Clark v. Chrysler Corp
Clark v. Chrysler Corp
Opinion
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 &ODUNY&KU\VOHU&RUS 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
UHTXLUHGRILWE\WKH)HGHUDO0RWRU9HKLFOH6DIHW\6WDQGDUGV )LOH 1DPH D S
$VLQGLFDWHGDERYH,KDYHQRSUREOHPZLWKWKLV,KDYHD VHULRXVSUREOHPKRZHYHUZLWKWKHXVHRI.HQWXFN\jVMXGLFLDO V\VWHPWRUHOLHYH&KU\VOHURIDQDGGLWLRQDOPLOOLRQoPRUH 81,7('67$7(6&28572)$33($/6 WKDQWLPHVWKHUHFRYHUDEOHFRPSHQVDWRU\GDPDJHVoIRULWV )257+(6,;7+&,5&8,7 VXSSRVHGUHFNOHVVQHVVLQIDLOLQJWRHTXLSWKHWUXFNZLWKDGRRU BBBBBBBBBBBBBBBBB ODWFKWKDWZRXOGKDYHVSDUHG0U&ODUNWKHLQFRQYHQLHQFHRI EXFNOLQJKLVVHDWEHOW $FFRUGLQJO\DOWKRXJK,FRQFXULQPRVWRIsXGJH2OLYHUjV '2527+< &/$5. ; ZHOOZULWWHQRSLQLRQ,UHVSHFWIXOO\GLVVHQWIURP3DUW9%RI ,QGLYLGXDOO\DQGDV WKHRSLQLRQDQGIURPWKHDIILUPDQFHRIWKHPLOOLRQSXQLWLYH $GPLQLVWUDWUL[RIWKH(VWDWHRI GDPDJHDZDUG 1R &KDUOHV&ODUN 3ODLQWLII$SSHOOHH ! Y &+5<6/(5 &25325$7,21 'HIHQGDQW$SSHOODQW 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW/RQGRQ 1R nsHQQLIHU%&RIIPDQ'LVWULFWsXGJH $UJXHG 1RYHPEHU 'HFLGHGDQG)LOHG 2FWREHU %HIRUH 0(55,77DQG1(/621&LUFXLWsXGJHV 2/,9(5'LVWULFWsXGJH
7KH +RQRUDEOH 6RORPRQ 2OLYHU sU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
&ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
BBBBBBBBBBBBBBBBB :LWKWKHGHPLVHRI.56 F DQGLWVGHILQLWLRQRI mPDOLFHl ZKDW LV LW WKDW PXVW EH SURYHG E\ FOHDU DQG &2816(/ FRQYLQFLQJ HYLGHQFH EHIRUH SXQLWLYH GDPDJHV PD\ EH DZDUGHG LQ .HQWXFN\" $EVHQW mRSSUHVVLRQl RU mIUDXGl $5*8(' 7KHRGRUHs%RXWURXVsU*,%621'811 ZKLFK WKH SODLQWLII GRHV QRW FODLP WR KDYH SURYHG KHUH &587&+(5 :DVKLQJWRQ '& IRU $SSHOODQW 5LFKDUG :LOOLDPV WHDFKHV WKDW ZH DUH WR IDOO EDFN RQ WKH .HQWXFN\ +D\ 6RPHUVHW .HQWXFN\ IRU $SSHOOHH 21 %5,() FRPPRQODZUXOHUHVWDWHGWKXVLQ+RUWRQY8QLRQ/LJKW+HDW 7KHRGRUHs%RXWURXVsU7KRPDV+'XSUHHsU*,%621 3RZHU&R 6:G .\ '811 &587&+(5 :DVKLQJWRQ '& /DZUHQFH $ 6XWWHU %ULDQ ' 6XOOLYDQ 5(0,1*(5 5(0,1*(5 m,QRUGHUWRMXVWLI\SXQLWLYHGDPDJHVWKHUHPXVWEHILUVW &OHYHODQG 2KLR IRU $SSHOODQW 5LFKDUG +D\ 6RPHUVHW DILQGLQJRIIDLOXUHWRH[HUFLVHUHDVRQDEOHFDUHDQGWKHQ .HQWXFN\IRU$SSHOOHH DQ DGGLWLRQDO ILQGLQJ WKDW WKLV QHJOLJHQFH ZDV DFFRPSDQLHGE\µZDQWRQRUUHFNOHVVGLVUHJDUGIRUWKH 2/,9(5'sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK OLYHV VDIHW\ RU SURSHUW\ RI RWKHUVjl (PSKDVLV 0(55,77sMRLQHG1(/621s SS GHOLYHUHGD VXSSOLHG VHSDUDWHRSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQSDUW 7KHUHFRUGEHIRUHXVDV,UHDGLWPHUHO\VXSSRUWVDILQGLQJ BBBBBBBBBBBBBBBBB RIJDUGHQYDULHW\QHJOLJHQFHRQ&KU\VOHUjVSDUW,ILQGLQWKH UHFRUGQRmFOHDUDQGFRQYLQFLQJHYLGHQFHlWKDW&KU\VOHUZDV 23,1,21 JXLOW\ RI mZDQWRQ RU UHFNOHVV GLVUHJDUGl IRU WKH OLYHV DQG BBBBBBBBBBBBBBBBB VDIHW\RILWVFXVWRPHUV7KHUHFRUGVKRZVRQWKHFRQWUDU\ WKDWWKHGHVLJQRI&KU\VOHUjVGRRUODWFKZDVLQIXOOFRPSOLDQFH 2/,9(5'LVWULFWsXGJH'HIHQGDQW$SSHOODQW&KU\VOHU ZLWK )HGHUDO 0RWRU 9HKLFOH 6DIHW\ 6WDQGDUG &RUSRUDWLRQ m&KU\VOHUl DSSHDOV D MXU\ YHUGLFW UHQGHUHG SURPXOJDWHGE\WKH8QLWHG6WDWHV*RYHUQPHQWLQDQHIIRUWWR DJDLQVWLWIRU LQFRPSHQVDWRU\DQGLQ DVVXUHGRRUODWFKVDIHW\m,QPRVWFRQWH[WVlDWOHDVWm SXQLWLYH GDPDJHV LQ D SURGXFW OLDELOLW\ DFWLRQ EURXJKW E\ FRPSOLDQFHZLWKDVWDWXWRU\VWDQGDUGVKRXOGEDUOLDELOLW\IRU 3ODLQWLII$SSHOOHH'RURWK\&ODUN m0UV&ODUNl LQGLYLGXDOO\ SXQLWLYH GDPDJHVl : 3DJH .HHWRQ HW DO 3URVVHU DQG DQG DV $GPLQLVWUDWUL[ RI WKH (VWDWH RI &KDUOHV &ODUN .HHWRQRQWKH/DZRI7RUWVDWQ WK(G m&KDUOHVlRUm0U&ODUNl KHUGHFHDVHGKXVEDQG,WDUJXHV LQWKLVODZVXLWJURZLQJRXWRIDFDUFUDVKLQZKLFK0U&ODUN 7KHUHFRUGIXUWKHUVKRZVWKDW&KU\VOHUHTXLSSHGLWVWUXFN ZDVNLOOHGWKDW WKHMXGJPHQWIRU0UV&ODUNVKRXOGEH ZLWK D VHDWEHOW WKDW XQGRXEWHGO\ ZRXOG KDYH VDYHG 0U UHYHUVHGDQGMXGJPHQWHQWHUHGLQLWVIDYRUEHFDXVHVKHIDLOHG &ODUNjVOLIHLIKHKDGRQO\XVHGLW9LUWXDOO\DQ\SURGXFWFDQ WRSURGXFHOHJDOO\VXIILFLHQWHYLGHQFHWRSHUPLWDUHDVRQDEOH FDXVHLQMXU\RUGHDWKLIPLVXVHGDQGE\KLVIDLOXUHWREXFNOH MXU\WRILQGFDXVDWLRQDQGLPSRVHSXQLWLYHGDPDJHVRULQWKH XS 0U &ODUN ZDV IDLOLQJ WR XVH KLV WUXFN LQ WKH PDQQHU DOWHUQDWLYH LWVKRXOGEHJUDQWHGDQHZWULDOEHFDXVH D WKH LQWHQGHGE\WKHPDQXIDFWXUHU7KHKDUGWUXWKXQFRPIRUWDEOH WHVWLPRQ\RI0UV&ODUNjVH[SHUWZLWQHVVHVZDVXQUHOLDEOHDQG WKRXJKLWPD\EHWRVD\VRLVWKDWLIDQ\RQHZDVUHFNOHVVLQ VKRXOGKDYHEHHQH[FOXGHGE\WKHWULDOFRXUWXQGHU)HG5 WKLVVLWXDWLRQLWZDV0U&ODUNKLPVHOIQRW&KU\VOHU (YLG IRU IDLOXUH WR FRQGXFW WHVWV RI WKH DOOHJHGO\ GHIHFWLYH SURGXFW RU RI DOWHUQDWLYH GHVLJQV WKDW FRXOG KDYH 8QGHUWKHODZRI.HQWXFN\DQGWKHILQGLQJVRIWKHMXU\LQ SUHYHQWHGWKHGHFHGHQWjVLQMXULHVDQGGHDWK E WKHWULDOFRXUW WKLV FDVH &KU\VOHU PXVW SD\ PRUH WKDQ LQ HUURQHRXVO\LQVWUXFWHGWKHMXU\WKDWFRPSOLDQFHZLWKIHGHUDO FRPSHQVDWRU\GDPDJHVIRULWVIDLOXUHWRJREH\RQGZKDWZDV &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
UHIRUPOHJLVODWLRQGHVLJQHGWROLPLWWKHUHFRYHU\RISXQLWLYH VDIHW\VWDQGDUGVmVKRXOGEHFRQVLGHUHGPHUHO\DVRQHSLHFH GDPDJHVWRFDVHVZKHUHomE\FOHDUDQGFRQYLQFLQJHYLGHQFHl RIHYLGHQFHRQWKHLVVXHVLQWKLVFDVHlUDWKHUWKDQLQVWUXFWLQJ oWKHSODLQWLIISURYHVmWKDWWKHGHIHQGDQWIURPZKRPVXFK LW DV UHTXLUHG E\ WKH .HQWXFN\ 5HYLVHG 6WDWXWH m.56l GDPDJHV DUH VRXJKW DFWHG WRZDUG WKH SODLQWLII ZLWK WKDWFRPSOLDQFHZLWKIHGHUDOVDIHW\VWDQGDUGV RSSUHVVLRQ IUDXG RU PDOLFHl .56 FUHDWHGDSUHVXPSWLRQWKDWWKHSURGXFWD'RGJH5DPWUXFN m>2@SSUHVVLRQIUDXG>DQG@PDOLFHlDUHGHILQHGLQWHUPVWKDW ZDVQRWGHIHFWLYHDQG F WKHWULDOFRXUWHUURQHRXVO\DOORZHG EDU WKH DZDUG RI SXQLWLYH GDPDJHV IRU QHJOLJHQFH RU RWKHU 0UV&ODUNjVH[SHUWWRWHVWLI\UHJDUGLQJRWKHUDOOHJHGLQFLGHQWV PLVFRQGXFW QRW DFWXDOO\ LQWHQGHG WR UHVXOW LQ LQMXU\ RU QRW DV HYLGHQFH WKDW WKH SURGXFW ZDV GHIHFWLYH ZLWKRXW FRPPLWWHGZLWKmIODJUDQWLQGLIIHUHQFHlWRWKHSODLQWLIIjVULJKWV HVWDEOLVKLQJWKDWWKHLQFLGHQWVLQYROYHGZHUHmVXEVWDQWLDOO\ DQGmDVXEMHFWLYHDZDUHQHVVlWKDWLQMXU\ZLOOUHVXOW VLPLODUlWRWKHLQFLGHQWLQWKLVFDVH)RUWKHUHDVRQVGLVFXVVHG KHUHLQWKHMXGJPHQWRIWKHWULDOFRXUWLVDIILUPHG m D µ2SSUHVVLRQj PHDQV FRQGXFW ZKLFK LV VSHFLILFDOO\ LQWHQGHGE\WKHGHIHQGDQWWRVXEMHFWWKHSODLQWLIIWRFUXHO , DQGXQMXVWKDUGVKLS &KDUOHV&ODUNDQRZQHURIDVPDOOFRQVWUXFWLRQFRPSDQ\ E µ)UDXGj PHDQV DQ LQWHQWLRQDOPLVUHSUHVHQWDWLRQ ZDV IDWDOO\ LQMXUHG RQ 2FWREHU LQ DQ DXWRPRELOH GHFHLW RU FRQFHDOPHQW RI PDWHULDO IDFW NQRZQ WR WKH DFFLGHQW ZKHQ KH DQG KLV WZR QHSKHZV )UHGG\ &ODUN GHIHQGDQWDQGPDGHZLWKWKHLQWHQWLRQRIFDXVLQJLQMXU\ m)UHGG\l DQG%LOO\&ODUN m%LOO\l OHIWDMREVLWHLQ*UD\ WRWKHSODLQWLII .HQWXFN\WRREWDLQOXQFK0U&ODUNZKRZDVGULYLQJKLV 'RGJH5DPFOXEFDESLFNXSRQ.HQWXFN\+LJKZD\ F µ0DOLFHjPHDQVHLWKHUFRQGXFWZKLFKLVVSHFLILFDOO\ ZLWK )UHGG\ LQ WKH IURQW VHDW DQG %LOO\ LQ WKH EDFN VHDW LQWHQGHGE\WKHGHIHQGDQWWRFDXVHWDQJLEOHRULQWDQJLEOH VWRSSHG DW WKH LQWHUVHFWLRQ RI +LJKZD\ DQG ,QWHUVWDWH LQMXU\WRWKHSODLQWLIIRUFRQGXFWWKDWLVFDUULHGRXWE\WKH 5RXWH $V 0U &ODUN EHJDQ WR PDNH D OHIW WXUQ RQWR GHIHQGDQWERWKZLWKDIODJUDQWLQGLIIHUHQFHWRWKHULJKWV 5RXWHKLVWUXFNZDVKLWE\D.HQWXFN\6WDWH3ROLFHFUXLVHU RIWKHSODLQWLIIDQGZLWKDVXEMHFWLYHDZDUHQHVVWKDWVXFK GULYHQ E\ $OIUHG %DUQHWW m2IILFHU %DUQHWWl DSSURDFKLQJ FRQGXFW ZLOO UHVXOW LQ KXPDQ GHDWK RU ERGLO\ KDUPl IURPKLVOHIW2IILFHU%DUQHWWWHVWLILHGWKDWKHZDVWUDYHOLQJ .56 PLOHV SHU KRXU ZKHQ KH VDZ 0U &ODUN SXOO LQWR WKH LQWHUVHFWLRQ2IILFHU%DUQHWWDSSOLHGKLVEUDNHVDQGWXUQHGKLV ,Q :LOOLDPV Y :LOVRQ 6:G .