Ziegler v. IBP Hog Market, Inc

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

/HDYHWRILOHDQDPHQGHGFRPSODLQWmVKDOOEHIUHHO\JLYHQ )LOH 1DPH DS

ZKHQMXVWLFHVRUHTXLUHVl)HG5&LY3DDQGVKRXOG
QRWEHGHQLHGXQOHVVWKHUHLVHYLGHQFHRIXQGXHGHOD\EDG
IDLWK XQGXH SUHMXGLFH WR WKH QRQPRYDQW RU IXWLOLW\  6HH 81,7('67$7(6&28572)$33($/6
)RPDQY'DYLV86+DKQ)G )257+(6,;7+&,5&8,7
DW2WKHUWKDQWKHXQWLPHOLQHVVRI=LHJOHUjV† BBBBBBBBBBBBBBBBB
FODLP,%3GRHVQRWFRQWHQGWKDWWKHUHDUHDQ\RWKHUEDVHVIRU
GHQ\LQJ=LHJOHUjVPRWLRQWRDPHQG,QIDFW,%3FRQFHGHGDW
RUDO DUJXPHQW WKDW LI ZH ZHUH WR ILQG =LHJOHUjV † 
FODLPWLPHO\WKHQKLVSXEOLFSROLF\FODLPLVVLPLODUO\WLPHO\ .(9,1 : =,(*/(5 ;
:H KDYH KHOG XQGHU =LHJOHUjV ILUVW FODLP RI HUURU WKDW KLV 3ODLQWLII$SSHOODQW 
†  FODLP ZDV WLPHO\ ILOHG  7KHUHIRUH ZH DOVR 
FRQFOXGH WKDW =LHJOHUjV FRPPRQ ODZ ZURQJIXO GLVFKDUJH  1R
FODLPZKLFKLVEDVHGRQ†LVVLPLODUO\WLPHO\6HH Y 
/HKPDQQ Y $$$ &LQFLQQDWL 1R &  :/ !

DW
2KLR&W$SS0DU ,%3 +2* 0$5.(7 ,1& 
'HIHQGDQW$SSHOOHH 
%HFDXVH,%3ZDVQRWHQWLWOHGWRMXGJPHQWRQWKHSOHDGLQJV 1
DPHQGPHQW RI =LHJOHUjV FRPSODLQW ZRXOG QRW KDYH EHHQ
IXWLOH$FFRUGLQJO\ZHKROGWKDWWKHGLVWULFWFRXUWLPSURSHUO\ $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
GHQLHG=LHJOHUjVPRWLRQWRDPHQG IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW7ROHGR
1RnsDPHV*&DUU'LVWULFWsXGJH
,,,&21&/86,21
$UJXHGDQG6XEPLWWHG0DUFK
)RUWKHIRUHJRLQJUHDVRQVZH9$&$7(WKHMXGJPHQWRI
WKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH1RUWKHUQ'LVWULFWRI 'HFLGHGDQG)LOHG$SULO
2KLR DQG 5(0$1' WKH FDVH IRU IXUWKHU SURFHHGLQJV
FRQVLVWHQWZLWKWKLVRSLQLRQ %HIRUH.(,7+6,/(5DQG&/$<&LUFXLWsXGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('  &DWKHULQH $GDPV 648,5( 6$1'(56
'(036(< &ROXPEXV 2KLR IRU $SSHOOHH  21 %5,()
sDPHV $ +DPPHU 0,7&+(// 67(516  +$00(5
%RZOLQJ*UHHQ2KLRIRU$SSHOODQW&DWKHULQH$GDPVsLOO
6 .LULOD 648,5( 6$1'(56  '(036(< &ROXPEXV
2KLRIRU$SSHOOHH


 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

BBBBBBBBBBBBBBBBB %$0(1'0(172)7+(&203/$,17
23,1,21 6WDQGDUGRI5HYLHZ
BBBBBBBBBBBBBBBBB
1RUPDOO\ZHUHYLHZDGLVWULFWFRXUWjVGHFLVLRQGHQ\LQJD
'$021 s .(,7+ &LUFXLW sXGJH  3ODLQWLIIDSSHOODQW SODLQWLIIjVPRWLRQIRUOHDYHWRDPHQGDFRPSODLQWXQGHU5XOH
.HYLQ:=LHJOHUEURXJKWVXLWLQVWDWHFRXUWDJDLQVWKLVIRUPHU HIRUDEXVHRIGLVFUHWLRQ6HH%HJDODY31&%DQN2KLR
HPSOR\HUGHIHQGDQWDSSHOOHH,%3+RJ0DUNHW,QFm,%3l 1DWjO $VVRF  )G   WK &LU  :KHQ
DOOHJLQJ DJH GLVFULPLQDWLRQ LQ YLRODWLRQ RI 2KLR ODZ  ,%3 KRZHYHUWKHGLVWULFWFRXUWKDVEDVHGLWVGHFLVLRQWRGHQ\OHDYH
UHPRYHGWKHFDVHWRIHGHUDOFRXUWWKHQPRYHGIRUMXGJPHQW WRDPHQGRQDOHJDOFRQFOXVLRQWKDWWKHDPHQGHG SOHDGLQJ
RQWKHSOHDGLQJV7KHGLVWULFWFRXUWJUDQWHG,%3jVPRWLRQDQG ZRXOGQRWZLWKVWDQGDPRWLRQWRGLVPLVVZHUHYLHZVXFKD
=LHJOHUDSSHDOV)RUWKHUHDVRQVWKDWIROORZZH9$&$7( GHFLVLRQGH QRYR6HH3DUU\Y0RKDZN0RWRUVRI0LFK
WKHGHFLVLRQRIWKHGLVWULFWFRXUWDQG5(0$1' ,QF)GWK&LU)LVKHUY5REHUWV
)GWK&LU+HUHWKHGLVWULFWFRXUW
,%$&.*5281' GHQLHG =LHJOHUjV PRWLRQ IRU OHDYH WR DPHQG EHFDXVH LW
EHOLHYHGWKDWWKHSURSRVHGDPHQGHGFRPSODLQWZRXOGVWLOOIDLO
2Q $XJXVW   =LHJOHU ILOHG KLV FRPSODLQW LQ WKH WRVWDWHDFODLPDQGDPHQGPHQWZDVWKHUHIRUHIXWLOH7KXV
+DQFRFN&RXQW\2KLR&RXUWRI&RPPRQ3OHDVDOOHJLQJWKUHH ZHUHYLHZWKHGLVWULFWFRXUWjVGHFLVLRQGHQRYR6HH+DKQY
FRXQWVRIDJHGLVFULPLQDWLRQLQYLRODWLRQRI2KLR5HY&RGH 6WDU%DQN)GWK&LU
$QQ m25&l †† 1  DQG 
=LHJOHUDOOHJHGWKDWKHZDVHPSOR\HGE\,%3IURP6HSWHPEHU $QDO\VLV
XQWLOKLVHPSOR\PHQWZDVWHUPLQDWHGRQsDQXDU\
  ,%3 UHPRYHG WKH FDVH RQ WKH EDVLV RI FRPSOHWH $V QRWHG SUHYLRXVO\ LQ UHVSRQVH WR ,%3jV PRWLRQ IRU
GLYHUVLW\RIFLWL]HQVKLSWRWKH8QLWHG6WDWHV'LVWULFW&RXUWIRU MXGJPHQWRQWKHSOHDGLQJV=LHJOHUWZLFHPRYHGIRUOHDYHWR
WKH1RUWKHUQ'LVWULFWRI2KLR ILOH DQ DPHQGHG FRPSODLQW  %\ KLV ILUVW PRWLRQ =LHJOHU
VRXJKWWRHOHFWDVLQJOHUHPHG\XQGHU&KDSWHU%\KLV
2Q 2FWREHU   ,%3 PRYHG IRU MXGJPHQW RQ WKH VHFRQG PRWLRQ KH VRXJKW WR DGG D FODLP IRU DJH
SOHDGLQJV SXUVXDQW WR )HG 5 &LY 3 F DQG E GLVFULPLQDWLRQLQYLRODWLRQRISXEOLFSROLF\
%HFDXVHWKH
DUJXLQJ WKDW =LHJOHUjV FODLPV ZHUH XQWLPHO\ XQGHU WKH GLVWULFW FRXUW FRQFOXGHG WKDW DOO RI =LHJOHUjV FODLPV ZHUH
DSSOLFDEOH VWDWXWH RI OLPLWDWLRQV DQG WKDW KLV FODLPV ZHUH XQWLPHO\LWGHQLHGKLVPRWLRQVWRDPHQGDVIXWLOH2QDSSHDO
EDUUHGEHFDXVHKHIDLOHGWRVHOHFWRQHUHPHG\DVUHTXLUHGE\ =LHJOHUDUJXHVWKDWEHFDXVHKLV†DQGFRPPRQODZ
25& &KDSWHU   2Q 1RYHPEHU   =LHJOHU ZURQJIXOGLVFKDUJHFODLPVZHUHWLPHO\WKHGLVWULFWFRXUWHUUHG
PRYHG IRU OHDYH WR ILOH DQ DPHQGHG FRPSODLQW VHHNLQJ WR LQGHQ\LQJKLVPRWLRQVWRDPHQG:HDJUHH
UHWDLQ RQO\ WKH †  FODLP  2Q 'HFHPEHU  
=LHJOHUPRYHGIRUOHDYHWRILOHDVHFRQGDPHQGHGFRPSODLQW
VHHNLQJWRDGGDQHZFODLPFRPPRQODZZURQJIXOGLVFKDUJH
IRUDJHGLVFULPLQDWLRQLQYLRODWLRQRISXEOLFSROLF\ 
7KH 2KLR 6XSUHPH &RXUW KDV UHFRJQL]HG D SXEOLF SROLF\ FDXVH RI

