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)
00-5993•02a0023p.06
7KH +RQRUDEOH 'DYLG $ .DW] 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
('1$ $<(56$GPLQLVWUDWUL[
RIWKH(VWDWHRI5R\/
+DUGLQGHFHDVHG
3ODLQWLII$SSHOODQW
Y
81,7(' 67$7(6 2) $0(5,&$
'HIHQGDQW$SSHOOHH
;!
1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW)UDQNIRUW
1R²-RVHSK0+RRG'LVWULFW-XGJH
$UJXHG6HSWHPEHU
'HFLGHGDQG)LOHG-DQXDU\
%HIRUH1(/621DQG0225(&LUFXLW-XGJHV.$7=
'LVWULFW-XGJH
-- 1 of 6 --
$\HUVY8QLWHG6WDWHV 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 3DXO $ &DVL ,, +2))0$1 &$6,
/RXLVYLOOH .HQWXFN\ IRU $SSHOODQW 'HEUD - .RVVRZ
81,7(' 67$7(6 '(3$570(17 2) -867,&( &,9,/
',9,6,21:DVKLQJWRQ'&IRU$SSHOOHH21%5,()
3DXO$&DVL+2))0$1 &$6,/RXLVYLOOH.HQWXFN\IRU
$SSHOODQW 'HEUD - .RVVRZ 81,7(' 67$7(6
'(3$570(17 2) -867,&( &,9,/ ',9,6,21
:DVKLQJWRQ'&IRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
'$9,'$.$7='LVWULFW-XGJH3ODLQWLII$SSHOODQW(GQD
$\HUV ³$\HUV´ DV DGPLQLVWUDWUL[ RI WKH HVWDWH RI 5R\ /
+DUGLQ ³+DUGLQ´ ILOHGVXLWXQGHUWKH6XLWVLQ$GPLUDOW\$FW
86&$SS ³6$$´ DQGWKH)HGHUDO7RUWV
&ODLPV $FW 86& ³)7&$´ DJDLQVW
'HIHQGDQW$SSHOOHHWKH8QLWHG6WDWHV$\HUVDOOHJHGWKDWWKH
QHJOLJHQWRSHUDWLRQRI/RFNDQG'DP1R ³/RFN1R RQ
WKH .HQWXFN\ 5LYHU E\ WKH 86 $UP\ &RUSV RI (QJLQHHUV
³&RUSV´ OHG WR WKH GURZQLQJ GHDWK RI GHFHGHQW +DUGLQ
$\HUV¶VRQ7KH8QLWHG6WDWHVILOHGDPRWLRQWRGLVPLVV7KH
GLVWULFWFRXUWKHOGWKDWWKHDFWLRQFDPHZLWKLQLWVDGPLUDOW\
MXULVGLFWLRQZDVWKHUHIRUHEDUUHGE\WKHVWDWXWHRIOLPLWDWLRQV
DQGJUDQWHGWKHPRWLRQWRGLVPLVV:HDIILUP
,%DFNJURXQG
/RFNDQG'DP1RORFDWHGDWPLOHRQWKH.HQWXFN\
5LYHULVRZQHGDQGRSHUDWHGE\WKH8QLWHG6WDWHVWKURXJKLWV
DJHQF\WKH&RUSV/RFN1RFRQVLVWVRIDORFNWRDOORZ
YHVVHO SDVVDJH RQ WKH ULYHU DQG D GDP WR PDLQWDLQ D
QDYLJDEOHZDWHUOHYHO7KHDUHDGRZQVWUHDPRI/RFN1R
QHDU/RFNSRUW.HQWXFN\LVDSRSXODUVZLPPLQJDUHD
-- 2 of 6 --
$\HUVY8QLWHG6WDWHV 1R
$SSHOODQW¶VFODLPWKDWHTXLWDEOHWROOLQJVKRXOGEHDSSOLHG
EHFDXVHVKHZDVPLVOHGE\WKH8QLWHG6WDWHV¶UHSUHVHQWDWLRQV
