Regensburger v. Bowling Green OH

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

s26(3+ s 5(*(16%85*(5 ;
s(5(0< 1())HWDO 
3ODLQWLIIV$SSHOOHHV 
 1R

Y !


&,7< 2) %2:/,1* *5((1 
2+,2HWDO 
'HIHQGDQWV$SSHOODQWV 

1
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW7ROHGR
1Rn'DYLG$.DW]'LVWULFWsXGJH
$UJXHG6HSWHPEHU
'HFLGHGDQG)LOHGsDQXDU\
%HIRUH%$7&+(/'(5&2/(DQG*,%621&LUFXLW
sXGJHV

7KH +RQRUDEOH sRKQ 5 *LEVRQ &LUFXLW sXGJH RI WKH 8QLWHG 6WDWHV
&RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ


 5HJHQVEXUJHUHWDOY&LW\RI 1R
%RZOLQJ*UHHQ2KLRHWDO

BBBBBBBBBBBBBBBBB
&2816(/
$5*8('6WHYHQ/6SLWOHU63,7/(592*76%(5*(5
 +8))0$1 %RZOLQJ *UHHQ 2KLR IRU $SSHOODQWV
5RGQH\$)OHPLQJ678'(17/(*$/6(59,&(6,1&
%2:/,1**5((181,9(56,7<%RZOLQJ*UHHQ2KLR
IRU $SSHOOHHV  21 %5,()  6WHYHQ / 6SLWOHU 0LPL 6
LQJ@WKHJRYHUQLQJODZRU
$&KDUWHU&LW\ XV>LQJ@DQHUURQHRXVOHJDOVWDQGDUGlDQGFRQVWLWXWHVDQDEXVH
RIGLVFUHWLRQ,G:HWKHUHIRUHKROGWKDWWKHPDJLVWUDWHMXGJH
%RZOLQJ *UHHQ D FKDUWHU FLW\ VXEMHFW WR $UWLFOH ;9,,, LPSURSHUO\UHWDLQHGMXULVGLFWLRQRYHUWKLVFDVHIRUWKHOLPLWHG
6HFWLRQRIWKH2KLR&RQVWLWXWLRQLVJRYHUQHGE\DFKDUWHU SXUSRVH RI UHYLHZLQJ WKH FRQVWLWXWLRQDOLW\ RI WKH &LW\jV
WKDWSURYLGHVLQSHUWLQHQWSDUWWKDW SURSRVHGUHDSSRUWLRQPHQWVFKHPHDQGUHYHUVHWKHMXGJPHQW
RIWKHGLVWULFWFRXUWRQWKLVSRLQW
>W@KHOHJLVODWLYHSRZHURIWKHFLW\VKDOOEHYHVWHGLQDFLW\
FRXQFLOZKLFKVKDOOEHDFRQWLQXLQJERG\FRQVLVWLQJRI ,9&21&/86,21
PHPEHUV DW ODUJH DQG RQH PHPEHU IURP HDFK RI VXFK
HYHQ QXPEHU RI ZDUGV ZKLFK VKDOO EH HVWDEOLVKHG E\ $FFRUGLQJO\ZH$)),50LQSDUWDQG5(9(56(LQSDUW
FRXQFLOE\RUGLQDQFHHQDFWHGQRWODWHUWKDQsDQXDU\RI WKHMXGJPHQWRIWKHGLVWULFWFRXUW
WKH \HDU LQ ZKLFK WKH ILUVW HOHFWLRQ IRU PHPEHUV RI
FRXQFLOIURPZDUGVDVHVWDEOLVKHGE\VXFKRUGLQDQFHLVWR
EHKHOG
2KLRODZSURYLGHVWKDWmWKHOHJLVODWLYHDXWKRULW\RIDFLW\VKDOO
VXEGLYLGHWKHFLW\LQWRZDUGVHTXDOLQQXPEHUWRWKHPHPEHUV
RI WKH OHJLVODWLYH DXWKRULW\ WR EH HOHFWHG IURP ZDUGVl DQG
GHOLQHDWHV WKH PDQQHU LQ ZKLFK D FLW\ LV WR FDUU\ RXW WKLV
GLUHFWLYH2+,2 5(9 &2'( $11†$QGHUVRQ
5HO\LQJ RQ WKH ODQJXDJH RI †  WKH PDJLVWUDWH MXGJH
IRXQGWKDWm>D@FLW\FRXQFLOKDVWKHFRQWLQXLQJDXWKRULW\DQG
GXW\WRUHGLYLGHWKHFLW\LQWRSURSHUZDUGVSXUVXDQWWRODZ
ZKHQDQLQFUHDVHLQSRSXODWLRQRFFXUVl
7KH &LW\ VHL]HV XSRQ WKLV VWDWHPHQW DUJXLQJ WKDW WKH
PDJLVWUDWHMXGJHHUURQHRXVO\FRQFOXGHGWKDWDFLW\LVUHTXLUHG
WR HVWDEOLVK D ZDUG V\VWHP DQG WKDW WKH &LW\jV K\EULG DW
ODUJHZDUGV\VWHPLVWKHUHIRUHLPSHUPLVVLEOHDVDPDWWHURI
ODZ&LWLQJ3HVHNY &LW\RI%UXQVZLFN)6XSS
1' 2KLR  IRU WKH SURSRVLWLRQ WKDW D FKDUWHU FLW\


