02a0332p.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
3$75,&,$ -2+1621 0,&+$(/
$8 )5$1&(
3ODLQWLIIV$SSHOOHHV
Y
&,7< 2) &,1&,11$7,
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL
1R²6XVDQ-'ORWW'LVWULFW-XGJH
$UJXHG)HEUXDU\
'HFLGHGDQG)LOHG6HSWHPEHU
%HIRUH0$57,1&KLHI&LUFXLW-XGJH*,/0$1&LUFXLW
-XGJH('081'6'LVWULFW-XGJH

-- 1 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('5LFKDUG*DQXOLQ&,7<62/,&,725¶62)),&(
&LQFLQQDWL 2KLR IRU $SSHOODQW %HUQDUG ) :RQJ
&LQFLQQDWL 2KLR IRU $SSHOOHH 21 %5,() 5LFKDUG
*DQXOLQ&,7<62/,&,725¶62)),&(&LQFLQQDWL2KLRIRU
$SSHOODQW %HUQDUG ) :RQJ &LQFLQQDWL 2KLR 5D\PRQG
9DVYDUL$0(5,&$1&,9,//,%(57,(681,212)2+,2
)281'$7,21 &OHYHODQG 2KLR 6FRWW 7 *UHHQZRRG
*5((1:22' $662&,$7(6 &LQFLQQDWL 2KLR IRU
$SSHOOHHV
0$57,1 & - GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ
ZKLFK('081'6'-MRLQHG*,/0$1- SS
GHOLYHUHGDVHSDUDWHGLVVHQWLQJRSLQLRQ
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
%2<&()0$57,1-5&KLHI&LUFXLW-XGJH7KH&LW\
RI &LQFLQQDWL DSSHDOV WKH GHFLVLRQ RI WKH GLVWULFW FRXUW
GHFODULQJ WKH &LW\¶V GUXJH[FOXVLRQ RUGLQDQFH &LQFLQQDWL
0XQLFLSDO &RGH † XQFRQVWLWXWLRQDO RQ LWV IDFH DQG
XQFRQVWLWXWLRQDODVDSSOLHGWRSODLQWLIIV3DWULFLD-RKQVRQDQG
0LFKDHO$X)UDQFHDQGDZDUGLQJSODLQWLIIVDWWRUQH\IHHV)RU
WKHUHDVRQVVHWIRUWKEHORZZH$)),50WKHMXGJPHQWRIWKH
GLVWULFWFRXUW
,
$
2Q $XJXVW WKH &LW\ HQDFWHG WKH 2UGLQDQFH WR
HQKDQFHWKHTXDOLW\RIOLIHDQGSURWHFWWKHKHDOWKVDIHW\DQG
ZHOIDUH RI SHUVRQV LQ QHLJKERUKRRGV ZLWK D ³VLJQLILFDQWO\
KLJKHULQFLGHQFHRIFRQGXFWDVVRFLDWHGZLWKGUXJDEXVHWKDQ
RWKHUDUHDVRIWKH&LW\´&LQFLQQDWL2KLR2UGLQDQFH1R

-- 2 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
,9&21&/86,21
7KH&LW\RI&LQFLQQDWLDVWKHPDMRULW\UHFRJQL]HVIDFHV
GLIILFXOWFKDOOHQJHVLQLWVHIIRUWVWRHQKDQFHWKHTXDOLW\RIOLIH
LQ GUXJSODJXHG QHLJKERUKRRGV DQG WR SURWHFW WKH KHDOWK
VDIHW\ DQG ZHOIDUH RI LWV FLWL]HQV LQ WKRVH DUHDV ,Q P\
RSLQLRQV WKH RUGLQDQFH ZDV D FRQVWLWXWLRQDOO\ SHUPLVVLEOH
PHDQVWRUHDFKWKDWJRDO,WKHUHIRUHUHVSHFWIXOO\GLVVHQW
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
7KH RIIHQVHV LQFOXGH FRUUXSWLQJ DQRWKHU ZLWK GUXJV LQ YLRODWLRQ RI
5& GUXJ WUDIILFNLQJ LQ YLRODWLRQ RI 5& GUXJ DEXVH
LQ YLRODWLRQ RI 5& H[FHSW IRU PLQRU PLVGHPHDQRU YLRODWLRQV
SRVVHVVLQJ GUXJ DEXVH LQVWUXPHQWV LQ YLRODWLRQ RI 5&
SRVVHVVLQJ GUXJ SDUDSKHUQDOLD LQ YLRODWLRQ RI 5& LOOHJDO
SURFHVVLQJ RI GUXJ GRFXPHQWV LQ YLRODWLRQ RI 5& DEXVLQJ
KDUPIXO LQWR[LFDQWV LQ YLRODWLRQ RI 5& WUDIILFNLQJ LQ KDUPIXO
LQWR[LFDQWV LQ YLRODWLRQ RI 5& DQG RIIHQVHV LQYROYLQJ
FRXQWHUIHLW FRQWUROOHG VXEVWDQFHV LQ YLRODWLRQ RI 5& †
† $ ' $XJ 7RDGYDQFHWKLVJRDO
WKH2UGLQDQFHH[FOXGHVDQLQGLYLGXDOIRUXSWRQLQHW\GD\V
IURPWKH³SXEOLFVWUHHWVVLGHZDONVDQGRWKHUSXEOLFZD\V´LQ
DOOGUXJH[FOXVLRQ]RQHVLIWKHLQGLYLGXDOLVDUUHVWHGRUWDNHQ
LQWR FXVWRG\ ZLWKLQ DQ\ GUXJH[FOXVLRQ ]RQH IRU RQH RI
VHYHUDO HQXPHUDWHG GUXJ RIIHQVHV &LQFLQQDWL 0XQLFLSDO
&RGH†7KH2UGLQDQFHH[WHQGVWKLVH[FOXVLRQIRUD
\HDULIWKHLQGLYLGXDOLVFRQYLFWHG,G7KH2UGLQDQFHGHILQHV
GUXJH[FOXVLRQ]RQHVDV³DUHDVZKHUHWKHQXPEHURIDUUHVWV
IRUGUXJDEXVHUHODWHGFULPHVIRUWKHWZHOYH PRQWK
SHULRG SUHFHGLQJ WKH RULJLQDO GHVLJQDWLRQ LV VLJQLILFDQWO\
KLJKHUWKDQWKDWIRURWKHUVLPLODUO\VLWXDWHGVL]HGDUHDVRIWKH
FLW\´,G†
([FOXGHGSHUVRQVZKRYLRODWHWKH2UGLQDQFHDUHVXEMHFWWR
SURVHFXWLRQ IRU FULPLQDO WUHVSDVV D IRXUWKGHJUHH
PLVGHPHDQRU,G7KH&LW\¶VFKLHIRISROLFHKRZHYHUPXVW
JUDQW D YDULDQFH WR DQ\ SHUVRQ ZKR SURYHV WKDW KH RU VKH
UHVLGHGLQWKHGUXJH[FOXVLRQ]RQHSULRUWRUHFHLYLQJWKH
H[FOXVLRQ QRWLFH RU ZDV HPSOR\HG E\ RU RZQHG D
EXVLQHVVORFDWHGLQDGUXJH[FOXVLRQ]RQHSULRUWRUHFHLYLQJ
WKHH[FOXVLRQQRWLFH,G† E 3URYLGHGWKH\KDYH
ZULWWHQUHJXODWLRQVSURKLELWLQJ³GUXJDEXVHUHODWHGDFWLYLWLHV
E\ WKHLU FOLHQWV DQG ZKLFK KDYH HQWHUHG LQWR D ZULWWHQ
DJUHHPHQW ZLWK WKH SROLFH GLYLVLRQ FRQFHUQLQJ WKH
DSSOLFDELOLW\RIWKRVHUXOHV´VRFLDOVHUYLFHDJHQFLHVPD\DOVR
JUDQWYDULDQFHV³IRUUHDVRQVUHODWLQJWRWKHKHDOWKZHOIDUHRU
ZHOOEHLQJRIWKHSHUVRQH[FOXGHGRUIRUGUXJDEXVHUHODWHG
FRXQVHOLQJVHUYLFHV´,G9DULDQFHVPXVWEHLQZULWLQJDQG
WKHLQGLYLGXDOPXVWNHHSWKHYDULDQFHZLWKKLPRUKHUDWDOO
WLPHVZLWKLQDGUXJH[FOXVLRQ]RQH,G† F 7KH

-- 3 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
YDULDQFHEHFRPHVYRLGLIWKHKROGHUYLRODWHVLWVWHUPVRULV
VXEVHTXHQWO\DUUHVWHGIRUDGUXJRIIHQVH,G† F
G
7KH2UGLQDQFHSURYLGHVDQDSSHDOPHFKDQLVPZKHUHE\DQ
H[FOXGHGLQGLYLGXDOPD\ILOHDZULWWHQUHTXHVWIRUDKHDULQJ
ZLWKLQILYHGD\VRIUHFHLYLQJDQH[FOXVLRQQRWLFH,G††
D 2Q DSSHDO WKH &LW\ PXVW SURYH E\ D
SUHSRQGHUDQFHRIWKHHYLGHQFHWKDWWKHH[FOXGHGLQGLYLGXDO
FRPPLWWHGDVSHFLILHGGUXJRIIHQVHLQDGUXJH[FOXVLRQ]RQH
,G † F 7KH &LW\ FDQ VXVWDLQ RU YDFDWH WKH
H[FOXVLRQQRWLFHEHLQJFKDOOHQJHGDQGWKDWGHWHUPLQDWLRQ³LV
DTXDVLMXGLFLDOGHFLVLRQDQGLVILQDOVXEMHFWRQO\WRDSSHDOWR
DFRXUWRIFRPSHWHQWMXULVGLFWLRQ´,G† & F '
,Q6HSWHPEHUWKH&LW\&RXQFLOGHVLJQDWHG2YHUWKH
5KLQH±DPL[HGUHVLGHQWLDOFRPPHUFLDOQHLJKERUKRRGORFDWHG
LPPHGLDWHO\QRUWKRIWKH&LW\¶VGRZQWRZQEXVLQHVVGLVWULFW±
DGUXJH[FOXVLRQ]RQH7KH&LW\¶VGHVLJQDWLRQRI2YHUWKH
5KLQH IROORZHG D SROLFH UHSRUW H[DPLQLQJ &LW\ZLGH GUXJ
DUUHVWVIURP-XQHWR0D\7KHUHSRUWZKLFKZDV
VXEVHTXHQWO\ LQFRUSRUDWHG LQWR WKH 2UGLQDQFH¶V IDFWXDO
ILQGLQJVGHWDLOHGWKDWRI&LW\GUXJDUUHVWVRFFXUUHGLQ
2YHUWKH5KLQH$FFRUGLQJWRWKHUHSRUWUHGXFLQJWKHQXPEHU
RIGUXJRIIHQVHVLQ2YHUWKH5KLQHZDVH[WUHPHO\GLIILFXOW
EHFDXVH PDQ\ DUUHVWHG LQGLYLGXDOV UHWXUQHG WR WKH
QHLJKERUKRRG LPPHGLDWHO\ XSRQ UHOHDVH &LWLQJ 3RUWODQG
2UHJRQ¶V FULPH UHGXFWLRQ LQ FHUWDLQ QHLJKERUKRRGV
IROORZLQJWKHHVWDEOLVKPHQWRIDGUXJH[FOXVLRQRUGLQDQFHWKH
SROLFHUHSRUWFKDUDFWHUL]HGDGUXJH[FOXVLRQRUGLQDQFHDVDQ
DGGLWLRQDOWRROWRUHGXFHFULPHDQGLPSURYHWKHTXDOLW\RIOLIH
LQ2YHUWKH5KLQH
,QWKH&LW\DPHQGHGWKH2UGLQDQFHWRSURYLGHWKDWWKH
QLQHW\GD\ H[FOXVLRQ SHULRG WHUPLQDWHV XSRQ DFTXLWWDO
GLVPLVVDORIFKDUJHVRUIDLOXUHWRSURVHFXWH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
VDQFWLRQDSSOLHGZDVDOUHDG\DFULPHQRWLQJWKDW³&RQJUHVV
PD\LPSRVHERWKDFULPLQDODQGDFLYLOVDQFWLRQLQUHVSHFWWR
WKHVDPHDFWRURPLVVLRQ´ LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
7KHSODLQWLIIVFRQFHGHWKDWWKHVL[WKIDFWRUZKLFKUHTXLUHV
DVNLQJ ³ZKHWKHU DQ DOWHUQDWLYH SXUSRVH WR ZKLFK >WKH
VDQFWLRQ@PD\UDWLRQDOO\EHFRQQHFWHGLVDVVLJQDEOHIRULW´
GRHV QRW VXSSRUW D FRQFOXVLRQ WKDW WKH RUGLQDQFH LPSRVHG
FULPLQDO VDQFWLRQV ,Q SDUWLFXODU WKH &LW\ HQDFWHG WKH
RUGLQDQFHLQDQDWWHPSWWRLPSURYHWKHTXDOLW\RIOLIHZLWKLQ
GUXJH[FOXVLRQ]RQHVDQGWRSURWHFWWKHKHDOWKVDIHW\DQG
ZHOIDUHRILWVFLWL]HQVLQWKRVHQHLJKERUKRRGV7KLVSXUSRVH
LVUDWLRQDOO\UHODWHGWRWKHRUGLQDQFH¶VVDQFWLRQRIH[FOXVLRQ
)LQDOO\ LQ FRQVLGHULQJ WKH VHYHQWK IDFWRU¶V IRFXV RQ
FRPSDULQJWKHQDWXUHRIWKHVDQFWLRQVWRWKHFLYLOSXUSRVHRU
WKH RUGLQDQFH , GR QRW ILQG WKH H[FOXVLRQV H[FHVVLYH LQ
UHODWLRQWRWKHOHJLWLPDWHJRYHUQPHQWDOJRDOVLQYROYHG$V
QRWHGDERYHWKHSRWHQWLDOO\KDUVKHIIHFWVRIWKHRUGLQDQFHDUH
PLWLJDWHGWKURXJKWKHDYDLODELOLW\RIYDULDQFHV
7KHSUHFHGLQJDQDO\VLVGHPRQVWUDWHVWKDWRQO\WKHILUVWDQG
IRXUWK IDFWRUV²ZKLFK IRFXV XSRQ ZKHWKHU WKH VDQFWLRQ
LQYROYHVDQDIILUPDWLYHGLVDELOLW\RUUHVWUDLQWDQGZKHWKHUWKH
SHQDOW\VHUYHVDUHWULEXWLYHRUGHWHUUHQWSXUSRVH²VXSSRUWD
ILQGLQJ WKDW WKH H[FOXVLRQ LV D FULPLQDO SXQLVKPHQW %XW
QHLWKHU RI WKHVH FRQVLGHUDWLRQV SURYLGHV HVSHFLDOO\ VWURQJ
VXSSRUWIRUWKHSODLQWLIIV¶SRVLWLRQ$OORIWKHRWKHUIDFWRUV
OHDGWRWKHFRQFOXVLRQWKDWWKHRUGLQDQFHZDVQRW³VRSXQLWLYH
HLWKHULQSXUSRVHRUHIIHFWDVWRWUDQVIRU>P@ZKDWZDVFOHDUO\
LQWHQGHGDVDFLYLOUHPHG\LQWRDFULPLQDOSHQDOW\´+XGVRQ
86 DW LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQV
RPLWWHG DOWHUDWLRQ LQ RULJLQDO , WKXV FRQFOXGH WKDW WKH
SODLQWLIIVKDYHIDLOHGWRVXVWDLQWKHLUKLJKEXUGHQRISUHVHQWLQJ
³WKHFOHDUHVWSURRI´WKDWWKHRUGLQDQFHZDVDFULPLQDOSHQDOW\
QRWZLWKVWDQGLQJLWVGHVLJQDWLRQE\WKH&LW\DVDFLYLOUHPHG\
,G DW $V D UHVXOW WKH RUGLQDQFH¶V VDQFWLRQV GLG QRW
YLRODWH WKH 'RXEOH -HRSDUG\ &ODXVH , ZRXOG WKHUHIRUH
UHYHUVHWKHMXGJPHQWRIWKHGLVWULFWFRXUWRQWKLVLVVXH

-- 4 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
7KH WKLUG 0HQGR]D0DUWLQH] IDFWRU UHTXLUHV D
GHWHUPLQDWLRQRIZKHWKHUWKHVDQFWLRQ³FRPHVLQWRSOD\RQO\
RQDILQGLQJRIVFLHQWHU´%HFDXVHH[FOXVLRQQRWLFHVFRXOGEH
JLYHQ WR LQGLYLGXDOV DUUHVWHG IRU GUXJ FULPHV ZLWKRXW DQ\
ILQGLQJRIPHQVUHDFULPLQDOLQWHQWLVQRWUHTXLUHGWRLPSRVH
WKHVDQFWLRQ7KLVIDFWRUIDYRUVWKH&LW\¶VSRVLWLRQWKDWWKH
H[FOXVLRQ LV D FLYLO VDQFWLRQ UDWKHU WKDQ D FULPLQDO
SXQLVKPHQW
:LWKUHJDUGWRWKHIRXUWKIDFWRUZKLFKIRFXVHVRQZKHWKHU
WKHVDQFWLRQVHUYHVDUHWULEXWLYHRUGHWHUUHQWSXUSRVHHYHQWKH
&LW\ FRQFHGHV WKDW WKH RUGLQDQFH ZRXOG KDYH D GHWHUUHQW
HIIHFW 'HWHUUHQFH LQ IDFW ZDV WKH YHU\ SXUSRVH RI WKH
RUGLQDQFH%XWWKHOLNHO\GHWHUUHQFH³LVLQVXIILFLHQWWRUHQGHU
DVDQFWLRQFULPLQDODVGHWHUUHQFHPD\VHUYHFLYLODVZHOODV
FULPLQDOJRDOV´+XGVRQ86DW LQWHUQDOTXRWDWLRQ
PDUNV RPLWWHG 0RUHRYHU WKH H[LVWHQFH RI WKH YDULDQFHV
FRXQWHUVDQ\VXJJHVWLRQWKDWWKHRUGLQDQFHZDVGHVLJQHGDVD
PHDQVRIUHWULEXWLRQ,WKHUHIRUHILQGWKDWWKLVIDFWRUDOWKRXJK
VRPHZKDWKHOSIXOWRWKHSODLQWLIIVGRHVQRWZHLJKKHDYLO\LQ
WKHLUIDYRU
7KH ILIWK IDFWRU²³ZKHWKHU WKH EHKDYLRU WR ZKLFK >WKH
VDQFWLRQ@ DSSOLHV LV DOUHDG\ D FULPH´²GRHV QRW VXSSRUW D
FRQFOXVLRQ WKDW WKH RUGLQDQFH LPSRVHG FULPLQDO SHQDOWLHV
([FOXVLRQRFFXUUHGRQO\LIDSHUVRQZDVDUUHVWHGRUFRQYLFWHG
RIDGUXJRIIHQVHLQDGUXJH[FOXVLRQ]RQH,QFRQWUDVWWKH
FULPLQDOODZVWKDWVXFKDSHUVRQYLRODWHGDSSO\UHJDUGOHVVRI
ZKHUH WKH FULPH LV FRPPLWWHG 7KH SDUWLFXODU EHKDYLRU WR
ZKLFKWKHRUGLQDQFHDSSOLHGGHILQHGLQWKLVPDQQHUZDVQRW
D VHSDUDWH FULPH (TXDOO\ LPSRUWDQW WKH IDFW WKDW ERWK
FULPLQDO SHQDOWLHV DQG WKH RUGLQDQFH¶V VDQFWLRQV FRXOG EH
LPSRVHG IRU WKH VDPH XQGHUO\LQJ GUXJ RIIHQVHV ZDV
LQVXIILFLHQW WR PDNH WKH H[FOXVLRQ FULPLQDOO\ SXQLWLYH
+XGVRQ 86 DW QRWLQJ WKDW D VDQFWLRQ LV QRW
QHFHVVDULO\SXQLWLYHVLPSO\EHFDXVHWKHFRQGXFWIRUZKLFKLW
LVLPSRVHGLVDOVRDFULPLQDORIIHQVH 8QLWHG6WDWHVY:DUG
86 KROGLQJWKDWWKHLPSRVLWLRQRI
DILQHIRUYLRODWLRQVRIWKH)HGHUDO:DWHU3ROOXWLRQ&RQWURO
$FWZDVDFLYLOSHQDOW\HYHQWKRXJKWKHEHKDYLRUWRZKLFKWKH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
%
-RKQVRQZDVDUUHVWHGRQ0DUFKIRUDPDULMXDQD
WUDIILFNLQJ RIIHQVH LQ 2YHU WKH 5KLQH $W WKH WLPH RI KHU
DUUHVWVKHYDULRXVO\OLYHGZLWK.DWULQD&KDPEHUVDQG)UDQN
-RKQVRQ WZR RI KHU DGXOW FKLOGUHQ 0DUTXLVD +DUPRQ
-RKQVRQ¶VRWKHUDGXOWGDXJKWHUUHVLGHGLQ2YHUWKH5KLQH
-RKQVRQGLGQRWUHVLGHZLWK+DUPRQEXWVKHKHOSHGFDUHIRU
+DUPRQ¶VILYHPLQRUFKLOGUHQDQGUHJXODUO\WRRNWZRRIWKH
FKLOGUHQ7DQLDDQG-DTXDQQDWRVFKRRO
$V D UHVXOW RI KHU DUUHVW -RKQVRQ UHFHLYHG DQ H[FOXVLRQ
QRWLFH SURKLELWLQJ KHU IURP HQWHULQJ 2YHU WKH 5KLQH IURP
0DUFKXQWLO-XQH%HFDXVHVKHZDVQRWD
ERQD ILGH UHVLGHQW RI RU HPSOR\HG LQ 2YHU WKH 5KLQH
-RKQVRQGLGQRWTXDOLI\IRUDYDULDQFHDQGVKHGLGQRWDSSHDO
KHUH[FOXVLRQQRWLFH
$IWHUDQ2KLRJUDQGMXU\WRRNQRDFWLRQRQWKHPDULMXDQD
WUDIILFNLQJFKDUJHDJDLQVW-RKQVRQWKHFDVHDJDLQVWKHUZDV
WHUPLQDWHGRQ0DUFK%HFDXVHWKH2UGLQDQFHKDG
QRW\HWEHHQDPHQGHGWRSURYLGHIRULPPHGLDWHWHUPLQDWLRQ
RIWKHH[FOXVLRQ-RKQVRQ UHPDLQHGEDQQHGIURP2YHUWKH
5KLQH7KXVZKHQ-RKQVRQZDVIRXQGZLWKLQ2YHUWKH5KLQH
RQ$SULOWKH&LW\FKDUJHGKHUZLWKFULPLQDOWUHVSDVV
7KLVFKDUJHZDVGLVPLVVHGRQ)HEUXDU\
$X)UDQFHDKRPHOHVVPDQZDVILUVWDUUHVWHGLQ2YHUWKH
5KLQHIRUSRVVHVVLRQRIGUXJSDUDSKHUQDOLDLQ2FWREHU
+HZDVFRQYLFWHGRIWKLVRIIHQVHRQ1RYHPEHU+H
ZDV VXEVHTXHQWO\ DUUHVWHG DQG FRQYLFWHG IRU PXOWLSOH
2UGLQDQFHYLRODWLRQVDQGDGGLWLRQDOGUXJUHODWHGFULPHVLQWKH
QHLJKERUKRRG$VDUHVXOWRIWKHVHDUUHVWVFRQYLFWLRQVDQG
UHODWHGH[FOXVLRQV$X)UDQFHFODLPVKHZDVSURKLELWHGIURP
HQWHULQJ2YHUWKH5KLQHIRUIRXU\HDUVDQGVSHQWRYHUIRXU
KXQGUHGGD\VLQMDLO
$X)UDQFHUHJXODUO\VRXJKWIRRGFORWKLQJDQGVKHOWHUIURP
VRFLDO VHUYLFH RUJDQL]DWLRQV ORFDWHG LQ 2YHU WKH 5KLQH
0RUHRYHU$X)UDQFH¶VDWWRUQH\¶VRIILFHLVORFDWHGLQ2YHUWKH
5KLQH$X)UDQFHDSSOLHGIRUDYDULDQFHRQ1RYHPEHU

