Aloisi v. Lockheed Martin

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

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

LQGLYLGXDOHPSOR\HHUHSUHVHQWHGE\DXQLRQJHQHUDOO\GRHV )LOH 1DPH DS

QRWKDYHVWDQGLQJWRFKDOOHQJHDQDUELWUDWLRQSURFHHGLQJWR ZKLFKWKHXQLRQDQGWKHHPSOR\HUZHUHWKHRQO\SDUWLHVl 6KRUHVY3HDERG\&RDO&R)GWK&LU 81,7('67$7(6&28572)$33($/6 m>,@QGLYLGXDOHPSOR\HHVZKRDUHXQLRQPHPEHUVKDYH )257+(6,;7+&,5&8,7 QRVWDQGLQJWRFKDOOHQJHLQD6HFWLRQVXLWDQDUELWUDWLRQ BBBBBBBBBBBBBBBBB SURFHHGLQJWRZKLFKWKHXQLRQDQGWKHHPSOR\HUZHUHWKHVROH SDUWLHVH[FHSWRQWKHJURXQGVRIIUDXGGHFHLWRUEUHDFKRI WKHXQLRQjVGXW\RIIDLUUHSUHVHQWDWLRQl7KLVUXOHIROORZV IURPWKHIDFWWKDWWKHXQLRQDQGWKHHPSOR\HUDQGQRWWKH 921'$ $ $/2,6, ; LQGLYLGXDOHPSOR\HHDUHXVXDOO\WKHRQO\VLJQDWRULHVWRWKH 3ODLQWLII$SSHOOHH  &%$6XFKLVWKHVLWXDWLRQLQWKHSUHVHQWFDVH   1R $ORLVLGLGQRWILOHDK\EULG†FODLPDJDLQVWERWKKHU Y  XQLRQDQGHPSOR\HUEXWLQVWHDGQDPHGRQO\KHUHPSOR\HUDV !  DGHIHQGDQW%HFDXVHQRH[FHSWLRQVWRWKHJHQHUDO/05$ /2&.+((' 0$57,1 (1(5*<  VWDQGLQJ MXULVSUXGHQFH DSSO\ LQ WKH FDVH EHIRUH XV $ORLVL 6<67(06 ,1&  ODFNVVWDQGLQJWRUDLVHKHUFODLPV 'HIHQGDQW$SSHOODQW   ,,,&21&/86,21 1 )RUDOORIWKHUHDVRQVVHWIRUWKDERYHZH5(9(56(WKH $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW MXGJPHQWRIWKHGLVWULFWFRXUWDQG5(0$1'WKHDFWLRQZLWK IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH LQVWUXFWLRQVWRGLVPLVVWKHFRPSODLQW 1RnsDPHV+sDUYLV'LVWULFWsXGJH $UJXHG)HEUXDU\ 'HFLGHGDQG)LOHG)HEUXDU\ %HIRUH*,/0$1DQG*,%%216&LUFXLWsXGJHV 32/67(5'LVWULFWsXGJH

7KH +RQRUDEOH 'DQ $DURQ 3ROVWHU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

  $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 1R 1R $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 

BBBBBBBBBBBBBBBBB KRZHYHUFORVHO\WUDFNV$ORLVLjVFODLPVDQGLVEDVHGRQWKH DVVXPSWLRQWKDWWKHSDUWLHVKDYHLQIDFWHQJDJHGLQDUELWUDWLRQ &2816(/ 7KLVLV†DRIWKH7HQQHVVHH&RGHZKLFKSURYLGHV WKDWm>X@SRQDSSOLFDWLRQRIDSDUW\WKHFRXUWVKDOOYDFDWHDQ $5*8('sRKQ%5D\VRQ.5$0(55$<621/($.( DZDUG ZKHUH    >W@KH DZDUG ZDV SURFXUHG E\    XQGXH 52'*(56  025*$1 .QR[YLOOH 7HQQHVVHH IRU PHDQV    l  6HFRQG WKH DSSOLFDEOH VWDWH VWDWXWH RI $SSHOODQWsRKQ'$JHH&22/(<&22/(< $*(( OLPLWDWLRQVQHHGQRWEHDSHUIHFWILWZLWKWKHSODLQWLIIjV/05$ .LQJVWRQ7HQQHVVHHIRU$SSHOOHH21%5,()sRKQ% FODLP5DWKHU0LWFKHOOUHTXLUHVRQO\WKDWWKHFRXUWPDWFKWKH 5D\VRQsRKQ&%XUJLQsU.5$0(55$<621/($.