Richards v. Consolidated Rail

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH   5LFKDUGVY&RQVROLGDWHG5DLO&RUS 1R
(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
)LOH 1DPH DS
3257(5 :5,*+7 0255,6  $57+85 &ROXPEXV
2KLR IRU $SSHOOHH  21 %5,()  /DZUHQFH $ .DW]
81,7('67$7(6&28572)$33($/6 &2))(<  .$<( %DOD &\QZ\G 3HQQV\OYDQLD IRU
$SSHOODQW&UDLJ5&DUOVRQ'DYLG:2UODQGLQL3257(5
)257+(6,;7+&,5&8,7 :5,*+7 0255,6  $57+85 &ROXPEXV 2KLR IRU
BBBBBBBBBBBBBBBBB $SSHOOHH
BBBBBBBBBBBBBBBBB
+21$6 + 5,&+$5'6 ;
 23,1,21
3ODLQWLII$SSHOODQW BBBBBBBBBBBBBBBBB

 1R 1$1&<*('081'6'LVWULFWsXGJH7KLVDSSHDODULVHV
Y 
! IURP WKH GLVWULFW FRXUWjV JUDQW RI VXPPDU\ MXGJPHQW IRU
 GHIHQGDQWDSSHOOHH&RQVROLGDWHG5DLO&RUSRUDWLRQm&RQUDLOl
&2162/,'$7(' 5$,/  LQWKLVDFWLRQILOHGXQGHUWKH)HGHUDO6DIHW\$SSOLDQFHV$FW
&25325$7,21  m)6$$l86&††WKH)HGHUDO(PSOR\HH
'HIHQGDQW$SSHOOHH  /LDELOLW\$FWm)(/$l86&††DQGWKH)HGHUDO
 %RLOHU,QVSHFWLRQ$FWm%,$l86&††
1 3ODLQWLII$SSHOODQW+RQDV5LFKDUGVm5LFKDUGVlFKDOOHQJHV
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW WKHGLVWULFWFRXUWjVGLVPLVVDORIKLV)6$$FODLPDUJXLQJWKDW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV WKHFRXUWHUUHGLQILQGLQJWKDWKHIDLOHGWRSURGXFHVXIILFLHQW
1Rn(GPXQG$6DUJXVsU'LVWULFWsXGJH HYLGHQFHRIDGHIHFWLYHDSSOLDQFHDQGWKDWWKLVGHIHFWFDXVHG
KLV LQMXULHV  %HFDXVH ZH ILQG WKDW 5LFKDUGV SURGXFHG
$UJXHG0DUFK VXIILFLHQWHYLGHQFHWRVXUYLYHVXPPDU\MXGJPHQWRQWKHLVVXH
RIWKHGHIHFWDQGEHFDXVHZHILQGWKDWWKLVFRXUWjVKROGLQJDV
'HFLGHGDQG)LOHG0D\ WRFDXVDWLRQLQ5HHW]Y&KLFDJR (ULH5DLOURDG&R)G
WK&LUKDVEHHQFDOOHGLQWRTXHVWLRQE\WKH8QLWHG
%HIRUH0$57,1&KLHI&LUFXLWsXGJH52*(56&LUFXLW 6WDWHV6XSUHPH&RXUWjVKROGLQJLQ5RJHUVY0LVVRXUL3DFLILF
sXGJH('081'6'LVWULFWsXGJH
5DLOURDG&R86DQGQHYHUFODULILHGZH
UHYHUVHDQGUHPDQG
BBBBBBBBBBBBBBBBB
5LFKDUGVEHJDQZRUNLQJIRU&RQUDLOLQ+HEHFDPH
&2816(/ D FRQGXFWRU LQ  DQG ZDV ZRUNLQJ LQ WKDW SRVLWLRQ RQ
0D\2QWKDWGDWH5LFKDUGVDQGDFRZRUNHUZHUH
$5*8('  /DZUHQFH $ .DW] &2))(<  .$<( %DOD
&\QZ\G 3HQQV\OYDQLD IRU $SSHOODQW  &UDLJ 5 &DUOVRQ


7KH GLVWULFW FRXUW VXPPDULO\ GLVPLVVHG 5LFKDUGVj )(/$ DQG %,$
7KH +RQRUDEOH 1DQF\ * (GPXQGV 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU FODLPV DV ZHOO KRZHYHU KH GRHV QRW DSSHDO WKRVH SRUWLRQV RI WKH FRXUWjV
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ GHFLVLRQ


1R 5LFKDUGVY&RQVROLGDWHG5DLO&RUS   5LFKDUGVY&RQVROLGDWHG5DLO&RUS 1R

UHVSRQVLEOH IRU WDNLQJ D IUHLJKW WUDLQ ZLWK DSSUR[LPDWHO\ H[SHULHQFHDQGZKDW,jYHEHHQWDXJKWLQWKHVHFODVVHVWKH
QLQHW\FDUVIURP&ROXPEXV2KLRWR&LQFLQQDWL2KLR RQO\ UHDVRQDEOH H[SODQDWLRQ ZDV D GHIHFWLYH FRQWURO
YDOYHDNLFNHU
$SSUR[LPDWHO\WKLUW\PLQXWHVDIWHUOHDYLQJ&ROXPEXVWKH
