81,7(' 67$7(6 ',675,&7 &2857 )25 7+( ',675,&7 2) &2/80%,$ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB *$5< $17+21< 3ODLQWLII Y &LYLO $FWLRQ 1R $%- ,17(51$7,21$/ $662&,$7,21 2) 0$&+,1,676 $1' $(5263$&( :25.(56 ',675,&7 /2'*( et al. 'HIHQGDQWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 0(025$1'80 23,1,21 3ODLQWLII *DU\ $QWKRQ\ EURXJKW WKLV DFWLRQ DJDLQVW GHIHQGDQWV 'LVWULFW /RGJH D XQLRQ DIILOLDWHG ZLWK WKH ,QWHUQDWLRQDO $VVRFLDWLRQ RI 0DFKLQLVWV DQG $HURVSDFH :RUNHUV ³,$0´ DQG WKH ,QWHUQDWLRQDO $VVRFLDWLRQ RI 0DFKLQLVWV DQG $HURVSDFH :RUNHUV 1DWLRQDO 3HQVLRQ )XQG ³,$0 1DWLRQDO 3HQVLRQ )XQG´ RU WKH ³3ODQ´ &RPSO >'NW @ +H DOOHJHV WKDW GHIHQGDQWV YLRODWHG WKH WHUPV RI WKH 3ODQ DQG EUHDFKHG WKHLU ILGXFLDU\ GXWLHV XQGHU WKH (PSOR\HH 5HWLUHPHQW ,QFRPH 6HFXULW\ $FW RI ³(5,6$´ 86& et seq ZKHQ WKH\ IDLOHG WR LQFOXGH KLP DV D SDUWLFLSDQW XQGHU WKH 3ODQ DQG GHQLHG KLP EHQHILWV Id. ,Q &RXQW , SODLQWLII DOOHJHV WKDW GHIHQGDQWV YLRODWHG WKH WHUPV RI WKH 3ODQ E\ GHQ\LQJ KLP HOLJLELOLW\ DV GLUHFWHG E\ WKH ³GRFXPHQWV DQG LQVWUXPHQWV JRYHUQLQJ WKH 3ODQ´ &RPSO ± ,Q &RXQW ,, SODLQWLII DOOHJHV WKDW GHIHQGDQWV RZHG KLP D ILGXFLDU\ GXW\ XQGHU (5,6$ WR ³REVHUYH DQG IROORZ WKH JRYHUQLQJ WHUPV´ RI WKH 3ODQ DQG WKDW WKH\ EUHDFKHG WKRVH GXWLHV Id. ± 'LVWULFW /RGJH KDV PRYHG WR GLVPLVV ERWK FRXQWV SXUVXDQW WR )HGHUDO 5XOH RI &LYLO 3URFHGXUH E ,W DUJXHV WKDW SODLQWLII KDV IDLOHG WR DOOHJH VXIILFLHQW IDFWV WR HVWDEOLVK WKDW 'LVWULFW /RGJH LV D ILGXFLDU\ DV GHILQHG XQGHU WKH VWDWXWH see 'HI¶V 0RW WR 'LVPLVV 6XSSRUWLQJ 0HP RI /DZ >'NW @ ³'HI¶V 0RW´ DQG WKH &RXUW DJUHHV %XW EHFDXVH ILGXFLDU\ VWDWXV LV RQO\ D UHTXLUHG HOHPHQW XQGHU &RXQW ,, WKH &RXUW ZLOO RQO\ JUDQW GHIHQGDQW¶V PRWLRQ WR GLVPLVV DV WR &RXQW ,, DQG LW ZLOO GHQ\ WKH PRWLRQ DV WR &RXQW , 7KHUHIRUH SODLQWLII¶V (5,6$ FODLP IRU YLRODWLRQ RI WKH WHUPV RI WKH 3ODQ ZLOO JR IRUZDUG %$&.