQPHQWRIHUURULVPHULWOHVV
9,,,7HVWLPRQ\RI<RODQGD)UDQNOLQ
,QUHYLHZLQJDPRWLRQWRVXSSUHVVWHVWLPRQ\ZHUHYLHZ
IDFWXDO ILQGLQJV IRU FOHDU HUURU ZH UHYLHZ OHJDO
GHWHUPLQDWLRQVGHQRYR8QLWHG6WDWHVY:LOOLDPV)G
WK&LU
7KHGHIHQGDQWVREMHFWHGWRWKHFRXUW¶VDOORZLQJWHVWLPRQ\
IURP FRFRQVSLUDWRU <RODQGD )UDQNOLQ FODLPLQJ WKDW WKH
JRYHUQPHQWKDGRIIHUHGKHU³VRPHWKLQJRIYDOXH´LQH[FKDQJH
IRU KHU WHVWLPRQ\ LQ YLRODWLRQ RI 86& F
7KHUHLVQRGLVSXWHWKDW)UDQNOLQ¶VSOHDDJUHHPHQW
LQFOXGHGWKHJRYHUQPHQW¶VFRPPLWPHQWWRILOHDPRWLRQIRUD
GRZQZDUG GHSDUWXUH EDVHG RQ FRRSHUDWLRQ DQG VXEVWDQWLDO
DVVLVWDQFH 7KLV FLUFXLW KDV XQDPELJXRXVO\ KHOG WKDW SOHD
DJUHHPHQWVZKLFKFRQWHPSODWHGHSDUWXUHPRWLRQVLQH[FKDQJH
1RV 8QLWHG6WDWHVY%URZQHWDO
7KH JRYHUQPHQW FRQWHQGV WKDW 6FUXJJV ZDLYHG KLV REMHFWLRQV WR
WKHVH HQKDQFHPHQWV E\ IDLOLQJ WR UDLVH WKHP EHIRUH WKH WULDO FRXUW ,Q IDFW
DOWKRXJK KH GLG QRW ILOH ZULWWHQ REMHFWLRQV WR WKH SUHVHQWHQFH LQYHVWLJDWLRQ
UHSRUW ZKLFK LQFOXGHG ERWK RI WKH HQKDQFHPHQWV GXULQJ WKH VHQWHQFLQJ
KHDULQJ 6FUXJJV HPSKDWLFDOO\ FKDOOHQJHG WKH GLVWULFW FRXUW¶V ILQGLQJV WKDW
DQ\ RI WKH FKLOGUHQ KDG EHHQ UHVWUDLQHG RU WKDW KH KDG XVHG DQ\ GXFW WDSH
:H WKLQN WKLV LV VXIILFLHQW SDUWLFXODUO\ VLQFH 6FUXJJV ZDV SURFHHGLQJ SUR
VH WR SUHVHUYH KLV REMHFWLRQ
IRUFRRSHUDWLRQGRQRWYLRODWH86& F 8QLWHG
6WDWHVY:DUH)G WK&LU 7KH
GLVWULFWFRXUWFRUUHFWO\IRXQGWKDWWKHJRYHUQPHQW¶VSURPLVH
RI D PRWLRQ IRU D GRZQZDUG GHSDUWXUH GLG QRW YLRODWH WKH
VWDWXWH7KLVDVVLJQPHQWRIHUURULVPHULWOHVV
,;6HQWHQFLQJHQKDQFHPHQWV
)LQDOO\ 6FUXJJV FODLPV WKDW WKH FRXUW HUUHG LQ DSSO\LQJ
XSZDUGDGMXVWPHQWVIRUZHDSRQVSRVVHVVLRQDQGWKHIRUFLEOH
UHVWUDLQWRIFKLOGUHQ,QUHYLHZLQJFKDOOHQJHVWRDJXLGHOLQH
VHQWHQFHDQDSSHOODWHFRXUW
VKDOOJLYHGXHUHJDUGWRWKHRSSRUWXQLW\RIWKHGLVWULFW
FRXUWWRMXGJHWKHFUHGLELOLW\RIWKHZLWQHVVHVDQGVKDOO
DFFHSWWKHILQGLQJVRIIDFWRIWKHGLVWULFWFRXUWXQOHVVWKH\
DUHFOHDUO\HUURQHRXVDQGVKDOOJLYHGXHGHIHUHQFHWRWKH
GLVWULFWFRXUW¶VDSSOLFDWLRQRIWKHJXLGHOLQHVWRWKHIDFWV
86& H
$OWKRXJKDWVHQWHQFLQJ6FUXJJVYRFLIHURXVO\GHQLHGWKDWKH
KDGSRVVHVVHGDQ\JXQVZKLOHDW:KLWH¶VUHVLGHQFHRUWKDWKH
KDGXVHGGXFWWDSHWRUHVWUDLQDQ\RQHRQWKHSUHPLVHVWKH
GLVWULFWFRXUWVSHFLILFDOO\IRXQGWKDWGXULQJWKHGHIHQGDQWV¶
VHDUFKIRUFRFDLQH6FUXJJVKDGFRQVWUXFWLYHSRVVHVVLRQRI
ILUHDUPVDQGWKDWWKHGHIHQGDQWVKDGUHVWUDLQHGWKHYLFWLPV
LQFOXGLQJVHYHUDOFKLOGUHQZLWKGXFWWDSH7KHGLVWULFWFRXUW
PDGH LW FOHDU WKDW KDYLQJ SUHVLGHG RYHU WKH WULDO LW ZDV
FUHGLWLQJWKHWULDOWHVWLPRQ\RIWKHDUUHVWLQJRIILFHUVDQGWKH
YLFWLPV7KHRIILFHUVKDGWHVWLILHGWKDWZKHQKHZDVDUUHVWHG
6FUXJJVLQGLFDWHGWKDWWKHJXQVFRXOGEHIRXQGLQDER[ZKHUH
-- 10 of 10 --
Connect Omnilex to search the legal corpus from your AI assistant.