Burzynski v. Cohen

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

$/ %85=<16.,$GPLQLVWUDWRU ; RIWKH(VWDWHRI$OIUHG:  +DOHYDQGHFHDVHG   1R 3ODLQWLII$SSHOODQW  !  Y   :,//,$0 6 &2+(16HFUHWDU\  RI'HIHQVH  'HIHQGDQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV 1RnsDPHV/*UDKDP'LVWULFWsXGJH $UJXHGsDQXDU\ 'HFLGHGDQG)LOHG$XJXVW %HIRUHs21(6DQG&2/(&LUFXLWsXGJHV18*(17 'LVWULFWsXGJH 

7KH +RQRUDEOH 'RQDOG & 1XJHQW 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

  %XU]\QVNLY&RKHQ 1R 1R %XU]\QVNLY&RKHQ 

BBBBBBBBBBBBBBBBB H[SHULHQFH LQ WKH SRVLWLRQ RI VXSHUYLVRU\ DFFRXQWDQW WKH SRVLWLRQ DW LVVXH KHUH  0RUHRYHU ZKLOH +DOHYDQ UHFHLYHG &2816(/ SHUIRUPDQFH HYDOXDWLRQV RI mKLJKO\ VXFFHVVIXOl DQG mIXOO\ VXFFHVVIXOl 0V ,QQVNHHS KDG UHFHLYHG WKH KLJKHU $5*8('7HUHVD/&XQQLQJKDP)ORUHQFH.HQWXFN\IRU SHUIRUPDQFHHYDOXDWLRQRImH[FHSWLRQDOl7KHGLVWULFWFRXUW $SSHOODQW  5DQGDOO (

)7ULDO&RXUWjV)LQGLQJRI1R/LDELOLW\XQGHU$'($ +DOHYDQILOHGDQDGPLQLVWUDWLYHFRPSODLQWZLWK')$6RQ $XJXVWDOOHJLQJWKDWKLVQRQVHOHFWLRQIRUWKH*6 7KH VROH FODLP WKDW VXUYLYHG VXPPDU\ MXGJPHQW ZDV  SRVLWLRQ s2$  /. ZDV EDVHG RQ DJH +DOHYDQjV QRQVHOHFWLRQ IRU s2$ /. ZKLFK KH GLVFULPLQDWLRQ,QKLVFKDUJH3ODLQWLIIUHIHUUHGWRDSDWWHUQ DOOHJHGZDVWKHSURGXFWRIDJHGLVFULPLQDWLRQLQYLRODWLRQRI HVWDEOLVKHGE\WKHGHIHQGDQWLQLWVKLULQJSUDFWLFHVIRUWKHODVW WKH $'($  7KH GLVWULFW FRXUW DSSOLHG WKH EXUGHQVKLIWLQJ VL[YDFDQF\DQQRXQFHPHQWVQRWLQJWKDWWKRVHSRVLWLRQVZHUH HYLGHQWLDU\ IUDPHZRUN RULJLQDOO\ DUWLFXODWHG LQ 0F'RQQHOO ILOOHGE\SHUVRQVXQGHUIRUW\\HDUVRIDJH')$6LVVXHGDILQDO 'RXJODV  &RUS Y *UHHQ  86    6&W GHFLVLRQRQSODLQWLIIjVFRPSODLQWRQ$SULODQGIRXQG /(GGDQGODWHUUHILQHGLQ WKDWWKHUHZDVQRGLVFULPLQDWLRQ3ODLQWLIISXUVXHGDQDSSHDO 7H[DV'HSjWRI&PW\$IIDLUVY%XUGLQH86 WR WKH (TXDO 2SSRUWXQLW\ (PSOR\PHQW &RPPLVVLRQ   6&W    /(G G    LQ m((2&lZKLFKXOWLPDWHO\DIILUPHGWKHDJHQF\jVGHFLVLRQ DQDO\]LQJSODLQWLIIjVFODLPRIDJHGLVFULPLQDWLRQ7RHVWDEOLVK DSULPDIDFLHFDVHRIDJHGLVFULPLQDWLRQXQGHUWKH$'($D 2Q$SULO+DOHYDQILOHGDVHFRQGDGPLQLVWUDWLYH SODLQWLIIPXVWHVWDEOLVKWKDWKHZDVDWOHDVW\HDUVROGDW FRPSODLQW ZLWK ')$6 FRQWHVWLQJ KLV QRQVHOHFWLRQ IRU WKH WKHWLPHRIWKHDOOHJHGGLVFULPLQDWLRQKHZDVVXEMHFWHGWR SRVLWLRQRIVWDIIDFFRXQWDQW*6s2$(%RQ DQDGYHUVHHPSOR\PHQWDFWLRQKHZDVRWKHUZLVHTXDOLILHG WKHEDVLVRIDJHDQGVH[GLVFULPLQDWLRQ,QVXSSRUWRIKLVDJH IRUWKHSRVLWLRQDQGDIWHUKHZDVUHMHFWHGDVXEVWDQWLDOO\ GLVFULPLQDWLRQFODLP+DOHYDQDOOHJHGWKDWWKHSHUVRQVHOHFWHG \RXQJHU DSSOLFDQW ZDV VHOHFWHG  6HH %DUQHWW Y 'HSjW RI ZDV QRW TXDOLILHG IRU WKH SRVLWLRQ  +H IXUWKHU DOOHJHG WKDW 9HWHUDQV$IIDLUV)GWK&LU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jVDJHDQGVH[GLVFULPLQDWLRQFRPSODLQW GHIHQGDQWjV SURIIHUHG UHDVRQ ZDV D SUHWH[W IRU DJH GLVFULPLQDWLRQ6HHLG +DOHYDQ UHWLUHG IURP ')$6 RQ 2FWREHU    2Q )HEUXDU\   +DOHYDQ ILOHG D WKLUG DGPLQLVWUDWLYH 7KHGLVWULFWFRXUWIRXQGWKDWSODLQWLIIHVWDEOLVKHGDSULPD FRPSODLQWZLWK')$6DOOHJLQJWKDWKLVUHWLUHPHQWDPRXQWHG IDFLHFDVHRIGLVFULPLQDWLRQ7KHGLVWULFWFRXUWIXUWKHUIRXQG WRDFRQVWUXFWLYHGLVFKDUJHFDXVHGE\KDUDVVPHQWGLVSDUDWH WKDWGHIHQGDQWDUWLFXODWHGDQRQGLVFULPLQDWRU\UDWLRQDOHIRU WUHDWPHQWDQGUHSULVDO,Q6HSWHPEHURI')$6LVVXHG SODLQWLIIjVQRQVHOHFWLRQWKHSHUVRQZKRZDVVHOHFWHGIRUWKH DILQDODJHQF\GHFLVLRQILQGLQJQRGLVFULPLQDWLRQ+DOHYDQ SRVLWLRQ%DUEDUD,QQVNHHSZDVVLPSO\WKHEHWWHUFDQGLGDWH DSSHDOHGWRWKH0HULW6\VWHPV3URWHFWLRQ%RDUGm063%lRQ 7KHGLVWULFWFRXUWFRQFOXGHGWKDWSODLQWLIIIDLOHGWRSURYHWKDW 2FWREHU    2Q 1RYHPEHU   WKH 063% GHIHQGDQWjVSURIIHUHGUHDVRQIRULWVGHFLVLRQZDVDSUHWH[WIRU GLVPLVVHGWKHSHWLWLRQRQWKHEDVLVWKDWWKHSODLQWLIIIDLOHGWR GLVFULPLQDWLRQ7KHFRXUWQRWHGWKDWERWKWKHSODLQWLIIDQG0V DGYDQFH D QRQIULYRORXV DOOHJDWLRQ WKDW KLV UHWLUHPHQW ZDV ,QQVNHHSKDYHEDFKHORUGHJUHHVRIVFLHQFHLQEXVLQHVVZLWKD LQYROXQWDU\RUWKDWDUHDVRQDEOHSHUVRQLQKLVVLWXDWLRQZRXOG PDMRULQDFFRXQWLQJ+RZHYHU0V,QQVNHHSjVJUDGHVLQKHU KDYHIHOWFRPSHOOHGWRUHVLJQDQGWKDWWKHUHIRUHWKH063% FRXUVHZRUNDUHVXSHULRUWRSODLQWLIIjV$OWKRXJK+DOHYDQ ODFNHGMXULVGLFWLRQ7KHRSLQLRQQRWLILHGWKHSODLQWLIIWKDWWKH KDGIDUPRUHRYHUDOOZRUNH[SHULHQFHLQWKHDFFRXQWLQJILHOG GHFLVLRQZRXOGEHFRPHILQDORQ'HFHPEHUDQGKLV WKH GLVWULFW FRXUW REVHUYHG WKDW 0V ,QQVNHHS KDG SULRU WLPHOLPLWIRUDSSHDOWRWKH)HGHUDO&LUFXLW&RXUWRI$SSHDOV  %XU]\QVNLY&RKHQ 1R 1R %XU]\QVNLY&RKHQ 

ZRXOGUXQIURPWKDWGDWH+DOHYDQGLGQRWSXUVXHDQDSSHDO HYLGHQFH RI D SDWWHUQ RU SUDFWLFH ZDV LQDGPLVVLEOH WKXV D WRWKH)HGHUDO&LUFXLW&RXUWRI$SSHDOV EURDGUHTXHVWIRULQIRUPDWLRQUHODWLQJWRSRVLWLRQVRWKHUWKDQ /.ZDVQRWMXVWLILHG:HILQGWKDWWKHGLVWULFWFRXUW +DOHYDQILOHGDFRPSODLQWZLWKWKHGLVWULFWFRXUWRQ0DUFK GLGQRWDEXVHLWVGLVFUHWLRQLQGHQ\LQJSODLQWLIIjVPRWLRQWR ,Q&RXQW,RIWKHFRPSODLQW+DOHYDQDOOHJHGWKDW FRPSHO SURGXFWLRQ  6HH $EUDPV Y )HGHUDO 'HSRVLW GXULQJWKHFRXUVHRIKLVHPSOR\PHQWZLWK')$6KHDSSOLHG ,QVXUDQFH &RUS  )G   WK &LU IRU RYHU IRUW\ *6 SRVLWLRQV IRU ZKLFK KH ZDV H[SODLQLQJWKDWWKLVFRXUWUHYLHZVDGLVWULFWFRXUW VUXOLQJRQ TXDOLILHGDQGWKDWSHUVRQVZKRZHUHVXEVWDQWLDOO\\RXQJHU D GLVFRYHU\ PRWLRQ IRU DEXVH RI GLVFUHWLRQ 7DUOHWRQ Y WKDQ KLP ZHUH VHOHFWHG IRU WKRVH SRVLWLRQV   ,Q &RXQW ,, 0HKDUU\ 0HGLFDO &ROOHJH  )G   