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 .$7+5<1 0 :$7(56 ; 3ODLQWLII$SSHOODQW 1R Y ! &,7< 2) 0255,672:1 7(11(66(( 0(5/,1 ( 6+8&.LQGLYLGXDOO\ DQGLQKLVRIILFLDOFDSDFLW\ DVD0RUULVWRZQ $OGHUPDQ0RUULVWRZQ&LW\ &RXQFLOPDQs(55< *5$+$0 LQGLYLGXDOO\DQGLQKLVRIILFLDO FDSDFLW\DV/LHXWHQDQWLQWKH 0RUULVWRZQ3ROLFH 'HSDUWPHQW 'HIHQGDQWV$SSHOOHHV 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW*UHHQHYLOOH 1RVn7KRPDV*+XOO'LVWULFWsXGJH $UJXHGsDQXDU\ 'HFLGHGDQG)LOHG)HEUXDU\ :DWHUVY&LW\RI0RUULVWRZQ 1R 7HQQHVVHHHWDO %HIRUH'$8*+75(<DQG*,/0$1&LUFXLWsXGJHV +(<%851'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8(' sDPHV 5 0RRUH 0225( %522.6 .QR[YLOOH 7HQQHVVHH IRU $SSHOODQW 3DPHOD / 5HHYHV :$7621 +2//2: 5((9(6.QR[YLOOH7HQQHVVHH 'HQLVH76WDSOHWRQ7(55<7(55<$1'67$3/(721 0RUULVWRZQ7HQQHVVHHIRU$SSHOOHHV21%5,()sDPHV 5 0RRUH 0225( %522.6 .QR[YLOOH 7HQQHVVHH sXGLWK(ODLQH%XUNH7233(1%(5* %85.(.QR[YLOOH 7HQQHVVHH IRU $SSHOODQW 3DPHOD / 5HHYHV :$7621 +2//2: 5((9(6 .QR[YLOOH 7HQQHVVHH 'HQLVH 7 6WDSOHWRQ 7(55< 7(55< $1' 67$3/(721 0RUULVWRZQ7HQQHVVHHIRU$SSHOOHHV BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 521$/' /(( *,/0$1 &LUFXLW sXGJH .DWKU\Q 0 :DWHUVEURXJKWVXLWDJDLQVW9HWHULQDULDQDQG&LW\$OGHUPDQ 0HUOLQ(6KXFN3ROLFH2IILFHUsHUU\*UDKDPDQGWKHFLW\RI 0RUULVWRZQ 7HQQHVVHH SXUVXDQW WR 86& FRQWHQGLQJWKDWWKH\KDGXQODZIXOO\GHSULYHG:DWHUVRIKHU FRQVWLWXWLRQDOO\SURWHFWHGULJKWV7KHGLVWULFWFRXUWJUDQWHG WKHGHIHQGDQWVjPRWLRQIRUVXPPDU\MXGJPHQWFRQFOXGLQJ WKDW'U6KXFNKDGQRWDFWHGXQGHUFRORURIVWDWHODZZKHQKH KDUDVVHGDQGDEXVHG:DWHUVWKDW2IILFHU*UDKDPZDVHQWLWOHG WRTXDOLILHGLPPXQLW\DQGWKDW:DWHUVKDGIDLOHGWRHVWDEOLVK DQ\ FXVWRP RU SROLF\ WKDW ZRXOG WULJJHU WKH FLW\ RI 0RUULVWRZQjVOLDELOLW\:DWHUVQRZFKDOOHQJHVWKDWGHFLVLRQ 7KH +RQRUDEOH sRKQ * +H\EXUQ ,, 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ 1R :DWHUVY&LW\RI0RUULVWRZQ 7HQQHVVHHHWDO )RUWKHUHDVRQVVHWIRUWKEHORZZH$)),50WKHMXGJPHQWRI WKHGLVWULFWFRXUW ,%$&.*5281' $ )DFWXDOEDFNJURXQG )URP sDQXDU\ RI WKURXJK 0D\ RI :DWHUV ZRUNHGDVDYHWHULQDU\DVVLVWDQWDW'U6KXFNjV0RUULVWRZQ $QLPDO+RVSLWDO'XULQJWKLVHQWLUHSHULRGRIWLPH'U6KXFN ZDV ERWK D OLFHQVHG YHWHULQDULDQ DQG D 0RUULVWRZQ FLW\ DOGHUPDQ :DWHUV DQG 'U 6KXFN EHFDPH LQYROYHG LQ D SHUVRQDO UHODWLRQVKLS VRPHWLPH DIWHU KHU HPSOR\PHQW FRPPHQFHGDWWKHDQLPDOKRVSLWDODQG'U6KXFNEHJDQWR H[HUWLQFUHDVLQJFRQWURORYHU:DWHUVjVOLIH'U6KXFNLQVLVWHG DVDFRQGLWLRQRI:DWHUVjVFRQWLQXLQJHPSOR\PHQWWKDWVKH DWWHQGKLVFKXUFKVWRSGULQNLQJH[FHVVLYHO\DQGOHDYHKHU KXVEDQGZKRZDVDOVRDKHDY\GULQNHU ,Qs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jV