*5281' 'HIHQGDQW 'LVWULFW /RGJH LV D XQLRQ DIILOLDWHG ZLWK WKH ,QWHUQDWLRQDO $VVRFLDWLRQ RI 0DFKLQLVWV DQG $HURVSDFH :RUNHUV &RPSO $FFRUGLQJ WR WKH FRPSODLQW SODLQWLII ZDV HPSOR\HG DV DQ ³2UJDQL]HU´ E\ 'LVWULFW /RGJH IURP 0D\ XQWLO -DQXDU\ ZKHQ KH EHFDPH D ³*UDQG /RGJH 5HSUHVHQWDWLYH´ D SRVLWLRQ KH FRQWLQXHV WR KROG Id. ,$0 1DWLRQDO 3HQVLRQ )XQG LV D PXOWLHPSOR\HU GHILQHG EHQHILW SHQVLRQ SODQ DQG 'LVWULFW /RGJH LV D ³&RQWULEXWLQJ (PSOR\HU´ WR WKH IXQG Id. ± 'LVWULFW /RGJH DQG WKH WUXVWHHV RI WKH ,$0 1DWLRQDO 3HQVLRQ )XQG H[HFXWHG D VHULHV RI ZULWWHQ 3DUWLFLSDWLRQ $JUHHPHQWV ZKLFK JRYHUQHG WKH XQLRQ¶V SDUWLFLSDWLRQ LQ WKH 3ODQ &RPSO 3ODLQWLII DOOHJHV WKDW WKH DJUHHPHQWV ³REOLJDWHG´ GHIHQGDQWV WR SURYLGH FRYHUDJH DQG PDNH FRQWULEXWLRQV IRU DOO 'LVWULFW /RGJH HPSOR\HHV LQFOXGLQJ SODLQWLII Id 3ODLQWLII VRXJKW SDUWLFLSDQW VWDWXV XQGHU WKH 3ODQ LQ RUGHU WR JDLQ HOLJLELOLW\ IRU WKH SD\PHQW RI SHQVLRQ EHQHILWV EXW KH ZDV XQVXFFHVVIXO See &RPSO +H H[KDXVWHG ³DOO LQWHUQDO 3ODQ UHPHGLHV´ LQFOXGLQJ WKH DSSHDOV SURFHVV GXULQJ ZKLFK WKH 3ODQ¶V DSSHDOV FRPPLWWHH GHWHUPLQHG WKDW SODLQWLII ZDV QRW HOLJLEOH WR SDUWLFLSDWH LQ WKH ,$0 1DWLRQDO 3HQVLRQ )XQG Id. see also ([ $ WR 3O¶V 2SS WR 'HI¶V 0RW >'NW @ ³'HQLDO /HWWHU´ 2Q -XQH SODLQWLII ILOHG WKLV DFWLRQ &RPSO DQG RQ $XJXVW GHIHQGDQW ,$0 1DWLRQDO 3HQVLRQ )XQG ILOHG DQ $QVZHU $QVZHU >'NW @ 2Q WKH VDPH GD\ GHIHQGDQW 'LVWULFW /RGJH ILOHG D PRWLRQ WR GLVPLVV XQGHU 5XOH E IRU IDLOXUH WR VWDWH D FODLP XSRQ ZKLFK UHOLHI PD\ EH JUDQWHG 'HI¶V 0RW 7KH PRWLRQ LV IXOO\ EULHIHG 67$1'$5' 2) 5(9,(: ³7R VXUYLYH D >5XOH E@ PRWLRQ WR GLVPLVV D FRPSODLQW PXVW FRQWDLQ VXIILFLHQW IDFWXDO PDWWHU DFFHSWHG DV WUXH WR VWDWH D FODLP WR UHOLHI WKDW LV SODXVLEOH RQ LWV IDFH´ Ashcroft v. Iqbal 86 LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG accord Bell Atl. Corp. v. Twombly 86 ,Q Iqbal WKH 6XSUHPH &RXUW UHLWHUDWHG WKH WZR SULQFLSOHV XQGHUO\LQJ LWV GHFLVLRQ LQ Twombly ³)LUVW WKH WHQHW WKDW D FRXUW PXVW DFFHSW DV WUXH DOO RI WKH DOOHJDWLRQV FRQWDLQHG LQ D FRPSODLQW LV LQDSSOLFDEOH WR OHJDO FRQFOXVLRQV´ 86 DW $QG ³>V@HFRQG