Armco Employees v. AK Steel Corp

Opinion

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

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB

$50&2 (03/2<((6 ; ,1'(3(1'(17 )('(5$7,21  3ODLQWLII$SSHOODQW   1R  Y !   $. 67((/ &25325$7,21  'HIHQGDQW$SSHOOHH   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL 1Rn+HUPDQs:HEHU'LVWULFWsXGJH $UJXHG0DUFK 'HFLGHGDQG)LOHGsXQH %HIRUH&2/(DQG*,/0$1&LUFXLWsXGJHV%250$1 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('  5REHUW + 0LWFKHOO 0$1/(< %85.( /,3721&LQFLQQDWL2KLRIRU$SSHOODQW*HRUJH(

7KH +RQRUDEOH 3DXO ' %RUPDQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

  $UPFR(PSOR\HHVY$.6WHHO&RUS 1R

21 %5,()  5REHUW + 0LWFKHOO 0$1/(< %85.( /,3721&LQFLQQDWL2KLRIRU$SSHOODQW*HRUJH(

:RUNVIRUPHUO\$UPFR6WHHO&R/30LGGOHWRZQ:RUNV LQ0LGGOHWRZQ2KLR$.6WHHOSULPDULO\SURGXFHVIODWUROOHG FDUERQDQGVWDLQOHVVVWHHOIRUXVHLQDXWRPRWLYHDQGDSSOLDQFH PDQXIDFWXULQJ$WWKHWLPHWKHGLVSXWHDURVH$.6WHHODQG $(,)ZHUHSDUWLHVWRD&%$HIIHFWLYHIURP0DUFK WKURXJK )HEUXDU\    8QGHU WKH JHQHUDO DUELWUDWLRQ FODXVHRIWKH&%$DOOXQLRQJULHYDQFHVZHUHUHTXLUHGWREH VXEPLWWHG WR DUELWUDWLRQ  7KH IROORZLQJ GHILQLWLRQ RI mJULHYDQFHl DV VHW IRUWK LQ WKH &%$ OLPLWHG WKH VXEMHFW PDWWHURYHUZKLFKWKHSDUWLHVDJUHHGWRDUELWUDWH $ JULHYDQFH ZLWKLQ WKH PHDQLQJ RI WKH JULHYDQFH SURFHGXUH LV UHVWULFWHG WR D UHTXHVW RU FRPSODLQW QRW UHVROYHGDVWKHUHVXOWRIWKHRUDOGLVFXVVLRQVUHTXLUHGLQ 6WHS , RU D UHTXHVW RU FRPSODLQW DSSURSULDWH IRU ILOLQJ GLUHFWO\LQ6WHS,,,WVKDOOFRQVLVWRQO\RIGLVSXWHVDERXW ZDJHV KRXUV RI ZRUN DQG ZRUNLQJ FRQGLWLRQV DV SURYLGHGLQWKLV$JUHHPHQWDERXWWKHLQWHUSUHWDWLRQDQG DSSOLFDWLRQ RI WKLV $JUHHPHQW DQG DERXW DQ DOOHJHG YLRODWLRQRIWKLV$JUHHPHQW,IDQ\TXHVWLRQDULVHVDVWR ZKHWKHU VDLG GLVSXWH LV RU LV QRW D SURSHU JULHYDQFH ZLWKLQWKHPHDQLQJRIWKHVHSURYLVLRQVWKHTXHVWLRQPD\ EH UHVHUYHG WKURXJKRXW WKH JULHYDQFH SURFHGXUH DQG GHWHUPLQHGLIQHFHVVDU\E\WKHDUELWUDWRU &%$$UW9,,†% 'ssRKQVRQZDVGLVFKDUJHGHDUO\LQIRUEHLQJLQWKH 0LGGOHWRZQ:RUNVSODQWXQGHUWKHLQIOXHQFHRIDQLQWR[LFDQW ,Q $SULO  KH VLJQHG D /DVW &KDQFH $JUHHPHQW WKDW DOORZHGKLPWRUHWXUQWRZRUNEXWUHTXLUHGKLPWRVXEPLWWR UDQGRPGUXJWHVWLQJ,Q1RYHPEHU$.6WHHODOOHJHG WKDW sRKQVRQ IDLOHG WR VXEPLW WR D GUXJ WHVW DIWHU D 6HQLRU ,QGXVWULDO5HODWLRQV5HSUHVHQWDWLYHRUGHUHGKLPWRGRVR$. 