\ WKH ZKHHOVWRWKHOHIWLQDQHIIRUWWRDYRLGWKHWUXFN+RZHYHUKH 6XSUHPH&RXUWRI.HQWXFN\KHOG.56 F WREH ZDV QRW DEOH WR GR VR DQG WKH ULJKW IHQGHU RI KLV YHKLFOH XQFRQVWLWXWLRQDO XQGHU .HQWXFN\jV mMXUDO ULJKWV GRFWULQHl VWUXFNWKHWUXFNjVOHIWIURQWIHQGHU7KHYHKLFOHVFROOLGHGLQ 7KH :LOOLDPV FRXUW H[SUHVVHG QR RSLQLRQ DV WR WKH VXFKDZD\WKDWWKH\URWDWHGFDXVLQJWKHPWRmVLGHVODSlDIWHU FRQVWLWXWLRQDOLW\RI.56 ZKLFKUHTXLUHVmFOHDU LPSDFW0U&ODUNjVWUXFNFRQWLQXHGWRURWDWHLQDFORFNZLVH DQGFRQYLQFLQJHYLGHQFHlIRUWKHDZDUGRISXQLWLYHGDPDJHV SRVLWLRQZKLOH2IILFHU%DUQHWWjVFUXLVHUWUDYHOLQJVRXWKDWWKH , SUHVXPH WKDW .56 LV FRQVWLWXWLRQDO 6HH WLPHRILPSDFWFRQWLQXHGOHIWDFURVVWZRQRUWKERXQGODQHVRI $QGHUVRQ Y :DGH )HG $SS[ WK &LU DQ WUDIILFFRPLQJWRUHVWDIWHUKLWWLQJDGLUWHPEDQNPHQWIHHW XQSXEOLVKHG GHFLVLRQ RI WKLV FRXUW ZKHUH ZH DQDO\]HG WKH DZD\'XULQJWKHFRXUVHRIWKHDFFLGHQW&KDUOHV&ODUNZKR SHUWLQHQW.HQWXFN\FDVHVDQGFRQFOXGHGWKDWWKH.HQWXFN\ ZDVQRWZHDULQJDVHDWEHOWZDVHMHFWHGIURPKLVYHKLFOHDQG SXQLWLYH GDPDJHV VWDWXWH UHPDLQV JRRG ODZ mZLWK WKH WKURZQLQWRWKHJUDVVPHGLDQ+HGLHGVL[KRXUVODWHUDWWKH H[FHSWLRQRI.56 F l,GDW 8QLYHUVLW\ RI .HQWXFN\ +RVSLWDO DV D UHVXOW RI LQMXULHV &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
VXVWDLQHG LQ WKH DFFLGHQW 7KH FRURQHU GHWHUPLQHG WKDW WKH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FDXVHRIGHDWKZDVGXHWRFDUGLRUHVSLUDWRU\DUUHVWDQGEOXQW IRUFH LQMXU\ WR WKH WKRUD[ JURZLQJ RXW RI D PRWRU YHKLFOH &21&855,1*,13$57',66(17,1*,13$57 FROOLVLRQ1HLWKHURI0U&ODUNjVQHSKHZVZDVHMHFWHG7KH\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ZHUH QRW ZHDULQJ VHDW EHOWV DW WKH WLPH RI WKH DFFLGHQW 2IILFHU%DUQHWWZKRZDVZHDULQJDVHDWEHOWDQGWKHGRJWKDW '$9,'$1(/621&LUFXLWsXGJHFRQFXUULQJLQSDUWDQG ZDV WUDYHOLQJ LQ WKH FUXLVHU ZLWK KLP ZHUH QRW VHULRXVO\ GLVVHQWLQJLQSDUW&KU\VOHUjVLQLWLDODVVLJQPHQWRIHUURUKDV LQMXUHG7KHRQO\LQMXU\2IILFHU%DUQHWWWHVWLILHGWRZDVD WZREUDQFKHV,QWKHILUVWEUDQFK&KU\VOHUFRQWHQGVWKDWWKH WKUHHLQFKODFHUDWLRQWRKLVULJKWIRUHDUP SODLQWLII 0UV &ODUN IDLOHG WR LQWURGXFH HYLGHQFH OHJDOO\ VXIILFLHQWWRVKRZWKDWWKHDOOHJHGGHIHFWLQWKHGHVLJQRIWKH 7KH'LVWULFW&RXUWKDGGLYHUVLW\MXULVGLFWLRQRYHUWKHFDVH GRRU ODWFK V\VWHP RQ KHU KXVEDQGjV 'RGJH 5DP ZDV D $IWHUDWKUHHGD\WULDOWKHMXU\UHQGHUHGDXQDQLPRXVYHUGLFW VXEVWDQWLDOIDFWRULQFDXVLQJ0U&ODUNjVLQMXULHVDQGGHDWK RQ2FWREHU 7KHHLJKWSHUVRQMXU\IRXQGLQIDYRURI 0\ FROOHDJXHV RQ WKH SDQHO GR QRW ILQG WKLV FRQWHQWLRQ 0UV&ODUNRQFODLPVRIVWULFWOLDELOLW\QHJOLJHQFHDQGIDLOXUH SHUVXDVLYH1HLWKHUGR, WRZDUQ,WVWDWHGLQDQVZHUWRDJUHHGWRLQWHUURJDWRULHV ,QWKHVHFRQGEUDQFK&KU\VOHUFRQWHQGVWKDWWKHHYLGHQFH 7KH 'RGJH5DPSLFNXSWUXFNLQTXHVWLRQZDV ZDV LQVXIILFLHQW WR VXSSRUW DQ DZDUG RI SXQLWLYH GDPDJHV GHIHFWLYH DQG XQUHDVRQDEO\ GDQJHURXV IRU XVH E\ $JDLQP\FROOHDJXHVRQWKHSDQHODUHXQSHUVXDGHG+HUH, &KDUOHV&ODUNDQGWKDWVXFKGHIHFWRUGHIHFWVZDVD PXVWSDUWFRPSDQ\ZLWKWKHP LIP\XQGHUVWDQGLQJRIWKHODZ VXEVWDQWLDOIDFWRULQFDXVLQJ&KDUOHV&ODUNjVLQMXULHV LVFRUUHFWWKHTXHVWLRQRISXQLWLYHGDPDJHVVKRXOGQHYHUKDYH DQGGHDWK EHHQVXEPLWWHGWRWKHMXU\LQWKLVFDVH &KU\VOHU&RUSRUDWLRQIDLOHGWRH[HUFLVHRUGLQDU\FDUH m7KH ZKROH LVVXH RI SXQLWLYH GDPDJHV LV EHFRPLQJ DQ LQWKHGHVLJQWHVWLQJPDQXIDFWXULQJRUPDUNHWLQJRI LQFUHDVLQJO\SUREOHPDWLFRQHlRXUFRXUWREVHUYHGLQDQHQ WKH 'RGJH5DPSLFNXSWUXFNLQTXHVWLRQDQG EDQFGHFLVLRQKDQGHGGRZQOHVVWKDQD\HDUEHIRUHWKHFDVHDW WKDWVXFKIDLOXUHZDVDVXEVWDQWLDOIDFWRULQFDXVLQJ EDUZHQWWRWULDOmDVDVRUWRIJDPHVKRZPHQWDOLW\OHDGV &KDUOHV&ODUNjVLQMXULHVDQGGHDWK VRPH FRQWHPSRUDU\ MXULHV WR DZDUG SXQLWLYH GDPDJHV LQ DPRXQWV WKDW VHHP XWWHUO\ FDSULFLRXVl 0DUHQR Y &KU\VOHU&RUSRUDWLRQIDLOHGWRXVHUHDVRQDEOHFDUHWR &RQVROLGDWHG5DLO&RUS )G WK&LU HQ SURYLGH DGHTXDWH ZDUQLQJ RI SRWHQWLDO GDQJHUV EDQF IRRWQRWHRPLWWHG m3XQLWLYHGDPDJHVSRVHDQDFXWH DVVRFLDWHGZLWKWKH 'RGJH5DPSLFNXSWUXFN GDQJHU RI DUELWUDU\ GHSULYDWLRQ RI SURSHUW\l WKH 6XSUHPH LQ TXHVWLRQ DQG WKDW VXFK IDLOXUH WR ZDUQ ZDV D &RXUWZDUQHGLQ+RQGD0RWRU&R/WGY2EHUJ86 VXEVWDQWLDOIDFWRULQFDXVLQJ&KDUOHV&ODUNj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
,Q WKDW FDVH WKH FRXUW IRXQG WKDW D SXQLWLYH E\ WKH MXU\ $IWHU WULDO &KU\VOHU UHQHZHG LWV PRWLRQ IRU GDPDJHVDZDUGZDVJURVVO\H[FHVVLYHZKHUHDMXU\UHWXUQHG MXGJPHQWDVDPDWWHURIODZZKLFKWKHFRXUWKDGGHQLHGDWWKH D FRPSHQVDWRU\ GDPDJHV DZDUG DJDLQVW %0: IRU HQGRI0UV&ODUNjVFDVHDQGDOVRILOHGDPRWLRQIRUDQHZ IUDXGLQIDLOLQJWRUHYHDOWRDSXUFKDVHUWKDWWKHDXWRPRELOHLW WULDO7KHFRXUWGHQLHGERWKPRWLRQV ERXJKWKDGEHHQUHSDLQWHG,QUHDFKLQJWKHFRQFOXVLRQWKDW WKH DZDUG YLRODWHG GXH SURFHVV WKH FRXUW FRQVLGHUHG WKUHH ,, IDFWRUV WKH GHJUHH RI UHSUHKHQVLELOLW\ RI GHIHQGDQWjV FRQGXFW WKHUDWLREHWZHHQWKHSODLQWLIIjVFRPSHQVDWRU\ &KU\VOHUDUJXHVWKDWWKHWULDOFRXUWVKRXOGKDYHH[FOXGHGWKH GDPDJHVDZDUGDQGWKHSXQLWLYHGDPDJHVDZDUG DQG WKH WHVWLPRQ\RI0UV&ODUNjVH[SHUWV0U%LOO\3HWHUVRQDODWFK GLIIHUHQFHEHWZHHQWKHFLYLORUFULPLQDOVDQFWLRQWKDWFRXOG H[SHUW DQG 0U $QGUHZ *LOEHUJ D %SLOODU DQG DFFLGHQW EHLPSRVHGIRUWKHPLVFRQGXFW,G UHFRQVWUXFWLRQ H[SHUW EHFDXVH WKH\ GLG QRW SHUIRUP DQ\ WHVWLQJUHODWLYHWRWKHDFFLGHQWLQVXLW:HUHYLHZWKHGHFLVLRQ ,QQRQHRILWVEULHILQJGRHV&KU\VOHULQGLFDWHZK\XQGHU RIDGLVWULFWFRXUWWRDGPLWRUH[FOXGHH[SHUWWHVWLPRQ\IRU *RUHDGXHSURFHVVYLRODWLRQRFFXUUHGLQWKLVFDVH+RZHYHU DEXVHRIGLVFUHWLRQ*HQHUDO(OHF&RYsRLQHU86 DUHYLHZRIWKHDERYHPHQWLRQHGIDFWRUVTXLFNO\UHYHDOVWKDW 'HIHUHQFHWRWKHGHFLVLRQRIWKHWULDO WKLVFDVHLVDIDUFU\IURP*RUH+HUH&KU\VOHUjVFRQGXFW FRXUWmLVWKHKDOOPDUNRIDEXVHRIGLVFUHWLRQUHYLHZl,GDW