U.S. Court of Appeals for the Sixth Circuit, 2001

United States v. Kimes

United States v. Kimes
U.S. Court of Appeals for the Sixth Circuit · Decided April 13, 2001

United States v. Kimes

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB

81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1R Y  !  s$0(6 $ .,0(6  'HIHQGDQW$SSHOODQW  $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW*UHHQHYLOOH 1R  n7KRPDV*+XOO'LVWULFWsXGJH $UJXHG 'HFHPEHU 'HFLGHGDQG)LOHG $SULO %HIRUH 0(55,771(/621DQG%$7&+(/'(5 &LUFXLWs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sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK 8S XQWLO WKH ODVW WZR GHFDGHV GXULQJ ZKLFK WKH IHGHUDO %$7&+(/'(5 s MRLQHG  0(55,77 s SS   FULPLQDO ODZ KDV EHFRPH LQFUHDVLQJO\ KDUVK DQG ULJLG WKH GHOLYHUHGDVHSDUDWHGLVVHQWLQJRSLQLRQ SUHVXPSWLRQ ZDV LQ IDYRU RI D PHQV UHD UHTXLUHPHQW IRU IHGHUDOFULPHV,Q'HQQLVY8QLWHG6WDWHV86  BBBBBBBBBBBBBBBBB   WKH6XSUHPH&RXUWVDLGWKDWmWKHH[LVWHQFHRIDPHQV UHDLVWKHUXOHRIUDWKHUWKDQWKHH[FHSWLRQWRWKHSULQFLSOHV 23,1,21 RI$QJOR$PHULFDQFULPLQDOMXULVSUXGHQFHl:KDWHYHUZH BBBBBBBBBBBBBBBBB GHFLGH WR FDOO WKH PHQWDO HOHPHQW UHTXLUHG IRU D IHGHUDO DVVDXOWZKHWKHUmJHQHUDOlmVSHFLILFlRURWKHUZLVHDGLVWLQFW '$9,' $ 1(/621 &LUFXLW sXGJH  7KLV LV DQ DSSHDO PHQWDOHOHPHQWUHTXLULQJVRPHGHOLEHUDWLRQDQGPRUHWKDQ IURP FULPLQDO FRQYLFWLRQV IRU DQ DVVDXOW RQ RIILFHUV RI WKH VLPSO\DQLQWHQWWRGRDQDFWPXVWEHSUHVHQW,WKHUHIRUH 'HSDUWPHQW RI 9HWHUDQV $IIDLUV D YLRODWLRQ RI  86& DJUHHZLWKWKRVH&LUFXLWVZKLFKKDYHUHDFKHGWKHRSSRVLWH † D  DQGSRVVHVVLRQRQ9$SURSHUW\RIDNQLIHZLWK UHVXOWIURPRXU&RXUWLQWKLVFDVH8QLWHG6WDWHVY6LPPRQGV D EODGH OHQJWK H[FHHGLQJ WKUHH LQFKHV  6XFK SRVVHVVLRQ )G WK&LU  8QLWHG6WDWHVY7D\ORU YLRODWHV D UXOH VHW IRUWK LQ  &)5 †  E   DQG )G WK&LU  8QLWHG6WDWHVY&DUXDQD)G YLRODWLRQRIWKDWUXOHLVDFULPHXQGHU86&†  F   VW&LU   7KHGHIHQGDQWSUHVHQWVIRXUDVVLJQPHQWVRIHUURU   WKDW , ZRXOG SHUPLW D GHIHQGDQW WR LQWURGXFH HYLGHQFH RI WKH GLVWULFW FRXUW HUUHG LQ IDLOLQJ WR VXSSUHVV HYLGHQFH GLPLQLVKHGFDSDFLW\WRIRUPWKHLQWHQWWRFRPPLWWKHIHGHUDO FRQVLVWLQJ RI WZR NQLYHV IRXQG LQ WKH GHIHQGDQWjV YHKLFOH DVVDXOW  ,I ZH DJUHH WKDW D PHQWDO HOHPHQW LV UHTXLUHG WR  WKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQH[FOXGLQJ FRPPLWWKHFULPHnDVLWVHHPVWRPHZHPXVWnWKHQZH SURIIHUHGH[SHUWWHVWLPRQ\FRQFHUQLQJWKHGHIHQGDQWj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mJHQHUDOLQWHQWFULPHlRUDmVSHFLILFLQWHQWFULPHl7KLVKDV KHUHWRIRUHEHHQDQRSHQTXHVWLRQLQRXUFLUFXLW sRLQLQJ WKH PDMRULW\ RI FLUFXLWV WKDW KDYH H[SUHVVHG DQ RSLQLRQRQWKHPDWWHUZHFRQFOXGHDVGLGWKHGLVWULFWFRXUW WKDW DVVDXOW RQ D IHGHUDO RIILFHU LV D JHQHUDO LQWHQW FULPH 'LPLQLVKHGPHQWDOFDSDFLW\LVQRWDGHIHQVHWRVXFKDFULPH VR WKH GLVWULFW FRXUW GLG QRW HUU LQ GHFOLQLQJ WR UHFHLYH HYLGHQFH RI WKH GHIHQGDQWjV DOOHJHGO\ GLPLQLVKHG FDSDFLW\  8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV  BBBBBBBBBBBBBB $FFRUGLQJO\ DQG EHFDXVH ZH ILQG QRQH RI WKH GHIHQGDQWjV UHPDLQLQJDVVLJQPHQWVRIHUURUSHUVXDVLYHZHVKDOODIILUPWKH ',66(17 FRQYLFWLRQV BBBBBBBBBBBBBB , 0(55,77&LUFXLWsXGJHGLVVHQWLQJ,WVHHPVWRPHWKDW LQGHWHUPLQLQJWKHLQWHQWUHTXLUHPHQWRUHOHPHQWRIPHQVUHD 7KH GHIHQGDQW sDPHV .LPHV LV D YHWHUDQ RI WKH ZDU LQ IRU DVVDXOWLQJ D IHGHUDO RIILFHU ZH VKRXOG UHWXUQ WR WKH 