- 5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 8QLWHG6WDWHVY3HQQLQJWRQ 1R (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH DS 21%5,()*UHJRU\&.URJsU0HPSKLV7HQQHVVHHIRU $SSHOODQW 7KRPDV $ &ROWKXUVW $66,67$17 81,7(' 67$7(6$77251(<0HPSKLV7HQQHVVHHIRU$SSHOOHH 81,7('67$7(6&28572)$33($/6 BBBBBBBBBBBBBBBBB )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB 81,7(' 67$7(6 2) $0(5,&$ ; 6$5*86'LVWULFWsXGJH'HIHQGDQW$SSHOODQW&ODUHQFH 3ODLQWLII$SSHOOHH 3HQQLQJWRQm3HQQLQJWRQlSOHDGHGJXLOW\WRSRVVHVVLRQZLWK LQWHQWWRGLVWULEXWHJUDPVRIFUDFNFRFDLQHLQYLRODWLRQ 1R RI86&3HQQLQJWRQUHVHUYHGKLVULJKWWRDSSHDO Y WKHRUGHURIWKHGLVWULFWFRXUWGHQ\LQJKLVPRWLRQWRVXSSUHVV ! WKHHYLGHQFHREWDLQHGIROORZLQJWKHLVVXDQFHDQGH[HFXWLRQ RI D VWDWH VHDUFK ZDUUDQW $IWHU D KHDULQJ WKH 0DJLVWUDWH &/$5(1&( 3(11,1*721 'HIHQGDQW$SSHOODQW sXGJHLVVXHGD5HSRUWDQG5HFRPPHQGDWLRQSURSRVLQJWKDW WKHPRWLRQEHGHQLHG6XEVHTXHQWO\WKHGLVWULFWFRXUWGHQLHG 1 WKHPRWLRQWRVXSSUHVV $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV 3HQQLQJWRQUDLVHVWKUHHLVVXHVRQDSSHDO)LUVWKHFRQWHQGV 1Rn%HUQLFH%'RQDOG'LVWULFWsXGJH WKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJWKDWWKHVHDUFKZDUUDQW ZDVLVVXHGE\DQHXWUDODQGGHWDFKHGPDJLVWUDWH6HFRQGKH $UJXHG'HFHPEHU DVVHUWVWKDWWKHJRRGIDLWKH[FHSWLRQLQ8QLWHG6WDWHVY/HRQ 86 GRHV QRW DSSO\ LQ WKH FRQWH[W RI WKH 'HFLGHGDQG)LOHG0DUFK VHDUFKZDUUDQWLVVXHGLQWKLVFDVH)LQDOO\3HQQLQJWRQFODLPV WKDWWKHH[HFXWLQJRIILFHUVYLRODWHGKLV)RXUWK$PHQGPHQW %HIRUH.(11('<DQG*,/0$1&LUFXLWsXGJHV ULJKWVE\IRUFLQJHQWU\LQWRKLVKRPHDIWHUNQRFNLQJZLWKRXW 6$5*86'LVWULFWsXGJH ZDLWLQJDUHDVRQDEOHSHULRGIRUKLPWRUHVSRQG BBBBBBBBBBBBBBBBB , &2816(/ ,W LV ZHOO HVWDEOLVKHG WKDW WKLV &RXUW UHYLHZV WKH GLVWULFW FRXUWjV ILQGLQJV RI IDFW LQ D VXSSUHVVLRQ KHDULQJ XQGHU WKH $5*8('*UHJRU\&.URJsU0HPSKLV7HQQHVVHHIRU