UHVXOWHGLQWKHORVVRIOLIHZKLFKFOHDUO\HYLGHQFHVDJUHDWHU *LYLQJWKHUXOLQJRIWKHWULDOMXGJHWKHEURDGUDQJHRI GLVUHJDUGIRUWKHULJKWVDQGVDIHW\RIRWKHUVWKDQIDLOXUH WR GLVFUHWLRQWRZKLFKLWLVHQWLWOHGWKLVFRXUWILQGVWKDWWKHWULDO UHYHDOWKDWDFDUKDVEHHQUHSDLQWHG7KHGLVSDULW\EHWZHHQ FRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQWKLVFDVH WKH MXU\jV FRPSHQVDWRU\ GDPDJHV DZDUG DQG LWV SXQLWLYH GDPDJHVDZDUGLVDOVRQRWFRPSDUDEOHWRWKDWLQ*RUH/DVWO\ ,QGHWHUPLQLQJZKHWKHUWRDGPLWH[SHUWWHVWLPRQ\WKHWULDO LWFDQEHVDLGWKDWDXWRPRELOHPDQXIDFWXUHUVDUHJHQHUDOO\RQ FRXUW PXVW GHFLGH ZKHWKHU DQ H[SHUWjV WHVWLPRQ\ LV ERWK QRWLFH WKDW WKHLU UHFNOHVV FRQGXFW UHVXOWLQJ LQ GHDWK FRXOG UHOHYDQWDQGUHOLDEOH&OD\Y)RUG0RWRU&R)G WULJJHUDVXEVWDQWLDOSXQLWLYHGDPDJHVDZDUG,QVXPPDU\ WK&LU &KU\VOHUjVFKDOOHQJHKHUHLQGRHVQRWJR ZHFDQQRWVD\WKDWWKHSXQLWLYHGDPDJHVDZDUGH[FHHGVWKH WR WKH UHOHYDQFH RI WKH WHVWLPRQ\ JLYHQ E\ 0UV &ODUNjV FRQVWLWXWLRQDO OLPLW m3XQLWLYH GDPDJHV PD\ SURSHUO\ EH H[SHUWVEXWWRLWVUHOLDELOLW\,QPDNLQJWKLVGHWHUPLQDWLRQWKH LPSRVHGWRIXUWKHUDVWDWHjVOHJLWLPDWHLQWHUHVWVLQSXQLVKLQJ 6XSUHPH &RXUW FRQILUPHG LQ .XPKR 7LUH &R /WG Y XQODZIXOFRQGXFWDQGGHWHUULQJLWVUHSHWLWLRQl,GDW &DUPLFKDHO 86 WKDW WKH JDWHNHHSLQJ 7KHFRXUWFDQQRWVD\WKDWWKHMXU\j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mUHDVRQDEOH &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
PHDVXUHVRIUHOLDELOLW\LQDSDUWLFXODUFDVHLVDPDWWHUWKDWWKH ODWFK &KU\VOHU NQHZ WKDW VHDW EHOW XVDJH ZDV RQO\ ODZJUDQWVWKHWULDOMXGJHEURDGODWLWXGHWRGHWHUPLQHl,GDW QDWLRQZLGHDQGZDVDVORZDVLQVWDWHVOLNH.HQWXFN\ ZKHUHWKHUHZDVQRVHDWEHOWODZ7KHHYLGHQFHDOVRVKRZHG WKDW LQ WKH 1+76$ VHQW DQ $GYDQFH 1RWLFH RI $W WULDO &KU\VOHU ILOHG D PRWLRQ LQ OLPLQH UHJDUGLQJ WKH 3URIHVVLRQDO5XOHPDNLQJUHJDUGLQJGRRUODWFKVWDQGDUGVLQDQ WHVWLPRQ\RIERWKRI0UV&ODUNjVH[SHUWV,QVXSSRUWRILWV HIIRUWWRIRUPXODWHVWDQGDUGVGHVLJQHGWRGHFUHDVHHMHFWLRQV PRWLRQLQOLPLQHVHHNLQJWRH[FOXGH0U*LOEHUJjVWHVWLPRQ\ WKURXJKGRRUVWKDWRSHQGXULQJDFFLGHQWV$OOPDQXIDFWXUHUV &KU\VOHUDUJXHGWKDW0U*LOEHUJjVRSLQLRQVZHUHQRWEDVHG ZHUH LQYLWHG WR UHVSRQG &KU\VOHUjV UHVSRQVH VKRZHG QR RQLQGHSHQGHQWVFLHQWLILFWHVWVWKDWKHKDGFRQGXFWHGDQGWKDW FRQFHUQ UHJDUGLQJ WKHVH VDIHW\ LVVXHV ,QGHHG DW WULDO KH GLG QRW SURGXFH DQ\ WHVW UHVXOWV RQ ZKLFK KH EDVHG KLV &KU\VOHUjV ZLWQHVVHV FRQWLQXDOO\ UHLWHUDWHG LQ UHVSRQVH WR RSLQLRQV7KHWULDOFRXUWGHQLHGWKHPRWLRQVWDWLQJ TXHVWLRQVVHHNLQJLQIRUPDWLRQRQGRRUODWFKGHVLJQDQGLWV UHODWLRQVKLS WR ULVN RI HMHFWLRQ WKDW LW ZDV QRW SURSHU WR >0U *LOEHUJ@ XVHG D VFLHQWLILF PHWKRG SUHYLRXVO\ LQ FRUUHODWHWKHGRRUODWFKGHVLJQWRULVNRIHMHFWLRQ WHVWLQJGRRUODWFKHV(YHQWKRXJKKHGLGQjWGRLWLQWKLV SDUWLFXODUFDVHKHFDQVSHDNWRWKHVHODWFKHVEHFDXVHKH $OORIWKLVHYLGHQFHVXSSRUWHGWKHMXU\jVFRQFOXVLRQWKDW KDVSUHYLRXVO\WHVWHGVLPLODUODWFKHV$QGWKHGLIIHUHQFHV &KU\VOHUDFWHGZLWKUHFNOHVVGLVUHJDUGIRUWKHVDIHW\RIRWKHUV EHWZHHQ WKRVH ODWFKHV FDQ EH H[DPLQHG RQ FURVV LQFOXGLQJ 0U &ODUN 7KH FRXUW WKHUHIRUH DIILUPV WKH WULDO H[DPLQDWLRQ7KRVHGLIIHUHQFHVDUHQRWDUHDVRQWR FRXUWjVGHQLDORI&KU\VOHUjVPRWLRQIRUMXGJPHQWDVDPDWWHU JUDQWD'DXEHUWPRWLRQ RI ODZ RQ 0UV &ODUNjV FODLP IRU SXQLWLYH GDPDJHV WR WKH H[WHQWLWZDVEDVHGRQLQVXIILFLHQF\RIWKHHYLGHQFH sRLQW$SSHQGL[ ms$l DW 7KHFRXUWVWDWHGIXUWKHU >+LV RSLQLRQ@ LV EDVHG XSRQ KLV RZQ SK\VLFDO H[DPLQDWLRQ RI WKH ODWFKHV KHUH DW LVVXH DQG XSRQ KLV &KU\VOHUDOVRPDLQWDLQVWKDWMXGJPHQWDVDPDWWHURIODZ FRQGXFWLQJRIKLVRZQWHVWLQJ VKRXOG KDYH EHHQ HQWHUHG LQ LWV IDYRU DV WR WKH FODLP IRU SXQLWLYHGDPDJHVEHFDXVHWKHMXU\jVDZDUGZDVVRH[FHVVLYH >+@LVNQRZOHGJHLVEDVHGXSRQKLVRZQWHVWLPRQ\DQG DV WR YLRODWHWKH'XH3URFHVV&ODXVH7KLVFRXUWGRHVQRW DVVLVWVWKHWULHURIIDFWWRXQGHUVWDQGWKHHYLGHQFHRUWR DJUHH GHWHUPLQHDIDFWLQLVVXH$QGVR,jPJRLQJWROHWLWLQ ,WLVFOHDUWKDWVRPHDZDUGRISXQLWLYHGDPDJHVPD\EHVR 'DXEHUWJRHVRQWRWDONDERXWDFFHSWDQFHRIRWKHUVLQWKH H[FHVVLYH DV WR LPSOLFDWH WKH 'XH 3URFHVV &ODXVH RI WKH ILHOGDQGRWKHUPHWKRGVRIHVWDEOLVKLQJUHOLDELOLW\$QG )RXUWHHQWK$PHQGPHQWWRWKH86&RQVWLWXWLRQ$VWKH86 ,jPVDWLVILHGWKDWZLWKKLVRZQWHVWLPRQ\WKDWjVDOOWDNHQ 6XSUHPH&RXUWVDLGLQ%0:RI1RUWK$PHULFD,QFY*RUH FDUHRI 86 s$DW >H@OHPHQWDU\ QRWLRQV RI IDLUQHVV HQVKULQHG LQ RXU FRQVWLWXWLRQDOMXULVSUXGHQFHGLFWDWHVWKDWDSHUVRQUHFHLYH &KU\VOHU DOVR DUJXHG LQ LWV PRWLRQ LQ OLPLQH WKDW WKH IDLUQRWLFHQRWRQO\RIWKHFRQGXFWWKDWZLOOVXEMHFWKLP WHVWLPRQ\ RI 0U 3HWHUVRQ UHJDUGLQJ %SLOODUV VKRXOG EH WRSXQLVKPHQWEXWDOVRRIWKHVHYHULW\RIWKHSHQDOW\WKDW H[FOXGHGEHFDXVHKHRQO\FRQGXFWHGDSK\VLFDOH[DPLQDWLRQ D6WDWHPD\LPSRVH RIWKH%SLOODUDQGGLGQRWGRDQ\WHVWLQJKLPVHOI3ULRUWR &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
$PSOH HYLGHQFH ZDV DGGXFHG DW WULDO IURP ZKLFK D UXOLQJRQWKHPRWLRQWKHFRXUWVXPPDUL]HG0U3HWHUVRQjV UHDVRQDEOHMXU\FRXOGKDYHFRQFOXGHGWKDW&KU\VOHUVKRZHG WHVWLPRQ\DVIROORZV UHFNOHVV GLVUHJDUG IRU WKH VDIHW\ RI RWKHUV LQFOXGLQJ 0U &ODUN0U3HWHUVRQj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s$DW7KHUHDIWHUQRWLQJWKDW'DXEHUWGRHVQRWUHTXLUH ZKLFKGLGQRWH[SHULHQFHE\SDVVIDLOXUHDQGZKLFKFRVWQR mDQH[SHUWWRFRPHLQDQGDFWXDOO\SHUIRUPWHVWVLQDQ\JLYHQ PRUHWKDQWKH.ODWFK,QIDFW&KU\VOHULWVHOIKDGXWLOL]HG VLWXDWLRQlWKHFRXUWFRQFOXGHGWKDWWKLVWHVWLPRQ\VKRXOGQRW VRPHRIWKHRWKHUODWFKHVLQLWVYHKLFOHV0U*LOEHUJDOVR EHSUHFOXGHGPHUHO\EHFDXVH0U3HWHUVRQKDGQRWSHUIRUPHG WHVWLILHGWKDWWKHUHZHUHVHYHUDOLQH[SHQVLYHZD\VWKH&KU\VOHU WHVWLQJLQWKHFDVH7KHFRXUWIRXQG0U3HWHUVRQjVRSLQLRQV .ODWFKFRXOGKDYHEHHQIL[HGWRSUHYHQWE\SDVVIDLOXUH EDVHG RQ KLV H[DPLQDWLRQ RI WKH %SLOODU WR EH VXIILFLHQWO\ UHOLDEOH EHFDXVH WKH\ ZHUH EDVHG RQ KLV WUDLQLQJ DV D ,QDGGLWLRQ&KU\VOHUNQHZWKDWWKH)0966WHVWJDYH PHFKDQLFDOHQJLQHHUDQGKLVH[SHULHQFHDVDVDIHW\VWDQGDUGV QRLQGLFDWLRQRIWKHVWUHQJWKRIWKH%SLOODUZKHQVXEMHFWHGWR HQJLQHHU ZLWK WKH 1DWLRQDO +LJKZD\ 7UDIILF 6DIHW\ WZLVWRXWIRUFH<HWD&KU\VOHUUHSUHVHQWDWLYHIURPWKH'RRU $GPLQLVWUDWLRQ m1+76$l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jV *LOEHUJ WR WHVWLI\ DW WULDO 7KH EDVHV IRU 0U *LOEHUJjV %SLOODUZDVQRW DVDQXQER[HGSLHFHRIPHWDOmLVZHDNLQ WHVWLPRQ\DQGRSLQLRQVDUHFOHDUO\UHOLDEOH)LUVW0U*LOEHUJ DOPRVWHYHU\GLUHFWLRQls$DW GHPRQVWUDWHGWKRURXJKNQRZOHGJHRIDXWRPRELOHGRRUODWFK V\VWHPV0U*LOEHUJUHFHLYHGDQXQGHUJUDGXDWHGHJUHHLQ 7KHUHZDVDOVRHYLGHQFHDGGXFHGDWWULDOWKDW&KU\VOHUNQHZ PHFKDQLFDOHQJLQHHULQJIURP5HQVVHODHU3RO\WHFKQLF,QVWLWXWH WKDWLIDGULYHUZDVHMHFWHGWKHULVNRIGHDWKLQFUHDVHGPXOWL DQGD0DVWHUVRI6FLHQFH'HJUHHLQPHFKDQLFDOHQJLQHHULQJ IROG $OWKRXJK &KU\VOHUjV UHSUHVHQWDWLYHV DQG H[SHUWV IURPWKH8QLYHUVLW\RI0LFKLJDQ+HZRUNHGIRU)RUG0RWRU HPSKDVL]HG DW WULDO WKDW WKH XVH RI VHDW EHOWV ZDV WKH PRVW &RPSDQ\IRUVL[\HDUVLQWKHDUHDRIVDIHW\UHVHDUFKEHJLQQLQJ LPSRUWDQWYDULDEOHUHODWHGWRHMHFWLRQVWKHUHZDVHYLGHQFHWR LQ +H ODWHU ZRUNHG IRU D IRXU\HDU SHULRG ZLWK VKRZWKDWDWWKHWLPHLWPDGHWKHGHFLVLRQ WRXWLOL]HWKH. 9HUVDWHFKDFRQVXOWLQJFRPSDQ\GRLQJDPRQJRWKHUWKLQJV DFFLGHQW LQYHVWLJDWLRQV IRU LQVXUDQFH FRPSDQLHV DWWRUQH\V &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