9LHWQDP,Qs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mYHUEDOVDIHW\FRQWUDFWl0U.LPHV DSSOLHG LQ QHFHVVDU\ DQG UHDVRQDEOH GHIHQVH RI RQHjV DFFHSWHGSURPLVLQJWKDWLIKHZHUHDERXWWRKXUWKLPVHOIRU SHUVRQRUSURSHUW\ RWKHUVKHZRXOGLPPHGLDWHO\FDOO0V*HUHW\RUFRPHWRWKH 9$0HGLFDO&HQWHUHPHUJHQF\URRP &RQVHQWRIWKHSHUVRQDJDLQVWRUXSRQZKRPWKHYLROHQFH LVDWWHPSWHGRULQIOLFWHGLVDGHIHQVHLIWKH FRQVHQWLV )ROORZLQJ WKH 0DUFK  VHVVLRQ 0U .LPHV DSSDUHQWO\ YDOLG PRYHG RXW RI KLV KRPH DQG EHJDQ OLYLQJ LQ KLV WUXFN  $W DSSUR[LPDWHO\ QRRQ RQ 0DUFK    WZR 9$ SROLFH &ODUNDQG0DUVKDOO&ULPHV  WKHG   RIILFHUV &UDLJ 'RXJKHUW\ DQG 3DPHOD (QVRU REVHUYHG WKH GHIHQGDQWjVWUXFNZLWKDEODQNHWRYHUWKHZLQGVKLHOGSDUNHG &HUWDLQO\PRUHFRQVFLRXVQHVVRIZURQJGRLQJWKDQVLPSO\ LQDEDFNFRUQHURIWKH0HGLFDO&HQWHUSDUNLQJORW6HHLQJ DQLQWHQWWRGRDQDFWLVQHFHVVDU\IRUWKHFULPH7KHFULPHRI PRYHPHQWLQVLGHWKHWUXFN2IILFHU'RXJKHUW\NQRFNHGRQWKH DVVDXOW QRUPDOO\ UHTXLUHV D IRUP RI JXLOW\ NQRZOHGJH n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jV JXQ IURP LWV KROVWHU  0U XQOHVV  m   D FRXQW LV H[WUHPHO\ FRPSOH[    WKHUH LV .LPHV ZDV WKHQ KDQGFXIIHG DQG WDNHQ WR WKH 9$ SROLFH YDULDQFH EHWZHHQ WKH LQGLFWPHQW DQG WKH SURRI DW WULDO RU VWDWLRQ  WKHUHLVDWDQJLEOHULVNRIMXU\FRQIXVLRQl8QLWHG6WDWHV Y 6DQGHUVRQ  )G   WK &LU    FLWLQJ 7KHUH 0U .LPHV ZDV TXHVWLRQHG E\ 9$ 2IILFHU .HQ 8QLWHG 6WDWHV Y 'XQFDQ  )G   WK :DUUHQ  ,Q WKH FRXUVH RI WKH TXHVWLRQLQJ 0U .LPHV &LU  $GHIHQGDQWFKDUJHGZLWKYLRODWLQJ†LVQRW PHQWLRQHGWKDWKHKDGVRPHWRROVLQKLVWUXFNDQGZDQWHGWKH HQWLWOHG WR D VSHFLILF XQDQLPLW\ LQVWUXFWLRQ XQOHVV WKH YHKLFOHWREHVHFXUHG2IILFHU:DUUHQZDVJLYHQWKHNH\VWR GHIHQGDQWjV FRQGXFW FRQVWLWXWHG mWZR VHSDUDWH DQG GLVWLQFW WKHWUXFNVRWKDWWKLVFRXOGEHGRQH RIIHQVHVlQRWPHUHO\mWZRSKDVHVRIDVLQJOHDVVDXOWl8QLWHG 6WDWHVY+RRG)G WK&LU TXRWLQJ 2IILFHU:DUUHQWXUQHGWKHNH\VRYHUWR2IILFHU(QVRUDQG 8QLWHG 6WDWHV Y 6HJLHQ  )G   WK &LU WROGKHUWRUHWXUQWRWKHKRVSLWDODQGFRQGXFWDVHDUFKRIWKH   1RQHRIWKHVHFRQGLWLRQVZDVPHWLQWKHFDVHDWEDU WUXFN6KHGLGVR7KH VHDUFKGLVFORVHGDED\RQHWRQWKH WKHUHZDVQRLQVWUXFWLRQDOHUURUDQGREYLRXVO\QRHUURULQQRW IORRUERDUG DQG D ILOHW NQLIH RQ D VHDW FXVKLRQ  %RWK UHTXLULQJDVSHFLDOYHUGLFW $VWRWKHODWWHUSRLQWZHQRWH LPSOHPHQWVKDGEODGHVRYHUWKUHHLQFKHVORQJ2IILFHU(QVRU DOVRWKDWWKLVFRXUWKDVREVHUYHGWKDWm>L@QJHQHUDOVSHFLDO UHPRYHG WKH NQLYHV IURP WKH WUXFN EHIRUH WKH YHKLFOH ZDV YHUGLFW IRUPV DUH QRW IDYRUHG DQG µPD\ LQ IDFW EH PRUH LPSRXQGHGDQGWRZHGDZD\ SURGXFWLYH RI FRQIXVLRQ WKDQ FODULW\jl  8QLWHG 6WDWHV Y :LOVRQ   )G    WK &LU    TXRWLQJ $ 0U .LPHV ZDV LQGLFWHG D PRQWK ODWHU DQG WKH FDVH 0RRUH V)HGHUDO3UDFWLFHDQG3URFHGXUH†  DW  XOWLPDWHO\ZHQWWRWULDO$VSDUWRIKLVGHIHQVH0U.LPHV VRXJKWWRLQWURGXFHPHGLFDOHYLGHQFHUHJDUGLQJKLVWUHDWPHQW $)),50(' IRUGHSUHVVLRQDQGSRVWWUDXPDWLFVWUHVVGLVRUGHU0U.LPHVj PHGLFDOH[SHUWVZHUHSUHSDUHGWRWHVWLI\WKDWZKHQ2IILFHU 'RXJKHUW\WRXFKHGKLP0U.LPHVFRXOGKDYHH[SHULHQFHG DmK\SHUVWDUWOHGUHDFWLRQlWKDWUREEHGKLPRIWKHDELOLW\WR FRQWURO KLV DFWLRQV  7KH GHIHQGDQWjV WKHRU\ ZDV WKDW WKLV SUHYHQWHGKLPIURPIRUPLQJWKHQHFHVVDU\PHQVUHDWRYLRODWH 86&† D   7KH GLVWULFW FRXUW UXOHG WKH SURIIHUHG WHVWLPRQ\ LQDGPLVVLEOHRQWZRJURXQGV)LUVWDQVZHULQJDTXHVWLRQOHIW RSHQE\WKLVFRXUWLQ8QLWHG6WDWHVY)DUURZ )G WK &LU   WKH GLVWULFW FRXUW KHOG WKDW DQ DVVDXOW RQ D IHGHUDORIILFHULQYLRODWLRQRI†LVDJHQHUDOLQWHQWFULPH DV WR ZKLFK GLPLQLVKHG