FOHDUO\ HUURQHRXV VWDQGDUG ZKLOH WKH GLVWULFW FRXUWjV $SSHOODQW 7KRPDV $ &ROWKXUVW $66,67$17 81,7(' FRQFOXVLRQVRIODZDUHUHYLHZHGGHQRYR8QLWHG6WDWHVY 67$7(6$77251(<0HPSKLV7HQQHVVHHIRU$SSHOOHH $YHU\)GWK&LU 7KH +RQRUDEOH (GPXQG $ 6DUJXV sU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ 1R 8QLWHG6WDWHVY3HQQLQJWRQ 8QLWHG6WDWHVY3HQQLQJWRQ 1R $ 7KH,VVXHURIWKH6HDUFK:DUUDQW HQIRUFHPHQWRIILFHUVFRXOGQRWUHO\XSRQWKH/HRQH[FHSWLRQ ,G 7KHZDUUDQWDWLVVXHLQWKLVFDVHZDVLVVXHGXQGHUVWDWHODZ E\ D 6KHOE\ &RXQW\ sXGLFLDO &RPPLVVLRQHU (VVHQWLDOO\ 3HQQLQJWRQ HVVHQWLDOO\ FRQWHQGV WKDW D MXGLFLDO 3HQQLQJWRQ FRQWHQGV WKDW 6KHOE\ &RXQW\ s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jVZDUUDQWUHTXLUHPHQWV YLRODWHV$UW,,6HFRIWKH&RQVWLWXWLRQRI7HQQHVVHHZKLFK GRHVQRWWXUQRQWKHODEHOLQJRIWKHLVVXLQJSDUW\7KH VHSDUDWHV JRYHUQPHQWDO SRZHUV LQWR WKH IDPLOLDU WKUHHSDUW ZDUUDQW WUDGLWLRQDOO\ KDV UHSUHVHQWHG DQ LQGHSHQGHQW DOLJQPHQWRIH[HFXWLYHOHJLVODWLYHDQGMXGLFLDODXWKRULW\ DVVXUDQFH WKDW D VHDUFK DQG DUUHVW ZLOO QRW SURFHHG ZLWKRXWSUREDEOHFDXVHWREHOLHYHWKDWDFULPHKDVEHHQ 7KH0DJLVWUDWHsXGJHDVZHOODVWKH'LVWULFWsXGJHUHOLHG FRPPLWWHG DQG WKDW WKH SHUVRQ RU SODFH QDPHG LQ WKH XSRQ8QLWHG6WDWHVY/HRQVXSUDWRKROGWKDWWKHRIILFHUV ZDUUDQW LV LQYROYHG LQ WKH FULPH 7KXV DQ LVVXLQJ UHOLHG LQ JRRG IDLWK RQ WKH ZDUUDQW LVVXHG E\ WKH MXGLFLDO PDJLVWUDWHPXVWPHHWWZRWHVWV+HPXVWEHQHXWUDODQG FRPPLVVLRQHU7KH5HSRUWDQG5HFRPPHQGDWLRQZDVLVVXHG GHWDFKHGDQGKHPXVWEHFDSDEOHRIGHWHUPLQLQJZKHWKHU E\ WKH 0DJLVWUDWH sXGJH RQ $XJXVW SULRU WR WKLV SUREDEOHFDXVHH[LVWVIRUWKHUHTXHVWHGDUUHVWRUVHDUFK &RXUWjVGHFLVLRQLQ8QLWHG6WDWHVY6FRWW)GWK 7KLV&RXUWORQJKDVLQVLVWHGWKDWLQIHUHQFHVRISUREDEOH &LU FDXVH EH GUDZQ E\ mD QHXWUDO DQG GHWDFKHG PDJLVWUDWH LQVWHDG RI EHLQJ MXGJHG E\ WKH RIILFHU HQJDJHG LQ WKH ,Q8QLWHG6WDWHVY6FRWWWKLV&RXUWGHFLGHGWKDWWKH/HRQ RIWHQFRPSHWLWLYHHQWHUSULVHRIIHUUHWLQJRXWFULPHl H[FHSWLRQ WR WKH H[FOXVLRQDU\ UXOH LV QRW DSSOLFDEOH LI WKH MXGLFLDO RIILFHU LVVXLQJ D VHDUFK ZDUUDQW LV ZKROO\ ZLWKRXW 7KHUHTXLVLWHGHWDFKPHQWLVSUHVHQWLQWKHFDVHDWKDQG OHJDODXWKRULW\,GDW,Q6FRWWWKHMXGJHZKRLVVXHGWKH :KDWHYHUHOVHQHXWUDOLW\DQGGHWDFKPHQWPLJKWHQWDLOLW VHDUFKZDUUDQWKDGUHWLUHGDQGKDGQRVWDWHODZDXWKRULW\WR LVFOHDUWKDWWKH\UHTXLUHVHYHUDQFHDQGGLVHQJDJHPHQW LVVXH D VHDUFK ZDUUDQW 8QGHU WKHVH FLUFXPVWDQFHV ODZ IURPDFWLYLWLHVRIODZHQIRUFHPHQW7KHUHKDVEHHQQR 1R 8QLWHG6WDWHVY3HQQLQJWRQ 8QLWHG6WDWHVY3HQQLQJWRQ 1R VKRZLQJZKDWHYHUKHUHRISDUWLDOLW\RUDIILOLDWLRQRIWKHVH LVVXDQFHRIVXFKUHTXHVWHGSURFHVV7KHUHFRUGLVLQVXIILFLHQW FOHUNVZLWKSURVHFXWRUVRUSROLFH7KHUHFRUGVKRZVQR WR GUDZ DQ\ FRQFOXVLRQV DV WR WKH ODFN RI QHXWUDOLW\ RI WKH FRQQHFWLRQ ZLWK DQ\ ODZ HQIRUFHPHQW DFWLYLW\ RU MXGLFLDOFRPPLVVLRQHUZKRLVVXHGWKHVHDUFKZDUUDQWLQWKLV DXWKRULW\ZKLFKZRXOGGLVWRUWWKHLQGHSHQGHQWMXGJPHQW FDVH WKH)RXUWK$PHQGPHQWUHTXLUHV:KLOHDVWDWXWRULO\ VSHFLILHG WHUP RI RIILFH DQG DSSRLQWPHQW E\ VRPHRQH )LQDOO\ D QXPEHU RI RWKHU FRXUWV KDYH IRXQG WKDW QR RWKHUWKDQmDQH[HFXWLYHDXWKRULW\lPLJKWEHGHVLUDEOH FRQVWLWXWLRQDO YLRODWLRQ RFFXUV ZKHQ D VHDUFK ZDUUDQW LV WKH DEVHQFH RI VXFK IHDWXUHV LV KDUGO\ GLVTXDOLI\LQJ LVVXHG E\ D QRQODZ\HU 8QLWHG 6WDWHV Y 0LWUR )G sXGJHV WKHPVHOYHV WDNH RIILFH XQGHU GLIIHULQJ VW&LU8QLWHG 6WDWHVY&RPVWRFN FLUFXPVWDQFHV 6RPH DUH DSSRLQWHG EXW PDQ\ DUH )GWK&LUFHUWGHQLHG86 HOHFWHG E\ OHJLVODWLYH ERGLHV RU E\ WKH SHRSOH 0DQ\ HQMR\EXWOLPLWHGWHUPVDQGDUHVXEMHFWWRUHDSSRLQWPHQW RUUHHOHFWLRQ0RVWGHSHQGIRUWKHLUVDODU\OHYHOXSRQ 3HQQLQJWRQjVFRQVWLWXWLRQDOFKDOOHQJHWRWKHDXWKRULW\RID WKHOHJLVODWLYHEUDQFK:HZLOOQRWHOHYDWHUHTXLUHPHQWV 6KHOE\&RXQW\s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sXGJHPDGHWKHIROORZLQJIDFWXDOILQGLQJV