McFarland v. US Postal Service

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

s$0,( / 0&)$5/$1' ; 3ODLQWLII$SSHOODQW    1R Y  !  :,//,$0 s +(1'(5621  81,7(' 67$7(6 32670$67(5  *(1(5$/  'HIHQGDQW$SSHOOHH   1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW7ROHGR 1Rn'DYLG$.DW]'LVWULFWsXGJH 6XEPLWWHG6HSWHPEHU 'HFLGHGDQG)LOHG2FWREHU %HIRUH'$8*+75(<*,/0$1DQG*,%621&LUFXLW sXGJHV

7KH +RQRUDEOH sRKQ 5 *LEVRQ 6HQLRU &LUFXLW sXGJH RI WKH 8QLWHG 6WDWHV &RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW VLWWLQJ E\ GHVLJQDWLRQ

  0F)DUODQGY863RVWDO6HUYLFH 1R 1R 0F)DUODQGY863RVWDO6HUYLFH 

BBBBBBBBBBBBBBBBB ,,,&21&/86,21 &2816(/ )RUDOORIWKHUHDVRQVVHWIRUWKDERYHZH5(9(56(WKH MXGJPHQW RI WKH GLVWULFW FRXUW DQG 5(0$1' WKH FDVH IRU 21%5,()+DUODQG0%ULW]%5,7= =(00(/0$1 IXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ 7ROHGR 2KLR IRU $SSHOODQW  .DWKOHHQ 0RUR 1HVL $66,67$17 81,7(' 67$7(6 $77251(< 'HWURLW 0LFKLJDQIRU$SSHOOHH BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 521$/' /(( *,/0$1 &LUFXLW sXGJH  sDPLH / 0F)DUODQG EURXJKW VXLW DJDLQVW :LOOLDP s +HQGHUVRQ WKH 8QLWHG 6WDWHV 3RVWPDVWHU *HQHUDO DOOHJLQJ WKDW VKH ZDV FRQVWUXFWLYHO\GLVFKDUJHGIURPKHUHPSOR\PHQWDVDUHVXOWRI VH[ GLVFULPLQDWLRQ LQ YLRODWLRQ RI 7LWOH 9,, RI WKH &LYLO 5LJKWV $FW RI   7KH GLVWULFW FRXUW JUDQWHG VXPPDU\ MXGJPHQWLQIDYRURIWKH3RVWDO6HUYLFHRQWKHJURXQGWKDW 0F)DUODQGKDGQRWWLPHO\LQLWLDWHGDJULHYDQFHZLWKWKH(TXDO (PSOR\PHQW2SSRUWXQLW\&RPPLVVLRQ((2&DVUHTXLUHG E\ODZDQGWKDWQRGRFWULQHRIHTXLW\H[FXVHGWKDWIDLOXUH 0F)DUODQGQRZDSSHDOV)RUWKHUHDVRQVVHWIRUWKEHORZZH 5(9(56(WKHMXGJPHQWRIWKHGLVWULFWFRXUWDQG5(0$1' WKHFDVHIRUIXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ ,%$&.*5281' ,Q0DUFKRI0F)DUODQGEHJDQZRUNLQJIRUWKH8QLWHG 6WDWHV 3RVWDO 6HUYLFH LQ 7ROHGR 2KLR DV D FDVXDO PDLO KDQGOHU+HUmFDVXDOlVWDWXVPHDQWWKDWVKHZDVDWHPSRUDU\ HPSOR\HHZKRGLGQRWUHFHLYHH[WHQVLYHRULHQWDWLRQRUXQLRQ UHSUHVHQWDWLRQ0F)DUODQGDOOHJHVWKDWRQ0DUFKRIWKDW \HDU 5REHUW *HURQLPR KHU DFWLQJ VXSHUYLVRU DW WKH WLPH DWWHPSWHG WR NLVV KHU  $OWKRXJK 0F)DUODQG SXOOHG DZD\ *HURQLPRSURFHHGHGWRVD\WKDWKHWKRXJKWDERXWKHUQHFN DQGOLSVZKLOHKHH[HUFL]HG7ZRGD\VDIWHUWKHDWWHPSWHG NLVV0F)DUODQGIHOWWKDW*HURQLPRZDV EHLQJUXGHWRKHU  0F)DUODQGY863RVWDO6HUYLFH 1R 1R 0F)DUODQGY863RVWDO6HUYLFH 

LQIRUPDWLRQ IURP /HZLV 0F)DUODQG WROG 3HWUXVN\ WKDW 6KHWKHQWROG*HURQLPRGLUHFWO\WKDWVKHKDGQRLQWHUHVWLQ m5REHUW *HURQLPR ZDV FDXVLQJ PH SUREOHPV DJDLQl  7KH KLP QH[WGD\0F)DUODQGFRQWDFWHGDQ((2&RXQVHORU 0F)DUODQG OHDUQHG LQ $SULO RU HDUO\ 0D\ RI  WKDW 0F)DUODQG DUJXHG LQ WKH GLVWULFW FRXUW WKDW WKLV FRQGXFW XQIRXQGHGUXPRUVZHUHEHLQJVSUHDGWKDWVKHZDVVOHHSLQJ WRJHWKHUZLWK*HURQLPRjVWUHDWPHQWRIKHUGDWLQJEDFNWRWKH ZLWKRWKHUPDOHSRVWDOHPSOR\HHVWKDWVKHJDYH*HURQLPRDQ DWWHPSWHGNLVVDPRXQWHGWRmDQHQYLURQPHQWSHUPHDWHGZLWK mDWWLWXGHlZKHQKHDVNHGKHUWRGRWKLQJVDQGWKDWVKHZDV XQIRXQGHG OLHV DERXW KHU DOOHJHG VH[XDO SURPLVFXLW\ KHU WDONLQJWRPDOHHPSOR\HHVLQVWHDGRIZRUNLQJ6KHEHOLHYHG FRPSHWHQFH DV DQ HPSOR\HH KHU EHLQJ DVVLJQHG WR OHVV WKDW *HURQLPR ZDV WKH VRXUFH RI WKHVH UXPRUV GHVLUDEOHZRUNDVVLJQPHQWVDQGKDYLQJKHUKRXUVUHGXFHGl $SSUR[LPDWHO\ ILYH ZHHNV DIWHU WKH DWWHPSWHG NLVV *LYHQWKDWWKHDERYHLQFLGHQWVRFFXUUHGLQsXQHDQGWKDWKHU 0F)DUODQG VSRNH WR %DUEDUD 3HWUXVN\ DERXW KHU SUREOHPV SRRU WUHDWPHQW E\ *HURQLPR DOOHJHGO\ VWHPPHG IURP KHU ZLWK *HURQLPR  3HWUXVN\ VXSHUYLVHG ERWK *HURQLPR DQG HDUOLHUUHMHFWLRQRIKLVVH[XDODGYDQFH0F)DUODQGKDVDOOHJHG 0F)DUODQG0F)DUODQGFRPSODLQHGWKDW*HURQLPRZDVmLQ IDFWV VXIILFLHQW WR VWDWH D FODLP WKDW D KRVWLOH ZRUN ORYHZLWKKHUlDQGWKDWKHXQIDLUO\PDGHKHURSHUDWHDOLQHDU HQYLURQPHQWH[LVWHGOHVVWKDQGD\VSULRUWRWKHGDWHRIKHU LQWHJUDWHGSDUFHOVRUWHU/,36PDFKLQHPRUHIUHTXHQWO\WKDQ ILUVW FRQWDFW ZLWK WKH ((2&  :H WKHUHIRUH FRQFOXGH WKDW WKHRWKHUFDVXDOZRUNHUV 0F)DUODQG VDWLVILHG WKH DGPLQLVWUDWLYH UHTXLUHPHQWV QHFHVVDU\ IRU KHU WR EULQJ WKH SUHVHQW VXLW  ,Q OLJKW RI RXU 3HWUXVN\WROG0F)DUODQGWKDWVKHZRXOGVSHDNWR*HURQLPR FRQFOXVLRQWKDW0F)DUODQGjVJULHYDQFHZDVWLPHO\LQLWLDWHG DERXWWKHPDWWHU:KHQ3HWUXVN\FRQIURQWHG*HURQLPRKH ZH QHHG QRW DGGUHVV KHU HTXLWDEOH HVWRSSHO DQG WROOLQJ GHQLHGWKDWKHKDGHLWKHUDWWHPSWHGWRNLVV0F)DUODQGRUWKDW DUJXPHQWV KH KDG VSUHDG UXPRUV DERXW KHU  +H DOVR DJUHHG ZLWK 