WKH DXWRPRELOH LQGXVWU\ DQG ORFDO JRYHUQPHQWV ,Q WKLV LQFOXGLQJ&KDUOHV&ODUNl,G&KU\VOHUGRHVQRWFRQWHQGWKDW FDSDFLW\KHORRNHGDWmKRZYHKLFOHVDFWHGDQGKHOGXSLQl WKLVLQVWUXFWLRQZDVHUURQHRXVDQGWKHLQVWUXFWLRQLVLQDFFRUG DFFLGHQWVDQGZDVVRPHWLPHVLQYROYHGLQUHFRQVWUXFWLRQVRI ZLWK .HQWXFN\ ODZ 6HH HJ +RUWRQ Y 8QLRQ /LJKW DQG DFFLGHQWVs$DW(YHQWXDOO\0U*LOEHUJFDPHWRVWXG\ 3RZHU 6:G .\ WKHHMHFWLRQRIRFFXSDQWVIURPYHKLFOHVLQFOXGLQJKRZDQG ZK\ HMHFWLRQV KDSSHQ ,Q KH EHJDQ DQDO\]LQJ FDVHV LQYROYLQJ GRRU ODWFK IDLOXUHV $W WKH WLPH RI WULDO KH ZDV HPSOR\HG E\ KLV RZQ FRPSDQ\ DQG KDG EHHQ LQYROYHG LQ 7KH GLVVHQW DUJXHV WKDW WKH FOHDU DQG FRQYLQFLQJ VWDQGDUG RI SURRI WHVWLQJ GRRU ODWFKHV IRU VWUHQJWK DQG KRZ WKH\ IDLOHG IRU IRXQG LQ .56 DSSOLHV ,W LV QRW FOHDU WKDW LW GRHV 7KDW VWDWXWH
WZHOYH\HDUV$WWKDWSRLQWDOPRVWDOORI0U*LOEHUJjVZRUN VRXJKW WR OLPLW SXQLWLYH GDPDJHV WR FDVHV LQYROYLQJ PDOLFH IUDXG RU RSSUHVVLRQ DQG WR FKDQJH WKH SODLQWLIIjV VWDQGDUG RI SURRI WR FOHDU DQG GHDOWZLWKGRRUODWFKHVDQGGRRUODWFKV\VWHPV KHKDGGRQH FRQYLQFLQJ HYLGHQFH DV RSSRVHG WR WKH WUDGLWLRQDO SUHSRQGHUDQFH RI WKH DSSUR[LPDWHO\FDVHVRIWKLVW\SHE\WKHWLPHRIWULDO HYLGHQFH VWDQGDUG 6HH 0 6FRWW 0F,QW\UH 7KH )XWXUH RI .HQWXFN\jV 3XQLWLYH 'DPDJHV 6WDWXWH DQG sXUDO 5LJKWV sXULVSUXGHQFH $ &DOO IRU D 6HFRQG 0U *LOEHUJ KDV GRQH H[WHQVLYH WHVWLQJ RQ GRRU < 6HSDUDWLRQ RI 3RZHUV . / s GLVFXVVLQJ ODWFKHVDQGLQSDUWLFXODUWHVWLQJRIE\SDVVIDLOXUHZKLFKLV OHJLVODWXUHjV DWWHPSW WR FKDQJH DSSOLFDEOH VWDQGDUG RI SURRI IRU SXQLWLYH
ZKDWKHPDLQWDLQVFDXVHGWKHGRRURIWKH 'RGJH5DP GDPDJH FODLPV 7KH .HQWXFN\ 6XSUHPH &RXUW LQ :LOOLDPV Y :LOVRQ 6:G .\ VWUXFN GRZQ WKDW SRUWLRQ RI WKH VWDWXWH SLFNXSWRRSHQLQWKLVFDVHHMHFWLQJ0U&ODUN)RUH[DPSOH LQYROYLQJ PDOLFH RQ WKH JURXQG WKDW WKH OHJLVODWXUH FRXOG QRW XQGHU 0U*LOEHUJKDVGHVLJQHGDQXPEHURIIL[WXUHVWRWHVWGRRU .HQWXFN\ FRQVWLWXWLRQDO SULQFLSOHV VXSHUVHGH WKH FRPPRQ ODZ ULJKW WR ODWFKHV2QHRI0U*LOEHUJjVWHVWVZDVVSHFLILFDOO\GHVLJQHG UHFRYHU RQ SURRI RI JURVV QHJOLJHQFH :KLOH WKLV FRXUW LQ DQ XQSXEOLVKHG WRWHVWE\SDVVIDLOXUH7KLVWHVWKDVEHHQXVHGE\WKH1+76$ RSLQLRQ $QGHUVRQ Y :DGH )HG$SS[ WK &LU 0DU
7KHIDFWWKDWKHGLGQRWGRDQ\VSHFLILFWHVWLQJLQWKLVFDVH LQGLFDWHG WKDW RWKHU SRUWLRQV RI WKH VWDWXWH ZHUH QRW LQYDOLGDWHG E\ :LOOLDPV LH WKH VHFWLRQV UHODWLQJ WR IUDXG DQG RSSUHVVLRQ WKHUH LV JRHV WR WKH ZHLJKW RI KLV WHVWLPRQ\ DQG QRW WR LWV QRWKLQJ LQ WKH VWDWXWH ZKLFK ZRXOG UHTXLUH D FODLP IRU SXQLWLYH GDPDJHV DGPLVVLELOLW\6HH&OD\)GDW RQ WKH EDVLV RI JURVV QHJOLJHQFH EH SURYHQ E\ FOHDU DQG FRQYLQFLQJ HYLGHQFH .56 VWDWHV 7KLUG0U*LOEHUJjVWHVWLPRQ\DWWULDOGHPRQVWUDWHVWKDWKH ZDVIDPLOLDUZLWKWKH&KU\VOHU.ODWFKWKHW\SHIRXQGRQWKH $ SODLQWLII VKDOO UHFRYHU SXQLWLYH GDPDJHV RQO\ XSRQ SURYLQJ E\
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
*LOEHUJGHVFULEHGWKHUDWFKHWDVD8VKDSHGSLYRWLQJDUPWKDW SXQLWLYH GDPDJH FODLPV EDVHG RQ IUDXG DQG RSSUHVVLRQ +HUH DV WKH GLVVHQW DFNQRZOHGJHV 0UV &ODUN VRXJKW SXQLWLYH GDPDJHV RQ WKH EDVLV JUDVSVDVWULNHU DEROWVWLFNLQJRXWRIWKH%SLOODUDWWKHUHDU RI JURVV QHJOLJHQFH DQG QRW IUDXG RU RSSUHVVLRQ ,Q WKLV FLUFXPVWDQFH LW RSHQLQJRIWKHGRRU DQGKROGVWKHGRRUFORVHG7KHSDZOLV FRXOG EH DUJXHG WKDW EDUULQJ IXUWKHU FKDQJH LQ WKH ODZ E\ WKH .HQWXFN\ DGHWHQWOHYHUZLWKDOLWWOHWRRWKZKLFKmGUDJVGRZQDQGKROGV OHJLVODWXUH FDVH ODZ SUHGDWLQJ DQG HPSOR\LQJ WKH WKHUDWFKHWLQDFORVHGSRVLWLRQls$DW,QRWKHUZRUGV SUHSRQGHUDQFH RI WKH HYLGHQFH VWDQGDUG WR FODLPV IRU SXQLWLYH GDPDJHV ZKHQ WKH VWULNHU RQ WKH IUDPH PRYHV LQWR WKH ODWFK RQ WKH EDVHG RQ JURVV QHJOLJHQFH ZRXOG EH DSSOLFDEOH
GRRUWKHSDZOGURSVGRZQWRKROGWKHUDWFKHWFORVHG:KHQ ,Q DQ\ HYHQW &KU\VOHU KDV ZDLYHG WKH ULJKW WR UDLVH DQ LVVXH UHJDUGLQJ WKHKDQGOHLVSXOOHGWKHSDZOLVOLIWHGUHOHDVLQJWKHVWULNHU WKH VWDQGDUG RI SURRI LQ WKLV FDVH VLQFH LW GLG QRW UDLVH EHORZ RU EHIRUH WKLV DQGRSHQLQJWKHGRRU1RUPDOO\WKHRQO\ZD\WKHGRRUVKRXOG FRXUW DQ\ LVVXH FKDOOHQJLQJ WKH VWDQGDUG RI SURRI DSSOLHG E\ WKH GLVWULFW FRXUW &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
LQMXUHGKDGKHUHPDLQHGLQWKHFDUDQGWKDWKLVHMHFWLRQIURP RSHQ LV ZKHQ WKH LQVLGH RU RXWVLGH KDQGOH OLIWV WKH SDZO WKHFDUZDVDUHVXOWRIDGHIHFWLQWKHODWFKV\VWHP %\SDVVIDLOXUHRFFXUVZKHQWKHUDWFKHWDQGSDZODUHRXWRI DOLJQPHQWZLWKHDFKRWKHU:KHQWKLVKDSSHQVWKH\VOLGHE\ % HDFKRWKHU &KU\VOHU DOVR PDLQWDLQV WKDW WKH WULDO FRXUW HUUHG LQ QRW )RXUWK0U*LOEHUJH[DPLQHGWKHODWFKLQWKLVFDVHWZLFH HQWHULQJMXGJPHQWLQLWVIDYRUDVDPDWWHURIODZLQUHJDUGWR +HDOVRH[DPLQHGRWKHU.ODWFKHVLGHQWLFDOWRWKHRQHRQ0U WKHMXU\jVDZDUGRISXQLWLYHGDPDJHV,QLWVPRWLRQEHIRUHWKH &ODUNjV'RGJH5DPZKLFKKDGEHHQLQYROYHGLQDFFLGHQWV WULDOFRXUW&KU\VOHUDUJXHGWKDW0UV&ODUNZDVQRWHQWLWOHGWR 'XULQJ KLV WHVWLPRQ\ KH HPSKDVL]HG WKHUH ZDV QRW PXFK DQ\ SXQLWLYH GDPDJHV EHFDXVH WKH\ ZHUH QRW SURYHQ DQG GDPDJHWRWKHIUDPH RI WKH GRRUHYHQZKHUHWKHFROOLVLRQ EHFDXVHWKHMXU\jVDZDUGRIVXFKGDPDJHVZDVH[FHVVLYH RFFXUUHGRUWRWKHDUHDRIWKHWUXFNZKHUHWKHVFUHZVKROGWKH ODWFKRQWRWKHGRRU7KHUHZDVKRZHYHUVLJQLILFDQWGDPDJH WR WKH %SLOODU ZKLFK ZDV WZLVWHG DQG URWDWHG RXWZDUG /LNHZLVHWKHVWULNHUZKLFKZRXOGQRUPDOO\SRLQWIRUZDUG $V WR &KU\VOHUjV DUJXPHQW WKDW WKHUH ZDV LQVXIILFLHQW KDGEHHQWXUQHGRXWZDUG0U*LOEHUJIXUWKHUWHVWLILHGWKDW HYLGHQFHWRVXSSRUWDQDZDUGRISXQLWLYHGDPDJHVWKHFRXUW KLVH[DPLQDWLRQRIWKHODWFKUHYHDOHGVHYHUDOLQGLFDWLRQVWKDW UHYLHZV WKH WULDO MXGJHjV GHQLDO RI &KU\VOHUjV PRWLRQ IRU E\SDVV IDLOXUH KDG RFFXUUHG LQ WKLV FDVH 6SHFLILFDOO\ KH MXGJPHQW DV D PDWWHU RI ODZ XQGHU WKH VDPH VWDQGDUGV LW SRLQWHGWRWKHGHQWLQJLQWKHEDFNRIWKHODWFKRSHQLQJZKHUH UHYLHZHGWKHVXEVWDQWLYHFODLPVDERYHsXGJPHQWmVKRXOG WKHVWULNHUZDVIRUFHGDQGDQLFNRQWKHUDWFKHWFDXVHGE\WKH >WKHUHIRUH@EHJUDQWHGRQO\LIWKHUHLVDFRPSOHWHDEVHQFHRI IRUN EROW JHWWLQJ KRRNHG RQ WKH FRUQHU