Perkins v. Amer Elec Power
Perkins v. Amer Elec Power
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
s$0(6 : 3(5.,16 ; 3ODLQWLII$SSHOODQW 1R s8',7+ /<11 3(5.,16 3ODLQWLII ! Y $0(5,&$1 (/(&75,& 32:(5 )8(/ 6833/< ,1& ,1',$1$ 0,&+,*$1 32:(5 &203$1< ,1& 5,9(5 75$163257$7,21 ',9,6,21 'HIHQGDQWV$SSHOOHHV $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL 1R n6DQGUD6%HFNZLWK'LVWULFWsXGJH $UJXHG 1RYHPEHU 'HFLGHGDQG)LOHG $SULO %HIRUH 1(/6216,/(5DQG&/$<&LUFXLWsXGJHV
3HUNLQVHWDOY$P 1R (OHFWULF3RZHUHWDO BBBBBBBBBBBBBBBBB &2816(/ $5*8(' sDPHV%+HOPHUsU+(/0(50$57,16 025*$1 &LQFLQQDWL 2KLR IRU $SSHOODQW 7RGG 0 3RZHUV 6&+52('(5 0$81'5(// %$5%,(5( 32:(56 &LQFLQQDWL 2KLR IRU $SSHOOHH 21 %5,() sDPHV%+HOPHUsU+(/0(50$57,16 025*$1 &LQFLQQDWL2KLR0HUHGLWK/\QQ/DZUHQFH/$:5(1&( 6&+/(7.(5:DUVDZ.HQWXFN\IRU$SSHOODQW7RGG0 3RZHUV 6&+52('(5 0$81'5(// %$5%,(5( 32:(56&LQFLQQDWL2KLRIRU$SSHOOHH &/$< s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK 1(/621sMRLQHG6,/(5s S GHOLYHUHGDVHSDUDWH FRQFXUULQJRSLQLRQ BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB &/$< &LUFXLW sXGJH 3ODLQWLII sDPHV 3HUNLQV DSSHDOV IURPWKHGLVWULFWFRXUWjVRUGHUHQWHULQJMXGJPHQWLQIDYRURI 'HIHQGDQWV $PHULFDQ (OHFWULF 3RZHU )XHO 6XSSO\ ,QF m$(3l DQG,QGLDQD0LFKLJDQ3RZHU&RPSDQ\,QF5LYHU 7UDQVSRUWDWLRQ 'LYLVLRQ DIWHU D EHQFK WULDO RQ 3ODLQWLIIjV FODLPVIRUQHJOLJHQFHXQGHUWKHsRQHV$FW86& DQGXQVHDZRUWKLQHVVXQGHUJHQHUDOPDULWLPHODZ3ODLQWLII DOVRDSSHDOVWKHGLVWULFWFRXUWjVRUGHUGHQ\LQJ3ODLQWLIIjVSUH WULDOPRWLRQWRFRQWLQXHWKHWULDOGDWHH[WHQGGLVFRYHU\DQG DPHQG KLV FRPSODLQW )RU WKH UHDVRQV WKDW IROORZ ZH 5(9(56(LQSDUWDQG$)),50LQSDUWWKHGLVWULFWFRXUWjV RUGHU HQWHULQJ MXGJPHQW DJDLQVW 3ODLQWLII DQG 5(0$1'
'HIHQGDQW $(3 RZQV DQG RSHUDWHV 'HIHQGDQW ,QGLDQD 0LFKLJDQ 3RZHU &RPSDQ\ ,QF 3HUNLQVHWDOY$P 1R 1R 3HUNLQVHWDOY$P (OHFWULF3RZHUHWDO (OHFWULF3RZHUHWDO BBBBBBBBBBBBBBBBBBBB KRZHYHU ZH $)),50 WKH GLVWULFW FRXUWjV RUGHU GHQ\LQJ 3ODLQWLIIjVSUHWULDOPRWLRQ &21&855(1&( BBBBBBBBBBBBBBBBBBBB %$&.*5281' 6,/(5&LUFXLWsXGJHFRQFXUULQJ,FRQFXULQPRVWRIWKH 3ODLQWLIIZRUNHGIRU'HIHQGDQW$(3IURP XQWLOWKH FRQFOXVLRQVUHDFKHGE\WKHPDMRULW\LQWKLVFDVH+RZHYHU, GDWHRIKLVDFFLGHQW3ODLQWLIIZRUNHGDVDGHFNKDQGIURP GLVDJUHH ZLWK WKH FRQFOXVLRQ WKDW WKH GLVWULFW FRXUW FOHDUO\ WR RQFRPPHUFLDOULYHUYHVVHOV,Q KHZDV HUUHGLQGHQ\LQJUHFRYHU\XQGHUWKHsRQHV$FW$OWKRXJKWKH SURPRWHGWRVHFRQGPDWHWKHSRVLWLRQKHKHOGXQWLOKLVLQMXU\ PDMRULW\PDNHVRXWDJRRGFDVHIRUFRQFOXGLQJWKDWGHIHQGDQW ZKLFKLVWKHVXEMHFWRIWKLVOLWLJDWLRQ'HIHQGDQW$(3LVD ZDV QHJOLJHQW LQ IDLOLQJ WR SURYLGH DGHTXDWH VDIHW\ ULYHUWUDQVSRUWDWLRQFRPSDQ\WUDQVSRUWLQJEXONFRPPRGLWLHV SUHFDXWLRQVWKLVLVDILQGLQJRIIDFW7KHUHZDVDEDVLVIRUWKH SULPDULO\ FRDO RQ WKH 2KLR 5LYHU DQG LWV WULEXWDULHV GLVWULFWFRXUWWRILQGWKDWWKHVKLSRZQHUZDVQRWQHJOLJHQWE\ 'HIHQGDQWV ZHUH WKH RSHUDWRUV RI WKH 09 &s %U\DQ DQG IDLOLQJWRKDYHVDIHW\URSHVRUKDQGUDLOVm:KHUHWKHUHDUH EDUJH$(3 WZRSHUPLVVLEOHYLHZVRIWKHHYLGHQFHWKHIDFWILQGHUjVFKRLFH EHWZHHQ WKHP FDQQRW EH FOHDUO\ HUURQHRXVl $QGHUVRQ Y 3ODLQWLIIjVGXWLHVDVVHFRQGPDWHLQFOXGHGVHHLQJWKDWZLUHV &LW\RI%HVVHPHU&LW\86 6LPLODUO\ UDWFKHWV DQG ULJJLQJ ZHUH SURSHUO\ SODFHG RQ WKH WRZ LQ , ZRXOG QRW ILQG WKDW WKH YHVVHO DQG WKH EDUJH ZHUH DFFRUGDQFHZLWKWKHFDSWDLQjVRUGHUVDQGLQVSHFWHGSULRUWR XQVHDZRUWK\EHFDXVHWKHUHZDVQRWDGHTXDWHVDIHW\HTXLSPHQW XVH3ODLQWLIIZDVLQMXUHGRQ'HFHPEHU ZKHQKH DV WKH IDLOXUH WR KDYH FHUWDLQ VDIHW\ HTXLSPHQW ZDV DOVR D IHOOIURPEDUJH$(3WRWKHGHFNRIWKH09&s%U\DQ ILQGLQJRIIDFWZKLFK,WKLQNZDVQRWFOHDUO\HUURQHRXV DGLVWDQFHRIDERXWHLJKWRUQLQHIHHW:KHQ3ODLQWLIIIHOOKH ZDVDWWHPSWLQJWRmOD\lDmURFNDQGUROOlRUmMRFNH\lZLUH 