2QsDQXDU\WKHGLVWULFWFRXUWHQWHUHGMXGJPHQW DFWLRQ DQ DJH GLVFULPLQDWLRQ FODLP 6HH /LYLQJVWRQ Y +LOOVLGH 5HKDE

JUDQWLQJ ,%3jV PRWLRQ IRU MXGJPHQW RQ WKH SOHDGLQJV +RVS  1(G   2KLR  UHYHUVLQJ ZLWKRXW RSLQLRQ
WKH DSSHOODWH FRXUW ZKLFK KDG KHOG WKDW QR ZURQJIXO GLVFKDUJH FODLP
FRQFOXGLQJ WKDW =LHJOHUjV FODLPV ZHUH XQWLPHO\ XQGHU WKH EDVHG RQ †  H[LVWHG
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

DQGWKDWWKH2KLR*HQHUDO$VVHPEO\LQWHQGHGWKDWWKHVHWZR DSSOLFDEOHVWDWXWHRIOLPLWDWLRQV7KHFRXUWGHHPHG=LHJOHUjV
UHPHGLHVKDYHGLIIHUHQWOLPLWDWLRQVSHULRGV1(GDW PRWLRQ IRU OHDYH WR ILOH D VHFRQG DPHQGHG FRPSODLQW WR
%DVHGRQWKHGLIIHUHQFHVEHWZHHQWKHWZRSURYLVLRQV VXSHUFHGHKLVPRWLRQIRUOHDYHWRILOHDQDPHQGHGFRPSODLQW
WKH FRXUW IRXQG LW mFOHDU WKDW WKH LQWHQW RI WKH *HQHUDO DQG GHQLHG WKH PRWLRQ FRQFOXGLQJ WKDW WKH SXEOLF SROLF\
$VVHPEO\ZDVWRFUHDWHVHSDUDWHDQGGLVWLQFWDYHQXHVIRUWKH ZURQJIXO GLVFKDUJH FODLP ZDV VLPLODUO\ XQWLPHO\ DQG
UHGUHVVRIDOOHJHGDJHGLVFULPLQDWLRQZURQJVl1(GDW DPHQGPHQWZDVWKHUHIRUHIXWLOH=LHJOHUILOHGDWLPHO\QRWLFH
  7KH 0RUULV FRXUW GLG QRW H[SUHVV DQ\ FRQFHUQ WKDW RIDSSHDOIURPWKHGLVWULFWFRXUWjVRUGHURQ)HEUXDU\
LQFRQVLVWHQW OLPLWDWLRQV SHULRGV ZRXOG FUHDWH KDYRF LQ WKH
ORZHUFRXUWV ,,',6&866,21
:H KDYH QRWHG WKDW WKHUH DUH WZR 2KLR DSSHOODWH FRXUW $s8'*0(17217+(3/($',1*6
RSLQLRQVRQSRLQWDOEHLWXQSXEOLVKHGZKLFKFRQFOXGHGWKDW
WKHOLPLWDWLRQVSHULRGDSSOLFDEOHWRFODLPVEURXJKWSXUVXDQW 6WDQGDUGRI5HYLHZ
WR†LVVL[\HDUV$IWHUWKHGLVWULFWFRXUWjVGHFLVLRQ
EHORZWKH2KLR&RXUWRI$SSHDOVDJDLQKHOGWKLVWLPHLQD 7KHVWDQGDUGRIUHYLHZDSSOLFDEOHWRDPRWLRQIRUMXGJPHQW
SXEOLVKHGRSLQLRQWKDWWKHOLPLWDWLRQVSHULRGDSSOLFDEOHWR RQWKHSOHDGLQJVXQGHU)HG5&LY3URFLVWKHVDPHGH
†LVVL[\HDUV6HH$KHUQY$PHULWHFK&RUS QRYRVWDQGDUGDSSOLFDEOHWRDPRWLRQWRGLVPLVVXQGHU5XOH
1(G   2KLR &W $SS FLWLQJ /HRQDUGL E6HH0L[RQY2KLR)GWK&LU
:/DSSHDOGHQLHG1(G2KLR   ,Q UHYLHZLQJ WKH PRWLRQ ZH PXVW FRQVWUXH WKH
$VVWDWHGSUHYLRXVO\ZHmPD\QRWGLVUHJDUGDGHFLVLRQRIWKH FRPSODLQWLQWKHOLJKWPRVWIDYRUDEOHWRWKHSODLQWLIIDFFHSW
VWDWHDSSHOODWHFRXUWRQSRLQWXQOHVV>ZHDUH@FRQYLQFHGE\ DOO RI WKH FRPSODLQWjV IDFWXDO DOOHJDWLRQV DV WUXH DQG
RWKHUSHUVXDVLYHGDWDWKDWWKHKLJKHVWFRXUWRIWKHVWDWHZRXOG GHWHUPLQHZKHWKHUWKHSODLQWLIIXQGRXEWHGO\FDQSURYHQRVHW
GHFLGHRWKHUZLVHl0RUHRYHUZHPXVWJLYHDQLQWHUYHQLQJ RIIDFWVLQVXSSRUWRIKLVFODLPWKDWZRXOGHQWLWOHKLPWRUHOLHI
VWDWHGHFLVLRQLWVIXOOIRUFHDQGHIIHFWGHVSLWHWKHIDFWWKDWWKH 6HHLGDW
GHFLVLRQZDVXQDYDLODEOHWRWKHGLVWULFWFRXUWDWWKHWLPHLW
UHQGHUHGLWVGHFLVLRQ6HH7DOOH\Y6WDWH)DUP)LUH &DV :HUHYLHZWKHGLVWULFWFRXUWjVLQWHUSUHWDWLRQDQGDSSOLFDWLRQ
&R)GWK&LU,%3KDVFLWHGQR RIVWDWHODZGHQRYR6HH6DOYH5HJLQD&ROOHJHY5XVVHOO
FDVHVSXEOLVKHGRUXQSXEOLVKHGWKDWVXSSRUWLWVFRQWHQWLRQ 86)HUUR&RUSY*DUULVRQ,QGXVW
WKDWDGD\OLPLWDWLRQVSHULRGDSSOLHVWR†FODLPV ,QF)GWK&LU