-- 5 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
7KH&LW\GHQLHGKLVDSSOLFDWLRQFLWLQJKLVFULPLQDO
UHFRUGDQGODFNRIDSHUPDQHQWUHVLGHQFHLQ2YHUWKH5KLQH
&
-RKQVRQ LQLWLDOO\ ILOHG VXLW RQ -XQH DQG ERWK
-RKQVRQ DQG $X )UDQFH ILOHG DQ DPHQGHG FRPSODLQW RQ
'HFHPEHU7KHSODLQWLIIVDOOHJHGWKDWWKH2UGLQDQFH
XQFRQVWLWXWLRQDOO\LQIULQJHVRQWKHLUULJKWVWRIUHHGRPRI
VSHHFKDQGIUHHGRPRIDVVRFLDWLRQ LQIULQJHVRQWKHLUULJKW
WRIUHHGRPRIPRYHPHQWLQLQWUDVWDWHWUDYHOLQYLRODWLRQRIWKH
)RXUWHHQWK$PHQGPHQW¶V'XH3URFHVVDQG(TXDO3URWHFWLRQ
&ODXVHV YLRODWHV WKH (LJKWK $PHQGPHQW¶V SURKLELWLRQ
DJDLQVWFUXHODQGXQXVXDOSXQLVKPHQWDQG YLRODWHVWKH
)LIWK $PHQGPHQW¶V 'RXEOH -HRSDUG\ &ODXVH 3ODLQWLIIV
VRXJKWDGHFODUDWLRQWKDWWKH2UGLQDQFHLVXQFRQVWLWXWLRQDORQ
LWV IDFH DQG DV DSSOLHG WR WKHP D SHUPDQHQW LQMXQFWLRQ
SURKLELWLQJ WKH &LW\ IURP HQIRUFLQJ WKH 2UGLQDQFH
FRPSHQVDWRU\ GDPDJHV DQG UHDVRQDEOH DWWRUQH\ IHHV DQG
FRVWV
7KH GLVWULFW FRXUW KHOG WKDW WKH 2UGLQDQFH ZDV
XQFRQVWLWXWLRQDOERWKDVDSSOLHGDQGRQLWVIDFHEHFDXVHLW
YLRODWHG WKH SODLQWLIIV¶ ULJKW WR IUHHGRP RI DVVRFLDWLRQ
YLRODWHG WKH ULJKW RI H[FOXGHG SHUVRQV WR IUHHGRP RI
PRYHPHQWLQWKHIRUPRIWKHLUULJKWWRLQWUDVWDWHWUDYHODQG
YLRODWHG $X )UDQFH¶V ULJKW WR EH IUHH IURP GRXEOH
MHRSDUG\ 7KH GLVWULFW FRXUW HQMRLQHG HQIRUFHPHQW RI WKH
2UGLQDQFHDQGDZDUGHGSODLQWLIIVLQIHHV
6XEVHTXHQW WR WKH GLVWULFW FRXUW¶V GHFLVLRQ WKH 2KLR
6XSUHPH&RXUWGHFODUHGWKDWWKHSRVWFRQYLFWLRQSRUWLRQRI
WKH2UGLQDQFHYLRODWHGERWKWKH8QLWHG6WDWHV&RQVWLWXWLRQ
DQG WKH 6WDWH RI 2KLR &RQVWLWXWLRQ 6WDWH Y %XUQHWW
1(G 2KLR FHUW GHQLHG 6&W
$FFRUGLQJWRDOOEXWRQH-XVWLFHRIWKH2KLR
6XSUHPH&RXUWWKH2UGLQDQFHLPSHUPLVVLEO\LQIULQJHGRQD
FRQYLFWHGLQGLYLGXDO¶VGXHSURFHVVULJKWWRLQWUDVWDWHWUDYHO
VSHFLILFDOO\WKHULJKWWR³WUDYHOORFDOO\WKURXJKSXEOLFVSDFHV
DQGURDGZD\V´RIWKHVWDWH,GDW7KH%XUQHWWFRXUWDOVR
UXOHGWKDWWKH2UGLQDQFHLPSHUPLVVLEO\H[FHHGHGWKHORFDO
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
SXQLVKPHQW RI LPSULVRQPHQW´ KRZHYHU WKLV IDFWRU LQ P\
YLHZLVQRWHQWLWOHGWRRYHUZKHOPLQJZHLJKW
7R VXSSRUW WKHLU SRVLWLRQ WKDW WKH VHFRQG IDFWRU²WKH
KLVWRULFDO WUHDWPHQW RI WKH VDQFWLRQ²LV LQGLFDWLYH RI D
FULPLQDO SHQDOW\ WKH SODLQWLIIV FRQWHQG WKDW WKH RUGLQDQFH
HIIHFWLYHO\ EDQLVKHG SHUVRQV IURP 2YHU WKH 5KLQH 7KH
SODLQWLIIV DUH FRUUHFW WKDW EDQLVKPHQW KDV KLVWRULFDOO\ EHHQ
UHJDUGHGDVDSXQLVKPHQW1L[RQY$GP¶URI*HQ6HUYV
86 UHFRJQL]LQJ WKDW EDQLVKPHQW LV D
SXQLVKPHQW FRPPRQO\ LQFOXGHG DV RQH RI WKH ³SDLQV DQG
SHQDOWLHV´ SURVFULEHG E\ $UWLFOH , † RI WKH &RQVWLWXWLRQ
ZKLFKSURKLELWV%LOOVRI$WWDLQGHU 0HQGR]D0DUWLQH]
86DWQ VWDWLQJWKDW³IRUIHLWXUHRIFLWL]HQVKLSDQGWKH
UHODWHG GHYLFHV RI EDQLVKPHQW DQG H[LOH KDYH WKURXJKRXW
KLVWRU\EHHQXVHGDVSXQLVKPHQW´
(TXDWLQJ WKH RUGLQDQFH¶V QLQHW\GD\ DQG RQH\HDU
H[FOXVLRQVZLWKEDQLVKPHQWKRZHYHULVSUREOHPDWLFEHFDXVH
WKH RUGLQDQFH SURYLGHG IRU YDULDQFHV WR LQGLYLGXDOV ZKR
UHVLGHLQRUZKRDUHHPSOR\HGE\DODZIXOEXVLQHVVORFDWHGLQ
DQ H[FOXVLRQ ]RQH 5HJLVWHUHG VRFLDO VHUYLFH DJHQFLHV
PRUHRYHUFRXOGJUDQWYDULDQFHVWRLQGLYLGXDOVZKRPWKH\
DVVLVW $V D UHVXOW , GR QRW EHOLHYH WKDW WKH RUGLQDQFH¶V
WHPSRUDU\ H[FOXVLRQV ZHUH HTXLYDOHQW WR ZKDW KDV EHHQ
KLVWRULFDOO\ UHFRJQL]HG DV D IRUP RI SXQLVKPHQW
)XUWKHUPRUHDOWKRXJKERWKWKHSODLQWLIIVDQGWKHGLVWULFWFRXUW
FRQVLGHUHGWKHSDUWLFXODUFLUFXPVWDQFHVRI-RKQVRQDQG$X
)UDQFH+XGVRQLQVWUXFWVWKDWWKHLQTXLU\VKRXOGEHOLPLWHGWR
WKH IDFH RI WKH VWDWXWH +XGVRQ 86 DW 7KH
RUGLQDQFHLQTXHVWLRQZKHQYLHZHGDVDZKROHSURYLGHGIRU
WKHWHPSRUDU\H[FOXVLRQRILQGLYLGXDOVZKRZHUHDUUHVWHGRU
FRQYLFWHGRIDGUXJUHODWHGFULPHIURPGHVLJQDWHGKLJKFULPH
QHLJKERUKRRGV DQG LW DOORZHG IRU YDULDQFHV WR SUHYHQW
LQWHUIHUHQFHZLWKVXFKDSHUVRQ¶VUHVLGHQFHHPSOR\PHQWRU
DELOLW\ WR REWDLQ FUXFLDO VRFLDO VHUYLFHV 8QGHU WKHVH
FLUFXPVWDQFHV,FRQFOXGHWKDWWKLVVDQFWLRQGLGQRWFRQVWLWXWH
D SHQDOW\ WKDW ³KDV KLVWRULFDOO\ EHHQ UHJDUGHG DV D
SXQLVKPHQW´

-- 6 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
DGUXJH[FOXVLRQ]RQHDVD³FLYLOH[FOXVLRQ´&0&†
)XUWKHUPRUH WKH RUGLQDQFH SURYLGHV WKDW LWV SXUSRVH LV WR
DGYDQFHWKH&LW\¶VLQWHUHVWLQ³UHVWRULQJWKHTXDOLW\RIOLIHDQG
SURWHFWLQJWKHKHDOWKVDIHW\DQGZHOIDUHRIFLWL]HQVXVLQJWKH
SXEOLFZD\V´LQQHLJKERUKRRGVZLWKKLJKLQFLGHQWVRIGUXJ
UHODWHGRIIHQVHV&LQFLQQDWL2KLR2UGLQDQFH1R
† ' $XJ :H FDQ WKHUHIRUH SURFHHG WR WKH
VHFRQGVWHSLQRUGHUWRGHWHUPLQHZKHWKHUWKHSODLQWLIIVPHHW
WKHKLJKEXUGHQQHFHVVDU\WRHVWDEOLVKWKDWWKHRUGLQDQFHLQ
IDFW FRQVWLWXWHG D FULPLQDO SHQDOW\ XQGHU WKH DERYHVWDWHG
IDFWRUV
:LWKUHJDUGWRWKHILUVWIDFWRUWKHRUGLQDQFHFOHDUO\OLPLWV
WKHIUHHGRPRIPRYHPHQWRISHUVRQVDUUHVWHGRUFRQYLFWHGIRU
GUXJUHODWHGRIIHQVHVWKDWRFFXULQH[FOXVLRQ]RQHV7KH&LW\
UHOLHV XSRQ +XGVRQ IRU WKH SURSRVLWLRQ WKDW H[FOXGLQJ
VRPHRQHIURPDOLPLWHGJHRJUDSKLFDUHDLVQRW³DQDIILUPDWLYH
GLVDELOLW\RUUHVWUDLQW´,Q+XGVRQWKH6XSUHPH&RXUWKHOG
WKDW EHLQJ EDUUHG IURP WKH EDQNLQJ SURIHVVLRQ LV QRW D
FULPLQDO SHQDOW\ +XGVRQ 86 DW 7KH &RXUW
UHMHFWHG WKH DUJXPHQW WKDW WKH VDQFWLRQV LQYROYHG DQ
³DIILUPDWLYH GLVDELOLW\ RU UHVWUDLQW´ QRWLQJ WKDW ³>Z@KLOH
SHWLWLRQHUVKDYHEHHQSURKLELWHGIURPIXUWKHUSDUWLFLSDWLQJLQ
WKHEDQNLQJLQGXVWU\WKLVLVFHUWDLQO\QRWKLQJDSSURDFKLQJWKH
LQIDPRXVSXQLVKPHQWRILPSULVRQPHQW´,GDW LQWHUQDO
TXRWDWLRQPDUNVRPLWWHG
&RQWUDU\WRWKH&LW\¶VSRVLWLRQ,GRQRWEHOLHYHWKDWWKLV
ODQJXDJH VXSSRUWV WKH FRQFOXVLRQ WKDW DQ ³DIILUPDWLYH
GLVDELOLW\ RU UHVWUDLQW´ RFFXUV RQO\ ZKHUH D SHUVRQ IDFHV
LPSULVRQPHQWRUFRQILQHPHQW,QVWHDGLWVLPSO\UHFRJQL]HV
WKDWLPSULVRQPHQWLVWKHFOHDUHVWH[DPSOHRIDUHVWUDLQW7KH
6XSUHPH&RXUWLQ0HQGR]D0DUWLQH]DQGVXEVHTXHQWFDVHV
FRXOG KDYH HDVLO\ XVHG WKH WHUP ³LPSULVRQPHQW´ LI LW KDG
LQWHQGHGWROLPLWWKHILUVWIDFWRUWRWKDWVDQFWLRQ,WKHUHIRUH
FRQFOXGH WKDW EHLQJ EDQQHG IURP D GUXJH[FOXVLRQ ]RQH
FRQVWLWXWHVDIRUPRIUHVWUDLQWDOEHLWQRWRIWKHPRVWH[WUHPH
W\SH7KHILUVWIDFWRUWKXVSURYLGHVDPRGLFXPRIVXSSRUWIRU
WKHSODLQWLIIV¶DUJXPHQWWKDWWKHRUGLQDQFHLPSRVHGDFULPLQDO
SHQDOW\ %HFDXVH WKH UHVWUDLQW LV IDU IURP WKH ³LQIDPRXV
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
DXWKRULW\JUDQWHGWRWKH&LW\E\6HFWLRQ$UWLFOH;9,,,RIWKH
2KLR&RQVWLWXWLRQ,GDW
,,
,Q OLJKW RI WKH 2KLR 6XSUHPH &RXUW¶V UHFHQW GHFLVLRQ LQ
%XUQHWWZHPXVWILUVWDGGUHVVZKHWKHUDQ³DFWXDOFRQWURYHUV\
VWLOO H[LVWV EHWZHHQ WKH SDUWLHV´ :-:79 ,QF Y &LW\ RI
&OHYHODQG)G WK&LU SHUFXULDP
FLWDWLRQVRPLWWHG VHHDOVR&',,QIR6HUYV,QFY5HQR
)G WK &LU QRWLQJ WKLV FRXUW¶V
REOLJDWLRQWRSROLFHLWVRZQMXULVGLFWLRQ :HUHFRJQL]HGLQ
:-:79,QFWKDWDQLQWHUYHQLQJVWDWHVXSUHPHFRXUWGHFLVLRQ
RQDSDUWLFXODULVVXHPD\UHQGHUDQDSSHDOWRWKLVFRXUWRQWKH
VDPH LVVXH PRRW ,G DW VHH JHQHUDOO\ 0RRUH¶V
)HGHUDO3UDFWLFH† GHG 7KDWWKHVWDWHFRXUW
UHVROYHG WKH :-:79 LVVXH RQ VWDWH DQG PXQLFLSDO ODZ
JURXQGVGLGQRWDIIHFWRXUFRQFOXVLRQ,G FLWLQJ'HWURLW)LUH
)LJKWHUV$VV¶Q/RFDO1R,$))Y'L[RQ)G
WK&LU SHUFXULDP
:KLOHWKH%XUQHWWFRXUWOLPLWHGLWVFRQVWLWXWLRQDODQDO\VLV
WRWKH2UGLQDQFH¶VSRVWFRQYLFWLRQH[FOXVLRQ%XUQHWW
1(GDWQLWVVWDWHODZKROGLQJDSSHDUVWRLQYDOLGDWH
WKHHQWLUH2UGLQDQFH,GDW ³7KHRUGLQDQFHWKHUHIRUH
LV LQYDOLG XQGHU VHFWLRQ $UWLFOH ;9,,, RI WKH 2KLR
&RQVWLWXWLRQ´ 7KXV%XUQHWWFRXOGPRRWWKHSUHVHQWDSSHDO
,QWKLVFDVHKRZHYHUWKHSDUWLHVVWLOOKDYHDQDFWXDOFDVHRU
FRQWURYHUV\ ZLWK UHVSHFW WR WKH GLVWULFW FRXUW¶V DZDUG RI
DWWRUQH\ IHHV 6HH 8QLWHG $VV¶Q RI -RXUQH\PHQ Y %HFKWHO
&RQVWU &R )G WK &LU
:DVKLQJWRQ+RVS&WUY&ROOLHU)G '&
&LU 7KHSODLQWLIIVDUHHQWLWOHGWRWKLVDZDUGRQO\LIWKH
2UGLQDQFHYLRODWHGWKHLUIHGHUDOULJKWVWKXVZHPXVWHYDOXDWH
WKHLUFODLPUHJDUGLQJWKHFRQVWLWXWLRQDOLW\RIWKH2UGLQDQFH
86&†%HUJHUY&LW\RI0D\ILHOG+HLJKWV
)G WK&LU
/DVWO\ZHQRWHWKDWWKH&LW\¶VDVVXUDQFHWKDWLWQRORQJHU
HQIRUFHVWKH2UGLQDQFHVHH%XUQHWW1(GDWGRHV
QRW UHQGHU WKH SUHVHQW DSSHDO PRRW ³>$@ GHIHQGDQW¶V

-- 7 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
YROXQWDU\FHVVDWLRQRIDFKDOOHQJHGSUDFWLFHGRHVQRWGHSULYH
DIHGHUDOFRXUWRILWVSRZHUWRGHWHUPLQHWKHOHJDOLW\RIWKH
SUDFWLFH´ 'HMD 9X RI 1DVKYLOOH ,QF Y 0HW *RY¶W RI
1DVKYLOOH)G WK&LU TXRWLQJ&LW\RI
0HVTXLWHY$ODGGLQ¶V&DVWOH,QF86
6&W/(G
,,,
:HUHYLHZDGLVWULFWFRXUW¶VJUDQWRIVXPPDU\MXGJPHQWGH
QRYR *ULEFKHFN Y 5XQ\RQ )G WK &LU
6XPPDU\ MXGJPHQW VKRXOG EH JUDQWHG ZKHQ ³WKH
SOHDGLQJV GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG
DGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZ
WKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDW
WKHPRYLQJSDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ´
)HG5&LY3 F
³:KHUH D SDUWLFXODU $PHQGPHQW μSURYLGHV DQ H[SOLFLW
WH[WXDOVRXUFHRIFRQVWLWXWLRQDOSURWHFWLRQ¶DJDLQVWDSDUWLFXODU
VRUWRIJRYHUQPHQWEHKDYLRUμWKDW$PHQGPHQWQRWWKHPRUH
JHQHUDOL]HGQRWLRQRIμVXEVWDQWLYHGXHSURFHVV¶PXVWEHWKH
JXLGHIRUDQDO\]LQJWKHVHFODLPV¶´$OEULJKWY2OLYHU
86 6&W /(G G
TXRWLQJ*UDKDPY&RQQRU866&W
/(G VHHDOVR0RQWJRPHU\Y&DUWHU
&\)G WK&LU &I8QLWHG6WDWHVY
/DQLHU86Q6&W/(GG
FDXWLRQLQJ WKDW QRW ³DOO FRQVWLWXWLRQDO FODLPV
UHODWLQJWRSK\VLFDOO\DEXVLYHJRYHUQPHQWFRQGXFWPXVWDULVH
XQGHUHLWKHUWKH)RXUWKRU(LJKWK$PHQGPHQWV´ 6HHNLQJWR
JURXQG WKLV GLVSXWH LQ DQ $PHQGPHQW RWKHU WKDQ WKH
)RXUWHHQWK $PHQGPHQW WKH &LW\ DUJXHV WKDW WKH )RXUWK
$PHQGPHQWSURYLGHVWKHH[FOXVLYHDQDO\WLFDOIUDPHZRUNWR
DVVHVVWKHFRQVWLWXWLRQDOLW\RIWKH2UGLQDQFH$FFRUGLQJWR
WKH&LW\SRVWDUUHVWRUSRVWFRQYLFWLRQH[FOXVLRQIURP2YHU
WKH 5KLQH¶V VLGHZDONV SXEOLF ZDONZD\V DQG VWUHHWV
FRQVWLWXWHVDWPRVWDSDUWLDOVHL]XUHWREHHYDOXDWHGXQGHUWKH
UXEULFRI)RXUWK$PHQGPHQWUHDVRQDEOHQHVV:HGLVDJUHH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
HVWDEOLVKLQJ WKH SHQDOL]LQJ PHFKDQLVP LQGLFDWHG HLWKHU
H[SUHVVO\RULPSOLHGO\DSUHIHUHQFHIRURQHODEHORUWKHRWKHU´
,G LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
(YHQLIWKHOHJLVODWXUHLQGLFDWHVLWVGHVLUHWRHVWDEOLVKDFLYLO
SHQDOW\DVHFRQGVWHSLQWKHDQDO\VLVLVQHFHVVDU\$FRXUW
PXVW GHWHUPLQH ³ZKHWKHU WKH VWDWXWRU\ VFKHPH ZDV VR
SXQLWLYHHLWKHULQSXUSRVHRUHIIHFWDVWRWUDQVIRU>P@ZKDWZDV
FOHDUO\LQWHQGHGDVDFLYLOUHPHG\LQWRDFULPLQDOSHQDOW\´,G
LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG DOWHUQDWLRQLQ
RULJLQDO 7KH6XSUHPH&RXUWKDVLGHQWLILHGVHYHQIDFWRUV
WKDW³SURYLGHXVHIXOJXLGHSRVWV´IRUDQVZHULQJWKLVTXHVWLRQ
>Z@KHWKHU WKH VDQFWLRQ LQYROYHV DQ DIILUPDWLYH
GLVDELOLW\RUUHVWUDLQW ZKHWKHULWKDVKLVWRULFDOO\EHHQ
UHJDUGHGDVDSXQLVKPHQW ZKHWKHULWFRPHVLQWRSOD\
RQO\RQDILQGLQJRIVFLHQWHU ZKHWKHULWVRSHUDWLRQ
Z L O O S U R P R W H W K H W U D G L W L R Q D O D L P V R I
SXQLVKPHQW²UHWULEXWLRQDQGGHWHUUHQFH ZKHWKHUWKH
EHKDYLRU WR ZKLFK LW DSSOLHV LV DOUHDG\ D FULPH
ZKHWKHU DQ DOWHUQDWLYH SXUSRVH WR ZKLFK LW PD\
UDWLRQDOO\ EH FRQQHFWHG LV DVVLJQDEOH IRU LW DQG
ZKHWKHU LW DSSHDUV H[FHVVLYH LQ UHODWLRQ WR WKH
DOWHUQDWLYHSXUSRVHDVVLJQHG,GDW DOWHUDWLRQ
DQG LWDOLFV LQ RULJLQDO TXRWLQJ .HQQHG\ Y 0HQGR]D
0DUWLQH]86
%HFDXVH WKHVH IDFWRUV ³PD\ RIWHQ SRLQW LQ GLIIHULQJ
GLUHFWLRQV´ QR VLQJOH IDFWRU LV GLVSRVLWLYH 0HQGR]D
0DUWLQH]86DW 7KH6XSUHPH&RXUWKDV
DOVR GHWHUPLQHG WKDW ³WKHVH IDFWRUV PXVW EH FRQVLGHUHG LQ
UHODWLRQ WR WKH VWDWXWH RQ LWV IDFH´ QRW LQ FRQQHFWLRQ ZLWK
LQGLYLGXDOV DIIHFWHG E\ WKH DOOHJHGO\ FLYLO SHQDOW\ ,G
)LQDOO\ ³RQO\ WKH FOHDUHVW SURRI ZLOO VXIILFH WR RYHUULGH
OHJLVODWLYHLQWHQWDQGWUDQVIRUPZKDWKDVEHHQGHQRPLQDWHG
DFLYLOUHPHG\LQWRDFULPLQDOSHQDOW\´+XGVRQ86DW
LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
1HLWKHUSDUW\GLVSXWHVWKDWWKHRUGLQDQFHZDVLQWHQGHGWREH
D FLYLO UHPHG\ 7KH RUGLQDQFH ODEHOV WKH UHVWULFWLRQV WKDW
IROORZDQDUUHVWRUFRQYLFWLRQIRUDGUXJRIIHQVHFRPPLWWHGLQ

-- 8 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
DSSO\LQJ UDWLRQDO EDVLV UHYLHZ WR D SROLF\ WKDW OLPLWHG
LQGLYLGXDOV¶PRELOLW\EXWGLGQRWDIIHFWIXQGDPHQWDOULJKWVRU
LQYROYHVXVSHFWFODVVLILFDWLRQV
7KHPDMRULW\UHFRJQL]HVWKDWWKH&LW\¶VJRDORIHUDGLFDWLQJ
WKH EOLJKW RI GUXJLQIHVWHG QHLJKERUKRRGV FRQVWLWXWHV D
FRPSHOOLQJJRYHUQPHQWDOLQWHUHVW 0DM2SDW 7KLV
SXUSRVH LQ HQDFWLQJ WKH RUGLQDQFH QHFHVVDULO\ VDWLVILHV WKH
PRUHOHQLHQWWHVWRIEHLQJDOHJLWLPDWHLQWHUHVW0RUHRYHU
SUHYHQWLQJLQGLYLGXDOVZKRDUHDUUHVWHGIRURUFRQYLFWHGRI
FRPPLWWLQJ GUXJ RIIHQVHV LQ GUXJH[FOXVLRQ ]RQHV IURP
HQWHULQJ WKRVH QHLJKERUKRRGV LV LQ P\ YLHZ UDWLRQDOO\
UHODWHGWRDFKLHYLQJWKH&LW\¶VLQWHUHVW6HH7KRPSVRQ
)GDW FRQFOXGLQJWKDWEDQQLQJLQGLYLGXDOVZKRKDYH
FULPLQDOKLVWRULHVIURPHQWHULQJWKHSXEOLFKRXVLQJDXWKRULW\¶V
SUHPLVHVZDVUDWLRQDOO\UHODWHGWRWKHJRDORIVXSSUHVVLQJDQG
SUHYHQWLQJ FULPH RQ WKH SUHPLVHV , DP WKHUHIRUH RI WKH
RSLQLRQWKDWWKHRUGLQDQFHZRXOGKDYHVXUYLYHGUDWLRQDOEDVLV
UHYLHZ
,,,'28%/(-(23$5'<
7KHSODLQWLIIV¶ILQDODUJXPHQWZKLFKWKHPDMRULW\KDGQR
UHDVRQWRDGGUHVVLVWKDWWKHRUGLQDQFHYLRODWHGWKH'RXEOH
-HRSDUG\ &ODXVH RI WKH )LIWK $PHQGPHQW 7KLV FODXVH
³SURWHFWVDJDLQVWVXFFHVVLYHSURVHFXWLRQVIRUWKHVDPHRIIHQVH
DIWHU DFTXLWWDO RU FRQYLFWLRQ DQG DJDLQVW PXOWLSOH FULPLQDO
SXQLVKPHQWVIRUWKHVDPHRIIHQVH´0RQJHY&DOLIRUQLD
86 $FFRUGLQJ WR WKH SODLQWLIIV WKH
VDQFWLRQVLPSRVHGE\WKHRUGLQDQFHDUHVRSXQLWLYHWKDWWKH\
DPRXQWWRH[WUDMXGLFLDOSXQLVKPHQWUDWKHUWKDQDUHPHGLDO
FLYLO HIIRUW E\ WKH &LW\ WR UHKDELOLWDWH QHLJKERUKRRGV WKDW
H[SHULHQFHGLVSURSRUWLRQDWHO\KLJKUDWHVRIGUXJDEXVHFULPHV
'HWHUPLQLQJZKHWKHUDSDUWLFXODUSXQLVKPHQWLVFULPLQDORU
FLYLOIRUSXUSRVHVRIWKH'RXEOH-HRSDUG\&ODXVHILUVWUHTXLUHV
DQH[DPLQDWLRQRIWKHOHJLVODWLRQWKDWLPSRVHVWKHVDQFWLRQDW
LVVXH +XGVRQ Y 8QLWHG 6WDWHV 86
³:KHWKHUDSDUWLFXODUSXQLVKPHQWLVFULPLQDORUFLYLOLVDW
OHDVWLQLWLDOO\DPDWWHURIVWDWXWRU\FRQVWUXFWLRQ´ 7KHILUVW
VWHSLQWKLVLQTXLU\LVWRGHWHUPLQH³ZKHWKHUWKHOHJLVODWXUHLQ
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
*HQHUDOO\ WKH )RXUWK $PHQGPHQW DSSOLHV WR ³SUHWULDO
GHSULYDWLRQV RI OLEHUW\´ $OEULJKW 86 DW 7KH
)RXUWK$PHQGPHQWSODLQO\DSSOLHVWRLQYHVWLJDWRU\VWRSVDQG
IRUPDO DUUHVWV EXW GRHV QRW DSSO\ SRVWFRQYLFWLRQ 6HH
*UDKDP86DWQ*HUVWHLQY3XJK86
6&W/(GG VHHDOVR3KHOSV
Y &R\ )G WK &LU ³:KLFK
DPHQGPHQWDSSOLHVGHSHQGVRQWKHVWDWXVRIWKHSODLQWLIIDW
WKH WLPH RI WKH LQFLGHQW ZKHWKHU IUHH FLWL]HQ FRQYLFWHG
SULVRQHURUVRPHWKLQJLQEHWZHHQ´ 7KXVWKHUHLVVLPSO\
QRUHDVRQDEOHEDVLVIRUWKH&LW\¶VDVVHUWLRQWKDWWKH)RXUWK
$PHQGPHQWSURYLGHVWKHH[FOXVLYHDQDO\WLFDOIUDPHZRUNWR
HYDOXDWHWKHSRVWFRQYLFWLRQSURYLVLRQRIWKH2UGLQDQFH
'HWHUPLQLQJZKHWKHUWKH)RXUWK$PHQGPHQWSURYLGHVWKH
DSSURSULDWHIUDPHZRUNIRUHYDOXDWLQJWKHSRVWDUUHVWSURYLVLRQ
RI WKH 2UGLQDQFH LV D PRUH GLIILFXOW TXHVWLRQ %H\RQG LWV
JHQHUDOVWDWHPHQWLQ$OEULJKWWKH6XSUHPH&RXUWKDVQRW\HW
SLQSRLQWHGWKHH[DFWSRLQWDORQJWKHSUHWULDOFRQWLQXXPZKHUH
WKH )RXUWK $PHQGPHQW¶V SURWHFWLRQ JLYHV ZD\ WR WKH
SURWHFWLRQRIDQRWKHU$PHQGPHQW*UDKDP86DW
Q DFNQRZOHGJLQJWKDWWKH&RXUWKDVQRW\HW³UHVROYHGWKH
TXHVWLRQZKHWKHUWKH)RXUWK$PHQGPHQWFRQWLQXHVWRSURYLGH
LQGLYLGXDOV ZLWK SURWHFWLRQ DJDLQVW WKH GHOLEHUDWH XVH RI
H[FHVVLYH IRUFH EH\RQG WKH SRLQW DW ZKLFK DUUHVW HQGV DQG
SUHWULDO GHWHQWLRQ EHJLQV´ $QG RXU VLVWHU FLUFXLWV KDYH
UHDFKHGGLIIHUHQWDQVZHUVWRWKLVTXHVWLRQ&RPSDUH5HHGY
&LW\RI&KLFDJR)GQ WK&LU ZLWK
0XUSK\Y/\QQ)G G&LU
&RQFXUULQJ LQ $OEULJKW -XVWLFH *LQVEXUJ VWDWHG WKDW D
GHIHQGDQWZKRLVUHOHDVHGEHIRUHWULDO³LVVFDUFHO\DWOLEHUW\´
86 DW *LQVEXUJ - FRQFXUULQJ $FFRUGLQJ WR
-XVWLFH *LQVEXUJ VXFK D GHIHQGDQW ³UHPDLQV DSSUHKHQGHG
DUUHVWHGLQKLVPRYHPHQWVLQGHHGμVHL]HG¶IRUWULDOVRORQJDV
KHLVERXQGWRDSSHDULQFRXUWDQGDQVZHUWKHVWDWH¶VFKDUJHV´
,GVHHDOVRLGDW 6WHYHQV-GLVVHQWLQJ QRWLQJKLV
DJUHHPHQW ZLWK -XVWLFH *LQVEXUJ¶V YLHZ WKDW ³WKH LQLWLDO
VHL]XUHRISHWLWLRQHUFRQWLQXHGXQWLOKLVGLVFKDUJH´ LGDW
6RXWHU - FRQFXUULQJ QRWLQJ WKDW PRYHPHQW LV