WUDLQ XQH[SHFWHGO\ VWRSSHG DV D UHVXOW RI DQ DXWRPDWLF 7KHGLVWULFWFRXUWJUDQWHG&RQUDLOjVPRWLRQIRUVXPPDU\
HPHUJHQF\DSSOLFDWLRQRIWKHDLUEUDNLQJV\VWHP,QVXFKD MXGJPHQWILQGLQJDVWR5LFKDUGjV)6$$FODLPWKDWKHIDLOHG
VLWXDWLRQWKHFRQGXFWRUPXVWDWWHPSWWRGHWHUPLQHWKHFDXVH WR SURYLGH VXIILFLHQW HYLGHQFH WR SURYH WKDW WKH EUDNLQJ
RIWKHXQGHVLUHGEUDNHDSSOLFDWLRQ7KLVLVGRQHE\mZDONLQJ V\VWHP ZDV GHIHFWLYH  $IWHU UHYLHZLQJ WKH HYLGHQFH
WKHWUDLQloLHJHWWLQJRIIWKHWUDLQZDONLQJLWVOHQJWKDQG VSHFLILFDOO\WKHWUDQVFULSWIURP5LFKDUGjVGHSRVLWLRQWKHFRXUW
LQVSHFWLQJ IRU YLVLEOH FDXVHV  $IWHU SODFLQJ DQ HPHUJHQF\ FRQFOXGHGWKDW5LFKDUGVRQO\FRXOGmRSLQH>@lWKDWWKHVWRS
UDGLRFDOOWRWKHGLVSDWFKHU5LFKDUGVFOLPEHGGRZQIURPWKH ZDV FDXVHG E\ D GHIHFWLYH FRQWURO YDOYH  7KH FRXUW DOVR
WUDLQDQGEHJDQKLVLQVSHFWLRQ FRQFOXGHG WKDW HYHQ XSRQ SURRI RI D GHIHFWLYH DSSOLDQFH
5LFKDUGVFRXOGQRWGHPRQVWUDWHWKDWKLVLQMXU\ZDVFDXVDOO\
5LFKDUGV ZDONHG HDVW DORQJVLGH WKH WUDLQ RQ WKH EDOODVW OLQNHGWRWKHDOOHJHGO\GHIHFWLYHDSSOLDQFH5HO\LQJSULPDULO\
VWRSSLQJRFFDVLRQDOO\WRLQVSHFWXQGHUQHDWKWKHFDUV$WVRPH XSRQWKLVFRXUWjVRSLQLRQLQ5HHW]WKHGLVWULFWFRXUWKHOGWKDW
SRLQW KH ORVW KLV IRRWLQJ DQG DOOHJHGO\ LQMXUHG KLV EDFN WKH GHIHFWLYH FRQWURO YDOYH GLG QRW FDXVH 5LFKDUGjV LQMXU\
5LFKDUGVZDLWHGXQWLOWKHSDLQLQKLVEDFNVXEVLGHGDQGWKHQ UDWKHUKLVLQMXU\PHUHO\ZDVDQLQFLGHQWDOFRQGLWLRQRIWKH
KHFRPSOHWHGKLVLQVSHFWLRQ GHIHFW7KHWULDOFRXUWH[SODLQHG
5LFKDUGVGLGQRWREVHUYHDQ\GHIHFWVGXULQJKLVLQVSHFWLRQ 3ODLQWLIIjV VOLS ZKLOH ZDONLQJ WKH WUDFN ZDV RQO\
WKDWZRXOGKDYHFDXVHGDQHPHUJHQF\EUDNHDSSOLFDWLRQoIRU LQFLGHQWDOO\FDXVHGE\WKHDOOHJHGDSSOLDQFHYLRODWLRQ
H[DPSOHDQDLUKRVHOHDNFDUGHUDLOPHQWRUmVKLIWLQORDGVl WKHLQMXU\ZDVQRWWKHµGLUHFWRUHIILFLHQWjFDXVHRIDQ\
%DVHG RQ KLV H[SHULHQFH DQG WUDLQLQJ 5LFKDUGV WKHUHIRUH DOOHJHG DSSOLDQFH YLRODWLRQ  $V LQ 5HHW] DOWKRXJK
FRQFOXGHGWKDWWKHVWRSPXVWKDYHEHHQFDXVHGE\DGHIHFWLYH 3ODLQWLII ZRXOG QRW KDYH EHHQ ZDONLQJ WKH WUDFN WR
FRQWURO YDOYH FRPPRQO\ UHIHUUHG WR DV D mNLFNHUl  (DFK LQVSHFW EXW IRU WKH DOOHJHGO\ GHIHFWLYH DSSOLDQFH KLV
IUHLJKWFDUHTXLSSHGZLWKDEUDNHKDVDQLQWHUQDOYDOYHWKDW VXEVHTXHQWVOLSDQGLQMXU\EHDUVWRRWHQXRXVDFRQQHFWLRQ
FRQWUROVWKHDPRXQWRIDLUWKDWLVGHSOHWHGWRDFWLYDWHWKHEUDNH ZLWKWKHGHIHFWLYHDSSOLDQFHVRDVWRJLYHULVHWROLDELOLW\
V\VWHP2EYLRXVO\LIWKLVYDOYHLVORFDWHGLQVLGHWKHEUDNH
PHFKDQLVP 5LFKDUGV FRXOG QRW YLVLEO\ LQVSHFW LW ZKHQ KH , 6WDQGDUGRI5HYLHZ
ZDONHGWKHWUDLQ$V5LFKDUGVH[SODLQHG
:H UHYLHZ GH QRYR D GLVWULFW FRXUWjV RUGHU JUDQWLQJ
0\H[DPLQDWLRQHOLPLQDWHGHYHU\WKLQJH[FHSWDGHIHFWLYH VXPPDU\MXGJPHQWYLHZLQJDOOWKHHYLGHQFHDQGLQIHUHQFHV
FRQWUROYDOYH7KHUHKDGWREHDUHDVRQDQGWKHUHZDVQR WKHUHIURPLQDOLJKWPRVWIDYRUDEOHWRWKHQRQPRYLQJSDUW\