:H DUH FRQYLQFHG WKDW LI WKH 2KLR 6XSUHPH &RXUW ZHUH $QDO\VLV
SUHVHQWHGZLWKWKHLVVXHLWZRXOGGHFLGHWKDWWKHSHULRGRI ,Q WKH FRXUW EHORZ ,%3 DVVHUWHG WKDW LW ZDV HQWLWOHG WR
OLPLWDWLRQV DSSOLFDEOH WR FODLPV EURXJKW XQGHU †  MXGJPHQWRQWKHSOHDGLQJVDV=LHJOHUjVFODLPVZHUHEDUUHG
FRQWLQXHV WR EH VL[ \HDUV XQGHU 0RUULV  $FFRUGLQJO\ ZH EHFDXVH=LHJOHUIDLOHGWRHOHFWDVLQJOHUHPHG\DVUHTXLUHG
FRQFOXGHWKDWWKHGLVWULFWFRXUWHUUHGLQJUDQWLQJ,%3jVPRWLRQ XQGHU 2KLR ODZ DQG  E\ WKH DSSOLFDEOH SHULRG RI
IRU MXGJPHQW RQ WKH SOHDGLQJV DQG LQ GLVPLVVLQJ =LHJOHUjV OLPLWDWLRQV7KHGLVWULFWFRXUWDJUHHGWKDW,%3jVFODLPVZHUH
†FODLP WLPHEDUUHG,WGLGQRWKRZHYHUDGGUHVVWKHLVVXHRIZKHWKHU
=LHJOHUjV IDLOXUH WR HOHFW D VLQJOH UHPHG\ HQWLWOHG ,%3 WR
MXGJPHQWRQWKHSOHDGLQJV7KHSDUWLHVGLVSXWHERWKRIWKHVH
LVVXHVRQDSSHDO
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

D(OHFWLRQRI5HPHGLHV DUJXHV WKDW WKH UHFRGLILFDWLRQ RI †  DV † 
EURXJKWWKLVSURYLVLRQZLWKLQWKH%HOOLDQEODQNHWVWDWHPHQW
,%3 DUJXHV WKDW =LHJOHUjV FRPSODLQW PXVW EH GLVPLVVHG WKDWDOODJHGLVFULPLQDWLRQFODLPVEURXJKWSXUVXDQWWR25&
EHFDXVH KH ZDV EDUUHG IURP VLPXOWDQHRXVO\ EULQJ FODLPV &KDSWHUDUHVXEMHFWWRWKH†1GD\VWDWXWH
XQGHU25&††1DQG=LHJOHU RIOLPLWDWLRQV6HFRQG,%3DUJXHVWKDWZHPXVWGLVUHJDUGWKH
FRQWHQGVWKDWEHFDXVHKHPRYHGIRUOHDYHWRILOHDQDPHQG XQUHSRUWHGGHFLVLRQVRIWKH2KLRDSSHOODWHFRXUWVVXJJHVWLQJ
FRPSODLQWVRDVWRGLVPLVVKLVDQGFODLPVLQ WKDW ZHUH ZH WR IROORZ WKRVH FRXUWV ZH ZRXOG mFUHDWH WKH
JRRGIDLWKDQGLQDWLPHO\IDVKLRQ,%3ZDVQRWHQWLWOHGWR LOORJLFDOFLUFXPVWDQFHRIWZRGLIIHUHQWVWDWXWHVRIOLPLWDWLRQV
MXGJPHQW RQ WKH SOHDGLQJV EDVHG RQ KLV IDLOXUH WR HOHFW D WRUHGUHVVWKHVDPHLQFLGHQWRIDOOHJHGDJHGLVFULPLQDWLRQl
VLQJOH UHPHG\  +H VXJJHVWV WKDW WKH DVVHUWLRQ RI PXOWLSOH
&KDSWHUFODLPVVLPXOWDQHRXVO\LVQRWDIDWDOGHIHFW:H :HUHMHFW,%3jVDVVHUWLRQWKDWZHDUHERXQGE\WKH2KLR
DJUHH 6XSUHPH&RXUWjVEODQNHWVWDWHPHQWLQ%HOOLDQ7KHFRXUWLQ
%HOOLDQ ZDV DGGUHVVLQJ WKH LVVXH RI ZKHWKHU DJH
7KHDYHQXHVRIUHOLHISURYLGHGE\2KLRVWDWXWRU\ODZIRU GLVFULPLQDWLRQ FODLPV EURXJKW SXUVXDQW WR †  ZHUH
DJHEDVHGHPSOR\PHQWGLVFULPLQDWLRQDUHH[FOXVLYHDQGRQFH VXEMHFWWRDIRXU\HDURUGD\SHULRGRIOLPLWDWLRQV7KDW
DQDFWLRQLVLQVWLWXWHGWKHUHXQGHUDSODLQWLIILVEDUUHGIURP FRXUW KDG QR RFFDVLRQ WR FRQVLGHU WKH OLPLWDWLRQV SHULRG
EULQJLQJDQDFWLRQXQGHUDGLIIHUHQWSURYLVLRQ6HH0RUULVY DSSOLFDEOH WR †  FODLPV VLQFH UHFRGLILFDWLRQ RI †
.DLVHU(QJLQHHUV,QF1(G2KLR  DV†KDGQRW\HWRFFXUUHGDWWKHWLPH%HOOLDQ
6HFWLRQ1SURYLGHVWKDWm>D@SHUVRQZKRILOHVDFLYLO ZDV GHFLGHG  7KH 2KLR 6XSUHPH &RXUW KDV QRW KDG DQ
DFWLRQ XQGHU WKLV GLYLVLRQ LV EDUUHG ZLWK UHVSHFW WR WKH RSSRUWXQLW\ WR UHFRQVLGHU HLWKHU LWV 0RUULV GHFLVLRQ RU WKH
SUDFWLFHVFRPSODLQHGRIIURPLQVWLWXWLQJDFLYLODFWLRQXQGHU YDOLGLW\RIWKHEODQNHWUXOHLWDQQRXQFHGLQ%HOOLDQLQOLJKWRI
VHFWLRQ  RI WKH 5HYLVHG &RGH    l  /LNHZLVH WKH*HQHUDO$VVHPEO\jVUHFRGLILFDWLRQRI†DVSDUWRI
†%SURYLGHVWKDWmDQ\SHUVRQLQVWLWXWLQJDQFLYLO &KDSWHU
DFWLRQ XQGHU WKLV VHFWLRQ LV EDUUHG ZLWK UHVSHFW WR WKH
SUDFWLFHVFRPSODLQHGRIIURPLQVWLWXWLQJDFLYLODFWLRQXQGHU 0RUHRYHUWKH%HOOLDQFRXUWjVUDWLRQDOHIRUGHWHUPLQLQJWKDW
GLYLVLRQ1RIVHFWLRQRIWKH5HYLVHG&RGHl WKH†1VWDWXWHRIOLPLWDWLRQVJRYHUQHG†LV
:KLOH†KDVQRVLPLODUH[SUHVVHOHFWLRQRIUHPHGLHV LQDSSOLFDEOH KHUH  7KHUH WKH FRXUW ZDV GHDOLQJ ZLWK D
ODQJXDJH WKHUH LV VRPH LQGLFDWLRQ WKDW 2KLR FRXUWV ZLOO VSHFLILF VWDWXWH DQG D JHQHUDO VWDWXWH   1(G DW 
LPSXWHWRLWVXFKDQH[FOXVLYLW\UHTXLUHPHQW6HH%DOHQWY $SSO\LQJ 2KLR UXOHV RI VWDWXWRU\ FRQVWUXFWLRQ WKH FRXUW
1DWLRQDO5HYHQXH&RUS1(G2KLR&W FRQFOXGHGWKDWWKHVSHFLILFVWDWXWHQHFHVVDULO\SUHYDLOHGRYHU
$SS  LPSXWLQJ WR †  DQ H[FOXVLYLW\ WKHPRUHJHQHUDO6HHLG+HUHLQFRQWUDVWZHDUHGHDOLQJ
UHTXLUHPHQW *LDPEURQH Y 6SDOGLQJ  (YHQIOR &R  ZLWK WZR VSHFLILF VWDWXWHV  7KHUHIRUH %HOOLDQ LV QRW
1(G2KLR&W$SSVDPH FRQWUROOLQJ DQG LW GRHV QRW IDLUO\ SUHGLFW KRZ WKH 2KLR
6XSUHPH&RXUWZLOOGHWHUPLQHWKHLVVXH
,%3LQWHUSUHWVWKHH[FOXVLYLW\ODQJXDJHRI††1
DQG%DVUHTXLULQJGLVPLVVDORIDFRPSODLQWZKLFK ,%3jVFRQWHQWLRQWKDWmLQFRQVLVWHQWOLPLWDWLRQVZRXOGOHDG
DVVHUWVPRUHWKDQRQH&KDSWHUFODLP,%3DUJXHVWKDW WR FRQIXVLRQ ODFN RI JXLGDQFH DQG GLVSDUDWH UHVXOWVl
VLQFH=LHJOHUDVVHUWHGD†FODLPWKHQWKH† GLVUHJDUGVWKHFRQFOXVLRQUHDFKHGE\WKH2KLR6XSUHPH&RXUW
DQG †  FODLPV PXVW EH GLVPLVVHG DQG EHFDXVH KH LQ 0RUULV  7KH 0RUULV FRXUW KHOG WKDW †  ZDV QRW
JRYHUQHGE\WKHOLPLWDWLRQVSHULRGFRQWDLQHGLQ†1
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