WKH SROLFH WKDW :DWHUV ZKR ZDV QR ORQJHU D SHUPDQHQW QRWLFHVKRXOGEHTXDVKHGDQGKHUPRWLRQGHQLHGEHFDXVHVKH HPSOR\HHZDVWUHVSDVVLQJ:DWHUVKDGDOUHDG\EHHQGULQNLQJ KDGIDLOHGWRHVWDEOLVKDQ\MXVWLILFDWLRQWRSLHUFHWKHDWWRUQH\ KHDYLO\ WKDW GD\ 7KH SROLFH DUUHVWHG :DWHUV IRU SXEOLF FOLHQWSULYLOHJHRUWRGLVTXDOLI\WKHDWWRUQH\VDIWHUWKH\KDG LQWR[LFDWLRQ DQG FULPLQDO WUHVSDVV DQG FRQILVFDWHG DV UHSUHVHQWHG'U6KXFNLQWKLVPDWWHUIRUVL[\HDUV SRWHQWLDO HYLGHQFH D NH\ WR WKH FOLQLF KHU FDUjV GLVWULEXWRU ZLUH DQG LQ FDVK DOO RI ZKLFK ZHUH IRXQG RQ KHU 7KHGLVFRYHU\UXOHVYHVWEURDGGLVFUHWLRQLQWKHWULDOFRXUW SHUVRQ$OWKRXJKWKHSROLFHUHWXUQHGWKHGLVWULEXWRUZLUHDQG 6HH%XVKY'LFWDSKRQH&RUS)GWK&LU PRQH\WR:DWHUVWKHNH\ZDVJLYHQWR'U6KXFNEHFDXVHLW m$QRUGHUGHQ\LQJIXUWKHUGLVFRYHU\ZLOOEHJURXQGV EHORQJHGWRWKHDQLPDOKRVSLWDO8SRQ'U6KXFNjVUHWXUQWR IRUUHYHUVDORQO\LILWZDVDQDEXVHRIGLVFUHWLRQUHVXOWLQJLQ 0RUULVWRZQ KH KDG WKH WUHVSDVV FKDUJHV GLVPLVVHG DQG VXEVWDQWLDOSUHMXGLFHl/HZLVY$&%%XV6HUYV,QF LQIRUPHGWKHSROLFHKHGLGQRWZDQWWRSXUVXHWKHPDWWHU )GWK&LU (DUO\WKHQH[WPRUQLQJWKHORFDOWD[LFRPSDQ\ZDVFLWHGE\ :DWHUV FODLPV WKDW EHFDXVH WKH ILQGLQJV LQ WKH GLVWULFW WKH 0RUULVWRZQ SROLFH IRU YLRODWLQJ VHYHUDO RI +DPEOHQ FRXUWjV VXPPDU\ MXGJPHQW RUGHU PHQWLRQ WKH 0D\ &RXQW\jVWD[LFDEUHJXODWLRQV7KHSROLFHIRXQGWKDWRQHRILWV VWDWHPHQWWKDWWKHFLUFXPVWDQFHVVXUURXQGLQJWKHPDWWHUDUH FDEVKDGG\VIXQFWLRQDOWDLOOLJKWVODFNHGDUDWHPHWHUDQGKDG VRPHKRZPDWHULDOWRWKHILQDOGLVSRVLWLRQRIKHUFDVH7KHUH DQLQYDOLGSHUPLW:DWHUVDOOHJHVWKDWWKLVZDVWKHRQO\WLPH LVQREDVLVIRUWKLVFRQWHQWLRQ$OWKRXJKVKHDUJXHVWKDWWKH WKDWWKHWD[LFRPSDQ\KDGHYHUEHHQLQVSHFWHGE\WKHSROLFH GLVWULFW FRXUWjV ILQGLQJV DUH LQ GLUHFW FRQWUDGLFWLRQ WR KHU DQG EHFDXVH RI LWV SUR[LPLW\ WR KHU DUUHVW DQG WR WKH YHUVLRQRIWKHVHHYHQWVVKHLVXQDEOHWRFLWHWRWKHUHFRUGLQ FRQILVFDWLRQ RI KHU FDUjV GLVWULEXWRU ZLUH GHPRQVWUDWHG D VXSSRUWRIWKLVDVVHUWLRQ:DWHUVLQIDFWDGPLWWHGLQSUHWULDO FRQFHUWHG HIIRUW E\ WKH 0RUULVWRZQ SROLFH WR UHVWULFW KHU GLVFRYHU\WKDW VKH KDGDFFHSWHGIURP'U6KXFNLQ DELOLW\WRWUDYHO H[FKDQJHIRUKHUDOOHJHGUHFDQWDWLRQ)XUWKHUPRUH:DWHUV ZDV QRW SUHMXGLFHG E\ WKH GLVWULFW FRXUWjV UXOLQJ RQ WKLV ,Q0DUFKRI'U6KXFNDOOHJHGO\ZHQWWR:DWHUVjV GLVFRYHU\ PDWWHU EHFDXVH LWV GHFLVLRQ WR JUDQW VXPPDU\ DSDUWPHQW DQG EHFDPH XSVHW ZKHQ KH IRXQG KHU GULQNLQJ MXGJPHQWZDVEDVHGRQJURXQGVZKROO\XQUHODWHGWRKHU0D\ :DWHUVFRQWHQGVWKDWKHVODSSHGKHUDFURVVWKHIDFHZLWKVXFK VWDWHPHQW :H WKHUHIRUH FRQFOXGH WKDW WKH GLVWULFW IRUFH WKDW KHU GHQWXUHV EURNH /DWHU WKDW VDPH PRQWK 'U FRXUWjVGHFLVLRQWRTXDVKWKHQRWLFHWRGHSRVH'U6KXFNj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jV