UHDVRQQRUPDOUHDVRQVDUHOLNHEXVWHGDLUKRVHVZKHUH &DPSEHOOY*UDQG7UXQN:55&R)G
WKHDLUHVFDSHVLQWRWKHDWPRVSKHUH7UDLQEUDNHVDSSO\ WK&LUFLWDWLRQVRPLWWHG7KHPRYLQJSDUW\PXVW
ZKHQDLULVWDNHQDZD\IURPWKHV\VWHPQRWZKHQLWjVSXW VKRZWKHDEVHQFHRIDJHQXLQHLVVXHRIPDWHULDOIDFWDQGWKH
LQ:KHQ\RXSXWLWLQWKHEUDNHVUHOHDVH:KHQ\RX QRQPRYLQJSDUW\PXVWWKHQFRPHIRUZDUGZLWKVSHFLILFIDFWV
WDNHLWDZD\WKHEUDNHVDSSO\ VKRZLQJWKDWWKHUHLVDJHQXLQHLVVXHIRUWULDO,G
$QGVRWKHUHKDGWREHVRPHVLQFHWKHUHZDV>VLF@QR
OHDNVDQG,ZDONHGWKDWZKROHWKLQJ6REDVHGRQP\
1R 5LFKDUGVY&RQVROLGDWHG5DLO&RUS   5LFKDUGVY&RQVROLGDWHG5DLO&RUS 1R

,, $QDO\VLV SHUIRUPDQFHRIWKHDSSOLDQFHVjDQGLWZDVQRWQHFHVVDU\
IRUWKHSODLQWLIIWRVKRZZKHWKHUWKLVIDLOXUHWRIXQFWLRQ
7KH)6$$LPSRVHVDQDEVROXWHGXW\RQUDLOURDGVWRSURYLGH ZDVGXHWRWKHIDFWWKDWWKHUDWFKHWEURNHORRVHIURPWKH
DQG PDLQWDLQ FHUWDLQ VDIHW\ DSSOLDQFHV LQFOXGLQJ SRZHU EUDNHVWDIIWKDWWKHUDWFKHWWHHWKZHUHZRUQWKDWWKHGRJ
EUDNLQJV\VWHPV0\HUVY5HDGLQJ&R86 RULWVURFNHUSLYRWEURNHWKDWWKHUHZDVWRRPXFKYHUWLFDO
2j'RQQHOOY(OJLQs (5\&R86 SOD\EHWZHHQGRJDQGUDWFKHWRUDQ\RWKHUSUHFLVH
   7R UHFRYHU IRU D YLRODWLRQ RI WKH )6$$ GHIHFW>0LQQHDSROLV 6W/RXLV55&RY*RWVFKDOO
WKHUHIRUH SODLQWLIIV QHHG RQO\ VKRZ  WKH VWDWXWH ZDV 86@,IWKHEUDNHZDVSURSHUO\VHWDV
YLRODWHGDQGWKH\VXIIHUHGLQMXULHVmUHVXOWLQJLQZKROHRU DVVHUWHG VRPH GHIHFW PXVW KDYH EHHQ ODWHQW LQ LW
LQSDUWlIURPWKHGHIHFWLYHHTXLSPHQW&RUD\Y63DF&R 2WKHUZLVHLWZRXOGKDYHKHOG
86
'LGLQJHU)GDW$V'LGLQJHUVXJJHVWVSODLQWLIIV
$ 3URRIRID'HIHFWLYH$SSOLDQFH PD\UHO\RQWKHGRFWULQHRIUHVLSVDORTXLWXUWRSURYHWKHLU
)6$$ FODLPV  ,G VHH DOVR 0\HUV  86 DW 
7KHUH DUH WZR UHFRJQL]HG PHWKRGV RI VKRZLQJ WKDW DQ KROGLQJWKDWFRQGXFWRUjVWHVWLPRQ\WKDWEUDNHZKHHOGLGQRW
DSSOLDQFH ZDV GHIHFWLYH  mµ(YLGHQFH PD\ EH DGGXFHG WR IXQFWLRQ OLNH RUGLQDU\ ZKHHO DQG WKDW LW VXGGHQO\ mNLFNHG
HVWDEOLVKVRPHSDUWLFXODUGHIHFWRUWKHVDPHLQHIILFLHQF\PD\ EDFNlDQGNQRFNHGKLPWRJURXQGZDVVXIILFLHQWWRPDNHDQ
EH HVWDEOLVKHG E\ VKRZLQJ D IDLOXUH WR IXQFWLRQ ZKHQ LVVXH IRU WKH MXU\ DV WR ZKHWKHU EUDNH ZDV GHIHFWLYH
RSHUDWHG ZLWK GXH FDUH LQ WKH QRUPDO QDWXUDO DQG XVXDO $QGHUVRQY%DOWLPRUH 25&R)GG&LU
PDQQHUjl 0\HUV  86 DW  TXRWLQJ 'LGLQJHU Y ILQGLQJWKDWmWKHIDLOXUHRIWKH>VDQGLQJ@DSSDUDWXVWR
3HQQV\OYDQLD55&R)GWK&LU$VWKH IXQFWLRQZKHQRSHUDWHGLQDSURSHUPDQQHUDQGXQGHUQRUPDO
0\HUV &RXUW HODERUDWHG m(IILFLHQW PHDQV DGHTXDWH LQ ZRUNLQJFRQGLWLRQVPDNHVDSULPDIDFLHFDVHRILQVXIILFLHQF\
SHUIRUPDQFHSURGXFLQJSURSHUO\DGHVLUHGHIIHFW,QHIILFLHQW HLWKHULQWKHDLUSUHVVXUHRULQPHFKDQLFDOFRQVWUXFWLRQ7KH
PHDQVQRWSURGXFLQJRUQRWFDSDEOHRISURGXFLQJWKHGHVLUHG GRFWULQHRIUHVLSVDORTXLWXUKDVIUHTXHQWO\EHHQDSSOLHGWR
HIIHFW LQFDSDEOH LQFRPSHWHQW LQDGHTXDWHl  ,G  ,I WKH SURYHLQWKHDEVHQFHRIH[SODQDWLRQDYLRODWLRQRISURYLVLRQV
