00a0291p.06

99-3219Court of Appeals for the Sixth Circuit31 août 2000

Texte intégral


5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
0&1(,/86 758&. $1'
0$18)$&785,1* ,1&D
0LQQHVRWD&RUSRUDWLRQ
0&1(,/86 ),1$1&,$/
6(59,&(6 ,1&D0LQQHVRWD
&RUSRUDWLRQ0&1(,/86
),1$1&,$/ ,1&D7H[DV
&RUSRUDWLRQ
3ODLQWLIIV$SSHOODQWV
Y
67$7( 2) 2+,2H[UHO%(77<
0217*20(5<$WWRUQH\
*HQHUDOIRUWKH6WDWHRI2KLR
0,7&+(// - %52:1
&RPPLVVLRQHURIWKH2KLR
%XUHDXRI0RWRU9HKLFOHVHW
DO
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
1R²(GPXQG$6DUJXV-U'LVWULFW-XGJH
$UJXHG$SULO

-- 1 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
'HFLGHGDQG)LOHG$XJXVW
%HIRUH*8<%2**6DQG68+5+(,15,&+&LUFXLW
-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('*HUDOG6'XII\6,(*(/%5,//*5(831(5
'8))< )267(5 3$ 0LQQHDSROLV 0LQQHVRWD IRU
$SSHOODQWV &KHVWHU 7 /\PDQ -U 2)),&( 2) 7+(
$77251(<*(1(5$/2)2+,2&ROXPEXV2KLR0DUN
' /DQGHV ,6$$& %5$17 /('0$1 7((725
&ROXPEXV 2KLR IRU $SSHOOHHV 21 %5,() *HUDOG 6
'XII\ 6WHYHQ :HLQWUDXW :LOOLDP &KULVWRSKHU 3HQZHOO
6,(*(/%5,//*5(831(5'8))< )267(53$
0LQQHDSROLV 0LQQHVRWD :LOOLDP + ,VH 'RGJH &HQWHU
0LQQHVRWD'0LFKDHO&ULWHV7($)25'5,&+&5,7(6
:(63&ROXPEXV2KLRIRU$SSHOODQWV0DUN'/DQGHV
/DQFH &KDSLQ ,6$$& %5$17 /('0$1 7((725
&ROXPEXV 2KLR -DPHV - 6FKDHIHU -RKQ - $UQROG
+$0,/721 &2817< 3526(&87,1* 2)),&(
&LQFLQQDWL 2KLR -HIIUH\ /\QQ *ODVJRZ 3526(&87,1*
$77251(<¶6 2)),&( )25 7+( &2817< 2)
)5$1./,1&ROXPEXV2KLR0DWWKHZ/6DJRQH2)),&(
2) 7+( $77251(< *(1(5$/ 2) 2+,2 &ROXPEXV
2KLRIRU$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
%2**6&LUFXLW-XGJH7KLVFDVHJUHZRXWRIDQ$FWRIWKH
OHJLVODWXUHRIWKH6WDWHRI2KLRWRDPHQGWKHVWDWH¶VGHDOHU
OLFHQVLQJODZV,QWKHVSULQJRIWKH2KLR%XUHDXRI
0RWRU9HKLFOHV ³2%09´ WROGGHDOHUVRIUHPDQXIDFWXUHG
YHKLFOHV WKH\ KDG WR FRPSO\ ZLWK FHUWDLQ UHTXLUHPHQWV IRU
OLFHQVLQJ E\ 0DUFK IDLOLQJ ZKLFK WKHLU GHDOHU
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

9,,,
$OWKRXJKPRVWRI0F1HLOXV¶VFODLPVGRQRWSURYLGHDEDVLV
IRU RYHUWXUQLQJ WKH UXOLQJ EHORZ 2KLR¶V VWDWXWH
GLVFULPLQDWRULO\DIIHFWVLQWHUVWDWHFRPPHUFHDQGLVWKXVDSHU
VHYLRODWLRQRIWKHGRUPDQW&RPPHUFH&ODXVH7KHUHIRUH
0F1HLOXV¶V PRWLRQ IRU D SHUPDQHQW LQMXQFWLRQ VKRXOG EH
*5$17('DJDLQVWWKHSRUWLRQRIWKHVWDWXWHWKDWRIIHQGVWKH
GRUPDQW&RPPHUFH&ODXVH7KHGLVWULFWFRXUW¶VMXGJPHQWLV
$)),50(' LQ SDUW 5(9(56(' LQ SDUW DQG WKH FDVH LV
5(0$1'('IRUWKHHQWU\RIDSHUPDQHQWLQMXQFWLRQDQGDQ\
IXUWKHUSURFHHGLQJVQHFHVVDU\XQGHUWKLVRSLQLRQ

-- 2 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
LVVXH KHUH WKH VWDWXWH LV LQGHIHQVLEOH 7KHUH LV QRW IRU
LQVWDQFHDXQLTXHDQGRYHUULGLQJHQYLURQPHQWDOEHQHILWIURP
WKHODZWKDWFRXOGMXVWLI\LWVSURWHFWLRQLVWHIIHFWV6HH0DLQH
Y7D\ORU86 KROGLQJWKDWDEDURQWKH
LPSRUWRIFHUWDLQPLQQRZVZDVWKHRQO\ZD\IRU0DLQHWR
SURWHFWWKHVWDWH¶VZDWHUVIURPWKHDFFLGHQWDOLQWURGXFWLRQRI
KD]DUGRXV SDUDVLWHV DQG QRQQDWLYH VSHFLHV ,QGHHG WKH
DSSHOOHHV WXUQ WKH ³DYDLODELOLW\ RI QRQGLVFULPLQDWRU\
DOWHUQDWLYHV´DQDO\VLVRQLWVKHDGDQGVXJJHVWWKDW0F1HLOXV
FRXOGDYRLGWKHVWULFWXUHVRIWKHUHJXODWLRQE\ GHYHORSLQJ
D IUDQFKLVH UHODWLRQVKLS ZLWK D WUXFN PDQXIDFWXUHU
SXUFKDVLQJLWVFKDVVLVIURPDXWKRUL]HG 2KLR GHDOHUVRU
VZLWFKLQJ WR UHPDQXIDFWXULQJ FKDVVLV SXUFKDVHG E\ LWV
FXVWRPHUV DQG WKHQ EURXJKW WR LW IRU FRQYHUVLRQ DV 2KLR
EDVHGUHPDQXIDFWXUHUVGR 6WDWHRI2KLR¶V%ULHIDW %XW
WKH H[LVWHQFH RI DOWHUQDWLYHV LV D EXUGHQ IRU WKH VWDWH WKDW
SUHFOXGHVXVLQJWKHGLVFULPLQDWRU\PHWKRGWKDWLWKDVFKRVHQ
QRWDZD\WRVKLIWWKHEODPHWR0F1HLOXVIRUWKHPDQQHULQ
ZKLFKLWUXQVLWVEXVLQHVV7KHVWDWHJLYHVDZD\WKHJDPH
ZKHQ LW FRQFHGHV WR GLVFULPLQDWLQJ DJDLQVW 0F1HLOXV¶V
EXVLQHVV PRGHO ,W LV SUHFLVHO\ WKH SURWHFWLRQLVW HIIHFW RI
WU\LQJWRIRUFH0F1HLOXVWREX\LWVWUXFNFKDVVLVLQ2KLRWKDW
WKHGRUPDQW&RPPHUFH&ODXVHSURVFULEHV
&
(YHQZHUH2KLR¶VVWDWXWHQRWVRREYLRXVO\GLVFULPLQDWRU\
DVWRVXEMHFWLWWRVWULFWVFUXWLQ\UHYLHZXQGHUWKHGRUPDQW
&RPPHUFH&ODXVHWKHODFNRIDQ\VLJQLILFDQWORFDOEHQHILW
WKDWGRHVQRWDOUHDG\H[LVWPHDQVWKDWWKH6WDWHRI2KLRFRXOG
QRWGHPRQVWUDWHWKDWWKHEHQHILWVRIWKHVWDWXWHRXWZHLJKHYHQ
DQ LQFLGHQWDO EXUGHQ RQ LQWHUVWDWH FRPPHUFH SRVHG E\ WKH
VWDWH¶V OLFHQVLQJ UHTXLUHPHQWV 7KXV HYHQ ZHUH ZH WR
FRQFOXGH WKDW WKLV VWDWXWH RQO\ KDV DQ LQFLGHQWDO HIIHFW RQ
LQWHUVWDWHFRPPHUFHZHZRXOGVWLOOILQGWKDWWKHEXUGHQLW
LPSRVHVLV³FOHDUO\H[FHVVLYHLQUHODWLRQWRWKHSXWDWLYHORFDO
EHQHILWV´3LNH86DW
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

OLFHQVHVZRXOGQRWEHUHQHZHGXSRQWKHLUH[SLUDWLRQWKDWGD\
7KH2%09EDFNWUDFNHGODWHUWKDW\HDUZKHQVWDWH6HQDWH%LOO
DPHQGHG DQG H[SDQGHG WKH UHOHYDQW ODZV HIIHFWLYH
'HFHPEHU ,Q SHUWLQHQW SDUW WKH DPHQGHG VWDWXWH
UHDGVDVIROORZV
6HFWLRQ ( 1RUHPDQXIDFWXUHUVKDOOHQJDJHLQ
WKHEXVLQHVVRIVHOOLQJDWUHWDLODQ\QHZPRWRUYHKLFOH
ZLWKRXWKDYLQJZULWWHQDXWKRULW\IURPWKHPDQXIDFWXUHU
RUGLVWULEXWRURIWKHYHKLFOHWRVHOOQHZPRWRUYHKLFOHV
DQG WR SHUIRUP UHSDLUV XQGHU WKH WHUPV RI WKH
PDQXIDFWXUHU V RU GLVWULEXWRU V QHZ PRWRU YHKLFOH
ZDUUDQW\XQOHVVDWWKHWLPHRIWKHVDOHRIWKHYHKLFOH
HDFKFXVWRPHULVIXUQLVKHGZLWKDELQGLQJ DJUHHPHQW
HQVXULQJ WKDW WKH FXVWRPHU KDV WKH ULJKW WR KDYH WKH
YHKLFOH VHUYLFHG RU UHSDLUHG E\ D QHZ PRWRU YHKLFOH
GHDOHUZKRLVIUDQFKLVHGWRVHOODQGVHUYLFHYHKLFOHVRI
WKHVDPHOLQHPDNHDVWKHFKDVVLVRIWKHUHPDQXIDFWXUHG
YHKLFOHSXUFKDVHGE\WKHFXVWRPHUDQGZKRVHVHUYLFHRU
UHSDLUIDFLOLW\LVORFDWHGZLWKLQHLWKHUWZHQW\PLOHVRIWKH
UHPDQXIDFWXUHU VORFDWLRQDQGSODFHRIEXVLQHVVRUWZHQW\
PLOHVRIWKHFXVWRPHU VUHVLGHQFHRUSODFHRIEXVLQHVV,I
WKHUHLVQRVXFKQHZPRWRUYHKLFOHGHDOHUORFDWHGZLWKLQ
WZHQW\PLOHVRIWKHUHPDQXIDFWXUHU VORFDWLRQDQGSODFH
RI EXVLQHVV RU WKH FXVWRPHU V UHVLGHQFH RU SODFH RI
EXVLQHVV WKH ELQGLQJ DJUHHPHQW IXUQLVKHG WR WKH
FXVWRPHUPD\EHZLWKWKHQHZPRWRUYHKLFOHGHDOHUZKR
LV IUDQFKLVHG WR VHOO DQG VHUYLFH YHKLFOHV RI WKH VDPH
OLQHPDNHDVWKHFKDVVLVRIWKHUHPDQXIDFWXUHGYHKLFOH
SXUFKDVHGE\WKHFXVWRPHUDQGZKRVHVHUYLFHRUUHSDLU
IDFLOLW\LVORFDWHGQHDUHVWWRWKHUHPDQXIDFWXUHU VORFDWLRQ
DQGSODFHRIEXVLQHVVRUWKHFXVWRPHU VUHVLGHQFHRUSODFH
RI EXVLQHVV $GGLWLRQDOO\ DW WKH WLPH RI VDOH RI DQ\
YHKLFOH HDFK FXVWRPHU RI WKH UHPDQXIDFWXUHU VKDOO EH
IXUQLVKHGZLWKDZDUUDQW\LVVXHGE\WKHUHPDQXIDFWXUHU
IRUDWHUPRIDWOHDVWRQH\HDU
6HFWLRQ $ 7KHUHJLVWUDURIPRWRUYHKLFOHVVKDOO
GHQ\ WKH DSSOLFDWLRQ RI DQ\ SHUVRQ IRU D OLFHQVH DV D