LVZLWKRXWPHULW,WLVZHOOHVWDEOLVKHGWKDWWKHILOLQJRIDQ
DGPLQLVWUDWLYH FODLP XQGHU WKH )7&$ ZLOO QRW WROO WKH
OLPLWDWLRQV SHULRG IRU DQ DFWLRQ XQGHU WKH 6$$ 6HH
0F0DKRQ86DWVHHDOVR%RYHOOY8QLWHG6WDWHV
'HS¶W RI 'HIHQVH )G G &LU
)XUWKHUPRUHWKHUHLVQRDOOHJDWLRQWKDWDUHSUHVHQWDWLYHRIWKH
8QLWHG6WDWHVHYHUPLVOHG$SSHOODQWDVWRKHUDGPLUDOW\FODLP
,QKHUEULHIWRWKLV&RXUWWKH$SSHOODQWVWDWHV³7KHILUVWWLPH
DGPLUDOW\MXULVGLFWLRQZDVUDLVHGDQGWKHWZR\HDUVWDWXWHRI
OLPLWDWLRQVZDVDVVHUWHGDVDGHIHQVHZDVLQUHVSRQVHWRWKH
$SSHOODQW¶V&RPSODLQW´ $SSHOODQW¶V%ULHIDW
$SSHOODQW¶VFRQWHQWLRQWKDWVKHVKRXOGEHH[FXVHGIURPWKH
FRQVHTXHQFHVRIKHUXQWLPHO\ILOLQJEHFDXVHWKHH[LVWHQFHRI
DGPLUDOW\MXULVGLFWLRQLQWKLVFDVHZDVDQXQVHWWOHGLVVXHLV
DOVR QRW ZHOOWDNHQ 'LOLJHQW UHVHDUFK ZDV OLNHO\ WR KDYH
UHYHDOHGQRWRQO\WKHH[LVWHQFHRIDSRVVLEOHFODLPXQGHUWKH
6$$EXWDOVRWKDWWKHOLPLWDWLRQVSHULRGIRUWKDWDFWLRQZRXOG
PRVW OLNHO\ QRW EH WROOHG E\ WKH ILOLQJ RI $SSHOODQW¶V
DGPLQLVWUDWLYHFODLP+DG$SSHOODQWDQ\GRXEWDVWRZKHWKHU
KHUDFWLRQZDVSURSHUO\EURXJKWXQGHUWKH)7&$RUWKH6$$
VKHZDVIUHHWRLQFOXGHLQKHULQLWLDOFRPSODLQWUHTXHVWVIRU
UHOLHIXQGHUERWKVWDWXWHV)(' 5 &,9 3 D &RQWUDU\WR
WKHVXJJHVWLRQRI$SSHOODQWDWRUDODUJXPHQWVXFKDOWHUQDWLYH
SOHDGLQJVDUHQRWGLVIDYRUHG
7KHGLVWULFWFRXUW¶VGHFLVLRQQRWWRDOORZHTXLWDEOHWROOLQJ
RIWKH6$$¶VVWDWXWHRIOLPLWDWLRQVZDVFRUUHFWDQGZLOOEH
DIILUPHG
,9&RQFOXVLRQ
)RUWKHIRUHJRLQJUHDVRQVZHKROGWKDWWKH$SSHOODQW¶VVXLW
LV EDUUHG GXH WR KHU IDLOXUH WR ILOH ZLWKLQ WZR \HDUV RI WKH
DOOHJHGWRUWLRXVDFWLYLW\DVUHTXLUHGE\WKH6XLWVLQ$GPLUDOW\
$FW7KHGHFLVLRQRIWKHGLVWULFWFRXUWJUDQWLQJWKHPRWLRQWR
GLVPLVVLV$)),50('
1R $\HUVY8QLWHG6WDWHV
2Q$XJXVW+DUGLQZDVVZLPPLQJDSSUR[LPDWHO\
RQHKXQGUHG\DUGVIURPWKHGRZQVWUHDPGLVFKDUJHDUHDRI
/RFN1RZKHQWKHORFNPDVWHUEHJDQ³ORFNLQJWKURXJK´
WZR SOHDVXUH FUDIW ³/RFNLQJ WKURXJK´ WKH FUDIW HQWDLOHG
RSHQLQJ WKH GRZQVWUHDP GLVFKDUJH HQG RI /RFN 1R
UHVXOWLQJLQWXUEXOHQFHIURPWKHVXGGHQDQGUDSLGUHOHDVHRI
ZDWHU 3ODLQWLII DOOHJHV WKDW WKLV WXUEXOHQFH SXOOHG +DUGLQ
XQGHU WKH ZDWHU DQG FDXVHG KLP WR GURZQ 3ODLQWLII DOVR