SODLQWLIIGHPRQVWUDWHVDGHIHFWXVLQJWKHVHFRQGPHWKRGKHRU RIWKH6DIHW\$SSOLDQFH$FWl7ULDOMXGJHVVKRXOGQRWUXOH
VKHQHHGQRWVKRZDQDFWXDOEUHDNRUYLVLEOHGHIHFW,G,IWKH RXW SODLQWLIIVj RSLQLRQV DV WR ZK\ DSSOLDQFHV IXQFWLRQHG
SODLQWLIIHVWDEOLVKHVWKDWWKHDSSOLDQFHIXQFWLRQHGLQHIILFLHQWO\ LQHIILFLHQWO\ZKHUHWKHSODLQWLIIVjRSLQLRQVDUHEDVHGRQWKHLU
DWWKHUHOHYDQWWLPHLWLVLUUHOHYDQWWKDWWKHDSSOLDQFHZRUNHG H[SHULHQFHDQGSHUFHSWLRQVDWWKHWLPHRIWKHLUDFFLGHQW6HH
HIILFLHQWO\ERWKEHIRUHDQGDIWHUWKHRFFDVLRQ,G )ULWWVY7ROHGR7HUPLQDO55&R)GWK
&LU KROGLQJ WKDW WULDO MXGJH LPSURSHUO\ UXOHG RXW
7KXVLQ'LGLQJHUZKHUHWKHSODLQWLIIGHPRQVWUDWHGWKDWKH SODLQWLIIjVRSLQLRQEDVHGRQKLVH[SHULHQFHZRUNLQJIRUWKH
ILUPO\ VHW D KDQG EUDNH ZKLFK LPPHGLDWHO\ JDYH ZD\ DQG UDLOURDGWKDWOXUFKLQJRIWKHHQJLQHZDVGXHWRDZRUQIURJ
IDLOHGWRKROGWKLVFRXUWKHOGWKDWLWZDVQRWQHFHVVDU\IRUWKH VHHDOVR0\HUV86DWKROGLQJWKDWWKHSODLQWLIIjV
SODLQWLIIWRVKRZWKHVSHFLILFUHDVRQZK\WKHEUDNHIDLOHG WHVWLPRQ\ DV WR WKH LQHIILFLHQF\ RI WKH DSSOLDQFH mLV VXFK
VXEVWDQWLDOHYLGHQFHRILQHIILFLHQF\DVWRPDNHDQLVVXHIRU
$VVXPLQJWKHSURSHUVHWWLQJRIWKH>KDQG@EUDNHWKHIDFW WKHMXU\l
WKDWLWGLGQRWKROGGHPRQVWUDWHVLWVLQHIILFLHQF\$VVDLG
LQ>3KLODGHOSKLD 555\&RY$XFKHQEDFK)G +HUHWKHGLVWULFWFRXUWKHOGWKDW5LFKDUGVIDLOHGWRSUHVHQW
G&LU@µ7KHWHVWRIWKHREVHUYDQFHRI HYLGHQFH RI D SDUWLFXODU GHIHFW ZLWK WKH WUDLQjV DLU EUDNLQJ
WKLV GXW\ XQGHU WKH 6DIHW\ $SSOLDQFH $FW LV WKH
1R 5LFKDUGVY&RQVROLGDWHG5DLO&RUS   5LFKDUGVY&RQVROLGDWHG5DLO&RUS 1R

V\VWHP  5LFKDUGV WHVWLILHG KRZHYHU WKDW EDVHG RQ KLV ILQGWKDWDFDVHIRUWKHMXU\LVPDGHRXWZKHWKHURUQRW
H[SHULHQFHDQGWUDLQLQJDQGKLVYLVXDOLQVSHFWLRQRIWKHWUDLQ WKH HYLGHQFH DOORZV WKH MXU\ D FKRLFH RI RWKHU
IROORZLQJWKHHPHUJHQF\VWRSWKDWWKHVWRSmPXVWKDYHEHHQl SUREDELOLWLHV  7KH VWDWXWH H[SUHVVO\ LPSRVHV OLDELOLW\
FDXVHGE\DGHIHFWLYHFRQWUROYDOYH$OWKRXJK5LFKDUGVPD\ XSRQWKHHPSOR\HUWRSD\GDPDJHVIRULQMXU\RUGHDWK
QRWKDYHHPSKDWLFDOO\H[SUHVVHGKLVDVVHVVPHQWRIWKHFDXVH GXHµLQZKROHRULQSDUWjWRLWVQHJOLJHQFH
RIWKHVWRSDWKLVGHSRVLWLRQDMXU\FRXOGFRQFOXGHWKDWKHZDV
VWDWLQJ PRUH WKDQ D PHUH DVVXPSWLRQ DV WKH GLVWULFW FRXUW 5RJHUV86DW8QGHUWKLVVWDQGDUGWKHUROHRI
FKDUDFWHUL]HGKLVWHVWLPRQ\ WKH MXU\ LV VLJQLILFDQWO\ JUHDWHU LQ )(/$ FDVHV WKDQ LQ
FRPPRQODZQHJOLJHQFHDFWLRQV(JJHUWY1RUIRON :5\
% &DXVDWLRQ &R)GG&LUFLWDWLRQVRPLWWHG$V
WKLVFRXUWKDVH[SODLQHG5RJHUVUHTXLUHVDSODLQWLIIDOOHJLQJ
7XUQLQJ WR WKH VHFRQG DQG ILQDO HOHPHQW RI D SODLQWLIIjV D)(/$YLRODWLRQWRRIIHUmPRUHWKDQDVFLQWLOODRIHYLGHQFH
)6$$FODLPoWKDWLVZKHWKHUWKHDOOHJHGGHIHFWFDXVHGWKH LQRUGHU WRFUHDWHDMXU\TXHVWLRQRQWKHLVVXHRIHPSOR\HU
SODLQWLIIjV LQMXU\o WKH 6XSUHPH &RXUW DQQRXQFHG D UHOD[HG OLDELOLW\EXWQRWPXFKPRUHl$SDULFLRY1RUIRON :5\