( QDWXUHRIWKHIHGHUDOFODLPZLWKDQDSSURSULDWHVWDWHVWDWXWHRI 52'*(56  025*$1 .QR[YLOOH 7HQQHVVHH IRU OLPLWDWLRQV7KHQDWXUHRI$ORLVLjVFODLPDVGLVFXVVHGDERYH $SSHOODQWsRKQ'$JHH&22/(<&22/(< $*(( LVDQDFWLRQWRYDFDWHDQDUELWUDWLRQDZDUGDQGWKHUHIRUHWKH .LQJVWRQ7HQQHVVHHIRU$SSHOOHH PRVWDSSURSULDWHVWDWHVWDWXWHRIOLPLWDWLRQVLVWKH7HQQHVVHH 8QLIRUP $UELWUDWLRQ $FWjV GD\ VWDWXWH RI OLPLWDWLRQV WR BBBBBBBBBBBBBBBBB YDFDWHVXFKDQDZDUG 23,1,21 )LQDOO\ZHILQGQRWKLQJmXQIDLUlDERXWDSSO\LQJDGD\ BBBBBBBBBBBBBBBBB VWDWXWH RI OLPLWDWLRQV XQGHU WKH FLUFXPVWDQFHV RI WKLV FDVH 1HLWKHUGLGWKH6XSUHPH&RXUWLQ0LWFKHOOHVSHFLDOO\LQOLJKW 521$/'/((*,/0$1&LUFXLWs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jVXQLRQDQG/RFNKHHG0DUWLQ /RFNKHHG0DUWLQjVDOWHUQDWLYHDUJXPHQWLVWKDW$ORLVLODFNV VWDQGLQJ WR UDLVH KHU FODLPV XQGHU †  RI WKH /05$ $ORLVL ZDV IRXQG WR EH HQWLWOHG WR VKRUWWHUP GLVDELOLW\ $ORLVLjVRQO\UHVSRQVHLVWKDWVKHKDVVWDQGLQJXQGHU(5,6$ EHQHILWVEXWWKHXQLRQDQG/RFNKHHG0DUWLQGLVDJUHHGDERXW ZKLFKDVPHQWLRQHGDERYHLVQRWDSSOLFDEOH WKHH[WHQWWRZKLFKVKHZDVHQWLWOHGWRORQJWHUPGLVDELOLW\ EHQHILWV7KLVFDXVHGWKHXQLRQWRLQYRNHWKH&%$jVPHGLFDO 7KH JHQHUDO UXOH LQ /05$ DFWLRQV LV WKDW DQ LQGLYLGXDO DUELWUDWLRQ SURFHGXUH IRU UHVROYLQJ VXFK GLVSXWHV  $W WKH HPSOR\HH KDV QR VWDQGLQJ WR ILOH DQ DFWLRQ DJDLQVW KHU FRQFOXVLRQRIWKHDUELWUDWLRQSURFHGXUH$ORLVLZDVLQIRUPHG HPSOR\HUZLWKRXWDOVRILOLQJVXLWDJDLQVWKHUXQLRQIRUEUHDFK WKDW VKH ZDV QRW HQWLWOHG WR WKH FRQWLQXDWLRQ RI ORQJWHUP RIWKH&%$%DFDVKLKXDY8QLWHG6WDWHV3RVWDO6HUY GLVDELOLW\EHQHILWV6KHWKHQILOHGWKHSUHVHQWDFWLRQLQWKH )G   WK &LU  H[SODLQLQJ WKDW DQ GLVWULFW FRXUW WR RYHUWXUQ WKH DGYHUVH GHFLVLRQ E\ WKH LQGLYLGXDO HPSOR\HH XVXDOO\ ODFNV LQGHSHQGHQW VWDQGLQJ WR DUELWUDWRUV ILOHDFRPSODLQWDJDLQVWKHUHPSOR\HUIRUEUHDFKRIWKH&%$ XQOHVVWKHHPSOR\HHDOVRDOOHJHVWKDWWKHXQLRQEUHDFKHGLWV 7KH GLVWULFW FRXUW GHQLHG /RFNKHHG 0DUWLQjV PRWLRQ IRU GXW\RIIDLUUHSUHVHQWDWLRQ.DWLUY&ROXPELD8QLY)G VXPPDU\ MXGJPHQW DQG UHPDQGHG WKH DFWLRQ IRU IXUWKHU G&LUSHUFXULDPm,IWKHUHLVQRFODLP DUELWUDWLRQ,WVXEVHTXHQWO\GHQLHG/RFNKHHG0DUWLQjVPRWLRQ WKDW WKH XQLRQ EUHDFKHG LWV GXW\ RI IDLU UHSUHVHQWDWLRQ DQ  $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 1R 1R $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 