RQO\ D FRPSODLQW WKDW VWDWHV D SODXVLEOH FODLP IRU UHOLHI VXUYLYHV D PRWLRQ WR GLVPLVV´ Id DW $ FODLP LV IDFLDOO\ SODXVLEOH ZKHQ WKH SOHDGHG IDFWXDO FRQWHQW ³DOORZV WKH FRXUW WR GUDZ WKH UHDVRQDEOH LQIHUHQFH WKDW WKH GHIHQGDQW LV OLDEOH IRU WKH PLVFRQGXFW DOOHJHG´ Id DW ³7KH SODXVLELOLW\ VWDQGDUG LV QRW DNLQ WR D µSUREDELOLW\ UHTXLUHPHQW¶ EXW LW DVNV IRU PRUH WKDQ D VKHHU SRVVLELOLW\ WKDW D GHIHQGDQW KDV DFWHG XQODZIXOO\´ Id $ SOHDGLQJ PXVW RIIHU PRUH WKDQ ³ODEHOV DQG FRQFOXVLRQV´ RU D ³IRUPXODLF UHFLWDWLRQ RI WKH HOHPHQWV RI D FDXVH RI DFWLRQ´ id TXRWLQJ Twombly 86 DW DQG ³>W@KUHDGEDUH UHFLWDOV RI WKH HOHPHQWV RI D FDXVH RI DFWLRQ VXSSRUWHG E\ PHUH FRQFOXVRU\ VWDWHPHQWV GR QRW VXIILFH´ Id :KHQ FRQVLGHULQJ D PRWLRQ WR GLVPLVV XQGHU 5XOH E WKH &RXUW LV ERXQG WR FRQVWUXH D FRPSODLQW OLEHUDOO\ LQ WKH SODLQWLII¶V IDYRU DQG LW VKRXOG JUDQW WKH SODLQWLII ³WKH EHQHILW RI DOO LQIHUHQFHV WKDW FDQ EH GHULYHG IURP WKH IDFWV DOOHJHG´ Kowal v. MCI Commc’ns Corp. )G 3ODLQWLII RSSRVHG WKH PRWLRQ RQ 6HSWHPEHU DUJXLQJ WKDW GHIHQGDQW YLRODWHG WKH WHUPV RI WKH 3ODQ DQG EUHDFKHG LWV ILGXFLDU\ GXWLHV E\ GHFLGLQJ WR ³H[FOXGH >SODLQWLII@ IURP HOLJLELOLW\ DQG SDUWLFLSDWLRQ LQ WKH >3@ODQ´ 3O¶V 2SS WR 'HI¶V 0RW >'NW @ ³3O¶V 2SS´ DW 2Q 6HSWHPEHU 'LVWULFW /RGJH ILOHG D UHSO\ 'HI¶V 5HSO\ WR 3O¶V 2SS >'NW @ ³'HI¶V 5HSO\´ '& &LU 1HYHUWKHOHVV WKH &RXUW QHHG QRW DFFHSW LQIHUHQFHV GUDZQ E\ WKH SODLQWLII LI WKRVH LQIHUHQFHV DUH XQVXSSRUWHG E\ IDFWV DOOHJHG LQ WKH FRPSODLQW QRU PXVW WKH &RXUW DFFHSW SODLQWLII¶V OHJDO FRQFOXVLRQV See id. Browning v. Clinton )G '& &LU ,Q UXOLQJ XSRQ D PRWLRQ WR GLVPLVV IRU IDLOXUH WR VWDWH D FODLP D FRXUW PD\ RUGLQDULO\ FRQVLGHU RQO\ ³WKH IDFWV DOOHJHG LQ WKH FRPSODLQW GRFXPHQWV DWWDFKHG DV H[KLELWV RU LQFRUSRUDWHG E\ UHIHUHQFH LQ WKH FRPSODLQW DQG PDWWHUV DERXW ZKLFK WKH &RXUW PD\ WDNH MXGLFLDO QRWLFH´ Gustave-Schmidt v. Chao ) 6XSS G ''& FLWDWLRQV RPLWWHG $1$/<6,6 , 'HIHQGDQW¶V PRWLRQ WR GLVPLVV &RXQW ,, ZLOO EH JUDQWHG &RXQW ,, DOOHJHV