DOOHJHVWKDWWKHORFNPDVWHUQHJOLJHQWO\IDLOHGWRZDUQRWKHUV
RI KLV LQWHQW WR RSHUDWH /RFN 1R )ROORZLQJ +DUGLQ¶V
GURZQLQJ WKH WZR SOHDVXUH FUDIW OHIW /RFN 1R DQG
SURFHHGHGGRZQVWUHDPRQWKH.HQWXFN\5LYHUZLWKRXWGHOD\
2Q-XQH$\HUVILOHGDQDGPLQLVWUDWLYHFODLPIRU
ZURQJIXOGHDWKZLWKWKH&RUSVSXUVXDQWWRWKH)7&$2Q
-XO\DQDWWRUQH\IRUWKH&RUSVDFNQRZOHGJHGUHFHLSW
RIWKHFODLPDQGVWDWHGWKDWWKHPDWWHUZRXOGEHLQYHVWLJDWHG
2Q-XO\$\HUVZDVLQIRUPHGE\IDFVLPLOHOHWWHUWKDW
WKHDGPLQLVWUDWLYHFODLPKDGQRWEHHQSURSHUO\ILOHGEHFDXVH
LWODFNHGQHFHVVDU\GRFXPHQWVGHPRQVWUDWLQJDXWKRUL]DWLRQWR
ILOHWKHFODLP7KHIDFVLPLOHDOVRVWDWHG³7KHFODLPKDVQRW
EHHQ SURSHUO\ SUHVHQWHG DQG WKH VWDWXWH RI OLPLWDWLRQV
FRQWLQXHVWRUXQ´,QUHVSRQVHWRWKH&RUSV¶IDFVLPLOHWKDW
VDPHGD\$\HUVVHQWDQHZDGPLQLVWUDWLYHFODLPFRQWDLQLQJ
WKHSURSHUDXWKRUL]DWLRQDQGUHFRJQL]LQJWKDWWKHVL[PRQWK
SHULRGIRUWKH8QLWHG6WDWHV¶UHVSRQVHWRWKHFODLPZRXOGUXQ
IURPWKHGDWHRIWKHQHZFODLP
7KHUHZDVQRILQDOGLVSRVLWLRQRI$\HUV¶FODLPZLWKLQWKH
SUHVFULEHGVL[PRQWKSHULRG2Q)HEUXDU\$\HUV
ILOHGD&RPSODLQWLQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH
(DVWHUQ 'LVWULFW RI .HQWXFN\ ,Q KHU &RPSODLQW $\HUV
DOOHJHG RQO\ WKDW KHU DFWLRQ DURVH XQGHU WKH )7&$ 2Q
-XQH$\HUVILOHGDQ$PHQGHG&RPSODLQWDOOHJLQJ
WKDWKHUDFWLRQDURVHXQGHUWKH)7&$RULQWKHDOWHUQDWLYH
XQGHUWKH6$$
7KH 8QLWHG 6WDWHV ILOHG D PRWLRQ WR GLVPLVV IRU ODFN RI
MXULVGLFWLRQ7KHGLVWULFWFRXUWDSSO\LQJ-HURPH%*UXEDUW
,QFY*UHDW/DNHV'UHGJH 'RFN&R86
-- 3 of 6 --
$\HUVY8QLWHG6WDWHV 1R
KHOGWKDW$\HUV¶DFWLRQZDVEHIRUHWKHFRXUWSXUVXDQWWRLWV
DGPLUDOW\MXULVGLFWLRQXQGHUWKH6$$DQGWKDWWKHVXLWZDV
XQWLPHO\GXHWR$\HUV¶IDLOXUHWRILOHKHUFRPSODLQWZLWKLQWKH
WZR\HDU SHULRG DOORZHG E\ 86&$SS 7KH
GLVWULFWFRXUWDOVRUHMHFWHG$\HUV¶DUJXPHQWWKDWWKH6$$¶V
OLPLWDWLRQV SHULRG ZDV VXEMHFW WR HTXLWDEOH WROOLQJ 7KH
GLVWULFWFRXUWJUDQWHGWKHPRWLRQWRGLVPLVVDQG$\HUV¶DSSHDO
WRWKLVFRXUWIROORZHG,QKHUDSSHDO$\HUVFODLPVWKDWKHU
DFWLRQ ZDV WLPHO\ EURXJKW XQGHU WKH )7&$ RU LQ WKH
DOWHUQDWLYH WKDW HTXLWDEOH WROOLQJ RI WKH 6$$¶V OLPLWDWLRQV
SHULRGLVDSSURSULDWHEDVHGRQKHUILOLQJRIDQDGPLQLVWUDWLYH