3HWUXVN\WKDWVH[XDOKDUDVVPHQWLVDVHULRXVLVVXH3HWUXVN\ :H UHLWHUDWH WKDW LW LV HQWLUHO\ XQGHUVWDQGDEOH JLYHQ 3ODQW0DQDJHU5DQG\&DUWHUDQG.HQQHWK'XUGHQDQRWKHU 0F)DUODQGjVFRQFHVVLRQRQWKHLVVXHRIWLPHOLQHVVDQGWKH PDQDJHU HDFK WROG 0F)DUODQG WKDW WKH\ KDG VSRNHQ WR IDFWWKDWWKH6XSUHPH&RXUWjVGHFLVLRQLQ0RUJDQKDGQRW\HW *HURQLPRDERXWKLVEHKDYLRUDQGWKDWKHKDGDVVXUHGWKHP EHHQ LVVXHG ZK\ WKH GLVWULFW FRXUW IDLOHG WR GHWHUPLQH WKH WKDWKHZRXOGmWUHDWKHUSURIHVVLRQDOO\l OHJDOFRUUHFWQHVVRIKHUFRQFHVVLRQ%XWLWLVWKHWDVNRIWKH FRXUWWRDSSO\WKHODZDVLWLVQRWMXVWDVWKHSDUWLHVGHVFULEH 6RPHWLPHLQsXQHRI*HURQLPRDOOHJHGO\SHUPLWWHG LW7KHIDFWVDVVHWIRUWKLQWKHFRPSODLQWDQG0F)DUODQGjV D PDJD]LQH WR IDOO RQ 0F)DUODQGjV KDQG E\ IDLOLQJ WR WHOO DIILGDYLWDOORIZKLFKPXVWEHFRQVWUXHGLQKHUIDYRUZKHQ DQRWKHUHPSOR\HHWRVWRSmNH\LQJlRQDPDFKLQH0F)DUODQG HYDOXDWLQJ WKH 3RVWDO 6HUYLFHjV PRWLRQ IRU VXPPDU\ DOVR DOOHJHV WKDW WKURXJKRXW KHU HPSOR\PHQW *HURQLPR MXGJPHQW PDNH LW SODLQ WKDW VKH VDWLVILHG WKH GD\ UHIXVHGWRDOORZKHUWRZRUNGXULQJWKHOXQFKEUHDNDVRWKHU JULHYDQFHGHDGOLQHXQGHUKHUKRVWLOHZRUNHQYLURQPHQWFODLP FDVXDOHPSOR\HHVZHUHDOORZHGWRGRLQRUGHUWRHDUQH[WUD :HWKHUHIRUHFRQFOXGHWKDW0F)DUODQGjVODZVXLWVXUYLYHVWKLV SD\ SURFHGXUDO KXUGOH DOWKRXJK ZH H[SUHVV QR RSLQLRQ RQ WKH VXEVWDQWLYHPHULWVRIKHUFRPSODLQW 0RQLFD /HZLV D FRZRUNHU FRQIURQWHG 0F)DUODQG RQ sXQH   WHOOLQJ 0F)DUODQG WKDW VKH KDG KHDUG IURP *HURQLPR WKDW 0F)DUODQG KDG VSUHDG LQQXHQGRV UHJDUGLQJ /HZLVDQG(GGLH5REHUWDXQLRQUHSUHVHQWDWLYH0F)DUODQG WKHQ VSRNH D VHFRQG WLPH WR 3HWUXVN\ mEHFDXVH 5REHUW *HURQLPR ZDV FDXVLQJ PH SUREOHPV DJDLQl  3HWUXVN\  0F)DUODQGY863RVWDO6HUYLFH 1R 1R 0F)DUODQGY863RVWDO6HUYLFH 

UHVSRQGHGE\LQIRUPLQJ0F)DUODQGWKDW3HWUXVN\KDGKHDUG WKH 6XSUHPH &RXUW UHFRJQL]HG WKDW WKH mYHU\ QDWXUHl RI D IURP /HZLV WKDW 0F)DUODQG ZDV VSUHDGLQJ UXPRUV DERXW KRVWLOHZRUNHQYLURQPHQWmLQYROYHVUHSHDWHGFRQGXFWl1DWjO 3HWUXVN\ VOHHSLQJ ZLWK WZR PHQ DW WKH 3RVW 2IILFH 55 3DVVHQJHU &RUS Y 0RUJDQ  6&W   0F)DUODQGDWWULEXWHGDOORIWKHVHIDOVHUXPRUVWR*HURQLPR 7KHXQODZIXOHPSOR\PHQWSUDFWLFHLQDKRVWLOHZRUN HQYLURQPHQWmRFFXUVRYHUDVHULHVRIGD\VRUSHUKDSV\HDUV 7KHQH[WGD\RQsXQH0F)DUODQGFRQWDFWHGDQ DQGLQGLUHFWFRQWUDVWWR>FODLPVEDVHGXSRQ@GLVFUHWHDFWVD ((2&RXQVHORUDERXWKHUSUREOHPVZLWK*HURQLPR7KLVZDV VLQJOHDFWRIKDUDVVPHQWPD\QRWEHDFWLRQDEOHRQLWVRZQl QHDUO\  GD\V DIWHU *HURQLPR KDG WULHG WR NLVV KHU ,Gm*LYHQWKHUHIRUHWKDWWKHLQFLGHQWVFRPSULVLQJDKRVWLOH 0F)DUODQGFODLPVWKDWVKHZDVXQDZDUHWKDWVKHZDVUHTXLUHG ZRUN HQYLURQPHQW DUH SDUW RI RQH XQODZIXO HPSOR\PHQW WR FRQWDFW WKH ((2& ZLWKLQ  GD\V RI DQ DFW RI SUDFWLFHWKHHPSOR\HUPD\EHOLDEOHIRUDOODFWVWKDWDUHSDUW GLVFULPLQDWLRQ,QVXSSRUWRIKHUFODLPWKDWVKHZDVXQDZDUH RIWKLVVLQJOHFODLP,QRUGHUIRUWKHFKDUJHWREHWLPHO\WKH RIWKHWLPHOLPLWVKHVXEPLWWHGWKHDIILGDYLWRIsRKQ+DUYH\ HPSOR\HHQHHGRQO\ILOHDFKDUJHZLWKLQ>WKHDSSOLFDEOHWLPH DPDLQWHQDQFHGLUHFWRUDQGXQLRQVWHZDUGZKRFODLPHGWKDW SHULRG@ RI DQ\ DFW WKDW LV SDUW RI WKH KRVWLOH ZRUN mLQ  WKHUH ZHUH QR QRWLFHV RU LQIRUPDWLRQ SRVWHUV HQYLURQPHQWl  ,G DW   $ KRVWLOHZRUNHQYLURQPHQW µSRVWHGjWKDWLQIRUPHGµFDVXDOVjDERXW((2FRPSODLQWWLPH FODLP WKXV KDV DQ HIIHFW VLPLODU WR WKDW RI D FRQWLQXLQJ OLPLWUHTXLUHPHQWVl$OWKRXJKWKH3RVWDO6HUYLFHGLVSXWHVKHU YLRODWLRQ FRPSRVHG RI VXFFHVVLYH GLVFUHWH DFWV LQ WKDW WKH DOOHJHGODFNRIQRWLFHZHDUHREOLJDWHGWRFRQVWUXHDOOIDFWV H[LVWHQFHRIWKHKRVWLOHZRUNHQYLURQPHQWZLWKLQWKHGD\ DQGLQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\LQUHYLHZLQJ WLPH OLPLW FDXVHV WKH DFWLRQDEOH YLRODWLRQ WR HQFRPSDVV WKH JUDQW RI D PRWLRQ IRU VXPPDU\ MXGJPHQW  0DWVXVKLWD FRQGXFWWKDWRFFXUUHGRXWVLGHRIWKHOLPLW (OHF,QGXV&RY=HQLWK5DGLR&RUS86  0F)DUODQGjV((2&JULHYDQFHZDVWKHUHIRUHWLPHO\LQLWLDWHG LILWZDVEDVHGXSRQDKRVWLOHZRUNHQYLURQPHQWWKDWH[LVWHG 0F)DUODQGOHIWKHUSRVLWLRQDVDFDVXDOPDLOKDQGOHULQsXO\ OHVV WKDQ  GD\V EHIRUH sXQH    7KH KDUDVVLQJ RI7KH3RVWDO6HUYLFHDWWULEXWHVWKLVGHFLVLRQWRWKHIDFW FRQGXFWLQWKHSUHVHQWFDVHZDVDOOHJHGWRKDYHmVWDUWHGRQRU WKDWVKHKDGEHHQZDUQHGLQsXQHDQGsXO\WKDWKHUH[FHVVLYH DERXW0DUFKlZLWK*HURQLPRjVDWWHPSWHGNLVVDQG DEVHQWHHLVPPHDQWWKDWDQ\DGGLWLRQDODEVHQFHVZRXOGUHVXOW KLVFRPPHQWVDERXW0F)DUODQGjVOLSVDQGQHFN0F)DUODQG LQWKHORVVRIKHUMRE0F)DUODQGRQWKHRWKHUKDQGFODLPV SHUFHLYHGWKDW*HURQLPRWKHUHDIWHUWUHDWHGKHUGLIIHUHQWO\WKDQ WKDWVKHZDVFRQVWUXFWLYHO\GLVFKDUJHGGXHWRDKRVWLOHZRUN