-- 9 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
UHVWUDLQHGZKHQ³VHL]XUHRFFXUVRUERQGWHUPVDUHLPSRVHG´
*HUVWHLQ 86 DW ³(YHQ SUHWULDO UHOHDVH PD\ EH
DFFRPSDQLHG E\ EXUGHQVRPH FRQGLWLRQV WKDW HIIHFW D
VLJQLILFDQWUHVWUDLQWRIOLEHUW\´ -XVWLFHVRI%RVWRQ0XQLFLSDO
&RXUW Y /\GRQ 86 6&W
/(GG VWDWLQJLQKDEHDVFRUSXVFRQWH[WWKDW
RQH UHOHDVHG RQ KLV RU KHU RZQ UHFRJQL]DQFH UHPDLQV LQ
RIILFLDOFXVWRG\EHFDXVHKHLV³VXEMHFW>HG@WRUHVWUDLQWVQRW
VKDUHG E\ WKH SXEOLF JHQHUDOO\´ VXFK DV ³DQ REOLJDWLRQ WR
DSSHDU IRU WULDO RQ WKH VFKHGXOHG GD\ DQG DOVR DW DQ\
VXEVHTXHQWWLPHWRZKLFKWKHFDVHPD\EHFRQWLQXHG´DQGD
³UHTXLUH>PHQW@ WKDW KH QRW GHSDUW´ IURP WKH MXULVGLFWLRQ
³ZLWKRXW OHDYH´ RI WKH FRXUW LQWHUQDO TXRWDWLRQ PDUNV
RPLWWHG -XVWLFH*LQVEXUJH[SODLQHG
7KHSXUSRVHRIDQDUUHVWDWFRPPRQODZLQERWKFULPLQDO
DQGFLYLOFDVHVZDV³RQO\WRFRPSHODQDSSHDUDQFHLQ
FRXUW´DQG³WKDWSXUSRVHLVHTXDOO\DQVZHUHGZKHWKHU
WKH VKHULII GHWDLQV >WKH VXVSHFW¶V@ SHUVRQ RU WDNHV
VXIILFLHQW VHFXULW\ IRU KLV DSSHDUDQFH FDOOHG EDLO´
FLWDWLRQVRPLWWHG 7KHFRPPRQODZWKXVVHHPVWRKDYH
UHJDUGHGWKHGLIIHUHQFHEHWZHHQSUHWULDOLQFDUFHUDWLRQDQG
RWKHUZD\VWRVHFXUHDGHIHQGDQW¶VFRXUWDWWHQGDQFHDVD
GLVWLQFWLRQEHWZHHQPHWKRGVRIUHWDLQLQJFRQWURORYHUD
GHIHQGDQW¶V SHUVRQ QRW RQH EHWZHHQ VHL]XUH DQG LWV
RSSRVLWH
,G%XWVHH5LOH\Y'RUWRQ)G WK&LU
HQ EDQF UHMHFWLQJ ³FRQWLQXLQJ VHL]XUH´ GRFWULQH
5HHG)GDWQ VDPH
,Q D VHULHV RI PDOLFLRXV SURVHFXWLRQ FDVHV VRPH RI RXU
VLVWHU FLUFXLWV ± UHO\LQJ SULPDULO\ RQ -XVWLFH *LQVEXUJ¶V
$OEULJKW FRQFXUUHQFH ± KDYH UXOHG WKDW FHUWDLQ SUHWULDO
GHWHQWLRQ FRQGLWLRQV LPSOLFDWH WKH )RXUWK $PHQGPHQW¶V
SURKLELWLRQ RQ XQUHDVRQDEOH VHL]XUHV )RU H[DPSOH WKH
6HFRQG &LUFXLW KHOG WKDW D MXGLFLDO RUGHU SURKLELWLQJ WKH
GHIHQGDQWIURPOHDYLQJWKHVWDWHFRPELQHGZLWKDGLUHFWLYHWR
DWWHQG FRXUW DSSRLQWPHQWV FRQVWLWXWHG D VHL]XUH 0XUSK\
)GDW&KDUDFWHUL]LQJLWDVD³FORVHTXHVWLRQ´WKH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
FKLOGELUWK WKH UDLVLQJ DQG HGXFDWLRQ RI FKLOGUHQ DQG
FRKDELWDWLRQZLWKRQH¶VUHODWLYHV´,G FLWDWLRQVRPLWWHG
$OWKRXJKWKHDWWRUQH\FOLHQWUHODWLRQVKLSVKDUHVPDQ\RIWKH
FKDUDFWHULVWLFV RI IDPLOLHV LQFOXGLQJ ³UHODWLYH VPDOOQHVV D
KLJKGHJUHHRIVHOHFWLYLW\LQGHFLVLRQVWREHJLQDQGPDLQWDLQ
WKHDIILOLDWLRQDQGVHFOXVLRQIURPRWKHUVLQFULWLFDODVSHFWVRI
WKHUHODWLRQVKLS´,UHMHFWWKHQRWLRQWKDWWKHVHWUDLWVDORQHDUH
VXIILFLHQWWRMXVWLI\ILQGLQJWKDW³IUHHGRPRIDVVRFLDWLRQDVDQ
LQWULQVLFHOHPHQWRISHUVRQDOOLEHUW\´DWWDFKHVWRWKHDWWRUQH\
FOLHQWUHODWLRQVKLS,GDW1HLWKHUDFOLHQWQRUDQDWWRUQH\
DUH W\SLFDOO\ VHHNLQJ ³HPRWLRQDO HQULFKPHQW´ IURP WKHLU
DVVRFLDWLRQ1RUGRHVWKHUHODWLRQVKLSFRQWULEXWHWRDFOLHQW¶V
DELOLW\ WR GHILQH KLV RU KHU LGHQWLW\ )XUWKHUPRUH WKH WLH
EHWZHHQDQDWWRUQH\DQGKLVRUKHUFOLHQWGRHVQRWUHSUHVHQW
WKH³NLQGVRISHUVRQDOERQGV>WKDW@KDYHSOD\HGDFULWLFDOUROH
LQWKHFXOWXUHDQGWUDGLWLRQVRIWKH1DWLRQE\FXOWLYDWLQJDQG
WUDQVPLWWLQJVKDUHGLGHDOVDQGEHOLHIV´,GDW
7KHSUHFHGLQJDQDO\VLVRIWKHDWWRUQH\FOLHQWUHODWLRQVKLSLV
HYHQPRUHDSSOLFDEOHWRDVVRFLDWLRQVEHWZHHQLQGLYLGXDOVDQG
FKDULWDEOH RUJDQL]DWLRQV $OWKRXJK D UHFLSLHQW DQG WKH
SURYLGHU RI VRFLDO VHUYLFHV PD\ GHYHORS FORVH WLHV WKH
UHODWLRQVKLS LV E\ QR PHDQV QHFHVVDULO\ RQH RI LQWLPDF\
(PRWLRQDOHQULFKPHQWDQGVHOIGHYHORSPHQWPRUHRYHUDUH
QRWWKHSULPDU\JRDOVRUSURGXFWVRIWKHVHDVVRFLDWLRQV
)RUDOORIWKHVHUHDVRQV,FRQFOXGHWKDWWKHRUGLQDQFHGLG
QRWLQWHUIHUHZLWK$X)UDQFH¶V)RXUWHHQWK$PHQGPHQWULJKW
WRIUHHGRPRIDVVRFLDWLRQ
,,5$7,21$/%$6,65(9,(:
,Q DGGLWLRQ WR QRW LQIULQJLQJ XSRQ WKH SODLQWLIIV¶
IXQGDPHQWDOULJKWVWKHRUGLQDQFHGLGQRWLQYROYHDQ\VXVSHFW
FODVVLILFDWLRQV$VDUHVXOWWKHRUGLQDQFHLVFRQVWLWXWLRQDOVR
ORQJ DV LW LV ³UDWLRQDOO\ UHODWHG WR OHJLWLPDWH JRYHUQPHQW
LQWHUHVWV´ :DVKLQJWRQ Y *OXFNVEHUJ 86
H[SODLQLQJWKHDSSOLFDEOHVWDQGDUGIRUUHYLHZLQJDODZ
WKDW GRHV QRW LQYROYH D IXQGDPHQWDO OLEHUW\ LQWHUHVW
7KRPSVRQ Y $VKH )G WK &LU

-- 10 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
FRXOG PHHW RXWVLGH 2YHU WKH 5KLQH FRPPXQLFDWH RQ WKH
WHOHSKRQHDQGFRUUHVSRQGWKURXJKWKHPDLO-RKQVRQFRXOG
WKHUHIRUH FRQWLQXH WR SDUWLFLSDWH LQ WKH XSEULQJLQJ RI KHU
JUDQGFKLOGUHQWKHYHU\ULJKWWKDWWKHPDMRULW\LGHQWLILHVDVWKH
IXQGDPHQWDODVVRFLDWLRQDOULJKWDWLVVXHLQWKHSUHVHQWFDVH
7KH IDFW WKDW VXFK SDUWLFLSDWLRQ EHFDPH OHVV FRQYHQLHQW
GXULQJKHUH[FOXVLRQLVQRWDIDFWRULQGHWHUPLQLQJZKHWKHU
-RKQVRQ¶VDVVHUWHGULJKWLVDIXQGDPHQWDOOLEHUW\LQWHUHVW
$VIRU$X)UDQFHKHFRQWHQGVWKDWWKHULJKW³WRHQWHULQWR
DQGPDLQWDLQFHUWDLQLQWLPDWHKXPDQUHODWLRQVKLSV´5REHUWV
Y8QLWHG6WDWHV-D\FHHV86 SURWHFWV
KLV ULJKW WR DVVRFLDWH ZLWK KLV FKRVHQ DWWRUQH\ DQG ZLWK
VXSSRUWLYHSHUVRQVDQGRUJDQL]DWLRQVLQ2YHUWKH5KLQH7KH
PDMRULW\ILQGWKLVDUJXPHQWSHUVXDVLYH,GLVDJUHH
,Q 5REHUWV WKH 6XSUHPH &RXUW KHOG WKDW D VWDWH ODZ
UHTXLULQJWKH-D\FHHVWRDFFHSWZRPHQDVPHPEHUVGLGQRW
YLRODWHWKHPDOHPHPEHUV¶FRQVWLWXWLRQDOULJKWVRIIUHHVSHHFK
DQGDVVRFLDWLRQ,GDW$OWKRXJKWKHODZLQIULQJHGRQ
WKH PHPEHUV¶ ULJKW RI H[SUHVVLYH DVVRFLDWLRQ WKH &RXUW
FRQFOXGHGWKDWWKHVWDWHRIIHUHGFRPSHOOLQJLQWHUHVWVWRMXVWLI\
WKH LQWHUIHUHQFH DQG WKDW WKH ODZ ZDV WKH OHDVW UHVWULFWLYH
PHDQVIRUDFKLHYLQJWKRVHJRDOV,G7KH&RXUWDOVRKHOGWKDW
WKHODZGLGQRWLQIULQJHRQWKHPHPEHUV¶IUHHGRPRILQWLPDWH
DVVRFLDWLRQ EHFDXVH WKH -D\FHHV ODFNHG WKH FKDUDFWHULVWLFV
QHFHVVDU\IRUWKLVW\SHRIFRQVWLWXWLRQDOSURWHFWLRQWRDSSO\
,G DW $V WKH &RXUW H[SODLQHG WKH UHDVRQ IRU
UHFRJQL]LQJ D FRQVWLWXWLRQDO ULJKW WR IRUP FHUWDLQ LQWLPDWH
UHODWLRQVKLSVLVWKDWWKH\SURYLGH³HPRWLRQDOHQULFKPHQW´WR
WKH OLYHV RI WKH SHUVRQV LQYROYHG ,G DW ³>7@KH
FRQVWLWXWLRQDOVKHOWHUDIIRUGHGVXFKUHODWLRQVKLSVUHIOHFWVWKH
UHDOL]DWLRQ WKDW LQGLYLGXDOV GUDZ PXFK RI WKHLU HPRWLRQDO
HQULFKPHQWIURPFORVHWLHVZLWKRWKHUV´ ³3URWHFWLQJWKHVH
UHODWLRQVKLSV IURP XQZDUUDQWHG VWDWH LQWHUIHUHQFH WKHUHIRUH
VDIHJXDUGVWKHDELOLW\LQGHSHQGHQWO\WRGHILQHRQH¶VLGHQWLW\
WKDWLVFHQWUDOWRDQ\FRQFHSWRIOLEHUW\´,G7KHH[DPSOHVRI
VXFKLQWLPDWHUHODWLRQVKLSVJLYHQE\WKH&RXUW³DUHWKRVHWKDW
DWWHQG WKH FUHDWLRQ DQG VXVWHQDQFH RI D IDPLO\²PDUULDJH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
7KLUG &LUFXLW VLPLODUO\ UXOHG WKDW SUHWULDO LQWHUVWDWH WUDYHO
UHVWULFWLRQV DQG PDQGDWRU\ FRXUW DWWHQGDQFH FRQVWLWXWHG D
VHL]XUH*DOORY&LW\RI3KLODGHOSKLD)G G
&LU VHHDOVR(YDQVY%DOO)G WK&LU
UXOLQJWKDWD³VXPPRQVWRDSSHDULQFRXUWFRXSOHG
ZLWKWKHUHTXLUHPHQWVWKDW>WKHGHIHQGDQW@REWDLQSHUPLVVLRQ
EHIRUHOHDYLQJWKHVWDWHUHSRUWUHJXODUO\WRSUHWULDOVHUYLFHV
VLJQ D SHUVRQDO UHFRJQL]DQFH ERQG DQG SURYLGH IHGHUDO
RIILFHUV ZLWK ILQDQFLDO DQG LGHQWLI\LQJ LQIRUPDWLRQ
GLPLQLVKHG >WKH GHIHQGDQW¶V@ OLEHUW\ HQRXJK WR UHQGHU KLP
VHL]HG´ FI1LHYHVY0F6ZHHQH\)G VW
&LU KROGLQJWKDWGHIHQGDQW¶VREOLJDWLRQWRDSSHDULQ
FRXUWGLGQRWFRQVWLWXWHDVHL]XUH %ULWWRQY0DORQH\
)G VW &LU UXOLQJ WKDW LVVXDQFH RI D
VXPPRQVGLGQRWFRQVWLWXWHDVHL]XUH
:HKDYHKHOGWKDWD)RXUWK$PHQGPHQWVHL]XUH³FRQWLQXHV
WKURXJKRXWWKHWLPHWKHSHUVRQUHPDLQVLQWKHFXVWRG\RIWKH
DUUHVWLQJRIILFHUV´0F'RZHOOY5RJHUV)G
WK&LU EXWZHKDYHQRW\HWDGGUHVVHGZKHWKHUWKH
VHL]XUHFRXOGFRQWLQXHSDVWWKLVSRLQW$QGZKLOHZHKDYH
KHOG WKDW WKH LVVXDQFH RI D WUDIILF WLFNHW GLG QRW VWDQGLQJ
DORQHFRQVWLWXWHDVHL]XUH'H3LHURY&LW\RI0DFHGRQLD
)G WK &LU ZH KDYH QRW \HW H[SOLFLWO\
DGGUHVVHG WKH ³FRQWLQXLQJ VHL]XUH´ GRFWULQH DGYDQFHG E\
-XVWLFH*LQVEXUJ6HH)R[Y9DQ2RVWHUXP)G
Q WK &LU FI 3KHOSV )G DW
LQWHUSUHWLQJ0F'RZHOODVHQGRUVLQJWKH³FRQWLQXLQJVHL]XUH´
GRFWULQH :HQHHGQRWUHVROYHWKLVTXHVWLRQLQWKHSUHVHQW
FDVHEHFDXVHHYHQDVVXPLQJWKHYDOLGLW\RIWKH³FRQWLQXLQJ
VHL]XUH´ GRFWULQH ZH GR QRW EHOLHYH WKDW WKH )RXUWK
$PHQGPHQWSURYLGHVWKHDSSURSULDWHIUDPHZRUNWRDQDO\]H
WKH2UGLQDQFH
7R EH VXUH DSSOLFDWLRQ RI WKH 2UGLQDQFH¶V SRVWDUUHVW
SURYLVLRQ UHVHPEOHV D VHL]XUH LQ WKDW LW LV D VKRZ RI
JRYHUQPHQW DXWKRULW\ DQG D UHVWUDLQW RQ D IUHHGRP RI
PRYHPHQW6HH8QLWHG6WDWHVY0HQGHQKDOO86
6&W/(G ³:HDGKHUHWRWKH
YLHZWKDWDSHUVRQLVμVHL]HG¶RQO\ZKHQE\PHDQVRISK\VLFDO

-- 11 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
IRUFH RU D VKRZ RI DXWKRULW\ KLV IUHHGRP RI PRYHPHQW LV
UHVWUDLQHG´ %XWLQHDFKRIWKHFDVHVDGGUHVVHGE\RXUVLVWHU
FLUFXLWVWKHJRYHUQPHQWQRWRQO\FXUWDLOHGWKHVXVSHFW¶VULJKW
WR LQWHUVWDWH WUDYHO LW DOVR LPSRVHG DGGLWLRQDO UHVWULFWLRQV
GHVLJQHG WR FRPSHO DQ XOWLPDWH FRXUW DSSHDUDQFH VXFK DV
REOLJDWLRQVWRSRVWERQGDWWHQGFRXUWKHDULQJVDQGFRQWDFW
SUHWULDOVHUYLFHV(YDQV)GDW*DOOR)GDW
0XUSK\)GDW,QFRQWUDVW WKH2UGLQDQFH
LPSRVHVVROHO\WUDYHOUHVWULFWLRQV WKHQLQHW\GD\H[FOXVLRQ
LVQRWERXQGHGE\DQHYHQWXDOFRXUWDSSHDUDQFHDQG WKH
VWDWHGSXUSRVHRIWKHVHUHVWULFWLRQVLVWRFRPEDWGUXJFULPHLQ
2YHU WKH 5KLQH 7KXV ZH FRQFOXGH WKDW WKH )RXUWK
$PHQGPHQW¶VSURKLELWLRQDJDLQVWXQUHDVRQDEOHVHL]XUHVGRHV
QRW SURYLGH WKH DSSURSULDWH DQDO\WLFDO IUDPHZRUN IRU
HYDOXDWLQJ WKH FRQVWLWXWLRQDOLW\ RI VXFK UHVWULFWLRQV
7KHUHIRUH ZH WXUQ WR WKH PRUH JHQHUDO SURWHFWLRQV RI GXH
SURFHVV6HH3KHOSV)GDW ³>,@ISODLQWLIILVQRWLQ
D VLWXDWLRQ ZKHUH KLV ULJKWV DUH JRYHUQHG E\ WKH SDUWLFXODU
SURYLVLRQ RI WKH )RXUWK RU (LJKW $PHQGPHQW WKH PRUH
JHQHUDOO\DSSOLFDEOHSURYLVLRQVRIWKHGXHSURFHVVFODXVHVWLOO
SURYLGHV WKH LQGLYLGXDO VRPH SURWHFWLRQ DJDLQVW SK\VLFDO
DEXVHE\RIILFLDOV´
,9
3ODLQWLIIVDUJXHWKDWWKH2UGLQDQFHYLRODWHVWKHLUDVVHUWHG
ULJKWWRIUHHGRPRIPRYHPHQWDQGLQWUDVWDWHWUDYHOEHFDXVHLW
H[FOXGHVDUUHVWHGDQGFRQYLFWHGLQGLYLGXDOVIURP2YHUWKH
5KLQHIRUQLQHW\GD\VDQGRQH\HDUUHVSHFWLYHO\
$
$WWKHRXWVHWZHPXVWDVFHUWDLQZKHWKHUDQRWKHUSDQHORI
WKLV FRXUW KDV DOUHDG\ DGGUHVVHG ZKHWKHU WKH &RQVWLWXWLRQ
SURWHFWVDULJKWWRLQWUDVWDWHWUDYHO,QDQVZHULQJWKLVTXHVWLRQ
ZHDGGUHVVWKUHHFDVHVWKDWWRXFKRQWKHTXHVWLRQRIZKHWKHU
WKH &RQVWLWXWLRQ SURWHFWV D ULJKW RI LQWUDVWDWH WUDYHO ±
:DUGZHOOY%RDUGRI(GXFDWLRQRIWKH&LW\RI&LQFLQQDWL
)G WK&LU .XKQOH%URWKHUV,QFY&RXQW\RI
*HDXJD)G WK&LU DQG7KRPSVRQY$VKH
)G WK &LU 2I FRXUVH ZLWKRXW DQ
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
HGXFDWLRQDQGUHDULQJZHZRXOGEHERXQGE\WKHKROGLQJLQ
7KRPSVRQY$VKH)G WK&LU WKDW
³7KRPSVRQ KDV QR IXQGDPHQWDO ULJKW WR YLVLW KLV IDPLO\
PHPEHUVRQ>WKHSXEOLFKRXVLQJDXWKRULW\¶V@SURSHUW\´ 0DM
2SDW %XWWKHPDMRULW\QHYHUWKHOHVVFRQFOXGHVWKDW
-RKQVRQKDVDIXQGDPHQWDOULJKWWRYLVLWKHUJUDQGFKLOGUHQLQ
RUGHUWRDVVLVWLQWKHLUXSEULQJLQJ
,Q VXSSRUW RI LWV SRVLWLRQ WKH PDMRULW\ UHOLHV XSRQ ERWK
0RRUHDQGDVHULHVRI6XSUHPH&RXUWFDVHVUHFRJQL]LQJWKDW
SDUHQWVRUJXDUGLDQVKDYHDIXQGDPHQWDOULJKW³WRGLUHFWWKH
HGXFDWLRQDQGXSEULQJLQJRIRQH¶VFKLOGUHQ´ *OXFNVEHUJ
86DWVHHDOVR0/%Y6/-86
UHFRJQL]LQJWKDW³>F@KRLFHVDERXWWKHXSEULQJLQJ
RI FKLOGUHQ DUH DPRQJ DVVRFLDWLRQDO ULJKWV WKLV &RXUW KDV
UDQNHG DV RI EDVLF LPSRUWDQFH LQ RXU VRFLHW\´ LQWHUQDO
TXRWDWLRQPDUNVRPLWWHG 1RQHRIWKHSHUWLQHQW6XSUHPH
&RXUW FDVHV KRZHYHU LQYROYH WKH ULJKW RI QRQUHVLGHQW
JUDQGSDUHQWV WR FRQWULEXWH WR WKH UDLVLQJ RI WKHLU
JUDQGFKLOGUHQ 3LHUFH Y 6RFLHW\ RI 6LVWHUV 86
KROGLQJ WKDW 2UHJRQ¶V UHTXLUHPHQW WKDW DOO
FKLOGUHQEHWZHHQWKHDJHVRIDQGDWWHQGSXEOLFVFKRROV
³XQUHDVRQDEO\ LQWHUIHUHV ZLWK WKH OLEHUW\ RI SDUHQWV DQG
JXDUGLDQVWRGLUHFWWKHXSEULQJLQJDQGHGXFDWLRQRIFKLOGUHQ
XQGHUWKHLUFRQWURO´ 0H\HUY1HEUDVND86
KROGLQJ WKDW D 1HEUDVND VWDWXWH UHVWULFWLQJ WKH
LQVWUXFWLRQ RI IRUHLJQ ODQJXDJHV YLRODWHG WKH IXQGDPHQWDO
ULJKWRISDUHQWVWRHQJDJHDWHDFKHUWRLQVWUXFWWKHLUFKLOGUHQ
LQWKRVHODQJXDJHV 0RRUHDVQRWHGDERYHIRFXVHGRQWKH
SRVVLELOLW\WKDWJUDQGSDUHQWVZKROLYHZLWKWKHLUJUDQGFKLOGUHQ
PLJKWDVVLVWLQUDLVLQJWKHPEXWLWGLGQRWDGGUHVVWKHULJKWV
RIDQRQUHVLGHQWJUDQGSDUHQW
-RKQVRQQHLWKHUOLYHGZLWKQRUDFWHGDVWKHJXDUGLDQRIKHU
JUDQGFKLOGUHQ 7KH UHODWLRQVKLS WKDW VKH KDG ZLWK KHU
JUDQGFKLOGUHQLVWKHUHIRUHGLVWLQJXLVKDEOHIURPWKHVLWXDWLRQV
WKDWDFWXDOO\H[LVWHGRUZHUHFRQWHPSODWHGLQ0RRUH3LHUFH
0H\HUDQGWKHRWKHUFDVHVXSRQZKLFKWKHPDMRULW\UHOLHV
0RUHRYHUQRWKLQJLQWKHRUGLQDQFHSUHYHQWHG-RKQVRQIURP
PDLQWDLQLQJFRQWLQXLQJFRQWDFWZLWKKHUJUDQGFKLOGUHQ7KH\

