Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 1 of 35 Page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† 0DJLVWUDWH -XGJH 'DQLHO 0DUWLQ KHOG D KHDULQJ DQG HQWHUHG DQ RUGHU FHUWLI\LQJ 9HQFNLHQH DV H[WUDGLWDEOH VHH ,Q UH ([WUDGLWLRQ RI 1HULQJD 9HQFNLHQH 1R &5 1 ' ,OO )HE DIWHU ZKLFK WKH 6HFUHWDU\ RI 6WDWH UHYLHZHG WKH PDWWHU DQG LVVXHG D ZDUUDQW IRU KHU VXUUHQGHU WR WKH /LWKXDQLDQ JRYHUQPHQW ,G DW 'NW ([ $ 2Q $SULO 9HQFNLHQH ILOHG D 3HWLWLRQ IRU D :ULW RI +DEHDV &RUSXV SXUVXDQW WR 8 6 & † VHHNLQJ UHYLHZ RI -XGJH 0DUWLQ¶V 2UGHU FHUWLI\LQJ KHU DV H[WUDGLWDEOH DQG WKH 6HFUHWDU\ RI 6WDWH¶V DXWKRUL]DWLRQ RI KHU VXUUHQGHU 'NW 2Q 0D\ 9HQFNLHQH ILOHG D 0RWLRQ IRU ([WHQVLRQ RI 6WD\ VHHNLQJ WR VWD\ KHU VXUUHQGHU XQWLO DIWHU KHU KDEHDV SHWLWLRQ KDV EHHQ GHFLGHG 'NW 9HQFNLHQH¶V 3HWLWLRQ DQG 0RWLRQ UDLVH VHULRXV LVVXHV FRQFHUQLQJ WKH 8QLWHG 6WDWHV¶ H[WUDGLWLRQ SURFHVV DQG SURSULHW\ RI KHU QDWLYH FRXQWU\¶V SROLWLFDO DQG MXGLFLDO V\VWHPV +RZHYHU JLYHQ WKH QDUURZ VFRSH RI KDEHDV UHYLHZ LQ H[WUDGLWLRQ SURFHHGLQJV DQG WKH EXUGHQVRPH VKRZLQJ UHTXLUHG WR REWDLQ D VWD\ WKLV &RXUW¶V DXWKRULW\ WR SURYLGH 9HQFNLHQH WKH UHOLHI VRXJKW LQ KHU 0RWLRQ LV TXLWH OLPLWHG 2I FRXUVH LQ Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 2 of 35 PageID #:559 DGGUHVVLQJ WKH LVVXHV UDLVHG E\ 9HQFNHLQH¶V 3HWLWLRQ DQG 0RWLRQ WKLV &RXUW PXVW UHVSHFW WKH ULJKW RI VRYHUHLJQ QDWLRQV WR HQDFW DQG HQIRUFH WKHLU RZQ FULPLQDO ODZV DQG WKH SULQFLSOH RI FRPLW\ XQGHUSLQQLQJ WKH PXWXDO OHJDO DVVLVWDQFH WUHDWLHV HQWHUHG EHWZHHQ QDWLRQV WR IDFLOLWDWH LQWHUQDWLRQDO UXOH RI ODZ DQG WKH YHU\ SURWHFWLRQ RI WKRVH ULJKWV )RU WKH IROORZLQJ UHDVRQV 9HQFNLHQH¶V 0RWLRQ IRU ([WHQVLRQ RI 6WD\ 'NW LV GHQLHG %$&.*5281' , 5HTXHVW IRU ([WUDGLWLRQ DQG $UUHVW 2Q -DQXDU\ WKH *RYHUQPHQW ILOHG D &ULPLQDO &RPSODLQW EHIRUH 0DJLVWUDWH -XGJH :HLVPDQ UHTXHVWLQJ WKDW WKH FRXUW LVVXH D ZDUUDQW IRU WKH DUUHVW RI 1HULQJD 9HQFNLHQH LQ DFFRUGDQFH ZLWK 8 6 & † DQG WKH ([WUDGLWLRQ 7UHDW\ EHWZHHQ WKH 8QLWHG 6WDWHV DQG WKH 5HSXEOLF RI /LWKXDQLD WKH ³7UHDW\´ 6HH 86$ Y 9HQFNLHQH 1R &5 1 ' ,OO DW 'NW 7KH &RPSODLQW VWDWHG WKDW WKH *RYHUQPHQW RI /LWKXDQLD KDG VXEPLWWHG D IRUPDO UHTXHVW WKURXJK GLSORPDWLF FKDQQHOV IRU WKH H[WUDGLWLRQ RI 9HQFNLHQH SXUVXDQW WR WKH 7UHDW\ WR IDFH FKDUJHV LVVXHG DJDLQVW KHU IRU WKH IROORZLQJ RIIHQVHV DOOHJHGO\ FRPPLWWHG LQ /LWKXDQLD FRPSOLFLW\ LQ FRPPLWWLQJ D FULPLQDO DFW XQODZIXO FROOHFWLRQ RI LQIRUPDWLRQ DERXW D SHUVRQ¶V SULYDWH OLIH L H VWDONLQJ LQ YLRODWLRQ RI /LWKXDQLD &ULPLQDO &RGH $UWLFOH XQODZIXO FROOHFWLRQ RI LQIRUPDWLRQ DERXW D SHUVRQ¶V SULYDWH OLIH VWDONLQJ LQ YLRODWLRQ RI /LWKXDQLD &ULPLQDO &RGH $UWLFOH L H KLQGHULQJ WKH DFWLYLWLHV RI D EDLOLII LQ YLRODWLRQ RI /LWKXDQLD &ULPLQDO &RGH $UWLFOH IDLOXUH WR FRPSO\ ZLWK D FRXUW¶V GHFLVLRQ QRW DVVRFLDWHG ZLWK D SHQDOW\ LQ YLRODWLRQ RI /LWKXDQLDQ &ULPLQDO &RGH $UWLFOH FDXVLQJ SK\VLFDO SDLQ LQ YLRODWLRQ RI /LWKXDQLD &ULPLQDO &RGH D DQG UHVLVWDQFH DJDLQVW D FLYLO VHUYDQW RU D SHUVRQ SHUIRUPLQJ WKH IXQFWLRQV RI SXEOLF DGPLQLVWUDWLRQ LQ YLRODWLRQ RI /LWKXDQLD &ULPLQDO &RGH $UWLFOH ,G Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 3 of 35 PageID #:560 -XGJH :HLVPDQ LVVXHG WKH DUUHVW ZDUUDQW WKH VDPH GD\ ,G DW 'NW 2Q )HEUXDU\ 9HQFNLHQH ZDV DUUHVWHG DQG DSSHDUHG EHIRUH 0DJLVWUDWH -XGJH 5RZODQG ,G DW 'NW ,, 3URFHHGLQJV EHIRUH 0DJLVWUDWH -XGJH 0DUWLQ 2Q )HEUXDU\ 0DJLVWUDWH -XGJH 0DUWLQ KHOG DQ H[WUDGLWLRQ KHDULQJ DQG WKDW VDPH GD\ LVVXHG DQ 2UGHU JUDQWLQJ WKH *RYHUQPHQW¶V H[WUDGLWLRQ UHTXHVW DQG ILQGLQJ WKH 7UHDW\ HQFRPSDVVHG WKH FULPHV FKDUJHG WKH ZDUUDQWV DQG GRFXPHQWV SURYLGHG E\ WKH *RYHUQPHQW RI /LWKXDQLD LQ VXSSRUW RI LWV UHTXHVW IRU H[WUDGLWLRQ ZHUH SURSHUO\ DXWKHQWLFDWHG DQG WKH FRPPLVVLRQ RI WZR RI WKH FULPHV FKDUJHG²³KLQGHULQJ WKH DFWLYLWLHV RI D MXGJH SURVHFXWRU SUH WULDO LQYHVWLJDWLRQ RIILFHU ODZ\HU RU EDLOLII´ DQG ³UHVLVWDQFH DJDLQVW D FLYLO VHUYDQW RU D SHUVRQ SHUIRUPLQJ WKH IXQFWLRQV RI SXEOLF DGPLQLVWUDWLRQ IRU ZKLFK H[WUDGLWLRQ LV VRXJKW´²ZDV HVWDEOLVKHG E\ SUREDEOH FDXVH WKDW ZRXOG MXVWLI\ FRPPLWPHQW IRU WULDO LI WKH RIIHQVH KDG EHHQ FRPPLWWHG LQ WKH 8QLWHG 6WDWHV ,G DW 'NW 7KH 2UGHU LQGLFDWHG WKDW WKH KHDULQJ ODVWHG WZR KRXUV ,G 2Q )HEUXDU\ -XGJH 0DUWLQ LVVXHG D &HUWLILFDWLRQ DQG &RPPLWWDO IRU ([WUDGLWLRQ FHUWLI\LQJ 9HQFNLHQH DV H[WUDGLWDEOH IRU WKH IROORZLQJ RIIHQVHV KLQGHULQJ WKH DFWLYLWLHV RI D EDLOLII IDLOXUH WR FRPSO\ ZLWK D FRXUW¶V GHFLVLRQ QRW DVVRFLDWHG ZLWK D SHQDOW\ FDXVLQJ SK\VLFDO SDLQ DQG UHVLVWDQFH DJDLQVW D FLYLO VHUYDQW RU D SHUVRQ SHUIRUPLQJ WKH IXQFWLRQV RI SXEOLF DGPLQLVWUDWLRQ ,G DW 'NW 7KH &HUWLILFDWLRQ DQG &RPPLWWDO DOVR FRPPLWWHG 9HQFNLHQH WR WKH FXVWRG\ RI WKH 8 6 0DUVKDOV SHQGLQJ WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ RQ H[WUDGLWLRQ DQG VXUUHQGHU ,G 7KDW VDPH GD\ WKH *RYHUQPHQW VHQW 9HQFNLHQH¶V DWWRUQH\ D OHWWHU QRWLI\LQJ KLP RI WKH QH[W VWHSV LQ WKH H[WUDGLWLRQ SURFHVV ,G DW 'NW 7KH OHWWHU DOVR QRWLILHG 9HQFNLHQH¶V FRXQVHO WKDW WKH 6HFUHWDU\ PD\ PDNH LWV GHFLVLRQ DW DQ\ WLPH DIWHU &HUWLILFDWLRQ WKDW VXUUHQGHU W\SLFDOO\ WDNHV SODFH ZLWKLQ WZR PRQWKV LI WKH H[WUDGLWLRQ UHTXHVW LV JUDQWHG DQG WKDW -XGJH 0DUWLQ¶V &HUWLILFDWLRQ ZDV Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 4 of 35 Page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¶V SUREDEOH FDXVH ILQGLQJV DQG LQ WKH DOWHUQDWLYH DUJXLQJ WKDW WKH RIIHQVHV FKDUJHG ZHUH VXEMHFW WR WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ WR WKH 7UHDW\ ,G DW 'NW 7KH *RYHUQPHQW REMHFWHG RQ WKH JURXQGV WKDW D VWD\ ZRXOG QRW EH QHFHVVDU\ EHFDXVH WKH 6HFUHWDU\ RI 6WDWH ZRXOG QRW LVVXH D ZDUUDQW XQWLO DW OHDVW GD\V DIWHU WKH HQWU\ RI WKH &HUWLILFDWLRQ 2UGHU GXULQJ ZKLFK WLPH 9HQFNLHQH FRXOG VHHN KDEHDV UHOLHI WKHUHE\ DXWRPDWLFDOO\ VXVSHQGLQJ WKH 6HFUHWDU\¶V UHYLHZ RI WKH H[WUDGLWLRQ PDWWHU RU VXEPLW DGGLWLRQDO PDWHULDOV WR WKH 6HFUHWDU\ RI 6WDWH IRU FRQVLGHUDWLRQ ,G DW 'NW 2Q 0DUFK -XGJH 0DUWLQ GHQLHG 9HQFNLHQH¶V 0RWLRQ WR 6WD\ ,G DW 'NW 9HQFNLHQH VXEPLWWHG PDWHULDOV WR WKH 6HFUHWDU\ RI 6WDWH EXW GLG QRW ILOH D KDEHDV SHWLWLRQ ,G DW 'NW 2Q $SULO WKH 6HFUHWDU\ RI 6WDWH DXWKRUL]HG 9HQFNLHQH¶V VXUUHQGHU SXUVXDQW WR WKH 7UHDW\ ,G DW 'NW ([ $ 9HQFNLHQH¶V FRXQVHO ZDV QRWLILHG RI WKH GHFLVLRQ E\ OHWWHU GDWHG $SULO ,G 7KH 6HFUHWDU\ GLG QRW VSHFLI\ WKH UHDVRQV IRU LWV GHFLVLRQ LQ WKH OHWWHU EXW VWDWHG WKH GHFLVLRQ ZDV EDVHG RQ ³D UHYLHZ RI DOO SHUWLQHQW LQIRUPDWLRQ LQFOXGLQJ SOHDGLQJV DQG ILOLQJV VXEPLWWHG RQ EHKDOI RI 0V 9HQFNLHQH´ XS WR DQG LQFOXGLQJ $SULO ,G Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 5 of 35 PageID #:562 2Q $SULO 9HQFNLHQH ILOHG D 0RWLRQ WR 6WD\ ([WUDGLWLRQ EHIRUH -XGJH 0DUWLQ UHTXHVWLQJ WKDW WKH FRXUW VWD\ FHUWLILFDWLRQ RI WKH H[WUDGLWLRQ RUGHU RU VHW D KHDULQJ DW ZKLFK VKH FRXOG SUHVHQW DGGLWLRQDO HYLGHQFH LQ VXSSRUW RI WKH UHTXHVWHG VWD\ ,G DW 'NW 7KH *RYHUQPHQW RSSRVHG WKH PRWLRQ DUJXLQJ SULPDULO\ WKDW 9HQFNLHQH HVVHQWLDOO\ VRXJKW D VWD\ RI KHU VXUUHQGHU QRW RI WKH FRXUW¶V FHUWLILFDWLRQ DQG WKDW WKH FRXUW QR ORQJHU KDG MXULVGLFWLRQ WR VWD\ 9HQFNLHQH¶V VXUUHQGHU IROORZLQJ WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ ,G DW 'NW 7KH *RYHUQPHQW H[SODLQHG WKDW FRXUWV