WK &LU SODLQWLIIDOOHJHGWKDWWKHGHIHQGDQWKDGPDLQWDLQHGDSDWWHUQ  RIDJHGLVFULPLQDWLRQLQYLRODWLRQRIWKH$'($,Q&RXQW,,, SODLQWLIIDOOHJHGWKDWWKHGHIHQGDQWGLVFULPLQDWHGDJDLQVWKLP +DOHYDQ DOVR DSSHDOV WKH GLVWULFW FRXUWjV H[FOXVLRQ RI EHFDXVHRIKLVVH[LQYLRODWLRQRI7LWOH9,,7KHGHIHQGDQW HYLGHQFH RI D mSDWWHUQ RU SUDFWLFH GLVFULPLQDWLRQl E\ WKH EURXJKWDSDUWLDOPRWLRQWRGLVPLVVSXUVXDQWWR)HG5&LY GHIHQGDQW7KLVFRXUWUHYLHZVHYLGHQWLDU\UXOLQJVIRUDEXVH 3E DUJXLQJWKDWDOORISODLQWLIIjVFODLPVH[FHSWRQH RIGLVFUHWLRQ6HH7UHSHOY5RDGZD\([SUHVV,QF)G VKRXOG EH GLVPLVVHG GXH WR SODLQWLIIjV IDLOXUH WR SURSHUO\   WK &LU   +DOHYDQ VRXJKW WR LQWURGXFH H[KDXVW KLV DGPLQLVWUDWLYH UHPHGLHV DQG  FRPSO\ ZLWK WKH HYLGHQFH RI QXPHURXV RWKHU IDLOXUHV E\ WKH GHIHQGDQW WR WLPH OLPLWV IRU ILOLQJ DQ DFWLRQ XQGHU 7LWOH 9,, DQG WKH SURPRWHKLPWRSRVLWLRQVIRUZKLFKKHDSSOLHG7KHGLVWULFW $'($  7KH GLVWULFW FRXUW XOWLPDWHO\ DJUHHG DQG JUDQWHG FRXUW KHOG  WKDW LW KDG DOUHDG\ GHWHUPLQHG WKDW DQ\ FODLPV GHIHQGDQWjVPRWLRQ UHODWHG WR RWKHU LQVWDQFHV RI IDLOXUH WR SURPRWH DUH WLPH EDUUHG7KHFRXUWREVHUYHGWKDWLWGLGQRWVHHPIDLUWRDOORZ $IWHUDEHQFKWULDORQWKHVROHFODLPWRVXUYLYHVXPPDU\ SODLQWLIIWKHEHQHILWRIZKDWHYHUHYLGHQWLDU\YDOXHWKHVHRWKHU MXGJPHQWSODLQWLIIjVQRQVHOHFWLRQIRUs2$/.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jV QRQ GLVFULPLQDWLRQZDVLQDGPLVVLEOH7KHGLVWULFWFRXUWGLGQRW GLVFULPLQDWRU\UDWLRQDOHIRUWKHQRQSURPRWLRQZDVDSUHWH[W DEXVHLWVGLVFUHWLRQLQH[FOXGLQJWKLVHYLGHQFH )LQDOO\+DOHYDQDUJXHVWKDWWKHWULDOFRXUWHUUHGLQGHQ\LQJ KLVGHPDQGIRUDMXU\WULDO7KLVDUJXPHQWLVZLWKRXWPHULW  %RWK SDUWLHV DJUHH WKDW +DOHYDQjV QRQVHOHFWLRQ IRU s2$ /. 7KH6XSUHPH&RXUWKDVKHOGWKDWSODLQWLIIVVXLQJWKH)HGHUDO ZDV QRW SURFHGXUDOO\ GHIDXOWHG +DOHYDQjV ILUVW DGPLQLVWUDWLYH FRPSODLQW *RYHUQPHQWXQGHUWKH$'($GRQRWKDYHDULJKWWRDMXU\ ILOHG RQ $XJXVW   ZDV EDVHG RQ KLV QRQVHOHFWLRQ IRU WKLV SRVLWLRQ WULDO6HH/HKPDQ86DW6&WDW 7KLV FODLP ZHQW WR WULDO UHVXOWLQJ LQ D ILQGLQJ RI QR OLDELOLW\ LQ IDYRU WKH GHIHQGDQW 7KXVWKHGLVWULFWFRXUWSURSHUO\GHQLHG+DOHYDQjVGHPDQGIRU DMXU\WULDO  6LQFH ERWK SDUWLHV VXEPLWWHG DIILGDYLWV DQG RWKHU GRFXPHQWV RXWVLGH WKH SOHDGLQJV LQ VXSSRUW RI WKHLU SRVLWLRQV WKH FRXUW FRQVLGHUHG WKH PRWLRQ DV RQH IRU SDUWLDO VXPPDU\ MXGJPHQW RQ WKH LVVXHV RI WLPHOLQHVV DQG H[KDXVWLRQ RI DGPLQLVWUDWLYH UHPHGLHV $00 s$ DW   %XU]\QVNLY&RKHQ 1R 1R %XU]\QVNLY&RKHQ 