WHVWIRUHVWDEOLVKLQJFDXVDWLRQLQ)(/$FDVHVLQLWVODQGPDUN &R)GWK&LU
GHFLVLRQ5RJHUVY0LVVRXUL3DFLILF5DLOURDG&R86
7KH5RJHUV&RXUWVHWIRUWKWKHIROORZLQJWHVWWR 7KH5RJHUV&RXUWDGRSWHGWKLVUHOD[HGVWDQGDUGLQRUGHUWR
GHWHUPLQHZKHWKHUWKHUHLVDMXU\TXHVWLRQRQWKLVLVVXH HIIHFWXDWH&RQJUHVVjLQWHQWZKHQLWDPHQGHG)(/$LQ
mWR SUHVHUYH WKH SODLQWLIIjV ULJKW WR D MXU\ WULDOl  *UHHQ Y
8QGHUWKLVVWDWXWHWKHWHVWRIDMXU\FDVHLVVLPSO\ZKHWKHU 5LYHU7HUPLQDO5\&R)GWK&LU
WKH SURRIV MXVWLI\ ZLWK UHDVRQ WKH FRQFOXVLRQ WKDW $VWKH6XSUHPH&RXUWH[SODLQHG
HPSOR\HUQHJOLJHQFHSOD\HGDQ\SDUWHYHQWKHVOLJKWHVW
LQSURGXFLQJWKHLQMXU\RUGHDWKIRUZKLFKGDPDJHVDUH 7KH &RQJUHVV ZKHQ DGRSWLQJ WKH ODZ ZDV SDUWLFXODUO\
VRXJKW,WGRHVQRWPDWWHUWKDWIURPWKHHYLGHQFHWKH FRQFHUQHG WKDW WKH LVVXHV ZKHWKHU WKHUH ZDV HPSOR\HU
MXU\ PD\ DOVR ZLWK UHDVRQ RQ JURXQGV RI SUREDELOLW\ IDXOWDQGZKHWKHUWKDWIDXOWSOD\HGDQ\SDUWLQWKHLQMXU\
DWWULEXWH WKH UHVXOW WR RWKHU FDXVHV LQFOXGLQJ WKH RUGHDWKRIWKHHPSOR\HHVKRXOGEHGHFLGHGE\WKHMXU\
HPSOR\HHjVFRQWULEXWRU\QHJOLJHQFHsXGLFLDODSSUDLVDO ZKHQHYHUIDLUPLQGHGPHQFRXOGUHDFKWKHVHFRQFOXVLRQV
RI WKH SURRIV WR GHWHUPLQH ZKHWKHU D MXU\ TXHVWLRQ LV RQWKHHYLGHQFH
SUHVHQWHG LV QDUURZO\ OLPLWHG WR WKH VLQJOH LQTXLU\
ZKHWKHUZLWKUHDVRQWKHFRQFOXVLRQPD\EHGUDZQWKDW 5RJHUV86DW,QRWKHUZRUGVWKH5RJHUV&RXUW
QHJOLJHQFHRIWKHHPSOR\HUSOD\HGDQ\SDUWDWDOOLQWKH IRXQG mWKDW WKH &RQJUHVV YHVWHG WKH SRZHU RI GHFLVLRQ LQ
LQMXU\RUGHDWKsXGJHVDUHWRIL[WKHLUVLJKWVSULPDULO\WR WKHVHDFWLRQVH[FOXVLYHO\LQWKHMXU\LQDOOEXWWKHLQIUHTXHQW
PDNHWKDWDSSUDLVDODQGLIWKDWWHVWLVPHWDUHERXQGWR FDVHVZKHUHIDLUPLQGHGMXURUVFDQQRWKRQHVWO\GLIIHUl
,GDW
3ULRU WR 5RJHUV VHYHUDO FRXUWV DQDO\]HG WKH LVVXH RI

$OWKRXJK 5RJHUV ZDV D )(/$ FDVH LWV KROGLQJ RQ FDXVDWLRQ DSSOLHV FDXVDWLRQ E\ GLVWLQJXLVKLQJ VLWXDWLRQV ZKHUH WKH GHIHFWLYH
WR )6$$ DQG %,$ FODLPV DV ZHOO 6HH 8ULH Y 7KRPSVRQ  86  DSSOLDQFHZDVmWKHFDXVHRIRUWKHLQVWUXPHQWDOLW\WKURXJK
KROGLQJ WKDW WKH )6$$ DQG %,$ DUH VXEVWDQWLDOO\ LI QRW LQ IRUP
ZKLFKWKHLQMXU\>ZDV@GLUHFWO\EURXJKWDERXWlIURPLQVWDQFHV
DPHQGPHQWV WR )(/$ WKH\ GLVSHQVH IRU SXUSRVHV RI HPSOR\HHVj VXLWV
ZLWK QHFHVVLW\ RI SURYLQJ WKDW YLRODWLRQV RI WKH VDIHW\ VWDWXWHV FRQVWLWXWH
ZKHUH WKH GHIHFW PHUHO\ ZDV LQFLGHQWDO LQ FUHDWLQJ WKH
QHJOLJHQFH VWDWXWHV VKRXOG EH UHDG DQG DSSOLHG WRJHWKHU FRQGLWLRQLQZKLFKWKHSODLQWLIIZDVLQMXUHG6HHHJ5HHW]
1R 5LFKDUGVY&RQVROLGDWHG5DLO&RUS   5LFKDUGVY&RQVROLGDWHG5DLO&RUS 1R

)GDW,Q5HHW]DFRQGXFWRUZDVNLOOHGDIWHUWKHWUDLQ DmFRQWULEXWRU\SUR[LPDWHFDXVHlRIWKHSODLQWLIIjVLQMXULHV
RQZKLFKKHZDVULGLQJZHQWLQWRDQHPHUJHQF\VWRSGXHWR *UHHQ  )G DW  UHO\LQJ RQ 5HHW] WR ILQG WKDW WKH
GHIHFWLYHFRXSOHUV,WZDVGDUNDWWKHWLPHDQGVRPHRIWKH GHIHFWLYH DSSOLDQFH DW EHVW RQO\ FUHDWHG DQ LQFLGHQWDO