LVVXLQJYDOLGVHDUFKZDUUDQWV)XUWKHUQRWZLWKVWDQGLQJKHU ZKLFKZHUHDGRSWHGE\WKHGLVWULFWFRXUW$WDSSUR[LPDWHO\ FRQQHFWLRQWRDODZHQIRUFHPHQWRIILFHUWKLV&RXUWIRXQGWKDW SP RQ 1RYHPEHU VL[ WR VHYHQ 0HPSKLV WKHVHDUFKZDUUDQWVKHLVVXHGVDWLVILHGWKHUHTXLUHPHQWRIWKH SROLFHRIILFHUVFDPHWR3HQQLQJWRQjVUHVLGHQFHWRH[HFXWHWKH )RXUWK$PHQGPHQW VHDUFK ZDUUDQW $OO RI WKH RIILFHUV ZHUH ZHDULQJ VKLUWV PDUNHGm3ROLFHl$FKDLQOLQNIHQFHVXUURXQGHGWKHKRXVH $SSHOODQWLQWKHFDVHDWEDUVXSSRUWVKLVSRVLWLRQZLWKWKH WHVWLPRQ\ RI 2IILFHU %ODFN ZKR VWDWHG WKDW WKH MXGLFLDO FRPPLVVLRQHU LQ WKLV FDVH KDG QHYHU UHMHFWHG D ZDUUDQW VRXJKW7KHUHFRUGKRZHYHULVGHYRLGRIDQ\HVWLPDWHRI :LWK UHJDUG WR D VHDUFK ZDUUDQW LVVXHG XQGHU IHGHUDO ODZ )HG 5 KRZ PDQ\ VHDUFK ZDUUDQWV 2IILFHU %ODFN KDG UHTXHVWHG &ULP 3 D OLPLWV WKH DXWKRULW\ WR LVVXH VHDUFK ZDUUDQWV WR D )HGHUDO )XUWKHULQWKHDEVHQFHRIDQ\RWKHUHYLGHQFHRQWKHLVVXHLW sXGJH RU 0DJLVWUDWH s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sXGJH )RXURIILFHUVWHVWLILHGFRQFHUQLQJWKHWLPLQJRIWKHHQWU\ ZKLFKWKH0DJLVWUDWHsXGJHIRXQGXQEHOLHYDEOH LQWR3HQQLQJWRQjVKRPH'HWHFWLYH:ULJKWWHVWLILHGWKDWKH ZDVWKHILUVWRIILFHUWRUHDFKWKHIURQWGRRU$VKHEDQJHGRQ 7KH0DJLVWUDWHsXGJHZKRVHILQGLQJVZHUHDGRSWHGE\WKH WKH GRRU KH \HOOHG LQ D ORXG YRLFH m0HPSKLV 3ROLFH 'LVWULFW&RXUWUHVROYHGWKHGLVSXWHGWHVWLPRQ\E\FRQFOXGLQJ 'HSDUWPHQW6HDUFK:DUUDQWl:ULJKWDOVRWHVWLILHGWKDWKH WKDWWKHRIILFHUVjWHVWLPRQ\ZDVPRUHFUHGLEOHLQOLJKWRIDOO WKHQKHDUGIRRWVWHSVWKDWVRXQGHGDVLIVRPHRQHZDVUXQQLQJ WKHFLUFXPVWDQFHV$FFRUGLQJO\WKH'LVWULFW&RXUWFRQFOXGHG DZD\IURP WKHGRRU:ULJKWHVWLPDWHGWKDWDSSUR[LPDWHO\ WKDW EHWZHHQ HLJKW WR WHQ VHFRQGV HODSVHG EHWZHHQ WKH HLJKWWRWHQVHFRQGVSDVVHGDIWHUKHDQQRXQFHGKLVSUHVHQFH NQRFNLQJRQWKHGRRUDQGWKHIRUFHGHQWU\LQWR3HQQLQJWRQjV DWZKLFKSRLQWKHXVHGDSU\EDUGHYLFHWRIRUFHRSHQWKHIURQW GZHOOLQJ7KLVIDFWXDOILQGLQJLVQRWFOHDUO\HUURQHRXVDQG GRRU WKHUHIRUHLVDFFHSWHGE\WKLV&RXUW 2IILFHU7LOWRQDOVRWHVWLILHGWKDWKHKHDUG:ULJKWNQRFNRQ 7KH OHJDO LVVXH SUHVHQWHG E\ 3HQQLQJWRQ LV ZKHWKHU WKH WKH GRRU DQG DQQRXQFH m3ROLFHl 7LOWRQ HVWLPDWHG RIILFHUVYLRODWHGWKHNQRFNDQGDQQRXQFHSULQFLSOHVVHWIRUWK DSSUR[LPDWHO\WHQVHFRQGVHODSVHGEHWZHHQWKHNQRFNDQGWKH LQ :LOVRQ Y $UNDQVDV 86 ,Q :LOVRQ D SU\LQJRSHQRIWKHGRRU'HWHFWLYH%ODFNIXUWKHUFRUURERUDWHG XQDQLPRXV6XSUHPH&RXUWKHOGWKDWWKH)RXUWK$PHQGPHQW 'HWHFWLYH :ULJKW DQG 2IILFHU 7LOWRQ DQG HVWLPDWHG WKDW SURKLELWLRQRQXQUHDVRQDEOHVHDUFKHVDQGVHL]XUHVLQFOXGHV DSSUR[LPDWHO\ HLJKW VHFRQGV HODSVHG EHWZHHQ WKH WKH JHQHUDO UXOH WKDW DQ RIILFHUj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jVHQWU\LQWRDGZHOOLQJZDVDPRQJ VWDWHGWKDWWKH\GLGQRWKHDUDNQRFNRQWKHGRRUDQGGLGQRW WKH IDFWRUV WR EH FRQVLGHUHG LQ DVVHVVLQJ WKH KHDUWKHSROLFHDQQRXQFHWKHLUSUHVHQFHEHIRUHWKHGRRUZDV UHDVRQDEOHQHVVRIDVHDUFKRUVHL]XUH&RQWUDU\WRWKH IRUFHGRSHQ$OOWKUHHZLWQHVVHVLQVWHDGWHVWLILHGWKDWWKHILUVW GHFLVLRQEHORZZHKROGWKDWLQVRPHFLUFXPVWDQFHVDQ WLPHWKHSROLFHDQQRXQFHGWKHLUSUHVHQFHRFFXUUHGDIWHUWKH RIILFHUjV XQDQQRXQFHG HQWU\ LQWR D KRPH PLJKW EH IRUFHGHQWU\RIWKHGZHOOLQJ XQUHDVRQDEOHXQGHUWKH)RXUWK$PHQGPHQW 7KH 0DJLVWUDWH sXGJH IRFXVHG RQ IDFWXDO LQFRQVLVWHQFLHV 7KLVLVQRWWRVD\RIFRXUVHWKDWHYHU\HQWU\PXVWEH LQYROYHG LQ WKH WHVWLPRQ\ RI WZR RI WKH WKUHH GHIHQVH SUHFHGHG E\ DQ DQQRXQFHPHQW 7KH )RXUWK ZLWQHVVHV:LOOLDPsHQQLQJVIRUH[DPSOHWHVWLILHGWKDWKH $PHQGPHQWjV IOH[LEOH UHTXLUHPHQW RI UHDVRQDEOHQHVV ZDVVHDWHGRQWKHIURQWSRUFKRIDIULHQGjVKRXVHDFURVVWKH VKRXOG QRW EH UHDG WR PDQGDWH D ULJLG UXOH RI VWUHHWIURP3HQQLQJWRQjVUHVLGHQFH$VHFRQGGHIHQVHZLWQHVV DQQRXQFHPHQWV WKDW LJQRUHV FRXQWHUYDLOLQJ ODZ WHVWLILHGKRZHYHUWKDWKHDQGsHQQLQJVZHUHRFFXS\LQJDFDU