6WHHOVXVSHQGHGsRKQVRQRQ1RYHPEHUIRUYLRODWLRQRID ODVW FKDQFH DJUHHPHQW DQG IDLOXUH WR IROORZ D FRPSDQ\ GLUHFWLYH$6WHS,DSSHDOKHDULQJWRRNSODFHRQ'HFHPEHU DQGFRQILUPHGWKDW$.6WHHOZRXOGWHUPLQDWHsRKQVRQ $(,)ILOHG*ULHYDQFH(RQ'HFHPEHUIRU WKHDOOHJHGYLRODWLRQE\$.6WHHORI&%$$UW,;† $  $UPFR(PSOR\HHVY$.6WHHO&RUS 1R 1R $UPFR(PSOR\HHVY$.6WHHO&RUS 

ZKLFK SURYLGHV WKDW WKH FRPSDQ\ PD\ QRW GLVFKDUJH DQ UHYLHZ7KHUHIRUHZHGHFOLQHWRDGGUHVVWKHPHULWVRIVXFK HPSOR\HH ZLWKRXW MXVW FDXVH DQG GXH FRQVLGHUDWLRQ  7KH DFODLPDWWKHSUHVHQWWLPH JULHYDQFH SURFHHGHG WR 6WHS ,, DQ LQWHUPHGLDWH VWHS WR DUELWUDWLRQ DQG RQ )HEUXDU\   WKH GLVFKDUJH ZDV ,,,&21&/86,21 XSKHOGDJDLQ,QWKHPHDQWLPH$.6WHHOUHYLHZHGsRKQVRQjV HPSOR\PHQWUHFRUGVDQGFRQFOXGHGWKDWKHKDGOLHGRQKLV $FFRUGLQJO\ZH5(9(56(WKHMXGJPHQWRIWKHGLVWULFW DSSOLFDWLRQ$.6WHHOVHQWDOHWWHUWRsRKQVRQRQ)HEUXDU\ FRXUW DQG 5(0$1' ZLWK LQVWUXFWLRQV WR HQWHU DQ RUGHU  OLVWLQJ IDOVLILFDWLRQ RI HPSOR\PHQW UHFRUGV DV DQ FRPSHOOLQJ DUELWUDWLRQ RI WKH JULHYDQFHV DQG WR FRQVLGHU DGGLWLRQDOUHDVRQIRUKLVGLVFKDUJH7KHDUELWUDWLRQKHDULQJ $(,)jVUHTXHVWIRUDWWRUQH\VjIHHVLQOLJKWRIWKLVRSLQLRQ ZDVFRQGXFWHGRQ0D\DQGLQ2FWREHUWKH DUELWUDWRU LVVXHG KLV RSLQLRQ DQG DZDUG VXVWDLQLQJ WKH JULHYDQFHDQGGLUHFWLQJ$.6WHHOWRUHLQVWDWHsRKQVRQ$. 6WHHOKRZHYHUUHIXVHGWRDOORZsRKQVRQWRUHWXUQWRZRUN FRQWHQGLQJ WKDW WKH DUELWUDWRU KDG QRW FRQVLGHUHG WKH IDOVLILFDWLRQ RI HPSOR\PHQW UHFRUGV DV VHW IRUWK LQ WKH FRPSDQ\jV)HEUXDU\OHWWHUDQGWKDWWKLVWKHUHIRUHUHPDLQHG DYDOLGUHDVRQIRUGLVFKDUJH6XEVHTXHQWO\$(,)VRXJKWWR UHLQYRNHWKHMXULVGLFWLRQRIWKHDUELWUDWRUIRUUHVROXWLRQRIWKLV LVVXH,QUHVSRQVHWKHDUELWUDWRUVHQWDOHWWHURQ'HFHPEHU ZKLFKVWDWHG ,GLGQRWGHHPWKH)HEUXDU\FKDUJH>RIIDOVLILFDWLRQ RIHPSOR\PHQWUHFRUGV@WREHFHQWUDOWRWKHUHVROXWLRQRI WKH 'HFHPEHU   JULHYDQFH ZKLFK VSHFLILFDOO\ UHODWHGWR*ULHYDQWjV'HFHPEHUWHUPLQDWLRQIRU DOOHJHGO\IDLOLQJWRFRPSO\ZLWKDGLUHFWLYHWRVXEPLWWR D GUXJ WHVW  ,Q VXVWDLQLQJ *ULHYDQFH ( DQG UHWDLQLQJMXULVGLFWLRQmRYHUDQ\UHPHG\UHODWHGLVVXHVl LWZDVQRWP\LQWHQWLRQWRH[WHQGP\MXULVGLFWLRQWRWKH LVVXHRIZKHWKHU*ULHYDQWZDVHQWLWOHGWREHPDGHZKROH EH\RQGWKHGDWHRIKLV)HEUXDU\GLVFKDUJHZKLFK