1HYHUWKHOHVV,DJUHHZLWKWKHPDMRULW\LQLWVFRQFOXVLRQWKDW IURP DQ RXWVLGH EDUJH WR WKH 09 &s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mGRJlRIWKHUDWFKHWIDLOHG VW&LU 7KHUHIRUHWKHPDOIXQFWLRQRIWKH WRFDWFKSURSHUO\FDXVLQJWKHWHQVLRQRQWKHFKHDWHUSLSHWR UDFKHW ZDV D VXEVWDQWLDO DQG GLUHFW FDXVH RI WKH LQMXULHV WR JLYH ZD\ 7KHQ 3ODLQWLII ZDV SURSHOOHG IRUZDUG ORVW KLV 3HUNLQV EDODQFHDQGIHOORYHUWKHHGJHRIWKHEDUJHRQWRWKHGHFNRI WKH 09 &s %U\DQ 7KH HYLGHQFH DW WULDO UHYHDOHG WKDW ,QFRQFOXVLRQ,ZRXOGDOVRUHYHUVHDQGUHPDQGEXWRQO\RQ DQDUURZHUEDVLVWKDQGHWHUPLQHGE\WKHPDMRULW\ 7KH mGRJl LV WKH EUDNHOLNH FRPSRQHQW RI WKH UDWFKHW GHVLJQHG WR HQJDJH WKH WHHWK RI RQH RI WKH JHDUV WR SUHYHQW WKH JHDU IURP WXUQLQJ s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sRQHV $FW VLQFH 3ODLQWLII SURYHG WKDW 'HIHQGDQWV ZHUH VXUJHULHV KLVULJKWNQHHLVSHUPDQHQWO\IXVHG KLVULJKWOHJ QHJOLJHQWLQIDLOLQJWRSURYLGHDGHTXDWHVDIHW\SUHFDXWLRQVWR VWDQGVDKDOILQFKRIIWKHJURXQG DQGKLVOHIWDQNOHLVILWWHG SUHYHQW3ODLQWLIIjVLQMXULHVDQGWKDW'HIHQGDQWVjQHJOLJHQFH ZLWKDVWHHOSODWHDQGPD\UHTXLUHIXVLRQRUHYHQDPSXWDWLRQ ZDVDFDXVHRI3ODLQWLIIjVLQMXULHV/LNHZLVHWKHGLVWULFWFRXUW HUUHGLQGHQ\LQJ3ODLQWLIIUHFRYHU\XQGHUWKHXQVHDZRUWKLQHVV 3ODLQWLII DQG KLV ZLIH sXGLWK 3HUNLQV ILOHG VXLW DJDLQVW GRFWULQHLQDVPXFKDVWKHUHFRUGLQGLFDWHVWKDW3ODLQWLIISURYHG 'HIHQGDQWV IRU KLV LQMXULHV RQ sDQXDU\ 7KH WKDW'HIHQGDQWVIDLOHGWRSURYLGHYHVVHOHTXLSPHQWLQWKLV FRPSODLQWDOOHJHGWKDW'HIHQGDQWVZHUHOLDEOHIRUQHJOLJHQFH FDVHDUDWFKHWUHDVRQDEO\ILWIRULWVLQWHQGHGSXUSRVHDQGWDNH XQGHUWKHsRQHV$FWDQGIRUWKHXQVHDZRUWKLQHVVRIWKH09 DGHTXDWHVDIHW\SUHFDXWLRQVIRU3ODLQWLIIjVVDIHW\7KHIDLOXUH &s%U\DQDQGRUWKH$(3EDUJHXQGHUJHQHUDODGPLUDOW\ RIWKHUDWFKHWDQGWKHLQDGHTXDWHVDIHW\SUHFDXWLRQVZHUHD ODZEHFDXVHWKHUDWFKHW3ODLQWLIIXVHGZDVGHIHFWLYHDQGZDV SUR[LPDWH RU GLUHFW DQG VXEVWDQWLDO FDXVH RI 3ODLQWLIIjV WKH FDXVH RI KLV LQMXULHV DQG 'HIHQGDQWV IDLOHG WR WDNH LQMXULHVWKHUHE\PDNLQJ'HIHQGDQWVVWULFWO\OLDEOHXQGHUWKH DGHTXDWHVDIHW\SUHFDXWLRQVDQGSURYLGHWUDLQLQJIRU3ODLQWLII XQVHDZRUWKLQHVVGRFWULQHIRU3ODLQWLIIjVLQMXULHV 3ULRUWRWULDORQsXO\ 3ODLQWLIIILOHGDPRWLRQWR :HIXUWKHUFRQFOXGHWKDW3ODLQWLIIIDLOHGWRHVWDEOLVKWKDWWKH FRQWLQXHWKHWULDODPHQGKLVFRPSODLQWDQGH[WHQGGLVFRYHU\ GLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQGHQ\LQJKLVPRWLRQWR 7KHGLVWULFWFRXUWGHQLHGWKHPRWLRQRQ$XJXVW DQG DPHQGKLVFRPSODLQWWRH[WHQGGLVFRYHU\DQGFRQWLQXHWKH WKHPDWWHUZHQWWRWULDORQ6HSWHPEHU WULDOGDWH $IWHUDWKUHHGD\EHQFKWULDOWKHGLVWULFWFRXUWIRXQGWKDW $FFRUGLQJO\ZH5(9(56(LQSDUWDQG$)),50LQSDUW 'HIHQGDQWVZHUHQRWQHJOLJHQWDQGWKDWWKH09&s%U\DQ WKH GLVWULFW FRXUWjV MXGJPHQW HQWHUHG DJDLQVW 3ODLQWLII DQG DQG$(3EDUJHZHUHVHDZRUWK\0RUHRYHUDOWKRXJKQRW 5(0$1'IRUDKHDULQJRQWKHLVVXHRIGDPDJHVWRWKHH[WHQW QHFHVVDU\WRLWVGHFLVLRQWKHGLVWULFWFRXUWFRQFOXGHGZLWKRXW QHFHVVDU\ ZHDOVR$)),50WKHGLVWULFWFRXUWjVRUGHUGHQ\LQJ H[SODQDWLRQ WKDW 3ODLQWLII ZDV QHJOLJHQW LQ VWUDGGOLQJ WKH 3ODLQWLIIjVPRWLRQWRDPHQGKLVFRPSODLQWH[WHQGGLVFRYHU\ UDWFKHWLQYLRODWLRQRI$(3SROLF\DQGWKDWKLVQHJOLJHQFHZDV DQGFRQWLQXHWKHWULDO OLNHO\WKHVROHSUR[LPDWHFDXVHRIKLVLQMXULHV7KLVDSSHDO IROORZHG