HQIRUFHPHQWLQWHUHVWV RQ WKH VWUHHW DW WKH WLPH WKH RIILFHUV SXOOHG XS WR WKH 3HQQLQJWRQUHVLGHQFH,QDGGLWLRQDOOWKUHHGHIHQVHZLWQHVVHV ,GDW 1R 8QLWHG6WDWHVY3HQQLQJWRQ 8QLWHG6WDWHVY3HQQLQJWRQ 1R ,Q 8QLWHG 6WDWHV Y 6SLNHV )G WK &LU LQFUHDVHWKHORQJHUWKH\GHOD\HGHQWU\LQWRWKHKRPH7KLUG WKLV &RXUW UHIXVHG WR DGRSW D ULJLG UXOH EDVHG XSRQ WKH RIILFHUV H[HFXWHG WKH ZDUUDQW GXULQJ WKH PLGGOH RI WKH QXPEHURIVHFRQGVEHWZHHQWKHWLPHWKHSROLFHDQQRXQFHWKHLU PRUQLQJDWLPHSHRSOHDUHW\SLFDOO\DZDNHDQGLQYROYHGLQ SUHVHQFHE\VHHNLQJHQWUDQFHLQWRDKRPHDQGWKHSRLQWDW HYHU\GD\DFWLYLWLHV,GDW&RQVHTXHQWO\OHVVWLPHLV ZKLFKWKHKRPHLVIRUFLEO\HQWHUHG7KLV&RXUWKHOG QHHGHGWRUHVSRQGWRDNQRFNRQWKHGRRU)LQDOO\WKH&RXUW QRWHGWKDWWKHRIILFHUVXVHGDEXOOKRUQWRDGYLVHWKRVHLQVLGH 1RQHWKHOHVV ZH GHFOLQH WKHLU LQYLWDWLRQ WR FUHDWH D WKHUHVLGHQFHRIWKHLUSUHVHQFH,G7KHEXOOKRUQZDVORXG EULJKWOLQHUXOHIRUHYHU\FDVHLHWKDWZDLWLQJOHVVWKDQ HQRXJKWRDOHUWPDQ\SHRSOHLQWKHQHLJKERUKRRGWKDWDVHDUFK ILYHVHFRQGVLVSHUVHXQUHDVRQDEOHZKLOHZDLWLQJPRUH ZDVXQGHUZD\DQGPDQ\QHLJKERUVFDPHRXWRIWKHLUKRPHV WKDQILYHVHFRQGVLVSHUVHUHDVRQDEOHXQGHUWKH)RXUWK WRREVHUYHZKDWZDVKDSSHQLQJ%DVHGXSRQWKHVHIDFWRUVWKH $PHQGPHQW &RXUWFRQFOXGHGWKDWWKHRIILFHUVGLGQRWYLRODWHWKHNQRFN DQG DQQRXQFH UXOH E\ ZDLWLQJ WR VHFRQGV EHIRUH 7KH )RXUWK $PHQGPHQWjV mNQRFN DQG DQQRXQFHl HQWHULQJWKHUHVLGHQFH,G SULQFLSOH JLYHQ LWV IDFWVHQVLWLYH QDWXUH FDQQRW EH GLVWLOOHGLQWRDFRQVWLWXWLRQDOVWRSZDWFKZKHUHDIUDFWLRQ 0RUHUHFHQWO\LQ8QLWHG6WDWHVY3LQVRQo)Go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mWKHRIILFHUVjRYHUDOODFWLRQVEHUHDVRQDEOHQRWWKDWWKH\ QRWHGWKDWWKHRIILFHUVZHUHDXWKRUL]HGWRVHDUFKIRUGUXJVDQG ZDLWDSUHVFULEHGOHQJWKRIWLPHEHIRUHIRUFLEOHHQWU\l,G WKDWWKH\FRXOGDVVXPHWKDWSHUVRQVLQVLGHWKHUHVLGHQFHPLJKW FLWLQJ6SLNHV)GDW GHVWUR\WKHHYLGHQFHmEHIRUHLWFRXOGEHVHL]HGl,G6HFRQG