-- 3 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
PRWRU YHKLFOH GHDOHU PRWRU YHKLFOH OHDVLQJ GHDOHU
PDQXIDFWXUHG KRPH EURNHU RU PRWRU YHKLFOH DXFWLRQ
RZQHUDQGUHIXVHWRLVVXHWKHOLFHQVHLIWKHUHJLVWUDUILQGV
WKDWWKHDSSOLFDQW
,VHQJDJHGRUZLOOHQJDJH LQWKHEXVLQHVVRI
VHOOLQJDWUHWDLODQ\QHZPRWRUYHKLFOHVZLWKRXWKDYLQJ
ZULWWHQ DXWKRULW\ IURP WKH PDQXIDFWXUHU RU GLVWULEXWRU
WKHUHRIWRVHOOQHZPRWRUYHKLFOHVDQGWRSHUIRUPUHSDLUV
XQGHUWKHWHUPVRIWKHPDQXIDFWXUHU VRUGLVWULEXWRU VQHZ
PRWRUYHKLFOHZDUUDQW\H[FHSWDVSURYLGHGLQGLYLVLRQ
& RI WKLV VHFWLRQ DQG H[FHSW WKDW D SHUVRQ ZKR
DVVHPEOHVRULQVWDOOVVSHFLDOHTXLSPHQWRUDFFHVVRULHVIRU
KDQGLFDSSHGSHUVRQVDVGHILQHGLQVHFWLRQRI
WKH5HYLVHG&RGHXSRQDPRWRUYHKLFOHFKDVVLVVXSSOLHG
E\ D PDQXIDFWXUHU RU GLVWULEXWRU VKDOO QRW EH GHQLHG D
OLFHQVHSXUVXDQWWRGLYLVLRQ $ RIWKLVVHFWLRQ
6HFWLRQ & 1RWZLWKVWDQGLQJGLYLVLRQ $ RI
WKLVVHFWLRQWKHUHJLVWUDUVKDOOQRWGHQ\WKHDSSOLFDWLRQRI
DQ\SHUVRQDQGUHIXVHWRLVVXHDOLFHQVHLIWKHUHJLVWUDU
ILQGVWKDWWKHDSSOLFDQWLVHQJDJHGRUZLOOHQJDJHLQWKH
EXVLQHVVRIVHOOLQJDWUHWDLODQ\QHZPRWRUYHKLFOHVDQG
GHPRQVWUDWHVDOORIWKHIROORZLQJLQWKHIRUPSUHVFULEHG
E\WKHUHJLVWUDU
7KDW WKH DSSOLFDQW KDV SRVWHG D ERQG VXUHW\ RU
FHUWLILFDWHRIGHSRVLWZLWKWKHUHJLVWUDULQDQDPRXQWQRW
OHVVWKDQRQHKXQGUHGWKRXVDQGGROODUVIRUWKHSURWHFWLRQ
DQGEHQHILWRIWKHDSSOLFDQW VFXVWRPHUVH[FHSWWKDWDQHZ
PRWRUYHKLFOHGHDOHUZKRLVQRWH[FOXVLYHO\HQJDJHGLQ
WKHEXVLQHVVRIVHOOLQJUHPDQXIDFWXUHGYHKLFOHVVKDOOQRW
EH UHTXLUHG WR SRVW WKH ERQG VXUHW\ RU FHUWLILFDWH RI
GHSRVLW RWKHUZLVH UHTXLUHG E\ GLYLVLRQ & RI WKLV
VHFWLRQ
7KDW DW WKH WLPH RI WKH VDOH RI WKH YHKLFOH HDFK
FXVWRPHU RI WKH DSSOLFDQW ZLOO EH IXUQLVKHG ZLWK D
ELQGLQJ DJUHHPHQW HQVXULQJ WKDW WKH FXVWRPHU KDV WKH
ULJKWWRKDYHWKHYHKLFOHVHUYLFHGRUUHSDLUHGE\DQHZ
PRWRUYHKLFOHGHDOHUZKRLVOLFHQVHGWRVHOODQGVHUYLFH
YHKLFOHV RI WKH VDPH OLQHPDNH DV WKH FKDVVLV RI WKH
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

%
%HFDXVH2KLR¶VVWDWXWHLVSURWHFWLRQLVWZHPXVWQH[WDVN
ZKHWKHUWKHODZIDOOVZLWKLQWKDWQDUURZJURXSRIVXFKODZV
WKDWWKHVWDWHPLJKWVKRZWREHMXVWLILHGE\IDFWRUVXQUHODWHG
WRSURWHFWLRQLVP³:KHQGLVFULPLQDWLRQDJDLQVWFRPPHUFH
LVGHPRQVWUDWHGWKHEXUGHQIDOOVRQWKH6WDWHWRMXVWLI\LW
ERWKLQWHUPVRIWKHORFDOEHQHILWVIORZLQJIURPWKHVWDWXWH
DQG WKH XQDYDLODELOLW\ RI QRQGLVFULPLQDWRU\ DOWHUQDWLYHV
DGHTXDWHWRSUHVHUYHWKHORFDOLQWHUHVWVDWVWDNH´+XQW
86DWFLWLQJ'HDQ0LON&RY0DGLVRQ86
6HHDOVR3LNH86DW7KH6WDWHRI2KLR
GRHVQRWPHHWWKDWEXUGHQKHUHEHFDXVHLWSURYLGHVQRXOWHULRU
MXVWLILFDWLRQIRUWKHODZDVLGHIURPWKHSXWDWLYHEHQHILWVWR
FRQVXPHUV RI UHPDQXIDFWXUHG YHKLFOHV ZKLFK ZH KDYH
DOUHDG\UHMHFWHG
7KHUHDUHQRGRXEWVRPHOHJLWLPDWHVWDWHLQWHUHVWVVHUYHGE\
WKLV VWDWXWH ,Q SDUWLFXODU 2KLR ZDQWV WR HQVXUH WKDW LWV
FLWL]HQVDUHQRWWULFNHGLQWREX\LQJYHKLFOHVIRUZKLFKWKH\
FDQQRW JHW FRQYHQLHQW VHUYLFH $V 0F1HLOXV SRLQWV RXW
KRZHYHU WKDW LQWHUHVW LV DOUHDG\ PHW E\ QHXWUDO ODZV
PDQGDWLQJ WKDW ZDUUDQWLHV EH SURYLGHG WR FXVWRPHUV WKDW
GHDOHUVVHUYLFHYHKLFOHVRIWKHEUDQGWKH\VHOOZKHWKHURUQRW
WKH\ VROG WKH SDUWLFXODU YHKLFOH DQG E\ FRQWUDFWV EHWZHHQ
FKDVVLVPDQXIDFWXUHUVDQGWKHLUIUDQFKLVHHVPDQGDWLQJVXFK
VHUYLFH7KHVWDWHDGYHUWHGWRRWKHULQWHUHVWVVHUYHGE\WKH
VWDWXWHVXFKDVRQHVWRSVKRSSLQJIRUZDUUDQW\VHUYLFHRQDOO
SDUWV RI D YHKLFOH WKRXJK D ELQGLQJ DJUHHPHQW ZRXOG VWLOO
VHHPWRUHTXLUHDVWRSDW0F1HLOXVIRUVHUYLFHWRDGGRQVDQG
D VWRS DW WKH GHDOHU IRU FKDVVLV VHUYLFH 7KH VWDWH DOVR
PHQWLRQVSUHYHQWLQJDQXQVXVSHFWLQJFXVWRPHUIURPEX\LQJ
D YHKLFOH ZKRVH ZDUUDQW\ RQO\ FRYHUV FKDVVLV VHUYLFH LQ
&DOLIRUQLDEXWLWSRLQWVWRQRFKDVVLVPDQXIDFWXUHUIRUZKLFK
WKLVZRXOGEHWUXHDQGQRUHPDQXIDFWXUHUHQJDJLQJLQVXFKD
SUDFWLFH
*LYHQ WKH SUHVHQFH RI UHDVRQDEOH QRQGLVFULPLQDWRU\
DOWHUQDWLYHVDGHTXDWHWRVHUYHWKHOHJLWLPDWHORFDOLQWHUHVWVDW