WUDLQjV FDUV VWRSSHG RQ D EULGJH  7KH FRQGXFWRU DQG WKH FRQGLWLRQLQZKLFKWKHSODLQWLIIZDVLQMXUHG,QQRQHRIWKH
WUDLQjVEUDNHPDQEHJDQWRZDONWKHWUDLQLQRUGHUWRLGHQWLI\ FDVHVGHFOLQLQJWRDSSO\5HHW]jGLVWLQFWLRQKRZHYHUKDVWKH
WKHFDXVHRIWKHVWRSDQGUHSDLUDQ\GHIHFW$VWKHFRQGXFWRU FRXUWRYHUUXOHGWKDWGHFLVLRQ&RXUWVLQRWKHUMXULVGLFWLRQV
ZDONHGDORQJVLGHWKHFDUVVWRSSHGRQWKHEULGJHKHIHOOWRKLV KRZHYHUVSHFLILFDOO\KDYHUHMHFWHG5HHW]LQFDVHVVLPLODUWR
GHDWK7KHEUDNHPDQZDVRQWKHRWKHUVLGHRIWKHWUDLQDQGVR WKHSUHVHQWPDWWHU6HH1HZ$@WOHDVWLQWKRVHFDVHVZKHUHWKHUHKDVEHHQDIDLOXUHRI DQGDIWHUDMXU\UHWXUQHGDYHUGLFWIRUWKHSODLQWLIIPRWLRQIRU
D UHTXLUHG DSSOLDQFH WKHUH LV OLDELOLW\ RQO\ ZKHUH WKH MXGJPHQW QRWZLWKVWDQGLQJ WKH YHUGLFW  /HDU\  )G DW
IDLOXUHRIWKHDSSOLDQFHQRWRQO\FUHDWHVDFRQGLWLRQXQGHU   7KH )LUVW &LUFXLW &RXUW RI $SSHDOV XSKHOG WKH ORZHU
ZKLFKRUDQLQFLGHQWDOVLWXDWLRQLQZKLFKWKHHPSOR\HH FRXUWjVGHFLVLRQVRQWKHPRWLRQVFRQFOXGLQJWKDWWKHUHZDV
LVLQMXUHGEXWZKHUHWKHGHIHFWLYHDSSOLDQFHLVLWVHOIDQ VXIILFLHQW HYLGHQFH IRU D MXU\ UHDVRQDEO\ WR ILQG WKDW WKH
HIILFLHQWFDXVHRIRUWKHLQVWUXPHQWDOLW\WKURXJKZKLFK FRQGXFWRUjVIDOOmZDVZLWKLQWKHULVNFUHDWHGE\WKHGHIHFWLYH
WKHLQMXU\LVGLUHFWO\EURXJKWDERXW DLUEUDNHl,GDW7KH/HDU\FRXUWUHMHFWHG5HHW]ILQGLQJ
WKLVFRXUWjVUHDVRQLQJmXQSHUVXDVLYHl,GDW7KHFRXUW
,GDW H[SODLQHG
$V WKH GLVWULFW FRXUW UHOLHG RQ WKLV LQFLGHQWDO VLWXDWLRQ 'HIHFWLYHEUDNHVFUHDWHDQXPEHURIKD]DUGVGHSHQGLQJ
YHUVXVLQVWUXPHQWDOLW\GLVWLQFWLRQWRGHFLGHWKHSUHVHQWPDWWHU RQ WKH FLUFXPVWDQFHV XQGHU ZKLFK WKH\ RSHUDWH  7KH
WKLVFRXUWPXVWGHWHUPLQHZKHWKHU5HHW]VWLOOLVDSSOLFDEOHWR GDQJHU LV QRW FRQILQHG PHUHO\ WR WKH OLNHOLKRRG WKDW D
GHFLGHFDXVDWLRQLQ)6$$FDVHVIROORZLQJ5RJHUV7KLVFRXUW VXGGHQVWRSRUDIDLOXUHWRVWRSPLJKWSURGXFHDFROOLVLRQ
KDVDGGUHVVHGWKLVLVVXHVLQFH5RJHUVEXWQRWFRQVLVWHQWO\,Q RU D VHYHUH MROW  ,Q WKH LQVWDQW FDVH WKH GDQJHU DOVR
VRPH FDVHV WKH FRXUW KDV DSSOLHG 5HHW] LQ RWKHU FDVHV WKH
FRXUWKDVKHOGWKDW5HHW]jGLVWLQFWLRQQRORQJHULVDSSURSULDWH
6HHHJ+DXVUDWKY1HZWKHSODLQWLIIjV@RZQ
UHTXLUHGPHWKRGIRUUHDFKLQJDQGIL[LQJWKHGHIHFWLYHSDUW DFWLQSODFLQJKLPVHOILQDSRVLWLRQRIGDQJHUZKHUHKH
,G7KHSLORWRQWKHORFRPRWLYHKRZHYHUZDVZHWDQGWKH ZRXOGEHVWUXFNE\WKH(ULHHQJLQHZDVWKHSUR[LPDWH
HQJLQHHUVOLSSHGDQGIHOO,G$IWHUWKHMXU\UHWXUQHGDYHUGLFW FDXVHRIKLVGHDWKDQGWKHGHIHFWLQWKHVDQGHUVRQO\D
LQIDYRURIWKHSODLQWLIIWKHGHIHQGDQWDSSHDOHGDUJXLQJLQ UHPRWHFDXVHRUFRQGLWLRQRIWKHDFFLGHQW%XWWKHMXU\
SDUWWKDWWKHGHIHFWLYHDSSOLDQFHZDVQRWWKHSUR[LPDWHFDXVH PLJKW UHDVRQDEO\ ILQG IURP WKH HYLGHQFH WKDW KH KDG
RIWKHHQJLQHHUjVLQMXULHVDQGWKDWWKHWULDOFRXUWjVLQVWUXFWLRQ WDNHQWKLVSRVLWLRQLQDQHIIRUWWRUHPHG\WKHGHIHFWDQG
RQFDXVDWLRQZDVLPSURSHU,GDW JHW WKH VDQG WR IORZ    DQG WKDW WKLV FRQGXFW ZDV D