FDSDFLW\ LV QRW D GHIHQVH  ,Q WKH  m:KLOH WKLV &RXUW KDV QRW \HW DGGUHVVHG WKH TXHVWLRQl RXU )DUURZ RSLQLRQ REVHUYHG mRWKHU FRXUWV KDYH FRQFOXGHG WKDW †  D  VHWV IRUWK D µJHQHUDO LQWHQWj UDWKHU WKDQ D µVSHFLILF LQWHQW FULPHj 7R HVWDEOLVK  8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV  WKH NQLYHV LQ HYLGHQFH  2XU UHVROXWLRQ RI WKH HYLGHQWLDU\ DOWHUQDWLYH WKH GLVWULFW FRXUW KHOG WKH SURIIHUHG WHVWLPRQ\ TXHVWLRQGLVSRVHVRIWKLVEUDQFKRIWKHLQVXIILFLHQF\FODLP LQDGPLVVLEOHXQGHU5XOH E )HG5(YLGLQVRIDUDVWKH ZLWQHVVHVSURSRVHGWRH[SUHVVDQRSLQLRQWKDWWKHGHIHQGDQW ' 6SHFLDO9HUGLFW)RUPVDQG,QVWUXFWLRQVRQ8QDQLPLW\ ODFNHGWKHUHTXLVLWHPHQVUHD 'XULQJ KLV WULDO 0U .LPHV SRLQWV RXW WKH JRYHUQPHQW 'HSULYHGRIKLVGLPLQLVKHGFDSDFLW\GHIHQVH0U.LPHV SUHVHQWHG HYLGHQFH DV WR DOO VL[ PRGDOLWLHV DVVDXOWLQJ IHOOEDFNRQDFODLPRIVHOIGHIHQVH KHPDLQWDLQHGWKDWKHZDV UHVLVWLQJRSSRVLQJLPSHGLQJLQWLPLGDWLQJDQGLQWHUIHULQJ VLPSO\ UHVSRQGLQJ WR D XVH RI H[FHVVLYH IRUFH E\ 2IILFHU E\ZKLFKDGHIHQGDQWFDQYLRODWH† D  ,WIROORZV0U 'RXJKHUW\7KHMXU\UHMHFWHGWKLVFODLPDQGIRXQG0U.LPHV .LPHVDVVHUWVWKDWWKHMXU\VKRXOGKDYHEHHQWROGLWFRXOG JXLOW\RQERWKFRXQWVRIWKHLQGLFWPHQW7KHGLVWULFWFRXUW FRQYLFWKLPRQO\LIWKHMXURUVZHUHXQDQLPRXVRQZKLFKW\SH VHQWHQFHG KLP WR SD\ D  ILQH DQG VHUYH WZR \HDUV RI RIFRQGXFWRFFXUUHGoDQGWKHDOOHJHGXQDQLPLW\UHTXLUHPHQW SUREDWLRQRQWKHDVVDXOWFRXQW7KHFRXUWVHQWHQFHGKLPWR VKRXOG KDYH EHHQ WHVWHG KH VXJJHVWV E\ D VSHFLDO YHUGLFW mWLPHVHUYHGl WKHIRXUGD\VKHKDGVSHQWLQWKHORFDOMDLO RQ IRUP WKHZHDSRQVFRXQW m7KH WULDO FRXUW LV µYHVWHG ZLWK EURDG GLVFUHWLRQ LQ ,, IRUPXODWLQJ LWV FKDUJH DQG ZLOO QRW EH UHYHUVHG XQOHVV WKH FKDUJHIDLOVDFFXUDWHO\WRUHIOHFWWKHODZjl8QLWHG6WDWHVY $ 0RWLRQWR6XSSUHVVWKH.QLYHV %XVDFFD)G WK&LU  FLWDWLRQRPLWWHG  $FFRUGLQJO\MXU\LQVWUXFWLRQVDUHUHYLHZHGIRUDQDEXVHRI 3ULRUWRWULDOWKHGHIHQGDQWPRYHGIRUVXSSUHVVLRQRIWKH GLVFUHWLRQ6HH8QLWHG6WDWHVY+RRG)G WK NQLYHVRQWKHJURXQGWKDWWKHZDUUDQWOHVVVHDUFKLQZKLFK &LU $QGWKHWULDOFRXUWjVLQVWUXFWLRQVVKRXOGEHUHDG WKH\KDGEHHQGLVFRYHUHGYLRODWHGWKH)RXUWK$PHQGPHQW$ mDVDZKROHWRGHWHUPLQHZKHWKHUWKH\IDLUO\DQGDGHTXDWHO\ PDJLVWUDWHMXGJHDJUHHGWKDWWKHUHKDGEHHQDYLRODWLRQRIWKH VXEPLWWHG WKH LVVXHV DQG DSSOLFDEOH ODZ WR WKH MXU\l  6HH )RXUWK $PHQGPHQW DQG WKLV  ZRXOG QRUPDOO\ KDYH EHHQ 8QLWHG 6WDWHV Y :LOOLDPV  )G   WK &LU VXIILFLHQWWRWULJJHUWKHH[FOXVLRQDU\UXOHDGRSWHGLQ0DSSY    2KLR  86       7KH PDJLVWUDWH IXUWKHU FRQFOXGHGKRZHYHUWKDWWKHNQLYHVZHUHDGPLVVLEOHXQGHU :HFRQFOXGHWKDWWKHLQVWUXFWLRQVLQWKHFDVHDWEDUZHUH WKHmLQHYLWDEOHGLVFRYHU\lH[FHSWLRQWRWKHH[FOXVLRQDU\UXOH DGHTXDWHDVJLYHQ7KHMXU\ZDVWROGWKDWLQHQDFWLQJ† 7KH PDJLVWUDWHjV FRQFOXVLRQV ZHUH DGRSWHG E\ WKH GLVWULFW m&RQJUHVVFUHDWHGDVLQJOHFULPHRIKDUPLQJRUWKUHDWHQLQJD MXGJH IHGHUDO RIILFLDO DQG VSHFLILHG VL[ ZD\V E\ ZKLFK WKH FULPH FRXOGEHFRPPLWWHG1RZSURRIEH\RQGDUHDVRQDEOHGRXEW 1HLWKHUWKHPDJLVWUDWHQRUWKHGLVWULFWMXGJHDGGUHVVHGWKH RIDQ\RIWKHVHVL[PHWKRGVZLOOVXSSRUWDILQGLQJRIJXLOWLQ REYLRXVSRVVLELOLW\WKDWWKHVHDUFKZDVFRQVHQVXDO7KLVLVVXH UHJDUG WR WKLV FULPHl  7KH MXU\ ZDV DOVR WROG m1RZ \RXU KDVQRWEHHQEULHIHGRUDUJXHGRQDSSHDO)RUSXUSRVHVRIWKLV YHUGLFWZKHWKHULWjVJXLOW\RUQRWJXLOW\PXVWEHXQDQLPRXV RSLQLRQWKHQZHVKDOODVVXPHZLWKRXWVRGHFLGLQJWKDWD 7RILQGWKHGHIHQGDQWJXLOW\HYHU\RQHRI\RXPXVWDJUHHWKDW YLRODWLRQ RI WKH )RXUWK $PHQGPHQW GLG RFFXU  6XFK D