-- 12 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
8QOLNHWKHSUHVHQWFDVH7UR[HOLQYROYHGDFRQIOLFWEHWZHHQ
WKHGHVLUHVRIWKHSDUHQWDQGWKRVHRIWKHJUDQGSDUHQWV7KH
SOXUDOLW\ RSLQLRQ QRQHWKHOHVV LPSOLFLWO\ TXHVWLRQV ZKHWKHU
JUDQGSDUHQWVKDYHDIXQGDPHQWDOOLEHUW\LQWHUHVWLQEHLQJDEOH
WR YLVLW WKHLU JUDQGFKLOGUHQ 7R EH VXUH WKH ODFN RI DQ\
GLVFXVVLRQ RI WKH JUDQGSDUHQWV¶ LQWHUHVW PD\ EH GXH WR WKH
KROGLQJWKDWWKHWULDOMXGJHXQFRQVWLWXWLRQDOO\LQIULQJHGRQWKH
PRWKHU¶VULJKWWRUDLVHKHUFKLOGUHQE\UHIXVLQJWRJLYHWKH
PRWKHU¶VLQWHUHVWDQ\VSHFLDOZHLJKW,GDW%XWWKHIDFW
WKDW JUDQGSDUHQWV ZHUH VHHNLQJ YLVLWDWLRQ ULJKWV FRPELQHG
ZLWKWKH&RXUW¶VDQDO\VLVRIWKHVWDWXWHDVDSSOLHGWRWKHFDVH
EHIRUH LW DFFHQWXDWHV WKH DEVHQFH RI HYHQ D SDVVLQJ
DFNQRZOHGJPHQWRIDQ\IXQGDPHQWDOULJKWWKDWJUDQGSDUHQWV
PLJKWKDYHWRYLVLWWKHLUJUDQGFKLOGUHQ,WKHUHIRUHEHOLHYH
WKDW 7UR[HO QRW RQO\ GLVWLQJXLVKHV EHWZHHQ WKH ULJKWV RI D
SDUHQW DV RSSRVHG WR D JUDQGSDUHQW WR UDLVH FKLOGUHQ DQG
JUDQGFKLOGUHQ EXW DOVR FDVWV VHULRXV GRXEW RQ -RKQVRQ¶V
DVVHUWHGOLEHUW\LQWHUHVW
)RUWKHVHUHDVRQV,FRQFOXGHWKDWQRQUHVLGHQWJUDQGSDUHQWV
ODFNDIXQGDPHQWDOOHJDOULJKWWRYLVLWWKHLUJUDQGFKLOGUHQ,Q
UHDFKLQJWKLVFRQFOXVLRQ,UHFRJQL]HWKHYDOXDEOHUROHWKDW
JUDQGSDUHQWVRIWHQSOD\LQWKHOLYHVRIWKHLUJUDQGFKLOGUHQ
%XWSDUHQWVUHWDLQWKHIXQGDPHQWDOULJKWWRUDLVHWKHLURZQ
FKLOGUHQ:KHUHJUDQGSDUHQWVUHVLGHZLWKWKHLUJUDQGFKLOGUHQ
DVZDVWKHFDVHLQ0RRUHWKHFLUFXPVWDQFHVDUH VXFK WKDW
UHFRJQL]LQJWKHJUDQGSDUHQWV¶ULJKWWROLYHLQWKDWKRXVHKROG
LVDORJLFDORXWJURZWKRIUHOHYDQW6XSUHPH&RXUWSUHFHGHQW
5HFRJQL]LQJWKHULJKWWRYLVLWJUDQGFKLOGUHQDVDIXQGDPHQWDO
OLEHUW\ LQWHUHVW LQ FRQWUDVW UHSUHVHQWV DQ H[SDQVLRQ RI
SUHYLRXVO\ UHFRJQL]HG IXQGDPHQWDO ULJKWV DQG SUHVHQWV WKH
ULVNRILPSRVLQJWKLVFRXUW¶VSROLF\SUHIHUHQFHVLQWKHJXLVHRI
WKH'XH3URFHVV&ODXVH:DVKLQJWRQY*OXFNVEHUJ86

7KH SUHFHGLQJ GLVFXVVLRQ H[SODLQV ZK\ , EHOLHYH WKDW
QRQFXVWRGLDOJUDQGSDUHQWVODFNDIXQGDPHQWDOOHJDOULJKWWR
YLVLWWKHLUJUDQGFKLOGUHQ$JUHHLQJZLWKWKLVSULQFLSOHWKH
PDMRULW\UHFRJQL]HVWKDWLIWKHLVVXHZHUHDSXUSRUWHGULJKWWR
YLVLWJUDQGFKLOGUHQUDWKHUWKDQDULJKWWRSDUWLFLSDWHLQWKHLU
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
LQWHUYHQLQJ 6XSUHPH &RXUW FDVH RU D FRQWUROOLQJ HQ EDQF
GHFLVLRQ VXFK D KROGLQJ ZRXOG EH ELQGLQJ RQ WKH SUHVHQW
SDQHO'DUUDKY&LW\RI2DN3DUN)G WK
&LU WK&LU5 F 7KLVUXOHGRHVQRWKRZHYHU
H[WHQGWRGLFWD8QLWHG6WDWHVY-HQNLQV)G
Q WK&LU 6WRFNOHUY*DUUDWW)G
Q WK &LU 7KXV ZH H[DPLQH RXU WKUHH SULRU
GHFLVLRQV WR GHWHUPLQH ZKHWKHU DQRWKHU SDQHO KDV DOUHDG\
DGGUHVVHGWKHTXHVWLRQRIZKHWKHUWKH&RQVWLWXWLRQSURWHFWVD
ULJKWWRLQWUDVWDWHWUDYHO
,Q:DUGZHOOWKHSODLQWLIIDUJXHGWKDWWKH&LQFLQQDWLVFKRRO
ERDUG¶V FRQWLQXLQJ UHVLGHQF\ UHTXLUHPHQW LQIULQJHG RQ KLV
FRQVWLWXWLRQDOO\SURWHFWHGULJKWWRWUDYHODVGHILQHGLQ6KDSLUR
Y7KRPSVRQ866&W/(G
DQG'XQQY%OXPVWHLQ866&W
/(GG )GDW$OWKRXJKWKRVH
FDVHVLQYROYHGRQO\LQWHUVWDWHWUDYHOSODLQWLIIDUJXHGWKDWWKH\
DOVR DSSOLHG WR LQWUDVWDWH WUDYHO ,G 7KLV FRXUW UHMHFWHG
SODLQWLII¶VDUJXPHQWH[SODLQLQJWKDW³:HILQGQRVXSSRUWIRU
SODLQWLII¶VWKHRU\WKDWWKHULJKWWRLQWUDVWDWHWUDYHOKDVEHHQ
DIIRUGHGIHGHUDOFRQVWLWXWLRQDOSURWHFWLRQ´$IWHUUHYLHZLQJ
6KDSLUR'XQQDQG0HPRULDO+RVSLWDOY0DULFRSD&RXQW\
866&W/(G DOORI
ZKLFKLQYROYHGUHVLGHQF\UHTXLUHPHQWVWKHFRXUWDGGHGWKDW
³WKHDVSHFWRIWKHULJKWWRWUDYHOZLWKZKLFKWKH&RXUWZDV
FRQFHUQHGLQWKRVHFDVHVLVQRWLQYROYHGKHUH´,G$SSO\LQJ
UDWLRQDO EDVLV UHYLHZ WKH FRXUW XSKHOG WKH VFKRRO ERDUG¶V
FRQWLQXLQJUHVLGHQF\UHTXLUHPHQW,GDW
,QLWLDOO\ZHDUHVDWLVILHGWKDW:DUGZHOO¶VKROGLQJ±WKDWWKH
&LQFLQQDWLVFKRROERDUG¶VFRQWLQXLQJUHVLGHQF\UHTXLUHPHQW
GLGQRWLPSOLFDWHGXHSURFHVVSURWHFWLRQV±GRHVQRWIRUHFORVH
SODLQWLIIV¶LQWUDVWDWHWUDYHOFODLP$WLWVVLPSOHVWWKLVFDVH
GRHV QRW LQYROYH D FRQWLQXLQJ UHVLGHQF\ UHTXLUHPHQW LW
LQYROYHV D FRQVWLWXWLRQDO FKDOOHQJH WR DQ RUGLQDQFH WKDW
H[FOXGHVFHUWDLQLQGLYLGXDOVIURPVSHFLILHGKLJKFULPHDUHDV
RIWKH&LW\RI&LQFLQQDWLDQGSUHVHQWVLVVXHVRIDFFHVVQRW
UDLVHGLQ:DUGZHOO

-- 13 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
:DUGZHOODOVRVWDWHGWKDW³6KDSLURDQGWKHRWKHUULJKWWR
WUDYHO FDVHV DUH QRW DSSOLFDEOH WR LQWUDVWDWH WUDYHO DQG
FRQWLQXLQJHPSOR\HHUHVLGHQF\UHTXLUHPHQWV´,G HPSKDVLV
LQRULJLQDO 2QHMXGJHRIWKH2KLR6XSUHPH&RXUWUHDGWKLV
ODQJXDJHWRUHMHFWDQ\FRQVWLWXWLRQDOULJKWWRLQWUDVWDWHWUDYHO
LQ WKLV FLUFXLW 6HH %XUQHWW 1(G DW &RRN -
FRQFXUULQJ 8SRQLQVSHFWLRQKRZHYHUWKLVVWDWHPHQWGRHV
QRWIRUHFORVHDFRQVWLWXWLRQDOULJKWWRLQWUDVWDWHWUDYHO5DWKHU
:DUGZHOO¶VVWDWHPHQWVWDQGVIRUWZRSURSRVLWLRQVQHLWKHURI
ZKLFK LV LPSOLFDWHG E\ WKH 2UGLQDQFH WKH 6XSUHPH
&RXUW¶VLQWHUVWDWHWUDYHOKROGLQJVDSSOLHGRQO\WR LQWHUVWDWH
WUDYHODQG WKH6XSUHPH&RXUW¶VLQWHUVWDWHWUDYHOFDVHVGLG
QRWSURKLELWDVFKRROGLVWULFW¶VUHVLGHQF\UHTXLUHPHQW7KXV
LQ.XKQOH%URWKHUV,QFWKHSDQHOVWDWHGWKDWWKHTXHVWLRQRI
ZKHWKHUWKH&RQVWLWXWLRQSURWHFWVDQ\ULJKWRILQWUDVWDWHWUDYHO
UHPDLQHGDQRSHQTXHVWLRQLQWKLVFLUFXLW)GDW
³,I VXFK OLEHUW\ LQWHUHVWV >LQ D IXQGDPHQWDO FRQVWLWXWLRQDO
ULJKW WR LQWUDVWDWH WUDYHO@ GR LQ IDFW H[LVW LQ WKLV FDVH ± D
TXHVWLRQWKDWZLOOKDYHWREHGHFLGHGRQUHPDQGEHFDXVHLWLV
QRWEHIRUHXVDQGZHH[SUHVVQRRSLQLRQRQLW´
7KHGLVVHQWDUJXHVWKDW:DUGZHOOKHOGWKDWWKH³UDWLRQDO
EDVLVWHVWDSSOLHVWRGHWHUPLQHWKHFRQVWLWXWLRQDOLW\RIDODZ
DIIHFWLQJLQWUDVWDWHWUDYHO´%XWWKHVWDWHPHQWWKDWWKHGLVVHQW
UHOLHVRQGRHVQRWH[WHQGWKLVIDU³2QWKHRWKHUKDQGZKHUH
DV LQ WKH SUHVHQW FDVH D FRQWLQXLQJ HPSOR\HH UHVLGHQF\
UHTXLUHPHQWDIIHFWLQJDWPRVWWKHULJKWRILQWUDVWDWHWUDYHOLV
LQYROYHG WKH μUDWLRQDO EDVLV¶ WHVW LV WKH WRXFKVWRQH WR
GHWHUPLQH LWV YDOLGLW\´ ,G DW HPSKDVLV LQ RULJLQDO
:KLOH WKLV VWDWHPHQW HVWDEOLVKHV WKDW FRQWLQXLQJ HPSOR\HH
UHVLGHQF\UHTXLUHPHQWVDUHHYDOXDWHGXQGHUWKHUDWLRQDOEDVLV
WHVWLWGRHVQRWKROGWKDWWKHUDWLRQDOEDVLVWHVWJRYHUQVHYHU\
LPSDLUPHQWRIDQDVVHUWHGULJKWWRLQWUDVWDWHWUDYHO2QHFRXOG
LQIHUWKDWWKH:DUGZHOOSDQHOZDVVXJJHVWLQJWKDWWKHUDWLRQDO
EDVLVWHVWVKRXOGJRYHUQDOOSRWHQWLDOLQWUDVWDWHWUDYHOFODLPV
EXWFRQVLGHUHGLQFRQWH[WRIWKHUHVWRIWKHRSLQLRQVXFKDQ
LQIHUHQFHLVQRWFRPSXOVRU\(YHQLIVXFKDQLQIHUHQFHZDV
WKHRQO\UHDVRQDEOHLQIHUHQFHLWZRXOGEHGLFWDDQGZRXOGQRW
ELQGWKLVFRXUW6HH-HQNLQV)GDWQ
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
H[SUHVVHGDUHOXFWDQFHWRH[WHQGLWEH\RQGJUDQGSDUHQWVOLYLQJ
ZLWKWKHLUJUDQGFKLOGUHQ6HH%URZQY,YHV)G
VW&LU QRWLQJWKDWFDVHVUDLVLQJWKHSRVVLELOLW\RI
JUDQGSDUHQWVKDYLQJ³VRPHFRQVWLWXWLRQDOO\SURWHFWHGULJKWV
LQ UHODWLRQ WR WKHLU DVVRFLDWLRQ ZLWK WKHLU JUDQGFKLOGUHQ´
LQYROYHJUDQGSDUHQWVUHVLGLQJZLWKWKHLUJUDQGFKLOGUHQDQG
WKDW WKH ULJKWV RI QRQUHVLGHQW JUDQGSDUHQWV ³KDYH DQ HYHQ
VOLPPHUSHGLJUHHLQWKHFDVHODZ´ :DWWHUVRQY3DSH
)GQ VW&LU UHFRJQL]LQJWKDW³WKHVFRSHDQG
OHYHORIFRQVWLWXWLRQDOSURWHFWLRQIRUWKHOLEHUW\LQWHUHVWVRI
JUDQGSDUHQWVSUREDEO\GLIIHUVIURPWKDWIRUSDUHQWV¶LQWHUHVWV´
EXW KROGLQJ WKDW JUDQGSDUHQWV ZKR UHVLGH ZLWK WKHLU
JUDQGFKLOGUHQ KDYH ³LQWHUHVWV DW OHDVW VXIILFLHQW WR DYRLG
GLVPLVVDO RI WKHLU † FODLPV RQ JURXQGV WKH\ KDYH QR
FRQVWLWXWLRQDOO\SURWHFWHGULJKWDWVWDNH´ (OOLVY+DPLOWRQ
)G WK&LU KROGLQJWKDWDJUDQGPRWKHU
KDGGXHSURFHVVULJKWVLQDVVRFLDWLQJZLWKKHUJUDQGFKLOGUHQ
ZKHUHVKHDFWHGLQORFRSDUHQWLVWRWKHFKLOGUHQFODLPHGWR
KDYHIRUPDOFXVWRG\RIWKHFKLOGUHQZKHQWKHGHIHQGDQWVWRRN
WKHP IURP KHU DQG ZDV ³D JUHDWDXQW DQ DGRSWLYH
JUDQGPRWKHUDQGDGHIDFWRPRWKHUDQGIDWKHUDOOUROOHGXS
LQWRRQH´ LWDOLFVLQRULJLQDO
0RUHRYHULQ7UR[HOY*UDQYLOOH86 D
SOXUDOLW\RIWKH6XSUHPH&RXUWKHOGWKDWDVDSSOLHGWR WKH
IDFWV EHIRUH LW D VWDWH ODZ SHUPLWWLQJ ³>D@Q\ SHUVRQ´ WR
SHWLWLRQ D VWDWH FRXUW IRU WKH ULJKW WR YLVLW D FKLOG DQG
DXWKRUL]LQJWKHFRXUWWRJUDQWVXFKULJKWVZKHQHYHU³YLVLWDWLRQ
PD\VHUYHWKHEHVWLQWHUHVWRIWKHFKLOG´XQFRQVWLWXWLRQDOO\
LQWHUIHUHGZLWKWKHIXQGDPHQWDOULJKWRIDPRWKHUWRUDLVHKHU
RZQFKLOGUHQ,GDW7UR[HOLQYROYHGWKHVWDWHFRXUW¶V
GHFLVLRQWRDOORZJUDQGSDUHQWVYLVLWDWLRQULJKWVWKDWH[FHHGHG
WKH SDUHQW¶V SUHIHUHQFH ,G DW $OWKRXJK WKH &RXUW
DFNQRZOHGJHGWKHSRWHQWLDOGHVLUDELOLW\RISDUHQWVIRVWHULQJ
VWURQJ UHODWLRQVKLSV EHWZHHQ JUDQGSDUHQWV DQG WKHLU
JUDQGFKLOGUHQLWHPSKDVL]HGWKDW³WKHGHFLVLRQZKHWKHUVXFK
DQLQWHUJHQHUDWLRQDOUHODWLRQVKLSZRXOGEHEHQHILFLDOLQDQ\
VSHFLILFFDVHLVIRUWKHSDUHQWWRPDNHLQWKHILUVWLQVWDQFH´
,GDW

-- 14 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
IDPLO\DQGGHILQHG³IDPLO\´LQVXFKDPDQQHUWKDWSUHYHQWHG
DJUDQGPRWKHUIURPOLYLQJZLWKKHUJUDQGFKLOGUHQYLRODWHG
WKHJUDQGPRWKHU¶VIXQGDPHQWDOOLEHUW\LQWHUHVWLQEHLQJDEOH
WROLYHZLWKWKHP,GDW7KHSODLQWLIILQ0RRUHZDV
DJUDQGPRWKHUZKROLYHGZLWKKHUVRQDQGWZRJUDQGVRQV
2QO\RQHRIWKHJUDQGVRQVZDVWKHFKLOGRIWKHVRQOLYLQJLQ
WKHKRXVHWKHRWKHUZDVWKHFKLOGRIWKHVRQ¶VVLEOLQJ7KLV
OLYLQJDUUDQJHPHQWYLRODWHGWKHFLW\¶VKRXVLQJRUGLQDQFH,G
DW
7KURXJKRXW WKH SOXUDOLW\ RSLQLRQ LQ 0RRUH WKH &RXUW
HPSKDVL]HGWKHIDPLO\DQGIDPLO\OLYLQJDUUDQJHPHQWVQRW
WKHULJKWVRIDJUDQGSDUHQWWRYLVLWJUDQGFKLOGUHQ6HH(OOLVY
+DPLOWRQ)G WK&LU FRQFOXGLQJWKDW
WKH&RXUWLQ0RRUH³ZDVFRQFHUQHGZLWKWKHLPSDFWRQWKH
IDPLO\XQLWDVDZKROH²WKDWLVZLWKWKHLQWHUHVWVRIWKHFKLOG
DVZHOODVRIWKHJUDQGSDUHQW´ ,QH[SODLQLQJZK\UDWLRQDO
EDVLV UHYLHZ ZDV QRW DSSURSULDWH IRU LQVWDQFH WKH &RXUW
QRWHGWKDWWKHRUGLQDQFH³VHOHFWVFHUWDLQFDWHJRULHVRIUHODWLYHV
ZKR PD\ OLYH WRJHWKHU DQG GHFODUHV WKDW RWKHUV PD\ QRW´
WKHUHE\ ³VOLFLQJ GHHSO\ LQWR WKH IDPLO\ LWVHOI´ DQG WKDW LW
³LQWUXGHVRQFKRLFHVFRQFHUQLQJIDPLO\OLYLQJDUUDQJHPHQWV´
0RRUH86DW HPSKDVLVDGGHG
7KH&RXUWLQ0RRUHDOVRIUDPHGWKHFRQWRXUVRIWKHOLEHUW\
LQWHUHVWDWLVVXHEHIRUHLWE\HPSKDVL]LQJWKDW³>W@KHWUDGLWLRQ
RIXQFOHVDXQWVFRXVLQVDQGHVSHFLDOO\JUDQGSDUHQWVVKDULQJ
DKRXVHKROGDORQJZLWKSDUHQWVDQGFKLOGUHQKDVURRWVHTXDOO\
YHQHUDEOHDQGHTXDOO\GHVHUYLQJRIFRQVWLWXWLRQDOUHFRJQLWLRQ
DVWKRVHRIWKHQXFOHDUIDPLO\´,GDW HPSKDVLVDGGHG
)LQDOO\ WKH &RXUW UHFRJQL]HG WKDW ³>G@HFLVLRQV FRQFHUQLQJ
FKLOGUHDULQJZKLFK<RGHU0H\HU3LHUFHDQGRWKHU FDVHV
KDYHUHFRJQL]HGDVHQWLWOHGWRFRQVWLWXWLRQDOSURWHFWLRQORQJ
KDYHEHHQVKDUHGZLWKJUDQGSDUHQWVRURWKHUUHODWLYHVZKR
RFFXS\WKHVDPHKRXVHKROG²LQGHHGZKRPD\WDNHRQPDMRU
UHVSRQVLELOLW\ IRU WKH UHDULQJ RI WKH FKLOGUHQ´ ,G DW
HPSKDVLVDGGHG
7KH IHGHUDO FRXUWV RI DSSHDOV WKDW KDYH FRQVLGHUHG WKH
FRQWRXUV RI WKH OLEHUW\ LQWHUHVW UHFRJQL]HG LQ 0RRUH KDYH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
)LQDOO\LQ7KRPSVRQWKLVFRXUWDGGUHVVHGDFKDOOHQJHWRD
7HQQHVVHHVWDWXWHSURKLELWLQJLQGLYLGXDOVVXVSHFWHGRIKDYLQJ
EHHQ LQYROYHG LQ ³GUXJ DFWLYLWLHV RU YLROHQW FULPLQDO
DFWLYLWLHV´ IURP WUHVSDVVLQJ LQ WZHOYH .QR[YLOOH KRXVLQJ
GHYHORSPHQWV )G DW $OWKRXJK WKH SODLQWLII
7KRPSVRQ DUJXHG WKH VWDWXWH YLRODWHG D QXPEHU RI KLV
FRQVWLWXWLRQDOULJKWVKHGLGQRWSUHVHQWDULJKWWRWUDYHOFODLP
WRHLWKHUWKHGLVWULFWRUDSSHOODWHFRXUW7KHFORVHVW7KRPSVRQ
FDPH WR UDLVLQJ DQ LQWUDVWDWH WUDYHO FODLP ZDV D SDVVLQJ
UHIHUHQFHWR³IUHHGRPRIPRYHPHQW´LQKLVDSSHOODWHEULHI
%XW7KRPSVRQRIIHUHGQRH[SODQDWLRQRUHODERUDWLRQRIWKLV
ULJKW DQG WKH FDVHV KH FLWHG LQ VXSSRUW RI WKLV SXUSRUWHG
³IUHHGRPRIPRYHPHQW´FRQFHUQHGDQ(LJKWK$PHQGPHQW
FKDOOHQJHWRFRUSRUDOSXQLVKPHQW,QJUDKDPY:ULJKW
86 DIUHHGRPRIDVVRFLDWLRQFKDOOHQJH5REHUWV
Y -D\FHHV 86 DQG D FKDOOHQJH WR D
JRYHUQPHQWFRQWUDFWELGGLQJSURFHVVVHH8QLWHGRI2PDKD
/LIH,QV&RY6RORPRQ)G WK&LU $VD
UHVXOWWKHSDQHOUHMHFWHG7KRPSVRQ¶VDUJXPHQWDV³ZLWKRXW
PHULW´DQGDGGHGWKDW³WRWKHH[WHQWWKDW7KRPSVRQUHIHUVWR
WKHμULJKWWRWUDYHO¶DVUHFRJQL]HGE\RXUMXULVSUXGHQFHWKDW
ULJKWLVHVVHQWLDOO\DULJKWRILQWHUVWDWHWUDYHO´6HH7KRPSVRQ
)GDW,QWKHSDQHO¶VWZRSDUDJUDSKGLVSRVDORI
7KRPSVRQ¶V³IUHHGRPRIPRYHPHQW´PHQWLRQWKHSDQHOFLWHG
RQO\WKH6XSUHPH&RXUW¶VPRVWUHFHQWLQWHUVWDWHWUDYHOFDVH
6DHQ] Y 5RH 86 DQG GLG QRW GLVFXVV
ZKHWKHUWKH&RQVWLWXWLRQSURWHFWVDOLPLWHGULJKWRILQWUDVWDWH
WUDYHO,G
*LYHQWKDW7KRPSVRQQHYHUDVVHUWHGDULJKWWRLQWUDVWDWH
WUDYHOZHFDQQRWILQGWKDWWKH7KRPSVRQFRXUWKHOGWKDWWKH
&RQVWLWXWLRQGRHVQRW SURWHFWDQ\ULJKWRILQWUDVWDWHWUDYHO
0RUHRYHUHYHQLIZHZHUHWRDQDO\]HWKHSDQHO¶VVWDWHPHQW
ZH ILQG WKDW LW VD\V RQO\ WKDW QHLWKHU WKLV FRXUW QRU WKH
6XSUHPH &RXUW KDV IRUPDOO\ UHFRJQL]HG D OLPLWHG ULJKW WR
LQWUDVWDWH WUDYHO :KLOH ZH KDYH QR TXDUUHO ZLWK WKLV
VWDWHPHQWRIODZZHHPSKDVL]HWKDWVXFKDVWDWHPHQWLVTXLWH
DSDUWIURPVD\LQJWKDWWKLVFRXUWRUWKH6XSUHPH&RXUWKDV
UHMHFWHG D ULJKW WR LQWUDVWDWH WUDYHO 8QGHU WKHVH