-- 4 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
WKH LQWHUVWDWH PDUNHW QRW SDUWLFXODU LQWHUVWDWH ILUPV IURP
SURKLELWLYH RU EXUGHQVRPH UHJXODWLRQV¶´ WKLV LV QRW D
SHUPLVVLEOHFDVHRIDUHJXODWLRQWKDWLQFLGHQWDOO\FDXVHVDVKLIW
RI EXVLQHVV IURP DQ RXWRIVWDWH ILUP WR DQ LQVWDWH ILUP
UDWKHU WKLV LV DQ LPSHUPLVVLEOH FDVH RI D GLVFULPLQDWRU\
UHJXODWLRQ WKDW EXUGHQV LQWHUVWDWH FRPPHUFH &ORYHU /HDI
&UHDPHU\86DWTXRWLQJ([[RQ&RUS86DW
7KHIDFWWKDWWKHEXUGHQLVERUQHSUHGRPLQDQWO\E\
RQHRXWRIVWDWHILUPPDWWHUVQRWDWDOO
7KHUHLVDOVRHYLGHQFHWKDW2KLR¶VVWDWXWHZDVSDVVHGZLWK
DGLVFULPLQDWRU\SXUSRVHZKLFKFRXOGDOVRLQYDOLGDWHWKHODZ
6HHHJ3HWH¶V%UHZLQJ&RY:KLWHKHDG)6XSSG
:' 0R VWULNLQJ GRZQ D QHXWUDOO\
ZRUGHGEHHUODEHOLQJODZWKDWLQGLUHFWO\EXUGHQHGRXWRIVWDWH
EUHZHUVDQGZDVOREELHGIRUE\LQVWDWHEUHZLQJLQWHUHVWV
+XQWY:DVKLQJWRQ6WDWH$SSOH$GYHU&RPP¶Q86
,Q ERWK 3HWH¶V %UHZLQJ DQG +XQW WKH UHFRUG
LQGLFDWHGWKDWORFDOSURGXFHUVVRXJKWWKHOHJLVODWLRQDQGWKDW
FRQVXPHUV KDG QRW FRPSODLQHG DERXW DQ\ SUREOHPV WKH
UHJXODWLRQVRVWHQVLEO\FXUHG7KHVDPHLVWUXHLQWKLVFDVH
0F1HLOXV SRLQWV WR VHYHUDO OHWWHUV E\ LQVWDWH GHDOHUV DQG
UHPDQXIDFWXUHUV WR WKH 2KLR OHJLVODWXUH VHHNLQJ WKLV
OHJLVODWLRQ7KHVHGHDOHUVDGPLWWHGLQGHSRVLWLRQWHVWLPRQ\
WKDW FXVWRPHUV KDG QRW FRPSODLQHG DERXW VHUYLFLQJ
DUUDQJHPHQWV ZLWK RXWRIVWDWH UHPDQXIDFWXUHUV OLNH
0F1HLOXV7KLVHYLGHQFHRIGLVFULPLQDWRU\SXUSRVHVXUSDVVHV
WKDWGHHPHGLQVXIILFLHQWLQSDVWGRUPDQW&RPPHUFH&ODXVH
FDVHVLQWKLVFLUFXLW6HHHJ(DVWHUQ.HQWXFN\5HVRXUFHV
)G$VLQ+XQWKRZHYHU³ZHQHHGQRWDVFULEHDQ
HFRQRPLF SURWHFWLRQ PRWLYH WR WKH >2KLR@ /HJLVODWXUH WR
UHVROYH WKLV FDVH´ +XQW 86 DW 7KH VWDWXWH¶V
GLVFULPLQDWRU\LPSDFWRQLQWHUVWDWHFRPPHUFHLVPDQLIHVWDQG
LWFDQQRWEHXSKHOGHYHQLIWUXO\HQDFWHGWRSURWHFWFRQVXPHUV
RIUHPDQXIDFWXUHGYHKLFOHV
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

UHPDQXIDFWXUHGYHKLFOHSXUFKDVHGE\WKHFXVWRPHUDQG
ZKRVHVHUYLFHRUUHSDLUIDFLOLW\LVORFDWHGZLWKLQHLWKHU
WZHQW\ PLOHV RI WKH DSSOLFDQW V ORFDWLRQ DQG SODFH RI
EXVLQHVVRUWZHQW\PLOHVRIWKHFXVWRPHU VUHVLGHQFHRU
SODFHRIEXVLQHVV,IWKHUHLVQRVXFKQHZPRWRUYHKLFOH
GHDOHU ORFDWHG ZLWKLQ WZHQW\ PLOHV RI WKH DSSOLFDQW V
ORFDWLRQDQGSODFHRIEXVLQHVVRUWKHFXVWRPHU VUHVLGHQFH
RUSODFHRIEXVLQHVVWKHELQGLQJDJUHHPHQWIXUQLVKHGWR
WKHFXVWRPHUPD\EHZLWKWKHQHZPRWRUYHKLFOHGHDOHU
ZKR LV IUDQFKLVHG WR VHOO DQG VHUYLFH YHKLFOHV RI WKH
VDPH OLQHPDNH DV WKH FKDVVLV RI WKH UHPDQXIDFWXUHG
YHKLFOHSXUFKDVHGE\WKHFXVWRPHUDQGZKRVHVHUYLFHRU
UHSDLUIDFLOLW\LVORFDWHGQHDUHVWWRWKHUHPDQXIDFWXUHU V
ORFDWLRQDQGSODFHRIEXVLQHVVRUWKHFXVWRPHU VUHVLGHQFH
RUSODFHRIEXVLQHVV
7KDW DW WKH WLPH RI WKH VDOH RI WKH YHKLFOH HDFK
FXVWRPHU RI WKH DSSOLFDQW ZLOO EH IXUQLVKHG ZLWK D
ZDUUDQW\LVVXHGE\WKHUHPDQXIDFWXUHUIRUDWHUPRIDW
OHDVWRQH\HDU
7KDW WKH DSSOLFDQW SURYLGHV DQG PDLQWDLQV DW WKH
DSSOLFDQW VORFDWLRQDQGSODFHRIEXVLQHVVDSHUPDQHQW
IDFLOLW\ZLWKDOORIWKHIROORZLQJ
D $VKRZURRPZLWKVSDFHXQGHUURRIIRUWKHGLVSOD\RI
DWOHDVWRQHQHZPRWRUYHKLFOH
E $ VHUYLFH DQG SDUWV IDFLOLW\ IRU UHPDQXIDFWXUHG
YHKLFOHV
F )XOOWLPHVHUYLFHDQGSDUWVSHUVRQQHOZLWKWKHSURSHU
WUDLQLQJ DQG WHFKQLFDO H[SHUWLVH WR VHUYLFH WKH
UHPDQXIDFWXUHGYHKLFOHVVROGE\WKHDSSOLFDQW
2+,2 5(9 &2'( $11 †† ( $ DQG
& %DQNV%DOGZLQ
7KH 0F1HLOXV 7UXFN DQG 0DQXIDFWXULQJ &RPSDQ\ DQG
UHODWHGHQWLWLHV ³0F1HLOXV´ FKDOOHQJHWKHFRQVWLWXWLRQDOLW\
RIWKHVHSURYLVLRQVRQWKHLUIDFHDQGDVDSSOLHGWR0F1HLOXV
7KHFRPSDQ\ILOHGLWVLQLWLDOFRPSODLQWLQWKH8QLWHG6WDWHV
'LVWULFW &RXUW IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR RQ
1RYHPEHU DOOHJLQJ WKDW 2KLR¶V UHTXLUHPHQWV IRU

-- 5 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
OLFHQVLQJ RI YHKLFOH UHPDQXIDFWXUHUV DUH XQFRQVWLWXWLRQDO
0F1HLOXVZKLFKLVLQWKHEXVLQHVVRIEX\LQJWUXFNFKDVVLV
IURPYDULRXVPDQXIDFWXUHUVLQVWDOOLQJFRQFUHWHWUDQVLWPL[HUV
RUUHIXVHSDFNHUERGLHVRQWKHPDQGUHVHOOLQJWKHFRPSOHWH
XQLWV GLUHFWO\ WR FXVWRPHUV FODLPV WKDW WKH VWDWXWRU\
SURYLVLRQVHIIHFWLYHO\SURKLELWWKHFRPSDQ\IURPHQJDJLQJLQ
WKHVDOHRIWKHVHUHPDQXIDFWXUHGWUXFNVLQ2KLRDQGVXEMHFW
LWWRSRVVLEOHFULPLQDOSURVHFXWLRQWKHUH
7KLVFRXUWDIILUPHGWKHGLVWULFWFRXUW¶VGHQLDORI0F1HLOXV¶V
SULRUPRWLRQIRUDSUHOLPLQDU\LQMXQFWLRQLQD)HEUXDU\
RUGHU6HH0F1HLOXV7UXFNDQG0IJ,QFY6WDWHRI
2KLR1R:/ WK&LU)HE
0F1HLOXV WKHQ DPHQGHG LWV FRPSODLQW WR DGG WKH FRXQW\
SURVHFXWRUV DV GHIHQGDQWV 2Q 0D\ WKH GLVWULFW
FRXUW JUDQWHG SDUWLDO VXPPDU\ MXGJPHQW WR GHIHQGDQWV
ILQGLQJWKDW0F1HLOXVFRXOGQRWFKDOOHQJHWKHVWDWXWHXQGHU
WKH6KHUPDQ$QWLWUXVW$FWDQGWKDWWKHUHZDVQRWMXULVGLFWLRQ
WRDGGUHVVSHQGHQWVWDWHODZFODLPV)ROORZLQJDQ$XJXVW
EHQFKWULDOWKHGLVWULFWFRXUWJUDQWHGMXGJPHQWLQIDYRU
RIGHIHQGDQWVRQDOOUHPDLQLQJLVVXHV2QDSSHDO0F1HLOXV
VHHNV HLWKHU D GHFODUDWRU\ MXGJPHQW WKDW LWV ZDUUDQWLHV WR
FXVWRPHUVDUHELQGLQJDJUHHPHQWVWKDWSXWLWLQFRPSOLDQFH
ZLWKDIDLUFRQVWUXFWLRQRIWKHVWDWXWHGHYRLGRIFRQVWLWXWLRQDO
LQILUPLWLHVRUDSHUPDQHQWLQMXQFWLRQDJDLQVWDQ\XQDYRLGDEO\
XQFRQVWLWXWLRQDOSRUWLRQVRIWKHVWDWXWH6HH$VKZDQGHUY
79$86 %UDQGHLV-FRQFXUULQJ
,
:KHQ 2%09 VHQW QRWLFH WR GHDOHUV RI UHPDQXIDFWXUHG
YHKLFOHVWKDWWKH\KDGWRFRPSO\ZLWKWKHODZDWLVVXHKHUH
0F1HLOXVVRXJKWLQWHUSUHWLYHJXLGDQFH2%09LQWHUSUHWHG
WKH VWDWXWH WR UHTXLUH 0F1HLOXV WR HQWHU LQWR ³ELQGLQJ
DJUHHPHQWV´ZLWKIUDQFKLVHGGHDOHUVIRUHDFKEUDQGRIFKDVVLV
VROG E\ 0F1HLOXV ORFDWHG ZLWKLQ PLOHV RI 0F1HLOXV¶V
*DKDQQD 2KLR EUDQFK RIILFH RU VRPHZKDW LPSUDFWLFDOO\
ZLWK VXFK GHDOHUV ZLWKLQ PLOHV RI HYHU\ RQH RI LWV
FXVWRPHUV WR UHPDLQ OLFHQVHG ,Q DQ HIIRUW WR FRPSO\
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