RI WKH SDZO 7KLV SURRIRQDPDWHULDOLVVXHLQWKHDFWLRQRULIQRGLVSXWHGLVVXH LQGLFDWHG WR KLP WKDW WKH UDWFKHW DQG WKH SDZO ZHUH RXW RI RI IDFW H[LVWV XSRQ ZKLFK UHDVRQDEOH PLQGV FRXOG GLIIHUl DOLJQPHQWDQGmMXVWDWWKHHQGDOLWWOHELWRIPHWDOZDVFOLSSHG 0RUDOHV)GDW7KHFRXUWDOVRFDQQRWVXEVWLWXWHLWV RIIls$DW $FFRUGLQJWR0U*LOEHUJWKLVPHDQWWKDWmLI MXGJPHQW IRU WKDW RI WKH MXU\ UDWKHU LW PXVW UHYLHZ WKH \RXOLIWWKDWSDZOSDUWLFXODUO\ZLWKHQRXJKIRUFHWRERWWRPLW HYLGHQFHLQWKHOLJKWPRVWIDYRUDEOHWR0UV&ODUNDQGVKH RXWKHUHWRPDNHDQLFN\RXKDYHUHOHDVHGWKHODWFKls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mFRQGXFW RI &KU\VOHU )LIWK0U*LOEHUJjVWHVWLPRQ\DWWULDOGHPRQVWUDWHVWKDWKH &RUSRUDWLRQLQGHVLJQLQJPDQXIDFWXULQJDQGPDUNHWLQJWKH KDG H[WHQVLYH WHFKQLFDO NQRZOHGJH RQ WKH W\SH RI E\SDVV 'RGJH5DPSLFNXSWUXFNFRQVWLWXWHGJURVVQHJOLJHQFHl IDLOXUH WHVWLQJ WKDW ZDV SHUIRUPHG RQ &KU\VOHU . ODWFKHV s$DW7KHLQVWUXFWLRQGHILQHGJURVVQHJOLJHQFH DV mD PDQXIDFWXUHGDWWKHWLPHRIWKHDFFLGHQWDQGVSHFLILFDOO\RQ UHFNOHVVGLVUHJDUGIRUWKHOLYHVDQGVDIHW\RIRWKHUSHUVRQV WKHLQDGHTXDFLHVRIVXFKWHVWLQJ+HWHVWLILHGWKDWWKHFRQFHSW RIODWFKE\SDVVIDLOXUHKDVEHHQNQRZQLQWKHLQGXVWU\VLQFH WKLV W\SH RI ODWFK ZDV LQWURGXFHG +H VWDWHG WKDW WKH ODWFK &KU\VOHU GLG QRW LQ LWV PRWLRQ IRU D QHZ WULDO VHHN D UHPLWWLWXU DV WR LWVHOI ZDV GHVLJQHG WR UHVLVW WKH IRUFHV GHVFULEHG E\ WKH WKH SXQLWLYH GDPDJHV DZDUG s$ DW &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
)HGHUDO0RWRU9HKLFOH6DIHW\6WDQGDUGV m)0966l FRQFOXVLRQ WKH FRXUW UHMHFWHG WKH WHVWLPRQ\ RI RQH RI 7KRVHVDIHW\VWDQGDUGVUHTXLUHDXWRPRELOHVWRGHPRQVWUDWH SODLQWLIIjV H[SHUWV ZKR WHVWLILHG WKDW SODLQWLII ZRXOG KDYH WKURXJKDPDFKLQHWHVWZKLFKmULJLGO\KROGVWKHODWFKLQRQH EHHQXQKXUWLIKHKDGUHPDLQHGLQWKHFDUDVKDYLQJQREDVLV MDZDQGWKHVWULNHULQWKHRWKHUlWKDWWKH\FDQQRWEHSXOOHG 7KHFRXUWVWDWHG DSDUW XS WR D FHUWDLQ DPRXQW RI SUHVVXUH s$ DW $FFRUGLQJWR0U*LOEHUJjVWHVWLPRQ\WKHUHDUHVLJQLILFDQW *LYHQWKHFRQGLWLRQRIWKHURRIDIWHUWKHDFFLGHQWDQGWKH SUREOHPVZLWKWKLVWHVWLQWKDWWKHODWFKDQGVWULNHUDUHQRW IDFWWKDWWKHsHWWDKLWWKHJURXQGDWWKHWHUPLQXV RI LWV DOORZHGWRPRYHDURXQGUHODWLYHWRHDFKRWKHUDVWKH\GRLQD µSROHYDXOWjLQDQLQYHUWHGSRVLWLRQDQGFRQWLQXHGWRUROO FDUERG\)RUH[DPSOHWKH\DUHQRWDOORZHGWRWZLVWPDNLQJ WKLVDVVHUWLRQDSSHDUVWRKDYHQRIDFWXDOEDVLV WKHODWFKDSSHDUVWURQJHUWKDQLWDFWXDOO\LV7KXVWKHWHVW GRHVQRWDFFXUDWHO\UHODWHKRZWKHODWFKZLOOSHUIRUPLQDQ ,G DW DOVR QRWLQJ WKDW 2j%U\DQ KDG QRW SURSRVHG DQ DFFLGHQW DOWHUQDWLYHGHVLJQIRUDPRUHFUDVKZRUWK\GRRUORFNDQGWKDW WKHLQIRUPDWLRQKHVXEPLWWHGUHJDUGLQJWKHHYDOXDWLRQRIWKH 0U*LOEHUJWHVWLILHGWKDWDQRWKHUSUREOHPZLWKWKHWHVWLV ODWFK V\VWHP DV D ZKROH GLG QRW LQFOXGH GDWD UHJDUGLQJ WKDW LW UHTXLUHV IRUFH WR EH DSSOLHG LQ RQO\ WZR H[LVWLQJSUDFWLFHVZLWKLQWKHLQGXVWU\ GLUHFWLRQVoORQJLWXGLQDOO\ WKHZD\WKHFDUWUDYHOV DQGLQD EXUVWGLUHFWLRQWRWKHGRRULQDQHIIRUWWRVKHDUWKHORFNRII 7KHIDFWVRI2j%U\DQDUHFULWLFDOO\GLIIHUHQWIURPWKHIDFWV $OWKRXJK0U*LOEHUJWHVWLILHGWKDWWKH&KU\VOHU.ODWFKGLG RIWKLVFDVH+HUH0UV&ODUNKDVSURGXFHGHYLGHQFHWKDW QRW SHUIRUP SRRUO\ RQ WKHVH WZR WHVWV KH H[SODLQHG WKDW WKHUHZHUHIHDVLEOHDOWHUQDWLYHGHVLJQVWRWKH&KU\VOHU.ODWFK ODWFKHVDUHDOPRVWQHYHUVXEMHFWHGWRSXUHORQJLWXGLQDORUSXUH V\VWHPWKDWZRXOGKDYHSUHYHQWHG0U&ODUNjVLQMXULHV0U VKHDUIRUFHGXULQJDFUDVK5DWKHUWKHIRUFHDSSOLHGWRWKH *LOEHUJ WHVWLILHG WKDW VHYHUDO VLPSOH IL[HV ZRXOG KDYH ODWFKLVXVXDOO\DFRPELQDWLRQRIQRWRQO\WKHVHIRUFHVEXW SUHYHQWHGE\SDVVIDLOXUHDQGWKDWDVWDWHRIWKHDUWRUVWDWHRI WZLVWRXWIRUFHDVZHOO WKHLQGXVWU\ODWFKZRXOGQRWKDYHDOORZHGWKHGRRUWRFRPH RSHQ0DQ\RIWKHDOWHUQDWLYHODWFKV\VWHPVSURSRVHGE\0U 7KHUHOLDELOLW\RI0U*LOEHUJjVWHVWLPRQ\DVWRWKLVLVVXHLV *LOEHUJKDGDFWXDOO\EHHQLQXVHE\YHKLFOHPDQXIDFWXUHUVIRU VXEVWDQWLDWHGE\WKHIDFWWKDWLQ WKH1DWLRQDO+LJKZD\ PDQ\ \HDUV SULRU WR WKH WLPH WKH 'RGJH 5DP ZDV 7UDIILF6DIHW\$GPLQLVWUDWRUSRVWHGDQRWLFHLQWKH)HGHUDO PDQXIDFWXUHG HJ WKH mSLH DQG FRQHl XVHG E\ 0HUFHGHV 5HJLVWHULQGLFDWLQJLWVGHVLUHWRFKDQJHWKHWHVWLQJSURFHGXUH %HQ]VLQFHWKH VDQGZKLFKZDVQRPRUHFRVWO\WKDQWKH IRU ODWFKHV WR PDNH LW PRUH UHIOHFWLYH RI WKH NLQG RI VWUHVV . ODWFK 0UV &ODUNjV RWKHU H[SHUW 0U 3HWHUVRQ ODWFKHVXQGHUJRLQDQDFFLGHQW GHPRQVWUDWHGWKHGLIIHUHQFHEHWZHHQWKHXQVXSSRUWHGVKHHW PHWDO%SLOODUXVHGE\&KU\VOHUDQGWKHER[HGDQGVXSSRUWHG )LQDOO\0U*LOEHUJjVWHVWLPRQ\DWWULDOUHJDUGLQJVWDWHRI %SLOODUVXVHGE\)RUG*HQHUDO0RWRUV1LVVDQDQG7R\RWD WKHDUWDQGVWDWHRIWKHLQGXVWU\LQGRRUODWFKHVDWWKHWLPHWKH +HWHVWLILHGWKDWLIWKH%SLOODUIURPWKH&ODUNYHKLFOHKDGKDG 'RGJH5DPZDVPDQXIDFWXUHGDOVRGHPRQVWUDWHVWKDW DER[HG%SLOODULWZRXOGQRWKDYHWZLVWHGRXW KLVRSLQLRQVZHUHUHOLDEOH6SHFLILFDOO\KHWHVWLILHGWKDWWKH )LQDOO\DOORIWKHHYLGHQFHPXVWEHYLHZHGLQOLJKWRIWKH IDFW WKDW 0UV &ODUNjV HYLGHQFH LQ WKLV FDVH LQ UHJDUG WR FDXVDWLRQGRHVQRWVXIIHUIURPWKHGHILFLHQFLHVZHIRXQGLQ &KU\VOHU ILOHG ZULWWHQ REMHFWLRQV WR WKH QRWLFH LQGLFDWLQJ WKDW WKH 2j%U\DQ$VH[SODLQHGDERYHWKHUHZDVFRPSHWHQWHYLGHQFH EHIRUH WKH MXU\ WKDW &KDUOHV &ODUN ZRXOG QRW KDYH EHHQ PHWKRG DQG IL[WXUH ZHUH GHYHORSHG WR HYDOXDWH ODWFK VWULNHU VHSDUDWLRQ VWUHQJWK DQG WKDW WKH WHVW ZDV QRW PHDQW WR EH D V\VWHPV WHVW RI WKH ODWFK DVVHPEO\ DQG LWV DWWDFKPHQWV &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
FRUQHUSHQHWUDWHGWKHXSSHUOHIWFRUQHURIWKHZLQGVKLHOG ODWFKLQWKH 'RGJH5DPSLFNXSZDVQRWVWDWHRIWKHDUW VWUXFN WKH VHDWEHOW HPHUJHQF\ UHOHDVH PHFKDQLVP DQG RUVWDWHRIWKHLQGXVWU\+HQRWHGWKDWWKHKLQJHVRQWKHGRRU WKHQKLWWKHGULYHUjVVLGHSLOODU7KHFDUmSROHYDXOWHGl ZHUHQRWGDPDJHGDQGWKDWWKHUHZDVQRWHFKQLFDOFKDOOHQJH RQWKLVORJVWUHWFKLQJWKHGRRUIUDPHOLNHDUXEEHUEDQG WRPDNLQJWKHGRRUODWFKDVVWURQJDVWKHKLQJHV,QGLFDWLQJ DQGUHOHDVLQJWKHGRRUODWFK7KHORJZDVFDUULHGZLWK WKDWWKHRYHUDOOSUREOHPZDVDmV\VWHPVSUREOHPlDQGQRW WKH YHKLFOH IRU DSSUR[LPDWHO\ IHHW 7KH ORJ DQG MXVWDODWFKSUREOHPKHH[SODLQHGWKDWWKHVWUHQJWKRIWKHODWFK YHKLFOHWKHQVHSDUDWHGDQGWKHUHDURIWKHFDUGXJLQWR FRXOGKDYHEHHQLQFUHDVHGE\VWLIIHQLQJXSWKHPRXQWLQJRU WKHJURXQGFDXVLQJLWWRURWDWHLQWKHRSSRVLWHGLUHFWLRQ PRYLQJWKHPRXQWLQJSRLQWVRUVFUHZVFORVHUWRJHWKHUVRWKH\ $VWKHsHWWDIHOOWRZDUGWKHJURXQG2j%U\DQZDVHMHFWHG FRXOGEUDFNHWWKHDUHDZKHUHWKHUDWFKHWDQGSDZOPHHW7KLV IURPWKHFDU0RYLQJVOLJKWO\DKHDGRIWKHYHKLFOHKH ZRXOGKDYHPDGHWKHODWFKPRUHUHVLVWDQWWRSU\LQJZLWKRXW FDPHWRUHVWRQWKHJURXQGDQGWKHsHWWDILQDOO\ODQGHGRQ DGGLQJZHLJKW$QRWKHUPHWKRGWKDWFRXOGKDYHEHHQXVHGWR WRSRIKLP(VWLPDWHVDVWRWKHWRWDOGLVWDQFHWUDYHOHGE\ PDNHWKHODWFKVWURQJHUZRXOGKDYHEHHQWRXWLOL]HDUDWFKHW WKHYHKLFOH LQFOXGLQJ\DZPDUNV YDULHGIURPIHHW ZKLFKEUDFNHWHGERWKVLGHVRIWKHGHWHQWOHYHUVRWKDWWKHSDZO WRIHHW WRRWKZDVLQVLGHWKHUDWFKHWDQGFRXOGQRWPRYHVLGHZD\V+H GHVFULEHGVHYHUDOH[DPSOHVLQWKHLQGXVWU\WKDWZHUHVWDWHRI ,GDW WKHDUWDWWKHWLPH0U&ODUNjV'RGJH5DPZDVPDQXIDFWXUHG LQFOXGLQJDSLQDQGFRQHV\VWHPZKLFKKDVDSLQVWLFNLQJRXW $WWULDO2j%U\DQjVH[SHUWVRIIHUHGWHVWLPRQ\WKDWWKHGRRU RI WKH ERG\ WKDW PDWHV ZLWK D KROH LQ WKH ODWFK WR KHOS DQGVHDWEHOWLQWKHsHWWDZHUHGHIHFWLYHDQGWKDWDPRWRUL]HG UHLQIRUFH WKH ODWFK 0U *LOEHUJ WHVWLILHG WKDW LW ZDV KLV WUDFN DERYH WKH GRRU ZRXOG KDYH SURYLGHG D SUDFWLFDEOH RSLQLRQWRDUHDVRQDEOHGHJUHHRIHQJLQHHULQJFHUWDLQW\WKDW DOWHUQDWLYHGHVLJQWKDWZRXOGKDYHSUHYHQWHGWKHSODLQWLIIjV DVWDWHRIWKHLQGXVWU\ODWFKZRXOGQRWKDYHDOORZHGWKHGRRU LQMXULHV+RZHYHULQUHYHUVLQJWKHMXU\YHUGLFWLQIDYRURI RQWKH'RGJH5DPWRRSHQ 2j%U\DQWKLVFRXUWIRXQGWKDWWKHUHZDVQRSURRIWKDWWKLV DOWHUQDWHGHVLJQZRXOGKDYHSUHYHQWHGWKHKDUPWKDWLVmWKDW )RUWKHVHUHDVRQVWKHWULDOFRXUWGLGQRWHUULQDOORZLQJ0U WKHPRWRUL]HGDWWDFKPHQWZRXOGQRWKDYHDFWLYDWHGZKHQWKH *LOEHUJ WR WHVWLI\ DW WULDO 0U *LOEHUJjV RSLQLRQ WKDW WKH GRRUIOHZRSHQLQWKLVDFFLGHQWl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jVH[SHUWVKDGQRW ODWFKHVPDQXIDFWXUHGDWWKHWLPHRIWKHDFFLGHQWDVZHOODV DGGXFHGSURRIWKDWWKHVHDWEHOWZRXOGKDYHUHPDLQHGLQWDFW WKHIDFWWKDWDVWDWHRIWKHLQGXVWU\GRRUODWFKSUREDEO\ZRXOG LI WKH sHWWD KDG ORFDWHG WKH HPHUJHQF\ UHOHDVH PHFKDQLVP KDYH SUHYHQWHG 0U &ODUNjV HMHFWLRQ 7KH FRXUW WKHUHIRUH EHWZHHQ WKH WZR IURQW VHDWV UDWKHU WKDQ QHDU WKH GRRU DJUHHVZLWKWKHWULDOFRXUWWKDWXQGHU'DXEHUW WKHUHZDVD PRXQWLQJDQRWKHUDOWHUQDWLYHGHVLJQSURSRVHGE\SODLQWLII VXIILFLHQWO\UHOLDEOHIRXQGDWLRQIRU0U*LOEHUJjVWHVWLPRQ\ )LQDOO\WKHFRXUWIRXQGWKDW2j%U\DQGLGQRWSURYHWKDWD GHIHFWLYH GRRU ODWFK FDXVHG KLV LQMXULHV ,Q UHDFKLQJ WKLV &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
% ,Q UHO\LQJ RQ WKLV XQSXEOLVKHG RSLQLRQ RI RXU FRXUW &KU\VOHUPDLQWDLQVWKDWSXUVXDQWWR6L[WK&LUFXLW5XOH J 7KHWULDOFRXUWDOVRGLGQRWHUULQGHQ\LQJ&KU\VOHUjVPRWLRQ WKHFDVHmKDVSUHFHGHQWLDOYDOXHLQUHODWLRQWRDPDWHULDOLVVXH LQOLPLQHZLWKUHVSHFWWR3ODLQWLIIVjRWKHUH[SHUW0U3HWHUVRQ LQWKHFDVHDQGWKDWWKHUHLVQRRSLQLRQZKLFKZRXOGVHUYHDV 0U3HWHUVRQZDVKLUHGWRWHVWLI\DVDQH[SHUWRQZK\WKHGRRU ZHOOl,QGLVSXWLQJWKDWWKHFUDVKZRUWKLQHVVGRFWULQHVKRXOG RQ 0U &ODUNjV WUXFN FDPH RSHQ DQG RQ DFFLGHQW QRWEHDSSOLHGWRWKLVFDVH0UV&ODUNDUJXHVWKDW.HQWXFN\ UHFRQVWUXFWLRQ /LNH 0U *LOEHUJ WKHUH ZDV D VXIILFLHQWO\ FRXUWVKDYHQHYHUDGRSWHGWKHGRFWULQHDQGQRWHVWKDWWKHUHDUH UHOLDEOHEDVLVIRU0U3HWHUVRQjVWHVWLPRQ\DWWULDO DQXPEHURIFDVHVZKLFKVHUYHDVUHOHYDQWSUHFHGHQWIRUWKH LVVXHVEHIRUHWKHFRXUW&KU\VOHUGRHVQRWGLVSXWHWKDWWKH $V WKH WULDO FRXUW IRXQG WKH IDFW WKDW 0U 3HWHUVRQ RQO\ 2j%U\DQFRXUWDFNQRZOHGJHGWKDW.HQWXFN\FRXUWVKDYHQRW FRQGXFWHGDSK\VLFDOH[DPLQDWLRQRIWKH%SLOODUDQGGLGQRW DGRSWHGWKHFUDVKZRUWKLQHVVGRFWULQH,QGHHGLWFLWHVWKLVIDFW GR DQ\ WHVWLQJ KLPVHOI GRHV QRW UHQGHU KLV WHVWLPRQ\ LQIDYRURIZK\WKHFRXUWVKRXOGORRNWR2j%U\DQDVSUHFHGHQW XQUHOLDEOH &OD\ )G DW )LUVW 0U 3HWHUVRQj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j%U\DQWKHSODLQWLIID\HDUROGER\ZDVVHULRXVO\ WHVW IDFLOLW\ LQ $WODQWLF &LW\ ZKHUH 1+76$ GLG WHVWLQJ LQMXUHGZKHQKHGURYHD 9RONVZDJHQsHWWDRIIWKHURDG UHVHDUFKDQGGHYHORSPHQW7KHUHKHZDVLQYROYHGLQWHVWLQJ DW DQ H[FHVVLYH UDWH RI VSHHG +H VXHG 9RONVZDJHQ RIYDULRXVNLQGVLQFOXGLQJVLGHLPSDFWWHVWLQJDQGUHDULPSDFW PDLQWDLQLQJWKDWWKHLQMXULHVZKLFKKHVXIIHUHGZHUHFDXVHG WHVWLQJ ,Q KH WUDQVIHUUHG WR WKH 7UDQVSRUWDWLRQ E\DGHIHFWLYHVHDWEHOWDQGGRRUODWFK7KHFRXUWLQWKDWFDVH 5HVHDUFK&HQWHURI2KLRDQRWKHU1+76$IDFLOLW\WRFUHDWH GHVFULEHGWKHDFFLGHQWDVIROORZV DUHVHDUFKGHYHORSPHQWDQGWHVWLQJDUPRIWKH&HQWHU+H ZDVDGLYLVLRQFKLHILQFKDUJHRISURMHFWHQJLQHHULQJDQGZDV $IWHU OHDYLQJ WKH URDG WKH FDU FURVVHG RYHU D GLWFK LQYROYHGLQDVXEVWDQWLDODPRXQWRIWHVWLQJIRUVDIHW\UHODWHG VWUXFN DQ HPEDQNPHQW FOLPEHG WKH HPEDQNPHQW DQG GHIHFWVLQYHKLFOHV+LVZRUNZLWKWKLVJURXSDOVRLQFOXGHG VWUXFNWZRRUWKUHHRIDJURXSRIWKUHHODUJHORJVDWWKH UHVHDUFK RQ EDUULHU WHVWV IRU WKH 1+76$ UHVHDUFK DQG WRSRIWKHHPEDQNPHQW$WWKLVSRLQWWKHFDUZDVXSVLGH GHYHORSPHQWJURXSLQ:DVKLQJWRQ GRZQDQGPRYLQJIRUZDUG2QHORJKLWWKHURRIRIWKH FDUZLWKVXFKIRUFH WKDWWKHURRIZDVSHHOHGEDFNDQG ,Q 0U 3HWHUVRQ HVWDEOLVKHG $XWRPRELOH 6DIHW\ XSZDUG RQ WKH GULYHUjV VLGH $QRWKHU ORJ FDPH 7HVWLQJ,QFRUSRUDWHG)RUWKHILUVWVL[RUVHYHQ\HDUVRIWKH GLDJRQDOO\DFURVVWKHKRRGRIWKHFDUIURPWKHULJKWIURQW &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
LQWKHIHQGHUZKHHODUHDDQGQRWWRWKHIUDPHRUFORVHWRWKH FRPSDQ\j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mVLGHVODSSHGls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jVVSDFH 6HFRQG0U3HWHUVRQjVRSLQLRQVDQGKLVWHVWLPRQ\LQWKH LQVLGHRIWKHWUXFN7KHRIILFHUWHVWLILHGWKDWWKHUHZDVQRVLJQ FDVHZHUHEDVHGLQSDUWRQKLVH[DPLQDWLRQRI0U&ODUNj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m%SLOODUl+HGHVFULEHGWKH% 0U&ODUN+RZHYHUFLWLQJWKLVFRXUWjVGHFLVLRQLQ2j%U\DQ SLOODUDVWKHmVNHOHWRQlRIWKHYHKLFOHDQGQRWHGWKDWSLOODUVDUH Y 9RONVZDJHQ RI $PHULFD 1RV DQG XVXDOO\ UHLQIRUFHG WR DFW DV D VWUXFWXUH $FFRUGLQJ WR 0U )G :/ WK &LU &KU\VOHU 3HWHUVRQRQHRIWKHPRVWHIILFLHQWDQGHDVLHVWZD\VWRPDNH PDLQWDLQVWKDWEHFDXVH0U&ODUNjVRZQDFWLRQVSUHFLSLWDWHG D VWUXFWXUH LV WR PDNH D ER[ RI VKHHW PHWDO E\ IRUPLQJ D WKH DXWRPRELOH DFFLGHQW WKH VRFDOOHG mFUDVKZRUWKLQHVVl VTXDUHDQGVSRWZHOGLQJLW+RZHYHUKHGHVFULEHGWKH% GRFWULQH DSSOLHV WR WKLV FDVH 8QGHU WKH FUDVKZRUWKLQHVV SLOODULQWKLVFDVHDVEHLQJ OLWWOHPRUHWKDQWKHVKHHWPHWDO GRFWULQHmFRXUWVGHQ\UHFRYHU\XQOHVVWKHSODLQWLIIHVWDEOLVKHV ERG\RIWKHYHKLFOH,WLVYHU\OLJKWO\UHLQIRUFHGVKHHWPHWDO E\FRPSHWHQWH[SHUWWHVWLPRQ\WKDWWKHGHIHFWZDVUHVSRQVLEOH ZKLFKIRUWKHPRVWSDUWKDVQRWEHHQIRUPHGLQWRDER[+H WRVRPHGHJUHHIRUHQKDQFHPHQWRILQMXU\WRWKHSODLQWLIIl,G GHVFULEHGWKHPHWDODVDORZDOOR\VWHHOZKLFKLVKLJKVWUHQJWK DW LQWHQVLRQ LHZKHQLWLVJUDEEHGRQHLWKHUVLGHDQGSXOOHG &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
