Herrada v. Detroit ( 2001 )

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 (/(1$ +(55$'$ ; 3ODLQWLII$SSHOODQW    1R Y  !  &,7 W@KH DQVZHU WR WKH TXHVWLRQ RI ZKDW SURFHVV LV GXH 'HWURLW0LFKLJDQIRU$SSHOOHH GHSHQGV RQ DSSURSULDWH DFFRPPRGDWLRQ RI WKH FRPSHWLQJ LQWHUHVWV LQYROYHGl LQWHUQDO TXRWDWLRQ PDUNV DQG FLWDWLRQ BBBBBBBBBBBBBBBBB RPLWWHG  7KH UHTXLUHPHQWV RI SURFHGXUDO GXH SURFHVV DUH WKHUHIRUHFRQVLGHUDEO\JUHDWHULQWKHFRQWH[WRIJXLOW\SOHDV 23,1,21 WKDQWKH\DUHLQWKHSUHVHQWFLYLOSURFHHGLQJ)LQDOO\DVWKH BBBBBBBBBBBBBBBBB GLVWULFWFRXUWQRWHGDJXLOW\SOHDRFFXUVDIWHUDIRUPDOFKDUJH KDVEHHQLVVXHGZKHUHDVDFLWDWLRQLVRQO\WKHDOOHJDWLRQRID 521$/'/((*,/0$1&LUFXLWsXGJH(OHQD+HUUDGD FLYLO LQIUDFWLRQ  7KHVH GLIIHUHQFHV DUH VXIILFLHQW WR PDNH ILOHGWKLVVXLWRQEHKDOIRIKHUVHOIDQGRWKHUVLPLODUO\VLWXDWHG +HUUDGDjVUHOLDQFHRQFDVHVLQYROYLQJJXLOW\SOHDVXQDYDLOLQJ LQGLYLGXDOVDOOHJLQJDYLRODWLRQRI86&†E\WKH &LW\RI'HWURLW+HUUDGDFRQWHQGVWKDWWKH&LW\jVPHWKRGRI ,,,&21&/86,21 LVVXLQJ FLWDWLRQV IRU SDUNLQJ YLRODWLRQV GHSULYHV PRWRULVWV VXFK DV KHUVHOI RI SURFHGXUDO GXH SURFHVV E\ YLUWXH RI WKH )RU DOO WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH FLWDWLRQVFRQWDLQLQJDOOHJHGO\IDOVHVWDWHPHQWVWKDWH[DJJHUDWH MXGJPHQWRIWKHGLVWULFWFRXUW WKHSHQDOWLHVIRUUHIXVLQJWRSD\WKHILQHV$IWHUILQGLQJWKDW WKH&LW\jVSURFHGXUHVGLGQRWGHSULYHYHKLFOHRZQHUVRIWKHLU SURSHUW\ZLWKRXWGXHSURFHVVRIODZWKHGLVWULFWFRXUWJUDQWHG WKH&LW\jVPRWLRQWRGLVPLVVSXUVXDQWWR5XOHERIWKH )HGHUDO5XOHVRI&LYLO3URFHGXUH)RUWKHUHDVRQVVHWIRUWK EHORZZH$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW ,%$&.*5281' $ )DFWXDOEDFNJURXQG 7KH&LW\jVSROLFHRIILFHUVDUHDXWKRUL]HGWRSODFHDmSDUNLQJ YLRODWLRQ QRWLFH RU FLWDWLRQl FLWDWLRQ RQ DQ\ DXWRPRELOH IRXQG LQ D ORFDWLRQ WKDW YLRODWHV WKH &LW\jV SDUNLQJ ODZV 'HWURLW &LW\ &RGH †   $ FLWDWLRQ FRQVWLWXWHV mDQ DOOHJDWLRQ RI D FLYLO LQIUDFWLRQl UDWKHU WKDQ D FRQFOXVLYH ILQGLQJRIJXLOW,G$VVXFKWKHFLWDWLRQVPXVWVSHFLI\WKH GHDGOLQH IRU WKH DXWRPRELOHj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  ,Q DGGLWLRQ +HUUDGD KDV EHHQ DGGUHVVWRZKLFKSD\PHQWVVKRXOGEHPDLOHGDQGLQIRUPWKH XQDEOHWRFLWHDQGZHKDYHEHHQXQDEOHWRORFDWHDQ\FDVHV UHFLSLHQW WKDW KH RU VKH KDV  GD\V LQ ZKLFK WR  DGPLW ILQGLQJDGXHSURFHVVYLRODWLRQEDVHGVROHO\RQWKHSUHVHQFH UHVSRQVLELOLW\DQGSD\WKHILQHDGPLWUHVSRQVLELOLW\ZLWK RIIDOVHVWDWHPHQWVUHODWLQJWRWKHFRQVHTXHQFHVRIWDNLQJQR DQH[SODQDWLRQRIZK\KHRUVKHVKRXOGQRWEHREOLJDWHGWR DFWLRQ SD\WKHILQHRUGHQ\UHVSRQVLELOLW\DQGUHTXHVWDKHDULQJ )XUWKHUPRUHWKHFLWDWLRQVVWDWHWKDWm>I@DLOXUHWRUHVSRQGPD\ 7KHGLVWLQFWLRQ EHWZHHQIDOVHDQGPLVOHDGLQJVWDWHPHQWV FDXVHDSHQDOW\WREHDGGHGFRXUWDFWLRQWDNHQRU\RXUYHKLFOH SHUWDLQLQJ WR WKH ULJKW WR UHTXHVW D KHDULQJ RU WR DSSHDO DQ ERRWHGDQGLPSRXQGHGlDQGWKDWm>O@DWHSD\PHQWZLOOFDXVH DGYHUVHGHFLVLRQDVRSSRVHGWRWKRVHUHODWLQJWRSHQDOWLHVIRU SHQDOWLHV WR EH DGGHG WR WKH RULJLQDO ILQHl  7KH ILQDO UHIXVLQJWRDFWDOVRKLJKOLJKWVWKHSUREOHPZLWK+HUUDGDjV SDUDJUDSKRIWKHFLWDWLRQVSURYLGHVWKHDGGUHVVDQGWHOHSKRQH FRQWHQWLRQ WKDW mDQ RSSRUWXQLW\ IRU D KHDULQJ LV QRW QXPEHU RI WKH &LW\jV SDUNLQJ YLRODWLRQV EXUHDX WR ZKLFK µPHDQLQJIXOjLIWKHJRYHUQPHQWjVQRWLFHPLVOHDGVFLWL]HQVLQWR UHTXHVWVIRUDGGLWLRQDOLQIRUPDWLRQPD\EHGLUHFWHG IRUHJRLQJVXFKDKHDULQJE\IDOVHO\LQGXFLQJWKHPWRSD\WKH VWDWHGILQHVl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D QRWLFH LQFOXGH WHOHSKRQH QXPEHUV WR FDOO IRU PRUH FLWDWLRQ mZLOO EH ILOHG LQ FRXUWl  WKH RZQHUjV GULYHUjV LQIRUPDWLRQWKHSRWHQWLDOSHQDOWLHVHYHQLIPLVOHDGLQJGRQRW OLFHQVHmPD\EHZLWKKHOGlDQGWKHRZQHUjVDXWRPRELOH YLRODWHSURFHGXUDOGXHSURFHVV mPD\EHERRWHGDQGWRZHGl +HUUDGDj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mLQWHOOLJHQWO\DQGYROXQWDULO\lEHFDXVH FRQWUDVWWRWKHQRWLFHVjUHSUHVHQWDWLRQVYHKLFOHVFDQEHERRWHG D SOHD mDPRXQWV WR WKH ZDLYHU RI WKH FRQVWLWXWLRQDO ULJKWV DQGWRZHGRQO\LIWKH\KDYHVL[RUPRUHXQDQVZHUHGSDUNLQJ DJDLQVW VHOILQFULPLQDWLRQ WR WULDO E\ MXU\ DQG WR FRQIURQW YLRODWLRQVDQGWKDWWKH&LW\KDVQRDXWKRULW\WRZLWKKROGD RQHjVDFFXVHUVl8QLWHG6WDWHVY/D\QH)G GULYHUjV OLFHQVH  $FFRUGLQJ WR +HUUDGD WKLV HUURQHRXV WK&LUFLWLQJ%R\NLQY$ODEDPD86 LQIRUPDWLRQ OHDGV SHUVRQV OLNH KHUVHOI WR SD\ SDUNLQJ ILQHV 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  ,Q WKH SUHVHQW FDVH DQ\ +HUUDGDEURXJKWWKLVFODVVDFWLRQODZVXLWLQ0LFKLJDQVWDWH FRQIXVLRQ RU PLVXQGHUVWDQGLQJ FUHDWHG E\ WKH WKUHDWHQHG FRXUWVHHNLQJUHOLHIXQGHU86&†$IWHUUHPRYLQJ FRQVHTXHQFHV RI IDLOLQJ WR UHVSRQG UHODWHV VROHO\ WR WKH WKHDFWLRQWRIHGHUDOFRXUWWKH&LW\ILOHGDPRWLRQWRGLVPLVV SHQDOWLHVIRUWDNLQJQRDFWLRQ IRUIDLOXUHWRVWDWHDFODLPSXUVXDQWWR5XOHERIWKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH  7KH GLVWULFW FRXUW 7KLV GLVWLQFWLRQ UHEXWV +HUUDGDjV HIIRUW WR GUDZ VXSSRUW FRQFOXGHG WKDW +HUUDGDjV FRPSODLQW SURSHUO\ DOOHJHG WKH IURP 6RFLDO 6HFXULW\ $FW FDVHV ZKHUH VWDWHPHQWV LQ WKH GHSULYDWLRQ RI D SURSHUW\ LQWHUHVW ZKLFK LW GHILQHG DV mWKH DJHQF\jVGHQLDOQRWLFHVUDLVHGXQFHUWDLQW\DERXWWKHHIIHFWRI ULJKWWRNHHSPRQLHVVXEMHFWRQO\WRULJKWIXODFWLRQVE\WKH IDLOLQJWRUHTXHVWDKHDULQJWRFKDOOHQJHWKHGHWHUPLQDWLRQ JRYHUQPHQWWKDWFRPSRUWZLWKGXHSURFHVVl,QDGGUHVVLQJ 6HH'D\Y6KDODOD)GWK&LU ZKHWKHUWKLVGHSULYDWLRQYLRODWHGWKH'XH3URFHVV&ODXVHRI KROGLQJWKDWDQRWLFHWKDWPLVOHGFODLPDQWVE\HTXDWLQJDQHZ WKH)RXUWHHQWK$PHQGPHQWWKHGLVWULFWFRXUWDOVRDVVXPHG DSSOLFDWLRQZLWKDQDSSHDORIWKHLQLWLDOGHWHUPLQDWLRQYLRODWHG IRUWKHSXUSRVHVRILWVDQDO\VLVWKDWWKHFLWDWLRQVDQGRYHUGXH GXHSURFHVV*RQ]DOH]Y6XOOLYDQ)GWK QRWLFHVFRQWDLQHGIDOVHLQIRUPDWLRQ,WQRQHWKHOHVVFRQFOXGHG &LU  FRQFOXGLQJ WKDW D QRWLFH RI GHQLDO RI GLVDELOLW\ WKDWWKHQRWLFHVGLGQRWYLRODWHGXHSURFHVVEHFDXVH+HUUDGD EHQHILWVIDLOHGWRSURYLGHDGHTXDWHQRWLFHEHFDXVHLWGLGQRW ZDV IXOO\ LQIRUPHG RI KHU ULJKW WR D KHDULQJ DQG VKH FOHDUO\ LQGLFDWH WKDW D GHWHUPLQDWLRQ EHFRPHV ILQDO LI QR YROXQWDULO\SDLGKHUILQHZLWKRXWDKHDULQJ$VDUHVXOWWKH UHTXHVWIRUUHFRQVLGHUDWLRQLVPDGH GLVWULFW FRXUW JUDQWHG WKH &LW\jV PRWLRQ WR GLVPLVV  7KLV GLVSRVLWLRQHOLPLQDWHGWKHQHHGIRUWKHGLVWULFWFRXUWWRGHFLGH +HUUDGDjVUHOLDQFHRQ&RYLQJWRQY'HSDUWPHQWRI+HDOWK ZKHWKHU +HUUDGDjV ODZVXLW VDWLVILHG WKH UHTXLUHPHQWV IRU D DQG +XPDQ 6HUYLFHV  )G  )HG &LU  LV FODVVDFWLRQ VLPLODUO\PLVSODFHG$OWKRXJKWKH&RXUWRI$SSHDOVIRUWKH )HGHUDO&LUFXLWVWDWHGWKDWm>D@GHFLVLRQPDGHZLWKEOLQGHUV ,,$1$/ W@KH 7KHPLVOHDGLQJQRWLFHWKHUHIRUHDIIHFWHGWKHSODLQWLIIjVULJKW FRXUWPXVWFRQVWUXHWKHFRPSODLQWLQDOLJKWPRVWIDYRUDEOHWR WR DSSHDO DQ DGYHUVH GHFLVLRQ ZKLFK LV HQWLWOHG WR PRUH WKHSODLQWLIIDQGDFFHSWDOORIWKHIDFWXDODOOHJDWLRQVDVWUXHl SURWHFWLRQWKDQWKHULJKWWREHLQIRUPHGRISRVVLEOHSHQDOWLHV ,G  FLWDWLRQ RPLWWHG   m$ PRWLRQ WR GLVPLVV XQGHU 5XOH &I%HWWVY%GRI(GXF)GWK&LU E VKRXOG QRW EH JUDQWHG µXQOHVV LW DSSHDUV EH\RQG KROGLQJWKDWZKHUHDKLJKVFKRROVWXGHQWDQGWKHVWXGHQWjV GRXEWWKDWWKHSODLQWLIIFDQSURYHQRVHWRIIDFWVLQVXSSRUWRI PRWKHU mUHFHLYHG DGHTXDWH QRWLFH RI WKH FKDUJHV KDG KLVFODLPZKLFKZRXOGHQWLWOHKLPWRUHOLHIjl%XFKDQDQY VXIILFLHQWRSSRUWXQLW\WRSUHSDUHIRUWKHPHHWLQJ>ZLWKVFKRRO $SIHO)GWK&LUTXRWLQJ&RQOH\Y SHUVRQQHO@ZHUHDFFRUGHGDQRUGHUO\KHDULQJDQGZHUHJLYHQ *LEVRQ86VHHDOVRsDFNVRQ D IDLU DQG LPSDUWLDO GHFLVLRQl QR GXH SURFHVV YLRODWLRQ )GDWQRWLQJWKDWGLVPLVVDOLVSURSHURQO\mLILWLVFOHDU RFFXUUHGHYHQWKRXJKWKHVFKRROIDLOHGWRSURYLGHDGYDQFH WKDW QR UHOLHI FRXOG EH JUDQWHG XQGHU DQ\ VHW RI IDFWV WKDW  +HUUDGDY&LW\RI'HWURLW 1R 1R +HUUDGDY&LW\RI'HWURLW  †ESURYLGLQJWKDWORFDODXWKRULWLHVFDQLPSRXQGRU FRXOGEHSURYHGFRQVLVWHQWZLWKWKHDOOHJDWLRQVlFLWDWLRQ LPPRELOL]HYHKLFOHVmZKRVHRZQHUKDVIDLOHGWRDQVZHURU RPLWWHG PRUHSDUNLQJYLRODWLRQQRWLFHVRUFLWDWLRQVUHJDUGLQJLOOHJDO SDUNLQJl  7KLV OHDYHV RQO\ WKH VWDWHPHQW LQ WKH RYHUGXH % 3URFHGXUDOGXHSURFHVVFODLP QRWLFHWKDWWKHFLWDWLRQmZLOOEHILOHGLQFRXUWl +HUUDGD FODLPV WKDW WKH &LW\j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mOLIH OLEHUW\ RU DXWKRULW\ WR ILOH WKH FLWDWLRQV  0LFK &RPS /DZV SURSHUW\lZLWKRXWmGXHSURFHVVRIODZl86&RQVWDPHQG † SURYLGLQJWKDWDFLWDWLRQPD\EHILOHGLQWKH ;,9$WZRVWHSDQDO\VLVJXLGHVRXUHYDOXDWLRQRISURFHGXUDO FRXUWZLWKMXULVGLFWLRQRYHUWKHORFDWLRQZKHUHWKHLQIUDFWLRQ GXHSURFHVVFODLPV:HPXVWILUVWGHWHUPLQHmZKHWKHUWKHUH RFFXUUHGLIDSDUNLQJYLRODWLRQQRWLFHLVLVVXHGDQGWKHYHKLFOH H[LVWVDOLEHUW\LQWHUHVWRUSURSHUW\LQWHUHVWZKLFKKDVEHHQ RZQHUGRHVQRWDGPLWUHVSRQVLELOLW\RUSD\WKHILQH(TXDOO\ LQWHUIHUHGZLWKE\WKHGHIHQGDQWVlsDFNVRQ)GDW LPSRUWDQWDVL[\HDUVWDWXWHRIOLPLWDWLRQVJRYHUQVWKHILOLQJ LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG6HFRQGLI RIFLWDWLRQVIRUFLYLOLQIUDFWLRQVVXFKDVSDUNLQJYLRODWLRQV VXFK D GHSULYDWLRQ RFFXUUHG ZH PXVW GHFLGH ZKHWKHU WKH 0LFK &RPS /DZV †  SURYLGLQJ WKDW D mFLYLO SURFHGXUHV WKDW DFFRPSDQLHG WKH LQWHUIHUHQFH ZHUH LQIUDFWLRQ DFWLRQl LV D mFLYLO DFWLRQl LG †  FRQVWLWXWLRQDOO\VXIILFLHQW%XFKDQDQ)GDW HVWDEOLVKLQJ D VL[\HDU VWDWXWH RI OLPLWDWLRQV IRU SHUVRQDO DFWLRQVQRWJRYHUQHGE\DQ\RWKHUSHULRGLG†  :KHWKHU WKH &LW\jV DFWLRQV GHSULYHG +HUUDGDRID SURYLGLQJ WKDW WKH DSSOLFDEOH VWDWXWHV RI OLPLWDWLRQ IRU SURSHUW\LQWHUHVW SHUVRQDODFWLRQVDSSO\WRSHUVRQDODFWLRQVEURXJKWE\RURQ EHKDOIRIWKHVWDWH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 7KHDOOHJHGO\IDOVHDQGPLVOHDGLQJVWDWHPHQWVPRUHRYHU GRQRW UDLVHGRXEWVDERXWDQRZQHUjVDELOLW\WRFRQWHVWWKH 'HWHUPLQLQJZKHWKHUWKH&LW\LPSURSHUO\LQWHUIHUHGZLWKRU DOOHJDWLRQVLQDKHDULQJRUDERXWWKHUHVXOWRISD\LQJWKHILQH GHSULYHG KHU RI WKLV LQWHUHVW KRZHYHU SUHVHQWV D PRUH DQGWKHUHE\ZDLYLQJDKHDULQJ&I:DOWHUVY5HQR)G GLIILFXOW TXHVWLRQ  7KH &LW\ DUJXHV WKDW EHFDXVH +HUUDGD WK&LUKROGLQJWKDW,PPLJUDWLRQDQG YROXQWDULO\ SDLG KHU SDUNLQJ WLFNHW QR JRYHUQPHQW DFWLRQ 1DWXUDOL]DWLRQ 6HUYLFH IRUPV SURYLGHG WR DOLHQV IDLOHG WR LQWHUIHUHG ZLWK KHU SURSHUW\ LQWHUHVW  7KLV SRVLWLRQ ILQGV VDWLVI\ GXH SURFHVV QRWLFH UHTXLUHPHQWV EHFDXVH WKH\ VXSSRUWDWOHDVWE\ZD\RIDQDORJ\LQWZRGHFLVLRQVIURPWKH FRQWDLQHGFRQIXVLQJDQGPLVOHDGLQJLQIRUPDWLRQUHJDUGLQJWKH 7HQWK&LUFXLW6HH*DUFLDY&LW\RI$OEXTXHUTXH)G QHHGWRUHTXHVWDVHSDUDWHKHDULQJDQGIDLOHGWRLQIRUPDOLHQV WK&LUKROGLQJWKDWWKHGHIHQGDQWGLGQRW GHSULYH WKHSODLQWLIIRIDSURSHUW\LQWHUHVWLQKLVFRQWLQXHG  +HUUDGDY&LW\RI'HWURLW 1R 1R +HUUDGDY&LW\RI'HWURLW  HPSOR\PHQWEHFDXVHWKHSODLQWLIIYROXQWDULO\UHVLJQHGZKHQ DQ\OLEHUW\LQWHUHVW%RWKWKHFLWDWLRQDQGWKHRYHUGXHQRWLFH KHUHIXVHGWRUHSRUWWRZRUNDIWHUEHLQJWUDQVIHUUHGWRDQHZ DOVRSURYLGHWHOHSKRQHQXPEHUVWRFDOOIRUPRUHLQIRUPDWLRQ SRVLWLRQ FXVWRPHUV@RI GHWHUPLQH ZKHWKHU WKH QRWLFHV WKDW VKH UHFHLYHG ZHUH WKHWKUHDWRIWHUPLQDWLRQRIVHUYLFH>LW@ZDVQRWUHDVRQDEO\ FRQVWLWXWLRQDOO\VXIILFLHQW FDOFXODWHGWRLQIRUPWKHPRIWKHDYDLODELOLW\RIDQRSSRUWXQLW\ WRSUHVHQWWKHLUREMHFWLRQVWRWKHLUELOOVlLQWHUQDOTXRWDWLRQ  :KHWKHUWKH&LW\jVDFWLRQVIDLOHGWRFRPSRUWZLWKWKH PDUNVDQGFLWDWLRQRPLWWHG UHTXLUHPHQWVRISURFHGXUDOGXHSURFHVV )XUWKHUPRUH ZH IDLO WR VHH ZKHUH WKH VWDWHPHQWV LQ WKH m$Q HOHPHQWDU\ DQG IXQGDPHQWDO UHTXLUHPHQW RI GXH FLWDWLRQDUHHLWKHUIDOVHRUPLVOHDGLQJ7KHFLWDWLRQSURYLGHV SURFHVVLQDQ\SURFHHGLQJZKLFKLVWREHDFFRUGHGILQDOLW\LV WKDWIDLOLQJWRUHVSRQGmPD\FDXVHDSHQDOW\WREHDGGHGFRXUW QRWLFHUHDVRQDEO\FDOFXODWHGXQGHUDOOWKHFLUFXPVWDQFHVWR DFWLRQ WDNHQ RU \RXU YHKLFOH ERRWHG DQG LPSRXQGHGl DSSULVHLQWHUHVWHGSDUWLHVRIWKHSHQGHQF\RIWKHDFWLRQDQG (PSKDVLV DGGHG  1RWKLQJ LQ WKLV ODQJXDJH VXJJHVWV WKDW DIIRUG WKHP DQ RSSRUWXQLW\ WR SUHVHQW WKHLU REMHFWLRQVl WKHVHSHQDOWLHVZLOOEHLPSRVHGLQHYHU\LQVWDQFH,QVWHDGWKH 0HPSKLV/LJKW*DV :DWHU'LYY&UDIW86 SRVVLELOLW\ RI WKHVH FRQVHTXHQFHV LQGLFDWHV WKH PD[LPXP FLWDWLRQRPLWWHG$OWKRXJKWKHFLWDWLRQDQGRYHUGXH SHQDOW\QRWWKHPLQLPXP QRWLFHPLJKWKDYHFRQWDLQHGIDOVHDQGPLVOHDGLQJLQIRUPDWLRQ UHJDUGLQJ WKH SHQDOWLHV IRU IDLOXUH WR UHVSRQG WKH FLWDWLRQ 7KH RYHUGXH QRWLFH VLPLODUO\ VWDWHV WKDW KDYLQJ RQHjV FOHDUO\VWDWHVWKDWDKHDULQJLVDYDLODEOHWRFRQWHVWWKH&LW\jV GULYLQJOLFHQVHZLWKKHOGRUWKHRIIHQGLQJYHKLFOHERRWHGDUH DOOHJDWLRQ WKDW WKH YHKLFOH RZQHU FRPPLWWHG D SDUNLQJ SRWHQWLDO QRW PDQGDWRU\ SHQDOWLHV IRU IDLOLQJ WR UHVSRQG YLRODWLRQ6HH'H3LHURY&LW\RI0DFHGRQLD)G 'HVSLWH+HUUDGDjVDUJXPHQWWRWKHFRQWUDU\WKH&LW\KDVWKH  WK &LU  KROGLQJ WKDW DOWKRXJK WKH SDUNLQJ DXWKRULW\WRLPSRVHERWKRIWKHVHSHQDOWLHVXQGHUDSSURSULDWH FLWDWLRQWKDWWKHSODLQWLIIUHFHLYHGGLGQRWLQGLFDWHZKHUHDQG FLUFXPVWDQFHV6HH0LFK&RPS/DZV†SURYLGLQJ KRZWRFRQWHVWWKHDOOHJDWLRQWKHSODLQWLIIZDVQRWGHSULYHGRI WKDWm>L@IWKHSHUVRQWRZKRPDFLWDWLRQLVLVVXHGIRUDFLYLO SURFHGXUDOGXHSURFHVVEHFDXVHKHUHFHLYHGDVXPPRQVWR LQIUDFWLRQIDLOVWRDSSHDUDVGLUHFWHGE\WKHFLWDWLRQRURWKHU DSSHDULQFRXUWYLDILUVWFODVVPDLOEHIRUHKHZDVGHSULYHGRI QRWLFHWKHFRXUWVKDOOHQWHUDGHIDXOWMXGJPHQWDJDLQVWWKDW SHUVRQDQGWKHSHUVRQjVOLFHQVHVKDOOEHVXVSHQGHGlLG