ZRXOGQHFHVVDULO\LQYROYHDUHVROXWLRQRIZKHWKHUKHZDV GLVFKDUJHGZLWKRXWMXVWFDXVHDQGGXHFRQVLGHUDWLRQIRU KLVDOOHJHGIDOVLILFDWLRQRIKLVHPSOR\PHQWDSSOLFDWLRQ \HDUVHDUOLHU2QWKHRWKHUKDQGWKRXJKP\GHFLVLRQWR VXVWDLQ WKH GLVFKDUJH ZDV QRW LQWHQGHG DV D UXOLQJ SUHFOXGLQJWKH8QLRQIURPFKDOOHQJLQJWKDWGLVFKDUJH 7KH 8QLRQ GLG QRW NQRZ WKDW WKH SURFHGXUDO DQGRU VXEVWDQWLYHLVVXHVUHODWLQJWR*ULHYDQWjV)HEUXDU\ WHUPLQDWLRQZRXOGQRWEHHQFRPSDVVHGLQP\UHVROXWLRQ  $UPFR(PSOR\HHVY$.6WHHO&RUS 1R 1R $UPFR(PSOR\HHVY$.6WHHO&RUS 

JULHYDQFHLV$.6WHHOjVSRZHUWRFRQWUDFWZRUNRXWWRQRQ RIWKH'HFHPEHUJULHYDQFH7KDWNQRZOHGJHZLOO XQLRQ HPSOR\HHV  7KH OLPLWDWLRQ RI $. 6WHHOjV SRZHU WR RFFXUXSRQWKH8QLRQUHFHLYLQJDFRS\RIWKLVOHWWHUIURP FRQWUDFWRXWLVVHWIRUWKLQ$UWLFOH;;,,,RIWKH&%$%HFDXVH RXURIILFH:KHWKHUDJULHYDQFHILOHGVKRUWO\DIWHUWKLV WKH DUELWUDWLRQ FODXVH &%$ $UW 9,, † % SURYLGHV WKDW OHWWHU ZRXOG EH D WLPHO\ SURWHVW WR WKH )HEUXDU\  GLVSXWHV RYHU DOOHJHG EUHDFKHV RI WKH &%$ DUH SURSHUO\ GLVFKDUJHXQGHUWKHVHXQLTXHFLUFXPVWDQFHVLVDQLVVXH VXEPLWWHGWRDUELWUDWLRQWKLVPDWWHULVVXEVWDQWLYHO\DUELWUDEOH RYHUZKLFK,GRQRWKDYHMXULVGLFWLRQ $.6WHHODUJXHVWKDWZHVKRXOGGHWHUPLQHZKLFKLVVXHVWKH s$ DUELWUDWRU VKRXOG FRQVLGHU  :H EHOLHYH WKDW ZH ZRXOG EH H[FHHGLQJ RXU OLPLWHG DXWKRULW\ XQGHU WKH 6WHHOZRUNHUV $VDUHVXOW$(,)LPPHGLDWHO\ILOHG*ULHYDQFH1R( 7ULORJ\LIZHGLGVR'HWHUPLQLQJWKHVSHFLILFLVVXHVWKDWPD\ WKLVWLPHGLVSXWLQJsRKQVRQjVGLVPLVVDOEDVHGRQWKH EH FRQVLGHUHG LQ DUELWUDWLRQ LV DOWRJHWKHU GLIIHUHQW IURP FKDUJH RI IDOVLILFDWLRQ RI HPSOR\PHQW UHFRUGV  $. 6WHHO GHWHUPLQLQJ WKH DUELWUDELOLW\ RI EURDG VXEMHFW PDWWHU UHIXVHGWRSURFHVVWKHJULHYDQFHFODLPLQJWKDWLWZDVXQWLPHO\ &RQWUDFWLQJRXWLVVXEVWDQWLYHO\DUELWUDEOHDFFRUGLQJWRWKH XQGHU WKH &%$ ZKLFK VSHFLILHV WKDW  m*ULHYDQFHV ILOHG &%$:KHWKHUDQ\SDUWLFXODULVVXHLVRXWVLGHWKHVFRSHRIWKH GLUHFWO\ LQ 6WHS ,, PXVW EH ILOHG ZLWKLQ WKLUW\ GD\V RI WKH JULHYDQFH LV D SURFHGXUDO PDWWHU WR EH GHWHUPLQHG LQ WKH LQFHSWLRQRURFFXUUHQFHRIWKHHYHQWXSRQZKLFKWKHUHTXHVW DUELWUDWLRQ6HH:LOH\86DW RUFRPSODLQWLVEDVHGl&%$$UW9,,†($VDUHVXOWQR KHDULQJRQWKLVJULHYDQFHZDVHYHUKHOG $. 