FRPSODLQW FRXSOHG ZLWK UHSUHVHQWDWLRQV DOOHJHGO\ PDGH E\
&RUSV DWWRUQH\V FRQFHUQLQJ WKH WROOLQJ RI WKH VWDWXWH RI
OLPLWDWLRQV
,,6WDQGDUGRI5HYLHZ
³$GLVWULFWFRXUW VGLVPLVVDORIFODLPVIRUODFNRIVXEMHFW
PDWWHUMXULVGLFWLRQLVUHYLHZHGGHQRYRRQDSSHDO´*RRGY
2KLR(GLVRQ&R)G WK&LU FLWLQJ
.UXVHY9LOODJHRI&KDJULQ)DOOV2KLR)G
WK&LU FHUWGHQLHG86
,,,'LVFXVVLRQ
$ $GPLUDOW\-XULVGLFWLRQ
³&ODLPVIRUZKLFKDUHPHG\LVDYDLODEOHXQGHU>6$$@DUH
QRWFRJQL]DEOHXQGHU)7&$´3HDUFHY8QLWHG6WDWHV
)G WK&LU TXRWLQJ(VWDWHRI&DOODVY
8QLWHG 6WDWHV )G Q WK &LU
86&$SS³7KH>6$$@SHUPLWVVXLWVLQDGPLUDOW\
DJDLQVWWKH8QLWHG6WDWHVμ>L@QFDVHVZKHUHLIDSULYDWH
SHUVRQRUSURSHUW\ZHUHLQYROYHGDSURFHHGLQJLQDGPLUDOW\
FRXOG EH PDLQWDLQHG¶´ 3HDUFH )G DW TXRWLQJ
)DXVWY6RXWK&DUROLQD6WDWH+LJKZD\'HS¶W)G
Q WK&LU
3ULRUWRWKHH[LVWHQFHRIDGPLUDOW\MXULVGLFWLRQZDV
GHWHUPLQHGE\WKHORFDOLW\WHVW:KHUH³WKHZURQJRFFXUUHGRQ
QDYLJDEOHZDWHUVWKHDFWLRQZDVZLWKLQDGPLUDOW\MXULVGLFWLRQ
1R $\HUVY8QLWHG6WDWHV
FRXUW ZDV WKHUHIRUH FRUUHFW LQ LWV GHWHUPLQDWLRQ WKDW WKH
H[FOXVLYHUHPHG\IRU$SSHOODQW¶VFRPSODLQWLVJRYHUQHGE\
WKH6$$
' 6WDWXWHRI/LPLWDWLRQV
$FWLRQVXQGHUWKH6$$DUHVXEMHFWWRDWZR\HDUVWDWXWHRI
OLPLWDWLRQV86&$SS)DLOXUHWREULQJDQDFWLRQ
XQGHUWKH6$$ZLWKLQWZR\HDUVIROORZLQJWKHRFFXUUHQFHRI
DQLQMXU\ZLOOGHSULYHIHGHUDOFRXUWVRIMXULVGLFWLRQWRKHDUWKH
DFWLRQ6HH0F0DKRQY8QLWHG6WDWHV86
6WDWHV0DULQH&RUSRI'HODZDUHY8QLWHG6WDWHV)G
G&LU $SSHOODQW¶V&RPSODLQWDOOHJHVWKDW
+DUGLQGURZQHGRQ$XJXVW7KH&RPSODLQWZDVILOHG
RQ)HEUXDU\DQGDPHQGHGWRLQFOXGHFODLPVXQGHU
WKH6$$RQ-XQH$SSHOODQW¶VFODLPIDOOVRXWVLGHWKH
WZR\HDUOLPLWDWLRQVSHULRGDQGLVWKHUHIRUHEDUUHG
( (TXLWDEOH7ROOLQJ
$SSHOODQW DUJXHV WKDW LQ WKH HYHQW DGPLUDOW\ MXULVGLFWLRQ
H[LVWVWKH8QLWHG6WDWHVVKRXOGEHEDUUHGIURPDVVHUWLQJD
VWDWXWHRIOLPLWDWLRQVGHIHQVHE\RSHUDWLRQRIHTXLWDEOHWROOLQJ
6KH FRQWHQGV WKDW WROOLQJ LV DSSURSULDWH ERWK EHFDXVH WKH
8QLWHG6WDWHVDIILUPDWLYHO\UHSUHVHQWHGWKDWWKHDGPLQLVWUDWLYH
FODLPILOHGSXUVXDQWWRKHU)7&$DFWLRQWROOHGWKHVWDWXWHRI
OLPLWDWLRQVDQGEHFDXVHKHUIDLOXUHWRWLPHO\ILOHDQDGPLUDOW\