IURP VLJQLQJ ELQGLQJ DJUHHPHQWV ZLWK FRPSDQLHV OLNH
0F1HLOXVEHFDXVHVXFKFRPSDQLHVGRQRWEX\WKHLUFKDVVLV
IURP2KLRGHDOHUV,QFRQWUDVWLQVWDWHUHPDQXIDFWXUHUVZKR
GREX\WKHLUFKDVVLVIURPWKRVHGHDOHUVZLOOKDYHQRSUREOHP
VDWLVI\LQJWKHOLFHQVHUHTXLUHPHQWV,QVWDWHUHPDQXIDFWXUHUV
PLJKWZDQWWRSXUFKDVHFKDVVLVWKDWDUHPDQXIDFWXUHGRXWVLGH
WKHVWDWHEXWWKHUHLVOLWWOHOLNHOLKRRGWKDWWKH\ZLOOZDQWWR
DFTXLUHFKDVVLVIURPRXWRIVWDWHGHDOHUV0F1HLOXVRQWKH
RWKHUKDQGPXVWHLWKHUVWDUWSXUFKDVLQJFKDVVLVIURPLQVWDWH
GHDOHUVRUHOVHVWRSGRLQJEXVLQHVVLQ2KLR(LWKHUZD\WKH
LQVWDWHGHDOHUVDQGUHPDQXIDFWXUHUVEHQHILWXQGHUWKHVWDWXWH
WRWKHH[FOXVLRQRIRXWRIVWDWHUHPDQXIDFWXUHUVDQGWRWKH
GHWULPHQWRILQWHUVWDWHFRPPHUFH
7KH VWDWXWHDWLVVXHKHUHGHILQLWHO\WKUHDWHQVWRVORZWKH
IORZRIRXWRIVWDWHUHPDQXIDFWXUHGYHKLFOHVLQWR2KLRDQ
HIIHFWWKDWGLVWLQJXLVKHVWKHVWDWXWHIURPRWKHUVWKDWKDYHEHHQ
XSKHOGXQGHUGRUPDQW&RPPHUFH&ODXVHDQDO\VLV6HHHJ
([[RQ&RUSY*RYHUQRURI0DU\ODQG86
XSKROGLQJ D 0DU\ODQG VWDWXWH SURYLGLQJ WKDW SHWUROHXP
SURGXFW SURGXFHUVUHILQHUV FDQQRW RSHUDWH UHWDLO VHUYLFH
VWDWLRQVLQWKHVWDWHQRWLQJWKDWWKHVWDWXWHKDV³QRLPSDFWRQ
WKHUHODWLYHSURSRUWLRQVRIORFDODQGRXWRIVWDWHJRRGVVROGLQ
0DU\ODQG´ &ORYHU /HDI &UHDPHU\ 86 DW
XSKROGLQJ D VWDWH ODZ SURKLELWLQJ WKH VDOH RI PLON LQ
GLVSRVDEOH SODVWLF FRQWDLQHUV EXW DOORZLQJ LWV VDOH LQ
GLVSRVDEOHSDSHUFDUWRQVLQSDUWEHFDXVH³WKHUHLVQRUHDVRQ
WRVXVSHFWWKDWWKHJDLQHUVZLOOEH0LQQHVRWDILUPVRUWKH
ORVHUVRXWRIVWDWHILUPV´
6WDWXWHV FDQ EH QHJDWHG XQGHU WKH GRUPDQW &RPPHUFH
&ODXVH HYHQ ZKHUH WKHLU HIIHFW LV SURGXFHG LQGLUHFWO\
KRZHYHUWKHGHQLDORIDOLFHQVHLQWKLVFDVHGLUHFWO\EXUGHQV
WKHLQWHUVWDWHPDUNHW&I%XFNY.X\NHQGDOO86
KROGLQJWKDWWKHGHQLDOE\WKH6WDWHRI:DVKLQJWRQRI
DFHUWLILFDWHQHHGHGWRUXQDQDXWRVWDJHOLQHEHWZHHQ3RUWODQG
DQG6HDWWOHYLRODWHGWKHFRPPHUFHFODXVHEHFDXVHWKHGHQLDO
QRW RQO\ EXUGHQHG LQWHUVWDWH FRPPHUFH EXW REVWUXFWHG LW
FRPSOHWHO\ $QGDOWKRXJK³WKH&RPPHUFH&ODXVHμSURWHFWV

-- 6 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
KRZHYHUDVWDWXWHKDVRQO\LQGLUHFWHIIHFWVRQLQWHUVWDWH
FRPPHUFH DQG UHJXODWHV HYHQKDQGHGO\ >WKH 6XSUHPH
&RXUW KDV@ H[DPLQHG ZKHWKHU WKH 6WDWH¶V LQWHUHVW LV
OHJLWLPDWH DQG ZKHWKHU WKH EXUGHQ RQ LQWHUVWDWH
FRPPHUFH FOHDUO\ H[FHHGV WKH ORFDO EHQHILWV 3LNH Y
%UXFH&KXUFK,QF86 ,QHLWKHU
VLWXDWLRQWKHFULWLFDOFRQVLGHUDWLRQLVWKHRYHUDOOHIIHFWRI
WKH VWDWXWH RQ ERWK ORFDO DQG LQWHUVWDWH DFWLYLW\ 6HH
5D\PRQG0RWRU7UDQVSRUWDWLRQ,QFY5LFH86

)HUQGDOH/DEV,QFY&DYHQGLVK)G WK
&LU EUDFNHWV LQ RULJLQDO TXRWLQJ %URZQ)RUPDQ
'LVWLOOHUV&RUS Y1HZ<RUN6WDWH/LTXRU$XWK86

$
:HPXVWILUVWDVNZKHWKHU2KLR¶VVWDWXWHLVDSURWHFWLRQLVW
PHDVXUH ,I 2KLR¶V VWDWXWH GLUHFWO\ GLVFULPLQDWHV DJDLQVW
LQWHUVWDWHFRPPHUFHLQIDYRURI2KLREXVLQHVVLWLV³SHUVH
LQYDOLGVDYHLQDQDUURZFODVVRIFDVHVLQZKLFKWKH>VWDWH@
FDQGHPRQVWUDWHXQGHUULJRURXVVFUXWLQ\WKDWLWKDVQRRWKHU
PHDQVWRDGYDQFHDOHJLWLPDWHORFDOLQWHUHVW´& $&DUERQH
,QF Y 7RZQ RI &ODUNVWRZQ 86
6KRXOGZHFRQFOXGHWKDW2KLR¶VVWDWXWHGLUHFWO\LQHIIHFWRU
LQSXUSRVHWUHDWVLQVWDWHDQGRXWRIVWDWHLQWHUHVWVGLIIHUHQWO\
WKHGLVSRVLWLYHLVVXHZLOOEHFRPHZKHWKHUWKHVWDWXWHVHUYHVD
OHJLWLPDWHVWDWHLQWHUHVWWKDWFDQQRWRWKHUZLVHEHPHW
2Q LWV IDFH 2KLR¶V VWDWXWH LV QHXWUDO LQ DSSOLFDWLRQ
:KHWKHUDUHPDQXIDFWXUHULVORFDWHGZLWKLQWKHVWDWHRI2KLR
RURXWVLGHRILWLWPXVWFRPSO\ZLWKWKHVWDWXWH¶VUHTXLUHPHQWV
WRREWDLQDOLFHQVH/RRNHGDWPRUHFORVHO\KRZHYHUWKH
VWDWXWHKDVDGLVFULPLQDWRU\HIIHFW$V0F1HLOXVXUJHVWKH
ELQGLQJDJUHHPHQWVWKDWWKHVWDWXWHUHTXLUHVLWWRREWDLQIURP
ORFDO GHDOHUV DUH PXFK KDUGHU IRU DQ RXWRIVWDWH
UHPDQXIDFWXUHU WR REWDLQ $V WKH VWDWXWH¶V GUDIWHUV VXUHO\
UHFRJQL]HGLQVWDWHWUXFNFKDVVLVGHDOHUVVWDQGWRJDLQQRWKLQJ
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

0F1HLOXVFRQWDFWHGFKDVVLVGHDOHUVWKURXJKRXW2KLRVHHNLQJ
WKHPDQGDWHG³ELQGLQJDJUHHPHQWV´WRVHUYLFHWUXFNFKDVVLV
RQ WKH YHKLFOHV LW VROG EXW WKH YDVW PDMRULW\ RI
GHDOHUV²LQFOXGLQJ DOO RI WKRVH ZLWKLQ PLOHV RI WKH
*DKDQQD RIILFH²UHIXVHG 2QH HYHQ UHWXUQHG 0F1HLOXV¶V
FHUWLILHG OHWWHU UHTXHVWLQJ D ELQGLQJ DJUHHPHQW ZLWK WKH
LQVFULSWLRQ³*RWR+HOO´
0F1HLOXV QRQHWKHOHVV SXUSRUWV WR EH LQ FRPSOLDQFH
0F1HLOXV¶V UHPDQXIDFWXUHG YHKLFOH FXVWRPHUV UHFHLYH D
ZDUUDQW\IRUWKHFKDVVLVIURPWKHWUXFNFKDVVLVPDQXIDFWXUHU
DZDUUDQW\IRUWKHDGGRQFRPSRQHQWIURP0F1HLOXVDQG
IUHTXHQWO\ DQ DGGLWLRQDO ZDUUDQW\ IRU WKH HQJLQH IURP LWV
PDQXIDFWXUHU 0F1HLOXV LV QRW DXWKRUL]HG WR VHUYLFH WKH
FKDVVLV DQG GRLQJ VR FRXOG YRLG WKH ZDUUDQW\ +HQFH
0F1HLOXV¶VFXVWRPHUVPXVWREWDLQFKDVVLVVHUYLFHDVQHHGHG
IURP2KLRFKDVVLVGHDOHUVZKRVHIUDQFKLVHDJUHHPHQWVZLWK
WKH FKDVVLV PDQXIDFWXUHUV UHTXLUH WKHP WR SURYLGH VXFK
VHUYLFHDQGZKLFK2KLRODZDOUHDG\PDQGDWHV6HH2+,2
5(9 &2'(†0F1HLOXVDVVHUWVWKDWWKHZDUUDQWLHV
LW JLYHV FXVWRPHUV FUHDWH VHUYLFH REOLJDWLRQV WKDW FRPELQH
ZLWKWKHFRQWUDFWVEHWZHHQFKDVVLVPDQXIDFWXUHUVDQGGHDOHUV
DOVR FUHDWLQJ VHUYLFH REOLJDWLRQV DQG VWDWH ODZV UHTXLULQJ
IUDQFKLVHHV WR VHUYLFH DQ\ FKDVVLV RI WKH NLQG WKH\ VHOO WR
FRQVWLWXWH³ELQGLQJDJUHHPHQWV´WKDWVDWLVI\WKHVWDWXWH
2%09DSSHDUVWRLQWHUSUHWWKHVWDWXWHWRUHTXLUHELQGLQJ
DJUHHPHQWVEHWZHHQ0F1HLOXVDQGFKDVVLVGHDOHUVWKRXJKLW
KHGJHV EHIRUH WKLV FRXUW RQ ZKHWKHU LW ZRXOG HQIRUFH WKH
VWDWXWH LQ VXFK D PDQQHU DQG QRWHV WKDW LW KDV UHQHZHG
0F1HLOXV¶VOLFHQVHWKURXJKRXWWKHFRXUVHRIWKLVOLWLJDWLRQ
0F1HLOXVFRPSODLQVWKDW2%09¶VLQWHUSUHWDWLRQDOORZV2KLR
FKDVVLV GHDOHUV ZLWK ZKRP LW FRPSHWHV IRU EXVLQHVV E\
LPSRUWLQJFKDVVLVIURPRXWRIVWDWH WRER\FRWW0F1HLOXVDQG
SUHYHQWLWIURPGRLQJEXVLQHVVLQ2KLR,QFRQWUDVWLQVWDWH
WUXFNUHPDQXIDFWXUHUVJHQHUDOO\EX\WKHLUFKDVVLVIURPGHDOHUV
LQWKHVWDWHDQGDUHWKXVDEOHWRVHFXUHWKHQHFHVVDU\ELQGLQJ
DJUHHPHQWV 7KH VWDWH UHVSRQGV WKDW WKH VWDWXWH GRHV QRW
GLVFULPLQDWH DJDLQVW RXWRIVWDWH FRPSDQLHV VR PXFK DV