-- 15 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
FLUFXPVWDQFHVZHFRQFOXGHWKDWWKHH[LVWHQFHRIDULJKWWR
LQWUDVWDWHWUDYHOUHPDLQVDQRSHQTXHVWLRQLQWKLVFLUFXLW
%
,Q DQDO\]LQJ ZKHWKHU D SDUWLFXODU ULJKW LPSOLFDWHV WKH
SURWHFWLRQRIWKH'XH3URFHVV&ODXVHZHILUVWFDUHIXOO\GHILQH
WKHDVVHUWHGULJKWDQGWKHQDVNZKHWKHULWLV³GHHSO\URRWHGLQ
WKLV1DWLRQ¶VKLVWRU\DQGWUDGLWLRQDQGLPSOLFLWLQWKHFRQFHSW
RIRUGHUHGOLEHUW\VXFKWKDWQHLWKHUOLEHUW\QRUMXVWLFHZRXOG
H[LVWLIWKH\ZHUHVDFULILFHG´:DVKLQJWRQY*OXFNVEHUJ
86 6&W /(G
LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQV RPLWWHG VHH DOVR
0LFKDHO+Y*HUDOG'866&W
/(GG *LYHQWKHVHLQVWUXFWLRQVZHEHOLHYH
WKHUHOHYDQWDVVHUWHGULJKWLPSOLFDWHGE\WKLVFDVHLVDULJKWWR
WUDYHOORFDOO\WKURXJKSXEOLFVSDFHVDQGURDGZD\V6HH/XW]
)G G&LU ³7KHULJKWRUWUDGLWLRQZH
FRQVLGHU PD\ EH GHVFULEHG DV WKH ULJKW WR WUDYHO ORFDOO\
WKURXJKSXEOLFVSDFHVDQGURDGZD\V´ :KLOHWKHWHUPVDUH
RIWHQXVHGLQWHUFKDQJHDEO\ZHGRQRWXVHWKHULJKWWRWUDYHO
ORFDOO\WKURXJKSXEOLFVSDFHVDQGURDGZD\VV\QRQ\PRXVO\
ZLWKDULJKWWRIUHHGRPRIPRYHPHQW7REHVXUHDULJKWWR
IUHHGRPRIPRYHPHQWFRXOGHQFRPSDVVDULJKWWRORFDOL]HG
WUDYHOEXWLWFRXOGDOVRLQFOXGHLQWHUVWDWHDQGLQWHUQDWLRQDO
WUDYHOFRPSRQHQWV:KLOHZHGUDZIURPKLVWRULFDOVRXUFHV
GLVFXVVLQJDIUHHGRPRIPRYHPHQWDQGILQGWKHLUDXWKRULW\
LQVWUXFWLYHRXUKROGLQJLVOLPLWHGWRWKHULJKWWRWUDYHOORFDOO\
WKURXJKSXEOLFVSDFHVDQGURDGZD\V0RUHRYHUZKLOHZHFDQ
FRQFHLYH RI GLIIHUHQW DUWLFXODWLRQV RI D ULJKW WR LQWUDVWDWH
WUDYHO WKH ULJKW ZH DGGUHVV ± WKH ULJKW WR WUDYHO ORFDOO\
WKURXJKSXEOLFVSDFHVDQGURDGZD\V±LVIXQGDPHQWDOO\RQH
RIDFFHVV
&
³7KHFRQVWLWXWLRQDOULJKWWRWUDYHOIURPRQH6WDWHWRDQRWKHU
RFFXSLHVDSRVLWLRQIXQGDPHQWDOWRWKHFRQFHSWRIRXU
)HGHUDO8QLRQ,WLVDULJKWWKDWKDVEHHQILUPO\HVWDEOLVKHG
DQGUHSHDWHGO\UHFRJQL]HG´8QLWHG6WDWHVY*XHVW86
6&W /(GG VHH DOVR
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
5REHUWV Y 8QLWHG 6WDWHV -D\FHHV 86
7KH&RXUWSURFHHGHGWRREVHUYHWKDWWKHUHODWLRQVKLSV
WKDW PRVW FOHDUO\ PHULW SURWHFWLRQ XQGHU WKH )RXUWHHQWK
$PHQGPHQW³DUHWKRVHWKDWDWWHQGWKHFUHDWLRQDQGVXVWHQDQFH
RIDIDPLO\²PDUULDJHFKLOGELUWKWKHUDLVLQJDQGHGXFDWLRQ
RIFKLOGUHQDQGFRKDELWDWLRQZLWKRQH¶VUHODWLYHV´,GDW
FLWDWLRQV RPLWWHG 7KHVH UHODWLRQVKLSV WKH &RXUW QRWHG
LQYROYH XQLTXH FKDUDFWHULVWLFV WKDW GLVWLQJXLVK WKHP IURP
RWKHUIRUPVRIDVVRFLDWLRQ
)DPLO\ UHODWLRQVKLSV E\ WKHLU QDWXUH LQYROYH GHHS
DWWDFKPHQWV DQG FRPPLWPHQWV WR WKH QHFHVVDULO\ IHZ
RWKHU LQGLYLGXDOV ZLWK ZKRP RQH VKDUHV QRW RQO\ D
VSHFLDOFRPPXQLW\RIWKRXJKWVH[SHULHQFHVDQGEHOLHIV
EXW DOVR GLVWLQFWLYHO\ SHUVRQDO DVSHFWV RI RQH¶V OLIH
$PRQJRWKHUWKLQJVWKHUHIRUHWKH\DUHGLVWLQJXLVKHGE\
VXFK DWWULEXWHV DV UHODWLYH VPDOOQHVV D KLJK GHJUHH RI
VHOHFWLYLW\ LQ GHFLVLRQV WR EHJLQ DQG PDLQWDLQ WKH
DIILOLDWLRQDQGVHFOXVLRQIURPRWKHUVLQFULWLFDODVSHFWVRI
WKHUHODWLRQVKLSV
,GDW
7KHUHFRUGDVWKHPDMRULW\QRWHVHVWDEOLVKHVWKDW-RKQVRQ
KHOSHGFDUHIRUKHUJUDQGFKLOGUHQDQGUHJXODUO\WRRNWZRRI
WKHPWRVFKRRO%HFDXVHKHUJUDQGFKLOGUHQOLYHGLQ2YHUWKH
5KLQH KRZHYHU -RKQVRQ ZDV XQDEOH WR FRQWLQXH WKHVH
DFWLYLWLHVDIWHUUHFHLYLQJKHUH[FOXVLRQQRWLFH-RKQVRQFRXOG
KDYHREWDLQHGDYDULDQFHLIVKHKDGEHHQDEOHWRHVWDEOLVKWKDW
VKHUHVLGHGZLWKKHUFKLOGUHQLQ2YHUWKH5KLQHEXWVKHQHYHU
DSSOLHGIRUVXFKDYDULDQFH
&RQIURQWHG ZLWK WKHVH IDFWV WKH PDMRULW\ FRQFOXGHV WKDW
-RKQVRQKDV³DIXQGDPHQWDOIUHHGRPRIDVVRFLDWLRQULJKWWR
SDUWLFLSDWHLQWKHXSEULQJLQJRIKHUJUDQGFKLOGUHQ´ 0DM2S
DW ,GLVDJUHH7KHNH\6XSUHPH&RXUWFDVHRI0RRUHY
&LW\RI(DVW&OHYHODQG86 LQP\YLHZQRW
RQO\IDLOVWRVXSSRUW-RKQVRQ¶VDVVHUWHGDVVRFLDWLRQDOULJKW
EXW DOVR VXJJHVWV WKDW QR VXFK ULJKW H[LVWV ,Q 0RRUH D
SOXUDOLW\RIWKH6XSUHPH&RXUWKHOGWKDWDFLW\RUGLQDQFHWKDW
OLPLWHGRFFXSDQF\RIVLQJOHGZHOOLQJXQLWVWRPHPEHUVRIRQH

-- 16 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
6XSUHPH &RXUW PRUHRYHU KDV QRWHG WKDW WKH )LUVW
$PHQGPHQWLQWHUHVWDWVWDNHLQFDVHVVXFKDV%URWKHUKRRGRI
5DLOURDG 7UDLQPHQ ³ZDV SULPDULO\ WKH ULJKW WR DVVRFLDWH
FROOHFWLYHO\IRUWKHFRPPRQJRRG´:DOWHUVY1DW¶O$VV¶QRI
5DGLDWLRQ6XUYLYRUV86
(YHQ LI WKH )LUVW $PHQGPHQW ZHUH GHHPHG WR SURWHFW D
SHUVRQ¶VULJKWWRDVVRFLDWHZLWKDSDUWLFXODUDWWRUQH\,ZRXOG
ILQGWKDWWKHRUGLQDQFHGLGQRWLQIULQJHXSRQWKDWULJKW$X
)UDQFH IRU H[DPSOH ZDV IUHH WR PHHW ZLWK KLV DWWRUQH\
%HUQDUG:RQJDZD\IURP:RQJ¶VRIILFHVSHDNZLWK:RQJ
RQWKHWHOHSKRQHDQGFRPPXQLFDWHZLWK:RQJWKURXJKWKH
PDLO7KHPDMRULW\H[SUHVVHVWKHYLHZWKDWVXFKSRVVLELOLWLHV
DUHPHDQLQJOHVVIRUDKRPHOHVVPDQZKRKDVQRWHOHSKRQHRU
SHUPDQHQWDGGUHVV%XW,EHOLHYHWKDWLWVWUHWFKHVFUHGXOLW\WR
ILQGWKDW:RQJDQG$X)UDQFHZRXOGKDYHEHHQXQDEOHWR
PHHW DW D FRIIHH VKRS D ERRNVWRUH RU D SXEOLF OLEUDU\
FRQYHQLHQWWRERWKRIWKHP
)RUDOORIWKHVHUHDVRQV,FRQFOXGHWKDWWKHRUGLQDQFHGLG
QRWLQWHUIHUHZLWKDQ\)LUVW$PHQGPHQWULJKWWKDW$X)UDQFH
PLJKWKDYHWRDVVRFLDWHZLWKDSDUWLFXODUDWWRUQH\
)XQGDPHQWDOOLEHUW\LQWHUHVWLQPDLQWDLQLQJLQWLPDWH
SHUVRQDOUHODWLRQVKLSV
7KHSODLQWLIIV¶DVVHUWLRQWKDWWKHRUGLQDQFHLQIULQJHGXSRQ
WKHLUIXQGDPHQWDOULJKWWRIRUPDQGPDLQWDLQEDVLFLQWLPDWH
SHUVRQDOUHODWLRQVKLSVKDVLWVIRXQGDWLRQLQWKHLPSRUWDQFHRI
WKHVH UHODWLRQVKLSV LQ WKH QDWLRQ¶V GHPRFUDWLF V\VWHP RI
JRYHUQPHQW$VWKH6XSUHPH&RXUWKDVH[SODLQHG
FKRLFHVWRHQWHULQWRDQGPDLQWDLQFHUWDLQLQWLPDWHKXPDQ
UHODWLRQVKLSVPXVWEHVHFXUHGDJDLQVWXQGXHLQWUXVLRQE\
WKH 6WDWH EHFDXVH RI WKH UROH RI VXFK UHODWLRQVKLSV LQ
VDIHJXDUGLQJWKHLQGLYLGXDOIUHHGRPWKDWLVFHQWUDOWRRXU
FRQVWLWXWLRQDO VFKHPH ,Q WKLV UHVSHFW IUHHGRP RI
DVVRFLDWLRQUHFHLYHVSURWHFWLRQDVDIXQGDPHQWDOHOHPHQW
RISHUVRQDOOLEHUW\
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
6DHQ]86DW GHVFULELQJWKHFRQVWLWXWLRQDOULJKWWR
WUDYHO DV ³ILUPO\ HPEHGGHG´ LQ WKH 6XSUHPH &RXUW¶V
MXULVSUXGHQFH ,WLV³DVVHUWDEOHDJDLQVWSULYDWHLQWHUIHUHQFHDV
ZHOO DV JRYHUQPHQW DFWLRQ D YLUWXDOO\ XQFRQGLWLRQDO
SHUVRQDO ULJKW JXDUDQWHHG E\ WKH &RQVWLWXWLRQ WR XV DOO´
6KDSLUR86DW 6WHZDUW-FRQFXUULQJ 7KHULJKW
WR LQWHUVWDWH WUDYHO HPEUDFHV WKUHH GLIIHUHQW FRPSRQHQWV
³WKHULJKWRIDFLWL]HQRIRQH6WDWHWRHQWHUDQGWROHDYH
DQRWKHUVWDWH´ ³WKHULJKWWREHWUHDWHGDVDZHOFRPHYLVLWRU
UDWKHUWKDQDQXQIULHQGO\DOLHQZKHQWHPSRUDULO\SUHVHQWLQ
WKHVHFRQG6WDWH´DQG ³IRUWKRVHWUDYHOHUVZKRHOHFWWR
EHFRPHSHUPDQHQWUHVLGHQWVWKHULJKWWREHWUHDWHGOLNHRWKHU
FLWL]HQVRIWKDW6WDWH´6DHQ]86DW7KH6XSUHPH
&RXUWKDVQRW\HWLGHQWLILHGWKHVRXUFHRIWKHILUVWWUDYHOULJKW
EXWWKHODWWHUWZRFRPSRQHQWVDUHH[SUHVVO\SURWHFWHGE\WKH
3ULYLOHJHVDQG,PPXQLWLHV&ODXVH,GDW
7KH 6XSUHPH &RXUW KDV QRW \HW DGGUHVVHG ZKHWKHU WKH
&RQVWLWXWLRQDOVRSURWHFWVDULJKWWRLQWUDVWDWHWUDYHO0HP¶O
+RVS86DW%RWKWKHGLVWULFWFRXUWLQWKLVFDVH
)6XSSGDWDQGWKH2KLR6XSUHPH&RXUWLQ
%XUQHWW 1(G DW UHFRJQL]HG D OLPLWHG
FRQVWLWXWLRQDOULJKWWRLQWUDVWDWHWUDYHODQGFRQFOXGHGWKDWWKH
2UGLQDQFHLPSHUPLVVLEO\LQIULQJHGRQWKLVULJKW6HHDOVR
6SHQFHU Y &DVDYLOOD )G G &LU
UHFRJQL]LQJWKDWWKH&RQVWLWXWLRQ³SURWHFWVWKHULJKWWRWUDYHO
IUHHO\ZLWKLQDVLQJOHVWDWH´ /XW])GDW KROGLQJ
WKDW³WKHULJKWWRPRYHIUHHO\DERXWRQH¶VRZQQHLJKERUKRRG
RUWRZQ´LVDIXQGDPHQWDOOLEHUW\ LQWHUHVWSURWHFWHGE\WKH
'XH3URFHVV&ODXVH +XWFKLQVY'LVWULFWRI&ROXPELD
)G '&&LU 5RJHUV-GLVVHQWLQJLQ
SDUW FRQFXUULQJ LQ SDUW MRLQHG E\ 7DWHO DQG :DOG --
³>3@UHFHGHQWVUHFRJQL]HDIXQGDPHQWDOULJKWWRZDONWKURXJK
SXEOLF VWUHHWV ZLWKRXW WKHUHE\ VXEMHFWLQJ RQHVHOI WR SROLFH
FXVWRG\´ VHH DOVR LG DW SOXUDOLW\ 6LOEHUPDQ -
DFFHSWLQJ WKDW D ³GUDFRQLDQ FXUIHZ´ PLJKW LPSOLFDWH
VXEVWDQWLYHGXHSURFHVV 3RWWLQJHUY&LW\RI0LDPL)

-- 17 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
%XW VHH :ULJKW Y &LW\ RI -DFNVRQ )G WK &LU

$ QXPEHU RI VWDWH FRXUWV KDYH DOVR UXOHG WKDW WKHLU UHVSHFWLYH VWDWH
FRQVWLWXWLRQV SURWHFW D ULJKW WR LQWUDVWDWH WUDYHO 6HH :DWW Y :DWW
3G :\R ³7KH ULJKW WR WUDYHO IUHHO\ WKURXJKRXW WKH
VWDWH LV D QHFHVVDU\ DQG IXQGDPHQWDO DVSHFW RI RXU HPDQFLSDWHG VRFLHW\
DQG LW LV UHWDLQHG E\ WKH FLWL]HQV´ %UDQGPLOOHU Y $UUHROD 1:G
:LVF ³>:@H UHFRJQL]H WKDW WKH ULJKW WR WUDYHO LQWUDVWDWH
LV IXQGDPHQWDO DPRQJ WKH OLEHUWLHV SUHVHUYHG E\ WKH :LVFRQVLQ
&RQVWLWXWLRQ 7KLV ULJKW WR WUDYHO LQFOXGHV WKH ULJKW WR PRYH IUHHO\ DERXW
RQH¶V QHLJKERUKRRG HYHQ LQ DQ DXWRPRELOH´ 6WDWH Y 6KLJHPDWVX
3G +DZ UHFRJQL]LQJ ULJKW WR IUHHGRP RI PRYHPHQW
ZKLFK ³LQFOXGH>V@ WKH ULJKW RI PHQ WR PRYH IURP SODFH WR SODFH WR ZDON
LQ WKH ILHOGV LQ WKH FRXQWU\ RU RQ WKH VWUHHWV RI D FLW\ >DQG@ WR VWDQG XQGHU
RSHQ VN\´ 6WDWH Y &X\SHUV 1:G 0LQQ $SS
³0LQQHVRWD DOVR UHFRJQL]HV WKH ULJKW WR LQWUDVWDWH WUDYHO´ &LW\ RI 1HZ
<RUN Y $QGUHZV 1<6G 1< 6XS &W ³7KHUH
FDQ EH QR GRXEW WKDW RXU 6WDWH &RQVWLWXWLRQ QR OHVV WKDQ WKH )HGHUDO
&RQVWLWXWLRQ VXSSRUWV WKH ULJKW WR WUDYHO IUHHO\ ZLWKLQ WKH 6WDWH´ VHH
DOVR &LW\ RI %LVPDUN Y 6WXDUW 1:G 1'
LPSO\LQJ H[LVWHQFH RI ULJKW
6XSS 6' )OD &LW\ RI 6HDWWOH Y
0F&RQDK\3G :DVK$SS
$OWKRXJKWKH6XSUHPH&RXUWKDVQRWH[SUHVVO\UHFRJQL]HG
DIXQGDPHQWDOULJKWWRLQWUDVWDWHWUDYHODVHDUO\DVWKH$UWLFOHV
RI&RQIHGHUDWLRQVWDWHFLWL]HQV³SRVVHVVHGWKHIXQGDPHQWDO
ULJKWLQKHUHQWLQFLWL]HQVRIDOOIUHHJRYHUQPHQWVSHDFHIXOO\
WRGZHOOZLWKLQWKHOLPLWVRIWKHLUUHVSHFWLYHVWDWHVWRPRYHDW
ZLOO IURP SODFH WR SODFH WKHUHLQ DQG WR KDYH IUHH LQJUHVV
WKHUHWRDQGHJUHVVWKHUHIURP´8QLWHG6WDWHVY:KHHOHU
866&W/( $V&KLHI
-XVWLFH7DQH\REVHUYHG
)RU DOO WKH JUHDW SXUSRVHV IRU ZKLFK WKH )HGHUDO
JRYHUQPHQWZDVIRUPHGZHDUHRQHSHRSOHZLWK RQH
FRPPRQ FRXQWU\ :H DUH DOO FLWL]HQV RI WKH 8QLWHG
6WDWHVDQGDVPHPEHUVRIWKHVDPHFRPPXQLW\PXVW
KDYHWKHULJKWWRSDVVDQGUHSDVVWKURXJKHYHU\SDUWRILW
ZLWKRXWLQWHUUXSWLRQDVIUHHO\DVLQRXURZQ6WDWHV
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
DVVHPEO\ SHWLWLRQ IRU WKH UHGUHVV RI JULHYDQFHV DQG WKH
H[HUFLVHRIUHOLJLRQ´ 7KHWKUXVWRIWKHSODLQWLIIV¶IUHHGRP
RIDVVRFLDWLRQFKDOOHQJH²WKDWWKHRUGLQDQFHLQWHUIHUHGZLWK
WKHLUDELOLWLHVWRPDLQWDLQLQWHUSHUVRQDOUHODWLRQVKLSV²GRHV
QRWUHODWHWRWKHVH)LUVW$PHQGPHQWULJKWV$VDUHVXOW,DP
RI WKH RSLQLRQ WKDW WKH )LUVW $PHQGPHQW GRHV QRW SURYLGH
SURWHFWLRQIRUSDUWLFLSDWLQJLQWKHUHODWLRQVKLSVVRXJKWE\WKH
SODLQWLIIV
,QUHDFKLQJWKLVFRQFOXVLRQ,UHFRJQL]HWKDW$X)UDQFH¶V
LQDELOLW\ WR YLVLW KLV DWWRUQH\¶V RIILFH GXULQJ KLV H[FOXVLRQ
IURP2YHUWKH5KLQHSUHVHQWVDFORVHUTXHVWLRQ$X)UDQFH
VHHNVWRGHULYHIURPWKH)LUVW$PHQGPHQWDULJKWWRDVVRFLDWH
ZLWKWKHSDUWLFXODUDWWRUQH\RIKLVFKRLFHLQRUGHUWRFKDOOHQJH
WKH DOOHJHG YLRODWLRQV RI KLV OHJDO ULJKWV $OWKRXJK WKLV
DVVHUWHGULJKWLVUHODWHGWR$X)UDQFH¶VGHVLUHWR³SHWLWLRQWKH
*RYHUQPHQWIRUDUHGUHVVRIJULHYDQFHV´86&RQVWDPHQG
,WKHSHUWLQHQW6XSUHPH&RXUWFDVHVDGGUHVVLQJWKHLQWHUSOD\
EHWZHHQWKH)LUVW$PHQGPHQW¶VJXDUDQWHHVDQGWKHULJKWWR
PHHWZLWKDQDWWRUQH\DOOGHDOZLWKWKHULJKWVRIRUJDQL]DWLRQV
DQGWKHLUPHPEHUV6HHHJ8QLWHG0LQH:RUNHUVRI$PY
,OOLQRLV 6WDWH %DU $VV¶Q 86
KROGLQJWKDWWKHXQLRQ¶VPHPEHUVKDGD)LUVW$PHQGPHQW
ULJKWWRKLUHDQDWWRUQH\FROOHFWLYHO\WRDVVLVWWKHPLQDVVHUWLQJ
WKHLUOHJDOFODLPV %KGRI557UDLQPHQY9LUJLQLDH[UHO
9LUJLQLD 6WDWH %DU 86 KROGLQJ WKDW WKH
)LUVW $PHQGPHQW SURWHFWHG WKH %URWKHUKRRG¶V ULJKW WR
PDLQWDLQ D 'HSDUWPHQW RI /HJDO &RXQVHO WKDW UHIHUUHG WKH
%URWKHUKRRG¶V PHPEHUV DQG WKHLU IDPLOLHV WR DWWRUQH\V
1$$&3Y%XWWRQ86 KROGLQJWKDW
WKH)LUVW$PHQGPHQWSURWHFWHGWKHULJKWRIWKH1$$&3WR
UHFRPPHQGDWWRUQH\VWRSURVSHFWLYHOLWLJDQWVVHHNLQJOHJDO
UHGUHVVIRUWKHDOOHJHGYLRODWLRQVRIWKHLUULJKWV
1RQH RI WKHVH FDVHV VXSSRUW WKH UHFRJQLWLRQ RI D )LUVW
$PHQGPHQW ULJKW WR DVVRFLDWH ZLWK D SDUWLFXODU DWWRUQH\
5DWKHU8QLWHG0LQH:RUNHUVGHDOWZLWKDSURKLELWLRQDJDLQVW
FROOHFWLYHO\ KLULQJ DQ DWWRUQH\ DQG ERWK %URWKHUKRRG RI
5DLOURDG 7UDLQPHQ DQG %XWWRQ LQYROYHG ODZV SURVFULELQJ
SDUWLFXODU PHWKRGV RI UHIHUULQJ FOLHQWV WR DWWRUQH\V 7KH

-- 18 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
PRYHPHQW LQ LQWUDVWDWH WUDYHO $V D UHVXOW , UHVSHFWIXOO\
GLVDJUHH ZLWK WKH PDMRULW\¶V FRQFOXVLRQ WKDW WKH ULJKW WR
LQWUDVWDWHWUDYHOLVDIXQGDPHQWDOOLEHUW\LQWHUHVWHQWLWOHGWR
KHLJKWHQHGFRQVWLWXWLRQDOSURWHFWLRQ
% )UHHGRPRIDVVRFLDWLRQ
%RWKSODLQWLIIVDOVRFODLPWKDWWKHRUGLQDQFHLQIULQJHGXSRQ
WKHLUIUHHGRPRIDVVRFLDWLRQDOOHJHGO\EHFDXVHLWLQWHUIHUHG
ZLWK WKHLU DELOLWLHV WR PDLQWDLQ LQWLPDWH LQWHUSHUVRQDO
UHODWLRQVKLSV-RKQVRQFRQWHQGVWKDWDVDJUDQGPRWKHUVKH
KDV D ULJKW WR YLVLW DQG DVVLVW LQ WKH UDLVLQJ RI KHU
JUDQGFKLOGUHQ$X)UDQFHRQWKHRWKHUKDQGFODLPVWKDWWKH
RUGLQDQFH LQWHUIHUHG ZLWK KLV ULJKW WR DVVRFLDWH ZLWK WKH
DWWRUQH\ RI KLV FKRLFH DQG WR PHHW ZLWK FKDULWDEOH
RUJDQL]DWLRQVWKDWKHOSSURYLGHIRUKLVHVVHQWLDOQHHGV7KH
SODLQWLIIV VHHN WR GHULYH WKHVH ULJKWV IURP WKH )LUVW
$PHQGPHQW¶VJXDUDQWHHRIIUHHGRPRIDVVRFLDWLRQDQGIURP
WKHVXEVWDQWLYHFRPSRQHQWRIWKH'XH3URFHVV&ODXVHRIWKH
)RXUWHHQWK$PHQGPHQW
8QOLNH WKH PDMRULW\ , GR QRW EHOLHYH WKDW WKH RUGLQDQFH
LQWHUIHUHGZLWKWKHSODLQWLIIV¶IUHHGRPRILQWLPDWHDVVRFLDWLRQ
D ULJKW WKDW LV SURWHFWHG E\ WKH 'XH 3URFHVV &ODXVH 7KH
PDMRULW\ GRHV QRW DGGUHVV ZKHWKHU WKH RUGLQDQFH LQIULQJHG
XSRQWKHSODLQWLIIV¶IUHHGRPRIH[SUHVVLYHDVVRFLDWLRQDULJKW
SURWHFWHGE\WKH)LUVW$PHQGPHQW1HYHUWKHOHVVEHFDXVHWKH
SODLQWLIIV PHQWLRQ ERWK WKH )LUVW DQG WKH )RXUWHHQWK
$PHQGPHQWVLQWKHLUFRPSODLQW,ZLOOFRQVLGHUEHORZHDFK
SRWHQWLDO VRXUFH RI FRQVWLWXWLRQDOO\ SURWHFWHG DVVRFLDWLRQDO
ULJKWV
)LUVW$PHQGPHQWULJKWWRIUHHGRPRIDVVRFLDWLRQ
$OWKRXJK WKH SODLQWLIIV¶ FRPSODLQW DOOHJHV WKDW WKH
RUGLQDQFHLQWHUIHUHGZLWKWKHLULQWHUSHUVRQDOUHODWLRQVKLSVWKH
IUHHGRPRIDVVRFLDWLRQJXDUDQWHHGE\WKH)LUVW$PHQGPHQW
KDVDPRUHQDUURZIRFXV5REHUWVY8QLWHG6WDWHV-D\FHHV
86 QRWLQJ WKDW ³WKH &RXUW KDV
UHFRJQL]HGDULJKWWRDVVRFLDWHIRUWKHSXUSRVHRIHQJDJLQJLQ
WKRVHDFWLYLWLHVSURWHFWHGE\WKH)LUVW$PHQGPHQW²VSHHFK
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
6PLWKY7XUQHU86 +RZ /(G
7DQH\&-GLVVHQWLQJ HPSKDVLVDGGHG VHH
DOVR&LYLO5LJKWV&DVHV866&W/(G
+DUODQ - GLVVHQWLQJ QRWLQJ WKDW ³SHUVRQDO
OLEHUW\FRQVLVWVVD\V%ODFNVWRQHLQWKHSRZHURIORFRPRWLRQ
RIFKDQJLQJVLWXDWLRQRUUHPRYLQJRQH¶VSHUVRQWRZKDWHYHU
SODFH RQH¶V RZQ LQFOLQDWLRQ PD\ GLUHFW ZLWKRXW UHVWUDLQW
XQOHVVE\GXHFRXUVHRIODZ´ LQWHUQDOTXRWDWLRQVRPLWWHG
2UDVWKH6XSUHPH&RXUWQRWHGDWWKHWXUQRIWKHWZHQWLHWK
FHQWXU\³>7@KHULJKWWRUHPRYH IURPRQHSODFHWRDQRWKHU
DFFRUGLQJ WR LQFOLQDWLRQ LV DQ DWWULEXWH RI OLEHUW\
VHFXUHG E\ WKH )RXUWHHQWK $PHQGPHQW DQG E\ RWKHU
SURYLVLRQVRIWKH&RQVWLWXWLRQ´:LOOLDPVY)HDUV86
6&W 0RUH UHFHQWO\ -XVWLFH
6WHYHQV MRLQHG E\ -XVWLFH 6RXWHU DQG -XVWLFH *LQVEXUJ
REVHUYHG
>,@WLVDSSDUHQWWKDWDQLQGLYLGXDO¶VGHFLVLRQWRUHPDLQLQ
D SXEOLF SODFH RI KLV FKRLFH LV DV PXFK D SDUW RI KLV
OLEHUW\DVWKHIUHHGRPRIPRYHPHQWLQVLGHIURQWLHUVWKDW
LV³DSDUWRIRXUKHULWDJH´.HQWY'XOOHV86
6&W/(GG RUWKHULJKW
WRPRYH³WRZKDWVRHYHUSODFHRQH¶VRZQLQFOLQDWLRQPD\
GLUHFW´LGHQWLILHGLQ%ODFNVWRQH¶V&RPPHQWDULHV:
%ODFNVWRQH&RPPHQWDULHVRQWKH/DZVRI(QJODQG