DFWLRQZDVQRWFDXVHGE\³JDUGHQYDULHW\QHJOHFW´EXWLQVWHDG
UHVXOWHG EHFDXVH KHU FODLP LQYROYHG DQ LVVXH RI DGPLUDOW\
MXULVGLFWLRQWKDWZDVRQHRIILUVWLPSUHVVLRQLQWKLVFLUFXLW
(TXLWDEOH WROOLQJ DOORZV DQ DFWLRQ WR SURFHHG GHVSLWH LWV
KDYLQJEHHQEURXJKWRXWVLGHWKHVWDWXWHRIOLPLWDWLRQVZKHQ
WKHUH H[LVW H[FHSWLRQDO FLUFXPVWDQFHV WKDW KDYH SUHYHQWHG
WLPHO\ILOLQJRIWKHDFWLRQWKURXJKQRIDXOWRIWKH3ODLQWLII
6HH7UXLWWY&RXQW\RI:D\QH)G WK&LU
$OWKRXJKHTXLWDEOH WROOLQJPD\EHDSSOLHGLQVXLWV
DJDLQVWWKHJRYHUQPHQWFRXUWVZLOORQO\GRVR³VSDULQJO\´
DQGQRWZKHQWKHUHKDVRQO\EHHQ³DJDUGHQYDULHW\FODLPRI
H[FXVDEOHQHJOHFW´,UZLQY'HSDUWPHQWRI9HWHUDQV¶$IIDLUV
86
-- 4 of 6 --
$\HUVY8QLWHG6WDWHV 1R
,Q KHU EULHI $SSHOODQW JLYHV QXPHURXV UHDVRQV ZK\ WKH GURZQLQJ
GLG QRW UHVXOW LQ DQ\ LQWHUUXSWLRQ RI PDULWLPH FRPPHUFLDO DFWLYLW\ 7KH
SRLQWV UDLVHG E\ WKH $SSHOODQW DUH QRW UHOHYDQW KRZHYHU EHFDXVH WKH WHVW
FRQVLGHUV QRW ZKDW FRPPHUFLDO GLVUXSWLRQ UHVXOWHG EXW ZKDW SRWHQWLDO IRU
GLVUXSWLRQ H[LVWHG 6HH *UXEDUW 86 DW
7KHORFDOLW\SURQJRIWKHWHVWIRUDGPLUDOW\MXULVGLFWLRQKDV
EHHQVDWLVILHG1RWRQO\ZDV+DUGLQGURZQHGLQQDYLJDEOH
ZDWHUVEXWDOVRWKHLQVWUXPHQWDOLW\WKDW$SSHOODQWVXJJHVWV
FDXVHGWKHGURZQLQJ /RFN1R ZDVORFDWHGLQQDYLJDEOH
ZDWHUV
& 7KH&RQQHFWLRQ5HTXLUHPHQW
,Q LWV LQLWLDO VWHS WKH ³FRQQHFWLRQ WHVW´ UHTXLUHV WKDW ZH
FKDUDFWHUL]H WKH FLUFXPVWDQFHV UHVXOWLQJ LQ +DUGLQ¶V GHDWK
ZLWK VRPH ³LQWHUPHGLDWH OHYHO RI JHQHUDOLW\´ +HUH WKH
LQFLGHQWPD\DSSURSULDWHO\EHFKDUDFWHUL]HGDVDGURZQLQJ
ZKLFKRFFXUUHGDVKRUWGLVWDQFHGRZQVWUHDPIURPDORFNRQ
QDYLJDEOHZDWHUV6RFKDUDFWHUL]HGLWLVFOHDUWKDWWKHUHZDV
VRPH SRWHQWLDO HIIHFW RQ PDULWLPH FRPPHUFH %DUULQJ
LPPHGLDWH UHFRYHU\ RI WKH GHFHDVHG D GURZQLQJ UHTXLUHV
YHVVHOVWRHQJDJHLQVRPHUHVFXHDQGUHFRYHU\HIIRUWDQGLI
VXFKDQHIIRUWZHUHWRRFFXULPPHGLDWHO\GRZQVWUHDPIURPD
ORFNWKHQVRPHQRWLQVLJQLILFDQWLQWHUUXSWLRQRIFRPPHUFLDO
DFWLYLW\PLJKWUHVXOW7KLVSRWHQWLDOLQWHUUXSWLRQLVVXIILFLHQW
WRVDWLVI\WKHILUVWSDUWRIWKH³FRQQHFWLRQWHVW´
7KH VHFRQG HQTXLU\ LQ WKH ³FRQQHFWLRQ WHVW´ UHTXLUHV
H[DPLQDWLRQ RI ZKHWKHU WKH WRUWIHDVRU¶V DFWLYLW\ ZDV