-- 7 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
DJDLQVWFRPSDQLHV RIZKLFK0F1HLOXVLVDSSDUHQWO\WKHVROH
H[DPSOH ZLWK 0F1HLOXV¶V SDUWLFXODU EXVLQHVV PRGHO DQG
DUJXHVWKDWWKHVWDWXWHPHUHO\HQVXUHVWKDW2KLRFRQVXPHUV
ZLOO QRW HQG XS ZLWK YHKLFOHV WKDW FDQQRW EH VHUYLFHG
FRQYHQLHQWO\LQWKHVWDWH0F1HLOXVUHSOLHVWKDWLWVFXVWRPHUV
FDQ DOUHDG\ KDYH WKHLU YHKLFOHV VHUYLFHG FRQYHQLHQWO\ DQG
VXJJHVWVWKDWWKHUHGXQGDQWVWDWXWRU\VFKHPHZDVSDVVHGZLWK
DQLPSHUPLVVLEOHSURWHFWLRQLVWLQWHQWWRGLVDGYDQWDJHRXWRI
VWDWHUHPDQXIDFWXUHUVRUIRUFHWKHP RUWKHLUFXVWRPHUV WR
SXUFKDVHFKDVVLVPDGHLQ2KLR(LWKHUZD\0F1HLOXVDOOHJHV
WKDW WKLV DQWLFRPSHWLWLYH VWDWH RI DIIDLUV YLRODWHV WKH
&RQVWLWXWLRQDQGIHGHUDODQWLWUXVWODZ
0F1HLOXVDVVHUWVWKDWWKHGLVSXWHGSURYLVLRQVRIWKHVWDWXWH
YLRODWHWKH&RQVWLWXWLRQLQDQXPEHURIZD\V)LUVW0F1HLOXV
DUJXHVWKDWWKHVWDWXWHYLRODWHVSURFHGXUDOGXHSURFHVVXQGHU
WKH )RXUWHHQWK $PHQGPHQW EHFDXVH WKH 2%09 IDLOHG WR
FRPSO\ ZLWK VWDWHPDQGDWHG UXOHPDNLQJ SURFHGXUHV LQ
FUDIWLQJLWVLQWHUSUHWDWLRQRIWKHVWDWXWH6HFRQG0F1HLOXV
DUJXHVWKDWWKHVWDWXWHLVYRLGIRUYDJXHQHVVIRUSURYLGLQJ
LQDGHTXDWH QRWLFH RI LWV UHTXLUHPHQWV DQG IRU IDLOLQJ WR
SUHYHQWRIILFLDODUELWUDULQHVVLQYLRODWLRQRIWKH'XH3URFHVV
&ODXVH7KLUG0F1HLOXVFRQWHQGVWKDWWKHPHDVXUHIXUWKHU
YLRODWHV VXEVWDQWLYH GXH SURFHVV E\ LQWHUIHULQJ ZLWK WKH
FRPSDQ\¶V ULJKW WR SXUVXH D ODZIXO EXVLQHVV )RXUWK
0F1HLOXVFODLPVWKDWWKHVWDWXWHYLRODWHVWKH(TXDO3URWHFWLRQ
&ODXVHE\H[FHVVLYHO\EXUGHQLQJRXWRIVWDWHUHPDQXIDFWXUHUV
1H[W0F1HLOXVDUJXHVWKDWWKHVWDWXWHLVSUHHPSWHGE\WKH
6KHUPDQ$QWLWUXVW$FW$QGODVWEXWQRWLQWKLVFDVHOHDVW
0F1HLOXV FRQWHQGV WKDW WKH VWDWXWH UXQV DIRXO RI WKH
&RQVWLWXWLRQ¶VGRUPDQW RUQHJDWLYH &RPPHUFH&ODXVH
%HFDXVHZHDJUHHWKDW2+,2 5(9 &2'( †† (
$ DQG & GLVFULPLQDWRULO\ DIIHFW
LQWHUVWDWHFRPPHUFHLQYLRODWLRQRIWKHGRUPDQW&RPPHUFH
&ODXVHZHZLOOUHYHUVHWKHMXGJPHQWEHORZRQWKRVHJURXQGV
DQGUHPDQGWKHFDVHWRWKHGLVWULFWFRXUWZLWKLQVWUXFWLRQVWR
JUDQWDSHUPDQHQWLQMXQFWLRQDJDLQVWWKHRIIHQGLQJSRUWLRQVRI
WKHVWDWXWH
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

DJDLQVWWKH6WDWHRI2KLR$VWKHGLVWULFWFRXUWKHOG2KLR¶V
VWDWXWHGRHVQRW³PDQGDWHFRQGXFWWKDWQHFHVVDULO\FRQVWLWXWHV
DYLRODWLRQRIWKH6KHUPDQ$FWLQDOOFDVHVDQGWKHUHLVQR
SUHVVXUHRQDQ\SDUW\WRYLRODWHWKH6KHUPDQ$FWLQRUGHUWR
FRPSO\ZLWK>WKH@VWDWXWHV´,QVKRUW2KLR¶VVWDWXWHPD\ZHOO
KDYH DQWLFRPSHWLWLYH HIIHFWV ,W QR GRXEW IDFLOLWDWHV HLWKHU
FRRUGLQDWHG DFWLRQ LI VXFK WKHUH EH RU HOVH XQFRRUGLQDWHG
WKRXJK SHUKDSV FRQVFLRXV SDUDOOHO DFWLRQ E\ GHDOHUV LQ
UHIXVLQJWRHQWHUELQGLQJDJUHHPHQWVEXWWKHVWDWXWHQHLWKHU
DXWKRUL]HV QRU UHTXLUHV WKDW GHDOHUV HQJDJH LQ EHKDYLRU
SURVFULEHG E\ WKH IHGHUDO DQWLWUXVW ODZV 7KXV LW LV WKH
EHKDYLRURIWKHGHDOHUVRUWKHGHDOHUDVVRFLDWLRQDQGQRWRI
WKHVWDWHWKDW0F1HLOXVPXVWDWWDFNLILWLVWRSURFHHGXQGHU
WKHDQWLWUXVWODZV
9,,
)LQDOO\ 0F1HLOXV DVVHUWV WKDW 2KLR¶V VWDWXWH LV YRLG
EHFDXVH LW LPSHUPLVVLEO\ UHJXODWHV LQWHUVWDWH FRPPHUFH
:LWKRXWHYHUTXLWHVD\LQJVR0F1HLOXVLQYRNHVWKHGRUPDQW
&RPPHUFH &ODXVH LQ FKDOOHQJLQJ WKH VWDWXWH¶V
FRQVWLWXWLRQDOLW\³7KLVμQHJDWLYH¶DVSHFWRIWKH&RPPHUFH
&ODXVHSURKLELWVHFRQRPLFSURWHFWLRQLVP²WKDWLVUHJXODWRU\
PHDVXUHVGHVLJQHGWREHQHILWLQVWDWHHFRQRPLFLQWHUHVWVE\
EXUGHQLQJRXWRIVWDWHFRPSHWLWRUV´:\RPLQJY2NODKRPD
86 TXRWLQJ 1HZ (QHUJ\ &R RI
,QGLDQDY/LPEDFK86 8QGHU
GRUPDQW&RPPHUFH&ODXVHDQDO\VLVFRXUWVWDNHDWZRWLHUHG
DSSURDFKLQGHWHUPLQLQJWKHSHUPLVVLELOLW\RIVWDWHHFRQRPLF
UHJXODWLRQVQRWDXWKRUL]HGE\&RQJUHVV
:KHQDVWDWHVWDWXWHGLUHFWO\UHJXODWHVRUGLVFULPLQDWHV
DJDLQVWLQWHUVWDWHFRPPHUFHRUZKHQLWVHIIHFWLVWRIDYRU
LQVWDWH HFRQRPLF LQWHUHVWV RYHU RXWRIVWDWH LQWHUHVWV
>WKH 6XSUHPH &RXUW KDV@ JHQHUDOO\ VWUXFN GRZQ WKH
VWDWXWHZLWKRXWIXUWKHULQTXLU\6HHHJ3KLODGHOSKLDY
1HZ-HUVH\86 6KDIHUY)DUPHUV>¶@
*UDLQ&R86 (GJDUY0,7(&RUS
86 SOXUDOLW\RSLQLRQ :KHQ