W\SLFDOO\ RQO\ H[HUFLVHG DXWKRULW\ WR LVVXH D VWD\ LQ H[WUDGLWLRQ SURFHHGLQJV SXUVXDQW WR KDEHDV FRUSXV SURFHHGLQJV LQLWLDWHG EHIRUH WKH 6HFUHWDU\ LVVXHG LWV H[WUDGLWLRQ GHWHUPLQDWLRQ ZKLFK GLG QRW RFFXU LQ 9HQFNLHQH¶V FDVH DQG WKDW WKH *RYHUQPHQW NQHZ RI QR UHSRUWHG FDVH LQ ZKLFK WKH FRXUW LVVXHG D VWD\ IROORZLQJ WKH 6HFUHWDU\ RI 6WDWH¶V GHWHUPLQDWLRQ ,G 9HQFNLHQH¶V QRWLFHG XS KHU 0RWLRQ EHIRUH -XGJH 0DUWLQ IRU 0D\ ,G DW 'NW 3ULRU WR WKDW GDWH RQ $SULO 9HQFNLHQH ILOHG D 3HWLWLRQ IRU D :ULW RI +DEHDV &RUSXV LQ WKLV &RXUW $W WKH 0D\ KHDULQJ LQ OLJKW RI 9HQFNLHQH¶V KDEHDV SHWLWLRQ -XGJH 0DUWLQ JUDQWHG 9HQFNLHQH¶V 0RWLRQ WR 6WD\ ([WUDGLWLRQ RQO\ WKURXJK DQG LQFOXGLQJ 0D\ ²WKH HDUOLHVW GDWH WKH PDWWHU FRXOG EH EURXJKW EHIRUH WKLV &RXUW ,G DW 'NW VHH DOVR 'NW ,,, 3URFHHGLQJV EHIRUH WKLV &RXUW $V VWDWHG DERYH 9HQFNLHQH ILOHG D 3HWLWLRQ IRU D :ULW RI +DEHDV &RUSXV LQ WKLV &RXUW RQ $SULO 'NW 7KH 3HWLWLRQ UHTXHVWV WKDW WKH &RXUW SUHYHQW KHU H[WUDGLWLRQ WR /LWKXDQLD IRU WKH IROORZLQJ UHDVRQV WKH RIIHQVHV FKDUJHG IDOO XQGHU WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ RI WKH 7UHDW\ WKH 0DJLVWUDWH -XGJH HUUHG LQ ILQGLQJ SUREDEOH FDXVH H[LVWHG DV WR WZR RI WKH RIIHQVHV DQG WKH H[WUDGLWLRQ VFKHPH YLRODWHV GXH SURFHVV WR WKH H[WHQW WKH 6HFUHWDU\ FDQ PDNH LWV GHWHUPLQDWLRQ ZLWKRXW SURYLGLQJ DQ\ EDVLV IRU LWV UXOLQJ ,G Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 6 of 35 PageID #:563 2Q 0D\ 9HQFNLHQH ILOHG D 0RWLRQ IRU ([WHQVLRQ RI 6WD\ WR H[WHQG WKH VWD\ LVVXHG E\ -XGJH 0DUWLQ XQWLO VXFK WLPH WKDW KHU KDEHDV SHWLWLRQ FDQ EH KHDUG RU LQ WKH DOWHUQDWLYH WR VHW D EULHILQJ VFKHGXOH DQG D KHDULQJ GDWH RQ WKH UHTXHVWHG VWD\ 'NW 7KH *RYHUQPHQW RSSRVHG WKH 0RWLRQ RQ HVVHQWLDOO\ WKH VDPH JURXQGV LW RSSRVHG 9HQFNLHQH¶V SULRU PRWLRQ EHIRUH -XGJH 0DUWLQ WKDW WKH &RXUW KDV QR DXWKRULW\ WR UHYLHZ WKH VXEVWDQFH RI WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ RU WR UHYLHZ -XGJH 0DUWLQ¶V FHUWLILFDWLRQ RUGHU QRZ WKDW WKH 6HFUHWDU\ KDV PDGH LWV GHFLVLRQ LI WKH &RXUW KDV DXWKRULW\ WR UHYLHZ WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ 9HQFNLHQH FDQQRW VKRZ D GXH SURFHVV IODZ LQ WKH 8 6 H[WUDGLWLRQ VFKHPH DQG LI WKH &RXUW KDV DXWKRULW\ WR UHYLHZ -XGJH 0DUWLQ¶V FHUWLILFDWLRQ RUGHU 9HQFNLHQH FDQQRW PDNH D VWURQJ VKRZLQJ VKH LV OLNHO\ WR VXFFHHG RQ WKH PHULWV RI KHU KDEHDV SHWLWLRQ 'NW 7KH &RXUW KHOG D KHDULQJ RQ 9HQFNLHQH¶V 0RWLRQ RQ 0D\ DQG RUGHUHG 3HWLWLRQHU WR ILOH D UHSO\ LQ VXSSRUW RI KHU 0RWLRQ IRU ([WHQVLRQ RI 6WD\ 'NW 7KH &RXUW KHOG DQRWKHU KHDULQJ RQ WKH IXOO\ EULHIHG 0RWLRQ RQ -XQH 'NW ,Q UHVSRQVH WR WKH &RXUW¶V TXHVWLRQV DW WKH -XQH KHDULQJ 9HQFNLHQH UDLVHG DGGLWLRQDO DUJXPHQWV LQ VXSSRUW RI KHU 0RWLRQ DQG 3HWLWLRQ LQFOXGLQJ WKDW WKH 6HFUHWDU\ RI 6WDWH DOOHJHGO\ EDVHG LWV GHWHUPLQDWLRQ RQ D FRQVWLWXWLRQDOO\ LPSHUPLVVLEOH EDVLV DQG WKDW WZR &RQJUHVVPHQ KDG LQWURGXFHG VHSDUDWH ELOOV WKDW LI SDVVHG ZRXOG SUHYHQW 9HQFNLHQH¶V H[WUDGLWLRQ XQWLO KHU SHQGLQJ DV\OXP FDVH ZDV KHDUG 6HH 'NW 7KH &RXUW GLUHFWHG 9HQFNLHQH WR SUHVHQW WKHVH QHZ DUJXPHQWV LQ D VXSSOHPHQWDO EULHI WR WKH &RXUW 9HQFNLHQH ILOHG KHU VXSSOHPHQWDO EULHI RQ -XO\ ,G ',6&866,21 ,Q KHU KDEHDV SHWLWLRQ 9HQFNLHQH FKDOOHQJHV ERWK WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ DQG -XGJH 0DUWLQ¶V 2UGHU FHUWLI\LQJ KHU DV H[WUDGLWDEOH 9HQFNLHQH PXVW VKRZ ILUVW WKDW WKLV &RXUW KDV DXWKRULW\ DW WKLV VWDJH WR UHYLHZ HLWKHU UXOLQJ ,I WKH &RXUW ILQGV WKDW LW FDQ KHDU Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 7 of 35 PageID #:564 9HQFNLHQH¶V KDEHDV SHWLWLRQ RQ HLWKHU JURXQG LW PXVW WKHQ GHFLGH ZKHWKHU WR VWD\ 9HQFNLHQH¶V H[WUDGLWLRQ XQWLO VXFK SHWLWLRQ LV KHDUG 9HQFNLHQH DOVR DUJXHV WKDW KHU H[WUDGLWLRQ VKRXOG EH VWD\HG XQWLO &RQJUHVV YRWHV RQ WKH WZR SHQGLQJ ELOOV WKDW ZRXOG SUHYHQW KHU H[WUDGLWLRQ XQWLO KHU DV\OXP FDVH LV KHDUG 7KH &RXUW FRQVLGHUV IRXU IDFWRUV LQ GHWHUPLQLQJ ZKHWKHU WR JUDQW D VWD\ ³ ZKHWKHU WKH VWD\ DSSOLFDQW KDV PDGH D VWURQJ VKRZLQJ WKDW KH LV OLNHO\ WR VXFFHHG RQ WKH PHULWV ZKHWKHU WKH DSSOLFDQW ZLOO EH LUUHSDUDEO\ LQMXUHG DEVHQW D VWD\ ZKHWKHU LVVXDQFH RI WKH VWD\ ZLOO VXEVWDQWLDOO\ LQMXUH WKH RWKHU SDUWLHV LQWHUHVWHG LQ WKH SURFHHGLQJ DQG ZKHUH WKH SXEOLF LQWHUHVW OLHV ´ 1NHQ Y +ROGHU 8 6 TXRWLQJ +LOWRQ Y %UDXQVNLOO 8 6 7KH ILUVW WZR IDFWRUV DUH WKH ³PRVW FULWLFDO ´ ,G $ VWD\ LV QRW D PDWWHU RI ULJKW ³HYHQ LI LUUHSDUDEOH LQMXU\ PLJKW RWKHUZLVH UHVXOW ´ ,G DW TXRWLQJ 9LUJLQLDQ 5 &R Y 8QLWHG 6WDWHV 8 6 7KH SDUW\ UHTXHVWLQJ D VWD\ ³EHDUV WKH EXUGHQ RI VKRZLQJ WKDW WKH FLUFXPVWDQFHV MXVWLI\ DQ H[HUFLVH RI >WKH FRXUW¶V@ GLVFUHWLRQ ´ ,G DW ± , 7KH 6HFUHWDU\ RI 6WDWH¶V ([WUDGLWLRQ 'HWHUPLQDWLRQ 7LWOH 8 6 & † SURYLGHV WKH IROORZLQJ H[WUDGLWLRQ VFKHPH ZKHUH D WUHDW\ IRU H[WUDGLWLRQ H[LVWV EHWZHHQ WKH 8QLWHG 6WDWHV DQG D IRUHLJQ JRYHUQPHQW WKH *RYHUQPHQW ILOHV D FRPSODLQW LQ IHGHUDO FRXUW FKDUJLQJ D SHUVRQ ZLWK KDYLQJ FRPPLWWHG FULPHV FRYHUHG E\ WKH DSSOLFDEOH WUHDW\ LQ WKH MXULVGLFWLRQ RI WKH IRUHLJQ JRYHUQPHQW WKH PDJLVWUDWH MXGJH LVVXHV D ZDUUDQW IRU WKDW SHUVRQ¶V DUUHVW DQG KHDUV HYLGHQFH DV WR WKH FKDUJHV DQG LI WKH PDJLVWUDWH MXGJH ³GHHPV WKH HYLGHQFH VXIILFLHQW WR VXVWDLQ WKH FKDUJH>V@ ´ KH ³VKDOO FHUWLI\ >KLV RU KHU ILQGLQJV@ WR WKH 6HFUHWDU\ RI 6WDWH ´ 8 6 & † 7KH 6HFUHWDU\ RI 6WDWH WKHQ GHFLGHV ZKHWKHU WR 7KHVH DUH WKH ³WUDGLWLRQDO´ VWD\ IDFWRUV 1NHQ 8 6 DW 7KH SDUWLHV GR QRW GLVSXWH WKDW WKHVH IDFWRUV JRYHUQ 9HQFNLHQH¶V 0RWLRQ Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 8 of 35 PageID #:565 VXUUHQGHU WKH LQGLYLGXDO WR WKH UHTXHVWLQJ IRUHLJQ JRYHUQPHQW 0DWWHU RI $VVDUVVRQ ) G WK &LU FLWLQJ 8 6 & † ³,I WKH FDVH LV FHUWLILHG WR WKH 6HFUHWDU\ IRU FRPSOHWLRQ RI WKH H[WUDGLWLRQ SURFHVV LW LV LQ WKH 6HFUHWDU\¶V VROH GLVFUHWLRQ WR GHWHUPLQH ZKHWKHU RU QRW H[WUDGLWLRQ VKRXOG SURFHHG IXUWKHU ZLWK WKH LVVXDQFH RI D ZDUUDQW RI VXUUHQGHU ´ (DLQ Y :LONHV ) G WK &LU VHH DOVR 'H6LOYD Y 'L/HRQDUGL ) G WK &LU ³$ FHUWLILFDWH RI H[WUDGLWLRQ LV QR GLIIHUHQW IURP D VHDUFK ZDUUDQW RU DQ RUGHU DSSURYLQJ D GHSRUWDWLRQ LW DXWKRUL]HV EXW GRHV QRW FRPSHO WKH H[HFXWLYH EUDQFK RI JRYHUQPHQW WR DFW LQ D FHUWDLQ ZD\ ´ ,Q UH ([WUDGLWLRQ RI )XOJHQFLR *DUFLD ) 6XSS G 1 ' ,OO ³7KH ILQDO GHFLVLRQ RQ ZKHWKHU RU QRW WR H[WUDGLWH WKH IXJLWLYH LV UHVHUYHG WR WKH 6HFUHWDU\ RI 6WDWH ´ 0DUWLQ Y :DUGHQ $WODQWD 3HQ ) G WK &LU ³([WUDGLWLRQ XOWLPDWHO\ UHPDLQV DQ ([HFXWLYH IXQFWLRQ $IWHU WKH FRXUWV KDYH FRPSOHWHG WKHLU OLPLWHG LQTXLU\ WKH 6HFUHWDU\ RI 6WDWH FRQGXFWV DQ LQGHSHQGHQW UHYLHZ RI WKH FDVH WR GHWHUPLQH ZKHWKHU WR LVVXH D ZDUUDQW RI VXUUHQGHU ´ 8QGHU WKH UXOH RI QRQ LQTXLU\ WKH 6HFUHWDU\ RI 6WDWH KDV VROH DXWKRULW\ WR FRQVLGHU RWKHU IDFWRUV VXFK DV WKH UHTXHVWLQJ VWDWH¶V SROLWLFDO PRWLYDWLRQV ZKHWKHU WKH UHTXHVWLQJ VWDWH¶V MXVWLFH V\VWHP LV IDLU DQG ZKHWKHU WKH UHTXHVW VKRXOG EH GHQLHG RQ KXPDQLWDULDQ JURXQGV (DLQ ) G DW WK &LU ³,W LV WKH VHWWOHG UXOH WKDW LW LV ZLWKLQ WKH 6HFUHWDU\ RI 6WDWH¶V VROH GLVFUHWLRQ WR GHWHUPLQH ZKHWKHU RU QRW D FRXQWU\¶V UHTXLVLWLRQ IRU H[WUDGLWLRQ LV PDGH ZLWK D YLHZ WR WU\ RU SXQLVK WKH IXJLWLYH IRU D SROLWLFDO FULPH L H ZKHWKHU WKH UHTXHVW LV D VXEWHUIXJH ´ 0DWWHU RI ([WUDGLWLRQ RI 1RHOOHU 1R &5 :/ DW 1 ' ,OO )HE ³>7@KH 