& RPPRQO\ UHIHUUHG WR DV WKH m+RPH 5XOHl SURYLVLRQ $UWLFOH ;9,,,
6HFWLRQ  SURYLGHV WKDW m>D@Q\ PXQLFLSDOLW\ PD\ IUDPH DQG DGRSW RU
DPHQG D FKDUWHU IRU LWV JRYHUQPHQW DQG PD\ VXEMHFW WR WKH SURYLVLRQV RI
VHFWLRQ  RI WKLV DUWLFOH H[HUFLVH WKHUHXQGHU DOO SRZHUV RI ORFDO VHOI
JRYHUQPHQWl 2 +,2 &2167 DUW ;9,,, † 
 5HJHQVEXUJHUHWDOY&LW\RI 1R 1R 5HJHQVEXUJHUHWDOY&LW\RI 
%RZOLQJ*UHHQ2KLRHWDO %RZOLQJ*UHHQ2KLRHWDO

SHUPLVVLEOH UHDSSRUWLRQPHQW SODQ  :LWK UHVSHFW WR VXEMHFW WR mKRPH UXOHl PD\ HQDFW D SURYLVLRQ WKDW LV LQ
MXULVGLFWLRQWKHPDJLVWUDWHMXGJHjVPHPRUDQGXPDQGRUGHU FRQIOLFW ZLWK VWDWH ODZ WKH &LW\ DUJXHV WKDW EHFDXVH WKH
VWDWHG &KDUWHU SURYLVLRQ DOORZLQJ D K\EULG V\VWHP LV LQ GLUHFW
FRQIOLFW ZLWK † 
V UHTXLUHPHQW WKDW D FLW\ HVWDEOLVK D
,Q YLHZ RI WKH IRUHJRLQJ 'HIHQGDQWV DUH KHUHE\ ZDUGV\VWHPRIUHSUHVHQWDWLRQWKHPDJLVWUDWHMXGJHHUUHGE\
25'(5('WRGHYHORSDSODQIRUUHDSSRUWLRQPHQWZLWKLQ UHTXLULQJWKH&LW\WRDGRSWDZDUGV\VWHP
VL[PRQWKVIURPWKHGDWHRIWKLVMXGJPHQWDQGWRVXEPLW
VXFKSODQWRWKH&RXUW7KLV&RXUWUHWDLQVMXULVGLFWLRQIRU 7KH&LW\jVDUJXPHQWLVZLWKRXWPHULW,QWKHILUVWLQVWDQFH
UHYLHZDQGDSSURYDORIVXFKSODQ WKHPDJLVWUDWHMXGJHGLGQRWPDNHDILQGLQJWKDWWKHDWODUJH
V\VWHPZDVSURKLELWHGE\†QRUGLGVKHFRQFOXGHWKDW
7KH&LW\GLGQRWUDLVHWKHPDJLVWUDWHMXGJHjVGHFLVLRQWRUHWDLQ WKH&LW\FRXOGQRWDGRSWDQDWODUJHV\VWHP5DWKHUVKHIRXQG
MXULVGLFWLRQ LQ LWV DSSHDO WR WKH GLVWULFW MXGJH  7KH GLVWULFW WKDWHYHQZKHQWDNLQJDWODUJHUHSUHVHQWDWLRQLQWRDFFRXQW
MXGJH DIILUPHG WKH PDJLVWUDWH MXGJHjV RSLQLRQ LQ WRWR WKHGHYLDWLRQIURPLGHDOGLGQRWSDVVFRQVWLWXWLRQDOPXVWHU
/LNHZLVHWKHLVVXHRIUHWHQWLRQRIMXULVGLFWLRQZDVQRWUDLVHG 6HFRQG DQG PRUH LPSRUWDQW 3HVHN GRHV QRW FUHDWH OHJDO
LQWKLVDSSHDODQGZDVQRWDGGUHVVHGE\HLWKHUSDUW\LQHLWKHU DXWKRULW\IRUWKH&LW\WRDYRLGWKHUHDFKRI†:KLOH
WKHLQLWLDORUVXSSOHPHQWDOEULHIVRUDWRUDODUJXPHQW LW LV WUXH WKDW m>W@KH JHQHUDO UXOH LV WKDW LQ PDWWHUV RI ORFDO
VHOIJRYHUQPHQW LI WKHUH LV D FRQIOLFW EHWZHHQ D FKDUWHU
$OWKRXJKQHLWKHUSDUW\DGGUHVVHVWKLVLVVXHmHYHU\IHGHUDO SURYLVLRQDQGDVWDWXWHWKHFKDUWHUSURYLVLRQSUHYDLOVlWKH
DSSHOODWHFRXUWKDVDVSHFLDOREOLJDWLRQWRµVDWLVI\LWVHOIQRW &LW\ KDV VKRZQ QR FRQIOLFW EHWZHHQ LWV &KDUWHU DQG WKH
RQO\RILWVRZQMXULVGLFWLRQEXWDOVR>RI@WKDWRIWKHORZHU VWDWXWH6WDWHH[UHO%DUGRY&LW\RI/\QGKXUVW1(G
FRXUWVLQDFDXVHXQGHUUHYLHZjHYHQWKRXJKWKHSDUWLHVDUH   2KLR   7KH &KDUWHU UHTXLUHV DWODUJH DQG
SUHSDUHG WR FRQFHGH LWl  $UL]RQDQV IRU 2IILFLDO (QJOLVK Y GLUHFW ZDUG UHSUHVHQWDWLRQ †  PHUHO\ GLUHFWV WKH
$UL]RQD86TXRWLQJ0LWFKHOOY0DXUHU OHJLVODWLYHDXWKRULW\RIDFLW\WKDWHPSOR\VDZDUGV\VWHPRI
86,QFRQVLGHULQJZKHWKHUWKHORZHU UHSUHVHQWDWLRQWRVXEGLYLGHWKHFLW\LQWRZDUGV1HLWKHUWKH
FRXUWjV UHWHQWLRQ RI MXULVGLFWLRQ RYHU WKH &LW\ SODQ LV RUJDQL]DWLRQSURYLVLRQVRI†QRUWKHPDJLVWUDWHMXGJHjV
mQHFHVVDU\ RU SUDFWLFDEOH WR DFKLHYH FRPSOLDQFHl ZLWK RUGHUUHTXLUHVDQ\SDUWLFXODUIRUPRIDSSRUWLRQPHQWVFKHPH
FRQVWLWXWLRQDO PDQGDWHV ZH XVH DQ DEXVH RI GLVFUHWLRQ 7KXV WKHUH LV QR FRQIOLFW WKDW ZRXOG UHTXLUH WKLV &RXUW WR
VWDQGDUG6HH0LVVRXULYsHQNLQV86 GHWHUPLQHZKLFKSURYLVLRQPXVWSUHYDLOLQWKLVFDVH(YHQ
TXRWLQJ)UHHPDQY3LWWV868QLWHG DVVXPLQJ WKHUH ZHUH LQ IDFW D FRQIOLFW mWKH UXOH RI FKDUWHU
6WDWHVY:7*UDQW&R868QGHU
WKLV VWDQGDUG WKH PDJLVWUDWH MXGJHjV GHFLVLRQ WR UHWDLQ
MXULVGLFWLRQ ZLOO EH GLVWXUEHG LI LW mUHOLHG XSRQ FOHDUO\
HUURQHRXVILQGLQJVRIIDFWLPSURSHUO\DSSOLHGWKHJRYHUQLQJ 
7KH &LW\ VHHPV WR DUJXH WKDW WKH DEVHQFH IURP †  RI DQ\
ODZRUXVHGDQHUURQHRXVOHJDOVWDQGDUGl%OXH&URVV %OXH UHIHUHQFH WR DQ DWODUJH V\VWHP RI UHSUHVHQWDWLRQ LV HYLGHQFH WKDW WKH 2KLR