OLDELOLW\ E\ WUDFN KHU ZKHUHDERXWV :KHQ WKH RZQHU RI WKH ORFDO WD[L DOOHJLQJWKDWWKHSROLFHFRQVSLUHGZLWK'U6KXFNWRYLRODWH FRPSDQ\UHIXVHGWRWHOO'U6KXFNZKHUH:DWHUVKDGEHHQ KHU FRQVWLWXWLRQDOO\ SURWHFWHG ULJKWV )LUVW VKH FLWHV WKH GULYHQRQDSDUWLFXODURFFDVLRQKHDOOHJHGO\KDGWKHSROLFH LQFLGHQWLQ)HEUXDU\RIZKHQVKHZDVDUUHVWHGIRUSXEOLF ILQGRXWWKHLQIRUPDWLRQIRUKLP7KHQRQ$SULO'U LQWR[LFDWLRQDQGWUHVSDVVZKLOHDW'U6KXFNjVDQLPDOKRVSLWDO 6KXFNSXUSRUWHGO\KDGWKHSROLFHGHSDUWPHQWLVVXHDm%2/2l DIWHU KRXUV 6KH FODLPV WKDW WKH SROLFH FRQILVFDWHG KHU %H2QWKH/RRNRXWIRU:DWHUV1RWKLQJHYHUFDPHRIWKH SURSHUW\DQGWKHQWXUQHGLWRYHUWR'U6KXFN7KHUHFRUG LQTXLU\ :DWHUV ZDV QRW DZDUH DW WKH WLPH WKDW LW KDG KRZHYHUVKRZVWKDWWKHSROLFHUHWXUQHGKHUFDVKDQGKHUFDUj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jVSDWWHUQRI 7KH QH[W DOWHUFDWLRQ EHWZHHQ 'U 6KXFN DQG :DWHUV KDUDVVPHQW)URPWKHVHIDFWV:DWHUVLVXQDEOHWRHVWDEOLVK RFFXUUHGRQ0D\'U6KXFNDOOHJHGO\EURNHLQWR WKDW DQ\ SROLF\ RU FXVWRP DWWULEXWDEOH WR WKH FLW\ ZDV WKH :DWHUVjVDSDUWPHQWZKLOHVKHZDVRXWDQGUXPPDJHGWKURXJK PRYLQJIRUFHEHKLQGKHULQMXULHV KHUEHORQJLQJV+HSXUSRUWHGO\OHIWDQRWHVWDWLQJWKDW:DWHUV KDGWXUQHGKLVOLIHXSVLGHGRZQVRKHZDVQRZJRLQJWRGR ( 7KH GLVWULFW FRXUW GLG QRW HUU ZKHQ LW TXDVKHG WKH VDPH WR KHU )RU WKH ILUVW WLPH VLQFH WKH DEXVH EHJDQ :DWHUVjVQRWLFHWRGHSRVH'U6KXFNjVFRXQVHO :DWHUVFRQWDFWHGWKHSROLFH6KHWROGWKHUHVSRQGLQJRIILFHUV WKDWVKHVXVSHFWHGWKDW'U6KXFNZDVWKHSHUSHWUDWRUDQGWKDW :DWHUVjVILQDODUJXPHQWLVWKDWWKHGLVWULFWFRXUWHUUHGZKHQ VKH ZDV DIUDLG RI KLP 6KH GHFOLQHG KRZHYHU WR PDNH D LW TXDVKHG KHU QRWLFH WR GHSRVH 'U 6KXFNjV FRXQVHO IRUPDOFRPSODLQW2QHRIWKHRIILFHUVODWHUWHVWLILHGWKDWWKH FRQFHUQLQJ WKH VZRUQ VWDWHPHQW WKDW VKH SURYLGHG WKHP LQ SUHVHQFH RI WKH RYHUWXUQHG IXUQLWXUH ZDV VXVSLFLRXV DQG 0D\RI:DWHUVRULJLQDOO\ILOHGWKLVQRWLFHDORQJZLWK ORRNHGVWDJHG7KHRIILFHUDOVRVWDWHGWKDW:DWHUVDSSHDUHG DPRWLRQIRUWKHLUUHFXVDOLQUHVSRQVHWR'U6KXFNjV0RWLRQ WR KDYH EHHQ GULQNLQJ ZKHQ WKH\ TXHVWLRQHG KHU DERXW WKH IRUsXGJPHQWRQWKH3OHDGLQJVZKLFKDOOHJHGWKDWWKHHQWLUH LQFLGHQW ODZVXLW VKRXOG EH GLVPLVVHG EHFDXVH RI :DWHUVjV XQFOHDQ KDQGVLOOHJDOLW\DQGIUDXG'U6KXFNjVFODLPZDVEDVHGRQ :DWHUVY&LW\RI0RUULVWRZQ 1R 1R :DWHUVY&LW\RI0RUULVWRZQ 7HQQHVVHHHWDO 7HQQHVVHHHWDO /DWHUWKDWGD\WKHSROLFHUHFHLYHGDFDOOUHSRUWLQJD %URZQ860XQLFLSDOOLDELOLW\FDQQRW VHFRQGGLVWXUEDQFHLQYROYLQJ'U6KXFN+HZDVUHSRUWHGWR EHEDVHGRQWKHWKHRU\RIUHVSRQGHDWVXSHULRU6HH0RQHOO KDYHEURNHQLQWRDQDSDUWPHQWEHORQJLQJWRRQHRI:DWHUVjV 86DW IULHQGV5REHUW&DGPDQLQVHDUFKRIKHU%RWK:DWHUVDQG &DGPDQZHUHDVOHHSLQVLGHWKHDSDUWPHQWZKHQ'U6KXFN $ JRYHUQPHQWDO HQWLW\ LV OLDEOH IRU DQ RIILFLDOj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jV KHDVNHG:DWHUVZKHWKHUVKHZDVRND\DQGLIVKHZDQWHGWR GHFLVLRQVDUHILQDODQGXQUHYLHZDEOHDQGDUHQRWFRQVWUDLQHG OHDYH ZLWK 'U 6KXFN +H FODLPV WKDW VKH UHVSRQGHG E\WKHRIILFLDOSROLFLHVRIVXSHULRURIILFLDOV6HH&LW\RI6W DIILUPDWLYHO\WHOOLQJKLPWKDW'U6KXFNDOZD\VWRRNFDUHRI /RXLVY3UDSURWQLN867RGHWHUPLQH KHU:KHQ:DWHUVZDVODWHUDVNHGDERXWWKHVHHYHQWVVKH ZKHWKHUILQDODXWKRULW\WRPDNHPXQLFLSDOSROLF\LVYHVWHGLQ DGPLWWHG WKDW WKH GHWDLOV ZHUH mUHDO IX]]\l WKDW VKH mKDG DSDUWLFXODURIILFLDOWKHFRXUWPXVWORRNWRVWDWHODZ6HHLG HQRXJKDOFRKROLQ>KHU@WKDW>VKH@FRXOGQRWVHHYHU\ZHOOl DW DQGWKDWVKHQHYHUWROGWKHSROLFHVKHGLGQRWZDQWWRJRZLWK 'U6KXFN&DGPDQLQIRUPHGWKHSROLFHWKDWKHZRXOGOHWWKH :DWHUVjV FODLP DJDLQVW WKH FLW\ RI 0RUULVWRZQ LV EDVHG FLW\RI0RUULVWRZQGHFLGHZKHWKHUWRSURVHFXWHEHFDXVHKH VROHO\ RQ WKH DFWLRQV RI 'U 6KXFN DQG 2IILFHU *UDKDP ZDVQRWVXUHLIKHZDQWHGWRSXUVXHWKHPDWWHU DOOHJLQJWKDWWKH\ZHUHmDFWLQJLQGHSHQGHQWO\DQGRQEHKDOIRI 'HIHQGDQW&LW\RI0RUULVWRZQl6KHFRQWHQGVWKDWWKHFLW\ 2Q0D\WZR0RUULVWRZQSROLFHRIILFHUVIROORZHG VKRXOGEHKHOGOLDEOHEHFDXVH'U6KXFNZRUNHGDWWKHKLJKHVW XSZLWK:DWHUVFRQFHUQLQJWKHLQFLGHQW:KHQWKH\LQIRUPHG OHYHORIJRYHUQPHQWDQGKDGGLUHFWDXWKRULW\RYHUWKHSROLFH :DWHUVWKDWVKHFRXOGSUHVVFKDUJHVDJDLQVW'U6KXFNVKH GHSDUWPHQW DQG WD[L RSHUDWRUV :DWHUV KRZHYHU GLG QRW VSHFLILFDOO\ WROG WKHP WKDW VKH GLG QRW ZLVK WR SURVHFXWH LQWURGXFHDQ\HYLGHQFHWRVKRZWKDW'U6KXFNj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jV DWWRUQH\V VKH WKH\ZRXOGQHJDWHDQ\FDXVDOOLQNEHWZHHQWKHFLW\jVFRQGXFW GLVDYRZHGKHUSUHYLRXVDOOHJDWLRQVDJDLQVWKLPDQGWHVWLILHG DQG:DWHUVjVULJKWV WKDWVKHKDGIHOWSUHVVXUHGE\WKHSROLFHWRPDNHDQRIILFLDO UHSRUW :DWHUVY&LW\RI0RUULVWRZQ 1R 1R :DWHUVY&LW\RI0RUULVWRZQ 7HQQHVVHHHWDO 7HQQHVVHHHWDO REMHFWLYHO\XQUHDVRQDEOH,Q0DOOH\Y%ULJJV86 'U6KXFNFRQWLQXHGKLVKDUDVVPHQWDQGDEXVHWKURXJKRXW WKH6XSUHPH&RXUWVWDWHGWKDWmDOOEXWWKHSODLQO\ WKHQH[WVL[PRQWKV2Q'HFHPEHU'U6KXFNZDV LQFRPSHWHQW RU WKRVH ZKR NQRZLQJO\ YLRODWH WKH ODZl DUH DUUHVWHG IRU FRQVSLUDF\ WR NLGQDS :DWHUV DQG KHU IRUPHU SURWHFWHG E\ WKH TXDOLILHG LPPXQLW\ GHIHQVH ,PPXQLW\ KXVEDQGZKRPVKHKDGGLYRUFHGE\WKHQDQGIRUFRQVSLUDF\ DSSOLHVLIUHDVRQDEOHRIILFLDOVFRXOGGLVDJUHHRQZKHWKHUWKH WRPXUGHU/DZUHQFH0\HUVWKHHGLWRURIWKHORFDOQHZVSDSHU SXEOLF RIILFLDO FRXOG KDYH UHDVRQDEO\ EHOLHYHG WKDW KLV ZKRKDGZULWWHQDVHULHVRIIURQWSDJHDUWLFOHVGHWDLOLQJ'U FRQGXFWZDVODZIXO6HH&DOGZHOOY0RRUH)G 6KXFNjVDEXVHRI:DWHUV6HH6WDWHY6KXFN:/ WK &LU +HUH :DWHUV FDQQRW HVWDEOLVK WKDW 7HQQ&ULP$SS:KHQ'U6KXFNZDVDUUHVWHGWKH 2IILFHU*UDKDPjVDFWLRQVZHUHXQUHDVRQDEOH:KHQ*UDKDP SROLFHIRXQGGRFXPHQWVFRQFHUQLQJWKH0D\LQFLGHQWV ZDVLQYHVWLJDWLQJWKH0D\LQFLGHQW:DWHUVKHUVHOI LQ 'U 6KXFNjV GHVN 7KH SDUWLHV GLVSXWH ZKHWKHU WKH IDLOHGWRDOHUWKLPDERXWWKHSRWHQWLDOGDQJHUSUHVHQWHGE\'U GRFXPHQWV ZHUH WKH RULJLQDOV RU RQO\ FRSLHV RI WKH 6KXFN :H WKHUHIRUH DJUHH ZLWK WKH GLVWULFW FRXUWjV 0RUULVWRZQ3ROLFH'HSDUWPHQWjVILOH FRQFOXVLRQWKDW*UDKDPj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o OHW DORQH WKDW KH DQ H[SHUW SV\FKRORJLFDO ZLWQHVV RIIHUHG WR VXSSRUW 'U FRQVSLUHGWRFRQFHDOo'U6KXFNjVDEXVHRI:DWHUVEHIRUH 6KXFNjVHQWUDSPHQWGHIHQVH6HH6WDWHY6KXFN6:G VKHILUVWUHSRUWHGLWWRWKHSROLFHLQ0D\RI:DWHUVjV 7HQQ FODLPVDJDLQVW2IILFHU*UDKDPDUHWKHUHIRUHZLWKRXWPHULW DQGZHDIILUPWKHGLVWULFWFRXUWjVRUGHUJUDQWLQJKLPVXPPDU\ % 3URFHGXUDOEDFNJURXQG MXGJPHQWRQWKHEDVLVRITXDOLILHGLPPXQLW\ ,Q)HEUXDU\RI:DWHUVILOHGVXLWSXUVXDQWWR86& ' 7KH GLVWULFW FRXUW GLG QRW HUU LQ FRQFOXGLQJWKDW DOOHJLQJWKDW'U6KXFN&LW\$OGHUPDQ%UXFH6OXGHU :DWHUVj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sXQH 'HSDUWPHQWRI6RF6HUYV867KH 6OXGHU ZDV YROXQWDULO\ GLVPLVVHG IURP WKH FDVH LQ 6XSUHPH&RXUWKDVUHFHQWO\HPSKDVL]HGWKDWVXFKDVKRZLQJ )HEUXDU\RI UHTXLUHVGHPRQVWUDWLQJDmGLUHFWFDXVDOOLQNlEHWZHHQRIILFLDO DFWLRQDQGWKHGHSULYDWLRQRIULJKWVVXFKWKDWWKHmGHOLEHUDWH 'U6KXFN2IILFHU*UDKDPDQGWKHFLW\RI0RUULVWRZQWKHQ FRQGXFWl RI WKH JRYHUQPHQWDO ERG\ LV WKH mPRYLQJ IRUFHl PRYHGIRUVXPPDU\MXGJPHQWRQDOOFODLPV2Q'HFHPEHU EHKLQGWKHDOOHJHGLQMXU\6HH%RDUGRI&RXQW\&RPP UVY WKHGLVWULFWFRXUWJUDQWHGWKHLUPRWLRQDQGGLVPLVVHGWKH :DWHUVY&LW\RI0RUULVWRZQ 1R 1R :DWHUVY&LW\RI0RUULVWRZQ 7HQQHVVHHHWDO 7HQQHVVHHHWDO FDVHILQGLQJWKDW'U6KXFNjVDFWLRQVIHOORXWVLGHWKHVFRSHRI :DWHUVVHHNVWRKROG2IILFHU*UDKDPOLDEOHIRULVVXLQJD EHFDXVHWKH\ZHUHQRWWDNHQXQGHUFRORURIVWDWHODZ m%2/2l IRU KHU IRU DOORZLQJ 'U 6KXFN WR mFRQWURO WKH WKDW 2IILFHU *UDKDP ZDV HQWLWOHG WR TXDOLILHG LPPXQLW\ LQYHVWLJDWLRQlRIWKH0D\LQFLGHQWDQGIRUDOOHJHGO\ EHFDXVHKHKDGDFWHGUHDVRQDEO\DQGGLGQRWYLRODWHFOHDUO\ FRQVSLULQJ WR FRYHUXS 'U 6KXFNjV DFWLRQV E\ GHQ\LQJ WKDW HVWDEOLVKHGODZDQGWKDW:DWHUVFRXOGQRWGHPRQVWUDWHDQ\ *UDKDP KDG VLJQHG WKH FLWDWLRQ DJDLQVW WKH ORFDO WD[L SROLF\RUFXVWRPDWWULEXWDEOHWRWKHFLW\RI0RUULVWRZQWKDW FRPSDQ\(VVHQWLDOO\VKHFRQWHQGVWKDWKHYLRODWHGKHUULJKWV ZRXOGWULJJHULWVOLDELOLW\7KHGLVWULFWFRXUWDOVRGHFOLQHGWR WR SULYDF\ DQG WR EH IUHH IURP GHWHQWLRQ DQG XQUHDVRQDEOH H[HUFLVH VXSSOHPHQWDO MXULVGLFWLRQ RYHU :DWHUVjV VWDWHODZ VHDUFKDQGVHL]XUH FODLPV 