QRUPDOUHDFWLRQWRWKHVWLPXOXVRIDVLWXDWLRQFUHDWHGE\
7KHWULDOFRXUWLQ:DUQLQJKDGVXEPLWWHGFDXVDWLRQWRWKH WKHGHIHQGDQWjVYLRODWLRQRILWVVWDWXWRU\GXW\
MXU\E\UHTXLULQJWKHVHILQGLQJV
,GTXRWLQJ$QGHUVRQ)GDWHPSKDVLVDGGHG,Q
WKHIDLOXUHRIWKHVDQGHUVWRIXQFWLRQmZDVWKHFDXVHRI RWKHUZRUGVWKH:DUQLQJFRXUWFRQFOXGHGDMXU\FRXOGILQG
SODLQWLIIEHLQJZKHUHKHZDVZKHQKHIHOO  KHIHOO WKDWWKHm>S@ODLQWLIIjVSUHVHQFHDWWKHSODFHZKHUHKHIHOOZDV
ZKLOHJHWWLQJRQWRRUWU\LQJWRJHWRQWRlWKHSLORWmKH QRµPHUHRFFDVLRQjlDVmKLVGXWLHVUHTXLUHGKLPWREHDWWKDW
ZDVJRLQJXSWRJHWWRWKHVDQGWUDSVWRGRZRUNWRJHW SODFHDQGKLVLQMXU\ZDVWKHGLUHFWUHVXOWRIWKHIDLOXUHRIWKH
VDQGWRJRRXWRIWKHVDQGWUDSVDQGRQWRWKHUDLOVE\XVH VDQGHUV WR IXQFWLRQl  ,G  %HFDXVH WKH HYLGHQFH FRXOG EH
RI WKH DLU YDOYH LQ WKH FDEl WKH IDLOXUH RI WKH VDQGLQJ LQWHUSUHWHGLQPRUHWKDQRQHZD\WKHFRXUWFRQFOXGHGWKDWWKH
DSSDUDWXVWRIXQFWLRQDQGKLVJRLQJXSWRJHWWRWKHWUDSV LVVXHRIFDXVDWLRQVKRXOGEHGHFLGHGE\WKHMXU\
WRJHWWKHVDQGWRIORZVXEMHFWHGKLPWRDSHULOWKDWZRXOG
KDYHEHHQXQQHFHVVDU\LIZKHQKHXVHGWKHDLUYDOYHLQ
WKHFDEWKHWUDSVZRXOGKDYHIXQFWLRQHG 
,Q $QGHUVRQ D ILUHPDQ ZDV VWUXFN DQG NLOOHG E\ D SDVVLQJ HQJLQH
ZKLOH EHQGLQJ RYHU WR H[DPLQH WKH SLSHV RI WKH WUDLQjV VDQGLQJ DSSDUDWXV
$QGHUVRQ
ZKLFK KDG IDLOHG WR GHOLYHU VDQG WR WKH UDLOV   )G DW 
1R 5LFKDUGVY&RQVROLGDWHG5DLO&RUS   5LFKDUGVY&RQVROLGDWHG5DLO&RUS 1R

$WOHDVWRQHRWKHUFRXUWKDVDSSOLHGWKHVDPHUDWLRQDOHWR VKRXOGEHGHFLGHGE\DMXU\QRWDMXGJH5RJHUV86DW
FRQFOXGH WKDW WKH LVVXH RI FDXVDWLRQ VKRXOG KDYH EHHQ 
VXEPLWWHG WR WKH MXU\ LQ D FDVH IDFWXDOO\ VLPLODU WR WKH RQH
EHIRUH WKLV FRXUW 6HH +HQGULFN Y &6; 7UDQVS ,QF  :HQRZMRLQWKRVHFRXUWVWKDWKDYHUHMHFWHG5HHW]LQOLJKW
6RG  )OD 'LVW &W $SS   ,Q +HQGULFN D RI5RJHUVDQGKROGWKDW5HHW]QRORQJHULVJRRGODZ&RXUWV
EUDNHPDQZDVULGLQJRQDWUDLQWKDWZHQWLQWRDQHPHUJHQF\ LQ )6$$ FDVHV DQG )(/$ DQG %,$ FDVHV DV ZHOO VKRXOG
VWRSDIWHUWZRFRXSOLQJPHFKDQLVPVRUmNQXFNOHVlEURNH IRFXVRQZKHWKHUDUHDVRQDEOHMXU\FRXOGFRQFOXGHWKDWWKH
+HQGULFN6RGDW7KHEUDNHPDQZDVUHVSRQVLEOH GHIHFWLYH DSSOLDQFH SOD\HG DQ\ SDUW HYHQ WKH VOLJKWHVW LQ
IRU UHSODFLQJ WKH EURNHQ NQXFNOHV  :KLOH FDUU\LQJ D QHZ EULQJLQJ DERXW WKH SODLQWLIIjV LQMXU\  7KLV PHDQV WKDW LI D
NQXFNOHXSWKHEDOODVWHGVORSHEHVLGHWKHWUDFNWKHEUDNHPDQ UHDVRQDEOH MXU\ FRXOG ILQG WKDW WKH SODLQWLIIjV LQMXU\ mZDV
ORVWKLVIRRWLQJVOLSSHGDQGLQMXUHGKLVEDFN ZLWKLQ WKH ULVN FUHDWHG E\l WKH GHIHFWLYH DSSOLDQFH WKH
SODLQWLIIjV ULJKW WR D MXU\ WULDO VKRXOG EH SUHVHUYHG  )RU
7KHWULDOFRXUWGLUHFWHGDYHUGLFWIRUWKHUDLOURDGKROGLQJ H[DPSOHLIDVDUHVXOWRIDGHIHFWLYHDSSOLDQFHDSODLQWLIILV
WKDWWKHEURNHQNQXFNOHVPHUHO\FUHDWHGWKHVLWXDWLRQWRZKLFK UHTXLUHGWRWDNHFHUWDLQDFWLRQVDQGKHRUVKHLVLQMXUHGZKLOH