6KLHOG0XWRI2KLRY%OXH&URVV %OXH6KLHOG$VVjQ OHJLVODWXUH IDYRUHG H[FOXVLYH XVH RI D ZDUG V\VWHP 6XFK DQ

)GWK&LU,QWKLVFDVHWKHPDJLVWUDWH LQWHUSUHWDWLRQ LI DFFHSWHG ZRXOG VWLOO FUHDWH QR FRQIOLFW EHWZHHQ LW DQG WKH

MXGJHUHWDLQHGMXULVGLFWLRQWRUHYLHZDQGDSSURYHWKH&LW\jV &KDUWHU DV WKH &KDUWHU LV VLOHQW RQ WKH TXHVWLRQ RI UHDSSRUWLRQPHQW
)XUWKHUPRUH DV D SUDFWLFDO PDWWHU DQ DWODUJH V\VWHP RI UHSUHVHQWDWLRQ
QHZ SODQ IRU UHDSSRUWLRQPHQW ZLWKRXW DQ\ IDFWXDO RU OHJDO ZRXOG QHYHU UHTXLUH UHDSSRUWLRQPHQW DV VXFK DQ\ VWDWXWRU\ SURYLVLRQ RQ
MXVWLILFDWLRQ:HILQGWKDWWKLVIDLOXUHWRLQFOXGHDQ\VWDWHG WKH TXHVWLRQ RI UHDSSRUWLRQPHQW ZRXOG WKHUHIRUH EH ERWK XQQHFHVVDU\ DQG
PHDQLQJOHVV
 5HJHQVEXUJHUHWDOY&LW\RI 1R 1R 5HJHQVEXUJHUHWDOY&LW\RI 
%RZOLQJ*UHHQ2KLRHWDO %RZOLQJ*UHHQ2KLRHWDO