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jVOHJDOFRQFOXVLRQVGHQRYR DQGIXWLOLW\RIDPHQGPHQW6HH*HQ(OHF&R )GDW 6HH6FKUR\HUY)UDQNHO )G WK&LU +HUHWKHUHLVHYLGHQFHRIGHOD\EXW'HIHQGDQWVKDYH 7KHIDFWXDOILQGLQJVRIWKHGLVWULFWFRXUWIROORZLQJDEHQFK QRWDOOHJHGWKDWWKH\KDYHEHHQSUHMXGLFHGE\DQ\SURSRVHG WULDODUHUHYLHZHGIRUFOHDUHUURU6HHLG,QRXUUHYLHZRIWKH DPHQGPHQW1HYHUWKHOHVVZHQRWHWKDWWKHFRXUWRQO\IRXU GLVWULFWFRXUWjVIDFWXDOILQGLQJVWKLV&RXUWJLYHVGXHUHJDUG PRQWKV HDUOLHU JDYH 3ODLQWLII DQ RSSRUWXQLW\ WR FXUH WRWKHGLVWULFWFRXUWjVRSSRUWXQLW\WRMXGJHWKHFUHGLELOLW\RI GHILFLHQFLHVLQKLVFRPSODLQWDQG3ODLQWLIIGHFOLQHGWRGRVR WKHZLWQHVVHV6HH$GDPV&RXQW\5HJjO:DWHU'LVWY9LOORI +DYLQJIRXQGWKDW3ODLQWLIIKDGQRWVKRZQMXVWLILFDWLRQIRUDQ 0DQFKHVWHU 2KLR )G WK &LU $ DPHQGPHQW WR DGG QHZ FODLPV RU QHZ SDUWLHV WR KLV ILQGLQJRIIDFWLVFOHDUO\HUURQHRXVmµZKHQDOWKRXJKWKHUHLV FRPSODLQW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ HYLGHQFH WR VXSSRUW LW WKH UHYLHZLQJ FRXUW RQ WKH HQWLUH GHQ\LQJWKHPRWLRQWRDPHQG HYLGHQFHLVOHIWZLWKWKHGHILQLWHDQGILUPFRQYLFWLRQWKDWD PLVWDNHKDVEHHQFRPPLWWHGjl,G TXRWLQJ8QLWHG6WDWHVY ,QDGGLWLRQWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ 8QLWHG6WDWHV*\SVXP&R86 GHQ\LQJ 3ODLQWLIIjV PRWLRQ WR FRQWLQXH WKH WULDO DQG H[WHQG GLVFRYHU\$VWRGLVFRYHU\WKHFRXUWQRWHGWKDW3ODLQWLIIKDG 7KLVDFWLRQDULVHVXQGHUWKHsRQHV$FW86& QRW VKRZQ ZKDW LQIRUPDWLRQ RU GLVFRYHU\ ZDV QHHGHG DQG DQGJHQHUDODGPLUDOW\ODZ3ODLQWLII'HIHQGDQWVjHPSOR\HH KRZ LW ZRXOG EH UHOHYDQW RU EHQHILFLDO WR 3ODLQWLIIjV FDVH DQGDVHDPDQFODLPVWKDW'HIHQGDQWVZHUHQHJOLJHQWDQG 0RUHRYHUWKHGLVFRYHU\SHULRGLQWKLVFDVHKDGDOUHDG\ODVWHG 'HIHQGDQWVjYHVVHOVWKH09&s%U\DQDQG$(3ZHUH RYHUD\HDU$QG3ODLQWLIIZDLWHGXQWLOOHVVWKDQWKUHHPRQWKV XQVHDZRUWK\ EHFDXVH WKH HTXLSPHQW DSSXUWHQDQW WKHUHWR SULRU WR WKH VWDUW RI WULDO WR ILOH KLV PRWLRQ 8QGHU WKHVH QDPHO\WKHUDWFKHWPDOIXQFWLRQHGXQGHUSURSHUDQGLQWHQGHG FLUFXPVWDQFHVWKHGLVWULFWFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQ XVH DQG 'HIHQGDQWV IDLOHG WR SURYLGH DGHTXDWH VDIHW\ GHQ\LQJIXUWKHUGLVFRYHU\6HHHJ/HZLVY$&%%XV6HUY PHDVXUHVDQGWUDLQLQJIRU3ODLQWLII ,QF)G WK&LU $VWR3ODLQWLIIjV PRWLRQWRFRQWLQXHWKHWULDO3ODLQWLIIKDVIDLOHGWRVKRZWKDW 3ODLQWLIIFRQWHQGVRQDSSHDOWKDWWKHGLVWULFWFRXUWHUUHGLQ KH ZDV DFWXDOO\ SUHMXGLFHG E\ GLVWULFW FRXUWjV GHQLDO RI KLV LWVIDFWXDOILQGLQJVDQGDSSOLFDWLRQRIWKHODZ6SHFLILFDOO\ PRWLRQWKDWDGGLWLRQDOWLPHZRXOGKDYHSURGXFHGDGGLWLRQDO 3ODLQWLIIFODLPVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJWKDWWKH ZLWQHVVHV RU HYLGHQFH IRU 3ODLQWLIIjV FDVH DEVHQW VXFK D UDWFKHWZDVQRWGHIHFWLYHWKDW3ODLQWLIIKDGUHFHLYHGDGHTXDWH VKRZLQJ3ODLQWLIIFDQQRWFODLPWKDWWKHGLVWULFWFRXUWDEXVHG WUDLQLQJWKDW'HIHQGDQWVZHUHQRWQHJOLJHQWLQIDLOLQJWRWDNH LWVGLVFUHWLRQ6HH8QLWHG6WDWHVY0DUWLQ)G FHUWDLQ VDIHW\ SUHFDXWLRQV WR SUHYHQW 3ODLQWLIIjV LQMXU\ DQG WK&LU WKDW WKH 09 &s %U\DQ DQG $(3 EDUJH ZHUH QRW XQVHDZRUWK\ 3ODLQWLII DOVR FODLPV WKDW WKH GLVWULFW FRXUW &21&/86,21 GLVUHJDUGHG3ODLQWLIIjVVWDWXVDVDZDUGRIWKHFRXUWDQGHUUHG :HWKHUHIRUHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUULQ GHQ\LQJ 3ODLQWLII UHFRYHU\ XQGHU WKH sRQHV $FW EDVHG RQ 1HLWKHU SDUW\ FRQWHVWV WKDW 3ODLQWLII LV D VHDPDQ ZLWKLQ WKH PHDQLQJ DQG FRYHUDJH RI WKH sRQHV $FW 3HUNLQVHWDOY$P 1R 1R 3HUNLQVHWDOY$P (OHFWULF3RZHUHWDO (OHFWULF3RZHUHWDO LQLWVDSSOLFDWLRQRIWKHSURRIRIQHJOLJHQFHUHTXLUHGXQGHUWKH 7KH GLVWULFW FRXUW LVVXHG DQ RUGHU GHQ\LQJ 3ODLQWLIIjV sRQHV $FW DQG WKH VWDQGDUG RI OLDELOLW\ XQGHU WKH PRWLRQ7KHFRXUWjVRUGHUVWDWHGLWKDGDGYLVHG3ODLQWLIIRI VHDZRUWKLQHVVGRFWULQH$QGDOWKRXJKQRWQHFHVVDU\WRWKH WKH GHILFLHQFLHV LQ KLV FRPSODLQW IRXU PRQWKV SULRU WR KLV GLVWULFWFRXUWjVGHFLVLRQ3ODLQWLIIDOVRFKDOOHQJHVWKHGLVWULFW PRWLRQDQGLQYLWHG3ODLQWLIIWRDPHQGKLVFRPSODLQWDWWKDW FRXUWjVILQGLQJWKDW3ODLQWLIIZDVQHJOLJHQWLQVWUDGGOLQJWKH WLPHEXW3ODLQWLIIGHFOLQHGWRGR VR7KHFRXUWQRWHGWKDW UDWFKHW DQG WKDW 3ODLQWLIIjV QHJOLJHQFH ZDV OLNHO\ WKH VROH m3ODLQWLIIVKDYHZDLWHGXQWLOWKHHOHYHQWKKRXUWRPRYHIRUDQ FDXVHRIKLVLQMXULHV:HKROGWKDWWKHGLVWULFWFRXUWHUUHGLQ H[WHQVLRQ D FRQWLQXDQFH DQG D