6HFUHWDU\ RI 6WDWH VKRXOG DGGUHVV D IXJLWLYH¶V FRQWHQWLRQV WKDW DQ H[WUDGLWLRQ UHTXHVW LV SROLWLFDOO\ PRWLYDWHG WKDW WKH UHTXHVWLQJ VWDWH¶V MXVWLFH V\VWHP LV XQIDLU RU WKDW H[WUDGLWLRQ VKRXOG EH GHQLHG RQ KXPDQLWDULDQ JURXQGV ´ 0DJLVWUDWH MXGJHV DUH SUHFOXGHG IURP FRQVLGHULQJ VXFK IDFWRUV 6HH Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 9 of 35 PageID #:566 H J ,Q UH ([WUDGLWLRQ RI 6DODV ) 6XSS G 1 ' ,OO ³7KH SUHYDLOLQJ FDVH ODZ LV WR WKH HIIHFW WKDW DQ H[WUDGLWLRQ GHWDLQHH¶V FODLP WKDW KH ZLOO EH PLVWUHDWHG GHQLHG D IDLU WULDO GHSULYHG RI KLV FRQVWLWXWLRQDO DQG KXPDQ ULJKWV RU HYHQ GHSULYHG RI KLV OLIH LI UHWXUQHG WR WKH UHTXHVWLQJ VRYHUHLJQ LV QRW D SURSHU PDWWHU IRU FRQVLGHUDWLRQ E\ WKH FHUWLI\LQJ 0DJLVWUDWH -XGJH ,W LV WKH IXQFWLRQ RI WKH 6HFUHWDU\ RI 6WDWH WR GHWHUPLQH ZKHWKHU H[WUDGLWLRQ VKRXOG EH GHQLHG RQ KXPDQLWDULDQ JURXQGV ´ 0DUWLQ ) G DW WK &LU ³7KH 6HFUHWDU\ H[HUFLVHV EURDG GLVFUHWLRQ DQG PD\ SURSHUO\ FRQVLGHU P\ULDG IDFWRUV DIIHFWLQJ ERWK WKH LQGLYLGXDO GHIHQGDQW DV ZHOO DV IRUHLJQ UHODWLRQV ZKLFK DQ H[WUDGLWLRQ PDJLVWUDWH PD\ QRW ´ ³7KLV SUDFWLFH LV FRQVLVWHQW ZLWK WKH ORQJ KHOG XQGHUVWDQGLQJ WKDW WKH VXUUHQGHU RI D IXJLWLYH WR D IRUHLJQ JRYHUQPHQW LV µSXUHO\ D QDWLRQDO DFW SHUIRUPHG WKURXJK WKH 6HFUHWDU\ RI 6WDWH ¶´ 0DWWHU RI ([WUDGLWLRQ RI 1RHOOHU :/ DW TXRWLQJ ,Q UH .DLQH 8 6 ,W LV DOVR YLWDO WR WKH YHU\ FRQFHSW EHKLQG PXWXDO OHJDO DVVLVWDQFH WUHDWLHV WKH SXUSRVH RI ZKLFK LV WR IDFLOLWDWH FRRSHUDWLRQ EHWZHHQ QDWLRQV LQ RUGHU WR SURWHFW WKH VRYHUHLJQW\ RI HDFK WR WKH H[WHQW SRVVLEOH ZLWKRXW YLRODWLQJ UHVSHFWLYH FRQVWLWXWLRQDO EHOLHIV $FFRUGLQJO\ WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ LV JHQHUDOO\ QRW VXEMHFW WR MXGLFLDO UHYLHZ 6HH H J 0DUWLQ ) G DW ³7KH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ LV QRW JHQHUDOO\ UHYLHZDEOH E\ WKH FRXUWV ´ (VFREHGR Y 8QLWHG 6WDWHV ) G WK &LU ³$VVXPLQJ WKDW WKH PDJLVWUDWH¶V GHFLVLRQ LV LQ IDYRU RI H[WUDGLWLRQ WKH ([HFXWLYH¶V GLVFUHWLRQDU\ GHWHUPLQDWLRQ WR H[WUDGLWH WKH IXJLWLYH LV QRW JHQHUDOO\ VXEMHFW WR MXGLFLDO UHYLHZ 7KH XOWLPDWH GHFLVLRQ WR H[WUDGLWH LV D PDWWHU ZLWKLQ WKH H[FOXVLYH SUHURJDWLYH RI WKH ([HFXWLYH LQ WKH H[HUFLVH RI LWV SRZHUV WR FRQGXFW IRUHLJQ DIIDLUV ´ +RZHYHU WKH 6HYHQWK &LUFXLW KDV UHFRJQL]HG DV D QDUURZ H[FHSWLRQ WR WKLV JHQHUDO UXOH WKDW WKH ([HFXWLYH¶V FRQGXFW LQ PDNLQJ LWV H[WUDGLWLRQ GHWHUPLQDWLRQ LV VXEMHFW WR VRPH FRQVWLWXWLRQDO FRQVWUDLQWV 6HH 0DWWHU RI %XUW Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 10 of 35 PageID #:567 ) G WK &LU ³>)@HGHUDO FRXUWV XQGHUWDNLQJ KDEHDV FRUSXV UHYLHZ RI H[WUDGLWLRQV KDYH WKH DXWKRULW\ WR FRQVLGHU WKH VXEVWDQWLYH FRQGXFW RI WKH 8QLWHG 6WDWHV LQ XQGHUWDNLQJ LWV GHFLVLRQ WR H[WUDGLWH LI VXFK FRQGXFW YLRODWHV FRQVWLWXWLRQDO ULJKWV ´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¶V GLVFUHWLRQ LQ H[WUDGLWLRQ SURFHHGLQJV 6HH H J 0DUWLQ ) G DW ³7KH 8QLWHG 6WDWHV¶ DFWLRQV LQ UHYLHZLQJ D UHTXHVW IRU H[WUDGLWLRQ DUH RI FRXUVH VXEMHFW WR WKH FRQVWUDLQWV RI WKH &RQVWLWXWLRQ ´ 3ODVWHU Y 8QLWHG 6WDWHV ) G WK &LU 7KH 6HFUHWDU\ RI 6WDWH DQG WKH 3UHVLGHQW ³PD\ QRW FKRRVH WR H[WUDGLWH DQ LQGLYLGXDO ZKHUH VXFK H[WUDGLWLRQ ZRXOG LQ WKH RSLQLRQ RI WKH MXGLFLDU\ YLRODWH WKH LQGLYLGXDO¶V FRQVWLWXWLRQDO ULJKWV ´ 9HQFNLHQH FKDOOHQJHV WKH FRQVWLWXWLRQDOLW\ RI WKH 6HFUHWDU\ RI 6WDWH¶V GHWHUPLQDWLRQ RQ WKUHH JURXQGV )LUVW 9HQFNLHQH DOOHJHV WKDW WKH H[WUDGLWLRQ VFKHPH YLRODWHG KHU SURFHGXUDO GXH SURFHVV ULJKWV EHFDXVH WKH 6HFUHWDU\ RI 6WDWH GLG QRW VSHFLI\ WKH EDVLV IRU LWV GHWHUPLQDWLRQ 6HFRQG 9HQFNLHQH DOOHJHV WKDW VKH ³LV EHLQJ SXQLVKHG IRU KHU SROLWLFDO EHOLHIV H J KHU FULWLFLVP RI WKH /LWKXDQLDQ JRYHUQPHQW DQG MXGLFLDU\ ´ 'NW DW ˆ 7KLUG 9HQFNLHQH DUJXHV WKDW /LWKXDQLD HPSOR\V SDUWLFXODUO\ DWURFLRXV SURFHGXUHV LQLPLFDO WR WKH FRQVWLWXWLRQDO SURWHFWLRQV RI WKH 8QLWHG 6WDWHV ,G DW ˆ 9HQFNLHQH UDLVHG WKH VHFRQG DQG WKLUG JURXQGV IRU WKH ILUVW WLPH LQ WKH VXSSOHPHQWDO EULHILQJ ILOHG DIWHU WKH &RXUW¶V -XQH KHDULQJ 3URFHGXUDO 'XH 3URFHVV Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 11 of 35 PageID #:568 9HQFNLHQH¶V SURFHGXUDO GXH SURFHVV FODLP GRHV QRW IDOO ZLWKLQ WKH QDUURZ UHYLHZDEOH FDWHJRULHV OLVWHG LQ 0DWWHU RI %XUW EHFDXVH LW GRHV QRW DOOHJH WKDW WKH 6HFUHWDU\ RI 6WDWH EDVHG LWV GHFLVLRQ RQ FRQVWLWXWLRQDOO\ LPSHUPLVVLEOH IDFWRUV L H KHU UDFH VH[ RU SROLWLFDO EHOLHIV RU WKDW /LWKXDQLD HPSOR\V SDUWLFXODUO\ DWURFLRXV SURFHGXUHV RU SXQLVKPHQWV 9HQFNLHQH GRHV QRW FLWH WR DQ\ FDVH ODZ WR VXSSRUW KHU SURFHGXUDO GXH SURFHVV FODLP RU WR VKRZ WKDW WKH 6HFUHWDU\ RI 6WDWH¶V GHWHUPLQDWLRQ LV VXEMHFW WR VXFK FODLP +RZHYHU WKHUH LV FDVH ODZ VXSSRUWLQJ WKH SRVLWLRQ WKDW WKLV &RXUW FDQ KHDU D SURFHGXUDO GXH SURFHVV FKDOOHQJH WR WKH 6HFUHWDU\ RI 6WDWH¶V GHWHUPLQDWLRQ ,Q 0DWWHU RI %XUW WKH SHWLWLRQHU DOOHJHG WKDW WKH H[HFXWLYH EUDQFK YLRODWHG KLV GXH SURFHVV ULJKWV XQGHU WKH )LIWK $PHQGPHQW E\ ILOLQJ D FRPSODLQW WR H[WUDGLWH KLP \HDUV DIWHU LQLWLDOO\ GHFLGLQJ QRW WR GR VR ) G DW 7KHUH KRZHYHU WKH SHWLWLRQHU FKDOOHQJHG WKH GHFLVLRQ WR ILOH WKH FRPSODLQW QRW WKH ILQDO GHFLVLRQ WR VXUUHQGHU WKH LQGLYLGXDO WR WKH IRUHLJQ QDWLRQ 7KH )RXUWK &LUFXLW¶V GHFLVLRQ LQ 3HURII Y +\OWRQ DQG WKH )LIWK &LUFXLW¶V GHFLVLRQ LQ (VFREHGR Y 8QLWHG 6WDWHV DUH PRUH RQ SRLQW KHUH ) G WK &LU ) G WK &LU ,Q 3HURII Y +\OWRQ WKH SHWLWLRQHU ILOHG D KDEHDV SHWLWLRQ FKDOOHQJLQJ WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ WR JUDQW H[WUDGLWLRQ DOOHJLQJ KH ZDV GHQLHG GXH SURFHVV E\ WKH 6HFUHWDU\ RI 6WDWH¶V UHIXVDO WR FRQGXFW D KHDULQJ SULRU WR LVVXLQJ WKH ZDUUDQW RI H[WUDGLWLRQ ) G DW ,Q (VFREHGR ,Q WKH -XULVGLFWLRQ VHFWLRQ RI KHU KDEHDV SHWLWLRQ 9HQFNLHQH FLWHV WR FDVHV VWDQGLQJ IRU WKH QDUURZ SULQFLSOH WKDW WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ LV VXEMHFW WR MXGLFLDO UHYLHZ RQ D KDEHDV SHWLWLRQ ZKHUH WKH SHWLWLRQHU VHHNV UHOLHI XQGHU WKH &RQYHQWLRQ $JDLQVW 7RUWXUH &$7 RU )RUHLJQ $IIDLUV 5HIRUP DQG 5HVWUXFWXULQJ $FW )$55 $FW 6HH H J 3UDVRSUDW Y %HQRY ) 6XSS G & ' &DO &$7 SURYLGHG IRU MXGLFLDO UHYLHZ RI 6HFUHWDU\¶V H[WUDGLWLRQ GHFLVLRQ +R[KD Y /HYL ) G G &LU ILQGLQJ WKDW FKDOOHQJH WR H[WUDGLWLRQ XQGHU )$55 ZDV QRW ULSH XQWLO WKH 6HFUHWDU\ KDG UXOHG 7KHVH FDVHV KDYH QR EHDULQJ RQ 9HQFNLHQH¶V 3HWLWLRQ RU 0RWLRQ EHFDXVH VKH KDV QRW PDGH DQ\ FODLP IRU UHOLHI XQGHU WKH &$7 RU )$55 $FW 0DWWHU RI %XUW 7KH FRXUW LQ KHOG WKDW LW ZDV DSSURSULDWH IRU WKH FRXUW WR KHDU WKH SHWLWLRQHU¶V GXH SURFHVV FKDOOHQJH WR WKH H[HFXWLYH EUDQFK¶V DFWLRQV LQ WKH H[WUDGLWLRQ SURFHHGLQJV EXW XOWLPDWHO\ IRXQG WKDW WKH H[HFXWLYH EUDQFK KDG QRW YLRODWHG SHWLWLRQHU¶ GXH SURFHVV ULJKWV EHFDXVH LW ZDV QRW IXQGDPHQWDOO\ XQIDLU ZKHQ WKH JRYHUQPHQW ³DV H[WUDGLWHU >@ PDNHV GHFLVLRQV UHVSRQVLYH WR GLSORPDWLF FRQFHUQV WKDW PD\ VHFRQGDULO\ DIIHFW WKH DFFXVHG¶V DELOLW\ WR UHVSRQG WR FULPLQDO FKDUJHV EURXJKW E\ D IRUHLJQ VWDWH ´ ) G DW Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 12 of 35 PageID #:569 WKH SHWLWLRQHU ILOHG D KDEHDV SHWLWLRQ DQG DUJXHG DPRQJ RWKHU WKLQJV WKDW WKH GLVFUHWLRQ SURYLGHG WR WKH H[HFXWLYH EUDQFK XQGHU WKH DSSOLFDEOH WUHDW\ YLRODWHG GXH SURFHVV EHFDXVH LW SURYLGHG QR VWDQGDUGV WR JXLGH WKH H[HUFLVH RI GLVFUHWLRQ ) G DW ,Q ERWK FDVHV WKH FRXUW KHDUG DQG GHFLGHG WKH SHWLWLRQHU¶V GXH SURFHVV FKDOOHQJH VXJJHVWLQJ WKLV &RXUW KDV WKH DXWKRULW\ WR GR WKH VDPH KHUH 7KH &RXUW ILQGV WKHVH FDVHV SHUVXDVLYH +RZHYHU WKLV GRHV QRW KHOS 9HQFNLHQH PXFK EHFDXVH ERWK FRXUWV DOVR UHMHFWHG WKH SHWLWLRQHU¶V DUJXPHQWV ,Q 3HURII WKH SHWLWLRQHU DUJXHG WKDW WKH 6HFUHWDU\ RI 6WDWH¶V H[HUFLVH RI GLVFUHWLRQ FRQVWLWXWHG DQ ³DGPLQLVWUDWLYH GHWHUPLQDWLRQ´ DQG WKHUHIRUH WKDW WKH 6HFUHWDU\ YLRODWHG KLV ULJKW WR GXH SURFHVV E\ GHQ\LQJ KLP D ³IDLU KHDULQJ´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³WKH FRQGXFW RI IRUHLJQ DIIDLUV IXQFWLRQV´ DUH H[SUHVVO\ H[HPSWHG IURP WKH KHDULQJ UHTXLUHPHQWV VHW RXW LQ 7KH $GPLQLVWUDWLYH 3URFHGXUH $FW ) G DW HPSKDVLV DGGHG 7KH FRXUW H[SODLQHG IXUWKHU WKDW WKH KHDULQJ EHIRUH WKH PDJLVWUDWH MXGJH DQG KDEHDV FRUSXV UHYLHZ DIIRUGHG WR WKH SHWLWLRQHU VDWLVILHG WKH UHTXLUHPHQWV RI SURFHGXUDO GXH SURFHVV ,G 6LPLODUO\ LQ (VFREHGR WKH FRXUW UHIXVHG WR ³SUHVFULEH WKH SURFHGXUH E\ ZKLFK WKH ([HFXWLYH H[HUFLVHV LWV GLVFUHWLRQ´ LQ H[WUDGLWLRQ SURFHHGLQJV DQG UHMHFWHG SHWLWLRQHU¶V DUJXPHQW WKDW VXFK GLVFUHWLRQ VKRXOG EH FRQILQHG ZLWKLQ VSHFLILF VWDQGDUGV ) G Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 13 of 35 PageID #:570 DW FLWLQJ 3HURII ) G DW 7KHUHIRUH ZKLOH WKH &RXUW KDV WKH DXWKRULW\ WR KHDU 3ODLQWLII¶V SURFHGXUDO GXH SURFHVV FKDOOHQJH EDVHG RQ WKH 6HFUHWDU\¶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³7KH SRVVLELOLW\ RI LUUHSDUDEOH LQMXU\ WR $UWXNRYLF LI ZH GHQ\ KLV PRWLRQ LV HYLGHQW KLV DSSHDO ZLOO EHFRPH PRRW DQG ZLOO EH GLVPLVVHG VLQFH WKH H[WUDGLWLRQ ZLOO KDYH EHHQ FDUULHG RXW 7KH EDODQFH RI KDUGVKLSV KRZHYHU LV WHPSHUHG E\ $UWXNRYLF¶V DELOLW\ WR GHIHQG KLPVHOI DW WULDO LQ )@RUHLJQ SURFHHGLQJV DUH QRW WR EH WHVWHG E\ RXU RZQ Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 17 of 35 PageID #:574 FRQVWLWXWLRQDO VDIHJXDUGV EHFDXVH WKRVH VDIHJXDUGV µKDYH QR UHODWLRQ WR FULPHV FRPPLWWHG ZLWKRXW WKH MXULVGLFWLRQ RI WKH 8QLWHG 6WDWHV DJDLQVW WKH ODZV RI D IRUHLJQ FRXQWU\ ¶´ TXRWLQJ 1HHO\ 8 6 DW +ROPHV Y /DLUG ) G ' & &LU ³>$@ VXUUHQGHU RI DQ $PHULFDQ FLWL]HQ UHTXLUHG E\ WUHDW\ IRU SXUSRVHV RI D IRUHLJQ FULPLQDO SURFHHGLQJ LV XQLPSDLUHG E\ DQ DEVHQFH LQ WKH IRUHLJQ MXGLFLDO V\VWHP RI VDIHJXDUGV LQ DOO UHVSHFWV HTXLYDOHQW WR WKRVH FRQVWLWXWLRQDOO\ HQMRLQHG XSRQ $PHULFDQ WULDOV ´ FLWLQJ 1HHO\ 8 6 DW 7KHUHIRUH ³>R@QH ZKR FRPPLWV D FULPH LQ D IRUHLJQ FRXQWU\ µFDQQRW FRPSODLQ LI UHTXLUHG WR VXEPLW WR VXFK PRGHV RI WULDO DV WKH ODZV RI WKDW FRXQWU\ PD\ SUHVFULEH IRU LWV RZQ SHRSOH XQOHVV D GLIIHUHQW PRGH EH SURYLGHG IRU E\ WUHDW\ ¶´ .DPULQ Y 8QLWHG 6WDWHV ) G WK &LU TXRWLQJ 1HHO\ 8 6 DW 7KH 7UHDW\ EHWZHHQ WKH 8QLWHG 6WDWHV DQG /LWKXDQLD GRHV QRW SURWHFW DJDLQVW H[WHQGHG VWDWXWHV RI OLPLWDWLRQV H[ SRVW IDFWR ODZV RU LQKXPDQ SULVRQ FRQGLWLRQV 1RQHWKHOHVV ³OLNH PRVW OHJDO SULQFLSOHV WKH SULQFLSOH RI FRPLW\ LV QRW ZLWKRXW H[FHSWLRQV ´ 6DKDJLDQ ) G DW ³7KH &RQVWLWXWLRQ PD\ LPSRVH VRPH OLPLWDWLRQV XSRQ H[WUDGLWLRQ GHFLVLRQV LQ H[FHSWLRQDO FDVHV GXH WR VRPH µSDUWLFXODUO\ DWURFLRXV SURFHGXUHV RU SXQLVKPHQWV HPSOR\HG E\ WKH IRUHLJQ MXULVGLFWLRQ ´ ,G TXRWLQJ 0DWWHU RI %XUW ) G DW %XW 9HQFNLHQH IDLOV WR DVVHUW DQ\ FODLP WKDW ULVHV WR WKLV OHYHO 9HQFNLHQH¶V ILUVW H[DPSOH RI ³SURFHGXUHV LQLPLFDO WR WKH FRQVWLWXWLRQDO SURWHFWLRQV LQ WKH 8QLWHG 6WDWHV´ UHODWHV WR DQ H[WHQVLRQ RI WKH VWDWXWH RI OLPLWDWLRQV 9HQFNLHQH FODLPV WKH KHDG RI WKH -XGLFLDO &RXQFLO SHWLWLRQHG WR H[WHQG WKH DOUHDG\ H[SLUHG OLPLWDWLRQV SHULRG IRU D ³KXPLOLDWLQJ WKH FRXUW´ FKDUJH LQ RUGHU WR FRQWLQXH DQ LQYHVWLJDWLRQ DJDLQVW KHU DQG WKH SHWLWLRQ ZDV JUDQWHG &RQVWLWXWLRQDO FKDOOHQJHV WR WKH UHWURDFWLYH H[WHQVLRQ RI DQ DOUHDG\ H[SLUHG VWDWXWH RI OLPLWDWLRQV IRU D FULPLQDO RIIHQVH DULVH XQGHU WKH ([ 3RVW )DFWR &ODXVH RI WKH &RQVWLWXWLRQ 6HH 8 6 &RQVW Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 18 of 35 PageID #:575 DUW , †† FO DQG FO VHH DOVR H J 6WRJQHU Y &DOLIRUQLD 8 6 ODZ FUHDWLQJ QHZ OLPLWDWLRQV SHULRG WKDW ZDV SDVVHG DIWHU WKH SULRU OLPLWDWLRQV SHULRG H[SLUHG WKHUHE\ DXWKRUL]LQJ SURVHFXWLRQV SUHYLRXVO\ EDUUHG E\ SDVVDJH RI WLPH YLRODWHG ([ 3RVW )DFWR &ODXVH +RZHYHU WKH 6XSUHPH &RXUW LQ 1HHO\ VSHFLILFDOO\ LGHQWLILHG FODLPV UHODWHG WR H[ SRVW IDFWR ODZV DV WKH W\SH RI DOOHJDWLRQ WKDW FDQQRW VHUYH DV D EDVLV WR SUHYHQW H[WUDGLWLRQ 6HH 1HHO\ 8 6 DW ³SURYLVLRQV UHODWLQJ WR H[ SRVW IDFWR ODZV KDYH QR UHODWLRQ WR FULPHV FRPPLWWHG ZLWKRXW WKH MXULVGLFWLRQ RI WKH 8QLWHG 6WDWHV DJDLQVW WKH ODZV RI D IRUHLJQ FRXQWU\ ´ 9HQFNLHQH¶V FODLPV UHJDUGLQJ H[ SRVW IDFWR HOLPLQDWLRQ RI KHU MXGLFLDO DQG SDUOLDPHQWDU\ LPPXQLWLHV IDLO IRU WKH VDPH UHDVRQ $GGLWLRQDOO\ WKHVH DOOHJDWLRQV GHPRQVWUDWH RQO\ WKDW /LWKXDQLDQ SURVHFXWRULDO DQG SUHWULDO SUDFWLFHV PD\ QRW DFFRUG ZLWK WKH 8QLWHG 6WDWHV &RQVWLWXWLRQ WKH\ UHYHDO QRWKLQJ DERXW WKH SURFHGXUHV 9HQFNLHQH ZLOO IDFH DW WULDO RU SXQLVKPHQWV VKH ZLOO XSRQ FRQYLFWLRQ LQ /LWKXDQLD LI WKH ZDUUDQW RI VXUUHQGHU LV H[HFXWHG 9HQFNLHQH QH[W FODLPV WKDW LI FRQYLFWHG LQ /LWKXDQLD VKH ZRXOG EH VXEMHFW WR LQKXPDQ SULVRQ FRQGLWLRQV WKDW ³ZRXOG OLNHO\ ULVH WR WKH OHYHO RI DQ (LJKWK $PHQGPHQW YLRODWLRQ RI $PHULFDQ ODZ ´ 'NW DW ˆ ,Q VXSSRUW RI WKLV FODLP 9HQFNLHQH UHOLHV RQO\ RQ DQ H[KLELW DWWDFKHG WR KHU 5HSO\ LQ 6XSSRUW RI KHU 0RWLRQ SXUSRUWHGO\ VKRZLQJ WKDW ³QXPHURXV RWKHU FRXQWULHV KDYH GHQLHG H[WUDGLWLRQ UHTXHVWV IURP /LWKXDQLD EHFDXVH RI LQKXPDQ FRQGLWLRQV LQ /LWKXDQLD SULVRQV ´ ,G DW ˆ 7KH H[KLELW OLVWV YDULRXV H[FHUSWV IURP /LWKXDQLDQ QHZV DUWLFOHV VRPH RI ZKLFK UHSRUW WKDW D 1RUWKHUQ ,UHODQG FRXUW LQ UHIXVHG WR H[WUDGLWH WZR LQGLYLGXDOV LQ RQ JURXQGV RI SRRU FRQGLWLRQV RI GHWHQWLRQ D 'DQLVK FRXUW LQ UHIXVHG WR H[WUDGLWH DQ LQGLYLGXDO FLWLQJ LQKXPDQ FRQGLWLRQV RI FRQILQHPHQW FHOOV DQG D 0DOWD FRXUW LQ UHIXVHG WR H[WUDGLWH DQ LQGLYLGXDO WR /LWKXDQLD EHFDXVH WKH FRQGLWLRQV RI GHWHQWLRQ DUH ³HTXLYDOHQW WR WRUWXUH ´ 'NW 2QH DUWLFOH H[FHUSW DOVR UHSRUWV WKDW DW VRPH XQLGHQWLILHG WLPH WKH (XURSHDQ &RXUW RI Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 19 of 35 PageID #:576 +XPDQ 5LJKWV DSSURYHG DQ DJUHHPHQW UHTXLULQJ /LWKXDQLD WR SD\ SULVRQHUV ¼ IRU GDPDJHV IURP SRRU GHWHQWLRQ FRQGLWLRQV ,G 9HQFNLHQH SURYLGHV QR RWKHU HYLGHQFH RI WKH DOOHJHG LQKXPDQ FRQGLWLRQV RI /LWKXDQLDQ SULVRQV 7KH &RXUW FDQQRW GHWHUPLQH EDVHG RQ WKHVH DUWLFOH H[FHUSWV DORQH ZKHWKHU SULVRQ FRQGLWLRQV LQ /LWKXDQLD ZRXOG YLRODWH WKH (LJKW $PHQGPHQW PXFK OHVV ZKHWKHU WKH\ ULVH WR WKH OHYHO RI ³DWURFLRXV´ SXQLVKPHQW ZDUUDQWLQJ LQWHUYHQWLRQ E\ WKLV &RXUW WR SUHYHQW KHU H[WUDGLWLRQ $GGLWLRQDOO\ SULVRQHUV UHJXODUO\ ILOH DQG SUHYDLO LQ SULVRQ FRQGLWLRQV VXLWV LQ WKH 8QLWHG 6WDWHV \HW FRXUWV GR QRW DVVXPH WKH 8QLWHG 6WDWHV KDV YLRODWHG WKH SULVRQHUV¶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²D FODLP WKDW LI LW 9HQFNLHQH ZHUH DEOH WR GHYHORS LW ZRXOG VXUHO\ KDYH EHHQ D EHWWHU VWUDWHJ\ IRU FKDOOHQJLQJ /LWKXDQLD¶V DOOHJHGO\ LQKXPDQ SULVRQ FRQGLWLRQV 7KXV 9HQFNLHQH DOVR IDLOV WR VKRZ D OLNHOLKRRG RI VXFFHVV RQ WKLV WKLUG FKDOOHQJH WR WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ %HFDXVH WKH UHPDLQLQJ IDFWRUV DOVR IDYRU GHQ\LQJ 9HQFNLHQH¶V UHTXHVW