VXSUHPDF\ DSSOLHV RQO\ ZKHUH WKH FRQIOLFW DSSHDUV E\ WKH HVSHFLDOO\UHYHDOLQJLQOLJKWRIWKHRYHUZKHOPLQJDXWKRULW\WR
H[SUHVV WHUPV RI WKH FKDUWHU DQG QRW E\ PHUH LQIHUHQFHl WKHFRQWUDU\6HHHJ0RUULV86DWVXJJHVWLQJ
/\QGKXUVW1(GDWHPSKDVLVDGGHG7KH&LW\jV WKDW D  GHYLDWLRQ FRXOG QHYHU EH MXVWLILHG &RQQRU Y
DUJXPHQW QHFHVVDULO\ UHOLHV XSRQ LQIHUHQFH DQG PXVW EH )LQFK86m7KHPD[LPXPSRSXODWLRQ
UHMHFWHG GHYLDWLRQVRILQWKH6HQDWHGLVWULFWVDQGLQWKH
+RXVH GLVWULFWVFDQKDUGO\EHFKDUDFWHUL]HGDVGHPLQLPLV
%$W/DUJH(OHFWHG2IILFLDOV WKH\ VXEVWDQWLDOO\ H[FHHG WKH µXQGHUj GHYLDWLRQV WKH
&RXUW KDV SUHYLRXVO\ FRQVLGHUHG WR EH RI SULPD IDFLH
,W LV ZHOOVHWWOHG WKDW ZKHQ H[DPLQLQJ OHJLVODWLYH FRQVWLWXWLRQDO YDOLGLW\ RQO\ LQ WKH FRQWH[W RI OHJLVODWLYHO\
UHGLVWULFWLQJ D UHYLHZLQJ FRXUW PXVW WDNH LQWR DFFRXQW WKH HQDFWHGDSSRUWLRQPHQWVl&KDSPDQ86DWm:H
SUHVHQFHRIDWODUJHUHSUHVHQWDWLRQ6HH%RDUGRI(VWLPDWHRI EHOLHYH WKDW D SRSXODWLRQ GHYLDWLRQ RI WKDW PDJQLWXGH
&LW\RI1HZ@ LQ D FRXUWRUGHUHG SODQ LV FRQVWLWXWLRQDOO\
FRQWHQWLRQWKDWWKHPDJLVWUDWHMXGJHHUUHGLQIDLOLQJWRJLYH LPSHUPLVVLEOHLQWKHDEVHQFHRIVLJQLILFDQWVWDWHSROLFLHVRU
GXH UHJDUG WR WKH &LW\jV DWODUJH DQG GLUHFW UHSUHVHQWDWLRQ RWKHUDFFHSWDEOHFRQVLGHUDWLRQVWKDWUHTXLUHDGRSWLRQRIDSODQ
V\VWHP ILQGV QR VXSSRUW LQ WKH UHFRUG  ,W LV FOHDU WKDW WKH ZLWK VR JUHDW D YDULDQFHl +RZHOO  86 DW 
PDJLVWUDWHMXGJHGLGFRQVLGHUWKHH[LVWHQFHRIWKH&LW\jVDW HPSKDVLVDGGHGQRWLQJWKDWDOWKRXJKmWKHRGGSHUFHQW
ODUJHZDUGV\VWHPLQH[DPLQLQJWKHRYHUDOOYRWLQJVFKHPH PD[LPXPGHYLDWLRQWKDWWKH'LVWULFW&RXUWIRXQGWRH[LVWLQ
7KH PDJLVWUDWH MXGJH PDGH DQ H[SUHVV ILQGLQJ WKDW mD WKHOHJLVODWLYHSODQIRUWKHUHDSSRUWLRQPHQWRIWKH+RXVH
GHYLDWLRQ DV KLJK DV  LV QRW FRQVWLWXWLRQDOO\ PD\ ZHOO DSSURDFK WROHUDEOH OLPLWV ZH GR QRW EHOLHYH LW
SHUPLVVLEOH HYHQ WKRXJK WKDW GHYLDWLRQ LV RIIVHW E\ WKH H[FHHGVWKHPl.LOJDUOLQY+LOO86
H[LVWHQFHRIWKUHHDWODUJHFRXQFLOSRVLWLRQVl m>,@WLVTXLWHFOHDUWKDWXQOHVVVDWLVIDFWRULO\MXVWLILHGE\WKH
FRXUWRUE\WKHHYLGHQFHRIUHFRUGSRSXODWLRQYDULDQFHVRIWKH
(YHQLIWKLV&RXUWZHUHLQFOLQHGWRORRNEH\RQGWKHSODLQ VL]HDQGVLJQLILFDQFHHYLGHQWKHUH>@DUHVXIILFLHQWWR
ODQJXDJH RI WKH PDJLVWUDWH MXGJHjV RSLQLRQ ZH ZRXOG LQYDOLGDWHDQDSSRUWLRQPHQWSODQl6ZDQQY$GDPV
QHYHUWKHOHVV ILQG WKDW WKH GHYLDWLRQ LQ WKLV FDVH LV 86    m'H PLQLPLV GHYLDWLRQV DUH
XQFRQVWLWXWLRQDO,Q0RUULVWKH6XSUHPH&RXUWKHOGWKDWLQ XQDYRLGDEOHEXWYDULDWLRQVRIDPRQJVHQDWHGLVWULFWVDQG
GHWHUPLQLQJWKHGHYLDWLRQDPRQJGLVWULFWVWKHUHOHYDQWLQTXLU\ DPRQJKRXVHGLVWULFWVFDQKDUGO\EHGHHPHGGHPLQLPLV
LVmZKHWKHUµWKHYRWHRIDQ\FLWL]HQLVDSSUR[LPDWHO\HTXDOLQ DQG QRQH RI RXU FDVHV VXJJHVWV WKDW GLIIHUHQFHV RI WKLV
ZHLJKW WR WKDW RI DQ\ RWKHU FLWL]HQj    WKH DLP EHLQJ WR PDJQLWXGHZLOOEHDSSURYHGZLWKRXWDVDWLVIDFWRU\H[SODQDWLRQ
SURYLGHµIDLUDQGHIIHFWLYH UHSUHVHQWDWLRQIRUDOOFLWL]HQVjl JURXQGHGRQDFFHSWDEOHVWDWHSROLF\$FFRUGLQJO\ZHILQG
86DWTXRWLQJ5H\QROGVY6LPV86 WKDW WKH PDJLVWUDWH MXGJH SURSHUO\ FRQFOXGHG WKDW WKH
$OWKRXJKWKH0RUULV&RXUWFRQFOXGHGWKDWWKHORZHU SRSXODWLRQGHYLDWLRQH[FHHGHGFRQVWLWXWLRQDOOLPLWV
FRXUWVHUUHGLQIDLOLQJWRGHWHUPLQHWKHGHYLDWLRQIURPLGHDO
ZLWKWKHDWODUJHUHSUHVHQWDWLRQIDFWRUHGLQWRWKHDQDO\VLVLW )sXULVGLFWLRQ
UHIXVHGWRILQGUHYHUVLEOHHUURUEHFDXVHWKHFLW\KDGFRQFHGHG
DSRSXODWLRQGHYLDWLRQRI6HHLGDW 8SRQ GHWHUPLQLQJ WKDW WKH &LW\jV YRWLQJ DSSRUWLRQPHQW
VFKHPH ZDV XQFRQVWLWXWLRQDO WKH PDJLVWUDWH MXGJH VWUXFN
,QWKHLQVWDQWFDVHWKHPDJLVWUDWHMXGJHIRXQGmDGHYLDWLRQ GRZQWKHVFKHPHDQGRUGHUHGWKH&LW\WRGHYHORSDQGVXEPLW
DV KLJK DV l  7KH &LW\ GRHV QRW DVVHUW WKDW WKH WR WKH FRXUW IRU LWV UHYLHZ DQG DSSURYDO D FRQVWLWXWLRQDOO\
 5HJHQVEXUJHUHWDOY&LW\RI 1R 1R 5HJHQVEXUJHUHWDOY&LW\RI 
%RZOLQJ*UHHQ2KLRHWDO %RZOLQJ*UHHQ2KLRHWDO