-- 8 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
RI D OLFHQVH DV ZDV WKH FDVH LQ 7RSFR )XUWKHUPRUH WKH
LVVXDQFHRIDOLFHQVHIURPDVWDWHDXWKRULW\LVQRWWKHVDPHDV
WKHLVVXDQFHRIRQHIURPDSULYDWHDVVRFLDWLRQ
0F1HLOXVQH[WFRQWHQGVWKDWWKHVWDWXWHRIIHQGVWKH$FWE\
DXWKRUL]LQJDER\FRWWDJDLQVW0F1HLOXVE\LQVWDWHGHDOHUV
*URXS ER\FRWWV E\ WUDGHUV DJDLQVW RWKHU WUDGHUV DUH SHU VH
LOOHJDOXQGHUWKH6KHUPDQ$QWLWUXVW$FW6HH&207(/,QF
Y'X.DQH&RUS)G WK&LU 7KDW
VDLGWKHVWDWXWHGRHVQRWH[SOLFLWO\DXWKRUL]HDER\FRWW1RU
LVWKHVWDWH¶VSDVVLQJRIWKHVWDWXWHWKHNLQGRIEHKDYLRUWR
ZKLFKWKHER\FRWWFDVHVVSHDN5DWKHUWKH\GLVFXVVFRQFHUWHG
DFWLRQV E\ WUDGH DVVRFLDWLRQV 0F1HLOXV PD\ ZHOO IDFH D
UHIXVDOWRGHDOE\LQGLYLGXDOGHDOHUVEXWQRFKDVVLVGHDOHURU
DVVRFLDWLRQRIGHDOHUVLVSDUW\WRWKLVVXLW,WLVWUXHWKDWWKH
VWDWXWH FUHDWHV WKH JRRG WKH ³ELQGLQJ DJUHHPHQW´ WKDW
0F1HLOXVZRXOGRWKHUZLVHKDYHQRUHDVRQWRDFTXLUHIURPWKH
FKDVVLVGHDOHUVEXWFUHDWLRQRIWKDWJRRGGRHVQRWPDQGDWHRU
DXWKRUL]HDUHIXVDOWRGHDOLQWKDWJRRG
6LPLODUO\ 0F1HLOXV¶V DUJXPHQWV DERXW ³VWDWH DFWLRQ´
LPPXQLW\DUHPLVSODFHG0F1HLOXVDUJXHVWKDWDVWDWHODZ
FDQQRW EH WKH EDVLV IRU DQWLWUXVW LPPXQLW\ 6HH 1RUWKHUQ
6HFV&RY8QLWHG6WDWHV86 7KDWLVWUXH
VRIDUDVLWJRHVEXW0F1HLOXVFRPSOHWHO\PLVVHVWKHLPSRUW
RI)HGHUDO7UDGH&RPPLVVLRQY7LFRU7LWOH,QVXUDQFH&R
86 7LFRUKHOGWKDWDVWDWHODZFRXOGQRW
H[FXVH D SULYDWH HQWLW\¶V LOOHJDO DQWLFRPSHWLWLYH EHKDYLRU
DEVHQWDFWLYHUHJXODWRU\VXSHUYLVLRQ7LFRUGRHVQRWDGGUHVV
WKH OHJDOLW\ RI D VWDWH ODZ WKDW LWVHOI IRVWHUV
DQWLFRPSHWLWLYHQHVV6XFKODZVDUHJHQHUDOO\JRYHUQHGE\WKH
GRFWULQHRI3DUNHUY%URZQ86 +RZHYHU
ZHQHHGQRWGHOYHLQWRWKHLQWULFDFLHVRIWKDWGRFWULQHKHUH
EHFDXVHLWGRHVQRWDSSO\ZKHUHWKHVWDWHGRHVQRWDXWKRUL]H
RUDFWLYHO\VXSHUYLVHWKHDQWLFRPSHWLWLYHVFKHPHZKLFKZH
KROG2KLRGRHVQRW6HH7LFRU86DW
0F1HLOXV¶VDUJXPHQWVPLJKWKDYHPHULWLIEURXJKWDJDLQVW
WKH 2KLR GHDOHUV EXW WKH\ PDNH QR VHQVH DW DOO LQ D VXLW
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

,,
7KHFDVHEHORZZDVGHFLGHGLQSDUWRQVXPPDU\MXGJPHQW
DQGLQSDUWDIWHUDWULDO)RUWKDWSDUWRIWKHFDVHGHFLGHGRQ
VXPPDU\MXGJPHQWWKLVFRXUWUHYLHZVWKHMXGJPHQWGHQRYR
EXWLWUHYLHZVWKHGLVWULFWFRXUW¶VILQGLQJVRIIDFWDWWULDOIRU
FOHDU HUURU 6HH *UDQG 7UDYHUVH %DQG RI 2WWDZD DQG
&KLSSHZD ,QGLDQV Y 'LUHFWRU 0LFK 'HS¶W RI 1DWXUDO
5HVRXUFHV)G WK&LU FLWLQJ5XVVRY
&LW\RI&LQFLQQDWL)G WK&LU
DQG(DVWHUQ.HQWXFN\5HVRXUFHVY)LVFDO&RXUWRI0DJRIILQ
&RXQW\ )G WK &LU +RZHYHU
ORZHU FRXUW ILQGLQJV RI XOWLPDWH IDFWV EDVHG XSRQ WKH
DSSOLFDWLRQRIOHJDOSULQFLSOHVWRVXEVLGLDU\IDFWVDUHVXEMHFW
WRGHQRYRUHYLHZ6HH:KLWQH\Y%URZQ)G
WK&LU 7D\ORUDQG*DVNLQ,QFY&KULV&UDIW
,QGXV)G WK&LU ,QWKLVFDVHWKH
GLVWULFWFRXUW¶VGHFLVLRQFRQVLVWVDOPRVWHQWLUHO\RITXHVWLRQV
RIODZ2QHQRWDEOHH[FHSWLRQLVWKHILQGLQJWKDWWKHVWDWHG
SXUSRVHRIWKHVWDWXWHDWLVVXHZDVDSURSHUSXEOLFSXUSRVH
ZKLFKLVDPL[HGTXHVWLRQRIIDFWDQGODZDQGVWLOOVXEMHFWWR
GHQRYRUHYLHZ FRQWUDU\WRWKHYLHZRIERWKVLGHVWKDWPL[HG
TXHVWLRQV RI IDFW DQG ODZ DUH UHYLHZHG IRU DEXVH RI
GLVFUHWLRQ 6HH+RZDUGY*ULQDJH)G
WK&LU FLWDWLRQVRPLWWHG
,,,
%HIRUHZHDQDO\]HWKHVXEVWDQFHRI0F1HLOXV¶VFODLPVD
IHZ SUHOLPLQDU\ SURFHGXUDO LVVXHV PXVW EH DGGUHVVHG
6SHFLILFDOO\ZHPXVWGHFLGHZKHWKHUWKHGLVWULFWFRXUWHUUHG
LQ GLVPLVVLQJ 2KLR¶V $WWRUQH\ *HQHUDO DQG FHUWDLQ FRXQW\
SURVHFXWRUV IURP WKH FDVH SXUVXDQW WR WKH ([ SDUWH <RXQJ
GRFWULQH :H EHOLHYH LW GLG $Q DFWLRQ VHHNLQJ WR HQMRLQ
HQIRUFHPHQWRIDQDOOHJHGO\XQFRQVWLWXWLRQDOVWDWXWHWKURXJK
DVXLWDJDLQVWVWDWHRIILFLDOVFKDUJHGZLWKLWVHQIRUFHPHQWLV
QRWEDUUHGE\WKH(OHYHQWK$PHQGPHQW6HH([SDUWH<RXQJ
86 =LHODVNRY6WDWHRI2KLR)G
WK &LU :KHUH WKHUH LV DQ LPPLQHQW WKUHDW RI

-- 9 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
HQIRUFHPHQWWKH$WWRUQH\*HQHUDODQGDOOFRXQW\DWWRUQH\V
DUH SURSHU GHIHQGDQWV 8QGHU ([ SDUWH <RXQJ 0F1HLOXV
ZRXOGEHDEOHWRVHHNLQMXQFWLYHUHOLHIDJDLQVWDOORIWKHP
7KH$WWRUQH\*HQHUDODQG&RPPLVVLRQHURIWKH2%09VHHN
WRKDYHWKHLUGLVPLVVDOXSKHOGEHFDXVHWKH\FODLPQRWWREH
HPSRZHUHGWRHQIRUFHWKHFULPLQDOFRPSRQHQWVRIWKHVWDWXWH
7KH2%09KRZHYHUKDVWKUHDWHQHGWRZLWKGUDZ0F1HLOXV¶V
OLFHQVH DQG WKH $WWRUQH\ *HQHUDO KHOSV HQIRUFH WKH
QRQFULPLQDOSRUWLRQVRIWKHVWDWXWH([SDUWH<RXQJVXLWVPD\
EHFRPPHQFHGWRHQMRLQFLYLORUFULPLQDODFWLRQVVRERWKWKH
$WWRUQH\*HQHUDODQGWKH2%09&RPPLVVLRQHUDUHSURSHU
GHIHQGDQWV
7KHSURVHFXWRUVLQFRXQWLHVZKHUH0F1HLOXVKDVQHYHUVROG
DYHKLFOHVHHNWRKDYHWKHLUGLVPLVVDOXSKHOGEHFDXVHWKHUHLV
QR FXUUHQW ULVN WKDW WKH\ FRXOG SURVHFXWH 0F1HLOXV 7KH
FRXQW\SURVHFXWRUVZKHUH0F1HLOXVKDVVROGYHKLFOHVVHHNWR
KDYHWKHGLVWULFWFRXUW¶VDVVHUWLRQRIMXULVGLFWLRQRYHUWKHP
UHYHUVHG DUJXLQJ WKDW EHFDXVH WKH\ KDYH QRW ³WKUHDWHQHG´
SURVHFXWLRQ LW FDQQRW EH LPPLQHQW 7KH ([ SDUWH <RXQJ
GRFWULQH GRHV QRW DSSO\ ZKHQ WKH GHIHQGDQW RIILFLDO KDV
QHLWKHU HQIRUFHG QRU WKUHDWHQHG WR HQIRUFH WKH VWDWXWH
FKDOOHQJHGDVXQFRQVWLWXWLRQDO6HH&KLOGUHQ¶V+HDOWKFDUH,V
$/HJDO'XW\,QFY'HWHUV)G WK&LU
,Q WKLV FDVH WKH 2%09 KDV WKUHDWHQHG WR UHYRNH
0F1HLOXV¶VOLFHQVHVRWKHRIILFLDOVFKDUJHGZLWKHQIRUFLQJ
WKH VWDWXWH DUH SURSHUO\ QDPHG GHIHQGDQWV 6RPH FRXQW\
SURVHFXWRUVDUHQHFHVVDU\DVGHIHQGDQWSDUWLHVLQDQDFWLRQ
EURXJKW XQGHU ([ SDUWH <RXQJ FKDOOHQJLQJ WKH
FRQVWLWXWLRQDOLW\RIDQ2KLRFULPLQDOVWDWXWH6HH:RPHQ¶V
0HG3URI¶O&RUSY9RLQRYLFK)G WK
&LU %HFDXVHVRPHEXWQRWDOOFRXQW\SURVHFXWRUVDUH
QHFHVVDU\GHIHQGDQWVWRPDLQWDLQWKLVDFWLRQWKHGLVWULFWFRXUW
SURSHUO\GLVPLVVHGWKHFRXQW\SURVHFXWRUVLQWKHFRXQWLHV
ZKHUH 0F1HLOXV KDV QHYHU VROG YHKLFOHV DQG LW SURSHUO\
UHWDLQHGMXULVGLFWLRQRYHUWKHRWKHUV
$VHFRQGSUHOLPLQDU\TXHVWLRQZHPXVWGHFLGHLVZKHWKHU
WKH GLVWULFW FRXUW HUUHG LQ UHIXVLQJ WR FRQVLGHU 0F1HLOXV¶V
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