WKDW D UHDVRQDEOH SHUVRQ LQ KLV SRVLWLRQ ZRXOG KDYH IHOW IRUGLVFULPLQDWLRQ$FFRUGLQJO\WKHGLVWULFWFRXUWIRXQGWKDW FRPSHOOHGWRUHVLJQDQGWKXVWKH%RDUGODFNHGMXULVGLFWLRQWR WKHGHIHQGDQWIDLOHGWRVDWLVI\KLVXOWLPDWHEXUGHQRISURYLQJ KHDU SODLQWLIIjV DSSHDO  ,W LV ZHOO VHWWOHG WKDW mD IHGHUDO WKDW KLV QRQSURPRWLRQ WR WKH /. YDFDQF\ IRU WKH HPSOR\HHVHHNLQJWRFRQWHVWWKHPHULWVRIKLVGLVFKDUJHZKR SRVLWLRQ RI VXSHUYLVRU\ DFFRXQWDQW ZDV WKH UHVXOW RI DJH PHUHO\DGGVDIULYRORXVDOOHJDWLRQRIGLVFULPLQDWLRQZLOOQRW GLVFULPLQDWLRQ YHVWWKHGLVWULFWFRXUWZLWKMXULVGLFWLRQl0DUUY'L[RQ1R   86 $SS /(;,6  DW  WK &LU ,,$1$/<6,6 6HSWXQSXEOLVKHG+LOOY'HSjWRIWKH$LU)RUFH  )G   )HG &LU  m>,@I WKH %RDUG $6WDQGDUGRI5HYLHZ FRUUHFWO\ KHOG WKDW WKH HPSOR\HH SUHVHQWHG QR PRUH WKDQ D IULYRORXVDOOHJDWLRQRIGLVFULPLQDWLRQUHYLHZRIWKHPHULWV +DOHYDQ DSSHDOV ERWK WKH GLVWULFW FRXUWjV EHQFK WULDO RI WKH DGYHUVH DFWLRQ OLHV H[FOXVLYHO\ ZLWK WKH )HGHUDO GHFLVLRQDQGLWVRUGHURIVXPPDU\MXGJPHQW,QFRQVLGHULQJ &LUFXLWl)XUWKHUPRUHDGHWHUPLQDWLRQE\WKH%RDUGWKDWLW DGLVWULFWFRXUW VGHFLVLRQIROORZLQJDEHQFKWULDOWKLVFRXUW ODFNV MXULVGLFWLRQ JLYHV WKH )HGHUDO &LUFXLW H[FOXVLYH UHYLHZVILQGLQJVRIIDFWXQGHUWKHFOHDUO\HUURQHRXVVWDQGDUG MXULVGLFWLRQRYHUWKDWDSSHDO6HH86&†D  6HH)('5&,93D$PHULFDQ3RVWDO:RUNHUV8QLRQY 86&†E 6ORDQY:HVW)GWK&LU 8QLWHG 6WDWHV 3RVWDO 6HUYLFH  )G   WK &LU m>$@VDJHQHUDOUXOHDQ063%GHWHUPLQDWLRQWKDWLW &RQFOXVLRQVRIODZRQWKHRWKHUKDQGDUHUHYLHZHG ODFNV MXULVGLFWLRQ WR KHDU D FODLP LV DSSHDODEOH RQO\ WR WKH GH QRYR  6HH $IILOLDWHG )0 ,QV &R Y 2ZHQV&RUQLQJ 8QLWHG6WDWHV&RXUWRI$SSHDOVIRUWKH)HGHUDO&LUFXLWl,Q )LEHUJODV&RUS)GWK&LU:HDOVR WKH FDVH DW EDU WKH %RDUGjV GHWHUPLQDWLRQ WKDW SODLQWLIIjV UHYLHZ GH QRYR WKH GLVWULFW FRXUWjV JUDQW RI VXPPDU\ FODLPZDVIULYRORXVDQGWKDWLWODFNHGMXULVGLFWLRQJLYHVWKH MXGJPHQW6HH6PLWKY$PHULWHFK)GWK&LU )HGHUDO &LUFXLW H[FOXVLYH MXULVGLFWLRQ RYHU SODLQWLIIjV 6XPPDU\MXGJPHQWLVDSSURSULDWHZKHQWKHUHDUHQR FRQVWUXFWLYHGLVFKDUJHFODLP$FFRUGLQJO\WKHGLVWULFWFRXUW JHQXLQH LVVXHV RI PDWHULDO IDFW LQ GLVSXWH DQG WKH PRYLQJ SURSHUO\ FRQFOXGHG WKDW LW ODFNHG MXULVGLFWLRQ RYHU WKH SDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ6HH)(' 5 GLVPLVVDO RI +DOHYDQjV FRQVWUXFWLYH GLVFKDUJH FODLP 6HH &,9 3F *UHDWHU'HWURLW5HVRXUFH5HFRYHU\$XWKY(3$)G WK&LU >(@YHU\IHGHUDODSSHOODWHFRXUW %)LUVW$GPLQLVWUDWLYH&RPSODLQW KDVDVSHFLDOREOLJDWLRQWRVDWLVI\LWVHOIQRWRQO\RILWVRZQ 7KH$'($LVH[SUHVVO\DSSOLFDEOHWRIHGHUDOJRYHUQPHQWDO MXULVGLFWLRQEXWDOVRWKDWRIWKHORZHUFRXUWVLQDFDXVHXQGHU HPSOR\HHVZKRDUHWUHDWHGVHSDUDWHO\IURPSULYDWHHPSOR\HHV UHYLHZ TXRWLQJ%HQGHUY:LOOLDPVSRUW$UHD6FK'LVW XQGHUWKHVWDWXWH6HH86&†D7KH6XSUHPH&RXUW 86  KDVFRQFOXGHGWKDW6HFWLRQDSURYLGHV (3UH7ULDO5XOLQJVE\WKH'LVWULFW&RXUW