SRSXODWLRQ GHYLDWLRQV  5DWKHU LW DGGUHVVHG ZKHWKHU PDJLVWUDWHMXGJHIDLOHGWRFDOFXODWHWKHGHYLDWLRQIURPLGHDO
:\RPLQJjV SODQ IRU SUHVHUYLQJ ERXQGDULHV MXVWLILHG WKH QRUGRHVLWDVVHUWWKDWWKHGHYLDWLRQVIRXQGE\WKHPDJLVWUDWH
DGGLWLRQDOGHYLDWLRQVIURPSRSXODWLRQHTXDOLW\UHVXOWLQJIURP MXGJH ZHUH ZLWKLQ SHU VH FRQVWLWXWLRQDO OLPLWV   ,W FDQQRW
D SDUWLFXODU FRXQW\jV UHSUHVHQWDWLRQ IRFXVLQJ RQ WKH (YHQ DVVXPLQJ WKH PDJLVWUDWH MXGJH IDLOHG WR FRQVLGHU WKH
DSSHOODQWVj FKDOOHQJH WR UHSUHVHQWDWLRQ RI WKDW SDUWLFXODU SUHVHQFH RI DWODUJH UHSUHVHQWDWLRQ LQ WKH &LW\ WKH 8QLWHG
FRXQW\DQGQRWRQWKHGHYLDWLRQVIURPLGHDO6HHLGDW 6WDWHV6XSUHPH&RXUWKDVVXJJHVWHGWKDWDGHYLDWLRQDVKLJK
7KH%URZQ&RXUWVWDWHG DVWKDWDWLVVXHLQWKLVFDVHPLJKWEHSHUVHXQFRQVWLWXWLRQDO
&ILGDWm:HQRWHWKDWQRFDVHRIRXUVKDVLQGLFDWHGWKDW
+HUHZHDUHQRWUHTXLUHGWRGHFLGHZKHWKHU:\RPLQJ
V DGHYLDWLRQRIVRPHFRXOGHYHUEHMXVWLILHGl*LYHQWKH
QRQGLVFULPLQDWRU\ DGKHUHQFH WR FRXQW\ ERXQGDULHV HYLGHQFHWKDWWKHPDJLVWUDWHMXGJHGLGFRQVLGHUWKHDWODUJH
MXVWLILHVWKHSRSXODWLRQGHYLDWLRQVWKDWH[LVWWKURXJKRXW V\VWHPLQFDOFXODWLQJWKHSRSXODWLRQGHYLDWLRQIURPLGHDODQG
:\RPLQJ
V UHSUHVHQWDWLYH GLVWULFWV  $SSHOODQWV JLYHQWKH&LW\jVIDLOXUHWRVKRZWKDWWKLVILJXUHLVLQDFFXUDWH
GHOLEHUDWHO\KDYHOLPLWHGWKHLUFKDOOHQJHWRWKHDOOHJHG ZH FRQFOXGH WKDW WKH PDJLVWUDWH MXGJHjV ILQGLQJV ZHUH QRW
GLOXWLRQ RI WKHLU YRWLQJ SRZHU UHVXOWLQJ IURP WKH RQH FOHDUO\HUURQHRXV
UHSUHVHQWDWLYH JLYHQ WR 1LREUDUD &RXQW\  7KH LVVXH
WKHUHIRUHLVQRWZKHWKHUDDYHUDJHGHYLDWLRQDQGDQ &+8'(VWLPDWHV
 PD[LPXP GHYLDWLRQ FRQVLGHULQJ WKH VWDWH
DSSRUWLRQPHQW SODQ DV D ZKROH DUH FRQVWLWXWLRQDOO\ 7KH&LW\FRQWHQGVWKDWWKHGLVWULFWFRXUWLPSURSHUO\UHMHFWHG
SHUPLVVLEOH  5DWKHU WKH LVVXH LV ZKHWKHU :\RPLQJ
V XVH RI WKH  8QLWHG 6WDWHV 'HSDUWPHQW RI +RXVLQJ DQG
SROLF\ RI SUHVHUYLQJ FRXQW\ ERXQGDULHV MXVWLILHV WKH 8UEDQ 'HYHORSPHQW m+8'l SRSXODWLRQ HVWLPDWHV DV