6WHHO DUJXHV WKDW &KDPSLRQ ,QWHUQDWLRQDO &RUS Y 8QLWHG3DSHUZRUNHUV,QWHUQDWLRQDO8QLRQ)GWK 2Q1RYHPEHU$(,)ILOHG*ULHYDQFH1R( &LUDGGUHVVHGWKHLVVXHRIWKHDUELWUDELOLW\RIPDWWHUV  ZKLFK UHDG m7KH &RPSDQ\ LV XVLQJ FRQWUDFWRU RXWVLGH WKH VFRSH RI WKH JULHYDQFH  7KLV LV SODLQO\ DQ HPSOR\HHVLQWKHSODQWWRWUDQVIHUVFUDSIURPUDLOURDGFDUVWR LQFRUUHFW UHDGLQJ RI &KDPSLRQ  7KH &KDPSLRQ SDQHO WUXFNV  7KLV ZRUN KDV KLVWRULFDOO\ EHHQ SHUIRUPHG E\ UHYLHZHGDQDUELWUDWLRQDZDUGDQGIRXQGWKDWWKHDUELWUDWRU %DUJDLQLQJ 8QLW (PSOR\HHV FUDQH RSHUDWRUV LQ WKLV FDVH RYHUVWHSSHGKLVERXQGVDQGFRQVLGHUHGLVVXHVQRWEHIRUHKLP 7KH 8QLRQ GLG QRW UHFHLYH SURSHU QRWLILFDWLRQl  $W WKH 7KHLVVXHLQWKDWFDVHZDVQRWmDUELWUDELOLW\lDWDOOEXWUDWKHU DUELWUDWLRQKHDULQJRQ$XJXVW$.6WHHOREMHFWHG WKHVFRSHRIWKHFRXUWjVSRZHUWRPRGLI\DQDUELWUDWLRQDZDUG DIWHU$(,)jVRSHQLQJVWDWHPHQWFKDOOHQJLQJWKHVFRSHRIWKH 7KDWWKHDUELWUDWRUVKRXOGGHFLGHZKLFKLVVXHVDUHSURSHUO\ LVVXH SURSHUO\ EHIRUH WKH DUELWUDWRU  $(,) DUJXHG WKDW WKH EHIRUH KLP LV QRW GLVSXWHG E\ &KDPSLRQ ZKLFK H[SOLFLWO\ VFRSH RI WKH JULHYDQFH LQFOXGHG DOO PDQQHU RI VFUDS VWDWHV WKDW LW LV DQ mDUELWUDWRUjV WKUHVKROG GHFLVLRQ WKDW WKH SUHSDUDWLRQ ZRUN SHUIRUPHG E\ EDUJDLQLQJ FUDQH XQLW SDUWLHV KDYH LQGHHG VXEPLWWHG D SDUWLFXODU LVVXH IRU RSHUDWRUV ZKHUHDV $. 6WHHO FRQWHQGHG WKDW WKH VFRSH ZDV DUELWUDWLRQl,GDW2QO\DIWHUWKHDUELWUDWRULVVXHVDQ OLPLWHGWRVFUDSWUDQVSRUWIURPWUDLQWRWUXFNV$IWHUKHDULQJ DZDUGEDVHGRQPDWWHUVQRWSURSHUO\EHIRUHLWGRHV&KDPSLRQ WHVWLPRQ\ LQGLFDWLQJ WKDW ERWK SDUWLHV XQGHUVWRRG WKDW WKH EHFRPHUHOHYDQW,I$.6WHHOZDQWVWRGLVSXWHWKHDUELWUDWLRQ LVVXHZDVEURDGO\FRQVWUXHGWKHDUELWUDWRUGHQLHG$.6WHHOjV DZDUG EDVHG RQ LVVXHV DOOHJHGO\ RXWVLGH WKH VFRSH RI WKH UHTXHVW WR OLPLW WKH VFRSH RI WKH HYLGHQFH SUHVHQWHG WR WKH JULHYDQFHWKHQWKHIHGHUDOFRXUWVKDYHWKHSRZHUWRUHYLHZ QDUURZLVVXHVWDWHGRQWKHIDFHRIWKHJULHYDQFH$.6WHHO WKDW GHFLVLRQ  &KDPSLRQ  )G DW  FLWLQJ UHIXVHG WR SDUWLFLSDWH IXUWKHU LQ WKH KHDULQJ LI WKH EURDGHU 6WHHOZRUNHUV ,,  86 DW   :H FDQQRW UHVROYH WKH LVVXHZDVFRQVLGHUHGDQG$(,)UHIXVHGWRSDUWLFLSDWHLIRQO\ PDWWHUXQWLOWKHDUELWUDWLRQKDVSURGXFHGDGHFLVLRQIRUXVWR WKHQDUURZLVVXHZDVFRQVLGHUHG  $UPFR(PSOR\HHVY$.6WHHO&RUS 1R 1R $UPFR(PSOR\HHVY$.6WHHO&RUS 