IRU D VWD\ WKH &RXUW GHQLHV 9HQFNLHQH¶V 0RWLRQ IRU ([WHQVLRQ RI 6WD\ RQ WKHVH JURXQGV DV ZHOO 7KH H[KLELW DOVR OLVWHG H[FHUSWV IURP DUWLFOHV WKDW DUH LUUHOHYDQW WR 9HQFNLHQH¶V SULVRQ FRQGLWLRQV FODLP IRU H[DPSOH DUWLFOHV UHSRUWLQJ WKDW 5XVVLD UHIXVHG WR H[WUDGLWH LQGLYLGXDOV WR /LWKXDQLD EHFDXVH LW KDG JUDQWHG WKRVH LQGLYLGXDOV DV\OXP DQG DUWLFOHV UHSRUWLQJ WKDW *HUPDQ\ DQG WKH 8NUDLQH LQ DQG UHVSHFWLYHO\ HDFK UHIXVHG WR H[WUDGLWH DQ LQGLYLGXDO LQYROYHG LQ WKH -DQXDU\ (YHQWV RI LQ /LWKXDQLD IRU UHDVRQV QRW UHODWHG LQ DQ\ ZD\ WR SULVRQ FRQGLWLRQV 'NW Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 20 of 35 PageID #:577 9HQFNLHQH¶V 0RWLRQ IRU ([WHQVLRQ RI 6WD\ LV GHQLHG ZLWK UHJDUG WR DOO FODLPV FKDOOHQJLQJ WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ ,, -XGJH 0DUWLQ¶V &HUWLILFDWLRQ 2UGHU 9HQFNLHQH DOVR FKDOOHQJHV -XGJH 0DUWLQ¶V 2UGHU FHUWLI\LQJ KHU DV H[WUDGLWDEOH RQ WKH JURXQGV WKDW WKH RIIHQVHV FKDUJHG IDOO ZLWKLQ WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ RI WKH 7UHDW\ DQG WKDW -XGJH 0DUWLQ HUUHG LQ ILQGLQJ SUREDEOH FDXVH H[LVWHG 9HQFNLHQH PXVW VKRZ ILUVW WKDW WKLV &RXUW KDV WKH DXWKRULW\ WR UHYLHZ -XGJH 0DUWLQ¶V 2UGHU DW WKLV VWDJH LQ WKH SURFHHGLQJV DQG VHFRQG WKDW WKH FLUFXPVWDQFHV ZDUUDQW D VWD\ RI KHU VXUUHQGHU XQWLO WKH FKDOOHQJH WR -XGJH 0DUWLQ¶V 2UGHU LQ KHU KDEHDV SHWLWLRQ FDQ EH KHDUG $ 7KH &RXUW¶V $XWKRULW\ WR 5HYLHZ -XGJH 0DUWLQ¶V &HUWLILFDWLRQ 2UGHU $ PDJLVWUDWH MXGJH¶V GHFLVLRQ LQ H[WUDGLWLRQ SURFHHGLQJV LV QRW GLUHFWO\ DSSHDODEOH %RYLR Y 8QLWHG 6WDWHV ) G Q WK &LU VHH DOVR (DLQ ) G DW $ SHUVRQ PD\ RQO\ FKDOOHQJH D PDJLVWUDWH¶V GHFLVLRQ E\ VHHNLQJ D ZULW RI KDEHDV FRUSXV ,G VHH DOVR /LQGVWURP Y *UDEHU ) G WK &LU ³+DEHDV FRUSXV LV WKH QRUPDO PHWKRG RI FKDOOHQJLQJ DQ H[WUDGLWLRQ RUGHU VXFK DQ RUGHU EHLQJ XQDSSHDODEOH ´ 'H6LOYD ) G DW ³'HFLVLRQV UHQGHUHG LQ SURFHHGLQJV XQGHU † DUH QRW UHYLHZDEOH RQ DSSHDO ,QVWHDG WKH SHUVRQ UHVLVWLQJ H[WUDGLWLRQ PXVW VHHN D ZULW RI KDEHDV FRUSXV XQGHU 8 6 & † ´ +RZHYHU KDEHDV FRUSXV UHYLHZ RI DQ H[WUDGLWLRQ PDJLVWUDWH¶V RUGHU LV OLPLWHG WR GHWHUPLQLQJ RQO\ ³ZKHWKHU WKH PDJLVWUDWH KDG MXULVGLFWLRQ ZKHWKHU WKH RIIHQVH FKDUJHG LV ZLWKLQ WKH WUHDW\ DQG E\ D VRPHZKDW OLEHUDO H[WHQVLRQ ZKHWKHU WKHUH ZDV DQ\ HYLGHQFH ZDUUDQWLQJ WKH ILQGLQJ WKDW WKHUH ZDV UHDVRQDEOH JURXQG WR EHOLHYH WKH DFFXVHG JXLOW\ ´ (DLQ ) G DW FLWLQJ )HUQDQGH] Y 3KLOOLSV 8 6 Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 21 of 35 PageID #:578 +HUH 9HQFNLHQH ILOHG KHU KDEHDV SHWLWLRQ FKDOOHQJLQJ WKH PDJLVWUDWH¶V GHFLVLRQ DIWHU WKH 6HFUHWDU\ LVVXHG LWV UXOLQJ DXWKRUL]LQJ KHU VXUUHQGHU SXUVXDQW WR WKH 7UHDW\ 9HQFNLHQH DVVHUWV WKDW WKLV &RXUW KDV MXULVGLFWLRQ WR KHDU KHU KDEHDV SHWLWLRQ EHFDXVH ³>D@OWKRXJK 3HWLWLRQHU FRXOG KDYH FKDOOHQJHG 0DJLVWUDWH -XGJH 0DUWLQ¶V FHUWLILFDWLRQ UXOLQJ WKURXJK D SHWLWLRQ IRU D ZULW RI KDEHDV FRUSXV LPPHGLDWHO\ D ZULW PD\ EH VRXJKW DW DQ\ SRLQW LQ WKH SURFHVV EHFDXVH WKH RUGHU LV QRW FRQVLGHUHG µILQDO¶ XQWLO WKH 6HFUHWDU\ KDV UHQGHUHG GHFLVLRQ ´ 'NW DW 7KH *RYHUQPHQW FRQWHQGV WKDW WKH FHUWLILFDWLRQ UXOLQJ LV VXEMHFW WR KDEHDV UHYLHZ RQO\ XQWLO WKH 6HFUHWDU\ UHQGHUV LWV ILQDO GHFLVLRQ DQG WKDW WKH ILQDO UXOLQJ UHQGHUV DQ\ FKDOOHQJH WR WKH FHUWLILFDWLRQ UXOLQJ PRRW 9HQFNLHQH¶V SHWLWLRQ UDLVHV D UDUH LI QRW QRYHO LVVXH LQ H[WUDGLWLRQ SURFHHGLQJV &DVH ODZ DGGUHVVLQJ ZKHWKHU WKH &RXUW KDV DXWKRULW\ WR FRQGXFW KDEHDV UHYLHZ RI D PDJLVWUDWH¶V UXOLQJ DW WKLV VWDJH RI WKH H[WUDGLWLRQ SURFHVV LV YLUWXDOO\ QRQH[LVWHQW 9HQFNLHQH FLWHV RQO\ RQH QRQ SUHFHGHQWLDO H[DPSOH RI D FDVH LQ ZKLFK D FRXUW FRQVLGHUHG D KDEHDV SHWLWLRQ FKDOOHQJLQJ WKH PDJLVWUDWH MXGJH¶V FHUWLILFDWLRQ UXOLQJ DIWHU WKH 6HFUHWDU\ LVVXHG LWV UXOLQJ ,Q 'H /D 5RVD 3HQD Y 'DQLHOV WKH SHWLWLRQHU ILOHG D KDEHDV SHWLWLRQ FKDOOHQJLQJ ERWK WKH 6HFUHWDU\¶V H[WUDGLWLRQ GHWHUPLQDWLRQ DQG WKH PDJLVWUDWH MXGJH¶V FHUWLILFDWLRQ UXOLQJ DQG WKH GLVWULFW FRXUW FRQVLGHUHG DQG GHFLGHG ERWK LVVXHV 1R & 8 6 'LVW /(;,6 ( ' 7H[ 'HF 7KH *RYHUQPHQW DGPLWV WKDW QR FRXUW KDV KHOG WKDW D SHUVRQ FDQQRW FKDOOHQJH D PDJLVWUDWH MXGJH¶V FHUWLILFDWLRQ UXOLQJ DIWHU WKH 6HFUHWDU\ KDV PDGH LWV GHWHUPLQDWLRQ ,QVWHDG LW DUJXHV WKDW WKH VWDWXWRU\ VFKHPH JRYHUQLQJ H[WUDGLWLRQ SURFHHGLQJV OLPLWV WKH MXGLFLDU\¶V UROH DQG WKDW DQ\ FKDOOHQJH WR WKH PDJLVWUDWH MXGJH¶V UXOLQJ ZRXOG EH PRRW DW WKLV VWDJH 7LWOH 8 6 & † JRYHUQV H[WUDGLWLRQ SURFHHGLQJV LQ WKH 8QLWHG 6WDWHV DQG SURYLGHV RQO\ D OLPLWHG UROH IRU WKH PDJLVWUDWH FRXUW LQ WKH H[WUDGLWLRQ SURFHVV WR GHWHUPLQH ZKHWKHU HYLGHQFH VXIILFLHQW WR VXVWDLQ WKH FKDUJHV H[LVWV DQG LI WKH MXGJH ILQGV WKDW LW LV WR FHUWLI\ WKH Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 22 of 35 PageID #:579 ILQGLQJ WR WKH 6HFUHWDU\ RI 6WDWH 2QFH WKH FHUWLILFDWLRQ LV HQWHUHG WKH PDJLVWUDWH FRXUW¶V UROH HQGV DQG WKH 6HFUHWDU\ RI 6WDWH¶V EHJLQV 7KH 6HFUHWDU\ RI 6WDWH WKHQ FRQVLGHUV WKH FRXUW¶V UXOLQJ DQG RWKHU IDFWRUV WR UHDFK LWV GHFLVLRQ DQG KDV IXOO GLVFUHWLRQ UHJDUGOHVV RI WKH PDJLVWUDWH MXGJH¶V UXOLQJ WR VXUUHQGHU RU QRW VXUUHQGHU WKH LQGLYLGXDO WR WKH IRUHLJQ JRYHUQPHQW +RZHYHU † GRHV QRW JRYHUQ WKH GLVWULFW FRXUW¶V DXWKRULW\ WR UHYLHZ WKH PDJLVWUDWH FRXUW¶V UXOLQJ RU WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ 7KHUHIRUH ZKLOH WKH *RYHUQPHQW LV FRUUHFW WKDW WKH VWDWXWRU\ VFKHPH VHW IRUWK LQ 8 6 & † SURYLGHV QR EDVLV IRU KDEHDV UHYLHZ RI WKH PDJLVWUDWH¶V GHFLVLRQ DIWHU WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ WKHUH LV QR UHDVRQ WR EHOLHYH WKDW LW ZRXOG $GGLWLRQDOO\ FRQWUDU\ WR WKH *RYHUQPHQW¶V FRQWHQWLRQ D FKDOOHQJH WR WKH PDJLVWUDWH FRXUW¶V UXOLQJ LV QRW QHFHVVDULO\ UHQGHUHG PRRW E\ WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ 8QGHU WKH VFKHPH VHW IRUWK LQ 8 6 & † WKH PDJLVWUDWH MXGJH FHUWLILHV LWV UXOLQJ DQG WKH GRFNHW WR WKH 6HFUHWDU\ RQO\ LI KH RU VKH ILQGV WKH HYLGHQFH VXIILFLHQW WR VXVWDLQ WKH FKDUJHV 6HH 8 6 & † ,I RQ VXFK KHDULQJ KH GHHPV WKH HYLGHQFH VXIILFLHQW WR VXVWDLQ WKH FKDUJH XQGHU WKH SURYLVLRQV RI WKH SURSHU WUHDW\ RU FRQYHQWLRQ RU XQGHU VHFWLRQ E KH VKDOO FHUWLI\ WKH VDPH WRJHWKHU ZLWK D FRS\ RI DOO WKH WHVWLPRQ\ WDNHQ EHIRUH KLP WR WKH 6HFUHWDU\ RI 6WDWH ´ HPSKDVLV DGGHG ,I WKH LQGLYLGXDO LV QRW H[WUDGLWDEOH WR EHJLQ ZLWK WKH 6HFUHWDU\ RI 6WDWH KDV QR DXWKRULW\ WR PDNH DQ\ GHFLVLRQ DV WR KLV RU KHU H[WUDGLWLRQ $ FKDOOHQJH RQ WKLV EDVLV ZRXOG QRW DWWDFN WKH VXEVWDQFH RI WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ ZKLFK LV JHQHUDOO\ QRW VXEMHFW WR MXGLFLDO UHYLHZ H[FHSW IRU RQ OLPLWHG FRQVWLWXWLRQDO JURXQGV EXW UDWKHU ZRXOG FKDOOHQJH WKH 6HFUHWDU\ RI 6WDWH¶V DXWKRULW\ WR DFW DW DOO ,W LV WHOOLQJ WKDW 9HQFNLHQH FDQ LGHQWLI\ RQO\ RQH H[DPSOH RI D FRXUW FRQVLGHULQJ D FKDOOHQJH WR WKH PDJLVWUDWH MXGJH¶V UXOLQJ DW WKLV VWDJH %XW WKLV LV OLNHO\ GXH WR WKH IDFW WKDW PRVW SDUWLHV RSW WR ILOH D KDEHDV SHWLWLRQ EHIRUH WKH 6HFUHWDU\ RI 6WDWH¶V GHFLVLRQ LV LVVXHG WKHUHE\ DXWRPDWLFDOO\ Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 23 of 35 Page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¶V UXOLQJ XQWLO DIWHU WKH 6HFUHWDU\ RI 6WDWH PDNHV LWV GHWHUPLQDWLRQ RU WKH &RXUW IURP KHDULQJ WKH SHWLWLRQ VR ORQJ DV WKH UHYLHZ LV OLPLWHG RQO\ WR ZKHWKHU 9HQFNLHQH ZDV H[WUDGLWDEOH LQ WKH ILUVW LQVWDQFH L H ZKHWKHU WKH PDWWHU VKRXOG KDYH EHHQ FHUWLILHG WR WKH 6HFUHWDU\ RI 6WDWH DW DOO 7KH TXHVWLRQ UHPDLQV KRZHYHU DV WR ZKDW HIIHFW JUDQWLQJ D KDEHDV SHWLWLRQ FKDOOHQJLQJ WKH PDJLVWUDWH MXGJH¶V UXOLQJ ZRXOG KDYH RQ WKH SHWLWLRQHU¶V H[WUDGLWLRQ VWDWXV %XW WKH &RXUW QHHG QRW DGGUHVV WKDW LVVXH QRZ LQ FRQVLGHULQJ ZKHWKHU WR JUDQW D VWD\ ,W LV VXIILFLHQW WR ILQG WKDW WKH &RXUW FDQ FRQVLGHU 9HQFNLHQH¶V FODLPV FKDOOHQJLQJ -XGJH 0DUWLQ¶V FHUWLILFDWLRQ RUGHU % 0RWLRQ WR 6WD\ +DEHDV FRUSXV UHYLHZ RI DQ H[WUDGLWLRQ PDJLVWUDWH¶V RUGHU LV OLPLWHG WR GHWHUPLQLQJ ³ZKHWKHU WKH PDJLVWUDWH KDG MXULVGLFWLRQ ZKHWKHU WKH RIIHQVH FKDUJHG LV ZLWKLQ WKH WUHDW\ DQG E\ D VRPHZKDW OLEHUDO H[WHQVLRQ ZKHWKHU WKHUH ZDV DQ\ HYLGHQFH ZDUUDQWLQJ WKH ILQGLQJ WKDW WKHUH ZDV UHDVRQDEOH JURXQG WR EHOLHYH WKH DFFXVHG JXLOW\ ´ (DLQ ) G DW FLWLQJ )HUQDQGH] 8 6 DW 9HQFNLHQH DUJXHV LQ KHU SHWLWLRQ WKDW WKH RIIHQVHV FKDUJHG IDOO ZLWKLQ WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ RI WKH 7UHDW\ DQG WKDW WKH PDJLVWUDWH FRXUW HUUHG LQ ILQGLQJ SUREDEOH FDXVH ZLWK UHVSHFW WR FHUWDLQ FKDUJHV ,Q DVVHVVLQJ WKH PRWLRQ IRU D VWD\ WKH &RXUW FRQVLGHUV ILUVW Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 24 of 35 PageID #:581 ZKHWKHU 9HQFNLHQH KDV PDGH D VWURQJ VKRZLQJ WKDW VKH LV OLNHO\ WR VXFFHHG RQ WKHVH FODLPV ³,W LV QRW HQRXJK WKDW WKH FKDQFH RI VXFFHVV RQ WKH PHULWV EH µEHWWHU WKDQ QHJOLJLEOH ¶´ 1NHQ 8 6 DW TXRWLQJ 6RILQHW Y ,16 ) G WK &LU ³>P@RUH WKDQ D PHUH µSRVVLELOLW\¶ RI UHOLHI LV UHTXLUHG ´ ,G ³3ROLWLFDO 2IIHQVH´ ([FHSWLRQ 7KH 7UHDW\ SURYLGHV WKDW ³([WUDGLWLRQ VKDOO QRW EH JUDQWHG LI WKH RIIHQVH IRU ZKLFK H[WUDGLWLRQ LV UHTXHVWHG LV D SROLWLFDO RIIHQVH ´ 7KH 7UHDW\ GRHV QRW GHILQH ³SROLWLFDO RIIHQVH ´ ³7KH RSHUDWLYH GHILQLWLRQ RI µSROLWLFDO RIIHQVHV¶ XQGHU H[WUDGLWLRQ WUHDWLHV DV FRQVWUXHG E\ WKH 8QLWHG 6WDWHV OLPLWV VXFK RIIHQVHV WR DFWV FRPPLWWHG LQ WKH FRXUVH RI DQG LQFLGHQWDO WR D YLROHQW SROLWLFDO GLVWXUEDQFH VXFK DV D ZDU UHYROXWLRQ RU UHEHOOLRQ ´ (DLQ ) G DW VHH DOVR H J (VFREHGR ) G DW *DUFLD *XLOOHUQ Y 8QLWHG 6WDWHV ) G WK &LU &RXUWV JHQHUDOO\ UHFRJQL]H WZR IRUPV RI SROLWLFDO RIIHQVHV ³SXUH´ SROLWLFDO RIIHQVHV L H DQ ³DFW WKDW LV GLUHFWHG DJDLQVW WKH VWDWH EXW ZKLFK FRQWDLQV QRQH RI WKH HOHPHQWV RI RUGLQDU\ FULPH´ VXFK DV WUHDVRQ VHGLWLRQ DQG HVSLRQDJH DQG ³UHODWLYH´ SROLWLFDO RIIHQVHV L H ³FRPPRQ FULPHV VR FRQQHFWHG ZLWK D SROLWLFDO DFW WKDW WKH HQWLUH RIIHQVH LV UHJDUGHG D SROLWLFDO ´ (DLQ ) G DW VHH DOVR H J 0H]D Y 8 6 $WW\ *HQ ) G WK &LU 1H]LURYLF Y +ROW ) G WK &LU %DUDSLQG Y (QRPRWR ) G WK &LU 4XLQQ Y 5RELQVRQ ) G WK &LU :KHWKHU WKH RIIHQVHV FKDUJHG TXDOLI\ DV ³SROLWLFDO RIIHQVHV´ LV D GLVWLQFW LVVXH IURP ZKHWKHU WKH UHTXHVW LWVHOI LV VHH (DLQ SROLWLFDOO\ PRWLYDWHG 7KH PDJLVWUDWH MXGJH GHFLGHV WKH IRUPHU ) G DW ³>7@KH -XGLFLDO EUDQFK KDV FRQVLVWHQWO\ GHWHUPLQHG ZKHWKHU RU QRW WKH ³SROLWLFDO RIIHQVH´ SURYLVLRQ DSSOLHV WR WKH FULPH FKDUJHG >7@KH H[WUDGLWLRQ VWDWXWH UHTXLUHV WKH PDJLVWUDWH WR GHWHUPLQH WKDW WKH FULPH DOOHJHG LV OLVWHG LQ WKH DSSOLFDEOH WUHDW\ DQG WKDW WKH SURYLVLRQ RI WKH WUHDW\ UHODWLQJ WR SROLWLFDO RIIHQVHV GRHV RU GRHV QRW DSSO\ ´ ZKLOH WKH 6HFUHWDU\ UHWDLQV VROH GLVFUHWLRQ XQGHU WKH UXOH RI QRQ LQTXLU\ DV GLVFXVVHG DERYH WR FRQVLGHU WKH ODWWHU Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 25 of 35 PageID #:582 9HQFNLHQH DUJXHV WKDW WKH FKDUJHV DJDLQVW KHU FRQVWLWXWH UHODWLYH SROLWLFDO RIIHQVHV 7R TXDOLI\ DV D ³UHODWLYH´ SROLWLFDO RIIHQVH WKH RIIHQVH PXVW VDWLVI\ WZR SURQJV LW PXVW KDYH LQYROYHG DQ XSULVLQJ RU RWKHU YLROHQW SROLWLFDO GLVWXUEDQFH VXFK DV ZDU UHYROXWLRQ RU UHEHOOLRQ DQG PXVW KDYH EHHQ LQFLGHQWDO WR LQ WKH FRXUVH RI RU LQ IXUWKHUDQFH RI WKH DOOHJHG XSULVLQJ 6HH 2UGLQROD Y +DFNPDQ ) G WK &LU ³9LUWXDOO\ HYHU\ FRXUW WR HQFRXQWHU WKH TXHVWLRQ RI ZKHWKHU WKH DOOHJHG FULPH LV D UHODWLYH SROLWLFDO RIIHQVH KDV DSSOLHG WKLV WZR SURQJHG WHVW ´ VHH DOVR H J 0H]D ) G DW 1H]LURYLF ) G DW %DUDSLQG ) G DW 9HQFNLHQH ZDV D MXGJH LQ /LWKXDQLD IURP WR 'NW DW ˆ ,Q KHU EURWKHU¶V IRXU \HDU ROG GDXJKWHU UHSRUWHG WKDW VKH KDG EHHQ VH[XDOO\ PROHVWHG E\ YDULRXV LQGLYLGXDOV LQ WKH /LWKXDQLDQ OHJLVODWXUH DQG MXGLFLDU\ ZKLOH LQ KHU PRWKHU¶V FDUH ,G DW ˆ 9HQFNLHQH DQG KHU EURWKHU ILOHG FRPSODLQWV DJDLQVW WKHVH LQGLYLGXDOV ZKLFK 9HQFNLHQH FODLPV ZHUH LJQRUHG ,G DW ˆ ,Q WZR RI WKH DFFXVHG ZHUH VKRW DQG NLOOHG VRRQ WKHUHDIWHU 9HQFNLHQH¶V EURWKHU¶V GHDG ERG\ ZDV GLVFRYHUHG DQG 9HQFNLHQH EHFDPH WKH FKLOG¶V OHJDO JXDUGLDQ ,G DW ˆ 9HQFNLHQH FODLPV WKH KLJKO\ SXEOLFL]HG SHGRSKLOLD FDVH LJQLWHG D JUDVVURRWV SROLWLFDO PRYHPHQW DQG DQWL JUDIW SROLWLFDO SDUW\ FDOOHG ³:D\ RI &RXUDJH ´ ,G DW ˆ 9HQFNLHQH EHFDPH WKH SDUW\¶V YRLFH DQG HYHQWXDOO\ WKH SDUW\ FKDLU ,G ,Q DQRWKHU DFFXVHG ZDV IRXQG GHDG ,G DW ˆ ,Q WKH &RXUW RUGHUHG WKH FKLOG EH UHWXUQHG WR KHU PRWKHU EXW WKH FKLOG UHIXVHG ,G DW ˆ ,Q RIILFHUV SK\VLFDOO\ DVVDXOWHG 9HQFNLHQH¶V PRWKHU LQ ODZ LQ DQ DWWHPSW WR UHPRYH WKH FKLOG IURP 9HQFNLHQH¶V KRPH ,G DW ˆ 'XULQJ D VHFRQG DWWHPSW DW WUDQVIHUULQJ WKH FKLOG SURWHVWRUV JDWKHUHG DW 9HQFNLHQH¶V KRPH DV SROLFH RIILFHUV GHVFHQGHG RQ WKH KRPH ,G DW ˆ 7KH RIILFHUV IRUFLEO\ UHPRYHG WKH FKLOG IURP 9HQFNLHQH LQMXULQJ 9HQFNLHQH¶V ULJKW VKRXOGHU LQ WKH SURFHVV DQG GHWDLQHG D PDMRULW\ RI WKH SURWHVWHUV ,G Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 26 of 35 PageID #:583 9HQFNLHQH ZDV FKDUJHG ZLWK KLQGHULQJ WKH DFWLYLWLHV RI D EDLOLII DQG UHVLVWLQJ D FLYLO VHUYDQW IRU KHU DFWLRQV UHODWHG WR WKH WUDQVIHU RI WKH FKLOG WR KHU PRWKHU 9HQFNLHQH DOVR FODLPV WKDW VKH ZDV WKH VXEMHFW RI DW OHDVW RQH DVVDVVLQDWLRQ DWWHPSW WKURXJK DSSDUHQW VDERWDJH RI KHU YHKLFOH 'NW DW ˆ 9HQFNLHQH DUJXHV WKDW WKH ³RUJDQL]HG SURWHVW DJDLQVW WKH /LWKXDQLDQ DXWKRULWLHV WKDW RYHUIORZHG LQWR YLROHQFH´ FRQVWLWXWHV DQ XSULVLQJ RU YLROHQW SROLWLFDO GLVWXUEDQFH DQG WKDW KHU DOOHJHG KLQGHUDQFH DQG UHVLVWDQFH ZHUH LQFLGHQWDO WR WKH XSULVLQJ 'NW DW 7KH 6HYHQWK &LUFXLW FRQVLGHUHG ZKDW FRQVWLWXWHV DQ XSULVLQJ RU YLROHQW SROLWLFDO GLVWXUEDQFH IRU SXUSRVHV RI WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ LQ (DLQ Y :LONHV ) G WK &LU 6SHFLILFDOO\ LQ (DLQ WKH 6HYHQWK &LUFXLW FRQVLGHUHG ZKHWKHU WKH ³ILQGLQJ RI D µFRQIOLFW¶ LV VXIILFLHQW WR HVWDEOLVK WKDW WKHUH H[LVWV µD YLROHQW SROLWLFDO GLVWXUEDQFH VXFK DV D ZDU UHYROXWLRQ RU UHEHOOLRQ ¶´ ) G DW 7KHUH WKH SHWLWLRQHU ZDV D PHPEHU RI WKH 3DOHVWLQH /LEHUDWLRQ 2UJDQL]DWLRQ FKDUJHG E\ WKH 6WDWH RI ,VUDHO ZLWK VHWWLQJ RII D ERPE LQ WKDW NLOOHG DQG LQMXUHG VHYHUDO FLYLOLDQV 7KH PDJLVWUDWH KDG IRXQG WKDW D FRQIOLFW H[LVWHG LQ WKH 0LGGOH (DVW DIWHU WKH RFFXSDWLRQ RI ,VUDHO LQ WKH :HVW EDQN ,G DW ,Q GHWHUPLQLQJ ZKHWKHU WKH ³FRQIOLFW´ FRQVWLWXWHG D VXIILFLHQW YLROHQW SROLWLFDO GLVWXUEDQFH WKH 6HYHQWK &LUFXLW VWUXJJOHG WR GHWHUPLQH ZKDW GHJUHH RI YLROHQFH ZRXOG EH VXIILFLHQW $Q RQ JRLQJ GHILQHG FODVK RI PLOLWDU\ IRUFHV PD\ EH VLJQLILFDQW EHFDXVH WKDW LV RQH EDFNGURS ZKLFK PD\ EULQJ LQWR VKDUS UHOLHI DQ LQGLYLGXDO DFW RI YLROHQFH 2QFH WKH FLUFXPVWDQFHV PRYH DZD\ IURP WKDW FRQWH[W WKH MXGLFLDU\¶V WDVN RI GHWHUPLQLQJ ZKDW GHJUHH RU W\SH RI YLROHQW GLVWXUEDQFH SHUPLWV D VXFFHVVIXO