&LW\RI&KLFDJRY0RUDOHV866&W
/(G VHHDOVR.ROHQGHUY/DZVRQ86
6&W/(GG QRWLQJWKDW
DQWLORLWHULQJVWDWXWHZKLFKUHTXLUHGLQGLYLGXDOVWRSURYLGH
³FUHGLEOH DQG UHOLDEOH´ LGHQWLILFDWLRQ ³LPSOLFDWHG
FRQVLGHUDWLRQ RI WKH FRQVWLWXWLRQDO ULJKW WR IUHHGRP RI
PRYHPHQW´ 3DSDFKULVWRXY&LW\RI-DFNVRQYLOOH86
6&W/(GG GHVFULELQJ
ZDONLQJORLWHULQJDQGZDQGHULQJDV³KLVWRULFDOO\SDUWRIWKH
DPHQLWLHVRIOLIHDVZHKDYHNQRZQWKHP´ *XHVW86
DW ³>)@UHHGRPWRWUDYHOWKURXJKRXWWKH8QLWHG6WDWHVKDV
ORQJ EHHQ UHFRJQL]HG DV D EDVLF ULJKW XQGHU WKH
&RQVWLWXWLRQ´ 1XQH]Y&LW\RI6DQ'LHJR)G

-- 19 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
:ULWLQJ LQ WKH 6HFRQG &LUFXLW NHHQO\ REVHUYHG WKDW ³>L@W ZRXOG
EH PHDQLQJOHVV WR GHVFULEH WKH ULJKW WR WUDYHO EHWZHHQ VWDWHV DV D
IXQGDPHQWDO SUHFHSW RI SHUVRQDO OLEHUW\ DQG QRW WR DFNQRZOHGJH D
FRUUHODWLYH FRQVWLWXWLRQDO ULJKW WR WUDYHO ZLWKLQ D VWDWH´ .LQJ Y 1HZ
5RFKHOOH 0XQ +RXV $XWK )G G &LU VHH DOVR
%XUQHWW 1(G DW ³:LWKRXW WKH RQH WKHUH ZRXOG QHYHU EH WKH
RWKHU´ :KLOH ZH FUHGLW WKLV REVHUYDWLRQ ZH FDQQRW UHO\ RQ WKLV
SURSRVLWLRQ EHFDXVH UHFHQW 6XSUHPH &RXUW FDVHV GHPRQVWUDWH WKDW WKH
&RXUW KDV QRW \HW GHILQLWHO\ ORFDWHG WKH WH[WXDO VRXUFH RI WKH ULJKW WR
LQWHUVWDWH WUDYHO /XW] )G DW $V WKH 7KLUG &LUFXLW QRWHG
³2QH FRQVHTXHQFH RI WKH &RXUW¶V UHIXVDO LQ 6KDSLUR DQG LWV SURJHQ\ WR
JURXQG WKH ULJKW WR WUDYHO LQ SDUWLFXODU FRQVWLWXWLRQDO WH[W LV WKDW WKHUH
H[LVWV VRPH XQFHUWDLQW\ DV WR ZKHWKHU LW LV LQ IDFW μD IXQGDPHQWDO SUHFHSW
RI SHUVRQDO OLEHUW\¶´ ,G 2I FRXUVH LI WKH ULJKW WR LQWHUVWDWH WUDYHO LV LQ
IDFW JURXQGHG LQ VXEVWDQWLYH GXH SURFHVV WKH 6HFRQG &LUFXLW¶V SRLQW LV
³XQLPSHDFKDEOH´ ,G
WK&LU ³&LWL]HQVKDYHDIXQGDPHQWDOULJKWRI
IUHHPRYHPHQWμKLVWRULFDOO\SDUWRIWKHDPHQLWLHVRIOLIHDVZH
KDYHNQRZQWKHP¶´ FLWDWLRQRPLWWHG %XUQHWW1(G
DW ³7KLV IUHHGRP RI PRELOLW\ LV D WUDGLWLRQ H[WHQGLQJ
EDFN WR ZKHQ WKH ILUVW VHWWOHU FURVVHG LQWR ZKDW ZRXOG
HYHQWXDOO\ EHFRPH WKLV JUHDW VWDWH DQG LW LV D WUDGLWLRQ QR
2KLRDQZRXOGIUHHO\UHOLQTXLVK´ *RPH]Y7XUQHU)G
Q '&&LU QRWLQJWKDWWKHDELOLW\WR
³ZDON WKH VWUHHWV ZLWKRXW H[SODQDWLRQ RU IRUPDO SDSHUV LV
VXUHO\ DPRQJ WKH FKHULVKHG OLEHUWLHV WKDW GLVWLQJXLVK WKLV
QDWLRQIURPVRPDQ\RWKHUV´ ,QOLJKWRIWKHVHFDVHVZH
ILQGWKDWWKHULJKWWRWUDYHOORFDOO\WKURXJKSXEOLFVSDFHVDQG
URDGZD\VHQMR\VDXQLTXHDQGSURWHFWHGSODFHLQRXUQDWLRQDO
KHULWDJH
,QDGGLWLRQWRLWVVROLGKLVWRULFDOIRXQGDWLRQWKHWUHPHQGRXV
SUDFWLFDO VLJQLILFDQFH RI D ULJKW WR ORFDOL]HG WUDYHO DOVR
VWURQJO\VXJJHVWVWKDWVXFKDULJKWLVVHFXUHGE\VXEVWDQWLYH
GXHSURFHVV7KHULJKWWRWUDYHOORFDOO\WKURXJKSXEOLFVSDFHV
DQGURDGZD\V±SHUKDSVPRUHWKDQDQ\RWKHUULJKWVHFXUHGE\
VXEVWDQWLYH GXH SURFHVV ± LV DQ HYHU\GD\ ULJKW D ULJKW ZH
GHSHQGRQWRFDUU\RXWRXUGDLO\OLIHDFWLYLWLHV,WLVDWLWV
FRUHDULJKWRIIXQFWLRQ,QWKHZRUGVRI-XVWLFH'RXJODV
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
,QVWHDG,EHOLHYHWKDW:DUGZHOO¶VKROGLQJWKDWWKHUDWLRQDO
EDVLVWHVWDSSOLHVWRGHWHUPLQHWKHFRQVWLWXWLRQDOLW\RIDODZ
DIIHFWLQJ LQWUDVWDWH WUDYHO LV QHFHVVDULO\ EDVHG XSRQ WKH
FRQFOXVLRQ WKDW RQO\ WKH ULJKW WR LQWHUVWDWH WUDYHO QRW WKH
DELOLW\WRWUDYHOZLWKLQDVLQJOHVWDWHLVDIXQGDPHQWDOOLEHUW\
LQWHUHVWHQWLWOHGWRKHLJKWHQHGFRQVWLWXWLRQDOSURWHFWLRQ6HH
+XWFKLQVY'LVWRI&ROXPELD)G '&
&LU HQEDQF FLWLQJ:DUGZHOOIRUWKHSURSRVLWLRQWKDW
WKH6L[WK&LUFXLWKDVUHMHFWHGDIXQGDPHQWDOULJKWWRLQWUDVWDWH
WUDYHO ,IWKHULJKWWRLQWUDVWDWHWUDYHOKDGEHHQDIXQGDPHQWDO
OLEHUW\LQWHUHVWWKLVFRXUWZRXOGKDYHEHHQUHTXLUHGWRDSSO\
VWULFW VFUXWLQ\ UDWKHU WKDQ WKH UDWLRQDOEDVLV VWDQGDUG RI
UHYLHZWKDWZDVLQIDFWXVHGWRHYDOXDWHWKHFRQVWLWXWLRQDOLW\
RIWKHUHVLGHQF\UHTXLUHPHQW
7KHPDMRULW\DFNQRZOHGJHVWKDW³DSULRUSXEOLVKHGRSLQLRQ
RIWKLVFRXUWLVELQGLQJXQOHVVHLWKHUDQLQWHUYHQLQJGHFLVLRQ
RIWKH8QLWHG6WDWHV6XSUHPH&RXUWUHTXLUHVPRGLILFDWLRQRI
WKH SULRU RSLQLRQ RU LW LV RYHUUXOHG E\ WKLV FRXUW VLWWLQJ HQ
EDQF´8QLWHG6WDWHVY5RSHU)G WK&LU
1HLWKHURIWKHVHHYHQWVKDVRFFXUUHGVLQFH:DUGZHOO
ZDVGHFLGHG,WKHUHIRUHEHOLHYHWKDW:DUGZHOOSURKLELWVXV
IURPUHFRQVLGHULQJWKHLVVXHRIZKHWKHUWKHULJKWWRLQWUDVWDWH
WUDYHORUWKH³ULJKWWRWUDYHOORFDOO\WKURXJKSXEOLFVSDFHVDQG
URDGZD\V´DVLWLVSKUDVHGE\WKHPDMRULW\LVDIXQGDPHQWDO
OLEHUW\LQWHUHVW0RUHRYHUZKHUHDVXEVHTXHQWRSLQLRQIURP
WKLV FRXUW FRQIOLFWV ZLWK DQ ROGHU RQH WKH HDUOLHU GHFLVLRQ
UHPDLQVWKHELQGLQJSUHFHGHQW'DUUDKY&LW\RI2DN3DUN
)G WK&LU ³>:@KHQDODWHUGHFLVLRQ
RI WKLV FRXUW FRQIOLFWV ZLWK RQH RI RXU SULRU SXEOLVKHG
GHFLVLRQV ZH DUH VWLOO ERXQG E\ WKH KROGLQJ RI WKH HDUOLHU
FDVH´ 7KLVUXOHUHTXLUHVXVWRDGKHUHWR:DUGZHOOHYHQLI
WKHFRXUWLQ.XKQOH%URWKHUV,QFY&RXQW\RI*HDXJD
)G WK&LU EHOLHYHG HUURQHRXVO\LQP\
RSLQLRQ WKDWWKHTXHVWLRQRIZKHWKHUWKHULJKWWRLQWUDVWDWH
WUDYHOLVHQWLWOHGWRKHLJKWHQHGFRQVWLWXWLRQDOSURWHFWLRQZDV
VWLOOXQUHVROYHGLQWKLVFLUFXLW
:DUGZHOO WKXV UHIXWHV WKH SODLQWLIIV¶ DUJXPHQW WKDW WKH
RUGLQDQFHLQIULQJHGXSRQDIXQGDPHQWDOULJKWWRIUHHGRPRI

-- 20 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
,G DW DOWHUDWLRQ DQG HPSKDVLV LQ RULJLQDO 7KLV
ODQJXDJH VWURQJO\ VXJJHVWV WKDW QR IXQGDPHQWDO ULJKW WR
LQWUDVWDWHWUDYHOH[LVWV
$IWHU DFNQRZOHGJLQJ WKDW WKH 6XSUHPH &RXUW KDV QRW
H[SOLFLWO\UHFRJQL]HGDULJKWWRLQWUDVWDWHWUDYHOWKHPDMRULW\
FRQFOXGHV WKDW WKH ³ULJKW WR WUDYHO ORFDOO\ WKURXJK SXEOLF
VSDFHVDQGURDGZD\V´LVDIXQGDPHQWDOOLEHUW\LQWHUHVW 0DM
2SDW 8QOLNHWKHPDMRULW\KRZHYHU,EHOLHYHWKDWWKLV
FRXUW¶V RSLQLRQ LQ :DUGZHOO Y %RDUG RI (GXFDWLRQ RI
&LQFLQQDWL)G WK&LU KHOGWKDWWKHULJKW
WRLQWUDVWDWHWUDYHOLVQRWHQWLWOHGWRKHLJKWHQHGFRQVWLWXWLRQDO
SURWHFWLRQ
7KHSODLQWLIILQ:DUGZHOOFKDOOHQJHGWKHFRQVWLWXWLRQDOLW\
RIWKH%RDUGRI(GXFDWLRQ¶VUXOHWKDWUHTXLUHGDOOWHDFKHUVLQ
WKH&LQFLQQDWLVFKRROV\VWHPWRUHVLGHZLWKLQWKHFLW\VFKRRO
GLVWULFW ,G DW :DUGZHOO DUJXHG WKDW WKH UHVLGHQF\
UHTXLUHPHQWLQIULQJHGXSRQKLVULJKWWRLQWUDVWDWHWUDYHO,G
DW7KLVFRXUWUHMHFWHGKLVDUJXPHQWFRQFOXGLQJWKDWWKH
UHOHYDQW 6XSUHPH &RXUW GHFLVLRQV KDG GHDOW RQO\ ZLWK
LQWHUVWDWH WUDYHO ,G ³:H ILQG QR VXSSRUW IRU SODLQWLII¶V
WKHRU\ WKDW WKH ULJKW WR LQWUDVWDWH WUDYHO KDV EHHQ DIIRUGHG
IHGHUDOFRQVWLWXWLRQDOSURWHFWLRQ´ (TXDOO\LPSRUWDQWWKLV
FRXUWKHOGWKDW³ZKHUHDVLQWKHSUHVHQWFDVHDFRQWLQXLQJ
HPSOR\HHUHVLGHQF\UHTXLUHPHQWDIIHFWLQJDWPRVWWKHULJKWRI
LQWUDVWDWH WUDYHO LV LQYROYHG WKH μUDWLRQDO EDVLV¶ WHVW LV WKH
WRXFKVWRQH WR GHWHUPLQH LWV YDOLGLW\´ ,G DW IRRWQRWH
RPLWWHG HPSKDVLVLQRULJLQDO
7KH PDMRULW\ LQ WKH SUHVHQW FDVH LQWHUSUHWV :DUGZHOO WR
KDYH HVWDEOLVKHG WKDW WKH 6XSUHPH &RXUW¶V WUDYHO KROGLQJV
³DSSOLHGRQO\WRLQWHUVWDWHWUDYHO´DQG ³GLGQRWSURKLELW
DVFKRROGLVWULFW¶VUHVLGHQF\UHTXLUHPHQW´ 0DM2SDW
,KDYHQRTXDUUHOZLWKWKHPDMRULW\¶VDQDO\VLVRI:DUGZHOO¶V
WUHDWPHQWRIWKHUHOHYDQW6XSUHPH&RXUWFDVHV%XW,GLVDJUHH
ZLWK WKH PDMRULW\¶V FRQFOXVLRQ WKDW :DUGZHOO GLG QRWKLQJ
PRUHWKDQGHWHUPLQHWKDWWKH6XSUHPH&RXUW¶VULJKWWRWUDYHO
FDVHV ZHUH QRW DSSOLFDEOH WR WKH UHVLGHQF\ UHTXLUHPHQW
LPSRVHGE\WKH&LQFLQQDWL%RDUGRI(GXFDWLRQ
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
)UHHGRPRIPRYHPHQWDWKRPHDQGDEURDGLVLPSRUWDQW
IRUMREDQGEXVLQHVVRSSRUWXQLWLHV±IRUFXOWXUDOSROLWLFDO
DQG VRFLDO DFWLYLWLHV ± IRU DOO WKH FRPPLQJOLQJ ZKLFK
JUHJDULRXV PDQ HQMR\V 7KRVH ZLWK WKH ULJKW RI IUHH
PRYHPHQWXVHLWDWWLPHVIRUPLVFKLHYRXVSXUSRVHV%XW
WKDWLVWUXHRIPDQ\OLEHUWLHVZHHQMR\:HQHYHUWKHOHVV
SODFHRXUIDLWKLQWKHPDQGDJDLQVWUHVWUDLQWNQRZLQJ
WKDW WKH ULVN RI DEXVLQJ OLEHUW\ VR DV WR JLYH ULVH WR
SXQLVKDEOHFRQGXFWLVSDUWRIWKHSULFHZHSD\IRUWKLV
IUHHVRFLHW\
$SWKHNHU Y 6HFUHWDU\ RI 6WDWH 86
6&W/(GG 'RXJODV-FRQFXUULQJ
VHHDOVR+XWFKLQV)GDW 5RJHUV- GLVVHQWLQJLQ
SDUWFRQFXUULQJLQSDUW 7KH2UGLQDQFHLWVHOIUHIHUHQFHVDQ
LQGLYLGXDO¶V³VLJQLILFDQWSULYDWHLQWHUHVWLQEHLQJDEOHWRWUDYHO
DQGDVVRFLDWHIUHHO\LQDOODUHDVRIWKH&LW\´,QYLHZRIWKH
KLVWRULFDOHQGRUVHPHQWRIDULJKWWRLQWUDVWDWHWUDYHODQGWKH
SUDFWLFDO QHFHVVLW\ RI VXFK D ULJKW ZH KROG WKDW WKH
&RQVWLWXWLRQSURWHFWVDULJKWWRWUDYHOORFDOO\WKURXJKSXEOLF
VSDFHVDQGURDGZD\V
9
3ODLQWLIIV DUJXH WKDW H[FOXVLRQ IURP 2YHU WKH 5KLQH
SXUVXDQWWRWKH2UGLQDQFHLQIULQJHVXSRQWKHLUFRQVWLWXWLRQDO
ULJKWWRIUHHGRPRIDVVRFLDWLRQ)UHHGRPRIDVVRFLDWLRQLVQRW
DQHQXPHUDWHGFRQVWLWXWLRQDOULJKWEXWDULVHVDVDQHFHVVDU\
DWWHQGDQWWRWKH%LOORI5LJKWV¶SURWHFWLRQRILQGLYLGXDOOLEHUW\
LQWHUHVWV6HH5REHUWVY8QLWHG6WDWHV-D\FHHV86
6&W/(GG
$
,Q 5REHUWV WKH 6XSUHPH &RXUW LGHQWLILHG WZR IRUPV RI
FRQVWLWXWLRQDOO\SURWHFWHG DVVRFLDWLRQDO ULJKWV ³IUHHGRP RI
LQWLPDWH DVVRFLDWLRQ´ DQG ³IUHHGRP RI H[SUHVVLYH
DVVRFLDWLRQ´,G7KHIUHHGRPRILQWLPDWHDVVRFLDWLRQZKLFK
LV DSSOLFDEOH WR SODLQWLIIV¶ FODLPV KHUH VWHPV IURP WKH
QHFHVVLW\RISURWHFWLQJLQGLYLGXDOV¶DELOLW\³WRHQWHULQWRDQG
PDLQWDLQFHUWDLQLQWLPDWHKXPDQUHODWLRQVKLSV>WKDW@PXVWEH

-- 21 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
VHFXUHGDJDLQVWXQGXHLQWUXVLRQE\WKH6WDWHEHFDXVHRIWKH
UROH RI VXFK UHODWLRQVKLSV LQ VDIHJXDUGLQJ WKH LQGLYLGXDO
IUHHGRP WKDW LV FHQWUDO WR RXU FRQVWLWXWLRQDO VFKHPH´ ,G
&RQVWLWXWLRQDOO\SURWHFWHGLQWLPDWHDVVRFLDWLRQVLQFOXGHWKRVH
³SHUVRQDOERQGV>WKDW@KDYHSOD\HGDFULWLFDOUROHLQWKHFXOWXUH
DQGWUDGLWLRQVRIWKH1DWLRQE\FXOWLYDWLQJDQGWUDQVPLWWLQJ
VKDUHGLGHDOVDQGEHOLHIV´DQGWKDW³WKHUHE\IRVWHUGLYHUVLW\
DQG DFW DV FULWLFDO EXIIHUV EHWZHHQ WKH LQGLYLGXDO DQG WKH
SRZHURIWKH6WDWH´,GDW
-RKQVRQ FODLPV WKDW WKH 2UGLQDQFH XQFRQVWLWXWLRQDOO\
LQIULQJHVRQKHUIUHHGRPRIDVVRFLDWLRQULJKWWRSDUWLFLSDWHLQ
WKHXSEULQJLQJRIKHUJUDQGFKLOGUHQ$X)UDQFHFODLPVWKDW
WKH2UGLQDQFHXQFRQVWLWXWLRQDOO\LQIULQJHVRQKLVIUHHGRPRI
DVVRFLDWLRQULJKWWRYLVLWKLVDWWRUQH\%HFDXVHERWKSODLQWLIIV¶
FODLPVLQYROYHLQWLPDWHUHODWLRQVKLSVWKDW³IRVWHUGLYHUVLW\DQG
DFWDVFULWLFDOEXIIHUVEHWZHHQWKHLQGLYLGXDODQGWKHSRZHURI
WKH 6WDWH´ ZH H[DPLQH WKHLU FODLPV XQGHU WKH IUHHGRP RI
LQWLPDWHDVVRFLDWLRQIUDPHZRUNDUWLFXODWHGLQ5REHUWV
%
-RKQVRQ¶VFODLPQHFHVVLWDWHVDQH[DPLQDWLRQRIWKHUHDFKRI
FRQVWLWXWLRQDOO\SURWHFWHGIDPLOLDODVVRFLDWLRQLQWHUHVWV
7KH6XSUHPH&RXUWKDVUHFRJQL]HGWKDWVRPHRIWKHPRVW
LPSRUWDQW SHUVRQDO ERQGV QHFHVVDU\ IRU WKH SURWHFWLRQ RI
LQGLYLGXDO IUHHGRP ³DUH WKRVH WKDW DWWHQG WKH FUHDWLRQ DQG
VXVWHQDQFH RI D IDPLO\ ± >LQFOXGLQJ@ WKH XSEULQJLQJ DQG
HGXFDWLRQRIFKLOGUHQ´5REHUWV86DW FLWLQJ6PLWK
Y2UJRI)RVWHU)DPLOLHV431 U.S. 816, 97 S.Ct. 2094, 53
L.Ed.2d 14 (1977)). Accordingly, the Supreme Court has
consistently recognized associational rights involving private
family life as worthy of special constitutional protection. See
Moore v. City of East Cleveland, 431 U.S. 494, 499, 97 S.Ct.
1932, 52 L.Ed.2d 531 (1976) ("A host of cases . . . have
consistently acknowledged a ‘private realm of family life
which the state cannot enter.’") (plurality opinion) (quoting
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
7KH³ULJKWWRWUDYHO´GLVFXVVHGLQRXUFDVHVHPEUDFHVDW
OHDVWWKUHHGLIIHUHQWFRPSRQHQWV,WSURWHFWVWKHULJKWRI
DFLWL]HQRIRQH6WDWHWRHQWHUDQGWROHDYHDQRWKHU6WDWH
WKHULJKWWREHWUHDWHGDVDZHOFRPHYLVLWRUUDWKHUWKDQDQ
XQIULHQGO\DOLHQZKHQWHPSRUDULO\SUHVHQWLQWKHVHFRQG
6WDWH DQG IRU WKRVH WUDYHOHUV ZKR HOHFW WR EHFRPH
SHUPDQHQW UHVLGHQWV WKH ULJKW WR EH WUHDWHG OLNH RWKHU
FLWL]HQVRIWKDW6WDWH
6DHQ]Y5RH86 1RWLFHDEO\DEVHQW
IURPWKLVSDVVDJHLVDUHFRJQLWLRQRIDQ\ULJKWWRLQWUDVWDWH
WUDYHO6HHJHQHUDOO\0HP¶O+RVSY0DULFRSD&RXQW\
86 GHFOLQLQJ WR GHFLGH ZKHWKHU D
FRQVWLWXWLRQDO GLVWLQFWLRQ H[LVWV EHWZHHQ LQWHUVWDWH DQG
LQWUDVWDWHWUDYHO
0RUHRYHU WKH 6XSUHPH &RXUW H[SOLFLWO\ GLIIHUHQWLDWHG
EHWZHHQ WKHVH WZR W\SHV RI WUDYHO LQ %UD\ Y $OH[DQGULD
:RPHQ¶V+HDOWK&OLQLF86 7KHSODLQWLIIV
LQ%UD\DOOHJHGWKDWE\REVWUXFWLQJDFFHVVWRDERUWLRQFOLQLFV
WKHGHIHQGDQWVYLRODWHG86&† E\LQWHUIHULQJ
ZLWKWKHSODLQWLIIV¶ULJKWWRLQWHUVWDWHWUDYHO%UD\86DW
,Q KROGLQJ WKDW WKH SODLQWLIIV IDLOHG WR VKRZ D
FRQVSLUDF\WRYLRODWHWKHLUIHGHUDOULJKWVWKH&RXUWH[SODLQHG
WKDW WKH GHIHQGDQWV¶ SURSRVHG GHPRQVWUDWLRQV ZRXOG QRW
LPSOLFDWH WKH ULJKW WR LQWHUVWDWH WUDYHO EHFDXVH WKH UHFRUG
HVWDEOLVKHGWKDWWKHGHIHQGDQWV¶DFWLRQVZRXOGKDYHUHVWULFWHG
RQO\LQWUDVWDWHWUDYHO
$V IDU DV DSSHDUV IURP WKLV UHFRUG WKH RQO\ ³DFWXDO
EDUULHUVWRPRYHPHQW´WKDWZRXOGKDYHUHVXOWHGIURP
SHWLWLRQHUV¶SURSRVHGGHPRQVWUDWLRQVZRXOGKDYHEHHQLQ
WKHLPPHGLDWHYLFLQLW\RIWKHDERUWLRQFOLQLFVUHVWULFWLQJ
PRYHPHQWIURPRQHSRUWLRQRIWKH&RPPRQZHDOWKRI
9LUJLQLDWRDQRWKHU6XFKDSXUHO\LQWUDVWDWHUHVWULFWLRQ
GRHVQRWLPSOLFDWHWKHULJKWRILQWHUVWDWHWUDYHOHYHQLILW
LV DSSOLHG LQWHQWLRQDOO\ DJDLQVW WUDYHOHUV IURP RWKHU
6WDWHVXQOHVVLWLVDSSOLHGGLVFULPLQDWRULO\DJDLQVWWKHP