$(,)EURXJKWWKHSUHVHQWFODLPRQ)HEUXDU\LQ DUELWUDWLRQ  0RRJ  )G DW  GLVWLQJXLVKLQJ 2LO WKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI :RUNHUVj,QWjO8QLRQ/RFDOY&KHYURQ&KHP&R 2KLRVHHNLQJDFRXUWRUGHUUHTXLULQJ$.6WHHOWRSURFHVVDQG )GWK&LUEHFDXVHWKHFROOHFWLYHEDUJDLQLQJ DUELWUDWH ERWK JULHYDQFHV DQG DQ DZDUG RI DWWRUQH\Vj IHHV DJUHHPHQWLQWKDWFDVHSURYLGHGWKDWDQXQWLPHO\JULHYDQFH $.6WHHODUJXHVWKDWEHFDXVHRQHJULHYDQFHZDVXQWLPHO\ ZRXOGEHmFRQVLGHUHGDEDQGRQHGl DQG WKH RWKHU RXWVLGH WKH VFRSH RI WKH QRWLFH ILOHG IRU DUELWUDWLRQ WKH PDWWHUV DUH QRW ZLWKLQ WKH &%$ DUELWUDWLRQ 7KH ODQJXDJH RI WKH &%$ EHWZHHQ $. 6WHHO DQG $(,* SURYLVLRQ DQG WKHUHIRUH DUH QRW VXEVWDQWLYHO\ DUELWUDEOH UHDGVm>,@QWKHHYHQWDSSHDOVDUHQRWPDGHWRWKHQH[WKLJKHU 3XUVXDQWWRDQDJUHHPHQWZLWKWKHGLVWULFWFRXUWWKHSDUWLHV 6WHSLQWKHJULHYDQFHSURFHGXUHZLWKLQWKHWLPHOLPLWDWLRQV ILOHGFURVVPRWLRQVIRUVXPPDU\MXGJPHQW2Q)HEUXDU\ VSHFLILHG    WKH UHTXHVW FRPSODLQW RU JULHYDQFH VKDOO EH  WKH GLVWULFW FRXUW HQWHUHG VXPPDU\ MXGJPHQW DJDLQVW FRQVLGHUHGVHWWOHGDQGQRIXUWKHUDFWLRQPD\EHWDNHQRQLWl $(,)%HFDXVHWKHGLVWULFWFRXUWIRXQGIRU$.6WHHOLWGLG &%$$UW9,,†(7KLVODQJXDJHGRHVQRWXQDPELJXRXVO\ QRWPDNHILQGLQJVRQWKHLVVXHRIDWWRUQH\VjIHHV7KLVWLPHO\ SUHYHQWDQXQWLPHO\JULHYDQFHIURPJRLQJWRDUELWUDWLRQ7KH DSSHDOIROORZV ODQJXDJHmQRIXUWKHUDFWLRQPD\EHWDNHQRQLWlLQWKH&%$ LVVLPLODUWRWKHmFRQVLGHUHGDEDQGRQHGlODQJXDJHIURPWKH ,,',6&866,21 &KHYURQFDVHWKDW0RRJVSHFLILFDOO\ GLVWLQJXLVKHV0RRJ )GDWFLWLQJ&KHYURQ)G)XUWKHU $$5%,75$%,/,7<2)7,0(/,1(66 WKLVFODXVHGRHVQRWVSHFLILFDOO\PHQWLRQDUELWUDELOLW\DWDOORU JLYHDQ\LQGLFDWLRQWKDWVXFKTXHVWLRQVDUHQRWDUELWUDEOH7R 2XUUROHDVDIHGHUDOFRXUWLQODERUGLVSXWHVKDVEHHQVHWWOHG WKH FRQWUDU\ &%$ $UW 9,, † % WKH JHQHUDO DUELWUDWLRQ VLQFHZKHQWKH6XSUHPH&RXUWGHFLGHGWKH6WHHOZRUNHUV FODXVHSURYLGHVWKDWTXHVWLRQVRIDUELWUDELOLW\DUHWKHPVHOYHV 7ULORJ\8QLWHG6WHHOZRUNHUVY$P0IJ&R86 WREHVXEPLWWHGWRDUELWUDWLRQZKLFKZHEHOLHYHZDVGHVLJQHG 6WHHOZRUNHUV,8QLWHG6WHHOZRUNHUVY:DUULRU WR DGGUHVV WKH SUHFLVH TXHVWLRQ EHIRUH XV  :LWKRXW DQ *XOI1DYLJDWLRQ&R866WHHOZRUNHUV,, mH[SUHVVSURYLVLRQlLQWKH&%$ZHGRQRWKDYHWKHNLQGRI 8QLWHG6WHHOZRUNHUVY(QWHU:KHHO &DU&RUS86 mIRUFHIXO HYLGHQFHl WKDW ZRXOG FRXQWHUDFW D SROLF\ RI 6WHHOZRUNHUV,,,:HDUHOLPLWHGWRGHWHUPLQLQJ SUHVXPSWLYHO\ VXEPLWWLQJ ODERU GLVSXWHV WR DUELWUDWLRQ VXEVWDQWLYH DUELWUDELOLW\ RQO\  WKDW LV ZKLFK VXEMHFWV WKH 6WHHOZRUNHUV,,86DW$FFRUGLQJO\:LOH\j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