VFHQDULRWKDWZDVPDWHULDOO\DOWHUHGE\WKHLQFOXVLRQRIIRUPHU DVVHUWHG D †  FODLP WKH †  DQG † 
†LQWR&KDSWHU,GDW
 FODLPVPXVWEHGLVPLVVHG7KLVZRXOGEHDKDUVKUXOHLQGHHG
$OWKRXJK=LHJOHUDUJXHGEHIRUHWKHGLVWULFWFRXUWWKDWWKH ,Q*LDPEURQHY6SDOGLQJ (YHQIOR&RDQ2KLRDSSHOODWH
SHULRG RI OLPLWDWLRQV ZDV VL[ \HDUV XQGHU 0RUULV DQG FRXUWUHMHFWHGWKHGHIHQGDQWjVFRQWHQWLRQWKDWWKHSODLQWLIIjV
SURYLGHGWKHFRXUWZLWKWKHWZRXQSXEOLVKHG2KLRDSSHOODWH DJH GLVFULPLQDWLRQ FODLPV ZHUH EDUUHG EHFDXVH KH ILOHG
FRXUWFDVHVGLVFXVVHGDERYHWKHGLVWULFWFRXUWGLGQRWDGGUHVV PXOWLSOH FODLPV SXUVXDQW WR 25& &KDSWHU   
KLVFRQWHQWLRQ5DWKHUWKHFRXUWDVVXPHGWKDWWKHOLPLWDWLRQV 1:G2KLR&W$SS7KHUHDVKHUHWKH
SHULRG DSSOLFDEOH WR DJH GLVFULPLQDWLRQ FODLPV EURXJKW SODLQWLII DVVHUWHG DJH GLVFULPLQDWLRQ FODLPV SXUVXDQW WR
SXUVXDQWWR25&&KDSWHULQFOXGLQJ†FODLPV 25&††DQG6HHLGDW
ZDVGD\VXQGHU%HOOLDQ 7KH WULDO FRXUW GLVPLVVHG WKH SODLQWLIIjV FDVH IRU IDLOXUH WR
HOHFWDVLQJOHUHPHG\6HHLG2QDSSHDO WKH*LDPEURQH
,QGLYHUVLW\FDVHVWKHIHGHUDOFRXUWVPXVWDSSO\VWDWHODZ FRXUW VWDWHG WKDW mGLVPLVVDO RI >SODLQWLIIjV@ HQWLUH FODLP
mµLQ DFFRUGDQFH ZLWK WKH WKHQ FRQWUROOLQJ GHFLVLRQ RI WKH EHFDXVH KH ILOHG XQGHU ERWK SURYLVLRQV VLPXOWDQHRXVO\ LV
KLJKHVW VWDWH FRXUWjl 8QLWHG 6WDWHV Y $QGHUVRQ &RXQW\ QHLWKHULQOLQHZLWKWKH>2KLR@6XSUHPH&RXUWjVVWDWHPHQWWKDW
7HQQHVVHH  )G   WK &LU  TXRWLQJ 5&&KDSWHULVDUHPHGLDO$FWWREHFRQVWUXHGOLEHUDOO\
9DQGHQEDUNY2ZHQV,OOLQRLV*ODVV&R86 QRU ZLWK WKH OHJLVODWLYH SXUSRVH RI WKH VWDWXWH LH WR
VHH(ULH55Y7RPSNLQV86,IWKH FRPSHQVDWHYLFWLPVRIDJHGLVFULPLQDWLRQl1:GDW
IRUXPVWDWHjVKLJKHVWFRXUWKDVQRWDGGUHVVHGWKHLVVXHWKH  HPSKDVLV LQ RULJLQDO  7KH DSSHOODWH FRXUW UHYHUVHG
IHGHUDOFRXUWPXVWDVFHUWDLQIURPDOODYDLODEOHGDWDLQFOXGLQJ KROGLQJWKDWmWKHORZHUFRXUWjVGLVPLVVDORI>WKHSODLQWLIIjV@
WKHGHFLVLRQDOODZRIWKHVWDWHjVORZHUFRXUWVZKDWWKHVWDWHjV DJHGLVFULPLQDWLRQFODLPZDVDQDEXVHRIGLVFUHWLRQDQGDQ
KLJKHVWFRXUWZRXOGGHFLGHLIIDFHGZLWKWKHLVVXH6HH%DLOH\ RYHUO\UHVWULFWLYHLQWHUSUHWDWLRQRIWKHVWDWXWHVl,G
Y9 23UHVV&R)GWK&LUFLWLQJ
FDVHV  :KHUH D VWDWHjV KLJKHVW FRXUW KDV QRW VSRNHQ RQ D :HILQGQRPHULWLQ,%3jVDVVHUWLRQWKDW=LHJOHUjVFODLPV
SUHFLVHLVVXHDIHGHUDOFRXUWPD\QRWGLVUHJDUGDGHFLVLRQRI DUH EDUUHG EHFDXVH KH DVVHUWHG PXOWLSOH DJH GLVFULPLQDWLRQ
WKHVWDWHDSSHOODWHFRXUWRQSRLQWXQOHVVLWLVFRQYLQFHGE\ FODLPVVLPXOWDQHRXVO\,%3FDQSRLQWWRQRFDVHVLQVXSSRUW
RWKHUSHUVXDVLYHGDWDWKDWWKHKLJKHVWFRXUWRIWKHVWDWHZRXOG RILWVFRQWHQWLRQ0RUHRYHULWVDUJXPHQWILQGVQRVXSSRUWLQ
GHFLGHRWKHUZLVHl3XFNHWWY7HQQHVVHH(DVWPDQ&R WKHODQJXDJHRIWKHSURYLVLRQVZKLFKEDUVXFFHVVLYHDFWLRQV
)GWK&LUDFFRUG1RUWKODQG,QV&R DIWHUDVLQJOHUHPHG\KDVEHHQHOHFWHG2XUGHFLVLRQLVJXLGHG
Y *XDUGVPDQ 3URGXFWV ,QF  )G   WK &LU E\WKHGLUHFWLYHRI25&†WKDW&KDSWHUmEH
7KLVUXOHDSSOLHVUHJDUGOHVVRIZKHWKHUWKHDSSHOODWH FRQVWUXHG OLEHUDOO\ IRU WKH DFFRPSOLVKPHQW RI LWV SXUSRVHV
FRXUW GHFLVLRQ LV SXEOLVKHG RU XQSXEOLVKHG  6HH 7DOOH\ Y l:KLOH=LHJOHUPD\QRWDVVHUWPXOWLSOH&KDSWHU
6WDWH )DUP )LUH  &DV &R  )G   WK &LU FODLPVKHPD\HOHFWDVLQJOHUHPHG\E\PRWLRQWRDPHQG
 3XFNHWW  )G DW   0RUHRYHU m>D@Q $FFRUGLQJO\ZHUHMHFW ,%3jVDVVHUWLRQWKDWLWLVHQWLWOHGWR
LQWHUYHQLQJ VWDWH GHFLVLRQ PXVW EH JLYHQ LWV IXOO HIIHFW DQG MXGJPHQW RQ WKH SOHDGLQJV VROHO\ GXH WR =LHJOHUjV
WUHDWHGDVWKRXJKWKHGHFLVLRQH[LVWHGGXULQJWKHSHQGHQF\RI VLPXOWDQHRXV DVVHUWLRQ RI PRUH WKDQ RQH &KDSWHU 
WKHDFWLRQEHIRUHWKHGLVWULFWFRXUWl7DOOH\)GDW UHPHG\
,%3RIIHUVWZRUDWLRQDOHVIRULWVFRQWHQWLRQWKDW†
FODLPVDUHVXEMHFWWRDGD\OLPLWDWLRQVSHULRG)LUVWLW
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