FLWLQJDVDVLJQLILFDQWSROLF\FRQFHUQmWKHUDSLGUHVROXWLRQRI WRDOWHURUDPHQGWKHRUGHUGHQ\LQJWKHPRWLRQIRUVXPPDU\ FROOHFWLYH EDUJDLQLQJ GLVSXWHV EHWZHHQ WKH HPSOR\HU DQG MXGJPHQW)RUWKHUHDVRQVVHWIRUWKEHORZZH5(9(56( HPSOR\HHVl  7KH SROLF\ EHKLQG SURPSWO\ UHVROYLQJ ODERU WKHMXGJPHQWRIWKHGLVWULFWFRXUWDQG5(0$1'WKHDFWLRQ GLVSXWHVREYLRXVO\PLOLWDWHVLQIDYRURIDSSO\LQJWKHGD\ ZLWKLQVWUXFWLRQVWRGLVPLVVWKHFRPSODLQW VWDWXWH RI OLPLWDWLRQV VHW IRUWK LQ WKH 7HQQHVVHH 8QLIRUP $UELWUDWLRQ$FWDVRSSRVHGWR7HQQHVVHHjVVL[\HDUVWDWXWHRI ,%$&.*5281' OLPLWDWLRQVIRUEUHDFKRIFRQWUDFWDFWLRQV7HQQ&RGH$QQ †D  $ )DFWXDOEDFNJURXQG

$VLQ0LWFKHOO$ORLVLjVmEUHDFKRIFRQWUDFWlDFWLRQFORVHO\ $ORLVL KDG EHHQ HPSOR\HG E\ /RFNKHHG 0DUWLQ DQG LWV UHVHPEOHV DQ DFWLRQ WR YDFDWH DQ DUELWUDWLRQ DZDUG  7KH SUHGHFHVVRU DV D VHFXULW\ SROLFH RIILFHU VLQFH  DQG DV FRPSODLQW VSHFLILFDOO\ VHHNV DQ LQMXQFWLRQ UHTXLULQJ WKH VXFK ZDV D PHPEHU RI WKH ,QWHUQDWLRQDO *XDUGV 8QLRQ RI LQVWLWXWLRQRIWKHYHU\EHQHILWVGHQLHGE\WKHILQDODUELWUDWRU $PHULFD WKH XQLRQ  6KH EHJDQ VXIIHULQJ IURP VHYHUH ,WIXUWKHUUHTXHVWVDQLQMXQFWLRQSURKLELWLQJWKHWHUPLQDWLRQRI KHDGDFKHVLQWKHHDUO\VZKLFKJUDGXDOO\ZRUVHQHGXQWLO ORQJWHUPGLVDELOLW\EHQHILWVXQOHVVDQGXQWLO$ORLVLLVIRXQG VKH EHFDPH XQDEOH WR SHUIRUP WKH GXWLHV RI KHU MRE QRWWREHWRWDOO\GLVDEOHGIROORZLQJVWULFWFRPSOLDQFHZLWKWKH $FFRUGLQJO\ $ORLVL ILOHG D FODLP IRU VKRUWWHUP GLVDELOLW\ &%$jVPHGLFDODUELWUDWLRQSURFHGXUH7KHPDLQSXUSRVHRI EHQHILWVSXUVXDQWWRWKH&%$ WKLVDFWLRQLVFOHDUO\WRYDFDWHWKHDUELWUDWLRQDZDUG$VVXFK ZHFRQFOXGHWKDWWKHGD\7HQQHVVHHVWDWXWHRIOLPLWDWLRQV $ORLVLjVFODLPZDVDSSURYHGDQGVKHUHFHLYHGWKHVKRUW IRU WKH YDFDWLRQ RI DQ DUELWUDWLRQ DZDUG LV WKH PRVW WHUPGLVDELOLW\EHQHILWVDOORZHGE\WKH&%$IRUVL[PRQWKV DSSURSULDWHRQHWRDSSO\WR$ORLVLjVFODLP $WWKHHQGRIWKLVVL[PRQWKSHULRG$ORLVLDSSOLHGIRUORQJ WHUPGLVDELOLW\EHQHILWV7KHVHEHQHILWVDUHDYDLODEOHXQGHU $ORLVL KRZHYHU UDLVHV WKUHH DUJXPHQWV ZK\ WKH GD\ WKH&%$WRDQHPSOR\HHZKRKDVH[KDXVWHGKHUVKRUWWHUP OLPLWDWLRQVSHULRGVKRXOGQRWEDUKHUFODLPVQRDUELWUDWLRQ GLVDELOLW\EHQHILWVDQGZKRLVmWRWDOO\GLVDEOHGl)RUWKHILUVW DZDUG ZDV HYHU LVVXHG VR WKH VWDWXWH RI OLPLWDWLRQV QHYHU PRQWKVRIORQJWHUPGLVDELOLW\DQHPSOR\HHLVFRQVLGHUHG EHJDQ WR UXQ  WKH 7HQQHVVHH 8QLIRUP $UELWUDWLRQ $FW WRWDOO\GLVDEOHGLIVKHLVmXQDEOHWRSHUIRUPWKHGXWLHVRI>KHU@ DSSOLHVRQO\DIWHUDSDUW\WRWKHDFWLRQUHIXVHVWRVXEPLWWR UHJXODUMREZLWKWKH&RPSDQ\l$IWHUWKHH[SLUDWLRQRIWKLV DUELWUDWLRQ DQG  WKH DSSOLFDWLRQ RI D GD\ VWDWXWH RI PRQWKSHULRGDQHPSOR\HHLVFRQVLGHUHGWRWDOO\GLVDEOHG OLPLWDWLRQVLVXQIDLU$VWR$ORLVLjVILUVWFRQWHQWLRQLWLVFOHDU DQGWKXVHOLJLEOHIRUORQJWHUPGLVDELOLW\EHQHILWVRQO\LIVKH WKDWDQDUELWUDWLRQDZDUGZDVLQIDFWLVVXHGHYHQWKRXJKLW LV mXQDEOH WR ZRUN DW DQ\ MRE IRU ZKLFK >VKH@ PLJKW EH ZDVQRWWKHDZDUGIRUZKLFK$ORLVLKDGKRSHGDQGZDVQRWDQ TXDOLILHGEDVHGRQ>KHU@HGXFDWLRQWUDLQLQJDQGH[SHULHQFHl DZDUGLVVXHGLQVWULFWFRPSOLDQFHZLWKWKH&%$SURFHGXUHV 7KH GLVWULFW FRXUWjV ILQGLQJ WR WKH FRQWUDU\ ZDV FOHDUO\ 0HWURSROLWDQ /LIH ,QVXUDQFH &RPSDQ\ 0HW/LIH ZKLFK HUURQHRXV DGPLQLVWHUV WKH ORQJWHUP GLVDELOLW\ SODQ IRU /RFNKHHG 0DUWLQ JUDQWHG $ORLVL ORQJWHUP GLVDELOLW\ EHQHILWV XQGHU 7KHUH DUH WZR UHVSRQVHV WR $ORLVLjV VHFRQG FRQWHQWLRQ SKDVH RQH RI WKH SODQ IRU WKH PRQWK SHULRG IURP )LUVWRQO\RQHVHFWLRQRIWKH7HQQHVVHH8QLIRUP$UELWUDWLRQ 1RYHPEHUWR1RYHPEHU7KHVHEHQHILWV $FWFRQFHUQVDSDUW\jVUHIXVDOWRDUELWUDWH7KLVLV† FRQVWLWXWHDSSUR[LPDWHO\RIDQHPSOR\HHjVPRQWKO\SD\ DRIWKH7HQQHVVHH&RGHZKLFKUHIHUVWRmWKHRSSRVLQJ %XW 0HW/LIH VXEVHTXHQWO\ GHWHUPLQHG WKDW $ORLVL ZDV QRW SDUW\jVUHIXVDOWRDUELWUDWHl$QRWKHUSURYLVLRQRIWKH$FW TXDOLILHGIRUORQJWHUPGLVDELOLW\EHQHILWVWKHUHDIWHUEDVHGRQ  $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 1R 1R $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 

LWVFRQFOXVLRQWKDWVKHZDVQRWWRWDOO\GLVDEOHGXQGHUSKDVH 8QLIRUP $UELWUDWLRQ $FWjV GD\ VWDWXWH RI OLPLWDWLRQV WR WZRRIWKHORQJWHUPGLVDELOLW\SODQ YDFDWHDQDUELWUDWLRQDZDUG $ORLVLUHTXHVWHGWKDW0HW/LIHUHFRQVLGHULWVGHWHUPLQDWLRQ 0LWFKHOOOLNHWKHFDVHDWEDUFRQFHUQHGWKHGHWHUPLQDWLRQ $IWHU FRQGXFWLQJ WKH UHTXHVWHG UHYLHZ 0HW/LIH XSKHOG LWV RI WKH DSSOLFDEOH VWDWXWH RI OLPLWDWLRQV WR D FODLP E\ DQ ILQGLQJWKDW$ORLVLZDVQRWWRWDOO\GLVDEOHGXQGHUWKHSKDVH HPSOR\HH DJDLQVW