WZR DOWHUQDWLYH URXWHV IRU SXUVXLQJ D FODLP RI DJH +DOHYDQDSSHDOVWKHGLVWULFWFRXUWjVGHQLDORIKLVPRWLRQWR GLVFULPLQDWLRQ$QLQGLYLGXDOPD\LQYRNHWKH((2&jV FRPSHOSURGXFWLRQRIWKHSHUVRQQHOILOHVRISHUVRQVZKRZHUH DGPLQLVWUDWLYH SURFHVV DQG WKHQ ILOH D FLYLO DFWLRQ LQ VHOHFWHGIRUSRVLWLRQVIRUZKLFKKHDSSOLHG7KHGLVWULFWFRXUW IHGHUDO GLVWULFW FRXUW LI KH LV QRW VDWLVILHG ZLWK KLV IRXQG WKDW WKH SHUVRQQHO LQIRUPDWLRQ IRU WKH LQGLYLGXDO DGPLQLVWUDWLYHUHPHGLHV6HH86&†DEDQG VHOHFWHG IRU s2$ /. KDG EHHQ SURYLGHG WR WKH F  $ IHGHUDO HPSOR\HH FRPSODLQLQJ RI DJH SODLQWLII  )XUWKHUPRUH WKH GLVWULFW FRXUW GHWHUPLQHG WKDW GLVFULPLQDWLRQ KRZHYHU GRHV QRW KDYH WR VHHN UHOLHI IURPKLVHPSOR\LQJDJHQF\RUWKH((2&DWDOO+HFDQ  %XU]\QVNLY&RKHQ 1R 1R %XU]\QVNLY&RKHQ 

GHFLGHWRSUHVHQWWKHPHULWVRIWKHFODLPWRDIHGHUDOFRXUW ILOHZLWKLQWKLUW\GD\VDQGWKDWDJHGLVFULPLQDWLRQFODLPDQWV LQWKHILUVWLQVWDQFH6HH†DG PD\KDYHXSWRVL[\HDUVDSSHDUVWREHDUHIOHFWLRQRIWKH GLIIHUHQFHRIMXGLFLDORSLQLRQFRPSDUH/XEQLHZVNL 6WHYHQVY'HSjWRI7UHDVXU\866&W )GDWKROGLQJVL[\HDUVWDWXWHRIOLPLWDWLRQVDSSOLHVWR   /(G G    ,I WKH HPSOR\HH HOHFWV WR $'($DFWLRQVLQYROYLQJIHGHUDOHPSOR\HHVZLWK(GZDUGV SXUVXHKLVDGPLQLVWUDWLYHUHPHGLHVKHmPXVWLQLWLDWHFRQWDFW )GKROGLQJWKDW7LWOH9,,jVGD\VWDWXWH ZLWKD&RXQVHORUZLWKLQGD\VRIWKHHIIHFWLYHGDWHRIWKH RI OLPLWDWLRQV DSSOLHV WR $'($ DFWLRQV LQYROYLQJ IHGHUDO DFWLRQl&)5†D ,QWKHFDVHDW HPSOR\HHV,QVKRUWWKHDPELJXLW\GRHVQRWDPRXQWWRWKH EDU +DOHYDQjV LQLWLDO FRQWDFW ZLWK DQ (TXDO (PSOR\PHQW W\SH RI DIILUPDWLYH PLVFRQGXFW ZKLFK ZRXOG MXVWLI\ WKH 2SSRUWXQLW\m((2lFRXQVHORUZDVRQsXQHZKHQ DSSOLFDWLRQ RI WKH HTXLWDEOH WROOLQJ GRFWULQH  6HH %DOGZLQ KH DOOHJHG WKDW KLV QRQVHOHFWLRQ IRU s2$ /. ZDV &RXQW\:HOFRPH&WUY%URZQ866&W GLVFULPLQDWRU\7KLVFODLPZDVILOHGZLWKLQWKHGD\WLPH /(GGHTXLWDEOHWROOLQJLV OLPLW+RZHYHUDOORIWKHRWKHUQRQVHOHFWLRQVWKDW+DOHYDQ ZDUUDQWHG ZKHUH mDIILUPDWLYH PLVFRQGXFW RQ WKH SDUW RI D UHIHUHQFHGERWKLQKLV((2FRPSODLQWDQGKLVFRPSODLQW GHIHQGDQWOXOOHGWKHSODLQWLIILQWRLQDFWLRQl WRWKHGLVWULFWFRXUWIDOORXWVLGHWKHGD\WLPHOLPLWDVWKH\ RFFXUUHGIURPIRXUPRQWKVWRRQH\HDUSULRU WR KLVsXQH +DOHYDQ IXUWKHU FRQWHQGV WKDW KLV 7LWOH 9,, DQG $'($ PHHWLQJZLWKWKH((2&RXQVHORU FODLPVVKRXOGEHHTXLWDEO\WROOHGRQDFFRXQWRIKLVDWWRUQH\jV ZLWKGUDZDOIURPWKHFDVH7KLVFODLPLVZLWKRXWPHULW$V $VQRWHGDERYHDIHGHUDOHPSOR\HHDOVRKDVWKHRSWLRQRI QRWHG DERYH +DOHYDQ UHFHLYHG ')$6jV ILQDO QRWLFH RI E\SDVVLQJ WKH DGPLQLVWUDWLYH SURFHVV DQG ILOLQJ DQ $'($ GHFLVLRQGLVPLVVLQJKLVDJHDQGVH[GLVFULPLQDWLRQFODLPVRQ FODLP GLUHFWO\ ZLWK WKH GLVWULFW