8SRQUHYLHZKRZHYHULWLVQRWFOHDUWKDW2IILFHU*UDKDP :DWHUVILOHGDWLPHO\DSSHDORIWKHGLVWULFWFRXUWjVGHFLVLRQ GHSULYHG:DWHUVRIDQ\FRQVWLWXWLRQDOO\SURWHFWHGULJKW)LUVW WR JUDQW VXPPDU\ MXGJPHQW WR TXDVK :DWHUVjV QRWLFH WR VKH DGPLWWHG WKDW VKH KDG QR SHUVRQDO NQRZOHGJH RI D GHSRVH'U6KXFNjVDWWRUQH\VDQGWRGHQ\KHUPRWLRQIRUWKHLU m%2/2lRURI2IILFHU*UDKDPjVDOOHJHGLQYROYHPHQW(YHQ UHFXVDO7KHVHODWWHUSOHDGLQJVUHODWHGWRWKHVWDWHPHQWWKDW LIWKHSROLFHKDGLVVXHGDQLPSURSHUm%2/2lIRU:DWHUVVKH :DWHUVJDYHWR'U6KXFNjVFRXQVHOLQ0D\RIZKHQVKH VXIIHUHG QR UHVXOWLQJ KDUP 6KH ZDV QHYHU SLFNHG XS RU UHFDQWHGKHUVZRUQVWDWHPHQWWRWKHSROLFH TXHVWLRQHGE\DQ\ODZHQIRUFHPHQWRIILFHU)XUWKHUPRUHVKH GLGQRWOHDUQRILWVDOOHJHGH[LVWHQFHXQWLODIWHUWKHFULPLQDO ,,$1$/<6,6 SURFHHGLQJVEHJDQDJDLQVW'U6KXFN $ 6WDQGDUGRIUHYLHZ 5HJDUGLQJWKH0D\LQFLGHQW:DWHUVWROG2IILFHU *UDKDPWKDW VKHGLGQRWZLVKWRPDNHDIRUPDOFRPSODLQW :HUHYLHZGHQRYRWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\ DJDLQVW'U6KXFN2IILFHU*UDKDPKDGQRZD\RINQRZLQJ MXGJPHQW6HHHJ+ROORZD\Y%UXVK)G DERXW 'U 6KXFNj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mZHLJK WKH HYLGHQFH DQG VKHZDVVRLQWR[LFDWHGDQGWKDWVKHQHYHUWROGWKHSROLFHVKH GHWHUPLQHWKHWUXWKRIWKHPDWWHUEXWWRGHWHUPLQHZKHWKHU GLGQRWZDQWWRJRZLWK'U6KXFN:DWHUVWKHUHIRUHIDLOHGWR WKHUHLVDJHQXLQHLVVXHIRUWULDOl$QGHUVRQY/LEHUW\/REE\ GHPRQVWUDWH WKH YLRODWLRQ RI DQ\ FOHDUO\ HVWDEOLVKHG ,QF 86 $ JHQXLQH LVVXH IRU WULDO FRQVWLWXWLRQDOULJKWV H[LVWVRQO\ZKHQWKHUHLVVXIILFLHQWmHYLGHQFHRQZKLFKWKH MXU\FRXOGUHDVRQDEO\ILQGIRUWKHSODLQWLIIl,GDW (YHQLI:DWHUVZHUHDEOHWRHVWDEOLVKWKDW2IILFHU*UDKDP KDG YLRODWHG KHU ULJKWV KHU FODLP ZRXOG QRW VXUYLYH WKH VHFRQG SURQJ RI WKH TXDOLILHG LPPXQLW\ DQDO\VLV ZKLFK LPSRVHV OLDELOLW\ RQO\ LI KLV DFWLRQV DUH VKRZQ WR EH :DWHUVY&LW\RI0RUULVWRZQ 1R 1R :DWHUVY&LW\RI0RUULVWRZQ 7HQQHVVHHHWDO 7HQQHVVHHHWDO IRQGOHGRQHRIWKHZRPHQZKLOHZHDULQJKLVMXGLFLDOUREHV % 7KH GLVWULFW FRXUW GLG QRW HUU LQ KROGLQJ WKDW 'U 6HHLGDW8QOLNH'U6KXFN/DQLHUZRXOGQRWKDYH 6KXFNjVDFWLRQVZHUHQRWWDNHQXQGHUFRORURIVWDWH EHHQLQWKHVDPHSRVLWLRQWRDEXVHKLVYLFWLPVH[FHSWIRUKLV ODZ RIILFLDOVWDWXVDVDVWDWHFRXUWMXGJH'U6KXFNRQWKHRWKHU KDQG ZRXOG KDYH EHHQ DEOH WR SXUVXH KLV KDUDVVPHQW RI 7KH GLVWULFW FRXUW KHOG WKDW 'U 6KXFN GLG QRW DFW XQGHU :DWHUV EHFDXVH RI WKHLU FORVH SHUVRQDO UHODWLRQVKLS DQG FRORURIVWDWHODZZKHQKHKDUDVVHGDQGDEXVHG:DWHUV,W EHFDXVHRIKLVVWDWXVDVKHUHPSOR\HUHYHQLIKHKDGQRWEHHQ IRXQGWKDW'U6KXFNjVDFWLRQVZHUHWDNHQLQSXUVXLWRIKLV DFLW\RI0RUULVWRZQDOGHUPDQ SHUVRQDOUHODWLRQVKLSZLWKKHUDQGZHUHZKROO\XQUHODWHGWR KLVSRVLWLRQDVDFLW\DOGHUPDQ7RSUHYDLORQDFODLP 