-- 22 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
LQVWLWXWLRQ´,GDW7KLVODQJXDJHUDWKHUWKDQDQDVVHUWHG
OLEHUW\LQWHUHVWLQ³>W@KHIUHHGRPIURPSK\VLFDOUHVWUDLQW´RU
³WKHULJKWRIDFKLOGWREHUHOHDVHGIURPDOORWKHUFXVWRG\LQWR
WKH FXVWRG\ RI LWV SDUHQWV OHJDO JXDUGLDQ RU HYHQ FORVH
UHODWLYHV´FRQVWLWXWHGWKH³FDUHIXOGHVFULSWLRQRIWKHDVVHUWHG
ULJKW´ WKDW LV QHFHVVDU\ LQ WKH VXEVWDQWLYHGXHSURFHVV
DQDO\VLV,G LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
,QDGGLWLRQWRHPSKDVL]LQJWKHVLJQLILFDQFHRIWKHGHILQLWLRQ
RIWKHDVVHUWHGIXQGDPHQWDOLQWHUHVWLPSOLFDWHGLQDSDUWLFXODU
FDVHWKH6XSUHPH&RXUW³KDVDOZD\VEHHQUHOXFWDQWWRH[SDQG
WKHFRQFHSWRIVXEVWDQWLYHGXHSURFHVVEHFDXVHJXLGHSRVWVIRU
UHVSRQVLEOHGHFLVLRQPDNLQJLQWKLVXQFKDUWHGDUHDDUHVFDUFH
DQGRSHQHQGHG´&ROOLQVY&LW\RI+DUNHU+HLJKWV86
VHHDOVR0RRUHY&LW\RI(DVW&OHYHODQG
86 SOXUDOLW\ RSLQLRQ QRWLQJ WKDW
³>V@XEVWDQWLYHGXHSURFHVVKDVDWWLPHVEHHQDWUHDFKHURXV
ILHOGIRUWKLV&RXUW´ 7KH&RXUWKDVH[SODLQHGWKHUHDVRQIRU
WKLVKHVLWDWLRQDVIROORZV
%\ H[WHQGLQJ FRQVWLWXWLRQDO SURWHFWLRQ WR DQ DVVHUWHG
ULJKWRUOLEHUW\LQWHUHVWZHWRDJUHDWH[WHQWSODFHWKH
PDWWHURXWVLGHWKHDUHQDRISXEOLFGHEDWHDQGOHJLVODWLYH
DFWLRQ :H PXVW WKHUHIRUH H[HUFLVH WKH XWPRVW FDUH
ZKHQHYHUZHDUHDVNHGWREUHDNQHZJURXQGLQWKLVILHOG
OHVWWKHOLEHUW\SURWHFWHGE\WKH'XH3URFHVV&ODXVHEH
VXEWO\ WUDQVIRUPHG LQWR WKH SROLF\ SUHIHUHQFHV RI WKH
0HPEHUVRIWKLV&RXUW
*OXFNVEHUJ86DW LQWHUQDOTXRWDWLRQPDUNVDQG
FLWDWLRQRPLWWHG ,EHOLHYHWKDWWKLVFRXUWOLNHWKH6XSUHPH
&RXUW PXVW SURFHHG ZLWK FDXWLRQ EHIRUH H[SDQGLQJ
SUHYLRXVO\ UHFRJQL]HG OLEHUW\ LQWHUHVWV WR HQFRPSDVV
VLWXDWLRQVWKDWKDYHQRW\HWEHHQHQFRXQWHUHG
$ 5LJKWWRLQWUDVWDWHWUDYHO
$V WKH PDMRULW\ UHFRJQL]HV WKH 6XSUHPH &RXUW KDV
GHVFULEHGWKHFRQWRXUVRIWKHULJKWWRWUDYHODVIROORZV
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
&LWLQJ Meyer v. Nebraska, 262 U.S. 390, 399-401, 43 S.Ct. 625, 67
L.Ed. 1042 (1923); Pierce v. Society of Sisters, 268 U.S. 510, 534-535,
45 S.Ct. 571, 69 L.Ed. 1070 (1925); Roe v. Wade, 410 U.S. 113, 152-153,
93 S.Ct. 705, 35 L.Ed.2d 147 (1973); Wisconsin v. Yoder, 406 U.S. 205,
231-233, 92 S.Ct. 1526, 32 L.Ed.2d 15 (1972); Stanley v. Illinois, 405
U.S. 645, 651, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972); Ginsberg v. New
York, 390 U.S. 629, 639, 88 S.Ct. 1274, 20 L.Ed.2d 195 (1968); Griswold
v. Connecticut, 381 U.S. 479, 85 S.Ct. 1678, 14 L.Ed.2d 510 (1965); Poe
v. Ullman, 367 U.S. 497, 542-544, 549-553, 81 S.Ct. 1752, 6 L.Ed.2d 989
(1961) (Harlan, J., dissenting); Loving v. Virginia, 388 U.S. 1, 12, 87
S.Ct. 1817, 18 L.Ed.2d 1010 (1967); May v. Anderson, 345 U.S. 528,
533, 73 S.Ct. 840, 97 L.Ed. 1221 (1953); Skinner v. Oklahoma ex rel.
Williamson, 316 U.S. 535, 541, 62 S.Ct. 1110, 86 L.Ed. 1655 (1942).
Prince v. Massachusetts, 321 U.S. 158, 166, 64 S.Ct. 438, 88
L.Ed. 645) (1944)).
%RWK6XSUHPH&RXUWSUHFHGHQWDQGRXUQDWLRQDOWUDGLWLRQ
VXJJHVWWKDWDIDPLO\PHPEHU¶VULJKWWRSDUWLFLSDWHLQFKLOG
UHDULQJDQGHGXFDWLRQLVRQHRIWKHPRVWEDVLFDQGLPSRUWDQW
DVVRFLDWLRQDOULJKWVSURWHFWHGE\WKH&RQVWLWXWLRQ&I0/%
Y6/-866&W/(GG
SOXUDOLW\RSLQLRQ ³&KRLFHVDERXWPDUULDJHIDPLO\
OLIHDQGWKHXSEULQJLQJRIFKLOGUHQDUHDPRQJDVVRFLDWLRQDO
ULJKWV WKLV &RXUW KDV UDQNHG DV RI EDVLF LPSRUWDQFH LQ RXU
VRFLHW\ ULJKWV VKHOWHUHG E\ WKH )RXUWHHQWK $PHQGPHQW
DJDLQVW WKH 6WDWH V XQZDUUDQWHG XVXUSDWLRQ GLVUHJDUG RU
GLVUHVSHFW´ TXRWLQJ%RGGLHY&RQQHFWLFXW86
6&W /(GG LQWHUQDO
SXQFWXDWLRQRPLWWHG HPSKDVLVDGGHG 0RRUH86DW
³>7@KH&RQVWLWXWLRQSURWHFWVWKHVDQFWLW\RIWKHIDPLO\
SUHFLVHO\EHFDXVHWKHLQVWLWXWLRQRIWKHIDPLO\LVGHHSO\URRWHG
LQWKLV1DWLRQ¶VKLVWRU\DQGWUDGLWLRQ,WLVWKURXJKWKHIDPLO\
WKDWZHLQFXOFDWHDQGSDVVGRZQPDQ\RIRXUPRVWFKHULVKHG
YDOXHV PRUDO DQG FXOWXUDO´ IRRWQRWHV RPLWWHG VHH DOVR
5REHUWV86DW ³)DPLO\UHODWLRQVKLSVE\WKHLU
QDWXUH LQYROYH GHHS DWWDFKPHQWV DQG FRPPLWPHQWV WR WKH
QHFHVVDULO\IHZRWKHULQGLYLGXDOVZLWKZKRPRQHVKDUHVQRW
RQO\ D VSHFLDO FRPPXQLW\ RI WKRXJKWV H[SHULHQFHV DQG
EHOLHIVEXWDOVRGLVWLQFWLYHO\SHUVRQDODVSHFWVRIRQH¶VOLIH´

-- 23 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
0RUHRYHU QRWKLQJ LQ RXU WUDGLWLRQ RU SUHFHGHQW FDQ
FUHGLEO\EHUHDGWRVXJJHVWWKDWWKHright to participate in child
rearing does not extend to grandparents. See, e.g., Moore,
431 U.S. at 504 ("Ours is by no means a tradition limited to
respect for the bonds uniting the members of the nuclear
family. The tradition of uncles, aunts, cousins, and especially
grandparents sharing a household along with parents and
children has roots equally venerable and equally deserving of
constitutional recognition.") (emphasis added) (footnote
omitted).
C.
Neither the Supreme Court nor this court, however, has
addressed the specific issue of whether a grandmother has a
fundamental freedom of association right to participate in the
upbringing of her grandchildren.
Our decision in Bazzetta v. McGinnis, 286 F.3d 311, 316
(6th Cir. 2002), provides some guidance. There, we
examined the constitutional validity of a prison regulation that
prohibited prisoners from receiving visits from their minor
siblings, nieces and nephews. We struck down the regulation
because it was unrelated to legitimate penological goals. Id.
Implicit in our analysis was the recognition that an inmate’s
ability to visit with his or her minor siblings, nieces and
nephews involves constitutionally protected associational
rights. See id. at 317 ("Close analysis is especially
appropriate when, as is the case here, the challenged
restrictions interfere with family relationships . . . specially
protected by the Constitution."). The right to participate in
the upbringing of one’s grandchild occupies a basic position
in our society’s hierarchy of values and is of a more intimate
% and therefore more fundamental % nature than the right to
visit one’s nieces or nephews. Therefore, a logical extension
of Bazzetta’s reasoning suggests that Johnson has a
fundamental freedom of association right to participate in the
upbringing of her grandchildren.
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
REMHFWLYHO\GHHSO\URRWHGLQWKLV1DWLRQ¶VKLVWRU\DQG
WUDGLWLRQDQGLPSOLFLWLQWKHFRQFHSWRIRUGHUHGOLEHUW\
VXFKWKDWQHLWKHUOLEHUW\QRUMXVWLFHZRXOGH[LVWLIWKH\
ZHUH VDFULILFHG 6HFRQG ZH KDYH UHTXLUHG LQ
VXEVWDQWLYHGXHSURFHVVFDVHVDFDUHIXOGHVFULSWLRQRIWKH
DVVHUWHGIXQGDPHQWDOOLEHUW\LQWHUHVW
:DVKLQJWRQ Y *OXFNVEHUJ 86
LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQVRPLWWHG VHHLGDW
KROGLQJWKDW³WKHDVVHUWHGμULJKW¶WRDVVLVWDQFHLQFRPPLWWLQJ
VXLFLGHLVQRWDIXQGDPHQWDOOLEHUW\LQWHUHVWSURWHFWHGE\WKH
'XH3URFHVV&ODXVH´
7KLV QHHG IRU D ³FDUHIXO GHVFULSWLRQ RI WKH DVVHUWHG
IXQGDPHQWDO OLEHUW\ LQWHUHVW´ DSSHDUV UHSHDWHGO\ LQ WKH
6XSUHPH&RXUW¶VGHFLVLRQVLQYROYLQJVXEVWDQWLYHGXHSURFHVV
,Q *OXFNVEHUJ IRU H[DPSOH WKH &RXUW ZDV IDFHG ZLWK D
FKDOOHQJHWRDSURKLELWLRQRQSK\VLFLDQDVVLVWHGVXLFLGH7KH
&RXUWH[SUHVVO\UHMHFWHGIUDPLQJWKHLVVXHLQWHUPVRIZKHWKHU
LQGLYLGXDOVKDYH³DOLEHUW\LQWHUHVWLQGHWHUPLQLQJWKHWLPH
DQG PDQQHU RI RQH¶V GHDWK´ ³D ULJKW WR GLH´ ³D OLEHUW\ WR
FKRRVHKRZWRGLH´RU³DULJKWWRFRQWURORIRQH¶VILQDOGD\V´
,GDW LQWHUQDOTXRWDWLRQPDUNVRPLWWHG ,QVWHDGWKH
&RXUWH[SODLQHGWKDW³WKHTXHVWLRQEHIRUHXVLVZKHWKHUWKH
μOLEHUW\¶ VSHFLDOO\ SURWHFWHG E\ WKH 'XH 3URFHVV &ODXVH
LQFOXGHVDULJKWWRFRPPLWVXLFLGHZKLFKLWVHOILQFOXGHVDULJKW
WRDVVLVWDQFHLQGRLQJVR´,GDW
7KH6XSUHPH&RXUWVLPLODUO\UHMHFWHGEURDGGHILQLWLRQVRI
WKHDVVHUWHGOLEHUW\LQWHUHVWLQ5HQRY)ORUHV86
ZKHUH LW XSKHOG WKH FRQVWLWXWLRQDOLW\ RI
UHJXODWLRQV SURPXOJDWHG E\ WKH ,PPLJUDWLRQ DQG
1DWXUDOL]DWLRQ6HUYLFHWKDWDGGUHVVHGWKHFLUFXPVWDQFHVDQG
WHUPVXQGHUZKLFKGHWDLQHGMXYHQLOHDOLHQVFRXOGEHUHOHDVHG
SHQGLQJWKHLUGHSRUWDWLRQKHDULQJV,QSDUWLFXODUWKH&RXUW
IUDPHGWKHLVVXHLQWHUPVRI³WKHDOOHJHGULJKWRIDFKLOGZKR
KDVQRDYDLODEOHSDUHQWFORVHUHODWLYHRUOHJDOJXDUGLDQDQG
IRUZKRPWKHJRYHUQPHQWLVUHVSRQVLEOHWREHSODFHGLQWKH
FXVWRG\RIDZLOOLQJDQGDEOHSULYDWHFXVWRGLDQUDWKHUWKDQRI
D JRYHUQPHQWRSHUDWHG RU JRYHUQPHQWVHOHFWHG FKLOGFDUH

-- 24 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
BBBBBBBBBBBBBBBBB
',66(17
BBBBBBBBBBBBBBBBB
521$/'/((*,/0$1&LUFXLW-XGJHGLVVHQWLQJ7KH
PDMRULW\KDVFRQFOXGHGWKDWWKHRUGLQDQFHLQTXHVWLRQYLRODWHG
WKHSODLQWLIIV¶IXQGDPHQWDOULJKWVWRLQWUDVWDWHWUDYHODQGWR
IUHHGRPRIDVVRFLDWLRQ7RWKHFRQWUDU\,DPRIWKHRSLQLRQ
WKDWWKLVFRXUWKDVSUHYLRXVO\KHOGWKDWQRIXQGDPHQWDOULJKW
WR LQWUDVWDWH WUDYHO H[LVWV 0RUHRYHU , GR QRW VKDUH WKH
PDMRULW\¶V EHOLHI WKDW WKH RUGLQDQFH YLRODWHG WKH SODLQWLIIV¶
ULJKWVWRIUHHGRPRIDVVRFLDWLRQ,WKHUHIRUHFRQFOXGHWKDWWKH
RUGLQDQFHGLGQRWLQIULQJHXSRQWKHSODLQWLIIV¶IXQGDPHQWDO
ULJKWV7KHRUGLQDQFHZDVWKXVVXEMHFWWRWKHORZHUVWDQGDUG
RI UDWLRQDO EDVLV UHYLHZ ZKLFK , EHOLHYH LW PHW , DOVR
FRQFOXGH WKDW WKH RUGLQDQFH GLG QRW YLRODWH WKH 'RXEOH
-HRSDUG\&ODXVHRIWKH)LIWK$PHQGPHQWDQLVVXHWKDWWKH
PDMRULW\ KDG QR QHHG WR UHDFK )RU DOO RI WKHVH UHDVRQV ,
ZRXOGUHYHUVHWKHMXGJPHQWRIWKHGLVWULFWFRXUW
,)81'$0(17$/5,*+76
7KHPDMRULW\FRQFOXGHVWKDWWKHRUGLQDQFHLQIULQJHGXSRQ
WKHULJKWVRIERWK-RKQVRQDQG$X)UDQFHWRLQWUDVWDWHWUDYHO
-RKQVRQ¶VULJKWWRDVVLVWLQUDLVLQJKHUJUDQGFKLOGUHQDQG$X
)UDQFH¶VULJKWWRYLVLWKLVDWWRUQH\$FFRUGLQJWRWKHPDMRULW\
HDFKRIWKHVHULJKWVFRQVWLWXWHVDIXQGDPHQWDOOLEHUW\LQWHUHVW
, UHVSHFWIXOO\ GLVDJUHH %HIRUH GLVFXVVLQJ HDFK RI WKHVH
SXUSRUWHG ULJKWV LQ GHWDLO , EHOLHYH WKDW D IHZ JHQHUDO
FRPPHQWVDERXWVXEVWDQWLYHGXHSURFHVVDUHZDUUDQWHG
7KH6XSUHPH&RXUW¶VDSSURDFKWRGHWHUPLQLQJZKHWKHUD
SDUWLFXODUULJKWLVSURWHFWHGE\WKH)RXUWHHQWK$PHQGPHQW¶V
'XH 3URFHVV &ODXVH HVWDEOLVKHV WKH IUDPHZRUN IRU P\
DQDO\VLV
2XU HVWDEOLVKHG PHWKRG RI VXEVWDQWLYHGXHSURFHVV
DQDO\VLV KDV WZR SULPDU\ IHDWXUHV )LUVW ZH KDYH
UHJXODUO\REVHUYHGWKDWWKH'XH3URFHVV&ODXVHVSHFLDOO\
SURWHFWVWKRVHIXQGDPHQWDOULJKWVDQGOLEHUWLHVZKLFKDUH
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
%H\RQG D SDVVLQJ UHIHUHQFH WR D EURWKHU 7KRPSVRQ GRHV QRW VSHFLI\
ZKLFK RI WKH SODLQWLII¶V IDPLO\ PHPEHUV OLYHG LQ WKH KRXVLQJ SURMHFW
Bazzetta’s implicit conclusion, that a prisoner has a right to
receive certain family members as visitors, is in some tension
with this court’s prior conclusion in Thompson v. Ashe, that
a plaintiff had "no fundamental right to visit his family
members on [a public housing development’s] property." 250
F.3d at 406-07.
In Thompson, the plaintiff challenged the constitutionality
of a "no trespass" list, which kept him from visiting family
members in a public housing development. ,G 7KH
7KRPSVRQ FRXUW DGGUHVVHG WKH LVVXH DV IROORZV )LUVW LW
DFNQRZOHGJHG WKDW WKH %LOO RI 5LJKWV SURWHFWV WKH ULJKW WR
³HQWHU LQWR DQG PDLQWDLQ FHUWDLQ LQWLPDWH RU SULYDWH
UHODWLRQVKLSV´ DQG OLVWHG VSHFLILF UHODWLRQVKLSV WKDW WKH
³6XSUHPH&RXUWKDVDFFRUGHGFRQVWLWXWLRQDOSURWHFWLRQWR´
,G QRWLQJ WKDW WKH 6XSUHPH &RXUW ³KDV DFFRUGHG
FRQVWLWXWLRQDO SURWHFWLRQ WR PDUULDJH WKH EHJHWWLQJ DQG
EHDULQJ RI FKLOGUHQ FKLOG UHDULQJ DQG HGXFDWLRQ DQG
FRKDELWDWLRQ ZLWK UHODWLYHV´ FLWDWLRQV RPLWWHG 7KH
7KRPSVRQFRXUWWKHQQRWHGWKDWWKHSODLQWLIIGLGQRWFODLPDQ
DVVRFLDWLRQ LQWHUHVW WR ZKLFK WKH 6XSUHPH &RXUW KDG
SUHYLRXVO\ DFFRUGHG FRQVWLWXWLRQDO SURWHFWLRQ ± LH
FRKDELWDWLRQ ZLWK UHODWLYHV ± and that the "Court has not
extended constitutional protection to mere visitation with
family members." Id. (emphasis added). Without further
explanation, the Thompson panel concluded that the plaintiff
did not have a fundamental right to visit his family members.
Put more succinctly, Thompson concluded that the plaintiff
had no fundamental right to visit his family members because
the Supreme Court had not yet articulated such a right. That
the Supreme Court’s recognition of a right establishes that
right’s existence for lower courts, however, tells us nothing
about the existence of rights that the Court has not yet
addressed. Unless one accepts the indefensible premise that
the absence of a Supreme Court opinion on the existence of

-- 25 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
a particular right means that a particular right does not exist,
there is simply no reason to infer the absence of a
fundamental right to visit a family member based on the
fortuity that the Supreme Court has not yet addressed the
issue.
1RWZLWKVWDQGLQJRXUFRQFHUQVZHQHYHUWKHOHVVZRXOGEH
ERXQGE\7KRPSVRQ¶VFRQFOXVLRQ±DVRSSRVHGWR%D]]HWWD¶V
LPSOLFLW FRQFOXVLRQ ± LI -RKQVRQ KDG PHUHO\ DVVHUWHG D
IXQGDPHQWDOULJKWWRYLVLWKHUGDXJKWHURUJUDQGFKLOGUHQWK
&LU5 F VHHDOVR8QLWHG6WDWHVY6PLWK)G
WK&LU
The issue before this court, however, is whether Johnson
has a fundamental associational right to participate in the
education and rearing of her grandchild. Unlike the plaintiff
in Thompson, Johnson has been an active participant in the
lives and activities of her grandchildren, with the consent and
support of the children’s mother. Thompson itself recognized
the distinction between participating in child rearing and
merely visiting one’s family. See Thompson, 250 F.3d at 407
(acknowledging that "[t]he Court has accorded constitutional
protection to . . . child rearing and education") (citing Pierce
v. Society of Sisters, 268 U.S. 510, 534-35, 45 S.Ct. 571, 69
L.Ed. 1070 (1925)). Moreover, to the extent that Thompson
can be read to proclaim the absence of a fundamental right to
participate in child-rearing it conflicts with Supreme Court
precedent and cannot bind this court. See Pierce, 268 U.S. at
534-35 (recognizing a fundamental child-rearing right);
Meyer, 262 U.S. at 398 (noting that "without doubt" the
liberty interest guaranteed by the Fourteenth Amendment
denotes the right to "establish a home and bring up children").
Accordingly, we find that Johnson does have a fundamental
freedom of association right to participate in the upbringing
of her grandchildren.
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
%HFDXVH ZH ILQG WKDW WKH 2UGLQDQFH XQFRQVWLWXWLRQDOO\ LQIULQJHV RQ
SODLQWLIIV¶ ULJKWV WR IUHHGRP RI DVVRFLDWLRQ DQG D ULJKW WR ORFDOL]HG WUDYHO
ZH GR QRW UHDFK $X )UDQFH¶V GRXEOH MHRSDUG\ FODLP
DSSO\´ VHH DOVR 1XQH] )G DW ILQGLQJ 6DQ
'LHJR¶VRUGLQDQFH³SUREOHPDWLF´EHFDXVHLWGLGQRW³SURYLGH
H[FHSWLRQV IRU PDQ\ OHJLWLPDWH DFWLYLWLHV ZLWK RU ZLWKRXW
SDUHQWDOSHUPLVVLRQ´
&
,QVWULNLQJGRZQWKH2UGLQDQFHZHGRQRWIRUHFORVHWKH
SRVVLELOLW\ WKDW D QDUURZHU YHUVLRQ RI WKH 2UGLQDQFH
VXSSRUWHGE\DFOHDUHUUHFRUGFRXOGZLWKVWDQGVWULFWVFUXWLQ\
7HPSRUDU\ H[FOXVLRQ LV DQ H[WUHPH PHDVXUH EXW ZH
UHFRJQL]HWKDWPXQLFLSDOLWLHVOLNHWKH&LW\RI&LQFLQQDWLIDFH
IRUPLGDEOHFKDOOHQJHVLQLPSURYLQJWKHVDIHW\DQGZHOOEHLQJ
RI LWV FLWL]HQV LQ KLJK FULPHV DUHDV :KLOH ZH KDYH HYHU\
FRQILGHQFHWKDWWKH&LW\DFWHGLQWKHXWPRVWJRRGIDLWKDQG
ZLWK WKH EHVW LQWHQWLRQV LQ HQDFWLQJ WKH 2UGLQDQFH WKH
2UGLQDQFH LQ LWV SUHVHQW IRUP GRHV QRW ZLWKVWDQG
FRQVWLWXWLRQDOVFUXWLQ\
9,,
)RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHMXGJPHQWRIWKH
GLVWULFWFRXUW

-- 26 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
$QGDVDKRPHOHVVLQGLYLGXDO$X)UDQFHODFNHGDFFHVVWRD
SULYDWHWHOHSKRQHWRVHHNDQGUHFHLYHOHJDODGYLFH*LYHQWKH
REYLRXVO\SULYLOHJHGQDWXUHRIKLVFRQYHUVDWLRQVLWFDQQRWEH
VDLG WKDW $X )UDQFH¶V DFFHVV WR WKH &LW\¶V SUHGRPLQDQWO\
XQHQFORVHGSXEOLFSKRQHVDOOHYLDWHGKLVSUREOHPRIDFFHVV
$QXUEDQVWUHHWFRUQHUVLPSO\GRHVQRWSURYLGHDVXIILFLHQW
JXDUDQWHHRISULYDF\DQGDUHDOLVWLFDOO\HIIHFWLYHJXDUGDJDLQVW
GLVFORVXUHRISULYLOHJHGDQGFRQILGHQWLDOLQIRUPDWLRQWREH
FRQVLGHUHGDYLDEOHDOWHUQDWLYH(YHQLI$X)UDQFHVHFXUHGD
ZKROO\HQFORVHGSXEOLFSKRQHKHLVKRPHOHVVDQGWKXVLQDOO
OLNHOLKRRGODFNVWKHPRQH\IRUDQ\WKLQJPRUHWKDQDVKRUW
FRQYHUVDWLRQZLWKKLVDWWRUQH\7KXVWKH2UGLQDQFHQRWRQO\
EORFNHG$X)UDQFH¶VSK\VLFDODFFHVVWRKLVDWWRUQH\¶VRIILFH
LWHIIHFWLYHO\EORFNHGDOODFFHVVWRKLVDWWRUQH\:KLOHWKLVD
WURXEOLQJ VFHQDULR UHJDUGOHVV RI WKH XQGHUO\LQJ IDFWXDO
FLUFXPVWDQFHVLWLVSDUWLFXODUWURXEOLQJLQ$X)UDQFH¶VFDVH
$X)UDQFHLVDKRPHOHVVPDQH[LVWLQJDWWKHPDUJLQVRIRXU
VRFLHW\ ZKHUH KH LV XQLTXHO\ YXOQHUDEOH DQG LQ SDUWLFXODU
QHHG RI XQREVWUXFWHG DFFHVV WR OHJDO UHSUHVHQWDWLRQ DQG D
EXIIHUDJDLQVWWKHSRZHURIWKH6WDWH
,Q HYDOXDWLQJ SODLQWLIIV¶ DVVRFLDWLRQDO FKDOOHQJHV ZH
HQFRXQWHU WKH VDPH IODZV LQ WKH 2UGLQDQFH WKDW ZH
HQFRXQWHUHG LQ HYDOXDWLQJ WKH ULJKW WR ORFDOL]HG WUDYHO
1DPHO\WKHFRPELQDWLRQRIWKHEURDGVZHHSRIWKH2UGLQDQFH
DQG WKH ODFN RI LQGLYLGXDOL]HG FRQVLGHUDWLRQ SULRU WR
H[FOXVLRQ$QGZKLOHWKHYDULDQFHPHFKDQLVPKDVWKHHIIHFW
RISURWHFWLQJVRPHDVVRFLDWLRQDOULJKWVLWGRHVQRWSURWHFWWKH
DVVRFLDWLRQDOULJKWVRIHLWKHU-RKQVRQRU$X)UDQFH,QWKLV
UHVSHFWWKH2UGLQDQFH¶VYDULDQFHPHFKDQLVPGHYLDWHVIURP
WKH YDULDQFH SURFHGXUHV XWLOL]HG LQ WKH MXYHQLOH FXUIHZ
RUGLQDQFHVXSKHOGE\RXUVLVWHUFLUFXLWV,QWKRVHFDVHVWKH
RSHUDWLYH YDULDQFH VSHFLILFDOO\ H[HPSWHG FRQVWLWXWLRQDOO\
SURWHFWHGDFWLYLW\6HH6FKOHLIHUY&LW\RI&KDUORWWHVYLOOH
)G WK&LU ³8QGHU&KDUORWWHVYLOOH¶V
FXUIHZPLQRUVDUHDOORZHGWRXQGHUWDNHLQWHUVWDWHWUDYHO
DQG WR HQJDJH IUHHO\ LQ DQ\ DFWLYLW\ SURWHFWHG E\ WKH )LUVW
$PHQGPHQW´ 4XWEY6WUDXVV)G WK&LU
³0RVWQRWDEO\LIWKHMXYHQLOHLVH[HUFLVLQJKLVRUKHU
)LUVW $PHQGPHQW ULJKWV WKH FXUIHZ RUGLQDQFH GRHV QRW
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
D.
Our analysis of Au France’s claim % that the Ordinance
infringes on his freedom of association right to visit his
attorney % is more straightforward. Much of our system of
law is based upon the presumption that one of the most
important relationships for "safeguarding of individual
freedom" is that between an individual and his or her
attorney. See Roberts, 468 U.S. at 617-618. It simply cannot
be denied that an individual’s relationship with his or her
attorney "acts as a critical buffer between the individual and
the power of the State." See id. Accordingly, we find that Au
France has a fundamental freedom of association right to visit
his attorney.
9,
+DYLQJDGGUHVVHGWKHH[LVWHQFHRIWKHUHOHYDQWULJKWVZH
QRZWXUQWRZKHWKHUWKH2UGLQDQFHLQIULQJHVRQWKRVHULJKWV
DQGLILWGRHVZKHWKHULWLVQHYHUWKHOHVVVXIILFLHQWO\WDLORUHG
WRDOORZWKH2UGLQDQFHWRSDVVMXGLFLDOVFUXWLQ\
$