FRXUW  6HH  86& $SULOZKLFKPHDQWWKDWKHKDGXQWLOsXO\ † DG  ,QGHHG LQ KLV FRPSODLQW WR WKH GLVWULFW FRXUW WRILOHDFLYLODFWLRQ+DOHYDQjVDWWRUQH\GLGQRWZLWKGUDZ +DOHYDQDOOHJHVWKDWEHJLQQLQJLQ0DUFKKHDSSOLHGIRU IURPWKHFDVHXQWLO'HFHPEHUVHYHUDOPRQWKVDIWHU RYHUIRUW\YDFDQF\DQQRXQFHPHQWVWRILOO*6SRVLWLRQV WKHILOLQJGHDGOLQHSDVVHG7KXVWKHDWWRUQH\jVZLWKGUDZDO mRWKHU QRQVHOHFWLRQVl   +RZHYHU  86& † DG SURYLGHVQREDVLVIRUWKHDSSOLFDWLRQRIWKHHTXLWDEOHWROOLQJ SURYLGHV GRFWULQHWRWKHDJHDQGVH[GLVFULPLQDWLRQFODLPVFRQWDLQHGLQ +DOHYDQjVVHFRQG((2FKDUJH :KHQWKHLQGLYLGXDOKDVQRWILOHGDFRPSODLQWFRQFHUQLQJ DJHGLVFULPLQDWLRQZLWKWKH&RPPLVVLRQQRFLYLODFWLRQ '7KLUG$GPLQLVWUDWLYH&RPSODLQW PD\EHFRPPHQFHGE\DQ\LQGLYLGXDOXQGHUWKLVVHFWLRQ XQWLOWKHLQGLYLGXDOKDVJLYHQWKH&RPPLVVLRQQRWOHVV 2Q 1RYHPEHU   WKH 0HULW 6\VWHPV 3URWHFWLRQ WKDQWKLUW\GD\VjQRWLFHRIDQLQWHQWWRILOHVXFKDFWLRQ %RDUGm063%lRUWKHm%RDUGlGLVPLVVHG+DOHYDQjVWKLUG ((2FRPSODLQWZKLFKDOOHJHGFRQVWUXFWLYHGLVFKDUJHFDXVHG E\KDUDVVPHQWGLVSDUDWHWUHDWPHQWDQGUHSULVDO,PSRUWDQWO\ WKH %RDUG FRQFOXGHG WKDW SODLQWLII KDG IDLOHG WR DGYDQFH D   &)5 † D SURYLGHV WKDW m>D@JJULHYHG SHUVRQV ZKR QRQIULYRORXVDUJXPHQWWKDWKLVUHWLUHPHQWZDVLQYROXQWDU\RU EHOLHYH WKH\ KDYH EHHQ GLVFULPLQDWHG DJDLQVW RQ WKH EDVLV RI UDFH FRORU UHOLJLRQ VH[ QDWLRQDO RULJLQ DJH RU KDQGLFDS PXVW FRQVXOW D &RXQVHORU SULRU WR ILOLQJ D FRPSODLQW LQ RUGHU WR WU\ WR LQIRUPDOO\ UHVROYH WKH PDWWHUl  7KH &LYLO 5LJKWV $FW RI   86& † HF 3XEO / 1R  ††   6WDW   H[WHQGHG WKH 7LWOH 9,, OLPLWDWLRQV  $00 s$ DW  GDWHV RI WKH QRQVHOHFWLRQV SHULRG IURP WKLUW\ GD\V WR QLQHW\ GD\V  %XU]\QVNLY&RKHQ 1R 1R %XU]\QVNLY&RKHQ 

GLVFULPLQDWLRQLQWKHZRUNSODFHl2VFDU0D\HU &RY 6XFKQRWLFHVKDOOEHILOHGZLWKLQRQHKXQGUHGDQGHLJKW\ (YDQV866&W/(GG GD\VDIWHUWKHDOOHJHGXQODZIXOSUDFWLFHRFFXUUHG ,QGHHGWKHILUVWWZRVHFWLRQVRI86&†D ZHUH mSDWWHUQHG DIWHUl VLPLODU VHFWLRQV LQ 7LWOH 9,, ZKLFK 7KHUHFRUGLVFOHDUWKDWWKHLQVWDQWVXLWZDVILOHGDWOHDVWIRXU H[WHQGHGWKHSURWHFWLRQVRI7LWOH9,,WRIHGHUDOHPSOR\HHV \HDUVDIWHUWKHVHRWKHUQRQVHOHFWLRQVRFFXUUHGZKLFKLVZHOO /HKPDQY1DNVKLDQ866&W RXWVLGHRIWKHGD\ZLQGRZSURYLGHGIRUE\VWDWXWH7KXV /(GG)XUWKHUPRUHWKH((2&jV WKHGLVWULFWFRXUWSURSHUO\IRXQGWKDWWKHRQO\FODLPWKDWZDV FXUUHQWUHJXODWLRQVHQIRUFLQJSURYLVLRQVRIWKH$'($DSSO\ SURSHUO\ EHIRUH WKH FRXUW ZDV +DOHYDQjV QRQVHOHFWLRQ IRU WKHVDPHVWDWXWHRIOLPLWDWLRQVSHULRGWRIHGHUDOFODLPVXQGHU s2$/. 