WKHJRYHUQPHQWKDVRYHUFRPHWKHSUHVXPSWLRQRILQQRFHQFH ZLWKHYLGHQFHWKDWSURYHVKLVJXLOWEH\RQGDUHDVRQDEOHGRXEW   (LWKHUZD\JXLOW\RUQRWJXLOW\\RXUYHUGLFWPXVWEH JHQHUDO LQWHQW WKH *RYHUQPHQW QHHG QRW VKRZ WKDW WKH GHIHQGDQW LQWHQGHG XQDQLPRXVl7KHVHLQVWUXFWLRQVZHUHVXIILFLHQWWRDSSULVHWKH WR LQMXUH D IHGHUDO RIILFHU EXW RQO\ µWKH NQRZLQJ FRPPLVVLRQ RI DQ DFW MXU\RIWKHDSSOLFDEOHODZ WKDW WKH ODZ PDNHV D FULPHjl ,G  DW  Q  FLWDWLRQV RPLWWHG   8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV  YLRODWLRQZRXOGUHTXLUHVXSSUHVVLRQRIWKHNQLYHVXQOHVVWKH\ RIILFLDO VWLOO ZRXOG EH LPSHGHG LQ WKH SHUIRUPDQFH RI KLV ZHUHGHVWLQHGWRKDYHEHHQGLVFRYHUHGoODZIXOO\oLQDQ\ RIILFLDOGXWLHVl8QLWHG6WDWHVYsHQQLQJV)6XSS HYHQW  0'3D   m7KH LQHYLWDEOH GLVFRYHU\ GRFWULQH DQ H[FHSWLRQ WR WKH ,QVXPZHFRQFOXGHWKDWWKHFULPHHVWDEOLVKHGLQ86& H[FOXVLRQDU\UXOHDOORZVXQODZIXOO\REWDLQHGHYLGHQFHWREH †  D  LV D JHQHUDO LQWHQW FULPH DV WR ZKLFK HYLGHQFH RI DGPLWWHG DW WULDO LI WKH JRYHUQPHQW FDQ SURYH E\ GLPLQLVKHG FDSDFLW\ LV QRW DGPLVVLEOH  7KLV FRQFOXVLRQ SUHSRQGHUDQFHWKDWWKHHYLGHQFHLQHYLWDEO\ZRXOGKDYHEHHQ REYLDWHV DQ\ QHHG IRU XV WR DGGUHVV WKH GLVWULFW FRXUWjV DFTXLUHGWKURXJKODZIXOPHDQVl8QLWHG6WDWHVY.HQQHG\ DOWHUQDWLYHKROGLQJZKLFKZDVWKDWDGPLVVLRQRIWKHSURIIHUHG )G   WK&LU   FLWLQJ1L[Y:LOOLDPV HYLGHQFHZDVSUHFOXGHGE\5XOH E )HG5(YLG 86        3URRI RI LQHYLWDEOH GLVFRYHU\ mLQYROYHV QR VSHFXODWLYH HOHPHQWV EXW IRFXVHV RQ & 6XIILFLHQF\RIWKH(YLGHQFH GHPRQVWUDWHGKLVWRULFDOIDFWVFDSDEOHRIUHDG\YHULILFDWLRQRU LPSHDFKPHQWl1L[86DWQm7KHH[FHSWLRQ 7KHGHIHQGDQWPDLQWDLQVWKDWWKHHYLGHQFHRIIHUHGDWWULDO UHTXLUHVWKHFRXUWWRGHWHUPLQHYLHZLQJDIIDLUVDVWKH\ ZDVLQVXIILFLHQWWRVXSSRUWDFRQYLFWLRQRQHLWKHUFRXQWRIWKH H[LVWHGDWWKHLQVWDQWEHIRUHWKHXQODZIXOVHDUFKZKDWZRXOG LQGLFWPHQW,QUHYLHZLQJWKHVXIILFLHQF\RIWKHHYLGHQFHIRU KDYH KDSSHQHG KDG WKH XQODZIXO VHDUFK QHYHU RFFXUUHGl D FULPLQDO FRQYLFWLRQ WKLV FRXUW PXVW GHWHUPLQH ZKHWKHU 8QLWHG6WDWHVY(QJ )G G&LU  FHUW WDNLQJ WKH HYLGHQFH LQ WKH OLJKW PRVW IDYRUDEOH WR WKH GHQLHG86    SURVHFXWLRQDQ\UDWLRQDOWULHURIIDFWFRXOGKDYHIRXQGWKH HVVHQWLDOHOHPHQWVRIWKHFULPHEH\RQGDUHDVRQDEOHGRXEW 9LHZLQJ WKH VLWXDWLRQ DV LW H[LVWHG MXVW EHIRUH 2IILFHU 6HHsDFNVRQY9LUJLQLD86   8QLWHG (QVRUjVVHDUFKZHWKLQNLWFOHDUWKDWWKHJRYHUQPHQWKDVPHW 6WDWHVY5XVVHOO)G WK&LU   LWV EXUGHQ RI GHPRQVWUDWLQJ WKDW WKH HYLGHQFH ZRXOG LQHYLWDEO\ KDYH EHHQ GLVFRYHUHG WKURXJK ODZIXO PHDQV $V WR WKH ILUVW FRXQW ZKLFK FKDUJHG KLP ZLWK IRUFLEO\ (VWDEOLVKHGSROLF\FDOOHGIRUWKHUHPRYDORIYHKLFOHVSDUNHG DVVDXOWLQJ 9$ SROLFH RIILFHUV LQ YLRODWLRQ RI  86& RQ9$SURSHUW\DQGQRWEHORQJLQJWRSDWLHQWVRUYLVLWRUV †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j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jVWHVWLPRQ\DQGUHMHFW0U&ORQLQJHUjV (VWDEOLVKHG9$SROLF\DOVRSUHVFULEHGDQLQYHQWRU\VHDUFK SULRUWRUHPRYDORIDYHKLFOH2IILFHU1RUZRRGWHVWLILHGWKDW $VWRWKHFRXQWUHODWLQJWRWKHNQLIHSRVVHVVLRQ0U.LPHV WKH SXUSRVH RI FRQGXFWLQJ VXFK D VHDUFK ZDV WR SURWHFW DUJXHV VLPSO\ WKDW WKHUH ZRXOG KDYH EHHQ QR HYLGHQFH WR VXSSRUWDFRQYLFWLRQEXWIRUWKHDOOHJHGO\LPSURSHUUHFHLSWRI  8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV  KLV GLPLQLVKHG PHQWDO FDSDFLW\  7KH ILUVW SDUDJUDSK RI  SHUVRQDO SURSHUW\ LQVLGH WKH YHKLFOH ZKLOH LW ZDV LQ SROLFH 86&† D EHJLQVWKXV FXVWRG\DQGWRSURWHFWWKH9$IURPFODLPVRIORVWRUVWROHQ SURSHUW\8QGHU2SSHUPDQDVHDUFKFRQGXFWHGIRUVXFKD m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l WKH\ZRXOGLQHYLWDEO\KDYHEHHQGLVFRYHUHGLQDQLQYHQWRU\ VHDUFK FRQGXFWHG LQ FRQQHFWLRQ ZLWK WKH UHPRYDO RI WKH ,QFRQWUDVWWKHVHFRQGSDUDJUDSKEHJLQVWKXV YHKLFOH3URRIWKDWFRQWUDEDQGZRXOGKDYHEHHQGHWHFWHGLQ mDQLQYHQWRU\VHDUFKWKDWZRXOGLQHYLWDEO\IROORZVHL]XUHRI m:KRHYHU HQWHUV RU DWWHPSWV WR HQWHU DQ\ EDQN FUHGLW D FDUl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l (PSKDVLVVXSSOLHG FRQQHFWLRQ0U.LPHVSRLQWVRXWWKDWRQVRPHRFFDVLRQVWKH 9$ SHUPLWWHG IDPLO\ PHPEHUV RU IULHQGV WR UHPRYH D %DVHGRQWKHGLIIHULQJODQJXDJHLQWKHWZRSDUDJUDSKVZH YHKLFOHLILWVRZQHURURSHUDWRUZDVXQDEOHWRGRVR7KH XSKHOG WKH GLVWULFW FRXUWjV HYLGHQWLDU\ UXOLQJ   EHFDXVH GHIHQGDQWDOVRFRPSODLQVWKDWD9$RIILFHUFRQGXFWLQJDQ m&RQJUHVVVKRZHGµFDUHIXOGUDIWVPDQVKLSjE\LQFOXGLQJDQ LQYHQWRU\VHDUFKKDVGLVFUHWLRQWRUHIUDLQIURPUHFRUGLQJWKH LQWHQWUHTXLUHPHQWLQWKHVHFRQGSDUDJUDSKEXWQRWWKHILUVW SUHVHQFHRILWHPVQRWFRQVLGHUHGYDOXDEOH SDUDJUDSKRI† D ZHKROGWKDWWKHILUVWSDUDJUDSKRI †  D  GHVFULEHV D JHQHUDO LQWHQW FULPHl  *RQ\HD  7KHGHIHQGDQWjVDUJXPHQWVDUHQRWSHUVXDVLYH'LVFUHWLRQ )GDW &LWDWLRQVRPLWWHG DVWRLPSRXQGPHQWLVSHUPLVVLEOHmVRORQJDVWKDWGLVFUHWLRQ LVH[HUFLVHGDFFRUGLQJWRVWDQGDUGFULWHULDDQGRQWKHEDVLVRI &RQVLGHUDWLRQ RI WKH RYHUDOO SXUSRVH RI †  D   DOVR VRPHWKLQJ RWKHU WKDQ VXVSLFLRQ RI HYLGHQFH RI FULPLQDO VXSSRUWVWKHFRQFOXVLRQWKDWWKHVWDWXWHVHWVIRUWKDJHQHUDO DFWLYLW\l&RORUDGRY%HUWLQH 86    LQWHQWFULPH,QHQDFWLQJWKLVVHFWLRQDVWKH6XSUHPH&RXUW +HUHDVZHJDWKHU9$SROLFHVRPHWLPHVSHUPLWWHGYHKLFOHV KDVUHFRJQL]HGm&RQJUHVVLQWHQGHGWRSURWHFWERWKIHGHUDO WREHSLFNHGXSE\DGULYHUjVIULHQGVDQGUHODWLRQVLIWKH\ZHUH RIILFHUVDQGIHGHUDOIXQFWLRQVDQGIXUWKHUDQFHRIWKHRQH DOUHDG\SUHVHQWRULIWKHGULYHUFRXOGFRQWDFW WKHPDQGJHW SROLF\ DGYDQFHV WKH RWKHUl  )HROD  86 DW   WKHPWRFRPHWRWKHIDFLOLW\SURPSWO\0U.LPHVVXJJHVWV &DWHJRUL]LQJ† D  DVDJHQHUDOLQWHQWFULPHIXUWKHUVWKH WKDW UDWKHU WKDQ WRZLQJ KLV WUXFN WKH RIILFHUV VKRXOG KDYH FRQJUHVVLRQDOREMHFWLYH m,IDSHUVRQDFWVLQDPDQQHUZKLFK WDNHQLWXSRQWKHPVHOYHVWRFDOOKLVZLIHDQGDVNKHUWRJHWWKH LV DVVDXOWLYH WRZDUG D IHGHUDO RIILFLDO ZLWKRXW VSHFLILFDOO\ LQWHQGLQJKDUPRUWKHDSSUHKHQVLRQRILPPLQHQWKDUPWKH  8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV  YHKLFOH+HFLWHVQRDXWKRULW\FRPSHOOLQJVXFKDFRQFOXVLRQ 7KLVTXHVWLRQLVDSSDUHQWO\RQHRIILUVWLPSUHVVLRQIRUXV DQGZHDUHDZDUHRIQRQH )RXU RI RXU VLVWHU FLUFXLWV KRZHYHU KDYH IRXQG WKDW QR DGGLWLRQDOSXUSRVHQHHGEHVKRZQXQGHU† D  WKHVH $V WR WKH FRPSUHKHQVLYHQHVV RI WKH LQYHQWRU\ OLVW DQ FLUFXLWV KDYH KHOG WKDW WKH VWDWXWH FUHDWHV D JHQHUDO LQWHQW RIILFHUjVXVHRIGLVFUHWLRQLQLPSOHPHQWLQJDJHQF\JXLGHOLQHV FULPHZLWKUHVSHFWWRZKLFKHYLGHQFHRIGLPLQLVKHGFDSDFLW\ UHJDUGLQJ WKH FRQGXFW RI DQ LQYHQWRU\ VHDUFK GRHV QRW LVQRWDGPLVVLEOH6HH8QLWHG6WDWHVY5LFNHWWV)G  QHFHVVDULO\YLRODWHWKH)RXUWK$PHQGPHQW6HH)ORULGDY   WK&LU  8QLWHG6WDWHVY.OHLQEDUW)G :HOOV   86      m>,@Q IRUELGGLQJ XQFDQDOL]HG   '&&LU  8QLWHG6WDWHVY2DNLH)G GLVFUHWLRQWRSROLFHRIILFHUVFRQGXFWLQJLQYHQWRU\VHDUFKHV  WK&LU  DQG8QLWHG6WDWHVYsLP)G WKHUHLVQRUHDVRQWRLQVLVWWKDWWKH\EHFRQGXFWHGLQDWRWDOO\  WK&LU FHUWGHQLHG 86   7KUHHRWKHU PHFKDQLFDOµDOORUQRWKLQJjIDVKLRQl 7KH9$jVSROLF\RI FLUFXLWVoZLWKRXWPXFKDQDO\VLVLWLVIDLUWRVD\oVHHPWR OLVWLQJRQO\mYDOXDEOHlLWHPVLVQRWLPSHUPLVVLEOHDQGQHLWKHU KDYH UHDFKHG WKH RSSRVLWH UHVXOW  6HH 8QLWHG 6WDWHV Y LVDPHDVXUHRIIOH[LELOLW\UHJDUGLQJWKHLPSOHPHQWDWLRQRI 6LPPRQGV )G WK&LU FHUWGHQLHG WKDWSROLF\7KHSRVWGLVFRYHU\OLVWLQJRILWHPVGLVFRYHUHGLQ 86   8QLWHG6WDWHVY7D\ORU)G D VHDUFK PRUHRYHU KDV QR SHUWLQHQW FRQQHFWLRQ WR WKH WK&LU  DQG8QLWHG6WDWHVY&DUXDQD)G GLVFRYHU\LWVHOI  VW&LU   0U.LPHVLPSOLHVWKDWWKHGHFLVLRQWRLPSRXQGWKHWUXFN ,Q VLGLQJ ZLWK WKH FLUFXLWV WKDW KDYH UHDG †  D   DV DQGFRQGXFWDQLQYHQWRU\VHDUFKLQWKHFDVHDWEDUZDVVLPSO\ GHILQLQJ D JHQHUDO LQWHQW FULPH ZH DUH JXLGHG ILUVW DQG D SUHWH[W IRU VDQLWL]LQJ WKH SUHVXPSWLYHO\ LOOHJDO VHDUFK IRUHPRVWE\WKHIDFWWKDW† D  FRQWDLQVQRODQJXDJH FRQGXFWHGHDUOLHU7KHUHFRUGGRHVQRWFRPSHODILQGLQJRI VXJJHVWLQJWKDWVSHFLILFLQWHQWPXVWEHVKRZQ,WLVSODLQIURP SUHWH[W DQG WKH GLVWULFW FRXUW PDGH QR VXFK ILQGLQJ  7KH DQH[DPLQDWLRQRIRWKHUIHGHUDOVWDWXWHVWKDW&RQJUHVVLVIXOO\ )RXUWK $PHQGPHQW SHUPLWV LPSRXQGPHQW GHFLVLRQV DQG FRJQL]DQW RI WKH JHQHUDO LQWHQWVSHFLILF LQWHQW GLFKRWRP\ LQYHQWRU\VHDUFKHVWKDWDUHREMHFWLYHO\MXVWLILDEOHPRUHRYHU :KHQLWLQWHQGVWRFUHDWHDVSHFLILFLQWHQWFULPH&RQJUHVV UHJDUGOHVV RI DQ RIILFHUjV VXEMHFWLYH LQWHQW  6HH :KUHQ Y H[SOLFLWO\VD\VVR6HHIRUH[DPSOH86&† D   8QLWHG 6WDWHV  86       7KH ZKLFKSURYLGHVWKDWmDVVDXOWZLWKLQWHQWWRFRPPLWPXUGHUlLQ LPSRXQGPHQWLQYHQWRU\ GHFLVLRQ LQ WKH FDVH DW EDU ZDV WKHVSHFLDOPDULWLPHDQGWHUULWRULDOMXULVGLFWLRQRIWKH8QLWHG REMHFWLYHO\MXVWLILDEOHDQGWKHWULDOFRXUWjVDSSOLFDWLRQRIWKH 6WDWHVLVDFULPHSXQLVKDEOHE\XSWR\HDUVLPSULVRQPHQW LQHYLWDEOHGLVFRYHU\GRFWULQHZDVHQWLUHO\SURSHU (PSKDVLVVXSSOLHG 8QGHU86&† D  VLPLODUO\ m>D@VVDXOWZLWKDGDQJHURXVZHDSRQZLWKLQWHQWWRGRERGLO\ % ([FOXVLRQRI([SHUW7HVWLPRQ\o*HQHUDOYV6SHFLILF KDUP DQG ZLWKRXW MXVW FDXVH RU H[FXVH   l LV PDGH ,QWHQW SXQLVKDEOH E\ XS WR  \HDUV LPSULVRQPHQW  (PSKDVLV VXSSOLHG 7KHGLVWULFWFRXUWjVGHFLVLRQQRWWRUHFHLYHWKHWHVWLPRQ\RI PHGLFDOH[SHUWVZKRZRXOGKDYHVXJJHVWHGWKDWWKHGHIHQGDQW 2XU SUHFHGHQWV JLYH GXH FRQVLGHUDWLRQ WR WKH DELOLW\ RI ODFNHG FRQWURO RYHU KLV DFWLRQV VWHPPHG LQ SDUW IURP WKH &RQJUHVVWRGLVWLQJXLVKEHWZHHQJHQHUDOLQWHQWDQGVSHFLILF FRXUWjVYLHZWKDWWKHFULPHGHILQHGLQ86&† D  LQWHQW&RQVLGHU*RQ\HDZKHUHWKHWULDOFRXUWEHOLHYLQJWKDW LVDJHQHUDOLQWHQWFULPHDVWRZKLFKGLPLQLVKHGFDSDFLW\LV EDQNUREEHU\LQYLRODWLRQRIWKHILUVWSDUDJUDSKRI86& QRWDGHIHQVH6HH8QLWHG6WDWHVY*RQ\HD)G  †  D  LV D JHQHUDO LQWHQW FULPH KDG GHFOLQHG WR OHW D  WK &LU    KROGLQJ WKDW GLPLQLVKHG FDSDFLW\ LV D GHIHQGDQWFKDUJHGXQGHUWKDWSDUDJUDSKSUHVHQWHYLGHQFHRI GHIHQVHRQO\WRVSHFLILFLQWHQWFULPHV 0U.LPHVFRQWHQGV  8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV EHIDFHGVHSDUDWHO\ZLWKUHVSHFWWRHDFKPDWHULDOHOHPHQWRI WKDWHYLGHQFH RIKLVGLPLQLVKHGFDSDFLW\VKRXOGKDYHEHHQ WKHFULPHl &LWDWLRQVRPLWWHG 6HFWLRQ D  FRQWDLQV DGPLWWHGEHFDXVHKLVDVVDXOWRQWKHRIILFHUVZDVQRWDFULPH IRXU GLVWLQFW HOHPHQWV  WKH JRYHUQPHQW PXVW VKRZ WKDW WKH XQGHU† D  DEVHQWVSHFLILFLQWHQW GHIHQGDQW    IRUFLEO\   DVVDXOWHG UHVLVWHG RSSRVHG LPSHGHGLQWLPLGDWHGRULQWHUIHUHGZLWK  DIHGHUDORIILFHU ,WLVLPSRUWDQWLQWKLVFRQQHFWLRQWRGLVWLQJXLVKEHWZHHQWZR  LQWKHSHUIRUPDQFHRIKLVGXWLHV)HRODPDNHVFOHDUWKDW GLIIHUHQWW\SHVRIPHQWDOGHIHFWGHIHQVH7KHILUVWVRPHWLPHV DWOHDVWDVWRWKHODWWHUWZRHOHPHQWVRQO\JHQHUDOLQWHQWLV FDOOHGWKHmGLPLQLVKHGUHVSRQVLELOLW\lGHIHQVHDSSOLHVZKHUH QHHGHG  7KH GHIHQGDQW QHHG KDYH QR VSHFLDO SXUSRVH WR