WKDW 'LVWULFW /RGJH LV OLDEOH IRU SODLQWLII¶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³$ ILGXFLDU\ ZLWKLQ WKH PHDQLQJ RI (5,6$ PXVW EH VRPHRQH DFWLQJ LQ WKH FDSDFLW\ RI PDQDJHU DGPLQLVWUDWRU RU ILQDQFLDO DGYLVHU WR D µSODQ¶´ Pegram v. Herdrich 86 ³µ>2@QO\ ZKHQ IXOILOOLQJ FHUWDLQ GHILQHG IXQFWLRQV LQFOXGLQJ WKH H[HUFLVH RI GLVFUHWLRQDU\ DXWKRULW\ RU FRQWURO RYHU SODQ PDQDJHPHQW RU DGPLQLVWUDWLRQ¶ GRHV D SHUVRQ EHFRPH D ILGXFLDU\ XQGHU > $@´ Lockheed Corp. v. Spink 86 TXRWLQJ Siskind v. Sperry Ret. Program, Unisys )G G &LU ³(PSOR\HUV FDQ EH (5,6$ ILGXFLDULHV´ see Pegram 86 DW ³>E@XW REYLRXVO\ QRW DOO RI >DQ HPSOR\HU¶V@ EXVLQHVV DFWLYLWLHV LQYROYH>@ SODQ PDQDJHPHQW RU DGPLQLVWUDWLRQ´ Varity Corp. v. Howe 86 ILQGLQJ WKDW WKH HPSOR\HU GHIHQGDQW¶V DFWV FRXOG RQO\ EH DFWLRQDEOH LI WKH DFWV ZHUH PDGH LQ WKH HPSOR\HU¶V ILGXFLDU\ FDSDFLW\ 7KH FRPSODLQW FRQWDLQV WKH FRQFOXVRU\ DOOHJDWLRQ WKDW ³GHIHQGDQW 'LVWULFW /RGJH RZHG D ILGXFLDU\ GXW\ WR >S@ODQWLII´ DQG WKDW LW EUHDFKHG LWV ILGXFLDU\ GXWLHV WKURXJK LWV ³IDLOXUH DQG UHIXVDO WR DFW LQ DFFRUGDQFH ZLWK WKH GRFXPHQWV DQG LQVWUXPHQWV JRYHUQLQJ WKH 3ODQ´ &RPSO 3ODLQWLII DOVR FODLPV DOWKRXJK LQ &RXQW , WKDW ³>W@KH DFWLRQV RI >G@HIHQGDQWV 'LVWULFW /RGJH DQG WKH ,$0 1DWLRQDO 3HQVLRQ )XQG DOOHJHG KHUHLQ LQ GHQ\LQJ HOLJLELOLW\ DQG EHQHILWV WR >S@ODLQWLII $QWKRQ\ DUH FRQWUDU\ WR WKH GRFXPHQWV DQG LQVWUXPHQWV JRYHUQLQJ WKH 3ODQ LQ EUHDFK RI WKHLU ILGXFLDU\ REOLJDWLRQV´ Id. %XW WKH &RXUW QHHG QRW DFFHSW D SODLQWLII¶V OHJDO FRQFOXVLRQV DV WUXH ZKHQ FRQVLGHULQJ D PRWLRQ WR GLVPLVV Iqbal 86 DW see also Strumsky v. Wash. Post Co. ) 6XSS G ''& ³>&@RQFOXVRU\ DOOHJDWLRQV WKDW D SHUVRQ ZDV DFWLQJ DV D ILGXFLDU\ DUH QRW VXIILFLHQW´ 7KH FRPSODLQW LGHQWLILHV 'LVWULFW /RGJH DV D ³&RQWULEXWLQJ (PSOR\HU´ see &RPSO EXW LW LV GHYRLG RI DQ\ DOOHJDWLRQV WKDW WKH XQLRQ H[HUFLVHG DQ\ DXWKRULW\ RU FRQWURO RYHU WKH PDQDJHPHQW RU DGPLQLVWUDWLRQ RI WKH 3ODQ RU LWV DVVHWV ,Q KLV RSSRVLWLRQ SODLQWLII DUJXHV WKDW KH