VXEVWDQWLDOO\ UHODWHG WR WUDGLWLRQDO PDULWLPH DFWLYLW\ 6HH
*UXEDUW86DW7KHUHFDQEHQRUHDVRQDEOHGLVSXWH
WKDWWKHRSHUDWLRQRIDORFNLVDWUDGLWLRQDOPDULWLPHDFWLYLW\
6HH HJ 0DULQH 7UDQVLW &RUS Y 'UH\IXV 86
YHVVHOVDQNZKLOHDSSURDFKLQJDORFN 7KH0RQWHOOR
86 UHFRJQL]LQJWKDWORFNVGDPVDQGFDQDOV
DOORZQDYLJDWLRQRIRWKHUZLVHXQQDYLJDEOHZDWHUV
%RWK WKH ORFDWLRQ DQG FRQQHFWLRQ UHTXLUHPHQWV IRU
DGPLUDOW\MXULVGLFWLRQDUHSUHVHQWLQWKLVFDVH7KHGLVWULFW
1R $\HUVY8QLWHG6WDWHV
LIWKHZURQJRFFXUUHGRQODQGLW>ZD@VQRW´([HFXWLYH-HW
$YLDWLRQY&LW\RI&OHYHODQG86 ,Q
([HFXWLYH-HWWKH&RXUWKHOGWKDWDGHWHUPLQDWLRQRIDGPLUDOW\
MXULVGLFWLRQ UHTXLUHG LQTXLU\ LQWR WKH ³UHODWLRQVKLS RI WKH
ZURQJWRWUDGLWLRQDOPDULWLPHDFWLYLW\´,GDW/DWHULQ
)RUHPRVW,QV&RY5LFKDUGVRQ86 WKH
&RXUWVWUHVVHGWKDWDGPLUDOW\MXULVGLFWLRQH[LVWHGRQO\ZKHUH
WKH WRUW ³KDG D VLJQLILFDQW FRQQHFWLRQ ZLWK WUDGLWLRQDO
PDULWLPHDFWLYLW\´,GDW7KH)RUHPRVW&RXUWIRXQG
WKDWWKH³VLJQLILFDQWFRQQHFWLRQ´UHTXLUHPHQWZDVVDWLVILHGE\
³>W@KHSRWHQWLDOGLVUXSWLYHLPSDFWRIDFROOLVLRQEHWZHHQERDWV
RQ QDYLJDEOH ZDWHUV ZKHQ FRXSOHG ZLWK WKH WUDGLWLRQDO
FRQFHUQ WKDW DGPLUDOW\ KROGV IRU QDYLJDWLRQ´ LG DW
GHVSLWH WKH IDFW WKDW QHLWKHU RI WKH YHVVHOV LQYROYHG LQ WKH
)RUHPRVW FROOLVLRQ ZDV HQJDJHG LQ FRPPHUFLDO DFWLYLW\
7KHUHDIWHULQ6LVVRQY5XE\86 WKH&RXUW
KHOG WKDW PDULWLPH MXULVGLFWLRQ ZDV DSSURSULDWH ZKHQ D
SRWHQWLDO KD]DUG WR PDULWLPH FRPPHUFH DULVHV RXW RI DQ
DFWLYLW\ WKDW EHDUV D VXEVWDQWLDO UHODWLRQVKLS WR WUDGLWLRQDO
PDULWLPHDFWLYLW\6HHLGDW
7KH 6XSUHPH &RXUW PRVW UHFHQWO\ DGGUHVVHG DGPLUDOW\
MXULVGLFWLRQLQ-HURPH%*UXEDUW,QFY*UHDW/DNHV'UHGJH
'RFN&R86 ,Q*UXEDUWWKH&RXUWKHOG
WKDW DGPLUDOW\ MXULVGLFWLRQ H[LVWHG RYHU FODLPV FRQFHUQLQJ
IORRGLQJRIEXLOGLQJVLQGRZQWRZQ&KLFDJRWKHIORRGLQJKDG
DOOHJHGO\ UHVXOWHG DIWHU D FUDQH VLWXDWHG RQ D EDUJH RQ WKH
&KLFDJR5LYHUZDVXVHGWRGULYHSLOHVLQWRWKHULYHUEHGDERYH
D WXQQHO 6HH LG DW 7KH *UXEDUW &RXUW DSSOLHG WKH
6LVVRQWHVWDQGVWDWHGWKDW³>$@SDUW\VHHNLQJWRLQYRNHIHGHUDO
DGPLUDOW\ MXULVGLFWLRQ RYHU D WRUW FODLP PXVW VDWLVI\