OHDYH WR DPHQG WKHLU FRQFOXGLQJWKDW3ODLQWLIIZDVQRWHQWLWOHGWRUHFRYHUHLWKHURQ FRPSODLQW 1RQH RI WKH PDWWHUV UDLVHG LQ VXSSRUW RI WKHLU WKHsRQHV$FWFODLPRUWKHXQVHDZRUWKLQHVVFODLP 0RWLRQVKRXOGKDYHFRPHDVDVXUSULVHWR3ODLQWLIIVl s$DW 7KH&RXUWDOVRIRXQGWKDW $ 7KH\ DVVHUW WKDW 3ODLQWLII sDPHV : 3HUNLQVj PHGLFDO ,W LV D ZHOOVHWWOHG SULQFLSOH RI ODZ WKDW VHDPHQ DUH FRQGLWLRQKDVFKDQJHGDQGZLOOFRQWLQXHWRFKDQJHWKDW mHPSKDWLFDOO\WKHZDUGVRIWKHDGPLUDOW\l&KUDQGLV,QFY WKHGLVFRYHU\LVQRW\HWFRPSOHWHDQGWKDWDQDPHQGPHQW /DWVLV86 FLWDWLRQDQGTXRWDWLRQ RI WKH FRPSODLQW ZRXOG SHUPLW WKHP WR DGG VSHFLILF RPLWWHG DFFRUG6RFRQ\9DFXXP2LO&RY6PLWK86 DOOHJDWLRQVUHODWHGWRPDWWHUVOHDUQHGLQUHFHQWGLVFRYHU\ 'DYLVY$P&RPPHUFLDO/LQHV,QF 7R WKH H[WHQW WKDW WKHVH PDWWHUV OHDUQHG LQ UHFHQW )G WK&LU GLVFRYHU\ DUH JHUPDQH WR 3ODLQWLIIVj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sDPHV:3HUNLQVjPHGLFDOFRQGLWLRQ3ODLQWLIIV DUHTXLWHXQOLNHWKHFRQGLWLRQVZKLFKDWWHQGODQGODERU KDYHQRWLGHQWLILHGPDWWHUVFRQFHUQLQJZKLFKDGGLWLRQDO DQGKDYHUHVXOWHGLQH[WUDRUGLQDU\UHPHGLHVEHLQJPDGH GLVFRYHU\VKRXOGEHSHUPLWWHG:LWKUHJDUGWRPDWWHUV DYDLODEOHWRWKRVHZKRDFFHSWWKLVFDOOLQJ UHODWHGWR0U3HUNLQVjPHGLFDOFRQGLWLRQ3ODLQWLIIVZLOO EH UHTXLUHG DV LV RIWHQ WKH FDVH LQ DFWLRQV LQYROYLQJ 3DXOY8QLWHG6WDWHV)G G&LU m,WLV ERGLO\LQMXULHVWRSUHVHQWHYLGHQFHUHODWHGWRWKHLQMXULHV IRU WKLV UHDVRQ WKDW UHPHGLDO OHJLVODWLRQ >HQDFWHG@ IRU WKH 0U 3HUNLQVj FXUUHQW FRQGLWLRQ DQG KLV SURJQRVLV EHQHILWDQGSURWHFWLRQRIVHDPHQKDVEHHQOLEHUDOO\FRQVWUXHG 3ODLQWLIIVKDYHQRWGHPRQVWUDWHGWKH\ZLOOEHXQDEOHWR WRDWWDLQWKDWHQGl6RFRQ\9DFFXP86DW DFFRUG GRVRLIWKH&RXUWGRHVQRWJUDQWWKHUHTXHVWHGH[WHQVLRQ ,VEUDQGWVHQ&RYsRKQVRQ86 DQG FRQWLQXDQFH )RU DOO RI WKRVH UHDVRQV 3ODLQWLIIVj 0RWLRQLVGHQLHG 2QH VXFK UHPHGLDO PHDVXUH LV WKH sRQHV $FW 86& ZKLFKSURYLGHVLQSHUWLQHQWSDUW s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sRQHV$FW ZLWK WKH ULJKW RI WULDO E\ MXU\ DQG LQ VXFK DFWLRQ DOO VWDWXWHVRIWKH8QLWHG6WDWHVFRQIHUULQJRUUHJXODWLQJWKH ,, ULJKWRIDFWLRQIRUGHDWKLQWKHFDVHRIUDLOZD\HPSOR\HHV VKDOOEHDSSOLFDEOH 3ODLQWLII QH[W FRQWHQGV WKDW WKH GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQLQGHQ\LQJKLVPRWLRQWRDPHQGKLVFRPSODLQWWR 86&8QGHUWKHsRQHV$FWVHDPDQDUHDIIRUGHG H[WHQGGLVFRYHU\DQGWRFRQWLQXHWKHWULDOGDWH:HILQGQR ULJKWVSDUDOOHOWRWKRVHJLYHQWRUDLOZD\HPSOR\HHVXQGHUWKH VXFKDEXVHRIGLVFUHWLRQ )HGHUDO(PSOR\HUV/LDELOLW\$FW m)(/$l 86&HW VHT7KH)(/$SURYLGHVLQSHUWLQHQWSDUW :HUHYLHZWKHGLVWULFWFRXUWjVGHQLDORI3ODLQWLIIjVPRWLRQ WR DPHQG KLV FRPSODLQW IRU DEXVH RI GLVFUHWLRQ 6HH *HQ (YHU\FRPPRQFDUULHUE\UDLOURDGVKDOOEHOLDEOHLQ (OHF&RY6DUJHQW /XQG\ )G WK&LU GDPDJHV WR DQ\ SHUVRQ VXIIHULQJ LQMXU\ ZKLOH KH LV 6LPLODUO\ ZH UHYLHZ WKH GLVWULFW FRXUWjV GHQLDO RI HPSOR\HGE\VXFK FDUULHUIRUVXFKLQMXU\RUGHDWK GLVFRYHU\IRUDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVYsRQHV UHVXOWLQJLQZKROHRULQSDUWIURPWKHQHJOLJHQFHRIDQ\ )G WK&LU /LNHZLVHWKHGHQLDORID RIWKHRIILFHUVDJHQWVRUHPSOR\HHVRIVXFKFDUULHURUE\ PRWLRQ IRU FRQWLQXDQFH RI WULDO LV UHYLHZHG IRU DEXVH RI UHDVRQ RI DQ\ GHIHFW RU LQVXIILFLHQF\ GXH WR LWV GLVFUHWLRQ6HH6FKROOY)HOPRQW2LO&RUS)G QHJOLJHQFHLQLWVFDUVHQJLQHVDSSOLDQFHVPDFKLQHU\ WK&LU WUDFN URDGEHG ZRUNV ERDWV ZKDUYHV RU RWKHU HTXLSPHQW 3ODLQWLII ILOHG KLV FRPSODLQW RQ sDQXDU\ $ FDOHQGHURUGHUHQWHUHG$SULO VHWWKHGHDGOLQHIRU 86&7KHUHIRUHLQVXLWVXQGHUWKHsRQHV$FWWKH DPHQGLQJWKHFRPSODLQWIRU0D\ DQGWKHGHDGOLQH FRXUW PXVW GHWHUPLQH ZKHWKHU WKH HYLGHQFH MXVWLILHV WKH IRU GLVFRYHU\ IRU 'HFHPEHU 7KH SDUWLHV ODWHU FRQFOXVLRQ WKDW WKH HPSOR\HU ZDV QHJOLJHQW DQG WKDW WKH HQWHUHGDVWLSXODWLRQH[WHQGLQJGLVFRYHU\WRsXO\ HPSOR\HUjV QHJOLJHQFH SOD\HG DQ\ SDUW KRZHYHU VOLJKW LQ 3ODLQWLII ILOHG KLV PRWLRQ WR DPHQG KLV FRPSODLQW H[WHQG SURGXFLQJ WKH LQMXU\ WR WKH VHDPDQ 6HH 6ZHHQH\ Y $P GLVFRYHU\DQGFRQWLQXHWKHWULDORQsXO\ 3ODLQWLII 6WHDPVKLS&R )G WK&LU DUJXHGWKDWKHVKRXOGEHDOORZHGWRDPHQGKLVFRPSODLQWWR UHIOHFW LQIRUPDWLRQ IRXQG WKURXJK GLVFRYHU\ 6SHFLILFDOO\ 3URRI RI QHJOLJHQFH GXW\ DQG EUHDFK LV HVVHQWLDO WR 3ODLQWLIIVWDWHGWKDWKHOHDUQHGWKDWWKHFKHDWHUSLSH3ODLQWLII UHFRYHU\XQGHUWKHsRQHV$FW6HHsDFREY&LW\RI1HZ<RUN XVHG KDG EHHQ PDQXIDFWXUHG E\ 'HIHQGDQW $(3 KH KDG 86 :KHWKHUDQHPSOR\HULVQHJOLJHQW OHDUQHGWKHLGHQWLW\RIWKHPDQXIDFWXUHURIWKHUDWFKHWZKRP LV GHWHUPLQHG XQGHU WKH mRUGLQDU\ SUXGHQFHl VWDQGDUG KHZDQWHGWRDGGDVDSDUW\ DQGWKDWGHSRVLWLRQVZHUHVWLOOQRW QRUPDOO\DSSOLFDEOHLQQHJOLJHQFHFDVHV6HH*DXWUHDX[Y FRPSOHWHGXHLQSDUWWRWKHGHELOLWDWLQJKHDOWKRI3ODLQWLII 6FXUORFN 0DULQH ,QF )G WK &LU 3HUNLQVHWDOY$P 1R 1R 3HUNLQVHWDOY$P (OHFWULF3RZHUHWDO (OHFWULF3RZHUHWDO +RZHYHURQFHWKHSODLQWLIISURYHVQHJOLJHQFHKHQHHGRQO\ WKDWGRLQJVRZDVGDQJHURXVEHFDXVHLWLQFUHDVHVWKH VKRZWKDWKLVHPSOR\HUjVQHJOLJHQFHLVWKHFDXVHLQZKROHRU OLNHOLKRRGRIWKHGRJVOLSSLQJDQGWKHRSHUDWHGEHLQJ LQSDUWRIKLVLQMXULHV6HH'DXJKHQEDXJKY%HWKOHKHP6WHHO WKURZQ RII EDODQFH 3ODLQWLII GHQLHG SXVKLQJ WKH &RUS )G WK&LU ,QHVVHQFHWKHUH SLSHSDVWYHUWLFDOWKHQLJKWRIKLVLQMXU\HYHQWKRXJK LVDUHGXFHGVWDQGDUGIRUFDXVDWLRQEHWZHHQWKHHPSOR\HUjV KH WHVWLILHG DW KLV GHSRVLWLRQ WKDW KH FRXOG QRW QHJOLJHQFHDQGWKHHPSOR\HHjVLQMXU\6HH*DXWUHDX[ UHPHPEHU ZKHWKHU KH KDG SXVKHG WKH SLSH SDVW )GDW0RUHRYHUEHFDXVHWKHFRPSDUDWLYHQHJOLJHQFH YHUWLFDO SULQFLSOHDSSOLHVWRQHJOLJHQFHDFWLRQVXQGHUWKHsRQHV$FW DQ\QHJOLJHQFHRQWKHSDUWRIWKHHPSOR\HHRSHUDWHVRQO\WR s$DW PLWLJDWH WKH GDPDJHV GXH WR WKH HPSOR\HH XQOHVV KLV QHJOLJHQFHLVWKHVROHFDXVHRIKLVLQMXULHV6HHsDFRE :HEHOLHYHWKDWWKHGLVWULFWFRXUWjVILQGLQJVLQWKLVUHVSHFW 86DW DUHXQVXSSRUWHGE\WKHHYLGHQFHDQGFOHDUO\HUURQHRXV(YHQ WKRXJK3ODLQWLIIZDVVWUDGGOLQJWKHUDWFKHWWKHUHLVQRWHQRXJK 7RUHFRYHUWKHSODLQWLIIPXVWILUVWHVWDEOLVKmWKHEUHDFKRI LQIRUPDWLRQ LQ WKH WHVWLPRQ\ WR FRQFOXGH WKDW WKLV SRVLWLRQ D GXW\ WR SURWHFW DJDLQVW IRUHVHHDEOH ULVNV RI KDUPl ZDVQHJOLJHQWDQGWKDWLWFRQWULEXWHGWR3ODLQWLIIjVLQMXULHV +HUQDQGH]Y7UDZOHU0LVV9HUWLH0DH,QF)G 3ODLQWLIIjVH[SHUWWHVWLILHGWKDW3ODLQWLIIjVVWUDGGOLQJSRVLWLRQ WK&LU ,QWKHLQVWDQWFDVH3ODLQWLIIDOOHJHGWKDW ZDVDPRUHVWDEOHSRVLWLRQWKDQLIKHKDGQRWVWUDGGOHGWKH 'HIHQGDQWV ZHUH QHJOLJHQW LQ VHYHUDO UHVSHFWV LQ UDWFKHW 'HIHQGDQWVj H[SHUW WHVWLILHG WKDW VWUDGGOLQJ WKH SURYLGLQJ D GHIHFWLYH UDWFKHW ZLWK ZKLFK 3ODLQWLII KDG WR UDWFKHWZDVLPSURSHUEXWRQFURVVH[DPLQDWLRQDGPLWWHGWKDW ZRUN LQIDLOLQJWRSURYLGH3ODLQWLIIZLWKDGHTXDWHWUDLQLQJ LQKLVGHSRVLWLRQKHWHVWLILHGWKDWVWUDGGOLQJWKHUDWFKHWLH DQG LQIDLOLQJWRWDNHFHUWDLQVDIHW\SUHFDXWLRQVWRSUHYHQW SODFLQJ3ODLQWLIIjVOHJVIDUWKHUDSDUWSURYLGHGDPRUHVWDEOH 3ODLQWLIIjVLQMXU\:HFRQFOXGHWKDW3ODLQWLIIPHWKLVEXUGHQ SODWIRUP,QWKHIDFHRIWKLVXQFRQWUDGLFWHGHYLGHQFHIURP RISURRIZLWKUHVSHFWWRWKHVDIHW\SUHFDXWLRQVDQGWKDWWKH 3ODLQWLIIjVH[SHUWDQG'HIHQGDQWVjH[SHUWj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jDUJXPHQWWKDW3ODLQWLII UDWFKHW ZDV GHIHFWLYH LQDVPXFK DV 3ODLQWLII KDV IDLOHG WR ZDVQHJOLJHQWLQSXVKLQJWKHUDWFKHWSDVWYHUWLFDOEHFDXVHWKH HVWDEOLVKWKHHPSOR\HUjVSULRUQRWLFHRIWKHGHIHFWRUWKDWWKH GLVWULFWFRXUWGLGQRWGUDZVXFKDFRQFOXVLRQ$WPRVWWKHUH ULVNRIKDUPIURPDGHIHFWLYHUDWFKHWZDVIRUHVHHDEOH,WLVD LV RQO\ HYLGHQFH WKDW 3ODLQWLII GLG QRW NQRZ ZKHWKHU KH IXQGDPHQWDOSULQFLSOHWKDWXQGHUWKHsRQHV$FWDQHPSOR\HU SXVKHGWKHUDWFKHWSDVWYHUWLFDO WKHUHLVQRHYLGHQFHWRVKRZ mPXVWKDYHQRWLFHDQGWKHRSSRUWXQLW\WRFRUUHFWDQXQVDIH