VXEVWDQWLYHO\DUELWUDEOH,GDWm>$@OOSDUWLHVVKDOO DUJXHVWKDWWLPHOLQHVVLVDSURFHGXUDOPDWWHUWREHGHWHUPLQHG EH EDUUHG IURP HYHU VXEPLWWLQJ >DQ XQWLPHO\@ JULHYDQFH GXULQJ DUELWUDWLRQ RI DQ RWKHUZLVH VXEVWDQWLYHO\ DUELWUDEOH GLVSXWHRUGLVDJUHHPHQWWRDUELWUDWLRQl JULHYDQFH  $. 6WHHO PDLQWDLQV WKDW WKH UHTXLUHPHQW WR DUELWUDWHLVQRWRQO\OLPLWHGE\WKHGHILQLWLRQRIDJULHYDQFH 0RRJ KRZHYHU GRHV QRW FRQWURO LQ WKH SUHVHQW FDVH EXWDOVRE\WKHSURFHGXUDOUHTXLUHPHQWVVHWIRUWKLQWKH&%$ EHFDXVHWKH&%$GRHVQRWH[SOLFLWO\SURYLGHWKDWDQXQWLPHO\ 7KH GLVWULFW FRXUW IRXQG WKDW EHFDXVH WKH JULHYDQFH ZDV JULHYDQFH LV VXEVWDQWLYHO\ SUHFOXGHG IURP DUELWUDWLRQ XQWLPHO\WKHXQLRQZDVEDUUHGIURPGHPDQGLQJDUELWUDWLRQ WKHUHIRUHLWGRHVQRWILWZLWKLQWKH0RRJH[FHSWLRQ0RRJ PDNHV FOHDU WKDW XQOHVV WKHUH LV QR RWKHU SRVVLEOH ,I D FRXUW GHFLGHV WKDW WKH VXEMHFW PDWWHU LV SURSHUO\ LQWHUSUHWDWLRQRIWKHFROOHFWLYHEDUJDLQLQJDJUHHPHQWEXWWKDW DUELWUDEOH WKHQ SRWHQWLDO SURFHGXUDO EDUV WR DUELWUDWLRQ DUH DQ XQWLPHO\ JULHYDQFH LV QRW WR JR WR DUELWUDWLRQ WKHQ WKH PDWWHUVIRUWKHDUELWUDWLRQLWVHOIsRKQ:LOH\ 6RQV,QFY PDWWHUPXVWEHVXEPLWWHGWRDUELWUDWLRQ0RRJUHLWHUDWHVD /LYLQJVWRQ  86   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l RIWKH6XSUHPH&RXUWjVGHFLVLRQLQ$7 77HFKQRORJLHV,QF Y&RPPXQLFDWLRQV:RUNHUV866HFRQG 6WHHOZRUNHUV,,86DWDFFRUG5DFHZD\ $. 6WHHO DUJXHV WKDW HYHQ DVVXPLQJ VXFK D GLVWLQFWLRQ 3DUN  )G DW  0RRJ  )G DW  SHUVLVWVRXUGHFLVLRQVLQ*HQHUDO'ULYHUV/RFDO8QLRQY 7KHUHIRUHFROOHFWLYHEDUJDLQLQJDJUHHPHQWODQJXDJHVHWWLQJ 0RRJ/RXLVYLOOH:DUHKRXVH)GWK&LU IRUWKWLPHSUHUHTXLVLWHVWRDUELWUDWLRQWKDWLVDQ\OHVVVSHFLILF DQG 5DFHZD\ 3DUN ,QF Y /RFDO  6HUYLFH (PSOR\HHV WKDQ mWKH XQLRQ VKDOO EH µFRQFOXVLYHO\ SUHVXPHG WR KDYH ,QWHUQDWLRQDO8QLRQ)GWK&LUVXJJHVW DFFHSWHGjWKHFRPSDQ\jVSRVLWLRQµDQGVDLGJULHYDQFHVKDOO WKDW WLPHOLQHVV LV D TXHVWLRQ RI VXEVWDQWLYH DUELWUDELOLW\ QRW WKHUHDIWHU EH DUELWUDEOHjl VKRXOG EH VXEPLWWHG WR SURSHUO\SUHVHQWHGWRDIHGHUDOFRXUWDQGQRWWRDQDUELWUDWRU $7 77HFKQRORJLHV  8QGHU WKH KHDGLQJ RI m0RRJjV 0LVIRUWXQHl WKH SDQHO RIIHUV D $.6WHHOUHOLHVKHDYLO\XSRQ$7 77HFKQRORJLHV,QFY