FRQGLWLRQVERWKRIORFDWLRQDQGRIFRQQHFWLRQZLWKPDULWLPH
DFWLYLW\´,GDW
7RGHWHUPLQHLIWKHORFDWLRQUHTXLUHPHQWKDVEHHQVDWLVILHG
DFRXUWH[DPLQLQJMXULVGLFWLRQ³PXVWGHWHUPLQHZKHWKHUWKH
WRUWRFFXUUHGRQQDYLJDEOHZDWHURUZKHWKHULQMXU\VXIIHUHGRQ
ODQGZDVFDXVHGE\DYHVVHORQQDYLJDEOHZDWHU´,G:KHUH
WKHUHLVVRPHGLVSXWHDVWRWKHFDXVDWLRQRIDQLQMXU\DFRXUW
-- 5 of 6 --
$\HUVY8QLWHG6WDWHV 1R
PD\ORRNWRJHQHUDOWRUWSULQFLSOHVRI³SUR[LPDWHFDXVH´,G
DW
7KH³FRQQHFWLRQWHVW´UHTXLUHVDWZRSDUWLQTXLU\)LUVWWKH
FRXUWLVUHTXLUHGWR³μDVVHVVWKHJHQHUDOIHDWXUHVRIWKHW\SHRI
LQFLGHQWLQYROYHG¶WRGHWHUPLQHZKHWKHUWKHLQFLGHQWKDVμD
SRWHQWLDOO\ GLVUXSWLYH LPSDFW RQ PDULWLPH FRPPHUFH¶´
*UXEDUW86DW TXRWLQJ6LVVRQ86DW
Q LQWHUQDOFLWDWLRQVRPLWWHG 7KLVDVVHVVPHQWPXVWEH
PDGH E\ PHDQV RI ³D GHVFULSWLRQ RI WKH LQFLGHQW DW DQ
LQWHUPHGLDWHOHYHORISRVVLEOHJHQHUDOLW\´*UXEDUW86
DW +DYLQJ FKDUDFWHUL]HG WKH LQFLGHQW ZH DUH WKHQ
UHTXLUHGWRDVN³ZKHWKHUWKHLQFLGHQWFRXOGEHVHHQZLWKLQD
FODVV RI LQFLGHQWV WKDW SRVHG PRUH WKDQ D IDQFLIXO ULVN WR
FRPPHUFLDOVKLSSLQJ´,GDW
7RVDWLVI\WKHVHFRQGSURQJRIWKH³FRQQHFWLRQWHVW´WKH
FRXUW³PXVWGHWHUPLQHZKHWKHUμWKHJHQHUDOFKDUDFWHU¶RIWKH
μDFWLYLW\ JLYLQJ ULVH WR WKH LQFLGHQW¶ VKRZV D μVXEVWDQWLDO
UHODWLRQVKLSWRWUDGLWLRQDOPDULWLPHDFWLYLW\¶´*UXEDUW
86DW TXRWLQJ6LVVRQ86DWDQGQ
7KDW LV WKH FRXUW ³DVN>V@ ZKHWKHU D WRUWIHDVRU¶V DFWLYLW\
FRPPHUFLDO RU QRQFRPPHUFLDO RQ QDYLJDEOH ZDWHUV LV VR
FORVHO\UHODWHGWRDFWLYLW\WUDGLWLRQDOO\VXEMHFWWRDGPLUDOW\
ODZ WKDW WKH UHDVRQV IRU DSSO\LQJ VSHFLDO DGPLUDOW\ UXOHV
ZRXOGDSSO\LQWKHVXLWDWKDQG´*UXEDUW86DW
:HDSSO\*UXEDUWEHORZ
% 7KH/RFDWLRQ5HTXLUHPHQW
7KHSDUWLHVGRQRWGLVSXWHWKDWWKHSRUWLRQRIWKH.HQWXFN\
5LYHU LQ ZKLFK +DUGLQ ZDV VZLPPLQJ ZKHQ KH GURZQHG
FRQVWLWXWHVDQDYLJDEOHZDWHUZD\QRUGRWKH\GLVSXWHWKDWWKH
ORFN PDVWHU ZDV ³ORFNLQJ WKURXJK´ WZR SOHDVXUH FUDIW MXVW
SULRUWR+DUGLQ¶VDFFLGHQW$SSHOODQWDUJXHVKRZHYHUWKDW
WKHVHIDFWVDUHLQVXIILFLHQWWRVDWLVI\WKHORFDWLRQUHTXLUHPHQW
IRUDQXPEHURIUHDVRQV
$SSHOODQW FODLPV WKDW WKH 6$$ UHTXLUHV WKDW D YHVVHO EH
LQYROYHGLQWKHFRPPLVVLRQRIWKHWRUW7KH6$$SURYLGHV