KLV HPSOR\HU XQGHU WKH /05$  6HH WZRGHILQLWLRQRIWRWDOGLVDELOLW\,WWKHUHIRUHWHUPLQDWHGKHU 'HO&RVWHOOR Y ,QWjO %KG RI 7HDPVWHUV  86   ORQJWHUPGLVDELOLW\EHQHILWVDIWHU1RYHPEHU H[SODLQLQJWKDWWKHKROGLQJLQ0LWFKHOOmZDVOLPLWHG WR WKH HPSOR\HHjV FODLP DJDLQVW WKH HPSOR\HU ZH GLG QRW &RQWHVWLQJ 0HW/LIHjV GHWHUPLQDWLRQ WKDW $ORLVL ZDV QRW DGGUHVVZKDWVWDWHVWDWXWHVKRXOGJRYHUQWKHFODLPDJDLQVWWKH WRWDOO\ GLVDEOHG WKH XQLRQ LQYRNHG WKH &%$jV PHGLFDO XQLRQl0RUHRYHULQ0LWFKHOODVKHUHWKHDFWLRQZDVVW\OHG DUELWUDWLRQ SURFHGXUH WR UHVROYH WKH GLVSXWH  7KH &%$ DVDEUHDFKRIFRQWUDFWFODLPWKDWDPRXQWHGWRDQDFWLRQWR SURYLGHVLQSHUWLQHQWSDUWWKDW YDFDWH DQ DUELWUDWLRQ DZDUG  0LWFKHOO  86 DW  m$OWKRXJKUHVSRQGHQWGLGQRWVW\OHKLVVXLWDVRQHWRYDFDWH >L@IDGLVSXWHDULVHVDVDUHVXOWRIDQHPSOR\HHjVFODLP WKH>DUELWUDWLRQ@DZDUGLIKHLVVXFFHVVIXOWKHVXLWZLOO WKDWKHRUVKHLVWRWDOO\DQGSHUPDQHQWO\GLVDEOHG>@ KDYH WKDW GLUHFW HIIHFW    >,@W LV FOHDU WKDW >KH@ ZDV WKH GLVSXWH VKDOO EH UHVROYHG LQ WKH IROORZLQJ PDQQHU GLVVDWLVILHG ZLWK DQG VLPSO\ VHHNV WR XSVHW WKH DUELWUDWRUjV XSRQWKHILOLQJZLWKWKH&RPSDQ\RIDZULWWHQUHTXHVWIRU GHFLVLRQ    l LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG ILIWK UHYLHZ E\ VXFK HPSOR\HH QRW PRUH WKDQ  GD\V DIWHU DOWHUDWLRQLQRULJLQDO UHFHLSWRIGHQLDO 7KH0LWFKHOO&RXUWVWDWHGWKDWWZRIDFWRUVDUHGHWHUPLQDWLYH 7KH HPSOR\HH VKDOO EH H[DPLQHG E\ D SK\VLFLDQ RIZKLFKVWDWHVWDWXWHRIOLPLWDWLRQVDSSOLHVmWKHQDWXUHRIWKH DSSRLQWHGIRUWKHSXUSRVHE\WKH&RPSDQ\DQGE\D IHGHUDOFODLPDQGWKHIHGHUDOSROLFLHVLQYROYHGl,GDW SK\VLFLDQDSSRLQWHGIRUWKHSXUSRVHE\WKH8QLRQ $OWKRXJKWKH&RXUWGLGQRWHQJDJHLQDQH[WHQVLYHDQDO\VLVRI ,IWKH\GLVDJUHHFRQFHUQLQJZKHWKHUWKHHPSOR\HHLV HLWKHUIDFWRULWKHOGWKDWWKHSODLQWLIIjVFRQWUDFWFODLPDJDLQVW WRWDOO\DQGSHUPDQHQWO\GLVDEOHGWKHTXHVWLRQVKDOO KLV HPSOR\HU IRU EUHDFKLQJ WKH &%$ ZDV VXEMHFW WR 1HZ EHVXEPLWWHGWRDWKLUGSK\VLFLDQVHOHFWHGE\VXFK 2@QH RI WKH OHDGLQJ IHGHUDO /RFNKHHG0DUWLQDSSRLQWHG'U5REHUW3HWULHWRH[DPLQHKHU SROLFLHVLQWKLVDUHDLVWKHUHODWLYHO\UDSLGGLVSRVLWLRQRIODERU 'U 5LFFKH H[DPLQHG $ORLVL DQG FRQFOXGHG WKDW VKH ZDV GLVSXWHVlLQWHUQDOTXRWDWLRQPDUNVRPLWWHG0DUWLQY/DNH WRWDOO\GLVDEOHGXQGHUWKH&%$'U3HWULHFRQVXOWHGRWKHU &RXQW\6HZHU&R,QF)GWK&LU GRFWRUVjSULRUPHGLFDOUHSRUWVFRQFHUQLQJ$ORLVLEXWGLGQRW  $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 1R 1R $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 