WKRXJKWIXO FULWLTXH RI 0RRJ XQUDYHOLQJ ZKDW LW FRQVLGHUV WR EH IDXOW\ &RPPXQLFDWLRQV:RUNHUV86DUJXLQJWKDW DQDO\VLV 6HH LG DW  $V D UHVXOW $(,) XUJHV XV WR UHYHUVH 0RRJ LWHUDVHVWKHGLVWLQFWLRQEHWZHHQVXEVWDQWLYHDQGSURFHGXUDO +RZHYHU UHJDUGOHVV RI ZKDW ZH PD\ WKLQN RI WKH 0RRJ H[FHSWLRQ WR :LOH\ WKLV SDQHO FDQQRW RYHUWXUQ D SXEOLVKHG GHFLVLRQ RI D SUHYLRXV SDQHO DUELWUDELOLW\DQQRXQFHGLQ:LOH\,Q$7 7WKH&RXUWKHOG RI WKLV FRXUW WK &LU 5 F &UDIW Y 8QLWHG 6WDWHV  )G   m8QOHVV WKH SDUWLHV FOHDUO\ DQG XQPLVWDNDEO\ SURYLGH WK &LU  GLVFXVVLQJ ODZRIWKHFLUFXLW GRFWULQH RWKHUZLVH WKH TXHVWLRQ RI ZKHWKHU WKH SDUWLHV DJUHHG WR  $UPFR(PSOR\HHVY$.6WHHO&RUS 1R 1R $UPFR(PSOR\HHVY$.6WHHO&RUS 

DUELWUDWHLVWREHGHFLGHGE\WKHFRXUWQRWWKHDUELWUDWRUl,G :RUNHUVY'DYLV+(OOLRW&R)GWK&LU DW$.6WHHOFRQWHQGVWKDWWKLVODQJXDJHPDQGDWHVWKDW  IHGHUDO FRXUWV GHWHUPLQH ERWK VXEVWDQWLYH DQG SURFHGXUDO DUELWUDELOLW\7KLVLVDQXQIDLWKIXOUHDGLQJRI$7 77KLV 0RRJDQG5DFHZD\3DUN FDVH LV D UHDIILUPDWLRQ RI WKH 6WHHOZRUNHUV SULQFLSOHV WKDW DUELWUDWLRQLVWKHSUHIHUUHGPHWKRGRIVHWWOLQJODERUGLVSXWHV $. 6WHHO DUJXHV WKDW WKH 6L[WK &LUFXLW FDVHV *HQHUDO DQGWKDWDFRXUWjVRQO\UROHVKRXOGEHGHWHUPLQLQJZKHWKHU 'ULYHUV/RFDO8QLRQY0RRJ/RXLVYLOOH:DUHKRXVH GLVSXWHVRYHUWKHLQWHUSUHWDWLRQRIWKHFROOHFWLYHEDUJDLQLQJ )GWK&LUDQG5DFHZD\3DUN,QFY/RFDO DJUHHPHQWDUHVXEMHFWWRWKHDUELWUDWLRQSURYLVLRQ,GDW 6HUYLFH(PSOR\HHV,QWHUQDWLRQDO8QLRQ)GWK   &RXUWV KDYH QR DXWKRULW\ mWR FRQVWUXH FROOHFWLYH &LUQDUURZWKHKROGLQJRI:LOH\0RRJKHOGWKDWD EDUJDLQLQJFRQWUDFWVDQGDUELWUDWLRQFODXVHVRUWRFRQVLGHU JULHYDQFHZDVQRWSURSHUO\DUELWUDEOHEHFDXVHWKHXQLRQKDG DQ\RWKHUHYLGHQFHWKDWPLJKWXQPLVWDNDEO\GHPRQVWUDWHWKDW QRWVXEPLWWHGLWVJULHYDQFHZLWKLQWKHWLPHIUDPHGLFWDWHGLQ DSDUWLFXODUJULHYDQFHZDVQRWWREHVXEMHFWWRDUELWUDWLRQl WKHFROOHFWLYHEDUJDLQLQJDJUHHPHQW,GDW0RRJFUHDWHV ,GDW7KDWWKHSRZHURIIHGHUDOFRXUWVLVOLPLWHGWR DQDUURZO\FUDIWHGH[FHSWLRQWR:LOH\DQGLVYLUWXDOO\OLPLWHG LQWHUSUHWLQJWKHVXEVWDQWLYHVFRSHRIWKHDUELWUDWLRQFODXVHLV WRLWVIDFWV6HH0RRJ)GDW7KHODQJXDJHRI XQGLVSXWHG$7 7PHUHO\FODULILHVWKDWWKHUHVSRQVLELOLW\IRU WKHFROOHFWLYHEDUJDLQLQJDJUHHPHQWLQ0RRJSURYLGHGm>,@I WKLVGHFLVLRQUHVWVVTXDUHO\RQRXUVKRXOGHUVDQGWKDWZHPD\ WKH8QLRQIDLOVWRQRWLI\WKH&RPSDQ\ZLWKLQFDOHQGDU