RWKHUFDVXDOHPSOR\HHVDQGWKDWWKLVWUHDWPHQWH[WHQGHGSDVW HQYLURQPHQWFUHDWHGE\*HURQLPRjVVH[XDOKDUDVVPHQW 0D\   ZKLFK ZDV  GD\V EHIRUH VKH LQLWLDWHG KHU ((2&JULHYDQFH7KHLQFLGHQWLQZKLFK*HURQLPRDOOHJHGO\ $IRUPDOFRPSODLQWZDVILOHGE\0F)DUODQGZLWKWKH((2& SHUPLWWHGWKHPDJD]LQHWRIDOORQ0F)DUODQGjVKDQGRFFXUUHG LQ$XJXVWRI%DVHGXSRQKHUFRPSODLQW WKH ((2& LQ sXQH RI   0F)DUODQGjV FRPSODLQW WKDW *HURQLPR EHJDQDQRIILFLDOLQYHVWLJDWLRQWZRPRQWKVODWHU:KHQWKH UHIXVHGKHUWKHRSWLRQRIZRUNLQJWKURXJKOXQFKFRQFHUQHG LQYHVWLJDWLRQ ZDV QRW FRPSOHWHG ZLWKLQ  GD\V RI LWV FRQGXFWWKDWWRRNSODFHWKURXJKRXWKHUWHQXUHDWWKH7ROHGR DFFHSWDQFH0F)DUODQGILOHGWKHSUHVHQWVXLWDOOHJLQJWKDWVKH 3RVW2IILFH$VODWHDVsXQH0F)DUODQGOHDUQHGWKDW KDGEHHQGLVFULPLQDWHGDJDLQVWRQWKHEDVLVRIVH[LQYLRODWLRQ *HURQLPRZDVVSHDNLQJRIKHULQDPDQQHUOLNHO\WRFDXVH RI 7LWOH 9,, RI WKH &LYLO 5LJKWV $FW RI   86& 0F)DUODQG WR ORVH HVWHHP LQ WKH H\HV RI KHU FRZRUNHUV †H7KH3RVWDO6HUYLFHPRYHGWRGLVPLVV0F)DUODQGjV /HZLVFRQIURQWHG0F)DUODQGVD\LQJWKDW*HURQLPRKDGWROG DFWLRQSXUVXDQWWR5XOHVE DQGE RIWKH)HGHUDO KHU WKDW 0F)DUODQG KDG VSUHDG LQQXHQGRV UHJDUGLQJ /HZLV 5XOHVRI&LYLO3URFHGXUH,WDUJXHGWKDWGLVPLVVDOZDVSURSHU DQG(GGLH5REHUWDXQLRQUHSUHVHQWDWLYH%DVHGXSRQWKLV  0F)DUODQGY863RVWDO6HUYLFH 1R 1R 0F)DUODQGY863RVWDO6HUYLFH 

RIDOHJDOVWDQGDUGWRWKHIDFWXDOILQGLQJVRIWKHWULDOMXGJHLQ EHFDXVH0F)DUODQGKDGIDLOHGWRFRQWDFWWKH((2&ZLWKLQ WKHEDQNUXSWF\FRXUWZHFRQFOXGHWKDWLWLVSUHVHQWHGZLWK GD\VRIWKHDOOHJHGDFWVRIGLVFULPLQDWLRQDVVKHZDVUHTXLUHG VXIILFLHQWFRPSOHWHQHVVDQGFODULW\IRUWKLVFRXUWWRUHVROYH WRGRLQRUGHUWRVXHWKHIHGHUDOJRYHUQPHQWSXUVXDQWWR7LWOH LWl7KLVLVMXVWVXFKDFDVH,QRUGHUWRGHWHUPLQHZKHWKHU 9,,&)5†D  0F)DUODQGjV JULHYDQFH ZDV WLPHO\ LQLWLDWHG ZH QHHG RQO\ DSSO\ D SULQFLSOH RI ODZ WR WKH IDFWV DV DOOHJHG LQ WKH ,QKHU0HPRUDQGXPLQ2SSRVLWLRQ0F)DUODQGFRQFHGHG FRPSODLQWDQG0F)DUODQGjVDIILGDYLW:HIXUWKHUQRWHWKDW WKDWKHU((2&JULHYDQFHKDGQRWEHHQWLPHO\LQLWLDWHG6KH RXUFRQVLGHUDWLRQRIWKLVLVVXHZLOOQRWXQIDLUO\SUHMXGLFHWKH DUJXHGKRZHYHUWKDWmHTXLW\PDQGDWHVWKDWWKLV&RXUWKHDU 3RVWDO 6HUYLFH ZKLFK KDV DUJXHG WKH VXEVWDQFH RI WKH KHUDFWLRQlDQGDVNHGmWKDWWKH&RXUWH[HUFLVHLWVGLVFUHWLRQ FRQWLQXLQJYLRODWLRQLVVXHERWKLQWKHGLVWULFWFRXUWDQGDJDLQ DQG ILQG WKDW SULQFLSOHV RI WROOLQJ ZDLYHU DQGRU HVWRSSHO RQDSSHDO DOORZWKHFDVHWREHKHDUGl7KHSDUWLHVVXEPLWWHGDIILGDYLWV WRVXSSRUWWKHLUDUJXPHQWVDVWRZDLYHUHVWRSSHODQGWROOLQJ 2XU GHFLVLRQ WR UHDFK WKH LVVXH RI WLPHOLQHVV GHVSLWH $V D UHVXOW WKH GLVWULFW FRXUW WUHDWHG WKH 3RVWDO 6HUYLFHjV 0F)DUODQGjVFRQFHVVLRQRQWKLVSRLQWLVEHLQJPDGHLQRUGHU PRWLRQ WR GLVPLVV DV D PRWLRQ IRU VXPPDU\ MXGJPHQW WRDYRLGmDSODLQPLVFDUULDJHRIMXVWLFHl)RVWHU)GDW SXUVXDQWWR5XOHRIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUH :HDUHQRWERXQGE\WKHIDLOXUHRIKHUWULDOFRXQVHOWR DSSO\ WKH ODZ  )XUWKHUPRUH WKLV LV QRW D FDVH ZKHUH 7KHGLVWULFWFRXUWLVVXHGD0HPRUDQGXPDQG2SLQLRQLQ 0F)DUODQGLVEDUUHGE\MXGLFLDOHVWRSSHOEHFDXVHWKHGLVWULFW 0DUFK RI  WKDW UHEXIIHG 0F)DUODQGjV HTXLWDEOH FRXUWGLGQRWDGRSWDUHSUHVHQWDWLRQPDGHE\KHUXQGHURDWK DUJXPHQWV DQG JUDQWHG VXPPDU\ MXGJPHQW WR WKH 3RVWDO 7HOHG\QH,QGXV,QFY1/5%)GWK&LU 6HUYLFH ZLWKRXW UHDFKLQJ WKH VXEVWDQWLYH PHULWV RI KHU KROGLQJWKDWWKHGRFWULQHRIMXGLFLDOHVWRSSHOEDUVD GLVFULPLQDWLRQFODLP2QDSSHDO0F)DUODQGFKDOOHQJHVWKH SDUW\IURPDVVHUWLQJDSRVLWLRQWKDWLVFRQWUDU\WRRQHWKDW GLVWULFWFRXUWjVFRQFOXVLRQVUHJDUGLQJHVWRSSHODQGHTXLWDEOH WKH SDUW\ KDV DVVHUWHG mXQGHU RDWK LQ D SULRU SURFHHGLQJl WROOLQJDQGFRQWHQGVIRUWKHILUVWWLPHWKDWKHU((2&FODLP ZKHUHWKHSULRUFRXUWDGRSWHGWKHFRQWUDU\SRVLWLRQmHLWKHU ZDVWLPHO\ILOHGEHFDXVHVKHZDVVXEMHFWHGWRmDFRQWLQXLQJ DV D SUHOLPLQDU\ PDWWHU RU DV SDUW RI D ILQDO YLRODWLRQl GLVSRVLWLRQl LQWHUQDOTXRWDWLRQPDUNVRPLWWHG ,,$1$/<6,6 & 0F)DUODQG WLPHO\ LQLWLDWHG KHU JULHYDQFH ZLWK WKH ((2& $ 7KHGD\WLPHOLPLW

:HPXVWFRQVWUXHDOORIWKHIDFWVDWWKHVXPPDU\MXGJPHQW ,Q SHUPLWWLQJ IHGHUDO HPSOR\HHV WR VXH XQGHU 7LWOH 9,, VWDJH RI WKH FDVH LQ 0F)DUODQGjV IDYRU 0DWVXVKLWD (OHF &RQJUHVVFRQGLWLRQHGWKHJRYHUQPHQWjVZDLYHURIVRYHUHLJQ ,QGXV&RY=HQLWK5DGLR&RUS86 LPPXQLW\ XSRQ D SODLQWLIIjV VDWLVIDFWLRQ RI mULJRURXV LQ GHFLGLQJ ZKHWKHU 0F)DUODQG FRPSOLHG ZLWK WKH GD\ DGPLQLVWUDWLYHH[KDXVWLRQUHTXLUHPHQWVDQGWLPHOLPLWDWLRQVl JULHYDQFHGHDGOLQHDVDSUHFRQGLWLRQWREULQJLQJVXLW6RHYHQ %URZQY*HQ6HUYV$GPLQ867KH WKRXJKWKHFRQFHSWRImDFRQWLQXLQJYLRODWLRQlGLGQRWHQWHU UHTXLUHPHQWDWLVVXHLQWKHSUHVHQWFDVHLVWKDWm>DQ@DJJULHYHG LQWR0F)DUODQGjVDUJXPHQWLQKHUGLVWULFWFRXUWILOLQJVVKH SHUVRQ PXVW LQLWLDWH FRQWDFW ZLWK D>Q@ >((2@ &RXQVHORU SOHGIURPWKHYHU\EHJLQQLQJWKDWWKH3RVWDO6HUYLFHjVDFWVRI ZLWKLQGD\VRIWKHPDWWHUDOOHJHGWREHGLVFULPLQDWRU\RU GLVFULPLQDWLRQKDGFUHDWHGDKRVWLOHZRUNHQYLURQPHQW,QDQ LQWKHFDVHRISHUVRQQHODFWLRQZLWKLQGD\VRIWKHHIIHFWLYH RSLQLRQILOHGDIWHUWKHGLVWULFWFRXUWGHFLGHGWKHSUHVHQWFDVH GDWHRIWKHDFWLRQl&)5†D %HFDXVH H[KDXVWLRQ UHTXLUHPHQWV SXUVXDQW WR 7LWOH 9,, DUH QRW  0F)DUODQGY863RVWDO6HUYLFH 1R 1R 0F)DUODQGY863RVWDO6HUYLFH 

MXULVGLFWLRQDO SUHUHTXLVLWHV WKH\ DUH VXEMHFW WR ZDLYHU RQJRLQJ FRQWLQXRXV VHULHV RI GLVFULPLQDWRU\ DFWV PD\ EH HVWRSSHODQGHTXLWDEOHWROOLQJ=LSHVY7UDQV:RUOG$LUOLQHV FKDOOHQJHGLIRQHRIWKRVHGLVFULPLQDWRU\DFWVRFFXUUHGZLWKLQ ,QF86 WKHOLPLWDWLRQVSHULRGl$OH[DQGHUY/DERUHUVj,QWjO8QLRQ )GWK&LU % 7KHQDWXUHRI0F)DUODQGjVFODLP ,QRUGHUWRUHDFKWKHLVVXHRIZKHWKHU0F)DUODQGjV((2& ,QKHU0HPRUDQGXPLQ2SSRVLWLRQWRWKH3RVWDO6HUYLFHjV JULHYDQFH ZDV WLPHO\ LQLWLDWHG ZH IDFH WKH TXHVWLRQ RI PRWLRQ WR GLVPLVV 0F)DUODQG FRQFHGHG WKDW KHU ((2& ZKHWKHU ZH VKRXOG GHYLDWH IURP RXU JHQHUDO UXOH DJDLQVW JULHYDQFHZDVQRWWLPHO\LQLWLDWHG FRQVLGHULQJQHZDUJXPHQWVRQDSSHDOm7KHPDWWHURIZKDW TXHVWLRQVPD\EHWDNHQXSDQGUHVROYHGIRUWKHILUVWWLPHRQ 'HVSLWHWKHIDFWWKDW3ODLQWLIIIDLOHGWRFRPSO\ZLWKD DSSHDOLVRQHOHIWSULPDULO\WRWKHGLVFUHWLRQRIWKHFRXUWVRI GD\ WLPH UHTXLUHPHQW IRU LQLWLDWLQJ ((2 FRXQVHOLQJ DSSHDOV WR EH H[HUFLVHG RQ WKH IDFWV RI LQGLYLGXDO FDVHVl HTXLWDEOH SULQFLSOHV RI WROOLQJ ZDLYHU DQG HVWRSSHO 6LQJOHWRQY:XOIIH867KLVFRXUWKDV PDQGDWH WKDW 3ODLQWLIIjV FODLPV VKRXOG VXUYLYH DQG KHOG WKDW LQ JHQHUDO m>L@VVXHV QRW SUHVHQWHG WR WKH GLVWULFW 3ODLQWLIIVKRXOGKDYHKHUGD\LQFRXUW FRXUWEXWUDLVHGIRUWKHILUVWWLPHRQDSSHDODUHQRWSURSHUO\ EHIRUHWKHFRXUWls&:\FNRII $VVRF,QFY6WDQGDUG *LYHQWKLVFRQFHVVLRQLWLVHQWLUHO\XQGHUVWDQGDEOHZK\WKH )LUH,QV&R)GWK&LU GLVWULFWFRXUWIDLOHGWRDGGUHVVZKHWKHU0F)DUODQGjVJULHYDQFH ZDV LQ IDFW LQLWLDWHG ZLWKLQ  GD\V RI WKH DOOHJHG 7KHUXOHVHUYHVDPRQJRWKHUWKLQJVWRSURPRWHMXGLFLDO