WKDWKHDFWXDOO\SXVKHGWKHUDWFKHWSDVWYHUWLFDO)XUWKHUPRUH FRQGLWLRQEHIRUHOLDELOLW\ZLOODWWDFKl+DYHQVY)73RODU WKHHYLGHQFHRQWKHUHFRUGVKRZVWKDWHYHQLI3ODLQWLIIKDG 0LVW )G WK &LU m7KHUH PXVW EH DFWXDOO\ SXVKHG WKH UDWFKHW SDVW YHUWLFDO LW ZRXOG QRW VRPHHYLGHQFHIURPZKLFKWKHWULHURIIDFWFDQLQIHUWKDWWKH FRQVWLWXWHQHJOLJHQFH,Q'HIHQGDQWVjRZQH[KLELWSXUSRUWLQJ RZQHUHLWKHUNQHZRULQWKHH[HUFLVHRIGXHFDUHVKRXOGKDYH 3HUNLQVHWDOY$P 1R 1R 3HUNLQVHWDOY$P (OHFWULF3RZHUHWDO (OHFWULF3RZHUHWDO IRUWKHLUIDLOXUHWRSURYLGHDVHDZRUWK\YHVVHO3ODLQWLIIDOVR NQRZQRIWKHXQVDIHFRQGLWLRQl,G7KHHYLGHQFHRQUHFRUG VKRZHGWKDWWKHIDLOXUHWRSURYLGHDGHTXDWHVDIHW\HTXLSPHQW IDLOVWRVKRZWKDW'HIHQGDQWVNQHZRUVKRXOGKDYHNQRZQRI ZDVDWOHDVWRQHRIWKHSUR[LPDWHFDXVHVRI3ODLQWLIIjVLQMXULHV DQ\SRVVLEOHGHIHFWLQWKHSDUWLFXODUUDWFKHW3ODLQWLIIZDVXVLQJ LQDVPXFKDVLWZDVIRUHVHHDEOHJLYHQWKHSUHYLRXVIDOOWKDW RUWKDWWKH\KDGDQRSSRUWXQLW\WRFRUUHFWVXFKDGHIHFW,Q 3ODLQWLIIFRXOGEHLQMXUHGIURPDIDOORQWKHYHVVHOLQOLJKWRI IDFW WKH HYLGHQFH GHPRQVWUDWHV WKDW 3ODLQWLII KLPVHOI WKHIDLOXUHWRSURYLGHVDIHW\URSHRUVLPLODUHTXLSPHQW LQVSHFWHGWKHUDWFKHWSULRUWRXVLQJLWDQGGLGQRWGHWHFWDQ\ GHIHFWV0RUHRYHU3ODLQWLIIjVVXSHUYLVRUFRQGXFWHGDQRWKHU & YLVXDOLQVSHFWLRQRIWKHUDWFKHWDIWHU3ODLQWLIIjVDFFLGHQWDQG GLG QRW GHWHFW DQ\ GHIHFWV LQ WKH UDWFKHW WKLV FRQVWLWXWHV :H QRZ FRQVLGHU 3ODLQWLIIjV FRQWHQWLRQ WKDW WKH GLVWULFW HYLGHQFHWKDW'HIHQGDQWVGLGQRWKDYHQRWLFHRIDQ\GHIHFWLQ FRXUWHUUHGLQGHWHUPLQLQJWKDWKHZDVQHJOLJHQWLQVWUDGGOLQJ WKH UDWFKHW $EVHQW HYLGHQFH VXIILFLHQW WR VKRZ WKDW WKHUDWFKHW:HQHHGQRWDGGUHVVWKHGLVWULFWFRXUWjVGLFWDWKDW 'HIHQGDQWVNQHZRUVKRXOGKDYHNQRZQWKDWWKHUDWFKHWZDV 3ODLQWLIIjV QHJOLJHQFH ZDV WKH VROH SUR[LPDWH FDXVH RI KLV GHIHFWLYH 3ODLQWLII KDV IDLOHG WR HVWDEOLVK WKDW 'HIHQGDQWV LQMXULHV LQDVPXFK DV ZH KDYH SUHYLRXVO\ FRQFOXGHG WKDW EUHDFKHGDGXW\WRSURWHFW3ODLQWLIIIURPDIRUHVHHDEOHULVN 'HIHQGDQWVjQHJOLJHQFHFRQWULEXWHGWR3ODLQWLIIjVLQMXULHV 6HH5LELW]NLY&DQPDU5HDGLQJ %DWHV/WG)G WK&LU 7KHGLVWULFWFRXUWQRWHGWKDW 6LPLODUO\ZHFRQFOXGHWKDW3ODLQWLIIKDVIDLOHGWRHVWDEOLVK $WWKHWLPHRIKLVLQMXU\3ODLQWLIIZDVVWUDGGOLQJWKH WKDW'HIHQGDQWVZHUHQHJOLJHQWLQHQVXULQJWKDW3ODLQWLIIZDV UDWFKHWZLWKRQHIRRWIOXVKWRWKHFRDPLQJDQGWKH DGHTXDWHO\WUDLQHGWROD\WKHMRFNH\ZLUH:LWKUHVSHFWWRWKH RWKHUEHVLGHWKHRXWVLGHHGJHRIWKHUDWFKHW$(3 DGHTXDF\RI3ODLQWLIIjVWUDLQLQJWKHGLVWULFWFRXUWIRXQG VDIHW\UXOHLQVWUXFWVHPSOR\HHVQRWWRmVWUDGGOH ZLUHRUUDWFKHWVZKHQWLJKWHQLQJEDUJHOLQHVl,QWKLV 3ODLQWLIIZDVDQH[SHULHQFHGVHDPDQ+HUHFHLYHG FRQWH[W WKH &RXUW ILQGV WKHUH LV QR VLJQLILFDQW RQWKHMRE WUDLQLQJ ZKLFK LV FRQVLVWHQW ZLWK WKH GLIIHUHQFH EHWZHHQ WLJKWHQLQJ EDUJH mOLQHVl DQG FXVWRP DQG SUDFWLFH LQ WKH ULYHU LQGXVWU\ ,Q WLJKWHQLQJ EDUJH mZLUHVl DV 3ODLQWLII ZDV GRLQJ DGGLWLRQ GXULQJ KLV VHYHQWHHQ \HDU ZLWK $(3 3ODLQWLIIjV RZQ H[SHUW WHVWLILHG WKDW LW ZRXOG EH 3ODLQWLII DWWHQGHG VDIHW\ PHHWLQJV RQ DW OHDVW D mFRPPRQVHQVHlLQWKHLQGXVWU\QRWWRVWUDGGOHWKH PRQWKO\ EDVLV :KHQ &DSWDLQ +DUULQJWRQ ZDV UDWFKHW5XOHIXUWKHUSURYLGHVWKDWmHPSOR\HHV DERDUGWKHYHVVHO3ODLQWLIIDWWHQGHGVDIHW\PHHWLQJV VKDOO RSHUDWH WKH UDWFKHW OHYHU IURP WKH LQERDUG RQDZHHNO\EDVLV6RPHRIWKHVHPHHWLQJVLQFOXGHG VLGHl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jH[SHUWFRQFOXGHGDQGWKHGLVWULFWFRXUWIRXQG ZD\LQZKLFKWKHZLUHVZHUHWLJKWHQHGRUWKHZD\ WKDWWKHUDWFKHWPDOIXQFWLRQHG WKHUDWFKHWZDVSRVLWLRQHGDQGFUDQNHG0RUHRYHU 3ODLQWLIIKDGODLGWKRXVDQGVRIRWKHUZLUHVDWOHDVW )XUWKHUPRUH3ODLQWLIIHVWDEOLVKHGWKDWWKHPDOIXQFWLRQRI VRPH RI ZKLFK KDG UHTXLUHG KLP WR WLJKWHQ WKH WKHUDWFKHWZDVDSUR[LPDWHRUDGLUHFWDQGVXEVWDQWLDOFDXVH UDWFKHWWRZDUGDQHPSW\FDUJRKRSSHURUWRZDUGWKH