LQYRFDWLRQ RI WKH SROLWLFDO RIIHQVH H[FHSWLRQ EHFRPHV PRUH GLIILFXOW ,G DW 7KH FRXUW XOWLPDWHO\ IRXQG WKDW WKH 3/2¶V DWWHPSW WR GHVWUR\ WKH ,VUDHOL SROLWLFDO VWUXFWXUH E\ WDUJHWLQJ FLYLOLDQV VKRXOG QRW EH FRQVLGHUHG ³D YLROHQW SROLWLFDO GLVWXUEDQFH´ EHFDXVH VXFK ILQGLQJ ZRXOG HQFRXUDJH WHUURULVP ,G Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 27 of 35 PageID #:584 2I FRXUVH 9HQFNLHQH¶V FDVH LV GLVWLQJXLVKDEOH IURP (DLQ EHFDXVH WKH :D\ RI &RXUDJH¶V DFWLYLWLHV DUH QRW GLUHFWHG DW FLYLOLDQV (DLQ LV VWLOO LQVWUXFWLYH KRZHYHU EHFDXVH WKH SURWHVW DJDLQVW /LWKXDQLDQ DXWKRULWLHV LV IDU IURP D ³FODVK RI PLOLWDU\ IRUFHV´ RQ WKH VSHFWUXP RI YLROHQW GLVWXUEDQFHV ,Q IDFW WKH RQO\ YLROHQFH 9HQFNLHQH DOOHJHV DUH WKH GHDWKV RI WKUHH RI WKH DFFXVHG DQG KHU EURWKHU LQMXULHV WR KHU PRWKHU LQ ODZ DQG KHU DQG WKH DVVDVVLQDWLRQ DWWHPSW DJDLQVW KHU 2WKHU FRXUWV KDYH KHOG WKDW VKRZLQJV RI JUHDWHU GHJUHHV RI YLROHQFH WKDQ 9HQFNLHQH DOOHJHV GLG QRW FRQVWLWXWH DQ XSULVLQJ RU YLROHQW SROLWLFDO GLVWXUEDQFH IRU H[DPSOH LQ 9R Y %HQRY ) G WK &LU 7KH 1LQWK &LUFXLW KDV KHOG WKDW WKH ³XSULVLQJ´ FRPSRQHQW PDNHV WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ ³DSSOLFDEOH RQO\ ZKHQ D FHUWDLQ OHYHO RI YLROHQFH H[LVWV DQG ZKHQ WKRVH HQJDJHG LQ WKDW YLROHQFH DUH VHHNLQJ WR DFFRPSOLVK D SDUWLFXODU REMHFWLYH ´ 4XLQQ Y 5RELQVRQ ) G WK &LU ³7KH H[FHSWLRQ GRHV QRW DSSO\ WR SROLWLFDO DFWV WKDW LQYROYH OHVV IXQGDPHQWDO HIIRUWV WR DFFRPSOLVK FKDQJH RU WKDW GR QRW DWWUDFW VXIILFLHQW DGKHUHQWV WR FUHDWH WKH UHTXLVLWH DPRXQW RI WXUPRLO ´ ,G ,Q 9R Y %HQRY WKH SHWLWLRQHU ZDV D PHPEHU RI WKH *RYHUQPHQW RI )UHH 9LHWQDP *)91 D SROLWLFDO SDUW\ IRUPHG WR GLVPDQWOH WKH &RPPXQLVW GLFWDWRUVKLS RI 9LHWQDP DQG FKDUJHG ZLWK DWWHPSWLQJ WR ERPE WKH 9LHWQDPHVH HPEDVV\ LQ %DQJNRN ) G DW 7R VXSSRUW KLV FODLP WKDW DQ XSULVLQJ H[LVWHG LQ 9LHWQDP DW WKH WLPH WKH SHWLWLRQHU SRLQWHG WR WKRXVDQGV RI VLJQDWXUHV RQ D SHWLWLRQ IRU IUHHGRP DQG D KDQGIXO RI *)91 DWWDFNV RQ WKH 9LHWQDPHVH JRYHUQPHQW DQG FODLPHG WKDW PHPEHUV RI *)91 KDG EHHQ PXUGHUHG DQG LPSULVRQHG IRU WKHLU DFWLRQV ,G DW $SSO\LQJ 4XLQQ DQG RWKHU SULRU GHFLVLRQV WKH 1LQWK &LUFXLW KHOG WKDW ³LQ RUGHU WR FRQVWLWXWH DQ XSULVLQJ D FRQIOLFW PXVW LQYROYH HLWKHU VRPH VKRUW SHULRG RI LQWHQVH EORRGVKHG RU DQ DFFXPXODWLRQ RI YLROHQW LQFLGHQWV RYHU D ORQJ SHULRG RI WLPH ´ ,G DW :LWK UHJDUG WR WKH SHWLWLRQHU¶V FODLP WKH FRXUW KHOG WKDW WKH ³VXP RI D IHZ VNLUPLVKHV ZLWK WKH SROLFH FRXSOHG ZLWK D KDQGIXO RI Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 28 of 35 PageID #:585 H[SORVLRQV DQG ERPELQJ DWWHPSWV DURXQG WKH 3DFLILF 5LP DQG D NHHQ GHVLUH WR VHH WKH GRZQIDOO RI WKH FRPPXQLVW UHJLPH LQ KLV QDWLYH ODQG´ GLG QRW UHDFK WKH QHFHVVDU\ OHYHO RI YLROHQFH WR DPRXQW WR DQ XSULVLQJ ,G DW & I 2UGLQROD ) G DW ³XSULVLQJ´ H[LVWHG ZKHUH ³3HUXYLDQ JRYHUQPHQW DQG WKH 6KLQLQJ 3DWK ZHUH HQJDJHG LQ D YLROHQW VWUXJJOH IRU FRQWURO RI WKH FRXQWU\´ DQG ³DSSUR[LPDWHO\ SHUFHQW RI 3HUXYLDQ WHUULWRU\ DQG DSSUR[LPDWHO\ SHUFHQW RI WKH FRXQWU\¶V SRSXODWLRQ ZDV XQGHU D VWDWH RI QDWLRQDO HPHUJHQF\´ LQWHUQDO FLWDWLRQ RPLWWHG %DUDSLQG ) G DW XSULVLQJ H[LVWHG ZKHUH ³WHQV RI WKRXVDQGV RI GHDWKV DQG FDVXDOWLHV UHVXOWHG EHWZHHQ WKH PLG V DQG HDUO\ V DV 6LNK QDWLRQDOLVWV FODVKHG ZLWK JRYHUQPHQW RIILFHUV DQG V\PSDWKL]HUV LQ 3XQMDE´ 9HQFNLHQH¶V DOOHJDWLRQV RI YLROHQFH DUH HYHQ OHVV WKDQ WKRVH UHMHFWHG E\ WKH FRXUW LQ 9R 7KH HYHQWV VHW IRUWK LQ 9HQFNLHQH¶V 3HWLWLRQ ZHUH FOHDUO\ WUDXPDWLF DQG WKH &RXUW LQ QR ZD\ PHDQV WR PLQLPL]H WKH YLROHQFH DQG KRUUHQGRXV DFWLRQV 9HQFNLHQH¶V IDPLO\ KDV HQGXUHG RU WKH SDLQ WKH\ FRQWLQXH WR VXIIHU DV D UHVXOW %XW WKH &RXUW FDQQRW FRQVLGHU 9HQFNLHQH¶V DOOHJDWLRQV LQ D YDFXXP 7KH &RXUW LV ERXQG E\ WKH SURYLVLRQV RI WKH 7UHDW\ DQG LV SHUPLWWHG WR LQWHUYHQH LQ WKH H[WUDGLWLRQ SURFHVV DW WKLV VWDJH RQO\ WR WKH QDUURZ H[WHQW SURYLGHG E\ FRQWUROOLQJ FDVH ODZ 7KDW FDVH ODZ LV FOHDU WKDW IRU WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ WR DSSO\ 9HQFNLHQH PXVW VKRZ D PXFK JUHDWHU GHJUHH RI YLROHQFH WKDQ VKH KDV EHHQ DEOH WR GHPRQVWUDWH KHUH 9HQFNLHQH FLWHV ]HUR FDVHV VXSSRUWLQJ KHU FODLP WKDW WKH SROLWLFDO SDUW\¶V DFWLRQV DQG SURWHVWV DUH VXIILFLHQW WR FRQVWLWXWH DQ XSULVLQJ IRU SXUSRVHV RI HVWDEOLVKLQJ WKH ³SROLWLFDO RIIHQVH´ H[FHSWLRQ 9HQFNLHQH IDLOV WR PHHW KHU EXUGHQ RI VKRZLQJ WKDW VKH ZLOO OLNHO\ VXFFHHG RQ KHU FODLP WKDW WKH SROLWLFDO RIIHQVH H[FHSWLRQ DSSOLHV Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 29 of 35 PageID #:586 3UREDEOH &DXVH %HIRUH FHUWLI\LQJ D SHUVRQ DV H[WUDGLWDEOH D PDJLVWUDWH MXGJH ³PXVW ILQG SUREDEOH FDXVH XQGHU IHGHUDO ODZ WKDW WKH SHUVRQ FRPPLWWHG WKH RIIHQVH KH LV FKDUJHG ZLWK E\ WKH IRUHLJQ JRYHUQPHQW ´ %RYLR ) G DW FLWLQJ (DLQ ) G DW -XGJH 0DUWLQ IRXQG SUREDEOH FDXVH WR EHOLHYH 9HQFNLHQH FRPPLWWHG WZR RI WKH RIIHQVHV FKDUJHG KLQGHULQJ WKH DFWLYLWLHV RI D EDLOLII DQG UHVLVWLQJ D FLYLO VHUYDQW RU SHUVRQ SHUIRUPLQJ WKH IXQFWLRQV RI SXEOLF DGPLQLVWUDWLRQ 2Q KDEHDV UHYLHZ WKH &RXUW UHYLHZV WKH PDJLVWUDWH MXGJH¶V SUREDEOH FDXVH ILQGLQJ WR GHWHUPLQH ZKHWKHU WKHUH LV ³DQ\ FRPSHWHQW HYLGHQFH´ WR VXSSRUW WKH MXGJH¶V ILQGLQJ ,G $FFRUGLQJO\ ³D PDJLVWUDWH MXGJH¶V ILQGLQJ RI SUREDEOH FDXVH WR VXSSRUW H[WUDGLWLRQ ZLOO EH XSKHOG LI µWKHUH LV DQ\ FRPSHWHQW HYLGHQFH WR VXSSRUW KHU ILQGLQJ ¶´ &KHXQJ Y 1LFNOLQ 1R & :/ DW 1 ' ,OO 'HF DII¶G )HE HPSKDVLV DGGHG FLWLQJ %RYLR ) G DW ³7KLV OLPLWHG VFRSH RI UHYLHZ LV FRPPHQVXUDWH ZLWK WKH OLPLWHG VFRSH RI LQTXLU\ LQ WKH H[WUDGLWLRQ KHDULQJ LWVHOI ´ ,G ³$Q H[WUDGLWLRQ KHDULQJ LV QRW D SOHQDU\ WULDO DW ZKLFK JXLOW RU LQQRFHQFH LV GHFLGHG UDWKHU LW LV LQ WKH QDWXUH RI D SUHOLPLQDU\ H[DPLQDWLRQ WR GHWHUPLQH ZKHWKHU SUREDEOH FDXVH H[LVWV WR KROG WKH IXJLWLYH IRU WULDO LQ WKH UHTXHVWLQJ FRXQWU\ ´ ,G FLWLQJ &ROOLQV Y /RLVHO 8 6 VHH DOVR H J ,Q UH 0D]XU 1R 0 :/ DW 1 ' ,OO -XO\ 7R VXFFHHG RQ KHU KDEHDV FODLPV 9HQFNLHQH PXVW VKRZ WKDW WKHUH ZDV QR HYLGHQFH ZDUUDQWLQJ -XGJH 0DUWLQ¶V SUREDEOH FDXVH ILQGLQJV 6HH H J LG DW UHYLHZ RI D SUREDEOH FDXVH ILQGLQJ RQ KDEHDV SHWLWLRQ ³LV OLPLWHG WR DVVHVVLQJ ZKHWKHU WKHUH ZDV DQ\ HYLGHQFH ZDUUDQWLQJ WKH RULJLQDO ILQGLQJ´ HPSKDVLV LQ RULJLQDO LQWHUQDO FLWDWLRQV RPLWWHG 0RUHRYHU LQ RUGHU IRU WKH &RXUW WR JUDQW KHU VWD\ 9HQFNLHQH PXVW HVWDEOLVK WKDW VKH ZLOO OLNHO\ EH DEOH WR PDNH VXFK VKRZLQJ 9HQFNLHQH IDLOV WR GR VR ZLWK UHJDUG WR HLWKHU FKDUJH Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 30 of 35 Page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¶V PRWKHU LQFOXGLQJ E\ DVVDXOWLQJ DQ RIILFHU DW KHU KRPH GXULQJ H[HFXWLRQ RI WKH RUGHU $FFRUGLQJ WR WKH HYLGHQFH VXEPLWWHG E\ WKH /LWKXDQLDQ JRYHUQPHQW GXULQJ WKH SUHWULDO LQYHVWLJDWLRQV WKH FKLOG¶V PRWKHU DQG WKH EDLOLII UHVSRQVLEOH IRU HIIHFWXDWLQJ WKH WUDQVIHU UHSRUWHG WKDW 9HQFNLHQH UHSHDWHGO\ IDLOHG WR WXUQ RYHU WKH FKLOG DV RUGHUHG DQG GHIHUUHG DWWHPSWV WR WUDQVIHU WKH FKLOG E\ VD\LQJ WKH FKLOG GLG QRW ZDQW WR JR WR KHU PRWKHU 6HH H J ,Q UH ([WUDGLWLRQ RI -DURV] ) 6XSS G 1 ' ,OO ³6R ORQJ DV WKH H[KLELWV VXEPLWWHG E\ WKH UHTXHVWLQJ QDWLRQ DUH FHUWLILHG DQG DXWKHQWLFDWHG LQ DFFRUGDQFH ZLWK WKH UHOHYDQW VWDWXWH WKH HYLGHQFH >LQ DQ H[WUDGLWLRQ KHDULQJ@ PD\ FRPH IURP D SURVHFXWRULDO