'U6KXFNPD\LQGHHGEHOLDEOHWR:DWHUVSXUVXDQWWRKHU DSODLQWLIIPXVWHVWDEOLVKWKDWDSHUVRQDFWLQJXQGHUFRORURI VWDWHODZFODLPV%XWLQWKHDEVHQFHRIDQ\FUHGLEOHHYLGHQFH VWDWH ODZ GHSULYHG WKH SODLQWLII RI D ULJKW VHFXUHG E\ WKH WKDW'U6KXFNjVRIILFLDOSRVLWLRQSOD\HGDPHDQLQJIXOUROHLQ &RQVWLWXWLRQRUODZVRIWKH8QLWHG6WDWHV6HH6HDUF\Y&LW\ DOORZLQJKLPWRKDUDVVDQGDEXVH:DWHUVKHUFODLP RI'D\WRQ)GWK&LU7KHFRXUWPXVW DJDLQVWKLPPXVWIDLO:HWKHUHIRUHDIILUPWKHGLVWULFWFRXUWjV WKHUHIRUHGHWHUPLQHDVDWKUHVKROGPDWWHUZKHWKHU'U6KXFN RUGHUJUDQWLQJVXPPDU\MXGJPHQWWR'U6KXFN DFWHGXQGHUFRORURIVWDWHODZ & 7KHGLVWULFWFRXUWGLGQRWHUULQKROGLQJWKDW2IILFHU 6HFWLRQ LV JHQHUDOO\ QRW LPSOLFDWHG XQOHVV D VWDWH *UDKDPZDVHQWLWOHGWRTXDOLILHGLPPXQLW\ DFWRUjVFRQGXFWRFFXUVLQWKHFRXUVHRISHUIRUPLQJDQDFWXDO RUDSSDUHQWGXW\RIKLVRIILFHRUXQOHVVWKHFRQGXFWLVVXFK 7KH 6XSUHPH &RXUW KDV KHOG WKDW mJRYHUQPHQW RIILFLDOV WKDWWKHDFWRUFRXOGQRWKDYHEHKDYHGDVKHGLGZLWKRXWWKH SHUIRUPLQJ GLVFUHWLRQDU\ IXQFWLRQV JHQHUDOO\ DUH VKLHOGHG DXWKRULW\RIKLVRIILFH6HH:HVWY$WNLQV86 IURPOLDELOLW\IRUFLYLOGDPDJHVLQVRIDUDVWKHLUFRQGXFWGRHV m7KHWUDGLWLRQDOGHILQLWLRQRIDFWLQJXQGHUFRORURI QRWYLRODWHFOHDUO\HVWDEOLVKHGVWDWXWRU\RUFRQVWLWXWLRQDOULJKWV VWDWH ODZ UHTXLUHV WKDW WKH GHIHQGDQW H[HUFLVHG SRZHU RIZKLFKDUHDVRQDEOHSHUVRQZRXOGKDYHNQRZQl+DUORZY SRVVHVVHG E\ YLUWXH RI VWDWH ODZ DQG PDGH SRVVLEOH RQO\ )LW]JHUDOG867KXVWKHILUVWVWHSLQ EHFDXVHWKHZURQJGRHULVFORWKHGZLWKWKHDXWKRULW\RIVWDWH DQ\ TXDOLILHG LPPXQLW\ DQDO\VLV LV WR GHWHUPLQH ZKHWKHU D ODZl LQWHUQDO FLWDWLRQ DQG TXRWDWLRQ PDUNV RPLWWHG $ FOHDUO\HVWDEOLVKHGVWDWXWRU\RUFRQVWLWXWLRQDOULJKWKDVEHHQ SHUVRQ mDFWV XQGHU FRORU RI VWDWH ODZ ZKHQ KH DEXVHV WKH YLRODWHG,QRWKHUZRUGVmIRUDSODLQWLIIWRPDNHDVXFFHVVIXO SRVLWLRQ JLYHQ WR KLP E\ WKH VWDWHl ,G DW 7KH NH\ FODLPWKHFRQWRXUVRIWKHULJKWPXVWEHVXIILFLHQWO\ GHWHUPLQDQWLVZKHWKHUWKHDFWRULQWHQGVWRDFWLQDQRIILFLDO FOHDUWKDWDUHDVRQDEOHRIILFLDOZRXOGXQGHUVWDQGWKDWZKDWKH FDSDFLW\ RU WR H[HUFLVH RIILFLDO UHVSRQVLELOLWLHV SXUVXDQW WR LVGRLQJYLRODWHVWKDWULJKWl'LFNHUVRQY0F&OHOODQ)G VWDWH ODZ 6HH LG /RJLFDOO\ WKHQ QRW HYHU\ DFWLRQ WK &LU LQWHUQDO FLWDWLRQ RPLWWHG ,I D XQGHUWDNHQ E\ D SHUVRQ ZKR KDSSHQV WR EH D VWDWH DFWRU LV FRQVWLWXWLRQDOYLRODWLRQKDVRFFXUUHGWKHQWKHSODLQWLIIPXVW DWWULEXWDEOH WR WKH VWDWH $OWKRXJK mXQGHU µFRORUj RI ODZ DVVHUW mVXIILFLHQW IDFWV VXSSRUWHG E\ VXIILFLHQW HYLGHQFH WR PHDQVXQGHUµSUHWHQVHjRIODZlWKHDFWVRIVWDWHRIILFLDOVmLQ LQGLFDWH ZKDW >WKH RIILFHU@ DOOHJHGO\ GLG ZDV REMHFWLYHO\ WKHDPELWRIWKHLUSHUVRQDOSXUVXLWVlGRQRWFRQVWLWXWHVWDWH XQUHDVRQDEOHLQOLJKWRI>WKH@FOHDUO\HVWDEOLVKHGFRQVWLWXWLRQDO