DSSO\LQJWKH/05$WRDGLVSXWHRYHUWKHFDOFXODWLRQ SHUVRQDOO\H[DPLQHKHUEHIRUHFRQFOXGLQJWKDW$ORLVLZDVQRW RISHQVLRQEHQHILWV/H%XKQY%XONPDWLF7UDQVSRUW&R WRWDOO\GLVDEOHG )GWK&LUm6HFWLRQRIWKH>/05$@    RFFXSLHV WKH HQWLUH ILHOG RI GLVSXWHV RYHU FROOHFWLYH 'UsHIIUH\8]]OHZDVWKHQVHOHFWHGDVWKHWKLUGSK\VLFLDQWR EDUJDLQLQJFRQWUDFWVl$SSO\LQJWKH/05$LQWKHSUHVHQW GHWHUPLQH ZKHWKHU $ORLVL ZDV WRWDOO\ GLVDEOHG  $IWHU FDVHLVWKHORJLFDOFKRLFHEHFDXVH$ORLVLjVFODLPVDUHEDVHG H[DPLQLQJ $ORLVL FRQVXOWLQJ ZLWK 'U 5LFFKH EXW QRW 'U VROHO\ RQ QRQFRPSOLDQFH ZLWK WKH PHGLFDO DUELWUDWLRQ 3HWULH DQG UHYLHZLQJ $ORLVLjV PHGLFDO UHFRUGV 'U 8]]OH SURFHGXUH VHW IRUWK LQ WKH &%$ QRW RQ DQ\ VLPLODU GHWHUPLQHGWKDW$ORLVLZDVQRWWRWDOO\GLVDEOHG+HGHWDLOHG UHTXLUHPHQWVVSHFLILHGE\(5,6$ KLVILQGLQJVLQDQLQHSDJHOHWWHUFRQFOXGLQJWKDWm,GRQRW ILQGHYLGHQFHRIDSK\VLFDORUDSV\FKRORJLFDOLPSDLUPHQWWKDW 7KHUH DUH WZR RWKHU SUREOHPV ZLWK $ORLVLjV DUJXPHQW ZRXOGOLPLWKHUIURPEHLQJDEOHWRIXQFWLRQDWVHGHQWDU\WR UHJDUGLQJWKHDSSOLFDELOLW\RI(5,6$7KHILUVWLVWKDWVKHGLG OLJKWSK\VLFDOGHPDQGOHYHOZRUNl QRW FRQWHQG WKDW (5,6$ ZDV FRQWUROOLQJ ZKHQ RSSRVLQJ /RFNKHHG0DUWLQjVVXPPDU\MXGJPHQWPRWLRQLQWKHGLVWULFW /RFNKHHG 0DUWLQ DSSULVHG $ORLVL RI 'U 8]]OHjV FRXUWDQGLQVWHDGUHOLHGH[FOXVLYHO\RQ/05$MXULVSUXGHQFH GHWHUPLQDWLRQDQGDVNHGKHUZKHWKHUVKHLQWHQGHGWRUHWXUQWR ,QRWKHUZRUGVKHU(5,6$DUJXPHQWZDVUDLVHGIRUWKHILUVW ZRUN  $ORLVL UHVSRQGHG ZLWK D OHWWHU FODLPLQJ WKDW WKH WLPHRQDSSHDOZKLFKLVJHQHUDOO\SURKLELWHG6LQJOHWRQY PHGLFDODUELWUDWLRQSURFHGXUHKDGQRWEHHQSURSHUO\IROORZHG :XOII  86    m7KH PDWWHU RI ZKDW 6KH GLG QRW VWDWH ZKHWKHU VKH ZRXOG UHWXUQ WR ZRUN DW TXHVWLRQVPD\EHWDNHQXSDQGUHVROYHGIRUWKHILUVWWLPHRQ /RFNKHHG 0DUWLQ  $IWHU /RFNKHHG 0DUWLQ DQG WKH XQLRQ DSSHDOLVRQHOHIWSULPDULO\WRWKHGLVFUHWLRQRIWKHFRXUWVRI GHWHUPLQHGWKDWWKH&%$ZDVSURSHUO\IROORZHG/RFNKHHG DSSHDOVWREHH[HUFLVHGRQWKHIDFWVRILQGLYLGXDOFDVHVl 0DUWLQ QRWLILHG $ORLVL RQ )HEUXDU\   WKDW KHU 2YHUVWUHHW Y /H[LQJWRQ)D\HWWH 8UEDQ &RXQW\ *RYjW  HPSOR\PHQWZRXOGEHWHUPLQDWHGDVRI)HEUXDU\ )G   WK &LU  m,W LV ZHOOVHWWOHG