2UGLQDULO\ZKHUHDIXQGDPHQWDOOLEHUW\LQWHUHVWSURWHFWHG
E\WKHVXEVWDQWLYHGXHSURFHVVFRPSRQHQWRIWKH)RXUWHHQWK
$PHQGPHQWLVLQYROYHGWKHJRYHUQPHQWFDQQRWLQIULQJHRQ
WKDW ULJKW ³XQOHVV WKH LQIULQJHPHQW LV QDUURZO\ WDLORUHG WR
VHUYHDFRPSHOOLQJVWDWHLQWHUHVW´*OXFNVEHUJ86DW
FLWDWLRQ RPLWWHG /DNHZRRG 2KLR &RQJUHJDWLRQ RI
-HKRYDK¶V:LWQHVVHV,QFY&LW\RI/DNHZRRG)G
WK&LU 1RWZLWKVWDQGLQJWKLVJHQHUDOUXOHWKH
&LW\ FRQWHQGV WKDW WKH LQWHUPHGLDWH VFUXWLQ\ DSSOLFDEOH WR
FRQWHQWQHXWUDO WLPH SODFH DQG PDQQHU UHJXODWLRQV RI
RWKHUZLVHSURWHFWHG)LUVW$PHQGPHQWDFWLYLW\VKRXOGJXLGH
RXUUHYLHZRIWKH2UGLQDQFH,QVXSSRUWRILWVFRQWHQWLRQWKH
&LW\UHOLHVSULPDULO\RQWKH7KLUG&LUFXLW¶VGHFLVLRQXSKROGLQJ
WKH&LW\RI<RUN¶VDQWLFUXLVLQJRUGLQDQFHZKLFKSURKLELWHG
GULYLQJ UHSHDWHGO\ WKURXJK D ORRS RI FHUWDLQ PDMRU SXEOLF

-- 27 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
8QOLNH D ³WLPH´ RU ³PDQQHU´ UHJXODWLRQ D ³SODFH´ UHJXODWLRQ LV PRUH
GLIILFXOW WR WUDQVIHU IURP WKH )LUVW $PHQGPHQW FRQWH[W WR WKH ORFDOL]HG
WUDYHO FRQWH[W $IWHU DOO UHJXODWLQJ WKH SODFH RI VSHHFK GRHV QRW IRUHFORVH
VSHHFK RU DVVRFLDWLRQ LQ WKH VDPH ZD\ DV UHJXODWLQJ WKH SODFH RI WUDYHO
PLJKW 1HYHUWKHOHVV ZH GR QRW IRUHFORVH WKH SRVVLELOLW\ WKDW D QDUURZ
³SODFH´ UHVWULFWLRQ PLJKW EH PRUH DSSURSULDWHO\ DQDO\]HG XQGHU
LQWHUPHGLDWH VFUXWLQ\
6HH KWWSZZZFLQFLQQDWLKRPHRUJQHLJKERUKRRGVRYHUWKHUKLQH
$V -XGJH %HFNHU H[SODLQHG
>-@XVW DV WKH ULJKW WR VSHDN FDQQRW FRQFHLYDEO\ LPSO\ WKH ULJKW WR
VSHDN ZKHQHYHU ZKHUHYHU DQG KRZHYHU RQH SOHDVHV ± HYHQ LQ
SXEOLF IRUD VSHFLILFDOO\ XVHG IRU SXEOLF VSHHFK ± VR WRR WKH ULJKW
WR WUDYHO FDQQRW FRQFHLYDEO\ LPSO\ WKH ULJKW WR WUDYHO ZKHQHYHU
ZKHUHYHU DQG KRZHYHU RQH SOHDVHV ± HYHQ RQ URDGV VSHFLILFDOO\
GHVLJQHG IRU SXEOLF WUDYHO 8QOLPLWHG DFFHVV WR SXEOLF IRUD RU
URDGZD\V ZRXOG UHVXOW QRW LQ PD[LPL]LQJ LQGLYLGXDOV¶
RSSRUWXQLW\ WR HQJDJH LQ SURWHFWHG DFWLYLW\ EXW FKDRV 7R
SUHYHQW WKDW VWDWH DQG ORFDO JRYHUQPHQWV PXVW HQMR\ VRPH
GHJUHH RI IOH[LELOLW\ WR UHJXODWH DFFHVV WR DQG XVH RI WKH
SXEOLFO\ KHOG LQVWUXPHQWDOLWLHV RI VSHHFK DQG WUDYHO
)G DW
URDGV WKURXJK <RUN¶V FHQWHU /XW] )G DW %XW
LQVWHDGRIUHJXODWLQJWKHPDQQHULQZKLFKDIIHFWHGLQGLYLGXDOV
DFFHVV2YHUWKH5KLQH LHDQDQWLFUXLVLQJRUGLQDQFH RUWKH
WLPHRIDFFHVV LHDFXUIHZ WKH2UGLQDQFHLPSRVHVDPRUH
VHYHUHUHVWULFWLRQEURDGO\SURKLELWLQJLQGLYLGXDOVWRDFFHVV
WKH HQWLUH QHLJKERUKRRG ZKLFK WKH &LW\ DGYHUWLVHV DV WKH
ODUJHVWQDWLRQDOKLVWRULFGLVWULFWLQWKHQDWLRQWKH&LW\¶VIDVWHVW
JURZLQJHQWHUWDLQPHQWGLVWULFWDQGKRPHWRQHDUO\&LW\
UHVLGHQWV7KXVZKLOHZHDFNQRZOHGJHWKHVWUHQJWKRIWKH
7KLUG &LUFXLW¶V UHDVRQLQJ DQG ZH GR QRW IRUHFORVH WKH
SRVVLELOLW\RIDSSO\LQJLQWHUPHGLDWHVFUXWLQ\WRDOHVVVHYHUH
UHJXODWLRQ RI ORFDOL]HG WUDYHO WKH EURDG SURKLELWLRQ RI WKH
2UGLQDQFHUHTXLUHVWKDWZHDSSO\VWULFWVFUXWLQ\
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL

)LQDOO\WKH2UGLQDQFH¶VYDULDQFHPHFKDQLVPGRHVQRWVDYH
WKH2UGLQDQFHIURPFRQVWLWXWLRQDOLQILUPLW\EHFDXVHLWRQO\
SURWHFWV WKH FRQVWLWXWLRQDO ULJKW WR ORFDOL]HG WUDYHO IRU D
OLPLWHGJURXSRIDIIHFWHGLQGLYLGXDOV,QDOORZLQJLQGLYLGXDOV
WRVHHNYDULDQFHVLIWKH\OLYHRUZRUNRUVHHNVRFLDOVHUYLFHV
LQ2YHUWKH5KLQHWKH2UGLQDQFHHIIHFWLYHO\SUHVHUYHVWKH
ULJKWWRWUDYHOORFDOO\WKURXJKSXEOLFVSDFHVDQGURDGZD\VIRU
VRPHLQGLYLGXDOV+RZHYHUWKH2UGLQDQFHGRHVQRWKLQJWR
SURWHFW WKH FRQVWLWXWLRQDO ULJKWV RI DOO RWKHU DIIHFWHG
LQGLYLGXDOV 7KH 2UGLQDQFH¶V YDULDQFH PHFKDQLVP HDVHV
VRPHRIWKHEXUGHQRIH[FOXVLRQIRUVRPHLQGLYLGXDOVEXWLW
GRHVQRWDOOHYLDWHWKHIXQGDPHQWDOFRQVWLWXWLRQDOSUREOHPWKDW
WKH2UGLQDQFHEORFNVWKHULJKWWRWUDYHOORFDOO\WKURXJKSXEOLF
VSDFHVDQGURDGZD\V
%

7KH2UGLQDQFHDOVRLPSOLFDWHV-RKQVRQDQG$X)UDQFH¶V
ULJKWV WR IUHHGRP RI DVVRFLDWLRQ 3ULRU WR UHFHLYLQJ DQ
H[FOXVLRQQRWLFH-RKQVRQDFWLYHO\SDUWLFLSDWHGLQFDULQJIRU
ILYHRIKHUJUDQGFKLOGUHQDOORIZKRPUHVLGHGLQ2YHUWKH
5KLQH-RKQVRQUHJXODUO\SLFNHGXSWZRRIKHUJUDQGFKLOGUHQ
7DQLDDQG-DTXDQQDDQGZDONHGWKHPWRDQGIURPVFKRRO
$IWHU KHU DUUHVW DQG QLQHW\ GD\ H[FOXVLRQ -RKQVRQ ZDV
HIIHFWLYHO\EDQLVKHGIURP2YHUWKH5KLQHDQGSUHFOXGHGIURP
KHUUHJXODUUROHLQFDULQJIRUKHUJUDQGFKLOGUHQ7KHUHIRUH
WKH 2UGLQDQFH SODLQO\ LQIULQJHG RQ -RKQVRQ¶V ULJKW WR
SDUWLFLSDWHLQWKHUHDULQJRIKHUJUDQGFKLOGUHQ
$ORQJVLPLODUOLQHV$X)UDQFH¶VH[FOXVLRQIURP2YHUWKH
5KLQHSURKLELWHGKLPIURPWUDYHOLQJWRKLVDWWRUQH\¶VRIILFH
LQ2YHUWKH5KLQH,Q$X)UDQFH¶VFDVHWKLVH[FOXVLRQZDV
SDUWLFXODUO\SUREOHPDWLFEHFDXVH$X)UDQFHZDVKRPHOHVV
WKXV KH KDG QR UHDGLO\ DYDLODEOH UHDOLVWLF DOWHUQDWLYH WR
FRPPXQLFDWHZLWKKLVDWWRUQH\)RUH[DPSOH$X)UDQFH¶V
ODZ\HUFRXOGQRWWDNHWKHH[FHSWLRQDOO\DFFRPPRGDWLQJVWHS
RIPDNLQJD³KRXVHFDOO´WRGLVFXVV$X)UDQFH¶VOHJDODIIDLUV

-- 28 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
WKH³XVHRIIRRWSDWUROVELF\FOHSDWUROVDQGXVHRIWKH'LVWULFW
2QH &ULPLQDO $SSUHKHQVLRQ 7HDP´ DQG SXW IRUWK VRPH
HYLGHQFH GHPRQVWUDWLQJ WKHVH HIIRUWV ZHUH LQHIIHFWLYH LQ
UHGXFLQJGUXJUHODWHGFULPHLQ2YHUWKH5KLQH6LPLODUO\
ZKLOHZHFUHGLWWKH&LW\¶VVWDWLVWLFDOHYLGHQFHUHJDUGLQJFRYHUW
RSHUDWLRQV VXFK HYLGHQFH GRHV QRW GHPRQVWUDWH WKH
LQHIIHFWLYHQHVVRIRWKHUODZHQIRUFHPHQWRSHUDWLRQV
7KH&LW\¶VFLWDWLRQWRWKHH[SHULHQFHVRI3RUWODQG2UHJRQ
LVDOVRPLVSODFHGLQFRQVLGHULQJQDUURZWDLORULQJ(YHQLIZH
ZHUHWRH[WUDSRODWHWKDWZKDWZRUNHGLQ3RUWODQGZRXOGOLNHO\
ZRUN LQ 2YHU WKH 5KLQH WKLV IDFW ZRXOG QRW VXVWDLQ WKH
2UGLQDQFH,QFRQVLGHULQJZKHWKHUDJRYHUQPHQWUHJXODWLRQ
LV QDUURZO\ WDLORUHG LW LV QRW HQRXJK WKDW WKH UHJXODWLRQ
DFKLHYHV LWV RVWHQVLEOH SXUSRVH LW PXVW GR VR ZLWKRXW
XQQHFHVVDULO\ LQIULQJLQJ XSRQ FRQVWLWXWLRQDOO\ SURWHFWHG
ULJKWV
%H\RQGLWVFRQFOXVRU\FODLPVWKDWRWKHUHIIRUWVWRFRPEDW
GUXJFULPHZHUHXQVXFFHVVIXOWKHSROLFHGHSDUWPHQW¶VUHSRUW
GRHV QRW FRQWDLQ DQ\ LQGLFDWLRQ WKDW WKH &LW\ RU LWV SROLFH
GHSDUWPHQWHYDOXDWHGDOWHUQDWLYHVWRWKH2UGLQDQFH)DFHG
ZLWKVXFKDUHFRUGZHFDQQRWFRQFOXGHWKDWRWKHUDOWHUQDWLYHV
FRXOGQRWDFKLHYHWKHVDPHLQWHQGHGJRDOVRIWKH$FW:KLOH
ZHDUHSUHSDUHGWRDFFHSWWKHOHJLVODWLYHMXGJPHQWRIWKH&LW\
UHJDUGLQJSRWHQWLDODOWHUQDWLYHVVHH*UXWWHU)GDW
WKH&LW\QHYHUWKHOHVVEHDUVWKHEXUGHQRILGHQWLI\LQJSRWHQWLDO
DOWHUQDWLYHV*LYHQWKHQDWXUHRIWKHULJKWDWLVVXH±LQGHHG
WKH 2UGLQDQFH LWVHOI SURFODLPV WKDW ³>L@QGLYLGXDOV KDYH D
VLJQLILFDQWSULYDWHLQWHUHVWLQEHLQJDEOHWRWUDYHODQGDVVRFLDWH
IUHHO\ LQ DOO DUHDV RI WKH FLW\´ ± WKH &LW\ PXVW GR PRUH WR
FRQVLGHUSRWHQWLDODOWHUQDWLYHV,WLVRIFRXUVHSRVVLEOHWKDW
D UHJXODWLRQ OLNH WKH 2UGLQDQFH PLJKW EH WKH QDUURZHVW
PHWKRGRIDGGUHVVLQJDVHHPLQJO\XQFRQWUROODEOHGUXJDQG
FULPHHSLGHPLF%XWZLWKRXWVRPHDIILUPDWLYHHYLGHQFHWKDW
WKHUHLVQROHVVVHYHUHDOWHUQDWLYHZHFDQQRWFRQFOXGHWKDWWKH
2UGLQDQFH LQ LWV SUHVHQW IRUP VXUYLYHV FRQVWLWXWLRQDO
VFUXWLQ\
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL

:HDJUHHZLWKWKHGLVWULFWFRXUW¶VFRQFOXVLRQWKDWWKH&LW\¶V
LQWHUHVWLQHQDFWLQJWKH2UGLQDQFH±WRHQKDQFHWKHTXDOLW\RI
OLIHLQGUXJSODJXHGQHLJKERUKRRGVDQGWRSURWHFWWKHKHDOWK
VDIHW\DQGZHOIDUHRIFLWL]HQVLQWKRVHDUHDV±UHSUHVHQWVD
FRPSHOOLQJ JRYHUQPHQW LQWHUHVW 7KH TXHVWLRQ WKHQ LV
ZKHWKHU WKH 2UGLQDQFH LV QDUURZO\ WDLORUHG WR VHUYH WKDW
LQWHUHVW
7RGHWHUPLQHZKHWKHUWKH2UGLQDQFHLVQDUURZO\WDLORUHGWR
DFKLHYHWKH&LW\¶VFRPSHOOLQJLQWHUHVWLQUHGXFLQJGUXJDEXVH
DQGGUXJUHODWHGFULPHZH DVVHVVZKHWKHUWKH2UGLQDQFH
LPSOLFDWHV DQ LQGLYLGXDO¶V LQWHUHVW LQ ORFDOL]HG WUDYHO ZLWK
VSHFLILFUHIHUHQFHWRWKHSUHFLVHQDWXUHRIWKHLQIULQJHPHQW
DQG GHWHUPLQH ZKHWKHU WKH 2UGLQDQFH LV WKH OHDVW
UHVWULFWLYHPHDQVWRDFFRPSOLVKWKH&LW\¶VJRDO,QPDNLQJ
WKLVODWWHULQTXLU\ZHDVNZKHWKHUDQ\RWKHUPHWKRGVH[LVWWR
DFKLHYHWKHGHVLUHGUHVXOWVRIHQKDQFLQJWKHTXDOLW\RIOLIHDQG
SURWHFWLQJWKHKHDOWKVDIHW\DQGZHOIDUHRIFLWL]HQVLQKLJK
GUXJFULPHQHLJKERUKRRGV³>,@IWKHUHDUHRWKHUUHDVRQDEOH
ZD\V WR DFKLHYH WKRVH JRDOV ZLWK D OHVVHU EXUGHQ RQ
FRQVWLWXWLRQDOO\SURWHFWHGDFWLYLW\D6WDWHPD\QRWFKRRVHWKH
ZD\RIJUHDWHULQWHUIHUHQFH,ILWDFWVDWDOOLWPXVWFKRRVH
μOHVVGUDVWLFPHDQV¶´'XQQ86DW
7KH2UGLQDQFHEDUVH[FOXGHGLQGLYLGXDOVIURPHDFKDQG
HYHU\SXEOLFVSDFHDQGURDGZD\LQ2YHUWKH5KLQH,QRXU
YLHZ WKH ULJKW WR WUDYHO ORFDOO\ WKURXJK SXEOLF VSDFHV DQG
URDGZD\VLVHVVHQWLDOO\DULJKWRIDFFHVV%\EORFNLQJDIIHFWHG
LQGLYLGXDOV¶DFFHVVWRDQHQWLUHPHWURSROLWDQQHLJKERUKRRGRI
SHRSOHWKH2UGLQDQFHWKHUHIRUHSODLQO\LQIULQJHVRQ
WKH ULJKW WR ORFDOL]HG WUDYHO WKURXJK WKH SXEOLF VSDFHV DQG
URDGZD\VRI2YHUWKH5KLQH
,Q GHQ\LQJ DFFHVV WKH 2UGLQDQFH LQLWLDOO\ SUHVHQWV
FRQVWLWXWLRQDOWDLORULQJSUREOHPVEHFDXVHLWEURDGO\H[FOXGHV
LQGLYLGXDOV IURP 2YHU WKH 5KLQH ZLWKRXW UHJDUG WR WKHLU
UHDVRQIRUWUDYHOLQWKHQHLJKERUKRRG7KXVWKH2UGLQDQFH
SURKLELWV -RKQVRQ IURP HQJDJLQJ LQ DQ DUUD\ RI QRW RQO\
ZKROO\LQQRFHQWFRQGXFWEXWVRFLDOO\EHQHILFLDODFWLRQOLNH

-- 29 of 30 --

-RKQVRQHWDOY&LW\RI&LQFLQQDWL 1R
FDULQJ IRU KHU JUDQGFKLOGUHQ DQG ZDONLQJ WKHP WR VFKRRO
/LNHZLVHWKH2UGLQDQFHEDQV$X)UDQFHIURPVHHNLQJIRRG
VKHOWHUVRFLDOVHUYLFHVDQGPHHWLQJZLWKKLVDWWRUQH\LQWKH
2YHUWKH5KLQHDWWKHVDPHWLPHLWEDQVKLPIURPSXUVXLQJ
LOOHJDOGUXJVLQ2YHUWKH5KLQH
7KHEURDGVZHHSRIWKH2UGLQDQFHLVFRPSRXQGHGE\WKH
IDFW WKDW WKH 2UGLQDQFH PHWHV RXW H[FOXVLRQ ZLWKRXW DQ\
SDUWLFXODUL]HG ILQGLQJ WKDW D SHUVRQ LV OLNHO\ WR HQJDJH LQ
UHFLGLYLVWGUXJDFWLYLW\LQ2YHUWKH5KLQH,Q8QLWHG6WDWHVY
6DOHUQR 86 6&W /(GG
WKH6XSUHPH&RXUWXSKHOGWKH%DLO5HIRUP$FWRI
ZKLFKDOORZHGIRUWKHSUHWULDOGHWDLQPHQWRIDUUHVWHHV
,GDW7KH&RXUWDFNQRZOHGJHGWKH³LPSRUWDQFHDQG
IXQGDPHQWDOQDWXUH´RIDQLQGLYLGXDO¶VLQWHUHVWLQOLEHUW\EXW
HPSKDVL]HGWKDW³WKLVULJKWPD\LQFLUFXPVWDQFHVZKHUHWKH
JRYHUQPHQW¶VLQWHUHVWLVVXIILFLHQWO\ZHLJKW\EHVXERUGLQDWHG
WRWKHJUHDWHUQHHGVRIVRFLHW\´,GDW7KXV³>Z@KHQ
WKH*RYHUQPHQWSURYHVE\FOHDUDQGFRQYLQFLQJHYLGHQFHWKDW
DQDUUHVWHHSUHVHQWVDQLGHQWLILHGDQGDUWLFXODEOHWKUHDWWRDQ
LQGLYLGXDORUWKHFRPPXQLW\ZHEHOLHYHWKDWFRQVLVWHQWZLWK
WKH'XH3URFHVV&ODXVHDFRXUWPD\GLVDEOHWKHDUUHVWHHIURP
H[HFXWLQJWKDWWKUHDW´,GDW
,Q VWDUN FRQWUDVW WR WKH %DLO 5HIRUP $FW WKH 2UGLQDQFH
DXWRPDWLFDOO\ DSSOLHV WR SHUVRQV DUUHVWHG RU FRQYLFWHG
ZLWKRXW DQ\ LQGLYLGXDOL]HG FRQVLGHUDWLRQ OHW DORQH
FRQVLGHUDWLRQE\DQHXWUDODUELWHUDQG GRHVQRWUHTXLUHDQ\
SDUWLFXODUL]HGILQGLQJWKDWWKHDUUHVWHGRUFRQYLFWHGLQGLYLGXDO
LVOLNHO\WRUHSHDWKLVRUKHUGUXJFULPH,QSODFHRIWKH%DLO
5HIRUP $FW¶V QHXWUDO LQGLYLGXDOL]HG DGMXGLFDWLRQ WKH
2UGLQDQFH UHOLHV RQ RQO\ JHQHUDO HYLGHQFH WKDW LQGLYLGXDOV
DUUHVWHGDQGRUFRQYLFWHGIRUGUXJDFWLYLW\LQ2YHUWKH5KLQH
W\SLFDOO\UHWXUQWRWKHQHLJKERUKRRGDQGUHSHDWWKHLURIIHQVHV
:KLOH ZH FUHGLW WKLV JHQHUDO HYLGHQFH LW LV LQVXIILFLHQW WR
RYHUULGHDQLQGLYLGXDO¶VLQWHUHVWLQORFDOL]HGWUDYHO,QWKH
VDPH ZD\ WKDW GXH SURFHVV GHPDQGV FHUWDLQ SURFHGXUDO
VDIHJXDUGVEHIRUHDQLQGLYLGXDOFDQEHGHWDLQHGSHQGLQJWULDO
ZHILQGWKDWGXHSURFHVVDOVRGHPDQGVVRPHLQGLYLGXDOL]HG
FRQVLGHUDWLRQEHIRUHDQLQGLYLGXDO¶VULJKWWRORFDOL]HGWUDYHO
1R -RKQVRQHWDOY&LW\RI&LQFLQQDWL
FDQ EH UHVWULFWHG $ORQJ ZLWK WKH EURDG VZHHS RI WKH
2UGLQDQFHWKH&LW\¶VIDLOXUHWRLQFOXGHSURFHGXUDOVDIHJXDUGV
UHVHPEOLQJWKHSURWHFWLRQVLQFRUSRUDWHGLQWRWKH%DLO5HIRUP
$FW ZHLJKV KHDYLO\ DJDLQVW ILQGLQJ WKH 2UGLQDQFH
FRQVWLWXWLRQDO
$ERYHDOOZHDUHPRVWWURXEOHGE\WKHSULRUYHUVLRQRIWKH
2UGLQDQFH EHFDXVH LW FXUWDLOHG DQ LQGLYLGXDO¶V ULJKW WR
ORFDOL]HGWUDYHOHYHQDIWHUKLVRUKHUGUXJFKDUJHZDVGURSSHG
RUDEDQGRQHG,QSUDFWLFHWKHQWKH2UGLQDQFHXQGRXEWHGO\
SHQDOL]HG LQQRFHQW LQGLYLGXDOV %\ H[FOXGLQJ LQQRFHQW
LQGLYLGXDOVWKH2UGLQDQFHQRWRQO\XQTXHVWLRQDEO\YLRODWHG
WKHFRQVWLWXWLRQDOULJKWVRIDIIHFWHGLQGLYLGXDOVLWIDLOHGWR
VHUYHWKHSXUSRVHVRIWKH$FW

:LWK UHVSHFW WR OHVV UHVWULFWLYH DOWHUQDWLYHV WKH &LW\
FRQWHQGVWKDWWKH2UGLQDQFHLVQDUURZO\WDLORUHGEHFDXVHWKH
&LW\¶V³RWKHU DWWHPSWVWRFXUEWKHLQFLGHQFHRIGUXJFULPH
IDLOHG´,QVXSSRUWRIWKLVDVVHUWLRQWKH&LW\DUJXHVWKDWGUXJ
DQGSURVWLWXWLRQDFWLYLW\UHPDLQHGFRQVWDQWLQ2YHUWKH5KLQH
QRWZLWKVWDQGLQJ³DQHIIRUWWRLQFUHDVHSROLFHSUHVHQFHLQWKH
DUHDWKURXJKWKHXVHRIIRRWSDWUROVELF\FOHSDWUROVDQGXVH
RIWKH'LVWULFW2QH&ULPLQDO$SSUHKHQVLRQ7HDP´6LPLODUO\
WKH&LW\FLWHVWKHUHSRUW¶VVWDWHPHQWWKDW³,Q-XO\RI
VHYHUDOFRYHUWRSHUDWLRQVUHVXOWHGLQWKHDUUHVWVRISHUVRQV
IRUVROLFLWLQJSURVWLWXWLRQDVZHOODVSHUVRQVIRUIHORQ\GUXJ
YLRODWLRQV (YHQ WKRXJK FRYHUW RSHUDWLRQV FRQWLQXHG RQ D
PRQWKO\EDVLVVHYHQPRQWKVODWHUHIIRUWVLQ)HEUXDU\DQG
0DUFKRIVWLOOUHVXOWHGLQVROLFLWLQJDUUHVWVDQG
YDULRXVGUXJDUUHVWV´
:HRIFRXUVH³GRQRWGHPDQGRIOHJLVODWXUHVVFLHQWLILFDOO\
FHUWDLQFULWHULDRIOHJLVODWLRQ´*LQVEXUJY1HZ<RUN
866&W/(GG LQWHUQDO
TXRWDWLRQV RPLWWHG %XW ZKHQ FRQVWLWXWLRQDO ULJKWV DUH DW
LVVXHVWULFWVFUXWLQ\UHTXLUHVOHJLVODWLYHFODULW\DQGHYLGHQFH
GHPRQVWUDWLQJWKHLQHIIHFWLYHQHVVRISURSRVHGDOWHUQDWLYHV
6HH *UXWWHU Y %ROOLQJHU )G WK &LU
7KXVWKH&LW\ZRXOGKDYHWRSURYLGHVRPHGHWDLORQ

-- 30 of 30 --