KDV ³PHW WKH PRGHVW SOHDGLQJ UHTXLUHPHQW WR DOOHJH WKDW WKH LQYROYHPHQW RI /RGJH LQ WKH GHFLVLRQ H[FOXGLQJ KLP IURP SDUWLFLSDWLRQ LQ WKH 3HQVLRQ )XQG DQG HOLJLELOLW\ IRU EHQHILWV FRQVWLWXWHV D EUHDFK RI ILGXFLDU\ GXW\ XQGHU (5,6$´ 3O¶V 2SS DW ± %XW WKHUH DUH QR DOOHJDWLRQV LQ WKH FRPSODLQW GHVFULELQJ 'LVWULFW /RGJH¶V LQYROYHPHQW LQ SODLQWLII¶V HOLJLELOLW\ GHWHUPLQDWLRQ 3ODLQWLII VLPSO\ DOOHJHV WKDW KH VRXJKW SDUWLFLSDQW VWDWXV IURP WKH 3ODQ DQG WKDW KH ³H[KDXVWHG DOO LQWHUQDO 3ODQ UHPHGLHV WR EH HOLJLEOH IRU WKH SD\PHQWV RI SHQVLRQ EHQHILWV´ &RPSO ,Q VXSSRUW RI KLV RSSRVLWLRQ SODLQWLII SURYLGHV WKH &RXUW ZLWK WKH GHQLDO OHWWHU KH UHFHLYHG IURP ,$0 1DWLRQDO 3HQVLRQ )XQG ZKLFK UHYHDOV WKDW WKH )XQG VRXJKW LQIRUPDWLRQ IURP WKH XQLRQ FRQFHUQLQJ ZKLFK SRVLWLRQV DQGRU MRE FODVVLILFDWLRQV DUH FRYHUHG E\ WKH 3DUWLFLSDWLRQ $JUHHPHQWV See 'HQLDO /HWWHU ³>7@KH &RPPLWWHH UHIHUUHG WKH PDWWHU WR 'LVWULFW /RGJH WR DVN WKH 'LVWULFW /RGJH¶V FRQVLGHUDWLRQ RI ZKDW SRVLWLRQV RU MRE FODVVLILFDWLRQV 'LVWULFW /RGJH LQWHQGHG WR FRQWULEXWH RQ EHKDOI RI DV D &RQWULEXWLQJ (PSOR\HU WR WKH )XQG DQG WR DVN ZKDW SRVLWLRQV RU MRE FODVVLILFDWLRQV ZHUH QRQFROOHFWLYHO\ EDUJDLQHG HPSOR\HHV RI 'LVWULFW /RGJH DW WLPHV UHOHYDQW WR >SODLQWLII¶V@ DSSHDO´ %XW WKHVH IDFWV ZRXOG QRW VXIILFH WR VWDWH D FODLP WKDW 'LVWULFW /RGJH LV D ILGXFLDU\ XQGHU (5,6$ EHFDXVH WKH ³>D@SSOLFDWLRQ RI UXOHV GHWHUPLQLQJ HOLJLELOLW\´ XQGHU D SODQ LV SXUHO\ PLQLVWHULDO DQG WKXV QRW D ILGXFLDU\ DFW See &)5 '± see also Harris v. Koenig ) 6XSS G ''& ³0HUH LQIOXHQFH RYHU D ILGXFLDU\¶V GHFLVLRQV 7KH 'HSDUWPHQW RI /DERU KDV LGHQWLILHG PLQLVWHULDO DFWV WKDW GR QRW TXDOLI\ DV ILGXFLDU\ DFWLYLWLHV ZLWK UHJDUG WR SODQ DGPLQLVWUDWLRQ DQG PDQDJHPHQW VXFK DV $SSOLFDWLRQ RI UXOHV GHWHUPLQLQJ HOLJLELOLW\ IRU SDUWLFLSDWLRQ RU EHQHILWV &DOFXODWLRQ RI VHUYLFHV DQG FRPSHQVDWLRQ FUHGLWV IRU EHQHILWV 3UHSDUDWLRQ RI HPSOR\HH FRPPXQLFDWLRQV PDWHULDO 0DLQWHQDQFH RI SDUWLFLSDQWV¶ VHUYLFH DQG HPSOR\PHQW UHFRUGV 3UHSDUDWLRQ RI UHSRUWV UHTXLUHG E\ JRYHUQPHQW DJHQFLHV &DOFXODWLRQ RI EHQHILWV 2ULHQWDWLRQ RI QHZ SDUWLFLSDQWV DQG DGYLVLQJ SDUWLFLSDQWV RI WKHLU ULJKWV DQG RSWLRQV XQGHU WKH SODQ &ROOHFWLRQ RI FRQWULEXWLRQV DQG DSSOLFDWLRQ RI FRQWULEXWLRQV DV SURYLGHG LQ WKH SODQ 3UHSDUDWLRQ RI UHSRUWV FRQFHUQLQJ SDUWLFLSDQWV¶ EHQHILWV 3URFHVVLQJ RI FODLPV DQG 0DNLQJ UHFRPPHQGDWLRQV WR RWKHUV IRU GHFLVLRQV ZLWK UHVSHFW WR SODQ DGPLQLVWUDWLRQ &)5 ' UHJDUGLQJ D SODQ LV QRW HQRXJK WR FRQVWLWXWH GLVFUHWLRQDU\ FRQWURO WULJJHULQJ (5,6$ OLDELOLW\´ TXRWLQJ Int’l Bhd. of Painters & Allied Trades Union & Indus. Pension Fund v. Duval ) 6XSS ''& 6LQFH SODLQWLII KDV IDLOHG WR SODXVLEO\ DOOHJH WKDW 'LVWULFW /RGJH ZDV D ILGXFLDU\ XQGHU (5,6$ RU WKDW LW H[HUFLVHG DQ\ ILGXFLDU\ UHVSRQVLELOLW\ LQ SODLQWLII¶V HOLJLELOLW\ GHWHUPLQDWLRQ WKH &RXUW ZLOO JUDQW GHIHQGDQW¶V PRWLRQ WR GLVPLVV &RXQW ,, ,, 'HIHQGDQW¶V PRWLRQ WR GLVPLVV &RXQW , ZLOO EH GHQLHG $OWKRXJK GHIHQGDQW KDV PRYHG WR GLVPLVV ERWK FRXQWV RQ WKLV EDVLV ILGXFLDU\ VWDWXV LV QRW UHTXLUHG WR VWDWH D FODLP XQGHU &RXQW , 7KHUHIRUH GHIHQGDQW¶V PRWLRQ WR GLVPLVV &RXQW , ZLOO EH GHQLHG 3ODLQWLII EURXJKW &RXQW , XQGHU VHFWLRQV D% DQG D RI (5,6$ &RPSO 6HFWLRQ D% DXWKRUL]HV D FLYLO DFWLRQ WR EH EURXJKW ³E\ D SDUWLFLSDQW RU EHQHILFLDU\ WR UHFRYHU EHQHILWV GXH WR KLP XQGHU WKH WHUPV RI KLV SODQ WR HQIRUFH KLV ULJKWV XQGHU WKH WHUPV RI WKH SODQ RU WR FODULI\ KLV ULJKWV WR IXWXUH EHQHILWV XQGHU WKH WHUPV RI WKH SODQ´ 86& D% 6HFWLRQ D SURYLGHV IRU D FLYLO DFWLRQ E\ D SDUWLFLSDQW RU EHQHILFLDU\ ³WR HQMRLQ DQ\ DFW RU SUDFWLFH ZKLFK YLRODWHV WKH WHUPV RI WKH SODQ RU WR REWDLQ RWKHU DSSURSULDWH HTXLWDEOH UHOLHI WR UHGUHVV VXFK YLRODWLRQV RU WR HQIRUFH WKH WHUPV RI WKH SODQ´ D 7KH 6XSUHPH &RXUW KDV GHVFULEHG VHFWLRQ D DV D ³FRPSUHKHQVLYH FLYLO HQIRUFHPHQW VFKHPH´ WKDW LV ³UHODWLYHO\ VWUDLJKWIRUZDUG´ Aetna Health Inc. v. Davila 86 ± TXRWLQJ Pilot Life Ins. Co. v. Dedeaux 86 ,I D SDUWLFLSDQW RU EHQHILFLDU\ EHOLHYHV WKDW EHQHILWV SURPLVHG