DGGLWLRQDOGHYLDWLRQVIURPSRSXODWLRQHTXDOLW\UHVXOWLQJ mXQVXSSRUWHGE\VXIILFLHQWIDFWVl8VHRIWKH+8'HVWLPDWHV
IURPWKHSURYLVLRQRIUHSUHVHQWDWLRQWR1LREUDUD&RXQW\ WKH &LW\ DUJXHV ZRXOG KDYH UHVXOWHG LQ D FRQVWLWXWLRQDOO\
SHUPLVVLEOH GHYLDWLRQ RI   7KH &LW\jV DUJXPHQW LV
,GDW ZLWKRXW PHULW  $IWHU KHDULQJ WKH WHVWLPRQ\ RI WKH &LW\
$GPLQLVWUDWRU ZKLFK FDOOHG LQWR TXHVWLRQ WKH VRXUFH DQG
,QWKHSUHVHQWDFWLRQWKHPDJLVWUDWHMXGJHSURSHUO\OLPLWHG DFFXUDF\ RI WKH +8' HVWLPDWHV WKH PDJLVWUDWH MXGJH
%URZQWRLWVIDFWVDQGFRQFOXGHGWKDWWKHGHYLDWLRQDWLVVXHLQ FRQFOXGHGWKDWXVHRIWKH&HQVXVILJXUHVZRXOGSURYLGH
WKH LQVWDQW FDVH ZDV QRW SHUPLVVLEOH HYHQ LQ OLJKW RI WKH D PRUH UHOLDEOH SRSXODWLRQ EDVH IRU GHWHUPLQDWLRQ RI WKH
DUJXDEO\ PLWLJDWLYH HIIHFW RI DWODUJH UHSUHVHQWDWLRQ  7KH GHYLDWLRQ IURP LGHDO  :H GR QRW ILQG WKDW WKH PDJLVWUDWH
8QLWHG 6WDWHV 6XSUHPH &RXUW KDV FRQVLVWHQWO\ IRXQG WKDW MXGJHjVGHWHUPLQDWLRQZDVFOHDUO\HUURQHRXVSDUWLFXODUO\LQ
GHYLDWLRQVIURPLGHDOnZKLOHQRWGLVSRVLWLYHnDUHLPSRUWDQW OLJKWRIWKHIDFWWKDWXQOLNHWKDWRIWKH+8'HVWLPDWHVWKHUH
LQ GHWHUPLQLQJ ZKHWKHU WKH FKDOOHQJHG OHJLVODWLYH SODQ ZDV QR TXHVWLRQ DV WR WKH DFFXUDF\ RI WKH  &HQVXV
FRPSOLHV ZLWK WKH (TXDO 3URWHFWLRQ &ODXVH  6HH HJ ILJXUHVWRZKLFKHYHQWKH&LW\VWLSXODWHG
&KDSPDQY0HLHU86LQWHUQDOFLWDWLRQ
DQG TXRWDWLRQ PDUNV RPLWWHG m:KLOH PDWKHPDWLFDO '3RSXODWLRQ%DVH
H[DFWQHVV RU SUHFLVLRQ LV QRW UHTXLUHG WKHUH PXVW EH
VXEVWDQWLDOFRPSOLDQFHZLWKWKHJRDORISRSXODWLRQHTXDOLW\l $OWKRXJKWKHPDJLVWUDWHMXGJHIRXQGWKDWWKH&LW\jVV\VWHP
7KH&LW\jVIDLOXUHWRFLWHHYHQRQHFDVHLQZKLFKDUHYLHZLQJ RI FRXQWLQJ :DUG  UHVLGHQWV ZDV UDWLRQDOnD SRLQW WKDW
FRXUWKDVXSKHOGDSRSXODWLRQGHYLDWLRQDVKLJKDVLV QHLWKHU SDUW\ GLVSXWHVnVKH FRQFOXGHG WKDW m>J@LYHQ WKDW
 5HJHQVEXUJHUHWDOY&LW\RI 1R 1R 5HJHQVEXUJHUHWDOY&LW\RI 
%RZOLQJ*UHHQ2KLRHWDO %RZOLQJ*UHHQ2KLRHWDO