&RUS Y )DXONQHU 86 8QGHU WKLV
UDWKHUOD[VWDQGDUG2KLR¶VEHOWDQGVXVSHQGHUVDSSURDFKWR
UHJXODWLRQSDVVHVPXVWHUEHFDXVHWKHUHGXQGDQWQDWXUHRIWKH
VWDWXWH GRHV QRW SUHFOXGH LWV EHLQJ UDWLRQDOO\ UHODWHG WR
SURWHFWLQJ2KLRFRQVXPHUVRIUHPDQXIDFWXUHGYHKLFOHV,Q
VKRUW WKH SODXVLEOH DOEHLW GXELRXV H[SODQDWLRQV JLYHQ E\
2KLRIRUWKHVWDWXWHVXIILFHWRHVWDEOLVKDUDWLRQDOUHODWLRQWR
D OHJLWLPDWH VWDWH HQG ZKLFK LV DOO WKDW HTXDO SURWHFWLRQ
UHTXLUHV
9,
0F1HLOXV QH[W VXJJHVWV WKDW WKH VWDWXWH YLRODWHV WKH
6KHUPDQ$QWLWUXVW$FWLQDYDULHW\RIZD\VDQGFODLPVWKDW
$FW SUHHPSWV WKH VWDWH VWDWXWH¶V ³ELQGLQJ DJUHHPHQW´
UHTXLUHPHQW0F1HLOXVFRUUHFWO\VWDWHVWKHSUHFRQGLWLRQIRU
DVWDWHVWDWXWHWRYLRODWHIHGHUDODQWLWUXVWODZ
>$@VWDWHVWDWXWHZKHQFRQVLGHUHGLQWKHDEVWUDFWPD\EH
FRQGHPQHGXQGHUWKHDQWLWUXVWODZVRQO\LILWPDQGDWHVRU
DXWKRUL]HVFRQGXFWWKDWQHFHVVDULO\FRQVWLWXWHVDYLRODWLRQ
RIWKHDQWLWUXVWODZVLQDOOFDVHVRULILWSODFHVLUUHVLVWLEOH
SUHVVXUHRQDSULYDWHSDUW\WRYLRODWHWKHDQWLWUXVWODZVLQ
RUGHUWRFRPSO\ZLWKWKHVWDWXWH
5LFH Y 1RUPDQ :LOOLDPV &R 86
+DYLQJ ODLGRXWWKLVVWDQGDUGKRZHYHU0F1HLOXVLQYRNHV
VHYHUDO LQDSSRVLWH SUHFHGHQWV WR PDNH LWV FDVH IRU WKH
DQWLFRPSHWLWLYHQDWXUHRIWKHVWDWXWH
)LUVW 0F1HLOXV VXJJHVWV WKDW WKH DQWLWUXVW ODZV EDU DQ\
VWDWXWHWKDWDOORZVRQHFRPSHWLWRUYHWRSRZHURYHUDQRWKHU
FLWLQJ8QLWHG6WDWHVY7RSFR$VVRFLDWHV,QF86
7RSFRIRUEDGHDQDVVRFLDWLRQRIJURFHU\VWRUHV
IURPJLYLQJYHWRSRZHUWRLWVPHPEHUVRYHUOLFHQVHVWRQHZ
PDUNHWHUVRIWKHDVVRFLDWLRQ¶V7RSFREUDQGLQWKHLUDUHDV,W
KDVQRDSSOLFDWLRQWRWKLVFDVHEHFDXVH0F1HLOXVGRHVQRW
DOOHJHWKDWWKH2KLRFKDVVLVGHDOHUVDUHDFWLQJLQFRQFHUWXQGHU
WKHUXEULFRIDQDVVRFLDWLRQ1RUGRHVWKHUHIXVDORIDQ\RQH
GHDOHUWRHQWHULQWRDELQGLQJDJUHHPHQWSUHYHQWWKHLVVXDQFH

-- 10 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
SXUSRVH WKH FRPSDQ\¶V DELOLW\ WR RSHUDWH LQ WKH VWDWH ,Q
KROGLQJRWKHUZLVHDFFRUGLQJWR0F1HLOXVWKHGLVWULFWFRXUW
XQMXVWLILDEO\DVVXPHGDSURSHUSXEOLFSXUSRVHIRUWKHOLFHQVH
UHTXLUHPHQWVLQSURWHFWLQJ2KLRFRQVXPHUVZKHUHDVWKHRQO\
HYLGHQFHLQGLFDWHVDQLQWHQWWRLQVXODWH2KLRFKDVVLVGHDOHUV
IURPFRPSHWLWLRQ0F1HLOXVDVNVWKLVFRXUWWRORRNEHKLQG
WKH VWDWHG SXUSRVH RI WKH VWDWXWH WR ZKHWKHU WKH KLGGHQ
SXUSRVH LV OHJLWLPDWH KRZHYHU IRU SXUSRVHV RI HTXDO
SURWHFWLRQDQDO\VLVZHPXVWDVVXPHWKDW WKHVWDWH¶VVWDWHG
SXUSRVHVDUHWKHDFWXDORQHVXQOHVVWKRVHSXUSRVHV³FRXOGQRW
KDYHEHHQDJRDORIWKHOHJLVODWLRQ´ 0LQQHVRWDY&ORYHU
/HDI&UHDPHU\&R86Q TXRWLQJ
:HLQEHUJHUY:LHVHQIHOG 86Q
0F1HLOXVZRXOGKDYHWRGHPRQVWUDWHWKDWWKHOHJLVODWLYHIDFWV
DVVHUWHGE\WKHVWDWH³FRXOGQRWUHDVRQDEO\EHFRQFHLYHGWREH
WUXH´ZKLFKLWKDVQRWGRQHLQRUGHUIRUWKLVFRXUWWRDEDQGRQ
WKHDVVXPSWLRQWKDWWKHVWDWHGSXUSRVHVDUHWKHDFWXDORQHV
&ORYHU /HDI &UHDPHU\ 86 DW TXRWLQJ 9DQFH Y
%UDGOH\86
:H WKHQ DVN ZKHWKHU WKH VWDWHG SXUSRVHV DUH OHJLWLPDWH
SXEOLF SXUSRVHV ZH GR QRW DVVXPH LW 7KLV H[SODLQV ZK\
0F1HLOXV¶VUHOLDQFHRQ0HWURSROLWDQ/LIH,QVXUDQFH&RY
:DUG86 LVPLVSODFHG,QVWULNLQJGRZQD
GLIIHUHQWLDOWD[RQRXWRIVWDWHLQVXUHUVRQHTXDOSURWHFWLRQ
JURXQGVWKH6XSUHPH&RXUWGLGQRWORRNEHKLQGWKHVWDWHG
SXUSRVHVRIWKHVWDWXWH5DWKHULWGHWHUPLQHGWKDWWKHVWDWHG
SXUSRVHVRISURPRWLQJGRPHVWLFLQGXVWU\DQGORFDOLQYHVWPHQW
LQDSXUHO\GLVFULPLQDWRU\IDVKLRQZHUHLOOHJLWLPDWH,QGHHG
WKH\ZHUHGHHPHGWKH³YHU\VRUWRISDURFKLDOGLVFULPLQDWLRQ
WKDWWKH(TXDO3URWHFWLRQ&ODXVHZDVLQWHQGHGWRSUHYHQW´,G
DW,QWKLVFDVHDVWKHGLVWULFWFRXUWGHWHUPLQHGWKHVWDWHG
SXUSRVH RI DVVXULQJ ³WKDW D SXUFKDVHU RI D FRQFUHWH WUDQVLW
PL[HURUUHIXVHSDFNHUVKRXOGKDYHUHDVRQDEOHDFFHVVWRD
PDQXIDFWXUHU RU GHDOHU ZKLFK LV DXWKRUL]HG WR UHSDLU D
GHIHFWLYH FKDVVLV XQGHU ZDUUDQW\´ LV D OHJLWLPDWH SXUSRVH
XQGHUWKHVWDWH¶VSROLFHSRZHUV)LQDOO\LQHTXDOSURWHFWLRQ
DQDO\VLVZHDGMXGJHZKHWKHUWKHVWDWXWHSDVVHGLVUDWLRQDOO\
UHODWHGWRWKHOHJLWLPDWHSXUSRVHWKDWPRWLYDWHGLW6HH)XOWRQ
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

7KLV VXLW SURYLGHV D FRQFUHWH H[DPSOH RI ZK\ WKH UXOH RI 3HQQKXUVW
LV IODZHG +HUH WKHUH LV D PDWWHU DULVLQJ IURP D ³FRPPRQ QXFOHXV RI
RSHUDWLYH IDFWV´ WKDW FRXOG EH DGMXGLFDWHG ZLWK OLWWOH GLIILFXOW\ LQ WKLV
IRUXP RQ VWDWH ODZ JURXQGV 3ULRU WR 3HQQKXUVW VLPLODU FDVHV ZHUH
GHFLGHG LQ VXFK D ZD\ 6HH %DQN RI 8QLWHG 6WDWHV Y 3ODQWHUV¶ %DQN
86 :KHDW ,Q DW OHDVW RQH FDVH GXULQJ WKDW WLPH IHGHUDO
FRQVWLWXWLRQDO FODLPV ZHUH LJQRUHG LQ RUGHU WR GHFLGH WKH FDVH RQ VWDWH ODZ
JURXQGV DQG DYRLG GHFLGLQJ XQQHFHVVDU\ FRQVWLWXWLRQDO TXHVWLRQV 6HH
6LOHU Y /RXLVYLOOH 1DVKYLOOH 55 &R 86
8QIRUWXQDWHO\ WKDW SDWK LV QR ORQJHU DYDLODEOH WR ORZHU IHGHUDO DSSHOODWH
FRXUWV EHFDXVH 3HQQKXUVW ³RYHUUXO>HG@ WKH HQWLUH KLVWRU\ RI
6LOHU$VKZDQGHU GRFWULQH LQ FDVHV ZKHUH LQMXQFWLYH UHOLHI LV UHTXHVWHG
DJDLQVW WKH VWDWH´ &XHVQRQJOH Y 5DPRV )G VW &LU