QRWGHOHJDWHLWWRWKHDUELWUDWRU6HHLG GD\VDIWHUWKH&RPSDQ\JLYHVLWVDQVZHU>WRWKHJULHYDQFH@ WKHQWKH8QLRQVKDOOEHFRQFOXVLYHO\SUHVXPHGWRKDYH $7 7GRHVQRWPHQWLRQWKHGLVWLQFWLRQEHWZHHQVXEVWDQWLYH DFFHSWHGWKH&RPSDQ\jVDQVZHUWKHUHWRDQGVDLGJULHYDQFH DQGSURFHGXUDODUELWUDELOLW\7KHGLVSXWHLQ$7 7DURVHRYHU VKDOO QRW WKHUHDIWHU EH DUELWUDEOHl  ,G DW  HPSKDVLV ZKHWKHUWKHGHIHQGDQWFRPSDQ\ZDVUHTXLUHGWRDUELWUDWHD DGGHG  0RRJ FRQFOXGHG WKDW WKLV ODQJXDJH LQGLFDWHG JULHYDQFHFRQFHUQLQJWKHSURSULHW\RIPDVVLYHOD\RIIV$V VXEVWDQWLYH QRW SURFHGXUDO DUELWUDELOLW\ DQG WKHUHIRUH WKH WKLV &RXUW KDV QRWHG SUHYLRXVO\ m:KHWKHU GLVSXWHV RYHU :LOH\GRFWULQHGLGQRWDSSO\6HHLGDWm,WZLOOQRWGRWR OD\RIIVVKRXOGEHDUELWUDWHGLVFOHDUO\DPDWWHURIVXEVWDQWLYH FKDUDFWHUL]H VRPHWKLQJ DV µSURFHGXUDOj DQG FRQFOXGH DUELWUDELOLW\RIWKHYHU\VRUWZKLFKWKH6WHHOZRUNHUV7ULORJ\ DXWRPDWLFDOO\WKDWµSURFHGXUDOjPDWWHUVDUHIRUWKHDUELWUDWRU UHTXLUHV WKH FRXUWV WR GHWHUPLQHl  5DFHZD\ 3DUN ,QF Y LI WKH SDUWLHV KDYH VSHFLILHG RWKHUZLVH LQ WKH DUELWUDWLRQ /RFDO6HUY(PSOR\HHV ,QWjO8QLRQ)G VHFWLRQLWVHOIl7KLVODQJXDJHWKHSDQHOFRQFOXGHGFOHDUO\ WK&LU$7 7GLGQRWHURGHWKH:LOH\GLVWLQFWLRQ SURKLELWVVXEPLWWLQJXQWLPHO\JULHYDQFHVWRDUELWUDWLRQ EHWZHHQVXEVWDQWLYHDQGSURFHGXUDODUELWUDELOLW\DVLWGLGQRW FRQIURQWWKDWLVVXH6HHLGm$7 77HFKQRORJLHVLQQRZD\ $OWKRXJK 5DFHZD\ 3DUN LV VXSHUILFLDOO\ RQH RI 0RRJjV ZKDWVRHYHU DOWHUV WKH LPSRUW RI WKH 6XSUHPH &RXUWjV SULRU SURJHQ\ WKH 5DFHZD\ SDQHO IRUWKULJKWO\ VWDWHV LQ WKH ILUVW GHFLVLRQLQsRKQ:LOH\ 6RQVl7KH:LOH\GLVWLQFWLRQLV SDUDJUDSKRIWKHRSLQLRQWKDW0RRJLVmDGHFLVLRQZLWKZKLFK VWLOO YDOLG DQG FRQWLQXHV WR EH UHFRJQL]HG E\ RWKHU FLUFXLWV ZH GLVDJUHHl DQG IROORZV LW mGHVSLWH VWURQJ PLVJLYLQJVl SRVW$7 7  6HH HJ %HOO $WODQWLF3HQQV\OYDQLD ,QF Y 5DFHZD\3DUN)GDW,QWKHUHVWRIWKHRSLQLRQWKH &RPPXQLFDWLRQV:RUNHUV/RFDO)G SDQHOVWDXQFKO\REMHFWVWR0RRJFRQVLGHULQJLWWREHDmJUDYH G&LU/RFDO6HUY(PSOR\HHV,QWjO8QLRQY GHSDUWXUHlIURP:LOH\DVZHOODVWKHEDVLF6WHHOZRUNHUVUXOHV 1RQRWXFN5HV$VVRFV,QF)GVW&LU ,GDW1HYHUWKHOHVV5DFHZD\3DUNIRXQGWKDW 6PLWK%DUQH\6KHDUVRQ,QFY%RRQH)G FROOHFWLYHEDUJDLQLQJDJUHHPHQWODQJXDJHVLPLODUWRWKDWLQ WK &LU  /RFDO 8QLRQ 1R  ,QWjO %KG RI (OHF 0RRJ GHPDQGHG WKDW D WLPHEDUUHG JULHYDQFH ZDV QRW