HLWKHU PHWKRG RI FDOFXODWLQJ SRSXODWLRQ GHYLDWLRQ H[FHHGV mUDWLRQDOVWDWHSROLF\lWKDWPD\MXVWLI\WKHGHYLDWLRQWR
FRQVWLWXWLRQDO OLPLWV WKH FRXUW GHWHUPLQHV WKDW LW LV H[SODLQKRZWKHDSSRUWLRQPHQWSODQmPD\UHDVRQDEO\EHVDLG
XQQHFHVVDU\ WR UHDFK WKH LVVXH RI ZKHWKHU WKH UHGXFWLRQ RI WRDGYDQFHlWKHUDWLRQDOVWDWHSROLF\DQGWRGHPRQVWUDWH
SRSXODWLRQ E\ UHJLVWHUHG YRWHUV LQ RQO\ RQH ZDUG LV DQ WKDWWKHUHVXOWLQJGHYLDWLRQGRHVQRWmH[FHHGFRQVWLWXWLRQDO
DFFHSWDEOH PHWKRG RI FDOFXODWLQJ SRSXODWLRQl  0RUH OLPLWVl0DKDQY+RZHOO86DFFRUG
LPSRUWDQWLQVWULNLQJGRZQWKH&LW\jVDSSRUWLRQPHQWVFKHPH 4XLOWHU  86 DW   :KLOH LW LV WUXH WKDW WKH
WKH PDJLVWUDWH MXGJH SURSHUO\ UHIXVHG WR VWDWH ZKHWKHU LQ PDJLVWUDWH MXGJH IRXQG WKDW WKH &LW\jV SURIIHUHG
GHYHORSLQJ D UHDSSRUWLRQPHQW VFKHPH WKH &LW\ ZRXOG EH MXVWLILFDWLRQnPDLQWHQDQFH RI mWKH HIILFLHQW DQG HFRQRPLF
UHTXLUHG WR UHO\ XSRQ WKH &HQVXV ILJXUHV RU WKH UHJLVWHUHG GHOLYHU\RIFLW\VHUYLFHVLQ%RZOLQJ*UHHQlnZDVDUDWLRQDO
YRWHUDGMXVWHG ILJXUHV  6XFK D TXHVWLRQ ZDV QRW SURSHUO\ VWDWHSROLF\DQGWKDWWKH&LW\jVDSSRUWLRQPHQWSODQDGYDQFHG
EHIRUH WKH GLVWULFW FRXUW DQG DQ\ VWDWHPHQW DV WR WKH WKDW SROLF\ VKH QHYHUWKHOHVV FRQFOXGHG WKDW D SRSXODWLRQ
DSSURSULDWH SRSXODWLRQ EDVH RQ ZKLFK WR EDVH D GHYLDWLRQDVKLJKDVH[FHHGHGFRQVWLWXWLRQDOOLPLWV
UHDSSRUWLRQPHQW VFKHPH ZRXOG KDYH DPRXQWHG WR QRWKLQJ LUUHVSHFWLYH RI WKH XQGHUO\LQJ SROLF\ UHDVRQV IRU WKDW
PRUH WKDQ DQ LPSHUPLVVLEOH DGYLVRU\ RSLQLRQ  6HH 1RUWK GHYLDWLRQ
&DUROLQDY5LFH86UHLWHUDWLQJWKDW
IHGHUDO FRXUWV KDYH QR SRZHU WR LVVXH DGYLVRU\ RSLQLRQV 7KH &LW\ PDLQWDLQV WKDW WKH PDJLVWUDWH MXGJH HUUHG E\
&KXUFKRI6FLHQWRORJ\RI+DZDLLY8QLWHG6WDWHV)G FRQFOXGLQJ WKDW WKH &LW\jV OHJLVODWLYH SODQ ZDV
  WK &LU  >7@KH FRXUW GRHV QRW UHQGHU XQFRQVWLWXWLRQDODIWHUILUVWILQGLQJWKDWWKHPXQLFLSDOSROLFLHV
DGYLVRU\ RSLQLRQV RU GHFLGH DEVWUDFW SURSRVLWLRQV XQGHUO\LQJWKHVFKHPHZHUHUDWLRQDODQGMXVWLILHG7KH&LW\