GLVFULPLQDWLRQ  7KH FRXUW LQVWHDG IRFXVHG VROHO\ XSRQ HFRQRP\  ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUW FDUHIXOO\ 0F)DUODQGjV HTXLWDEOH DUJXPHQWV  ,Q OLJKW RI WKH IDFW WKDW FRQVLGHUHG HDFK RI 0F)DUODQGjV DUJXPHQWV LQ UHDFKLQJ LWV mERWK 0F)DUODQG DQG WKH 3RVWDO 6HUYLFH KDYH VHHQ ILW WR GHFLVLRQ7KHGLVWULFWFRXUWZRXOGSUHVXPDEO\KDYHDGGUHVVHG VXEPLWGRFXPHQWVDQGDIILGDYLWVLQVXSSRUWRIWKHLUSRVLWLRQV WKH WLPHOLQHVV LVVXH LI LW KDG EHHQ UDLVHG  %XW MXGLFLDO ZLWKUHVSHFWWR0F)DUODQGjVDELOLW\WREULQJKHUFDVHGHVSLWH HFRQRP\LVQRWQHFHVVDULO\WKHKLJKHVWYDOXHWRFRQVLGHULQ KDYLQJPLVVHGWKH((2ILOLQJGHDGOLQHlWKHGLVWULFWFRXUWDOVR GHWHUPLQLQJZKHWKHUWRKHDUDQHZDUJXPHQWRQDSSHDOm:H IRXQGLWDSSURSULDWHWRmFRQVLGHUWKHPRWLRQWRGLVPLVVDVLI KDYH RQ RFFDVLRQ GHYLDWHG IURP WKH JHQHUDO UXOH LQ LWZHUHDPRWLRQIRUVXPPDU\MXGJPHQWSXUVXDQWWR5XOH H[FHSWLRQDO FDVHV RU SDUWLFXODU FLUFXPVWDQFHV RU ZKHQ WKH RIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUHl UXOHZRXOGSURGXFHDSODLQPLVFDUULDJHRIMXVWLFHl)RVWHUY %DULORZ)GWK&LULQWHUQDOTXRWDWLRQ :LWK QHZ FRXQVHO RQ DSSHDO 0F)DUODQG QRZ DUJXHV PDUNVRPLWWHG)RUH[DPSOHLQ3LQQH\'RFNDQG7UDQVS FRQWUDU\WRKHUFRQFHVVLRQLQWKHGLVWULFWFRXUWWKDWKHU((2& &R Y 3HQQ &HQWUDO &RUS  )G   WK &LU JULHYDQFHZDVWLPHO\LQLWLDWHGEHFDXVHVKHVXIIHUHGIURPmD ZHVWDWHGWKDWLWPD\EHDSSURSULDWHWRFRQVLGHUDQHZ FRQWLQXLQJYLRODWLRQlWKDWZDVRQJRLQJOHVVWKDQGD\VSULRU LVVXHRQDSSHDOLILWLVmSUHVHQWHGZLWKVXIILFLHQWFODULW\DQG WRsXQHWKHGD\WKDW0F)DUODQGILUVWFRQWDFWHGDQ FRPSOHWHQHVVlIRUXVWRUHVROYHWKHLVVXH ((2 &RXQVHORU  $ FRQWLQXLQJ YLRODWLRQ H[LVWV ZKHUH WKH SODLQWLII VXIIHUV IURP HLWKHU  D VHULHV RI GLVFUHWH m7KH 3LQQH\ 'RFN H[FHSWLRQ LV PRVW FRPPRQO\ DSSOLHG GLVFULPLQDWRU\DFWVWKDWDUHDQFKRUHGE\DWOHDVWRQHVXFKDFW ZKHUHWKHLVVXHLVRQHRIODZDQGIXUWKHUGHYHORSPHQWRIWKH ZLWKLQWKHOLPLWDWLRQVSHULRGRUZKHUHWKHUHKDVRFFXUUHG UHFRUGLVXQQHFHVVDU\l)RVWHU)GDW6HHHJ,QUH DmORQJVWDQGLQJDQGGHPRQVWUDEOHRYHUDUFKLQJSROLF\RI $OOLHG 6XSHUPDUNHWV ,QF  )G   WK &LU GLVFULPLQDWLRQl'L[RQY$QGHUVRQ)G m%HFDXVHWKHLVVXHLQWKLVFDVHLQYROYHVWKHDSSOLFDWLRQ WK &LU   7KLV FRXUW KDV mORQJ UHFRJQL]HG WKDW DQ