VWDWH ODZ FODLPV KROGLQJ WKDW WKH\ ZHUH EDUUHG IURP
DGMXGLFDWLRQ LQ IHGHUDO FRXUW E\ WKH (OHYHQWK $PHQGPHQW
0F1HLOXV FRPSODLQV WKDW WKH 2%09 GLG QRW DV LW PXVW
³H[HFXWHDXWKRULW\UHDVRQDEO\DQGLQDPDQQHUFRQVLVWHQWZLWK
WKHREMHFWLYHVDQGVWDQGDUGVWKDWJRYHUQLQJVWDWXWHVLPSRVH´
6WDWHH[UHO+RRYHU&RY0LKP2KLR6WG
2KLR 7KH GLVWULFW FRXUW KHOG WKDW WKH (OHYHQWK
$PHQGPHQW SUHFOXGHV D IHGHUDO FRXUW IURP WDNLQJ
VXSSOHPHQWDOMXULVGLFWLRQRYHUFODLPHGVWDWHODZYLRODWLRQVE\
VWDWH RIILFHUV ,Q DGGLWLRQ WKH GLVWULFW FRXUW UXOHG WKDW
FRQVLGHUDWLRQRIDQ\VWDWHODZEDVHGFODLPVZRXOGYLRODWHWKH
(OHYHQWK$PHQGPHQWEHFDXVHWKHGHIHQGDQWVZHUHDOOQDPHG
LQ WKHLU RIILFLDO FDSDFLWLHV UDWKHU WKDQ DV LQGLYLGXDOV :H
DJUHH7RWKHH[WHQWWKDW0F1HLOXVVHHNVWRVXHVWDWHRIILFLDOV
LQDIHGHUDOFRXUWIRUYLRODWLQJVWDWHODZVXFKDVXLWLVLQGHHG
EDUUHG6HH3HQQKXUVW6WDWH6FK +RVSY+DOGHUPDQ
86 7KLVLVWUXHHYHQWKRXJKWKHUHZRXOG
RWKHUZLVH EH VXSSOHPHQWDO MXULVGLFWLRQ 7KRXJK URXQGO\
FULWLFL]HGWKH3HQQKXUVWGHFLVLRQLVWKHJRYHUQLQJ6XSUHPH
&RXUW SUHFHGHQW ZKRVH ZLVGRP WKLV FRXUW PD\ FDOO LQWR
TXHVWLRQ EXW ZKRVH FRPPDQG WKLV FRXUW PXVW IROORZ
0F1HLOXVDUJXHVWKDWWKH6XSUHPH&RXUWKDVLQWHUSUHWHGWKH
(OHYHQWK$PHQGPHQWQRWWREDUDQLQMXQFWLRQDJDLQVWDVWDWH
RIILFLDOIRUHQIRUFLQJDQXQFRQVWLWXWLRQDOVWDWHODZ,WLVWUXH
WKDW XQGHUWKH([SDUWH<RXQJGRFWULQHVWDWHRIILFHUVPD\

-- 11 of 12 --

0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO
1R
RUGLQDULO\EHVXHGLQDQRIILFLDOFDSDFLW\IRULQMXQFWLYHUHOLHI
EXWRQO\IRUWKRVHRIILFLDOV¶YLRODWLRQVRIIHGHUDOODZ6HH:LOO
Y 0LFKLJDQ 'HS¶W RI 6WDWH 3ROLFH 86 Q
0F1HLOXVKDVEURXJKWDQDFWLRQIRULQMXQFWLYHUHOLHI
FKDOOHQJLQJWKHFRQVWLWXWLRQDOLW\RI2KLR¶VVWDWXWH2IFRXUVH
LIWKHODZLVIRXQGWREHXQFRQVWLWXWLRQDO WKDWZRXOGEHD
IHGHUDOGHIHFWLQWKHODZDQGQRWDVWDWHGHIHFWEDUUHGIURPD
IHGHUDOFRXUW¶VFRQVLGHUDWLRQE\3HQQKXUVW
,9
:H QRZ WXUQ WR WKH PHULWV RI 0F1HLOXV¶V FRQVWLWXWLRQDO
DUJXPHQWVWKHILUVWRIZKLFKLVWKDW2KLR¶VVWDWXWHYLRODWHV
FRQVWLWXWLRQDO GXH SURFHVV EHFDXVH WKH 2%09 IDLOHG WR
IROORZ SURSHU UXOHPDNLQJ SURFHGXUHV LQ LVVXLQJ LWV
LQWHUSUHWDWLRQ RI ELQGLQJ DJUHHPHQWV XQGHU WKH VWDWXWH
2%09 FRQFHGHV WKDW LW LVVXHG LQWHUSUHWLYH UXOHV ZLWKRXW
HQJDJLQJLQVWDWHPDQGDWHGUXOHPDNLQJSURFHGXUHVKRZHYHU
0F1HLOXV FDQQRW UHVXUUHFW LWV VWDWH ODZ FODLPV IRU ZKLFK
SHQGHQWMXULVGLFWLRQLVEDUUHGE\WKHUXOHRI3HQQKXUVWPHUHO\
E\FDVWLQJLWVDUJXPHQWLQFRQVWLWXWLRQDOWHUPV:KHQWKH
2%09 LQIRUPHG 0F1HLOXV WKDW LW ZRXOG EH GHQ\LQJ LWV
DSSOLFDWLRQIRUUHQHZDORIOLFHQVHLWGLGVRRQWKHJURXQGV
WKDW 0F1HLOXV ZDV QRW LQ FRPSOLDQFH ZLWK D UXOH
LQWHUSUHWDWLRQWKDWWKH2%09KDGQRWLVVXHGWKURXJKSURSHU
UXOHPDNLQJSURFHGXUHV0F1HLOXVDVVHUWVWKDWLWYLRODWHVWKH
)RXUWHHQWK $PHQGPHQW IRU D VWDWH QRW WR IROORZ LWV RZQ
UXOHPDNLQJSURFHGXUHV+RZHYHUZKHWKHUVWDWHRIILFHUVKDYH
YLRODWHG VWDWH ODZ LQ IDLOLQJ WR IROORZ DGPLQLVWUDWLYH
SURFHGXUHVLVDVWDWHODZTXHVWLRQLQWKHILUVWLQVWDQFHDQGWKLV
FRXUW VWLOO ODFNV VXSSOHPHQWDO MXULVGLFWLRQ WR FRQVLGHU WKH
FODLP&I/HYLQHY7RUYLN)G WK&LU
FLWLQJ(QJOHY,VDDF86 ³$VWDWH
FDQQRW EH VDLG WR KDYH D IHGHUDO GXH SURFHVV REOLJDWLRQ WR
IROORZDOORILWVSURFHGXUHVVXFKDV\VWHPZRXOGUHVXOWLQWKH
FRQVWLWXWLRQDOL]LQJ RI HYHU\ VWDWH UXOH DQG ZRXOG QRW EH
DGPLQLVWUDEOH´
1R 0F1HLOXV7UXFNHWDOY
6WDWHRI2KLRHWDO

0F1HLOXVDOVRDUJXHVWKDWWKHVWDWXWHLVYRLGIRUYDJXHQHVV
ODFN RI QRWLFH DQG IRU HQDEOLQJ RIILFLDO DUELWUDULQHVV :H
GLVDJUHH 7KH FKDOOHQJHG VWDWXWH LV YHU\ VSHFLILF LQ LWV
UHTXLUHPHQWV DQG SXWV WKRVH DIIHFWHG RQ DGHTXDWH QRWLFH
,QGHHGWKH2%09FRQWDFWHG0F1HLOXVWRLQIRUPLWRIWKH
UHTXLUHPHQWVLWZRXOGKDYHWRIXOILOO1RUGRHVWKHUHFRUG
HYLQFHDQ\DUELWUDU\HQIRUFHPHQWDVLGHIURPWKHGLIIHUHQWLDO
LPSDFW RQ RXWRIVWDWH LQWHUHVWV DOUHDG\ FRYHUHG E\ RWKHU
FODLPV 0F1HLOXV FRQWHQGV WKDW 2KLR¶V VWDWXWH IXUWKHU
YLRODWHV WKH 'XH 3URFHVV &ODXVH E\ LQWHUIHULQJ ZLWK WKH
FRPSDQ\¶V ULJKW WR SXUVXH D ODZIXO EXVLQHVV EHFDXVH WKH
OLFHQVHGRHVQRWSURWHFWFXVWRPHUVRUDQ\SXEOLFLQWHUHVWQRW
DOUHDG\ RWKHUZLVH DGHTXDWHO\ SURWHFWHG 0F1HLOXV QHLWKHU
H[SODLQV KRZ VXFK LQWHUIHUHQFH YLRODWHV GXH SURFHVV QRU
GLVWLQJXLVKHV WKLV UHJXODWLRQ IURP WKH NLQG XSKHOG LQ WKH
6ODXJKWHU+RXVH&DVHV86 :DOO
:KDW0F1HLOXVFDOOVDGXHSURFHVVDUJXPHQWORRNVOLNHD
FRPSODLQW WKDW 2KLR UXQV DIRXO RI WKH 3ULYLOHJHV DQG
,PPXQLWLHV&ODXVHE\GHQ\LQJDQRXWRIVWDWHFRPSDQ\WKH
ULJKWWRUXQDEXVLQHVVWKDWLVODZIXOIRUDQLQVWDWHFRPSDQ\
WRUXQ6HH86 &2167DUW,9†FO6HHDOVR7RRPHUY
:LWVHOO86 ³>,@WZDVORQJDJRGHFLGHG
WKDW RQH RI WKH SULYLOHJHV ZKLFK WKH FODXVH JXDUDQWHHV WR
FLWL]HQVRI6WDWH$LVWKDWRIGRLQJEXVLQHVVLQ6WDWH % RQ
WHUPVRIVXEVWDQWLDOHTXDOLW\ZLWKWKHFLWL]HQVRIWKDW6WDWH´
FLWDWLRQVRPLWWHG 'DYLG3&XUULH7KH&RQVWLWXWLRQLQWKH
6XSUHPH&RXUW$UWLFOH,9DQG)HGHUDO3RZHUV
'8.( /- Q GLVFXVVLQJ KLVWRULFDO
LQWHUSUHWDWLRQVRIWKHFODXVH %XWZKDWHYHUWKHFRPSDQ\¶V
DUJXPHQW LQWHQGV LW LV VHWWOHG ODZ WKDW WKH 3ULYLOHJHV DQG
,PPXQLWLHV&ODXVHGRHVQRWDSSO\WRFRUSRUDWLRQVDQGZH
WKHUHIRUH GHFLGH WKH FDVH RQ RWKHU JURXQGV 6HH 3DXO Y
9LUJLQLD86 :DOO
9
1H[W 0F1HLOXV DUJXHV WKDW 2KLR¶V VWDWXWH YLRODWHV WKH
(TXDO3URWHFWLRQ&ODXVHE\FXUWDLOLQJZLWKRXWDOHJLWLPDWH

-- 12 of 12 --

Poursuivez vos recherches dans ChatGPT ou Claude

Connectez Omnilex pour rechercher dans le corpus juridique depuis votre assistant IA.