WKDW WKLV FRXUWZLOOQRWFRQVLGHUDUJXPHQWVUDLVHGIRUWKHILUVWWLPHRQ % 3URFHGXUDOEDFNJURXQG DSSHDOXQOHVVRXUIDLOXUHWRFRQVLGHUWKHLVVXHZLOOUHVXOWLQD SODLQPLVFDUULDJHRIMXVWLFHl:HILQGQREDVLVWRGHSDUW $OWKRXJKWKH&%$SURYLGHVIRUDJULHYDQFHSURFHGXUHWKDW IURPWKHJHQHUDOUXOHLQWKHSUHVHQWFDVH PXVWEHLQLWLDWHGE\WKHDJJULHYHGHPSOR\HHZLWKLQWHQGD\V DIWHUWKHRFFXUUHQFHRIWKHDOOHJHGO\ZURQJIXOFRQGXFW$ORLVL 7KHVHFRQGSUREOHPZLWK$ORLVLjVUHOLDQFHRQ(5,6$LVWKH WRRNQRIXUWKHUDFWLRQXQWLOVKHILOHGWKHSUHVHQWODZVXLW2Q VWDWXWHjVmVDYLQJVFODXVHl(5,6$H[SOLFLWO\SURYLGHVWKDWLW sXO\   DSSUR[LPDWHO\  PRQWKV DIWHU /RFNKHHG GRHVQRWmVXSHUVHGHlDQ\IHGHUDOODZ86&†G 0DUWLQ QRWLILHG $ORLVL RI 'U 8]]OHjV GHWHUPLQDWLRQ DQG ,IZHZHUHWRDSSO\WKHSURYLVLRQVRI(5,6$LQVWHDGRIWKH PRQWKVDIWHU/RFNKHHG0DUWLQWROG$ORLVLWKDWVKHZRXOG /05$ZHZRXOGEHDOORZLQJ(5,6$WRVXSHUVHGHDIHGHUDO EHWHUPLQDWHGIURPKHUHPSOR\PHQW$ORLVLILOHGDFRPSODLQW ODZ7KH/05$WKHUHIRUHDSSOLHVWR$ORLVLjVFODLPV LQ7HQQHVVHHVWDWHFRXUWDJDLQVW/RFNKHHG0DUWLQ

& 6WDWXWHRIOLPLWDWLRQV 7KHFRPSODLQWZDVmIRUEUHDFKRIFRQWUDFWDQGWRGHFODUH WKHULJKWVVWDWXVDQGRWKHUOHJDOUHODWLRQVRIWKHSDUWLHV $FWLRQVILOHGXQGHU†RIWKH/05$DUHVXEMHFWWRmWKH DULVLQJRXWRIWKHFROOHFWLYHEDUJDLQLQJFRQWUDFWl$ORLVL DSSURSULDWHVWDWHVWDWXWHRIOLPLWDWLRQVl8QLWHG3DUFHO6HUY DOOHJHGWKDW/RFNKHHG0DUWLQEUHDFKHGWKH&%$EHFDXVHWKH Y 0LWFKHOO  86     /RFNKHHG 0DUWLQ FRPSDQ\jV GRFWRU QHYHU H[DPLQHG KHU SHUVRQDOO\  6KH PDLQWDLQV WKDW WKLV DFWLRQ LV JRYHUQHG E\ WKH 7HQQHVVHH WKHUHIRUHVRXJKWDGHFODUDWLRQRIWKHULJKWVDQGREOLJDWLRQVRI  $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 1R 1R $ORLVLY/RFNKHHG0DUWLQ(QHUJ\6\V 

WKHSDUWLHVXQGHUWKH&%$DVZHOODVDQRUGHUWKDW/RFNKHHG VDPHLWLVLQHIIHFWDSSHDOLQJVROHO\WKHRUGHUGHQ\LQJWKH 0DUWLQ SURYLGH KHU ZLWK SKDVH WZR ORQJWHUP GLVDELOLW\ PRWLRQIRUVXPPDU\MXGJPHQW7KHVXEVWDQFHRI/RFNKHHG EHQHILWV XQOHVV DQG XQWLO VKH ZDV IRXQG QRW WR EH WRWDOO\ 0DUWLQjVEULHIVRQDSSHDODQGWKHVWDQGDUGRIUHYLHZLWFLWHV GLVDEOHG IROORZLQJ VWULFW FRPSOLDQFH ZLWK WKH PHGLFDO WKHUHLQ IRFXV RQ WKH GHQLDO RI WKH PRWLRQ IRU VXPPDU\ DUELWUDWLRQSURFHGXUH MXGJPHQW /RFNKHHG0DUWLQUHPRYHGWKHFRPSODLQWWRIHGHUDOFRXUW 7KLV FRXUW UHYLHZV WKH GLVWULFW FRXUWjV JUDQW RI VXPPDU\ SXUVXDQWWR86&††DQGEFRQWHQGLQJWKDW