EXW LV QRW YHU\ VWURQJ LQ EHQGLQJ RU VKHDU 0U 3HWHUVRQ .HQWXFN\ODZDGHIHFWFDQEHVDLGWREHWKHFDXVHRIDQLQMXU\ WHVWLILHGWKDWLQKLVRSLQLRQWKH%SLOODULQYROYHGLQWKLVFDVH RUGHDWKLILWLVDVXEVWDQWLDOIDFWRULQEULQJLQJDERXWWKHLQMXU\ ZDVGHIHFWLYHDWWKHWLPHWKHYHKLFOHZDVPDGHDQGDVVHPEOHG RUGHDWK'HXWVFKY6KHLQ 6:G .\ LQ +HQRWHGWKDWDIWHUWKHDFFLGHQWmWKHVWULNHUZKLFK $W WULDO 0UV &ODUN VRXJKW WR HVWDEOLVK WKDW 0U &ODUNjV VKRXOGEHGLUHFWO\SDUDOOHOWRWKHFHQWHUOLQHRIWKHYHKLFOH LQMXULHVDQGGHDWKZHUHFDXVHGE\DGHIHFWLYHGRRUODWFKRQ LWjVSRLQWHGRXWDWDQDQJOHWRWKDWGLUHFWLRQls$DW+H WKH 'RGJH5DPSLFNXSWKDWKHZDVGULYLQJDWWKHWLPH GHVFULEHGWKH%SLOODUDVEHLQJERZHGRXWZDUG RIKLVGHDWK2QUHYLHZRIWKHWULDOUHFRUGZHILQGWKDWWKHUH ZDVHYLGHQFHLQWKHUHFRUGIURPZKLFKWKHMXU\FRXOGKDYH 7KLUG0U3HWHUVRQjVWHVWLPRQ\DWWULDOUHJDUGLQJWKHVWDWH FRQFOXGHGWKDWWKH'RGJH5DPjVGHIHFWLYHGRRUODWFKZDVD RIWKHLQGXVWU\LQ%SLOODUVDWWKHWLPHWKH 'RGJH5DP VXEVWDQWLDOIDFWRULQEULQJLQJDERXW0U&ODUNjVGHDWK ZDVPDQXIDFWXUHGDOVRGHPRQVWUDWHVWKDWKLVWHVWLPRQ\DQG RSLQLRQVZHUHUHOLDEOH$WWULDO0U3HWHUVRQWHVWLILHGDERXW 6SHFLILFDOO\0UV&ODUNRIIHUHGWHVWLPRQ\WRHVWDEOLVKWKDW KRZ RWKHU YHKLFOHV DW WKH WLPH WKH 'RGJH 5DP ZDV WKHDFFLGHQWGLGQRWRFFXUDWKLJKLPSDFWDQGWKDW0U&ODUN PDQXIDFWXUHGLQFOXGLQJD7R\RWDSLFNXSD 1LVVDQDQG ZRXOGQRWKDYHEHHQVHULRXVO\LQMXUHGRUNLOOHGKDGKLVGRRU D )RUGKDGmER[HGl%SLOODUV WKDWLVWKH%SLOODUZDV ODWFKQRWIDLOHGDQGKHQRWEHHQHMHFWHGIURPWKHWUXFN7KH ER[HGDQGUHLQIRUFHGLQWKHDUHDRIWKHVWULNHU$QDO\]LQJD IDFWWKDWQHLWKHURI0U&ODUNjVQHSKHZVZDVHMHFWHGDQGWKDW %SLOODURIWKHW\SHXVHGLQWKH&KU\VOHUSLFNXSLQYROYHGLQ QHLWKHU VXIIHUHG DQ\ VHULRXV LQMXULHV VXSSRUWV WKLV WKHRU\ WKHDFFLGHQW0U3HWHUVRQQRWHGWKDWLWGLGQRWXWLOL]HWKHER[ )UHGG\ZKRZDVVLWWLQJLQWKHIURQWSDVVHQJHUVHDWDWWKHWLPH ZLWKLQDER[GHVLJQDVLQWKHRWKHUYHKLFOHV$OWKRXJKWKH% RIWKHDFFLGHQWWHVWLILHGWKDWWKHDFFLGHQWmVWRYHGP\QHFNXS SLOODULQ0U&ODUNjVWUXFNGLG KDYHVRPHER[LQJIURPWKH DOLWWOHELWEXWLWGLGQjWKXUWPHWKDWEDGls$DW%LOO\ ERWWRP RI WKH ZLQGRZ XS WKH ER[LQJ GLG QRW EHJLQ XQWLO VLWWLQJ LQ WKH EDFN VHDW ZDV VHHQ LQ WKH HPHUJHQF\ URRP mFRQVLGHUDEO\DERYHWKHVWULNHUl0U3HWHUVRQWHVWLILHGWKDW ZKHUH KH ZDV JLYHQ 7\OHQRO DQG VHQW KRPH /LNHZLVH WKH %SLOODU LQ &ODUNjV WUXFN ZDV WZLVWHG RXW DW WKH SODFH 2IILFHU%DUQHWWDQGWKHGRJWKDWZDVWUDYHOLQJLQWKHFUXLVHU ZKHUHWKHODWFKVWULNHUSODWHLVDWWDFKHG$FFRUGLQJWRKLP ZLWKKLPZHUHQRWVHULRXVO\LQMXUHG WKHODWFKIDLOHGEHFDXVHWKHUHZDVQRWKLQJEHORZWKHZLQGRZ WR SUHYHQW WKH %SLOODU IURP WZLVWLQJ RXW 0U 3HWHUVRQ 2IILFHU %DUQHWWjV WHVWLPRQ\ DW WULDO WKDW WKH FROOLVLRQ WHVWLILHG WKDW WKH ODWFK RQ WKH 'RGJH 5DP ZDV FOHDUO\ QRW EHWZHHQWKHWZRYHKLFOHVZDVVLPSO\DmJODQFLQJEORZlOHQW VWDWHRIWKHDUW WRWKHFRQWUDU\LWZDVSUREDEO\\HDUVRXW IXUWKHUVXSSRUWWR0UV&ODUNjVSRVLWLRQs$DW%7KH RIGDWH+HIXUWKHUWHVWLILHGWKDWKHKDGQHYHUVHHQD%SLOODU LQYHVWLJDWLQJSROLFHRIILFHU*DU\0DUWLQDOVRGHVFULEHGWKH WKDW ZDV D VLQJOH SLHFH RI VKHHW PHWDO OLNH WKH RQH LQ WKH FROOLVLRQDVDmJODQFLQJEORZlDQGQRWHGWKDWmLWZDVQRWD 'RGJH5DP+HFRQFOXGHGWKDWWKH%SLOODUZDVGHIHFWLYHO\ GLUHFW GHJUHHEORZDWDOOls$DW0U3HWHUVRQZKR GHVLJQHGDQGWKDWER[LQJZRXOGKDYHSUHYHQWHGWKHWZLVWRXW SURYLGHG H[SHUW WHVWLPRQ\ RQ DFFLGHQW UHFRQVWUXFWLRQ WHVWLILHG WKDW WKH EORZ WR WKH WUXFN UHVXOWHG LQ D FKDQJH LQ )LQDOO\ 0U 3HWHUVRQjV WHVWLPRQ\ ZDV EDVHG LQ SDUW RQ YHORFLW\RImDSSUR[LPDWHO\PLOHVSHUKRXURQWKHWUXFNl JHQHUDODFFHSWDQFHLQWKHDXWRPRELOHLQGXVWU\UHJDUGLQJ% s$DW +HH[SODLQHGWKDWWKLVmZRXOGEHOLNHWDNLQJWKLV SLOODUWHVWLQJDWWKHWLPHWKH'RGJH5DPZDVPDQXIDFWXUHG WUXFNDQGUXQQLQJLWGRZQWRDFRQFUHWHEDUULHUDSSUR[LPDWHO\ 0U3HWHUVRQLQGLFDWHGWKDWWKRXJK%SLOODUWZLVWRXWZDVD DWPLOHVSHUKRXUl,G QRWLQJWKDWWKHFUDVKWHVWVWDQGDUG NQRZQIDLOXUHPRGHLQWKHDXWRPRELOHLQGXVWU\KHKDGQHYHU IRU QHZ FDUV ZDV PLOHV SHU KRXU 7KHUH ZDV DOVR VHHQRQHWRWKHH[WHQWRIWKHRQHLQYROYHGLQWKLVODZVXLW+H WHVWLPRQ\DWWULDOE\WKHLQYHVWLJDWLQJSROLFHRIILFHUDQGRWKHUV QRWHGWKDWLQ *HQHUDO0RWRUVVXEPLWWHGDWZLVWRXWWHVW WKDWWKHGDPDJHWR0U&ODUNjVYHKLFOHZDVPRVWO\WRWKHERG\ &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
UHJDUGWR0UV&ODUNjVFODLPIRUFRPSHQVDWRU\GDPDJHVDQG SURFHGXUH WR 1+76$ IRU LQIRUPDWLRQDO SXUSRVHV 7KH KHUFODLPIRUSXQLWLYHGDPDJHV7KHFRXUWZLOOILUVWDGGUHVV SURFHGXUH ZDV DOVR PDGH DYDLODEOH WR RWKHU DXWRPRELOH &KUV\OHUjVDUJXPHQWVLQUHJDUGWRFRPSHQVDWRU\GDPDJHV PDQXIDFWXUHVLQFOXGLQJ&KU\VOHU'HVSLWHLWVDZDUHQHVVWKDW *HQHUDO 0RWRUV ZDV WHVWLQJ LWV %SLOODUV IRU WZLVWRXW $ &KU\VOHUGLGQRWFKRRVHWRWHVWLWVODWFKHVIRUWZLVWRXWIDLOXUH 7RVXSSRUWLWVPRWLRQIRUMXGJPHQWDVDPDWWHURIODZZLWK )RUWKHVHUHDVRQV&KU\VOHUjVPRWLRQLQOLPLQHWRH[FOXGH UHJDUG WR FRPSHQVDWRU\ GDPDJHV &KU\VOHU PDLQWDLQV WKDW 0U 3HWHUVRQ ZDV SURSHUO\ GHQLHG E\ WKH WULDO FRXUW 0U 0UV&ODUNIDLOHGWRHVWDEOLVKWKHFDXVHRI0U&ODUNjVGHDWK 3HWHUVRQjVRSLQLRQVZHUHEDVHGRQKLVH[WHQVLYHEDFNJURXQG 6SHFLILFDOO\ &KU\VOHU DUJXHV WKDW WKHUH ZDV LQVXIILFLHQW LQDXWRPRELOHVDIHW\WHVWLQJ KLVH[DPLQDWLRQRI0U&ODUNjV HYLGHQFHSUHVHQWHGWRVXSSRUWDMXU\ILQGLQJWKDW0U&ODUNjV WUXFNWKHDFFLGHQWVFHQHWKHSROLFHUHSRUWWKHSKRWRJUDSKV HMHFWLRQ IURP WKH YHKLFOH FDXVHG KLV GHDWK UDWKHU WKDQ IRU DQGWKHGHSRVLWLRQVLQWKHFDVH WKHVWDWHRIWKHDUWDQGVWDWH H[DPSOHLQMXULHVKHVXVWDLQHGLQVLGHWKHYHKLFOH,QDVPXFK RIWKH LQGXVWU\ LQ %SLOODUV DQG JHQHUDO DFFHSWDQFH LQ WKH DVWKHFRXUWKDVDOUHDG\GHWHUPLQHGWKDWWKHWULDOFRXUWGLGQRW DXWRPRELOHLQGXVWU\UHJDUGLQJ%SLOODUWHVWLQJDWWKHWLPHWKH HUULQUHIXVLQJWREDUWHVWLPRQ\RI0UV&ODUNjVH[SHUWVXQGHU 'RGJH5DPZDVPDQXIDFWXUHG7KHFRXUWWKHUHIRUHDJUHHV )HG5(YLGRULQDGPLWWLQJWHVWLPRQ\UHJDUGLQJRWKHU ZLWK WKH WULDO FRXUW WKDW XQGHU 'DXEHUW WKHUH ZDV D DFFLGHQWVWKHFRXUWZLOOFRQVLGHU&KU\VOHUjVDUJXPHQWVZLWK VXIILFLHQWO\UHOLDEOHIRXQGDWLRQIRU0U3HWHUVRQj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mVXEVWDQWLDOO\ .HQWXFN\ ODZ D PRWLRQ IRU MXGJPHQW DV D PDWWHU RI ODZ VLPLODUlWRWKRVHVXUURXQGLQJ0U&ODUNjVDFFLGHQW mVKRXOG EH JUDQWHG RQO\ LI WKHUH LV D FRPSOHWH DEVHQFH RI SURRIRQDPDWHULDOLVVXHLQWKHDFWLRQRULIQRGLVSXWHGLVVXH ,QRUGHUIRUHYLGHQFHRISULRUDFFLGHQWVWREHDGPLVVLEOH RIIDFWH[LVWVXSRQZKLFKUHDVRQDEOHPLQGVFRXOGGLIIHUl,G WKH SULRU DFFLGHQWV PXVW EH mVXEVWDQWLDOO\ VLPLODUl WR WKH FLWLQJ:DVKLQJWRQY*RRGPDQ6:G .\ DFFLGHQWLQVXLW5\HY%ODFN 'HFNHU0IJ&R )G $SS ,QWKHGHWHUPLQDWLRQRIVXFKDPRWLRQHYHU\ WK&LU m6XEVWDQWLDOO\VLPLODUPHDQVWKDW IDYRUDEOHLQIHUHQFHZKLFKPD\UHDVRQDEO\EHGUDZQIURPWKH WKHDFFLGHQWVPXVWKDYHRFFXUUHGXQGHUVLPLODUFLUFXPVWDQFHV HYLGHQFH VKRXOG EH DFFRUGHG WKH SDUW\ DJDLQVW ZKRP WKH RU VKDUH WKH VDPH FDXVHl ,G DW ,Q UHYLHZLQJ WKH PRWLRQLVPDGH,G DGPLVVLRQRUH[FOXVLRQRIHYLGHQFHFRQFHUQLQJDFFLGHQWVRU LQFLGHQWVWKLVFRXUWDSSOLHVDQDEXVHRIGLVFUHWLRQVWDQGDUG ,QPDNLQJWKLVGHWHUPLQDWLRQWKHWULDOFRXUWjVGHFLVLRQLVWREH JLYHQJUHDWODWLWXGHDQGLWFDQQRWEHUHYHUVHGXQOHVVWKHUHLV .HQWXFN\KDVDGRSWHG$RIWKH5HVWDWHPHQW 6HFRQG DVWURQJVKRZLQJRIDEXVH,G8SRQUHYLHZZHFRQFOXGH RI7RUWVZKLFKLPSRVHVOLDELOLW\RQSURGXFWPDQXIDFWXUHUV WKDWWKHWULDOFRXUWGLGQRWDEXVHLWVGLVFUHWLRQLQDOORZLQJ0U XSRQDVKRZLQJWKDWWKHSURGXFWLVmLQDGHIHFWLYHFRQGLWLRQ *LOEHUJ WR WHVWLI\ DERXW WKH IRXU SULRU &KU\VOHU . ODWFK XQUHDVRQDEO\ GDQJHURXV WR WKH XVHU RU FRQVXPHUl 8QGHU IDLOXUHV &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