SULRU WR H[HFXWLQJ WKH ZDUUDQW WKH RIILFHUV UHDVRQDEO\ ,QWKLVFDVHWKHRIILFHUVZHUHDOVRVHDUFKLQJIRUGUXJV7KH EHOLHYHGWKDWSRWHQWLDOGUXJWUDIILFNHUVDWWKHUHVLGHQFHPLJKW UHFRUGGRHVQRWFRQWDLQHYLGHQFHWKDWWKHRZQHURIWKHKRPH KDYHORRNRXWVDQGEHDUPHG,G5LVNVWRWKHRIILFHUVZRXOG RU RFFXSDQWV WKHUHRI ZHUH DUPHG %XW WKH ZDUUDQW ZDV H[HFXWHG DW LQ WKH DIWHUQRRQ ZKLFK DV LQ 6SLNHV DQG 3LQVRQZDVDWLPHWKDWSHRSOHZHUHSUHVXPDEO\DZDNHDQG HQJDJHGLQHYHU\GD\DFWLYLWLHV$VREVHUYHGLQ6SLNHVmWKH 7KH VHDUFK ZDUUDQW DW LVVXH LQ WKLV FDVH ZDV LVVXHG DQG H[HFXWHG XQGHU VWDWH ODZ $ VHDUFK ZDUUDQW H[HFXWHG XQGHU IHGHUDO ODZ PXVW DOVR DPRXQWRIWLPHRIILFHUVQHHGWRZDLWEHIRUHHQWHULQJDKRPH PHHW WKH FRQGLWLRQV VHW IRUWK LQ 86& 8QGHU WKH VWDWXWH QHFHVVDULO\GHSHQGVRQKRZPXFKWLPHLWZRXOGWDNHIRUD EHIRUH DQ RIILFHU PD\ IRUFLEO\ HQWHU D KRXVH WR H[HFXWH D VHDUFK ZDUUDQW SHUVRQ LQ WKH KRXVH WR RSHQ WKH GRRU :KHQ WKH SROLFH WKH RIILFHU PXVW EH mUHIXVHG DGPLWWDQFHl RU WKH RIILFHU PXVW EH LQ WKH H[HFXWHDZDUUDQWLQWKHGHDGRIWKHQLJKWWKHOHQJWKRI WLPHWKHRIILFHUVVKRXOGZDLWLQFUHDVHVl6SLNHV)GDW :LOVRQ SURFHVV RI OLEHUDWLQJ KLPVHOI RU D SHUVRQ DLGLQJ LQ WKH H[HFXWLRQ RI WKH ZDUUDQW 7KH )RXUWK $PHQGPHQW VWDQGDUG DUWLFXODWHG LQ LV VRPHZKDW VLPLODU WR WKDW VHW IRUWK LQ LQ WKDW XQGHU WKH VWDWXWH DIWHU ODZ HQIRUFHPHQW DQQRXQFH WKHLU SUHVHQFH DQG LQWHQWLRQ WR VHDUFK WKH KRPH D GHOD\ RI D FHUWDLQ SHULRG RI WLPH LQ HIIHFW FRQVWLWXWHV D mUHIXVHG DGPLWWDQFHl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jV SHUPLVVLRQ 8QLWHG 6WDWHV Y sRKQVRQ)GXQSXEOLVKHGWDEOHGHFLVLRQ1R DYDLODEOH DW :/ VHFRQGV 8QLWHG 6WDWHVYs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jV SUHFHGHQW LQ 6SLNHV DQG 3LQVRQ
Document Info
Docket Number: 01-5593
Filed Date: 3/27/2003
Precedential Status: Precedential
Modified Date: 3/3/2016