7LWOH 9,,  6HH  &)5 †    7KLV LV VLJQLILFDQW EHFDXVH m>D@Q DJHQF\jV LQWHUSUHWDWLRQ RI DQ +DOHYDQ FRQWHQGV WKDW WKH RWKHU QRQVHOHFWLRQV DUH DPELJXRXV SURYLVLRQ ZLWKLQ WKH VWDWXWH LW LV DXWKRUL]HG WR QRQHWKHOHVVSURSHUO\EHIRUHWKHFRXUWRQWKHEDVLVRIWKHLU LPSOHPHQWLVHQWLWOHGWRMXGLFLDOGHIHUHQFHlsRQHV)GDW UHODWLRQVKLS WR WKH RQH WLPHO\ FODLP KLV QRQVHOHFWLRQ IRU $FFRUGLQJO\ZHKROGWKDWWKHDQDORJRXVOLPLWDWLRQV s2$/.6SHFLILFDOO\+DOHYDQFLWHVWKHFRQWLQXLQJ SHULRG IURP 7LWOH 9,,  86& † HF LV WKH YLRODWLRQWKHRU\ZKLFKLVDQHTXLWDEOHH[FHSWLRQWRWKHWLPH DSSURSULDWH SHULRG WR DSSO\ WR $'($ FODLPV EURXJKW E\ OLPLWV IRU ILOLQJ DQ DGPLQLVWUDWLYH FRPSODLQW  7KH 6L[WK IHGHUDOHPSOR\HHVZKRSXUVXHWKHLUDGPLQLVWUDWLYHUHPHGLHV &LUFXLW DUWLFXODWHG WKH FRQWLQXLQJ YLRODWLRQ WKHRU\ LQ EHIRUHJRLQJWRFRXUW6LQFH+DOHYDQIDLOHGWRILOHVXLWRQKLV +DLWKFRFN Y )UDQN VWDWLQJ WKDW mGLVFULPLQDWRU\ LQFLGHQWV $'($FODLPZLWKLQWKHGD\WLPHSHULRGSUHVFULEHGE\ ZKLFK RFFXU EH\RQG WKH OLPLWDWLRQV SHULRG DUH DFWLRQDEOH 86&†HFWKHGLVWULFWFRXUWSURSHUO\IRXQGWKDW ZKHUHDSODLQWLIIFKDOOHQJHVQRWMXVWRQHLQFLGHQWEXW WKLVFODLPLVWLPHEDUUHG DQXQODZIXOSUDFWLFHWKDWFRQWLQXHVLQWRWKHOLPLWDWLRQSHULRG l)GWK&LULQWHUQDOTXRWDWLRQV +DOHYDQDUJXHVWKDWWKHVWDWXWHRIOLPLWDWLRQVIRUWKH$'($ RPLWWHG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 ORQJVWDQGLQJ DQG GHPRQVWUDEOH SROLF\ RI GLVFULPLQDWLRQ ,QWKDWFDVHWKH((2&jVILQDOGHFLVLRQGLVPLVVLQJSODLQWLIIjV 7KLVUHTXLUHVDVKRZLQJE\DSUHSRQGHUDQFHRIWKHHYLGHQFH $'($FODLPVWDWHGWKDWm,IDQ\RI\RXUFODLPVZHUHEDVHG WKDWVRPHIRUPRILQWHQWLRQDOGLVFULPLQDWLRQDJDLQVWWKHFODVV RQWKH$JH'LVFULPLQDWLRQLQ(PSOR\PHQW$FWRI RIZKLFKSODLQWLIIZDVDPHPEHUZDVWKHFRPSDQ\ V VWDQGLQJ $6727+26(&/$,0621/<\RX0$<KDYHXSWRVL[ RSHUDWLQJ SURFHGXUH  ((2& Y 3HQWRQ ,QGXV 3XEO J &R \HDUVDIWHUWKHULJKWRIDFWLRQILUVWDFFUXHGLQZKLFKWRILOHD )GWK&LU FLYLO DFWLRQl ,G   7KH 6HFRQG &LUFXLW KHOG WKDW HTXLWDEOH WROOLQJZDVQRWZDUUDQWHGEHFDXVHWKHmXQFHUWDLQW\UHIOHFWHG  ,Q WKH FDVH DW EDU  +DOHYDQ KDV IDLOHG WR VKRZ HLWKHU LQ WKH QRWLFH VWHPV IURP WKH LQFRQVLVWHQF\ LQ WKH FDVH ODZ SUHVHQW GLVFULPLQDWRU\ DFWLYLW\ JLYLQJ ULVH WR D FODLP RI EHWZHHQWKHFLUFXLWVl,GVHHDOVR/DYHU\)GDW FRQWLQXLQJ YLRODWLRQ RU D ORQJVWDQGLQJ DQG GHPRQVWUDEOH m>W@KHDUJXDEO\FRQWUDGLFWRU\ODQJXDJHWKDWFODLPDQWPXVW SROLF\RIGLVFULPLQDWLRQ+DOHYDQjVFRPSODLQWGRHVQRWDOOHJH  %XU]\QVNLY&RKHQ 1R 1R %XU]\QVNLY&RKHQ 