7KHWHVWLPRQ\WRZKLFK&KU\VOHUREMHFWVRFFXUUHGGXULQJ HYLGHQWLDU\SUHVXPSWLRQVl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jVHLWKHUDFRPELQDWLRQRIERWK ,G 7KH &KDSPDQ FRXUW DOVR GHVFULEHG WKH .HQWXFN\ XVXDOO\WKHUHLVDWZLVWRXWIRUFHDFWLQJRQWKHODWFKDV DSSURDFKWRMXU\LQVWUXFWLRQVDVQRWWRSURYLGHGHWDLOEXWRQO\ ZHOO WR SURYLGH WKH mµEDUH ERQHVj RI WKH TXHVWLRQ IRU MXU\ GHWHUPLQDWLRQl,G s$DW0U*LOEHUJLQGLFDWHGWKDWIURPKLVH[DPLQDWLRQ RIWKH'RGJH5DPODWFKKHFRXOGWHOOWKDWLWZDVVXEMHFWHGWR 7KHGHFLVLRQE\WKH.HQWXFN\&RXUWRI$SSHDOVLQ/HVOLHY D WZLVWRXW IRUFH &RXQVHO WKHUHDIWHU VRXJKW WR HOLFLW &LQFLQQDWL 6XE=HUR 3URGXFWV 6:G .\ WHVWLPRQ\ IURP 0U *LOEHUJ UHJDUGLQJ KLV H[DPLQDWLRQ RI $SS IXUWKHUVXSSRUWVWKHFRQFOXVLRQWKDWWKHWULDOFRXUW &KU\VOHU . ODWFKHV LQ RWKHU DFFLGHQWV &KU\VOHUjV FRXQVHO GLG QRW HUU LQ QRW JLYLQJ D MXU\ LQVWUXFWLRQ WKDW &KU\VOHUjV REMHFWHG RQ WKH JURXQG RI UHOHYDQFH DQG WKH IROORZLQJ FRPSOLDQFHZLWK)0966FUHDWHGDSUHVXPSWLRQWKDWWKH FROORTX\WRRNSODFHDWVLGHEDU 'RGJH5DPSLFNXSWUXFNZDVQRWGHIHFWLYH,Q/HVOLHWKH DSSHOODWH FRXUW RYHUUXOHG WKH WULDO FRXUWjV JUDQWLQJ RI WKH 056877(5>'HIHQGDQWjVFRXQVHO@ +HjVQHYHUVHHQDQ GHIHQGDQWjVVXPPDU\MXGJPHQWPRWLRQZKHUHWKHGHIHQGDQW HMHFWLRQLQWKLVW\SHRIYHKLFOH+HKDVVHHQHMHFWLRQVLQ KDGUHOLHGRQWKHSUHVXPSWLRQVLQ.56,QGRLQJ RWKHUYHKLFOHVRWKHUPDNHVDQGRWKHUPRGHOV1RQHLQ VR WKH &RXUW VWDWHG m>W@KH VWDWXWRU\ SUHVXPSWLRQV RI .56 DGDPDJHGFOXEFDE GRQRPRUHWKDQOHDYHWKHEXUGHQRISURRIZLWK >SODLQWLII@WRSURYHWKDW>WKHSURGXFW@ZDVGHIHFWLYHl,G 7+(&2857 :KHUHDUH\RXJRLQJZLWKWKLV" )RUWKHDERYHPHQWLRQHGUHDVRQVWKLVFRXUWILQGVWKDWWKH 05+$<>3ODLQWLIIjVFRXQVHO@ <RXU+RQRUKHjVKHj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
IRXQGWKDWQRVXFKMXU\LQVWUXFWLRQZDVUHTXLUHG,Q6H[WRQY 7+(&2857 7KDWjVFURVVH[DPLQDWLRQ2YHUUXOHG %HOO +HOPHWV ,QF )G WK &LU WKH SDUWLHVDJUHHGWKDWDWWKHWLPHWKHKHOPHWZDVGHVLJQHGDQG s$DW PDQXIDFWXUHG WKHUH ZHUH WKUHH LQGXVWU\ VWDQGDUGV ZKLFK H[LVWHG SHUWDLQLQJ WR WKH PDQXIDFWXULQJ RI KHOPHWV 7KH 7KHUHDIWHU0U*LOEHUJWHVWLILHGWKDWKHKDGH[DPLQHGRWKHU SDUWLHVDOVRDJUHHGWKDWWKHKHOPHWDWLVVXHFRPSOLHGZLWKHDFK .ODWFKHVLGHQWLFDOWRWKHRQHLQYROYHGLQWKHODZVXLWDQGWKDW RIWKHVWDQGDUGV$IWHUVXEVWDQWLDOHYLGHQFHZDVSUHVHQWHGWKDW IRXURIWKHPKDGIDLOHGLQDPDQQHUmLGHQWLFDOlWRWKHODWFK WKHSURGXFWZDVGHIHFWLYHWKHWULDOFRXUWFRQFOXGHGWKDWWKH LQYROYHG LQ WKH ODZVXLW UHVXOWLQJ LQ ILYH SHUVRQV EHLQJ SUHVXPSWLRQZDVQRORQJHUDPDWWHUWREHFRQVLGHUHG7KH HMHFWHGs$DW+HLQGLFDWHGWKDWWKHVHODWFKHVKDGIDLOHG WULDO FRXUW WKHUHIRUH VHQW WKH FDVH WR WKH MXU\ ZLWKRXW DQ\ LQWKHILYHRUVL[\HDUVSULRUWRWULDODQGWKDWWKH\LQYROYHG LQVWUXFWLRQ UHJDUGLQJ WKH SUHVXPSWLRQ VHW IRUWK LQ .56 E\SDVVWZLVWRXWIDLOXUHRIWKHORFNVMXVWDVWKHORFNLQYROYHG 7KH &RXUW RI $SSHDOV DJUHHG WKDW WKLV ZDV LQWKH&ODUNDFFLGHQWGLG SURSHUVWDWLQJ ,WLVFOHDUWKDWWKHSXUSRVHRI0U*LOEHUJj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jVWHVWLPRQ\LWLVHYLGHQWWKDWWKHSULRUDFFLGHQWV XQGHUWKHVWDWXWHLHE\LQWURGXFWLRQRIHYLGHQFHWKDW VKDUHGWKHVDPHFDXVHDV0U&ODUNjVDFFLGHQW0U*LOEHUJjV VKRZVDGHIHFWE\DSUHSRQGHUDQFHRIWKHHYLGHQFHLV WHVWLPRQ\FOHDUO\GHPRQVWUDWHGWKDWKHFRXOGWHOOE\ORRNLQJ WKHVDPHDVWKDWZKLFKPDNHVRXWDSULPDIDFLHFDVHIRU DWDGRRUODWFKZKHWKHURUQRWWKHODWFKKDGEHHQVXEMHFWHGWR WKHSODLQWLII DWZLVWRXWIRUFHRUSU\LQJORDGGXULQJDQDFFLGHQW%HFDXVH 0U*LOEHUJFRXOGWHOOWKDWWKHODWFKHVLQWKHSULRUDFFLGHQWVDV ,G,QGHHGWKHFRXUWQRWHGWKDWLWFRXOGmSHUFHLYHQRUHDVRQ ZHOODVWKHODWFKLQWKHDFFLGHQWLQVXLWKDGDOOEHHQVXEMHFWHG ZK\ WKH WULDO FRXUW ZRXOG HYHU KDYH WR LQVWUXFW RQ WKLV WRDWZLVWRXWIRUFHDQGQRWMXVWDWHQVLOHDQGRUVKHDUIRUFH VWDWXWRU\SUHVXPSWLRQl,G m+DYLQJEXUVWWKHEXEEOHE\WKH LQWURGXFWLRQRIHYLGHQFH>RISURGXFWGHIHFW@WKHSODLQWLIIZDV $OWKRXJKWKHIDFWWKDWWKHDFFLGHQWVVKDUHGWKHVDPHFDXVH HQWLWOHGWRKDYHWKHTXHVWLRQGHFLGHGRQWKHHYLGHQFHDQGWKH ZRXOG KDYH EHHQ HQRXJK WR VXSSRUW WKH WULDO FRXUWjV SUHVXPSWLRQRI.56 ZDVQRORQJHUDSSOLFDEOHl FRQFOXVLRQWKDW0U*LOEHUJjVWHVWLPRQ\VKRXOGEHDGPLWWHG WKHWHVWLPRQ\DOVRFRXOGKDYHEHHQDGPLWWHGRQWKHEDVLVWKDW 7KH)RXUWK&LUFXLWjVRSLQLRQLQ6H[WRQLVLQDFFRUGZLWKWKH 0U&ODUNj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m>L@Q.HQWXFN\MXU\LQVWUXFWLRQVGRQRWLQFOXGH &LUFXLWQRWHGLQ6PLWKY,QJHUVROO5DQG&R)G WK&LU &ODUNY&KU\VOHU&RUS 1R 1R &ODUNY&KU\VOHU&RUS
7KHVXEVWDQWLDOVLPLODULW\UXOHGRHVQRWUHTXLUHLGHQWLFDO IDFWVRIWKHFDVHLVVROHO\IRU\RXWRGHWHUPLQHDVLVWKH SURGXFWV QRUGRHVLWUHTXLUHXVWRFRPSDUHWKHSURGXFWV ZHLJKWWREHJLYHQWKHVWDQGDUGLQGHWHUPLQLQJWKHLVVXHV LQWKHLUHQWLUHWLHV7KHUXOHUHTXLUHVVXEVWDQWLDOVLPLODULW\ DPRQJWKHYDULDEOHVUHOHYDQWWRWKHSODLQWLIIjVWKHRU\RI s$DW GHIHFW 7KLV FRXUW UHYLHZV D GLVWULFW FRXUWjV UHIXVDO WR JLYH ,G DW ,Q WKLV FDVH DOO RI WKH LQFLGHQWV 0U *LOEHUJ UHTXHVWHG MXU\ LQVWUXFWLRQV XQGHU DQ DEXVH RI GLVFUHWLRQ WHVWLILHG WR LQYROYHG IDLOXUH RI WKH . ODWFK LQ DFFLGHQWV VWDQGDUG6HH%X]LDVKYLOLY,QPDQ)G WK LQYROYLQJ&KU\VOHUYHKLFOHV3DUWLFXODUO\LQOLJKWRIWHVWLPRQ\ &LU :HUHYLHZMXU\LQVWUXFWLRQVmDVDZKROHLQRUGHUWR LQWKHFDVHWKDW2IILFHU%DUQHWWjVFUXLVHUKLW0U&ODUNjVWUXFN GHWHUPLQHZKHWKHUWKHLQVWUXFWLRQVDGHTXDWHO\LQIRUPWKHMXU\ DWDUHODWLYHO\ORZLPSDFW LHPRVWOLNHO\DWDORZHURUDW RI UHOHYDQW FRQVLGHUDWLRQV DQG SURYLGH D EDVLV LQ ODZ IRU PRVW WKH VDPH LPSDFW WKDQ WKH SULRU DFFLGHQWV WKH WULDO DLGLQJWKHMXU\WRUHDFKLWVGHFLVLRQl+LVULFKY9ROYR&DUV FRXUW ZRXOG KDYH EHHQ MXVWLILHG LQ FRQFOXGLQJ WKDW WKH RI1$P,QF)G WK&LU FLWDWLRQ FLUFXPVWDQFHVRIWKHSULRUDFFLGHQWVZHUHVXIILFLHQWO\VLPLODU RPLWWHG WRWKHDFFLGHQWLQWKLVFDVHWRDOORZ0U*LOEHUJjVWHVWLPRQ\ 7RVXSSRUWLWVDUJXPHQWWKDW&KU\VOHUjVFRPSOLDQFHZLWK *LYLQJWKHWULDOMXGJHWKHODWLWXGHUHTXLUHGE\WKHDEXVHRI )0966 FUHDWHG D SUHVXPSWLRQ WKDW WKH 'RGJH 5DP GLVFUHWLRQ VWDQGDUG ZH ILQG WKDW VKH GLG QRW DEXVH KHU SLFNXS WUXFN ZDV QRW GHIHFWLYH &KU\VOHU FLWHV .HQWXFN\ GLVFUHWLRQLQDOORZLQJ0U*LOEHUJjVWHVWLPRQ\ RQWKHIRXU 5HYLVHG6WDWXWHV m.56l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j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
Reference
- Status
- Published