0LQQHVRWDY8QLWHG6WDWHV6WHHO&RUS)G GRHV QRW GLVSXWH WKH DFFXUDF\ RI WKH PDJLVWUDWH MXGJHjV
WK&LU7KHOHJDOTXHVWLRQVVKRXOGQRWEHFRQVLGHUHG ILQGLQJRIDSRSXODWLRQGHYLDWLRQRI5DWKHULWVHHPV
LQWKHDEVWUDFW WR DUJXH WKDW D SROLF\ WKDW LV VKRZQ WR EH UDWLRQDO DQG
DGYDQFHG E\ D PXQLFLSDOLW\jV DSSRUWLRQPHQW VFKHPH PXVW
(/HJLVODWLYH3ODQ QHFHVVDULO\ EH FRQVWLWXWLRQDO UHJDUGOHVV RI WKH DWWHQGDQW
SRSXODWLRQ GHYLDWLRQ DQG WKDW D UHYLHZLQJ FRXUW PD\ QRW
,WLVZHOOHVWDEOLVKHGWKDWDSODLQWLIIPD\HVWDEOLVKDSULPD FRQFOXGH DV WKH PDJLVWUDWH MXGJH GLG LQ WKLV FDVH WKDW D
IDFLHFDVHRIGLOXWLRQE\GHPRQVWUDWLQJDSRSXODWLRQGHYLDWLRQ SRSXODWLRQ GHYLDWLRQ RI  LV SHU VH XQFRQVWLWXWLRQDO
LQ H[FHVV RI   6HH 4XLOWHU  86 DW   6XFK D 7KH&LW\IDLOVWRUHFRJQL]HWKDWWKHILUVWWZR SURQJVRIWKH
VKRZLQJ VKLIWV WR WKH VWDWH RU PXQLFLSDOLW\ WKH EXUGHQ RI 0DKDQWHVWGRQRWH[LVWWRVXEVWDQWLDWHWKHWKLUG:KLOHLWLV
MXVWLI\LQJWKHGHYLDWLRQZKLFKUHTXLUHVLWWRDUWLFXODWHD WUXH WKDW D VWDWH KDV D OHJLWLPDWH LQWHUHVW LQ PDLQWDLQLQJ
ERXQGDULHVVHH+RZHOO86DWVXFKDQLQWHUHVW
LQ QR ZD\ MXVWLILHV HYHU\ GHYLDWLRQ IURP LGHDO
 $SSRUWLRQPHQWVFKHPHVWKDWDUHPRWLYDWHGE\UDWLRQDODQG
(YHQ DVVXPLQJ WKDW WKH TXHVWLRQ RI WKH DSSURSULDWH SRSXODWLRQ EDVH RWKHUZLVH MXVWLILDEOH SROLFHV PD\ QHYHUWKHOHVV UHVXOW LQ
IRU SXUSRVHV RI UHDSSRUWLRQPHQW ZHUH SURSHUO\ EHIRUH WKLV &RXUW ZH
ZRXOG UHMHFW WKH &LW\jV DUJXPHQW WKDW LW VKRXOG EH SHUPLWWHG WR UHO\ XSRQ
SRSXODWLRQGHYLDWLRQVWKDWH[FHHGFRQVWLWXWLRQDOOLPLWV
WKH &HQVXVEDVHG SRSXODWLRQ QXPEHUV IRU DOO SDUWV RI WKH FLW\ H[FHSW
3UHFLQFW & ZKHUH LW ZRXOG VXEVWLWXWH WKH QXPEHU RI UHJLVWHUHG YRWHUV
7KH&LW\jVUHOLDQFHRQ%URZQY7KRPVRQ86
6XFK D SURSRVLWLRQ ILQGV QR VXSSRUW LQ WKH ODZ DQG ZRXOG YLRODWH WKH WRVXSSRUWLWVDUJXPHQWLVPLVSODFHG%URZQQHYHU
ILUPO\ HVWDEOLVKHG mRQH SHUVRQRQH YRWHl SULQFLSOH LQ WKH PRVW OLWHUDO GHDOW ZLWK WKH TXHVWLRQ RI FRQVWLWXWLRQDOO\ SHUPLVVLEOH
VHQVH