DFWLRQ6HH6FUHZVY8QLWHG6WDWHV86 ULJKWVl$GDPVY0HWLYD)GWK&LU KROGLQJWKDWWKHGHIHQGDQWVoD*HRUJLDVKHULIIDSROLFHPDQ DQGDVSHFLDOGHSXW\oDFWHGXQGHUFRORURIVWDWHODZZKHQ WKH\ DUUHVWHG DQG WKHQ EHDW WR GHDWK D \RXQJ $IULFDQ :DWHUVY&LW\RI0RUULVWRZQ 1R 1R :DWHUVY&LW\RI0RUULVWRZQ 7HQQHVVHHHWDO 7HQQHVVHHHWDO $PHULFDQLQRUGHUWRSURWHFWWKHPVHOYHVDQGWRNHHSKLPIURP EHHQLQWKHVDPHSRVLWLRQWRKDUDVVDQGDEXVH:DWHUVHYHQLI HVFDSLQJ KHKDGQRWEHHQDFLW\DOGHUPDQ $FFRUGLQJO\ D GHIHQGDQWjV SULYDWH FRQGXFW RXWVLGH WKH :DWHUV FODLPV WKDW EXW IRU KLV SRVLWLRQ RI DXWKRULW\ DQG FRXUVHRUVFRSHRIKLVGXWLHVDQGXQDLGHGE\DQ\LQGLFLDRI LQIOXHQFH'U6KXFNZRXOGQRWKDYHEHHQDEOHWRWKUHDWHQWKH DFWXDORURVWHQVLEOHVWDWHDXWKRULW\LVQRWFRQGXFWRFFXUULQJ WD[L FRPSDQ\ KDYH WKH SROLFH GHSDUWPHQW WUDFN DQG LVVXH XQGHUFRORURIVWDWHODZ6HH0F1HHVHY9DQGHUFRRN1R m%2/2Vl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j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jVJRYHUQPHQWDOVWDWXVRUWR YLHZ'U6KXFNDVKDYLQJDQ\DXWKRULW\WKDWWKH\ZRXOGKDYH WKH SHUIRUPDQFH RI KLV GXWLHV 6HH =DPEUDQD0DUUHUR Y DVVLVWHG DQ\ 0RUULVWRZQ FLWL]HQ LQ WUDFNLQJ GRZQ WKH 6XDUH]&UX])GVW&LU7KHFRQGXFW ZKHUHDERXWVRIIULHQGVDQGUHODWLYHVDQGWKDWKLVDWWHPSWVWR DOOHJHGO\FDXVLQJWKHGHSULYDWLRQRIDFRQVWLWXWLRQDOODZPXVW LVVXHm%2/2VlIRU:DWHUVZHUHWUHDWHGDVDMRNH)LQDOO\WKH EHmIDLUO\DWWULEXWDEOHlWRWKHVWDWH6HH/XJDUY(GPRQGVRQ WD[LFRPSDQ\FRQWLQXHGWRGULYH:DWHUVSD\LQJQRKHHGWR 2LO&R86 'U6KXFNjVWKUHDWVWRKDYHLWVOLFHQVHUHYRNHG 'U6KXFNjVFRQGXFWLQWKLVFDVHWKRXJKUHSUHKHQVLEOHZDV 7KLVFDVHLVYHU\GLIIHUHQWIURPWKHRQHSUHVHQWHGWRWKLV QRWDFWLRQWDNHQXQGHUFRORURUSUHWHQVHRIVWDWHODZ(YHQ FRXUWLQ8QLWHG6WDWHVY/DQLHU)GWK&LU ZKHQYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWR:DWHUVWKHIDFWV HQEDQFYDFDWHGRQRWKHUJURXQGVE\86 GHPRQVWUDWHWKDW'U6KXFNZDVSXUVXLQJKLVSXUHO\SHUVRQDO /DQLHUWKHRQO\FKDQFHOORUDQGMXYHQLOHFRXUWMXGJHLQWZR SULYDWHLQWHUHVWV7KHSURRIVKRZVWKDW'U6KXFNDWPRVW 7HQQHVVHHFRXQWLHVZDVIRXQGJXLOW\XQGHU86& ZDVRFFDVLRQDOO\mWKURZLQJKLVZHLJKWDURXQGlRQSHULSKHUDO RI XVLQJ KLV RIILFLDO SRVLWLRQ WR FRHUFH VH[XDO IDYRUV IURP PDWWHUVWKDWGLGQRWJRWRWKHKHDUWRIKLVKDUDVVLQJFRQGXFW YDULRXVZRPHQZKRDSSHDUHGEHIRUHKLP$OORI/DQLHUjV 7KLV LV QRW HQRXJK WR HVWDEOLVK OLDELOLW\ XQGHU YLFWLPVKDGEXVLQHVVZLWKWKHFRXUWHLWKHUDVOLWLJDQWVFRXUW %HFDXVHRIWKHFORVHSHUVRQDOUHODWLRQVKLSEHWZHHQ:DWHUV SHUVRQQHO RU SDUWLFLSDQWV LQ FRXUWUHODWHG SURJUDPV DQG'U6KXFNDQGKLVVWDWXVDVKHUHPSOR\HUKHZRXOGKDYH )XUWKHUPRUH DOO RI WKH DWWDFNV WRRN SODFH LQ /DQLHUjV FKDPEHUVGXULQJZRUNLQJKRXUV6HHLGDW/DQLHUHYHQ
Waters v. Cty Morristown TN
Combined Opinion