WR KLP XQGHU WKH WHUPV RI WKH SODQ DUH QRW SURYLGHG KH FDQ EULQJ VXLW VHHNLQJ SURYLVLRQ RI WKRVH EHQHILWV $ SDUWLFLSDQW RU EHQHILFLDU\ FDQ DOVR EULQJ VXLW JHQHULFDOO\ WR ³HQIRUFH KLV ULJKWV´ XQGHU WKH SODQ RU WR FODULI\ DQ\ RI KLV ULJKWV WR IXWXUH EHQHILWV Id. DW 7KH &RXUW ZHQW RQ WR H[SODLQ WKDW ³>W@KH VL[ FDUHIXOO\ LQWHJUDWHG FLYLO HQIRUFHPHQW SURYLVLRQV IRXQG LQ >WKLV VHFWLRQ@ RI WKH VWDWXWH DV ILQDOO\ HQDFWHG SURYLGH VWURQJ HYLGHQFH WKDW &RQJUHVV GLG not LQWHQG WR DXWKRUL]H RWKHU UHPHGLHV WKDW LW VLPSO\ IRUJRW WR LQFRUSRUDWH H[SUHVVO\´ Id. DW TXRWLQJ Pilot Life Ins. Co. 86 DW HPSKDVLV LQ RULJLQDO 6SHFLILFDOO\ DGGUHVVLQJ 6HFWLRQ D WKH 6XSUHPH &RXUW KDV KHOG WKDW WKLV VHFWLRQ ³DGPLWV RI QR OLPLW RQ WKH XQLYHUVH RI SRVVLEOH GHIHQGDQWV´ DQG LQVWHDG LV IRFXVHG ³RQ UHGUHVVLQJ WKH µact or practice ZKLFK YLRODWHV DQ\ SURYLVLRQ¶´ RI (5,6$ Harris Tr. & Sav. Bank v. Salomon Smith Barney, Inc. 86 TXRWLQJ 86& D HPSKDVLV LQ RULJLQDO see id. DW ³>'@HIHQGDQW VWDWXV XQGHU >@D PD\ DULVH IURP GXWLHV LPSRVHG E\ >@D LWVHOI DQG KHQFH GRHV QRW WXUQ RQ ZKHWKHU WKH GHIHQGDQW LV H[SUHVVO\ VXEMHFW WR D GXW\ XQGHU RQH RI (5,6$¶V VXEVWDQWLYH SURYLVLRQV´ 7KH &RXUW HPSKDVL]HG WKDW ³>R@WKHU SURYLVLRQV RI (5,6$ E\ FRQWUDVW GR H[SUHVVO\ DGGUHVV ZKR PD\ EH D GHIHQGDQW´ DQG WKDW ³>L@Q OLJKW RI &RQJUHVV¶ SUHFLVLRQ LQ WKHVH UHVSHFWV´ LW LV SURSHU WR ³DVVXPH WKDW &RQJUHVV¶ IDLOXUH WR VSHFLI\ SURSHU GHIHQGDQWV ZDV LQWHQWLRQDO´ Id. DW ± 6LQFH QHLWKHU SURYLVLRQ RI WKH VWDWXWH H[SUHVVO\ LGHQWLILHV D SURSHU GHIHQGDQW WKH &RXUW ZLOO QRW UHDG D WHUP LQWR WKH VWDWXWH WKDW LV QRW SUHVHQW 6R SODLQWLII¶V IDLOXUH WR DOOHJH IDFWV WR VKRZ WKDW GHIHQGDQW LV D ILGXFLDU\ GRHV QRW SUHFOXGH &RXQW , IURP JRLQJ IRUZDUG DJDLQVW WKH XQLRQ DW WKLV WLPH &21&/86,21 )RU DOO RI WKHVH UHDVRQV WKH &RXUW ZLOO GLVPLVV WKH FODLPV LQ &RXQW ,, DJDLQVW 'LVWULFW /RGJH DQG WKH UHPDLQGHU RI WKH FDVH ZLOO JR IRUZDUG $ VHSDUDWH RUGHU ZLOO LVVXH $0< %(50$1 -$&.621 8QLWHG 6WDWHV 'LVWULFW -XGJH '$7( 1RYHPEHU