E6WDWXWHRI/LPLWDWLRQV %HOOLDQZDVGHFLGHGSULRUWRWKHUHFRGLILFDWLRQRI†
DV†,GDW
7KHFRXUWFRQFOXGHGWKDWWKHSHULRG
7KHTXHVWLRQRIZKHWKHUWKHGLVWULFWFRXUWHUUHGLQJUDQWLQJ RIOLPLWDWLRQVDSSOLFDEOHWR†ZDVVL[\HDUV,G
,%3jV PRWLRQ IRU MXGJPHQW RQ WKH SOHDGLQJV WXUQV RQ WKH
OLPLWDWLRQV SHULRG DSSOLFDEOH WR =LHJOHUjV FODLP EURXJKW :H KDYH IRXQG RQH IHGHUDO FRXUW GHFLVLRQ RQ SRLQW  ,Q
SXUVXDQWWR†=LHJOHUILOHGKLVFRPSODLQWOHVVWKDQ 9DQERXUJRQGLHQ Y +RUWLFXOWXUH )DUPV ,QF WKH 8QLWHG
WZR\HDUVEXWPRUHWKDQGD\VDIWHUKLVFDXVHRIDFWLRQ 6WDWHV 'LVWULFW &RXUW IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR
DFFUXHG=LHJOHUFRQWHQGVWKDWDVL[\HDUOLPLWDWLRQVSHULRG VXFFLQFWO\WHUPHGWKHLVVXHDVIROORZVm>:@KHWKHUWKH>2KLR@
DSSOLHV WR KLV FODLP ,%3 FRQWHQGV DQG WKH GLVWULFW FRXUW 6XSUHPH &RXUWjV KROGLQJ LQ %HOOLDQ  WKDW DOO DJH
IRXQGWKDWWKHDSSOLFDEOHSHULRGLVGD\V GLVFULPLQDWLRQFODLPVEURXJKWXQGHU&KDSWHUDUHVXEMHFW
WR D VL[PRQWK VWDWXWH RI OLPLWDWLRQV  KDV VXE VLOHQWLR
7KH2KLRVWDWXWRU\VFKHPHSURKLELWLQJDJHGLVFULPLQDWLRQ RYHUUXOHG 0RUULV LQ OLJKW RI WKH    UHFRGLILFDWLRQ DQG
KDVDUDWKHUFRPSOLFDWHGKLVWRU\DQGDEULHIRYHUYLHZZRXOG WKHUHE\ FRQYHUWHG WKH VWDWXWHjV SUHYLRXV VL[\HDU VWDWXH RI
EHKHOSIXO)RXUVHFWLRQVRIWKH25&SURYLGHUHPHGLHVIRU OLPLWDWLRQVWRRQHRIVL[PRQWKVl1R:/
DJHEDVHGHPSOR\PHQWGLVFULPLQDWLRQ6HFWLRQLVD  DW
 6' 2KLR sXO\    7KH GLVWULFW
JHQHUDO DQWLGLVFULPLQDWLRQ VWDWXWH WKDWSURYLGHV D SULYDWH FRXUW FRQFOXGHG WKDW †  UHWDLQHG LWV VL[\HDU
FDXVH RI DFWLRQ IRU DJH GLVFULPLQDWLRQ   6HFWLRQ  OLPLWDWLRQVSHULRGXQGHUWKH2KLR6XSUHPH&RXUWjV0RUULV
DOORZV DQ LQGLYLGXDO WR HQIRUFH WKRVH ULJKWV FUHDWHG E\ GHFLVLRQDQGWKDW%HOOLDQZDVLQDSSOLFDEOH,GDW