MXGJPHQWGHQRYR6SHUOHY0LFK'HSjWRI&RUU)G †RIWKH/DERU0DQDJHPHQW5HODWLRQV$FW/05$ WK&LU6XPPDU\MXGJPHQWLVSURSHUZKHUH 86&†DQG†RIWKH(PSOR\HH5HWLUHPHQW,QFRPH WKHUHH[LVWVQRLVVXHRIPDWHULDOIDFWDQGWKHPRYLQJSDUW\LV 6HFXULW\$FW(5,6$86&†SUHHPSWHG$ORLVLjV HQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG5&LY3F FODLPV$IWHUUHPRYDO/RFNKHHG0DUWLQPRYHGIRUVXPPDU\ ,Q FRQVLGHULQJ VXFK D PRWLRQ WKH FRXUW FRQVWUXHV DOO MXGJPHQWRQWKHJURXQGVWKDW7HQQHVVHHjVGD\VWDWXWH UHDVRQDEOHIDFWXDOLQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\ RI OLPLWDWLRQV EDUUHG WKH FODLPV DQG  $ORLVL ODFNHG 0DWVXVKLWD(OHF,QGXV&RY=HQLWK5DGLR&RUS86 VWDQGLQJWRPDLQWDLQWKHDFWLRQXQGHU†RIWKH/05$ 7KHFHQWUDOLVVXHLVmZKHWKHUWKHHYLGHQFH SUHVHQWVDVXIILFLHQWGLVDJUHHPHQWWRUHTXLUHVXEPLVVLRQWRD 7KHGLVWULFWFRXUWGHQLHG/RFNKHHG0DUWLQjVPRWLRQDIWHU MXU\RUZKHWKHULWLVVRRQHVLGHGWKDWRQHSDUW\PXVWSUHYDLO ILQGLQJ WKDW WKH FRPSDQ\ KDG QRW IROORZHG WKH PHGLFDO DVDPDWWHURIODZl$QGHUVRQY/LEHUW\/REE\,QF86 DUELWUDWLRQSURFHGXUHDVVHWIRUWKLQWKH&%$%HFDXVH'U  3HWULHGLGQRWSHUVRQDOO\H[DPLQH$ORLVLWKHFRXUWFRQFOXGHG WKDW mQR ILQDO DQG ELQGLQJ DUELWUDWLRQ DZDUG ZDV HYHU % 7KHDSSOLFDWLRQRIWKH/05$YHUVXV(5,6$ HQWHUHGl  :LWKRXW UXOLQJ RQ /RFNKHHG 0DUWLQjV VWDWXWH RI OLPLWDWLRQVDQGVWDQGLQJDUJXPHQWVWKHFRXUWUHPDQGHGWKH $WWKHKHDUWRIWKHSDUWLHVjFRQWHQWLRQVDERXWWKHDSSOLFDEOH DFWLRQmIRUPHGLFDODUELWUDWLRQLQFRQIRUPLW\ZLWKWKHWHUPV VWDWXWH RI OLPLWDWLRQV DQG $ORLVLjV VWDQGLQJ LV WKHLU GLVSXWH RIWKHFROOHFWLYHEDUJDLQLQJDJUHHPHQWlLQRUGHUWRGHWHUPLQH DERXWZKHWKHU(5,6$RUWKH/05$JRYHUQV$ORLVLjVFODLPV ZKHWKHU$ORLVLZDVWRWDOO\GLVDEOHGZLWKLQWKHPHDQLQJRIWKH $FFRUGLQJ WR $ORLVL VKH KDV VWDQGLQJ XQGHU (5,6$ DQG &%$ (5,6$j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†RIWKH$FW ,,$1$/<6,6 7KLV FRXUW DQG RWKHU FLUFXLWV KDYH UHSHDWHGO\ KHOG WKDW $ 6WDQGDUGRIUHYLHZ FODLPVLQYROYLQJULJKWVFUHDWHGE\D&%$DUHJRYHUQHGE\WKH /05$0DUWLQY/DNH&RXQW\6HZHU&R,QF)G $OWKRXJK/RFNKHHG0DUWLQDSSHDOVERWKWKHGLVWULFWFRXUWjV WK&LU DQDO\]LQJDFODLPIRUDYLRODWLRQRIULJKWV RUGHU GHQ\LQJ WKH PRWLRQ IRU VXPPDU\ MXGJPHQW DQG WKH FRQIHUUHG E\ D &%$ XQGHU WKH /05$2FFLGHQWDO &KHP GLVWULFWFRXUWjVRUGHUGHQ\LQJWKHPRWLRQWRDOWHURUDPHQGWKH &RUSY,QWjO&KHP:RUNHUV8QLRQ)GWK&LU