RI KLV LQMXULHV 'HIHQGDQWVj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s$DW :HDUHQRWFRQYLQFHGWKDWWKHVHILQGLQJVDUH RI3ODLQWLIIjVLQMXULHV7KHGLVWULFWFRXUWWKHUHIRUH HUUHGLQ FOHDUO\HUURQHRXV GHWHUPLQLQJ WKDW GHVSLWH WKH WHVWLPRQ\ WKDW WKH UDWFKHW PDOIXQFWLRQHG XQGHU QRUPDO XVH WKH 09 &s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s%U\DQDQG $(3 GLG QRW KDYH DGHTXDWH VDIHW\ HTXLSPHQW DQG 'HIHQGDQWVj H[SHUW KRZHYHU WHVWLILHG WKDW D UHYLHZ RI WKHUHIRUHZHUHQRWILWIRUWKHLULQWHQGHGXVHV$VGLVFXVVHG H[KLELWV DGPLWWHG LQWR HYLGHQFH UHYHDOHG WKDW 3ODLQWLII KDG HDUOLHU'HIHQGDQWVNQHZRIWKHGDQJHUVRIWKHUDWFKHWIDLOLQJ H[WHQVLYHWUDLQLQJVRPHDERYHDQGEH\RQGLQGXVWU\VWDQGDUG DVZHOODVWKHGDQJHUVRIVHDPHQIDOOLQJRQWKHYHVVHOKDYLQJ 'HIHQGDQWVjH[SHUWIXUWKHUWHVWLILHGWKDW3ODLQWLIIZDVWUDLQHG KDGDVHDPDQLQMXUHGRQWKHVDPHYHVVHOE\DIDOOMXVWDPRQWK LQWLJKWHQLQJZLUHVUDWFKHWUHSODFHPHQWDQGSURSHUULJJLQJ SULRU WR 3ODLQWLIIjV LQMXULHV 7KLV HYLGHQFH LV VXIILFLHQW WR 'HVSLWH WKDW 3ODLQWLII KDG QRW UHFHLYHG VSHFLILF LQVWUXFWLRQ VKRZ WKDW WKH 09 &s %U\DQ DQG $(3 ZHUH UHJDUGLQJOD\LQJMRFNH\ZLUHWRDQRXWVLGHEDUJH'HIHQGDQWVj XQVHDZRUWK\DQGWKDW'HIHQGDQWVZHUHWKHUHIRUHVWULFWO\OLDEOH H[SHUWWHVWLILHGWKDWWKHUHZDVQRDSSUHFLDEOHGLIIHUHQFHLQWKH PHWKRGIRUOD\LQJMRFNH\ZLUHVWRDQRXWVLGHEDUJHDQGWKH WKRXVDQGV RI RWKHU ZLUHV 3ODLQWLII ODLG WR WKH FHQWHU EDUJH 8QOLNH D FODLP XQGHU WKH sRQHV $FW ZKHUH D ILQGLQJ RI QHJOLJHQFH 'HIHQGDQWVjH[SHUWVWDWHGWKDWIURPWKHHYLGHQFHLQFOXGLQJ LV QHFHVVDU\ WKH VRXUFH RI WKH PDOIXQFWLRQ LV LUUHOHYDQW WR DQ 3ODLQWLIIjV GHSRVLWLRQ DQG WUDLQLQJ LQIRUPDWLRQ 3ODLQWLIIjV XQVHDZRUWKLQHVV FODLP m>8@QVHDZRUWKLQHVV LV D FRQGLWLRQ DQG KRZ WKDW WUDLQLQJZDVDGHTXDWHWRDOORZKLPWROD\DMRFNH\ZLUHWRDQ FRQGLWLRQ FDPH LQWR EHLQJZKHUH E\ QHJOLJHQFH RU RWKHUZLVHLV TXLWH RXWVLGHEDUJH'HIHQGDQWVjH[SHUWjVWHVWLPRQ\VXSSRUWVWKH LUUHOHYDQW WR WKH RZQHUjV OLDELOLW\ IRU SHUVRQDO LQMXULHV UHVXOWLQJ IURP LWl )HUUDUD )G DW HPSKDVLV LQ RULJLQDO 3HUNLQVHWDOY$P 1R 1R 3HUNLQVHWDOY$P (OHFWULF3RZHUHWDO (OHFWULF3RZHUHWDO KDYH KDG VRPHWKLQJ WR JUDE DQG KLV IDOO ZRXOG KDYH EHHQ GLVWULFWFRXUWjVFRQFOXVLRQ*LYLQJGXHUHJDUGWRWKHGLVWULFW SUHYHQWHG:HWKHUHIRUHFRQFOXGHWKDWWKHGLVWULFWFRXUWHUUHG FRXUWjVRSSRUWXQLW\WRMXGJHWKHZLWQHVVjFUHGLELOLW\DVZH LQGHWHUPLQLQJWKDW3ODLQWLIIZDVQRWHQWLWOHGWRUHFRYHUXQGHU PXVWZHFRQFOXGHWKDWWKHGLVWULFWFRXUWjVILQGLQJVDVWRWKH WKLVWKHRU\RIQHJOLJHQFH DGHTXDF\RI3ODLQWLIIjVWUDLQLQJZHUHQRWFOHDUO\HUURQHRXV % :H QH[W WXUQ WR WKH GLVWULFW FRXUWjV ILQGLQJ RI IDFW DQG FRQFOXVLRQVRIODZDVWR3ODLQWLIIjVDOOHJDWLRQWKDW'HIHQGDQWV 8QGHUWKHVHDZRUWKLQHVVGRFWULQHWKHUHLVDQDEVROXWHGXW\ ZHUH QHJOLJHQW LQ IDLOLQJ WR SURYLGH DGHTXDWH VDIHW\ WRPDLQWDLQDVHDZRUWK\VKLSWKHEUHDFKRIZKLFKLPSRVHV SUHFDXWLRQV6SHFLILFDOO\WKHGLVWULFWFRXUWIRXQGWKDW OLDELOLW\ZLWKRXWIDXOWLHVWULFWOLDELOLW\6HH%URZQY'UDYR &RUS)G G&LU $VKLSRZQHUKDVDQ $OWKRXJK WKH UDWFKHW RQ EDUJH $(3WKDW REOLJDWLRQWRmµIXUQLVKDYHVVHODQGDSSXUWHQDQFHVUHDVRQDEO\ 3ODLQWLIIZDVXVLQJDWWKHWLPHRIWKHDFFLGHQWZDV ILW IRU WKHLU LQWHQGHG XVHjl +DYHQV )G DW ROGHUKHGHWHUPLQHGSXUVXDQWWRKLVUHVSRQVLELOLW\DV +RZHYHUDYHVVHOQHHGQRWEHmIUHHIURPDOOSRVVLELOLW\RI VHFRQGPDWHWKDWLWZDVQRWLQQHHGRIUHSODFHPHQW PLVKDSIRUWKHVHDZRUWKLQHVVRIDVKLSLVDUHODWLYHFRQFHSW RU UHSDLU /LNHZLVH XSRQ LQVSHFWLRQ DIWHU WKH GHSHQGHQWLQHDFKLQVWDQFHXSRQFLUFXPVWDQFHVl%URZQ DFFLGHQW&DSWDLQ+DUULQJWRQGHWHUPLQHGWKHUDWFKHW )GDW7RSURYHDQXQVHDZRUWKLQHVVFODLPDSODLQWLII ZDVQRWLQQHHGRIUHSODFHPHQWRUUHSDLUDQGOHIWLW PXVWVKRZWKDWWKHXQVHDZRUWK\FRQGLWLRQRIWKHYHVVHOZDV LQ VHUYLFH IRU WKH UHPDLQGHU RI WKH WRZ 7RZ WKHVXEVWDQWLDODQGGLUHFWRUSUR[LPDWHFDXVHRIWKHSODLQWLIIjV UDWFKHWV ZHUH UHPRYHG IURP EDUJH $(3 RQ LQMXULHV6HH+DYHQV )GDW s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sRKQVRQ 7KH&s%U\DQKDGSDVVHGLQVSHFWLRQE\WKH&RDVW )G WK&LU 3ODLQWLIIWHVWLILHGWKDWKH *XDUG XQGHU WKH 5HVSRQVLEOH &DUULHU SURJUDP XVHGWKHUDWFKHWDQGDWWHPSWHGWROD\WKHMRFNH\ZLUHLQWKH ZLWKRXW VXJJHVWLRQ WKDW DQ\ PRGLILFDWLRQ ZDV VDPHPDQQHUDVDOZD\V,QDGGLWLRQ3ODLQWLIIjVVXSHUYLVRU QHHGHGWRWKHYHVVHOLQRUGHUIRULWWREHUHDVRQDEO\ WHVWLILHGWKDWKHVDZQRWKLQJDEQRUPDOLQFRUUHFWRUXQXVXDO VDIHDQGILWIRULWVLQWHQGHGSXUSRVH7KHLQVWDOODWLRQ DERXW 3ODLQWLIIjV SHUIRUPDQFH GXULQJ WKH SHULRG WKDW KH RI D mULJJLQJl RU mVDIHW\l GHFN EHWZHHQ WKH REVHUYHGKLP,QWKHLQVWDQWFDVHWKHUHLVVXIILFLHQWHYLGHQFH WRZNQHHV>VLF@LVQRWUHTXLUHGE\UHJXODWLRQQRULVLW RQWKHUHFRUGWRFRQFOXGHWKDW3ODLQWLIIZDVSURSHUO\XVLQJWKH FXVWRPDU\ RU FRPPRQ LQ WKH LQGXVWU\ RQ D YHVVHO UDWFKHW IRU LWV LQWHQGHG SXUSRVH ZKHQ LW PDOIXQFWLRQHG OLNHWKH&s%U\DQ/LNHZLVHWKHLQVWDOODWLRQRID mVDIHW\FKDLQlRUJUDELURQVEHWZHHQWKHWRZNQHHV >VLF@ LV QRW UHTXLUHG RU FXVWRPDU\ LQ WKH LQGXVWU\ 3HUNLQVHWDOY$P 1R 1R 3HUNLQVHWDOY$P (OHFWULF3RZHUHWDO (OHFWULF3RZHUHWDO 1HLWKHUWKHDEVHQFHRIWKHVHVDIHJXDUGVQRUWKHODFN YHVVHO 0RUHRYHU RWKHU YHVVHOV LQ 'HIHQGDQWVj IOHHW KDG RIUXEEHURQWKHWRZNQHHV>VLF@UHQGHUHGWKH&s VDIHW\DSSOLDQFHVEHWZHHQWKHWRZNQHHV'HIHQGDQWVjH[SHUW %U\DQ XQVDIH RU XQILW IRU VHUYLFH WKH QLJKW RI WHVWLILHGDWWULDOWKDWWKHVL]HRIWKHYHVVHOZRXOGSURKLELWWKH 'HFHPEHU LQVWDOODWLRQ RI D VDIHW\ GHFN EXW FRQFHGHG WKDW QRWKLQJ SUHYHQWVWKHLQVWDOODWLRQRIDVDIHW\FKDLQRQWRSRIWKHWRZ s$DW +HUH3ODLQWLIIWDNHVLVVXHZLWKGLVWULFWFRXUWjV NQHHV 'HIHQGDQWV DUJXH WKDW WKH LQVSHFWLRQV RI WKH ILQGLQJV DQG DUJXHV WKDW WKH\ DUH EDVHG RQ IDFWV QRW LQ 5HVSRQVLEOH &DUULHU SURJUDP GLG QRW UHVXOW LQ HYLGHQFH :H DJUHH WKDW WKH GLVWULFW FRXUWjV ILQGLQJV DUH UHFRPPHQGDWLRQVWKDWHLWKHUVDIHW\FKDLQVRUVDIHW\GHFNVEH XQVXSSRUWHGE\WKHHYLGHQFHLQWKHUHFRUG FRQVWUXFWHGRQWKHVKLS+RZHYHUWKHWHVWLPRQ\ GRHVQRW SRLQW WR WKH H[WHQW RI WKRVH LQVSHFWLRQV DQG ZKHWKHU WKH 3ODLQWLII DUJXHV WKDW WKH GLVWULFW FRXUWjV ILQGLQJ WKDW09 LQVSHFWLRQVZHUHPHDQWWRFRQVLGHUZKHWKHUVDIHW\FKDLQVRU &s %U\DQ KDG SDVVHG LQVSHFWLRQ E\ WKH &RDVW *XDUG DQG VDIHW\GHFNVZHUHQHHGHG XQGHU WKH 5HVSRQVLEOH &DUULHU SURJUDP ZLWKRXW VXJJHVWLRQ WKDWPRGLILFDWLRQZDVQHHGHGWRWKHYHVVHOZDVQRWVXSSRUWHG ,Q DGGLWLRQ WKHUH ZDV WHVWLPRQ\ E\ 'HIHQGDQWVj VDIHW\ E\WKHUHFRUG6SHFLILFDOO\3ODLQWLIISRLQWVWRWKHIDFWWKDW PDQDJHUWKDWRQHPRQWKSULRUWR3ODLQWLIIjVDFFLGHQWDQRWKHU 09&s%U\DQLVDQXQLQVSHFWHGYHVVHOPHDQLQJWKDWWKH ZRUNHURQWKH09&s%U\DQIHOOIURPWKHWRZNQHHDQGZDV &RDVW*XDUGGRHVQRWLQVSHFWWKHYHVVHOIRURUUHJXODWHWKH LQMXUHG)XUWKHUPRUH'HIHQGDQWVj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s%U\DQLQGLFDWHVWKDWLW WKDWVDIHW\URSHVRUKDQGUDLOVZHUHLQFRQVLVWHQWZLWKFXVWRP ZRXOGQRWKDYHEHHQH[FHVVLYHO\EXUGHQVRPHLQOLJKWRIWKH DQGSUDFWLFH7KHHYLGHQFHDWWULDOUHYHDOVWKDW'HIHQGDQWV ULVNVWRWKHVHDPHQIRU'HIHQGDQWVWRLQVWDOOVDIHW\URSHVKHUH LQVWDOOHGVDIHW\FKDLQVDQGUDLOVLQVHYHUDORWKHUDUHDVRIWKH *LYHQ WKDW RQH PRQWK SULRU WR 3ODLQWLIIjV LQMXU\ DQRWKHU VHDPDQ ZDV LQMXUHG E\ D IDOO RQ WKH 09 &s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jIDLOXUHWRSURYLGHWKHVDIHW\URSHVZDVWKHFDXVH FRXUW WKDW WKH YHVVHO ZDV DQ XQLQVSHFWHG YHVVHO DQG WKH GLVWULFW FRXUW KDG LQZKROHRUSDUWRI3ODLQWLIIjVLQMXULHV7KHWHVWLPRQ\DWWULDO DW LWV GLVSRVDO WKH UHJXODWLRQV LQGLFDWLQJ WKH VDIHW\ UHTXLUHPHQWV RI DQ ZDVWKDWLIDVDIHW\URSHKDGEHHQLQSODFH3ODLQWLIIZRXOG XQLQVSHFWHG YHVVHO
Case-law data current through December 31, 2025. Source: CourtListener bulk data.