†DGPLQLVWUDWLYHO\UDWKHUWKDQMXGLFLDOO\E\ILOLQJD
FKDUJH ZLWK WKH 2KLR &LYLO 5LJKWV &RPPLVVLRQ  6HFWLRQ 7KH9DQERXUJRQGLHQFRXUWQRWHGWKDWZKHUHDVWDWXWHWKDW
 IRUPHUO\ †  LV DGGUHVVHG VROHO\ WR DJH KDV EHHQ FRQVWUXHG E\ WKH 2KLR 6XSUHPH &RXUW LV ODWHU
GLVFULPLQDWLRQDQGDOORZVDQDJJULHYHGHPSOR\HHWRLQVWLWXWH DPHQGHG KDYLQJ VXEVWDQWLDOO\ WKH VDPH WHUPV WKH 2KLR
OHJLVODWXUH LV SUHVXPHG WR KDYH EHHQ IDPLOLDU ZLWK LWV
FRQVWUXFWLRQDQGWRKDYHDGRSWHGLWDVSDUWRIWKHODZXQOHVV
LWH[SUHVVO\SURYLGHVIRUDGLIIHUHQWFRQVWUXFWLRQ,GDW

FLWLQJ6SLW]HUY6WLOOLQJV1(2KLR
7KH FRXUW FRQFOXGHG WKHUHIRUH WKDW WKH 2KLR *HQHUDO
 $VVHPEO\ZDVSUHVXPDEO\IDPLOLDUZLWKWKH0RUULVFRXUWjV
%HFDXVH ZH FRQFOXGH WKDW =LHJOHUjV PRWLRQ IRU OHDYH WR ILOH D ILUVW GHFLVLRQ WKDW WKH VL[\HDU VWDWXWH RI OLPLWDWLRQV DSSOLHG WR
DPHQGHG FRPSODLQW VR DV WR YROXQWDULO\ GLVPLVV KLV FODLPV EURXJKW
SXUVXDQW WR ††  DQG  VKRXOG KDYH EHHQ JUDQWHG ZH QHHG
†DWWKHWLPHRIWKHUHFRGLILFDWLRQDQGVLQFHLWPDGH
RQO\ DGGUHVV WKH WLPHOLQHVV RI KLV †  FODLP
QRH[SUHVVSURYLVLRQWRWKHFRQWUDU\LWZDVIXUWKHUSUHVXPHG
WKDW WKH *HQHUDO $VVHPEO\ LQWHQGHG WR UHWDLQ WKH VL[\HDU

2KLR 5HY &RGH $QQ † $ SURKLELWV HPSOR\HUV IURP
OLPLWDWLRQVSHULRGDIWHULWVUHFRGLILFDWLRQ,GDW
7KH
GLVFULPLQDWLQJ DJDLQVW LQGLYLGXDOV EDVHG RQ UDFH FRORU UHOLJLRQ VH[ 9DQERXUJRQGLHQFRXUWUHMHFWHGWKHDUJXPHQWWKDWWKH2KLR
QDWLRQDO RULJLQ KDQGLFDS DJH RU DQFHVWU\ 2KLR 5HY &RGH $QQ /HJLVODWXUH LQWHQGHG WR UHO\ XSRQ WKH %HOOLDQ KROGLQJ WR
† 1 SURYLGHV LQ SHUWLQHQW SDUW RYHUUXOH VXE VLOHQWLR WKH 0RUULV KROGLQJ WKDW WKH VL[\HDU
$Q DJJULHYHG LQGLYLGXDO PD\ HQIRUFH WKH LQGLYLGXDOjV ULJKWV VWDWXWH RI OLPLWDWLRQV DSSOLHG PHUHO\ E\ UHFRGLI\LQJ
UHODWLYH WR GLVFULPLQDWLRQ RQ WKH EDVLV RI DJH DV SURYLGHG IRU LQ
WKLV VHFWLRQ E\ LQVWLWXWLQJ D FLYLO DFWLRQ ZLWKLQ RQH KXQGUHG
†DQGSODFLQJLWLQ&KDSWHU7KHGLVWULFWFRXUW
HLJKW\ GD\V DIWHU WKH DOOHJHG XQODZIXO GLVFULPLQDWRU\ SUDFWLFH QRWHGWKDWVXFKDUHVXOWZRXOGEHDEVXUGDQGXQUHDVRQDEOH
RFFXUUHG LQ DQ\ FRXUW ZLWK MXULVGLFWLRQ IRU DQ\ OHJDO RU HTXLWDEOH SDUWLFXODUO\ VLQFH %HOOLDQ ZDV SUHGLFDWHG XSRQ D IDFWXDO
UHOLHI WKDW ZLOO HIIHFWXDWH WKH LQGLYLGXDOjV ULJKWV
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