WKHFLUFXPVWDQFHVRIWKHQRQVHOHFWLRQVQRULVWKHUHHYLGHQFH FRPSODLQW RI GLVFULPLQDWLRQ EDVHG RQ UDFH FRORU RIDGLVFULPLQDWRU\DQLPXVOLQNLQJWKHYDULRXVQRQVHOHFWLRQV UHOLJLRQ VH[ RU QDWLRQDO RULJLQ    DQ HPSOR\HH RU 6HH/LJKWIRRWY8QLRQ&DUELGH&RUS)GG DSSOLFDQW IRU HPSOR\PHQW LI DJJULHYHG E\ WKH ILQDO &LUILQGLQJQRFRQWLQXLQJYLRODWLRQZKHUHHPSOR\HH GLVSRVLWLRQRIKLVFRPSODLQWPD\ILOHDFLYLODFWLRQDV SUHVHQWHG QR HYLGHQFH RI D FRQQHFWLRQ EHWZHHQ MRE SURYLGHGLQVHFWLRQHRIWKLVWLWOHLQZKLFKFLYLO UHDVVLJQPHQWVDQGGLVFULPLQDWRU\DQLPXV,QDGGLWLRQWKHUH DFWLRQ WKH KHDG RI WKH GHSDUWPHQW DJHQF\ RU XQLW DV LVQRHYLGHQFHLQWKHUHFRUGWRVXJJHVWWKDWWKHGHIHQGDQWKDG DSSURSULDWHVKDOOEHWKHGHIHQGDQW D GHPRQVWUDEOH SROLF\ RI GLVFULPLQDWLRQ  6LPSO\ DOOHJLQJ GLVFUHWHDFWVRIQRQVHOHFWLRQVLVQRWVXIILFLHQWWRHVWDEOLVKD 86&†HF6LQFH+DOHYDQUHFHLYHGQRWLFHRI FRQWLQXLQJYLRODWLRQ6HH'DYLVY(UPFR0IJ1R ')$6jVILQDOGHFLVLRQRQ$SULOKHKDGGD\VRU  86 $SS /(;,6  DW  WK &LU  0D\  XQWLOsXO\WRUDLVHWKH7LWOH9,,VH[GLVFULPLQDWLRQ  m>SODLQWLII@ FRPSODLQV RI D VHULHV RI GLVFUHWH DQG FODLPLQDFLYLODFWLRQ,QVWHDG+DOYHDQGLGQRWILOHVXLWXQWLO VHSDUDWH DFWV WKDW PD\ FRQVWLWXWH LQGLYLGXDO LQVWDQFHV RI 0DUFKZHOORXWVLGHWKHGD\ZLQGRZSURYLGHGIRU GLVSDUDWH WUHDWPHQW EXW GR QRW HYHQ ZKHQ FRQVLGHUHG E\ VWDWXWH  7KXV WKH GLVWULFW FRXUW SURSHUO\ IRXQG WKDW WRJHWKHUHYLGHQFHDSROLF\RUSUDFWLFHRIUDFLDOGLVFULPLQDWLRQ +DOHYDQjV7LWOH9,,FODLPZDVWLPHEDUUHG lXQSXEOLVKHG7KHUHFRUGLVGHYRLGRIDQ\HYLGHQFH ZKLFK ZRXOG VXSSRUW WKH DSSOLFDWLRQ RI WKH FRQWLQXLQJ $V IRU +DOHYDQj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mDQDORJRXVl WR WKH $'($  7KH 1LQWK DFFRXQWDQW*6s2$(%RQWKHEDVLVRIDJH &LUFXLW KDV IRXQG WKDW WKH JHQHUDO VL[\HDU VWDWXWH RI DQGVH[GLVFULPLQDWLRQ+DOHYDQIDLOHGWRDSSHDUDWDQ((2& OLPLWDWLRQVXQGHU86&†DDSSOLHV6HH/XEQLHZVNL KHDULQJ VFKHGXOHG RQ 0DUFK   DQG KLV FDVH ZDV Y/HKPDQ)GWK&LU+RZHYHUWKH UHPDQGHGWR')$6IRUIXUWKHUDGPLQLVWUDWLYHSURFHVVLQJ2Q YDVW PDMRULW\ RI WKH FLUFXLWV WKDW KDYH DGGUHVVHG WKLV LVVXH $SULO   ')$6 LVVXHG D ILQDO GHFLVLRQ GHQ\LQJ KDYHFRQFOXGHGWKDW7LWOH9,,LVPRVWDQDORJRXVWRWKH$'($ +DOHYDQjVFRPSODLQW7KLVGHFLVLRQZDVGHOLYHUHGWR+DOHYDQ 6HH5DZOHWWY5XQ\RQ1R86$SS/(;,6 RQ $SULO    7KH GLVWULFW FRXUW IRXQG WKDW +DOHYDQ DW WK&LU'HFXQSXEOLVKHG(GZDUGV IDLOHG WR EULQJ D WLPHO\ FLYLO DFWLRQ UDLVLQJ KLV $'($ DQG Y6KDODOD)GWK&LUsRQHVY 7LWOH9,,FODLPV 5XQ\RQ  )G   WK &LU  /RQJ Y )UDQN)GG&LU/DYHU\Y0DUVK 86&†HFSURYLGHVWKDW )GVW&LU7KLVLVDQLVVXHRI ILUVWLPSUHVVLRQIRUWKH6L[WK&LUFXLW :LWKLQGD\VRIUHFHLSWRIQRWLFHRIILQDODFWLRQWDNHQ E\DGHSDUWPHQWDJHQF\RUXQLWUHIHUUHGWRLQVXEVHFWLRQ 7LWOH 9,, LV D QDWXUDO VRXUFH RI ERUURZLQJ D VWDWXWH RI D RI WKLV VHFWLRQ RU E\ WKH (TXDO (PSOR\PHQW OLPLWDWLRQVIRUDJHGLVFULPLQDWLRQEHFDXVHmWKH$'($DQG 2SSRUWXQLW\&RPPLVVLRQXSRQDQDSSHDOIURPDGHFLVLRQ 7LWOH 9,, VKDUH D FRPPRQ SXUSRVH WKH HOLPLQDWLRQ RI RU RUGHU RI VXFK  GHSDUWPHQW DJHQF\ RU XQLW RQ D