UHSRUW ´ 7KH EDLOLII UHSRUWHG WKDW ZKHQ ODZ HQIRUFHPHQW DUULYHG DW 9HQFNLHQH¶V KRPH WR WDNH FXVWRG\ RI WKH FKLOG 9HQFNLHQH KDG HUHFWHG Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 31 of 35 PageID #:588 REVWDFOHV DURXQG KHU KRPH DQG UHIXVHG WR UHPRYH WKH EDUULFDGHV RQ KHU GRRUV ZKHQ WKH RIILFHUV NQRFNHG DQG DQQRXQFHG WKHLU SUHVHQFH IRUFLQJ WKH RIILFHUV WR XVH VSHFLDO HTXLSPHQW WR HQWHU WKH KRPH 7KH EDLOLII UHSRUWHG IXUWKHU WKDW RQFH LQVLGH 9HQFNLHQH UHIXVHG WR DOORZ RWKHUV WR FRPPXQLFDWH ZLWK WKH FKLOG VKRXWHG KHOG WKH FKLOG ZLWK KHU KDQGV DURXQG KHU ZDLVW DQG EHJDQ NLFNLQJ WKH FKLOG¶V PRWKHU 7KH EDLOLII UHSRUWHG DOVR WKDW RIILFHUV LQFOXGLQJ DQ 2IILFHU 0LQGDXJDV *XVDXVNDV KDG WR WDNH 9HQFNLHQH¶V KDQGV RII RI WKH FKLOG WR DOORZ WKH PRWKHU WR WDNH WKH FKLOG 2WKHU RIILFHUV DW WKH VFHQH FRQILUPHG WKH EDLOLII¶V DFFRXQW *XVDXVNDV UHSRUWHG WKDW DIWHU WKH FKLOG OHIW WKH URRP 9HQFNLHQH VWRRG XS DQG SXQFKHG KLP WZLFH LQ WKH ULJKW VLGH RI KLV IDFH $QRWKHU RIILFHU REVHUYHG WKH SXQFKHV DQG WKH LQMXULHV ZHUH GRFXPHQWHG E\ PHGLFDO UHFRUGV %DVHG RQ WKLV HYLGHQFH WKHUH ZDV PRUH WKDQ VXIILFLHQW HYLGHQFH WR VXSSRUW -XGJH 0DUWLQ¶V ILQGLQJ RI SUREDEOH FDXVH WKDW 9HQFNLHQH KLQGHUHG WKH EDLOLII LQ H[HFXWLQJ WKH FRXUW¶V WUDQVIHU RUGHU²L H E\ UHIXVLQJ WR WXUQ RYHU WKH FKLOG EDUULFDGLQJ WKH FKLOG LQ KHU KRPH SUHYHQWLQJ WKH RIILFHUV IURP SK\VLFDOO\ UHPRYLQJ WKH FKLOG HWF ²DQG WKDW 9HQFNLHQH XVHG SK\VLFDO YLROHQFH WR UHVLVW D FLYLO VHUYDQW RU RWKHU SHUVRQ SHUIRUPLQJ WKH IXQFWLRQV RI SXEOLF DGPLQLVWUDWLRQ²L H E\ NLFNLQJ WKH FKLOG¶V PRWKHU DQG SXQFKLQJ WKH RIILFHU H[HFXWLQJ WKH FRXUW¶V RUGHU ,Q RWKHU ZRUGV 9HQFNLHQH FDQQRW VKRZ WKDW WKHUH LV QR HYLGHQFH VXSSRUWLQJ WKH SUREDEOH FDXVH ILQGLQJ 3ODLQWLII DUJXHV WKDW D WUDQVFULSW RI WKH HYHQWV WUDQVSLULQJ WKH GD\ WKH RIILFLDOV FDPH WR 9HQFNLHQH¶V KRXVH WR UHPRYH WKH FKLOG QHJDWHV DQ\ ILQGLQJ RI SUREDEOH FDXVH ³1HLWKHU WKH IHGHUDO UXOHV RI HYLGHQFH QRU WKH IHGHUDO UXOHV RI FULPLQDO SURFHGXUH DSSO\´ LQ DQ H[WUDGLWLRQ KHDULQJ ,Q UH 0D]XU :/ DW FLWLQJ (DLQ ) G DW *HQHUDOO\ ³>D@Q DFFXVHG LQ DQ H[WUDGLWLRQ KHDULQJ KDV QR ULJKW WR FRQWUDGLFW WKH GHPDQGLQJ FRXQWU\¶V SURRI RU WR SRVH TXHVWLRQV RI FUHGLELOLW\ DV LQ DQ RUGLQDU\ WULDO´ ³>W@R GR RWKHUZLVH ZRXOG FRQYHUW WKH H[WUDGLWLRQ LQWR D IXOO VFDOH WULDO ZKLFK LW LV QRW WR EH ´ (DLQ ) G DW +RZHYHU WKH DFFXVHG PD\ SUHVHQW Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 32 of 35 PageID #:589 HYLGHQFH WKDW ³REOLWHUDWHV´ WKH SUREDEOH FDXVH ILQGLQJ ,Q UH 0D]XU :/ DW 9HQFNLHQH DUJXHV WKH WUDQVFULSW ³REOLWHUDWHV´ WKH SUREDEOH FDXVH ILQGLQJ EHFDXVH WKHUH LV QR LQGLFDWLRQ LQ WKH WUDQVFULSW WKDW 9HQFNLHQH NLFNHG WKH PRWKHU RU SXQFKHG WKH RIILFHU 7KH WUDQVFULSW GRHV QRW ³REOLWHUDWH´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¶V FODLP WKDW 9HQFNLHQH HUHFWHG EDUULHUV WR SUHYHQW WKH RIILFHUV IURP HQWHULQJ KHU KRXVH WR H[HFXWH WKH WUDQVIHU RUGHU 6HH H J 'NW DW ([ ³%DLOLII 3ROLFH RIILFHUV DUH DVNHG WR UHPRYH WKH REVWDFOHV 3OHDVH UHPRYH WKH REVWDFOHV ´ $GGLWLRQDOO\ 9HQFNLHQH DUJXHV IRU WKH ILUVW WLPH LQ KHU VXSSOHPHQWDO EULHI WKDW WKHUH DUH YLGHRV IURP WKH LQFLGHQW WKDW VKRXOG EH FROOHFWHG DQG SURGXFHG SULRU WR GHQ\LQJ WKH VWD\ 'NW DW ˆ 9HQFNLHQH SURYLGHV ]HUR GHWDLOV DERXW WKHVH YLGHRV IRU H[DPSOH ZKDW WKH\ ZLOO VKRZ RU KRZ WKH\ ZLOO PDNH 9HQFNLHQH PRUH OLNHO\ WR VXFFHHG RQ KHU KDEHDV SHWLWLRQ H[FHSW WR VD\ WKDW WKH\ DUH ³UHOHYDQW WR H[SODLQ ZKDW KDSSHQHG RQ WKH GD\ WKH RIIHQVHV RFFXUUHG ´ ,G :LWKRXW PRUH WKLV HOHYHQWK KRXU DWWHPSW WR VWD\ WKH &RXUW¶V UXOLQJ EDVHG RQ QHZ HYLGHQFH LV XQFRQYLQFLQJ DQG DV GLVFXVVHG DOUHDG\ WKH HYLGHQFH SURIIHUHG E\ WKH /LWKXDQLDQ JRYHUQPHQW SURYLGHV DPSOH VXSSRUW IRU -XGJH 0DUWLQ¶V SUREDEOH FDXVH ILQGLQJV 6HH H J 3HURII ) G DW (YHQ LQ OLJKW RI QHZO\ GLVFRYHUHG HYLGHQFH ³WKH HYLGHQFH SURIIHUHG E\ WKH 6ZHGLVK DXWKRULWLHV LQ WKHLU Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 33 of 35 PageID #:590 UHTXHVW IRU 3HURII¶V H[WUDGLWLRQ DPSO\ VXSSRUWV WKH RULJLQDO ILQGLQJ RI SUREDEOH FDXVH WR EHOLHYH WKDW 3HURII SDUWLFLSDWHG LQ WKH FULPHV FKDUJHG ´ 7KHUHIRUH 9HQFNLHQH IDLOV WR PDNH D VWURQJ VKRZLQJ WKDW VKH ZLOO OLNHO\ VXFFHHG RQ WKH PHULWV RI KHU FKDOOHQJHV WR WKH PDJLVWUDWH MXGJH¶V FHUWLILFDWLRQ RUGHU 7KH UHPDLQLQJ VWD\ IDFWRUV IDYRU GHQ\LQJ WKH PRWLRQ IRU D VWD\ IRU WKH VDPH UHDVRQV GLVFXVVHG DERYH 9HQFNLHQH¶V RQO\ LUUHSDUDEOH KDUP²WKDW KHU RXWVWDQGLQJ OHJDO FODLPV UHODWHG WR KHU H[WUDGLWLRQ ZLOO EHFRPH PRRW² LV WHPSHUHG E\ WKH IDFW WKDW VKH PD\ VWLOO SUHVHQW D GHIHQVH EHIRUH WKH /LWKXDQLDQ FRXUWV DQG SURPSW H[HFXWLRQ RI UHPRYDO RUGHUV IDFLOLWDWHV LQWHUQDWLRQDO UXOH RI ODZ DQG SURPRWHV SXEOLF LQWHUHVW 9HQFNLHQH¶V 0RWLRQ IRU ([WHQVLRQ RI 6WD\ LV GHQLHG ZLWK UHJDUG WR DOO FODLPV FKDOOHQJLQJ -XGJH 0DUWLQ¶V 2UGHU FHUWLI\LQJ KHU DV H[WUDGLWDEOH ,,, 3HQGLQJ &RQJUHVVLRQDO %LOOV 2Q -XQH 1HZ -HUVH\ 5HSUHVHQWDWLYH &KULVWRSKHU 6PLWK SUHVHQWHG WR &RQJUHVV D ELOO WLWOHG ³*LYH -XGJH 9HQFNLHQH +HU 'D\ LQ &RXUW $FW´ WKDW VHHNV ³WKH UHOLHI RI -XGJH 1HULQJD 9HQFNLHQH ZKR WKH *RYHUQPHQW RI /LWKXDQLD VHHNV RQ FKDUJHV UHODWHG WR KHU SXUVXLW RI MXVWLFH DJDLQVW /LWKXDQLDQ SXEOLF RIILFLDOV DFFXVHG RI VH[XDOO\ PROHVWLQJ KHU \RXQJ QLHFH ´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ase: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 34 of 35 PageID #:591 VWDWHV DOVR WKDW KH LV ZRUNLQJ ZLWK WKH -XGLFLDU\ &RPPLWWHH WR DFKLHYH IDVW WUDFN SURFHVVLQJ IRU WKH ELOO ,G 9HQFNLHQH¶V VWD\ UHTXHVW EDVHG RQ WKH SHQGLQJ &RQJUHVVLRQDO ELOOV LV VXEMHFW WR WKH VDPH IRXU IDFWRU DQDO\VLV XQGHU 1NHQ 7KHUHIRUH 9HQFNLHQH EHDUV WKH EXUGHQ RI VKRZLQJ WKDW WKH SHQGLQJ ELOOV ZDUUDQW DQ H[HUFLVH RI WKH FRXUW¶V GLVFUHWLRQ LQ KHU IDYRU LQFOXGLQJ E\ PDNLQJ D VWURQJ VKRZLQJ WKDW VKH LV OLNHO\ WR VXFFHHG RQ WKH PHULWV L H WKDW KHU H[WUDGLWLRQ ZLOO OLNHO\ EH SUHYHQWHG E\ WKH SDVVDJH RI HLWKHU ELOO %XW 9HQFNLHQH¶V EULHI LV GHYRLG RI DQ\ VXFK DUJXPHQW )LUVW 9HQFNLHQH SURYLGHV QR SUHFHGHQW²DQG WKH &RXUW NQRZV RI QRQH²IRU D FRXUW VWD\LQJ H[HFXWLRQ RI D ZDUUDQW RI VXUUHQGHU LVVXHG E\ WKH 6HFUHWDU\ RI 6WDWH XQWLO &RQJUHVV FRXOG YRWH RQ D SHQGLQJ SURSRVHG ELOO 6HFRQG H[FHSW IRU 5HSUHVHQWDWLYH 6PLWK¶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¶V 0RWLRQ IRU ([WHQVLRQ RI 6WD\ EDVHG RQ WKH SHQGLQJ &RQJUHVVLRQDO ELOOV Case: 1:18-cv-03061 Document #: 32 Filed: 07/12/18 Page 35 of 35 PageID #:592 &21&/86,21 )RU WKH UHDVRQV VWDWHG DERYH WKH &RXUW GHQLHV 9HQFNLHQH¶V 0RWLRQ IRU ([WHQVLRQ RI 6WD\ 'NW $OWKRXJK WKH &RXUW KDV UXOHG RQ WKH OLNHOLKRRG 9HQFNLHQH ZLOO VXFFHHG RQ WKH PHULWV RI KHU KDEHDV SHWLWLRQ WKH 3HWLWLRQ LV QRW \HW IXOO\ EULHIHG %HFDXVH WKH &RXUW KDV IRXQG WKDW LW KDV WKH DXWKRULW\ WR KHDU 9HQFNLHQH¶V FKDOOHQJHV WR WKH 6HFUHWDU\ RI 6WDWH¶V H[WUDGLWLRQ GHWHUPLQDWLRQ DQG -XGJH 0DUWLQ¶V FHUWLILFDWLRQ RUGHU WKH &RXUW GLUHFWV WKH SDUWLHV WR VXEPLW EULHILQJ RQ 9HQFNLHQH¶V SHQGLQJ 3HWLWLRQ $GGLWLRQDOO\ WKH &RXUW SHUPLWV 9HQFNLHQH WR ILUVW DPHQG KHU 3HWLWLRQ WR LQFOXGH WKH FKDOOHQJHV UDLVHG IRU WKH ILUVW WLPH LQ KHU VXSSOHPHQWDO EULHI LI VR GHVLUHG 'DWH -XO\ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB +RQ 9LUJLQLD 0 .HQGDOO 8QLWHG 6WDWHV 'LVWULFW -XGJH