:HDUHWKHUHIRUHUHTXLUHGWRGHWHUPLQHZKHWKHUWKHSHULRG D FLYLO DFWLRQ  )LQDOO\ †  LV D JHQHUDO DQWL
RIOLPLWDWLRQVDSSOLFDEOHWR†SULRUWRHQDFWPHQWRI GLVFULPLQDWLRQVWDWXWHWKDWSHUPLWVDSULYDWHFDXVHRIDFWLRQ
WKHWRUWUHIRUPDFWDQGWKXVDSSOLFDEOHWRGD\ZDVVL[\HDUV IRUDJHGLVFULPLQDWLRQ6HH(OHNY+XQWLQJWRQ1DWjO%DQN
XQGHU0RUULVRUGD\VXQGHU%HOOLDQ,%3FRQWHQGVWKDW 1(G2KLR
ZHDUHERXQGE\WKH2KLR6XSUHPH&RXUWjVEODQNHWVWDWHPHQW
LQ%HOOLDQWKDWDOODJHGLVFULPLQDWLRQFODLPVEURXJKWSXUVXDQW :KLOH † 1 LQFOXGHV D VWDWXWH RI OLPLWDWLRQV
WR &KDSWHU  DUH VXEMHFW WR WKH GD\ VWDWXWH RI †GRHVQRW,QWKH2KLR6XSUHPH&RXUWLQ
OLPLWDWLRQVIRXQGLQ†1=LHJOHUDUJXHVWKDWWKH 0RUULVY.DLVHU(QJLQHHUV,QF1(G2KLR
EODQNHW UXOH DQQRXQFHG LQ %HOOLDQ LV LQDSSOLFDEOH WR ZDVFRQIURQWHGZLWKWKHLVVXHRIZKHWKHUWKHH[SUHVV
†   )RU WKLV SURSRVLWLRQ =LHJOHU UHOLHV RQ WZR OLPLWDWLRQVSHULRGRI†1DSSOLHGWRFODLPVEURXJKW
XQUHSRUWHG2KLR&RXUWRI$SSHDOVFDVHVWKDWDGGUHVVHGWKH SXUVXDQWWR††SULRUWRUHFRGLILFDWLRQ
YHU\LVVXHSUHVHQWHGKHUH 7KH0RUULVFRXUWKHOGWKH†1VWDWXWHRIOLPLWDWLRQV
GLGQRWDSSO\WRFODLPVEURXJKWSXUVXDQWWR†,G$
,Q/HRQDUGLY/DZUHQFH,QGXV,QF1R:/ UHYLHZRIWKH2KLRDJHGLVFULPLQDWLRQVWDWXWRU\VFKHPHOHG
DW
2KLR&W$SS6HSWWKH2KLR&RXUW WKHFRXUWWRFRQFOXGHWKDWWKH2KLR*HQHUDO$VVHPEO\FOHDUO\
RI$SSHDOVKHOGWKDWWKHSHULRGDSSOLFDEOHWR†LVVL[ LQWHQGHG mWR FUHDWH VHSDUDWH DQG GLVWLQFW DYHQXHV IRU WKH
\HDUV7KHFRXUWILUVWQRWHGWKDW%HOOLDQZDVGHFLGHGSULRUWR UHGUHVVRIDOOHJHGDJHGLVFULPLQDWLRQZURQJVl,GDW
WKHUHFRGLILFDWLRQRI†DQGWKXVZDVQRWFRQWUROOLQJ 7KH FRXUW DOVR UHMHFWHG WKH GHIHQGDQWjV FRQWHQWLRQ WKDW
,G)XUWKHUWKHFRXUWGHWHUPLQHGWKDWEHFDXVHWKHUHPHGLHV †  PXVW EH FRQVWUXHG LQ SDUL PDWHULD ZLWK
RI ††  DQG 1 ZHUH H[FOXVLYH WKH 2KLR †1QRWLQJWKDWm>W@KHLQSDULPDWHULDUXOHLVWREH
*HQHUDO$VVHPEO\SUHVXPSWLYHO\GLGQRWLQWHQGIRUWKHVDPH DSSOLHGRQO\ZKHUHWKHVWDWXWHWREHFRQVWUXHGLVDPELJXRXV
VWDWXWHRIOLPLWDWLRQVWRDSSO\WRERWKVLPSO\DVDUHVXOWRIWKH RUWKHVLJQLILFDQFHRILWVWHUPVGRXEWIXOl,GDW7KH
UHFRGLILFDWLRQRIRQHRIWKHUHPHGLHV,G7KHFRXUWIRXQG 0RUULV FRXUW FRQFOXGHG WKDW EHFDXVH WKH 2KLR *HQHUDO
IXUWKHUHYLGHQFHRIOHJLVODWLYHLQWHQWWRWUHDWWKHWZRVWDWXWHV $VVHPEO\KDGQRWLQFOXGHGDQH[SUHVVSHULRGRIOLPLWDWLRQ
GLIIHUHQWO\ LQ WKH VXEVHTXHQW DPHQGPHQW RI  †  WR
LQFOXGHDWZR\HDUVWDWXWHRIOLPLWDWLRQV
,Q/HKPDQQY$$$&LQFLQQDWLWKH2KLR&RXUWRI$SSHDOV
IRXQGWKHUHDVRQLQJLQ/HRQDUGLWREHSHUVXDVLYHDQGDJUHHG
WKDWWKH2KLR6XSUHPH&RXUWjVGHFLVLRQLQ0RUULVFRQWUROOHG 
2KLR 5HY &RGH $QQ † $ SURYLGHV WKDW
1R&:/DW
2KLR&W$SS0DU 1R HPSOR\HU VKDOO GLVFULPLQDWH LQ DQ\ MRE RSHQLQJ DJDLQVW DQ\
7KH/HKPDQQFRXUWVLPLODUO\UHMHFWHGWKHQRWLRQ DSSOLFDQW RU GLVFKDUJH ZLWKRXW MXVW FDXVH DQ\ HPSOR\HH DJHG

WKDW WKH UXOH DUWLFXODWHG LQ %HOOLDQ ZDV FRQWUROOLQJ VLQFH IRUW\ RU ROGHU ZKR LV SK\VLFDOO\ DEOH WR SHUIRUP WKH GXWLHV DQG
RWKHUZLVH PHHWV WKH HVWDEOLVKHG UHTXLUHPHQWV RI WKH MRE DQG ODZV
SHUWDLQLQJ WR WKH UHODWLRQVKLS EHWZHHQ HPSOR\HU DQG HPSOR\HH


2KLR 5HY &RGH $QQ †  SURYLGHV WKDW m>Z@KRHYHU YLRODWHV
=LHJOHU DOVR FRQWHQGV WKDW EHFDXVH KLV FDXVH RI DFWLRQ DFFUXHG ZKLOH
WKLV FKDSWHU LV VXEMHFW WR D FLYLO DFWLRQ IRU GDPDJHV LQMXQFWLYH UHOLHI RU
WKH 7RUW 5HIRUP $FW ZDV HIIHFWLYH WKH WZR\HDU VWDWXWH RI OLPLWDWLRQV
DQ\ RWKHU DSSURSULDWH UHOLHIl
DSSOLHV WR KLV FODLP +H FRQWHQGV WKDW DQ\ RWKHU UHVXOW ZRXOG YLRODWH WKH
FRQVWLWXWLRQDO SURKLELWLRQ DJDLQVW WDNLQJ SURSHUW\ ZLWKRXW GXH SURFHVV RI

ODZ %HFDXVH ZH FRQFOXGH WKDW †  LV VXEMHFW WR D VL[\HDU SHULRG 7KH 2KLR *HQHUDO $VVHPEO\ UHFRGLILHG †  DV †  LQ
RI OLPLWDWLRQV ZH QHHG QRW DGGUHVV WKLV LVVXH  $00 6% 1R  VW *HQ $VV )LOH  2KLR 
 =LHJOHUY,%3+RJ0DUNHW,QF 1R 1R =LHJOHUY,%3+RJ0DUNHW,QF 