WKHEUDNHPDQZDVUHVSRQGLQJZKHQKHZDVLQMXUHG,GDW WDNLQJWKRVHDFWLRQVWKHLVVXHRIFDXVDWLRQJHQHUDOO\VKRXOG
  7KH DSSHOODWH FRXUW UHYHUVHG KROGLQJ WKDW mWKH WULDO EHVXEPLWWHGWRDMXU\
FRXUWHUUHGLQIRFXVLQJRQFRQFHSWVRISUR[LPDWHFDXVHDQG
ZKHWKHUWKHUDLOURDGjVQHJOLJHQFHPHUHO\FUHDWHGDFRQGLWLRQ ,,, &RQFOXVLRQ
RU VLWXDWLRQ WR ZKLFK WKH HPSOR\HU >VLF@ ZDV UHTXLUHG WR
UHVSRQGl,GDW7KHFRXUWUHDVRQHGWKDWWKHMXU\FRXOG $VWKHHYLGHQFHLQGLFDWHVWKDWDLUEUDNHVRQO\JRLQWRDQ
KDYHIRXQGWKDWEXWIRUWKHGHIHFWLYHHTXLSPHQWWKHEUDNHPDQ HPHUJHQF\VWRSGXHWRDQDFWXDOHPHUJHQF\ZKLFKZDVQRW
QHYHUZRXOGKDYHEHHQUHTXLUHGWRUHSODFHWKHNQXFNOHDQG SUHVHQW KHUH DSSOLFDWLRQ E\ VRPHRQH RQ WKH WUDLQ DOVR
EHHQLQMXUHG,G DEVHQWRUVRPHGHIHFWZHILQGWKDWWKHWULDOFRXUWHUUHGLQ
KROGLQJ 5LFKDUGVj WHVWLPRQ\ LQVXIILFLHQW WR GHPRQVWUDWH D
$VWKH:DUQLQJFRXUWQRWHGGHWHUPLQLQJLQDJLYHQFDVH TXHVWLRQRIPDWHULDOIDFWRQWKHLVVXHRIZKHWKHUWKHDSSOLDQFH
ZKHWKHUDQDOOHJHGGHIHFWLVWKHSUR[LPDWHFDXVHRUPHUHO\D ZDVGHIHFWLYH:HILQGWKDWWKHGLVWULFWFRXUWHUUHGLQIDLOLQJ
FRQGLWLRQ RI WKH SODLQWLIIjV LQMXU\ LV RIWHQ D WURXEOHVRPH WRVXEPLWWKHLVVXHRIFDXVDWLRQWRDMXU\DVZHOO7KHGLVWULFW
PDWWHUDVDUHVXOWFRXUWVRIWHQUHDFKGLIIHUHQWFRQFOXVLRQVRQ FRXUW UHOLHG RQ 5HHW] LQ DQDO\]LQJ WKH LVVXH RI FDXVDWLRQ
WKH LVVXH RI FDXVDWLRQ ZKHQ IDFHG ZLWK IDFWXDOO\ VLPLODU KRZHYHUWKDWFDVHLVQRORQJHUJRRGODZLQOLJKWRI5RJHUV
VFHQDULRV+HUHDSSO\LQJ5HHW]WKHGLVWULFWFRXUWFRQFOXGHG )RUWKHVHUHDVRQVZH5(9(56(WKHMXGJPHQWRIWKHGLVWULFW
WKDW 5LFKDUGVj ORVLQJ KLV IRRWLQJ RQ WKH EDOODVW ZDV RQO\
LQFLGHQWDOWRWKHGHIHFWZKLFKKHZDVDWWHPSWLQJWRLGHQWLI\
$V RWKHU FRXUWV KDYH UHFRJQL]HG KRZHYHU D MXU\ PLJKW
UHDVRQDEO\ KDYH FRQFOXGHG WKDW 5LFKDUGV RQO\ ZDV LQMXUHG 
$GPLWWHGO\ VFHQDULRV ZLOO DULVH ZKHUH WKH FRQQHFWLRQ EHWZHHQ WKH
EHFDXVHWKHEUDNLQJV\VWHPIDLOHGWRIXQFWLRQSURSHUO\LWZDV GHIHFWLYH DSSOLDQFH DQG WKH SODLQWLIIjV LQMXULHV EHFRPH WRR DWWHQXDWHG WR
KLV GXW\ WR LGHQWLI\ DQG UHPHG\ WKH GHIHFW DQG WKH SURSHU FRQFOXGH WKDW WKH GHIHFW FDXVHG WKH LQMXU\ 7DNH IRU H[DPSOH WKH
PHWKRG IRU IXOILOOLQJ KLV UHVSRQVLELOLWLHV ZDV ZDONLQJ WKH IROORZLQJ VFHQDULR D WUDLQ JRHV LQWR DQ HPHUJHQF\ VWRS GXH WR GHIHFWLYH
DLU EUDNHV DQG DQ HPSOR\HH ZKR KDV H[LWHG WKH WUDLQ DQG LV VWDQGLQJ QH[W
WUDLQ  5RJHUV PDNHV FOHDU WKDW ZKHUH WKH HYLGHQFH DOORZV WR LW PHUHO\ ZDLWLQJ IRU WKH EUDNHV WR EH UHSDLUHG LV DWWDFNHG E\ D UDELG
PRUHWKDQRQHRXWFRPHRQWKHLVVXHRIFDXVDWLRQWKHLVVXH GRJ 2U WKH VDPH HPSOR\HH ZDLWLQJ IRU WKH GHIHFW WR EH UHSDLUHG GHFLGHV
WR VWUHWFK KLV RU KHU OHJV JRHV IRU D ZDON IDOOV DQG LV LQMXUHG $ FRXUW
UHDVRQDEO\ FRXOG ILQG QR FDXVDWLRQ DV D PDWWHU RI ODZ LQ WKHVH VLWXDWLRQV
1R 5LFKDUGVY&RQVROLGDWHG5DLO&RUS 

FRXUWDQG5(0$1'IRUIXUWKHUSURFHHGLQJVFRQVLVWHQWZLWK
WKLVRSLQLRQ