LQSHUWLQHQWSDUW³,QFDVHVZKHUHLIVXFKYHVVHOZHUHSULYDWHO\
1R $\HUVY8QLWHG6WDWHV
$SSHOODQW HYHQ VWDWHV WKDW VXFK LV WKH FDVH LQ KHU $PHQGHG
&RPSODLQW ³6XFK QHJOLJHQFH LQFOXGHG EXW ZDV QRW QHFHVVDULO\ OLPLWHG WR
WKH VXGGHQ DQG UDSLG UHOHDVH RI D ODUJH YROXPH RI ZDWHU ZKLOH WUDQVSRUWLQJ
YHVVHOV WKURXJK VXFK /RFN 1R ´ $S[ DW
RZQHGRURSHUDWHGRULIVXFKFDUJRZHUHSULYDWHO\RZQHGRU
SRVVHVVHGRULIDSULYDWHSHUVRQRUSURSHUW\ZHUHLQYROYHGD
SURFHHGLQJ LQ DGPLUDOW\ FRXOG EH PDLQWDLQHG ´
86&$SS7KHSODLQODQJXDJHRIWKHVWDWXWHVWDWHV
WKDWRQO\³SULYDWHSHUVRQRUSURSHUW\´LVQHFHVVDU\VRORQJDV
DQ DFWLRQ LQ DGPLUDOW\ PLJKW RWKHUZLVH EH PDLQWDLQHG
$SSHOODQW¶VDUJXPHQWLVWKHUHIRUHZLWKRXWPHULW
$SSHOODQWDOVRFRQWHQGVWKDWEHFDXVHWKHORFNPDVWHUZDVRQ
ODQGZKHQKHDFWLYDWHGWKHPHFKDQLVPWRUHOHDVHWKHZDWHU
IURPWKHORFNWKLVFDVHVKRXOGEHFKDUDFWHUL]HGDVDODQG
EDVHGWRUWWKDWKDVFDXVHGLQMXU\RQDQDYLJDEOHZDWHUZD\,Q
HIIHFW$SSHOODQWLVDVNLQJWKLVFRXUWWRHQWHUWDLQDQDUJXPHQW
VLPLODU WR WKDW DGYDQFHG LQ ([HFXWLYH -HW LQ ZKLFK WKH
6XSUHPH&RXUW³UHIXVHGWRHQWHULQWRDGHEDWHRYHUZKHWKHU
WKH WRUW RFFXUUHG ZKHUH WKH SODQH KDG FUDVKHG DQG EHHQ
GHVWUR\HG WKHQDYLJDEOHZDWHUVRI/DNH(ULH RUZKHUHLWKDG
VWUXFN WKH VHD JXOOV RYHU ODQG ´ 6LVVRQ 86 DW
FLWLQJ([HFXWLYH-HW86DW 7RHQJDJHLQVXFK
DGHEDWHKHUHZRXOGEHWRDSSO\WRRPHFKDQLFDODQDSSOLFDWLRQ
RI WKH ORFDOLW\ WHVW VRPHWKLQJ WKDW WKH 6XSUHPH &RXUW KDV
UHFRJQL]HG DV QHLWKHU ³VHQVLEOH´ QRU ³FRQVRQDQW ZLWK WKH
SXUSRVHV RI PDULWLPH ODZ´ *UXEDUW 86 DW
TXRWLQJ([HFXWLYH-HW86DW
)LQDOO\ZHQRWHWKDW$SSHOODQW¶VFRQWLQXHGDVVHUWLRQWKDW
QRYHVVHOZDVLQYROYHGLQ+DUGLQ¶VGURZQLQJLVGLVLQJHQXRXV
DWEHVW$OWKRXJKWKHLUFRQQHFWLRQZLWK+DUGLQ¶VGURZQLQJLV
FOHDUO\PRUHWHQXRXVWKDQLIKHKDGEHHQ VWUXFNE\RUKDG
IDOOHQIURPRQHRIWKHFUDIW$SSHOODQWGRHVQRWGLVSXWHWKDW
WKHORFNPDVWHUDFWLYDWHG/RFN1RWRDOORZSDVVDJHRIWZR
SOHDVXUH FUDIW ,W ZRXOG WKHUHIRUH EH XQUHDVRQDEOH IRU
$SSHOODQW WR DVVHUW WKDW +DUGLQ¶V GURZQLQJ ZDV HQWLUHO\
XQUHODWHGWRZDWHUFUDIW
-- 6 of 6 --
Connect Omnilex to search the legal corpus from your AI assistant.