ZLWKLQ†LWLQWHQGHGWKHVL[\HDUSHULRGFRQWDLQHGLQ LQWHQWWKDWWKHJHQHUDOSURYLVLRQ†SUHYDLORYHUWKH
25&†WRDSSO\WRVXFKFODLPV6HHLG VSHFLILFSURYLVLRQ†1WKHFRXUWFRQFOXGHGWKDW
WKHVSHFLILFSURYLVLRQSUHYDLOHG,G
7KH0RUULVKROGLQJWKDW†LVVXEMHFWWRDVL[\HDU
OLPLWDWLRQVSHULRGZDVQHYHURYHUWXUQHGH[SUHVVO\EXWZDV ,Q  VKRUWO\ DIWHU %HOOLDQ ZDV GHFLGHG WKH 2KLR
WKHRUHWLFDOO\ FDOOHG LQWR TXHVWLRQ E\ D ODWHU 2KLR 6XSUHPH *HQHUDO$VVHPEO\UHFRGLILHGKXQGUHGVRIVWDWXWRU\SURYLVLRQV
&RXUWGHFLVLRQ%HOOLDQY%LFURQ&RUS1(G DV SDUW RI D OHQJWK\ ELOO HQWLWOHG m6WDWH *RYHUQPHQW
2KLR,Q%HOOLDQWKH2KLR6XSUHPH&RXUWKHOGWKDW (QIRUFHPHQWDQG5HJXODWLRQ5HRUJDQL]DWLRQl6HH6%1R
mDQ\GLVFULPLQDWLRQFODLPSUHPLVHGRQDYLRODWLRQGHVFULEHG VW*HQ$VV)LOH2KLR7KLVOHJLVODWLRQ
LQ25&&KDSWHUPXVWFRPSO\ZLWKWKHRQHKXQGUHG UHFRGLILHG †  DV †  WKHUHE\ SODFLQJ LW LQ
HLJKW\GD\ VWDWXWH RI OLPLWDWLRQV SHULRG VHW IRUWK LQ IRUPHU 25& &KDSWHU   7KH WH[W RI WKH SURYLVLRQ ZDV
25&1l1(GDW$WWKHWLPH%HOOLDQ XQFKDQJHG6HHLG
ZDVGHFLGHGWKHUHZHUHRQO\WZRVWDWXWHVLQ&KDSWHU
SURYLGLQJ D FLYLO FDXVH RI DFWLRQ IRU DJH GLVFULPLQDWLRQ 6XEVHTXHQW WR WKLV UHFRGLILFDWLRQ WKH 2KLR OHJLVODWXUH
†1DQG†6HHLG SDVVHG WRUW UHIRUP OHJLVODWLRQ WKDW DPHQGHG †  WR
H[SUHVVO\ LQFOXGH D WZR\HDU VWDWXWH RI OLPLWDWLRQV  7KLV
7KH%HOOLDQFRXUWZDVUHTXLUHGWRGHWHUPLQHWKHDSSOLFDEOH FKDQJHZDVHIIHFWLYHsDQXDU\+RZHYHURQ$XJXVW
SHULRGRIOLPLWDWLRQVIRUDQDJHGLVFULPLQDWLRQFODLPEURXJKW WKH2KLR6XSUHPH&RXUWKHOGWKHWRUWUHIRUPDFW
SXUVXDQWWR†ZKLFKLVZLWKLQ&KDSWHUDQG XQFRQVWLWXWLRQDOLQWRWR6HH6WDWHH[UH2KLR$FDGHP\RI
ZKLFK DW WKDW WLPH GLG QRW FRQWDLQ DQ H[SUHVV SHULRG RI 7ULDO /DZ\HUV Y 6KHUZDUG  1(G   2KLR
OLPLWDWLRQV  7KH SODLQWLII LQ %HOOLDQ FRQWHQGHG WKDW WKH   7KXV WKH WZR\HDU VWDWXWH RI OLPLWDWLRQV ZDV
DSSOLFDEOHSHULRGZDVWKHVL[\HDUSHULRGFRQWDLQHGLQ25& LQYDOLGDWHGDQGWKHOLPLWDWLRQVSHULRGDSSOLFDEOHWRFODLPV
†   &RQYHUVHO\ WKH GHIHQGDQW FRQWHQGHG WKH EURXJKWSXUVXDQWWR†LVWKHSHULRGWKDWZDVHIIHFWLYH
DSSOLFDEOHSHULRGZDVWKHGD\SHULRGFRQWDLQHGLQ25& LPPHGLDWHO\SULRUWRHQDFWPHQWRIWKHWRUWUHIRUPOHJLVODWLRQ
†17KH%HOOLDQFRXUWQRWHGWKDWXQGHUVWDWXWRU\
FRQVWUXFWLRQSULQFLSOHVZKHUHDFRQIOLFWH[LVWVDVWRJHQHUDO
DQG VSHFLILF VWDWXWHV DQG WKHUH LV QR PDQLIHVW OHJLVODWLYH 
,Q7ULDO /DZ\HUV WKH 2KLR 6XSUHPH &RXUW KHOG WKDW WKH 7RUW 5HIRUP
LQWHQW WKDW WKH JHQHUDO SURYLVLRQ SUHYDLO RYHU WKH VSHFLILF $FW XVXUSHG MXGLFLDO SRZHU LQ YLRODWLRQ RI WKH 2KLR FRQVWLWXWLRQDO GRFWULQH
SURYLVLRQWKHVSHFLILFSURYLVLRQDSSOLHV1(GDW RI VHSDUDWLRQ RI SRZHUV  1(G DW  DQG YLRODWHG WKH RQHVXEMHFW

)LQGLQJWKDWWKHUHZDVQRFOHDUPDQLIHVWDWLRQRIOHJLVODWLYH UXOH RI WKH 2KLR 6WDWH &RQVWLWXWLRQ ,G DW  6HFWLRQ ' $UWLFOH ,,
RI WKH 2KLR &RQVWLWXWLRQ SURYLGHV WKDW mQR ELOO VKDOO FRQWDLQ PRUH WKDQ RQH
VXEMHFW ZKLFK VKDOO EH FOHDUO\ H[SUHVVHG LQ LWV WLWOHl

 =LHJOHU FRQWHQGV WKDW EHFDXVH WKH 2KLR 6XSUHPH &RXUWjV GHFLVLRQ
2KLR 5HY &RGH $QQ †  VWDWHV m([FHSW DV SURYLGHG LQ
LQ 7ULDO /DZ\HUV GLG QRW VSHFLILFDOO\ VWDWH WKDW WKH VWDWXWH RI OLPLWDWLRQV
VHFWLRQV  DQG  RI WKH 5HYLVHG &RGH DQ DFWLRQ XSRQ D
FRQWDLQHG LQ †  LV XQFRQVWLWXWLRQDO ZH VKRXOG ILQG WKDW WKH WZR
FRQWUDFW QRW LQ ZULWLQJ H[SUHVV RU LPSOLHG RU XSRQ D OLDELOLW\ FUHDWHG E\
\HDU VWDWXWH RI OLPLWDWLRQV UHPDLQV YDOLG ,Q HIIHFW =LHJOHU DVNV WKLV &RXUW
VWDWXWH RWKHU WKDQ D IRUIHLWXUH RU SHQDOW\ VKDOO EH EURXJKW ZLWKLQ VL[ \HDUV
WR GLVUHJDUG WKH KROGLQJ RI 2KLRjV KLJKHVW FRXUW RQ DQ LVVXH RI VWDWH
DIWHU WKH FDXVH WKHUHIRUH DFFUXHGl
FRQVWLWXWLRQDO ODZ :H RI FRXUVH PD\ QRW GR VR %HORZ WKH GLVWULFW
FRXUW FRUUHFWO\ QRWHG DQG ZH DJUHH WKDW DV D UHVXOW RI 7ULDO /DZ\HUV WKH

2KLR 5HY &RGH $QQ †  SURYLGHV m:KRHYHU YLRODWHV WKLV SHULRG RI OLPLWDWLRQV DSSOLFDEOH WR =LHJOHUjV †  FODLP LV WKDW SHULRG
FKDSWHU LV VXEMHFW WR D FLYLO DFWLRQ IRU GDPDJHV LQMXQFWLYH UHOLHI RU DQ\ ZKLFK ZDV HIIHFWLYH LPPHGLDWHO\ SULRU WR HQDFWPHQW RI WKH 7RUW 5HIRUP
RWKHU DSSURSULDWH UHOLHIl $FW