WKHGHIHQGDQWjVPHQWDOFRQGLWLRQmFRPSOHWHO\DEVROYHVKLPRI DVVDXOWDIHGHUDORIILFHULQWKHSHUIRUPDQFHRIKLVGXWLHV LWLV FULPLQDOUHVSRQVLELOLW\UHJDUGOHVVRIZKHWKHURUQRWJXLOWFDQ HQRXJKWKDWWKHGHIHQGDQWLQWHQGVWRDVVDXOWVRPHRQH)HROD EHSURYHQl86Y)D]]LQL)G WK&LU FHUW PD\OHDYHURRPIRUDUJXPHQWKRZHYHUDVWRZKDWPHQWDO GHQLHG 86    7KHVHFRQGRIWHQUHIHUUHGWRDV VWDWHLVUHTXLUHGLQFRQQHFWLRQZLWKWKHILUVWWZRHOHPHQWV WKH mGLPLQLVKHG FDSDFLW\l GHIHQVH DSSOLHV mZKHUH WKH GHIHQGDQWFODLPVRQO\WKDWKLVPHQWDOFRQGLWLRQLVVXFKWKDWKH +HUHWKHGHIHQGDQWIRFXVHVRQWKHmIRUFLEO\lHOHPHQWRI RUVKHFDQQRWDWWDLQWKHFXOSDEOHVWDWHRIPLQGUHTXLUHGE\WKH † D  FRQWHQGLQJWKDWLWVLQFOXVLRQUHTXLUHVDVKRZLQJ GHILQLWLRQRIWKHFULPHl)D]]LQL)GDW RImLQWHQW GHOLEHUDWLRQDQGYROXQWDULQHVVl(YHQWRVKRZ JHQHUDOLQWHQWKRZHYHUmWKH*RYHUQPHQWPXVWSURYHEH\RQG ,Q ZLWKSDVVDJHRIWKH,QVDQLW\'HIHQVH5HIRUP$FW DUHDVRQDEOHGRXEWWKDWWKHGHIHQGDQWNQRZLQJO\FRQVFLRXVO\  86& †  &RQJUHVV LPSOLHGO\ SODFHG VLJQLILFDQW DQG YROXQWDULO\ FRPPLWWHG DQ DFW ZKLFK WKH ODZ PDNHV D UHVWULFWLRQVRQWKHXVHRIPHQWDOGHIHFWHYLGHQFH 7KHVWDWXWH FULPHl.OHLQEDUW)GDW  HPSKDVLVDGGHG :KDW PDNHVLQVDQLW\DGHIHQVHEXWUHTXLUHVWKHGHIHQGDQWWRVDWLVI\ VHWVJHQHUDOLQWHQWDSDUWIURPVSHFLILFLQWHQWLVWKDWmJHQHUDO WKH0j1DJKWHQVWDQGDUGoLHWKHGHIHQGDQWPXVWVKRZE\ LQWHQW PD\ EH LQIHUUHG IURP WKH GRLQJ RI WKH DFWl  ,G  ,Q FOHDU DQG FRQYLQFLQJ HYLGHQFH WKDW KH ZDV mXQDEOH WR FRQWUDVWVSHFLILFLQWHQWUHTXLUHVDVKRZLQJRImEDGSXUSRVHl DSSUHFLDWHWKHQDWXUHDQGTXDOLW\RUWKHZURQJIXOQHVVRIKLV ,GDW Q6HHDOVR*RQ\HD)GDW KROGLQJ DFWVl6HFWLRQIXUWKHUSURYLGHVWKDWm>P@HQWDOGLVHDVHRU WKDWWRYLRODWHDVSHFLILFLQWHQWVWDWXWHWKHGHIHQGDQWPXVWDFW GHIHFWGRHVQRWRWKHUZLVHFRQVWLWXWHDGHIHQVHl mZLWKWKHSXUSRVHRIYLRODWLQJWKHODZl  /LNHRWKHUFRXUWVoVHH8QLWHG6WDWHVY7ZLQH)G 7KHTXHVWLRQZLWKZKLFKZHDUHOHIWLVWKLV IRUDYLRODWLRQ   WK&LU  DQG8QLWHG6WDWHVY3RKORW RI† D  WRRFFXULVLWVXIILFLHQWIRUDGHIHQGDQWWRDFW )G     G &LU   FHUW GHQLHG  86  UHJDUGOHVVRIWKHUHDVRQIRUWKHDFWLRQLQVXFKDZD\DVWR DVVDXOWUHVLVWRSSRVHLPSHGHLQWLPLGDWHRULQWHUIHUHZLWKD IHGHUDORIILFHULQWKHSHUIRUPDQFHRIKLVGXWLHVRULVLWDOVR   86& †  SURYLGHV QHFHVVDU\IRUWKHGHIHQGDQWWRKDYHDVSHFLILFmEDGlSXUSRVH" m D $IILUPDWLYH GHIHQVH o ,W LV DQ DIILUPDWLYH GHIHQVH WR D SURVHFXWLRQ XQGHU DQ\ )HGHUDO VWDWXWH WKDW DW WKH WLPH RI WKH FRPPLVVLRQ RI WKH DFWV FRQVWLWXWLQJ WKH RIIHQVH WKH GHIHQGDQW DV D UHVXOW RI D VHYHUH PHQWDO GLVHDVH RU GHIHFW ZDV XQDEOH WR DSSUHFLDWH WKH QDWXUH DQG TXDOLW\ RU WKH ZURQJIXOQHVV RI KLV DFWV 0HQWDO GLVHDVH RU GHIHFW GRHV QRW RWKHUZLVH  7KH WHUP mIRUFLEO\l KDV EHHQ GHILQHG WR PHDQ PDNLQJ mVXFK D WKUHDW FRQVWLWXWH D GHIHQVH RU GLVSOD\ RI SK\VLFDO DJJUHVVLRQ    DV WR LQVSLUH IHDU RI SDLQ ERGLO\ KDUP RU GHDWKl 6HH 8QLWHG 6WDWHV Y :DONHU  )G   G E %XUGHQ RI SURRI o 7KH GHIHQGDQW KDV WKH EXUGHQ RI SURYLQJ WKH &LU   GHIHQVH RI LQVDQLW\ E\ FOHDU DQG FRQYLQFLQJ HYLGHQFHl  8QLWHG6WDWHVY.LPHV 1R 1R 8QLWHG6WDWHVY.LPHV     o  ZH KDYH FRQWLQXHG WR SHUPLW WKH LQWURGXFWLRQ RI WKDW WKH ODZ SURVFULEHVjl   )G DW   &LWDWLRQV HYLGHQFHRIGLPLQLVKHGFDSDFLW\IRUWKHSXUSRVHRIQHJDWLQJ RPLWWHG ,QRWKHUZRUGVmDJHQHUDOLQWHQWFULPHUHTXLUHVWKH WKHPHQVUHDHOHPHQWRIFHUWDLQFULPHV6HH8QLWHG6WDWHVY NQRZLQJFRPPLVVLRQRIDQDFWWKDWWKHODZPDNHVDFULPH$ 1HZPDQ )G  WK&LU  FHUWGHQLHG  VSHFLILF LQWHQW FULPH UHTXLUHV DGGLWLRQDO µEDG SXUSRVHjl 86     ,QVRGRLQJKRZHYHUZHKDYHDGKHUHGWR 8QLWHG6WDWHVY.OHLQEDUW)G  '&&LU   WKHYLHZWKDWmGLPLQLVKHGFDSDFLW\PD\EHXVHGRQO\WRQHJDWH Q FLWDWLRQVRPLWWHG  WKHPHQVUHDRIDVSHFLILFLQWHQWFULPHl*RQ\HD)GDW  HPSKDVLVDGGHG  6HFWLRQ D  SURYLGHVDVIROORZV m:KRHYHUIRUFLEO\ DVVDXOWVUHVLVWVRSSRVHVLPSHGHVLQWLPLGDWHVRULQWHUIHUHV +HUHWKHGHIHQGDQWSURIIHUHGH[SHUWSV\FKLDWULFWHVWLPRQ\ ZLWKDQ\>IHGHUDORIILFHURUDJHQF\HPSOR\HH@ZKLOHHQJDJHG WHQGLQJ WR VKRZ WKDW KLV SV\FKRORJLFDO SUREOHPV OHIW KLP LQRURQDFFRXQWRIWKHSHUIRUPDQFHRIRIILFLDOGXWLHVVKDOO XQDEOH WR FRQWURO KLV DFWLRQV GXULQJ WKH DOWHUFDWLRQ ZLWK EHILQHGXQGHUWKLVWLWOHRULPSULVRQHGl7KHUHZDVD 2IILFHUV 'RXJKHUW\ DQG (QVRU  2Q LWV IDFH WKH SURIIHUHG WLPHZKHQWKLVODQJXDJHZRXOGKDYHOHIWQRSRVVLEOHURRPIRU WHVWLPRQ\ PLJKW KDYH VHHPHG GHVLJQHG WR HVWDEOLVK WKH GRXEWWKDWRQO\JHQHUDOLQWHQWZDVUHTXLUHG6HH8QLWHG6WDWHV IRXQGDWLRQIRUDQLQVDQLW\GHIHQVH7KHGHIHQGDQWFKRVHQRW Y)HROD86   ZKHUHWKH6XSUHPH&RXUW WRSXUVXHDQLQVDQLW\GHIHQVHKRZHYHURIIHULQJWKHWHVWLPRQ\ GHFODUHGWKDW RQO\ WR mQHJDWH WKH PHQWDO VWDWHV UHTXLUHG IRU WKH RIIHQVH l mLQ RUGHU WR HIIHFWXDWH WKH FRQJUHVVLRQDO SXUSRVH RI DFFRUGLQJ PD[LPXP SURWHFWLRQ WR IHGHUDO RIILFHUV E\ 7KH GLIIHUHQFH LV PRUH WKDQ VHPDQWLF  +DG 0U .LPHV PDNLQJSURVHFXWLRQIRUDVVDXOWVXSRQWKHPFRJQL]DEOHLQ HOHFWHGWRSXUVXHDQLQVDQLW\GHIHQVH86&†ZRXOG WKH IHGHUDO FRXUWV †  FDQQRW EH FRQVWUXHG DV KDYH DVVLJQHG KLP WKH EXUGHQ RI SURYLQJ E\ FOHDU DQG HPERG\LQJDQXQH[SUHVVHGUHTXLUHPHQWWKDWDQDVVDLODQW FRQYLQFLQJHYLGHQFHWKDWKHZDVLQIDFWLQVDQHDWWKHWLPHRI EHDZDUHWKDWKLVYLFWLPLVDIHGHUDORIILFHU$OOWKDWWKH WKH DOWHUFDWLRQ  8QGHU D WKHRU\ RI GLPLQLVKHG FDSDFLW\ VWDWXWHUHTXLUHVLVDQLQWHQWWRDVVDXOW QRWDQLQWHQWWR KRZHYHUWKHWHVWLPRQ\LIDGPLVVLEOHQHHGRQO\KDYHFDVWD DVVDXOWDIHGHUDORIILFHUl,G UHDVRQDEOHGRXEWRQWKHJRYHUQPHQWjVSURRIWKDW0U.LPHV KDGWKHQHFHVVDU\PHQVUHD ,Q 8QLWHG 6WDWHV Y %DLOH\  86       KRZHYHUWKH6XSUHPH&RXUWKHOGWKDWLQGHWHUPLQLQJZKHWKHU $VZHKDYHVDLGHYLGHQFHRIGLPLQLVKHGFDSDFLW\PD\EH DQRIIHQVHLVDJHQHUDOLQWHQWFULPHRUDVSHFLILFLQWHQWFULPH XVHGWRQHJDWHWKHPHQVUHDRIVSHFLILFLQWHQWFULPHVRQO\ mFOHDU DQDO\VLV UHTXLUHV WKDW WKH TXHVWLRQ RI WKH NLQG RI 0U .LPHVj SURIIHUHG WHVWLPRQ\ ZDV RQO\ DGPLVVLEOH FXOSDELOLW\UHTXLUHGWRHVWDEOLVKWKHFRPPLVVLRQRIDQRIIHQVH WKHUHIRUHLI† D  UHTXLUHVDVKRZLQJRIVSHFLILFLQWHQW 7KHGLVWULFWFRXUWKHOGWKDWLWGRHVQRW  6HH DOVR 8QLWHG 6WDWHV Y %RRQH  )G  WK &LU    D 7KH GLIIHUHQFH EHWZHHQ D VSHFLILF LQWHQW FULPH DQG D GHFLVLRQ DIILUPLQJ WKH FRQYLFWLRQ RI D PDQ DFFXVHG RI YLRODWLQJ  86& JHQHUDO LQWHQW FULPH ZDV VSHOOHG RXW LQ *RQ\HD ZKHUH ZH †  E\ NQRFNLQJ GRZQ D MXGJH RI WKLV FRXUW DQG VQDWFKLQJ KHU SXUVH DV H[SODLQHGWKDWmDVSHFLILFLQWHQWFULPHLVRQHWKDWUHTXLUHVD VKH ZDV ZDONLQJ WR WKH FRXUWKRXVH RQ D 6XQGD\ HYHQLQJ WR FRPSOHWH KHU GHIHQGDQWWRGRPRUHWKDQNQRZLQJO\DFWLQYLRODWLRQRIWKH SUHSDUDWLRQV IRU 0RQGD\jV RUDO DUJXPHQWV 0U %RRQH ZDV REYLRXVO\ ODZ  7KH GHIHQGDQW PXVW DOVR DFW ZLWK WKH SXUSRVH RI XQDZDUH WKDW KLV YLFWLP ZDV D IHGHUDO MXGJH VR KH FRXOG KDYH KDG QR

YLRODWLQJWKHODZ7KHYLRODWLRQRIDJHQHUDOLQWHQWVWDWXWHE\ VSHFLILF LQWHQW WR DVVDXOW D MXGLFLDO RIILFHU o EXW DV WKH FRXUW LPSOLFLWO\ KHOG D VKRZLQJ RI VSHFLILF LQWHQW ZDV QRW UHTXLUHG %RRQHjV JHQHUDO FRQWUDVWUHTXLUHVRQO\WKDWDGHIHQGDQWµLQWHQGWRGRWKHDFW LQWHQW WR FRPPLW DQ DVVDXOW ZDV VXIILFLHQW

Case-law data current through December 31, 2025. Source: CourtListener bulk data.