Peabody Coal Co v. Dir. OWCP

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 3($%2' *URYHVjV@GHDWKZDVKDVWHQHG E\ SQHXPRFRQLRVLV  +RZHYHU , ILQG WKDW 'U %OXHjV RSLQLRQ LV RXWZHLJKHG E\ WKH ZHOOUHDVRQHG DQG ZHOO GRFXPHQWHGRSLQLRQVRI'UV%UDQVFRPEDQG)LQR7R WKH FRQWUDU\ 'U %OXHjV RSLQLRQ UHJDUGLQJ WKH IDFWRUV FRQWULEXWLQJWR>*URYHVjV@GHDWKLVQRWZHOOGRFXPHQWHG $Q XQGRFXPHQWHG RSLQLRQ PD\ EH JLYHQ OLWWOH RU QR ZHLJKW  *URYHV KLPVHOI ILOHG DQ DSSOLFDWLRQ IRU EHQHILWV RQ 1RYHPEHU   ZKLFK ZDV GHQLHG RQ 0D\   *URYHV GLG QRW DSSHDO WKLV GHFLVLRQ  'UV sRKQVRQ DQG %OXH ZHUH *URYHVjV WUHDWLQJ SK\VLFLDQV 'U sRKQVRQ ZDV *URYHVjV SHUVRQDO SK\VLFLDQ IRU DSSUR[LPDWHO\ ILIWHHQ \HDUV IURP  WR  'U %OXH WUHDWHG *URYHV IURP  XQWLO *URYHVjV GHDWK  3HDERG\&RDO&RY*URYHVHWDO 1R 1R 3HDERG\&RDO&RY*URYHVHWDO  s$DWFLWDWLRQVDQGIRRWQRWHRPLWWHG:LOPDILOHGD WKDW SQHXPRFRQLRVLV GLG QRW LQFUHDVH WKH OLNHOLKRRG RI WLPHO\QRWLFHRIDSSHDOZLWKWKH%RDUG2QsXO\WKH FRURQDU\DUWHU\GLVHDVH6LPSO\GLVPLVVLQJWKHRSLQLRQVRI %RDUG DIILUPHG WKH $/sjV ILQGLQJ RI SQHXPRFRQLRVLV EXW 'UV)LQRDQG%UDQVFRPEDVWKH$/sGLGEHFDXVHWKH\GLG YDFDWHG KLV ILQGLQJ DERXW *URYHVjV FDXVH RI GHDWK DQG QRWSHUVRQDOO\H[DPLQHWKHSDWLHQWRUEHFDXVHWKH\GLGQRW UHPDQGHGWKHFDVHIRUIXUWKHUFRQVLGHUDWLRQ7KH%RDUGQRWHG EHOLHYHWKDW*URYHVVXIIHUHGIURPSQHXPRFRQLRVLVPLVVHVWKH WKDW WKH $/s KDG GHVFULEHG 'U %OXHjV RSLQLRQ DV SRLQW  7KH SHUVRQDO H[DPLQDWLRQ DQG WUHDWPHQW RI *URYHV mXQGRFXPHQWHGlEXWIDLOHGWRFRQVLGHU'U%OXHjVWUHDWPHQW RYHUWKHFRXUVHRIKLVOLIHWLPHGRHVQRWREYLRXVO\SODFH'U QRWHV DV KH VKRXOG KDYH LQ GHWHUPLQLQJ WKH SK\VLFLDQjV %OXHLQDEHWWHUSRVLWLRQWRGHWHUPLQHZKHWKHURQHFRQGLWLRQ FUHGLELOLW\s$DW FRXOGKDYHFDXVHGWKHRWKHU,IWKHUHZHUHDUHDVRQWREHOLHYH WKDWSHUVRQDOH[DPLQDWLRQZRXOGHQDEOHDWUHDWLQJGRFWRUWR 2Q 1RYHPEHU   WKH $/s LVVXHG D GHFLVLRQ DQG EHWWHUDVVHVVWKHSRVVLELOLW\WKDWWZRFRQGLWLRQVZHUHFDXVDOO\ RUGHUDZDUGLQJVXUYLYRUjVEHQHILWVWR:LOPD,QILQGLQJRQ FRQQHFWHGWKHQUHOLDQFHRQ'U%OXHjVFRQFOXVLRQZRXOGEH UHPDQGWKDW'U%OXHjVRSLQLRQDERXW*URYHVjVFDXVHRIGHDWK UHDVRQDEOH%XWWKH$/sJDYHQRVXFKUHDVRQ6HH3HDERG\ ZDVmWKHPRVWFUHGLEOHls$DWWKH$/sUHIHUUHGWR'U &RDO&RY0F&DQGOHVV)GWK&LU %OXHjV WUHDWPHQW QRWHV ZKLFK UHFRUGHG WKDW 'U %OXH KDG )XUWKHU'U%OXHjVRSLQLRQDQGWUHDWPHQWQRWHVFRQWDLQQR WUHDWHG *URYHV IRU EUHDWKLQJ SUREOHPV IURP  WR  REMHFWLYH VXSSRUW IRU KLV ODFN RI R[\JHQDWLRQ WKHRU\  'UV )LQR DQG %UDQVFRPE ERWK GLVFUHGLW 'U %OXHjV WKHRU\ DV XQVXSSRUWHGDQGWKHRQO\REMHFWLYHPHGLFDOVXSSRUWFLWHGLQ WKHUHFRUGXQGHUPLQHV'U%OXHjVWKHRU\7KH$/sIDLOHGWR  FULWLFDOO\DQDO\]H'U%OXHjVFDXVDWLRQWKHRU\RUGLVFRXQWWKH 'U %HQ 9 %UDQVFRPE m%UDQVFRPEl LVVXHG D FRQVXOWDWLYH UHSRUW GDWHG $XJXVW   LQ ZKLFK KH FRQFOXGHG m>Z@LWK D KLJK OHYHO RI RSLQLRQVRI'UV)LQRRU%UDQVFRPERQDQ\ORJLFDOJURXQGV PHGLFDO FHUWDLQW\l WKDW *URYHV GLG QRW VXIIHU IURP SQHXPRFRQLRVLV s$ +HQFH , ZRXOG UHPDQG IRU IXUWKHU SURFHHGLQJV FRQVLVWHQW DW  +H DWWULEXWHG *URYHVjV GHDWK WR FRURQDU\ DUWHU\ GLVHDVH ZKLFK KH ZLWKP\GLVVHQW FODLPHG mZDV LQ QR ZD\ FDXVHG KDVWHQHG >@RU    DJJUDYDWHG E\ SXOPRQDU\ GLVHDVH RU E\ FRDO PLQH GXVW H[SRVXUHl s$ DW  +H WKHQ VWDWHG m$OWKRXJK >*URYHV@ KDV QR >SQHXPRFRQLRVLV@ LI , DVVXPH KH GLG WKHUH ZRXOG VWLOO EH QR UHDVRQDEOH EDVLV IRU DWWULEXWLQJ DQ\ DJJUDYDWLRQ FRQWULEXWLRQ WR RU DFFHOHUDWLRQ RI KLV GHDWK DV D UHVXOW RI VXFK SQHXPRFRQLRVLVl s$ DW   'U *UHJRU\ s )LQR m)LQRl LVVXHG D FRQVXOWDWLYH UHSRUW GDWHG $PRQJ WKH ZRUNV FLWHG E\ 'U )LQR ZHUH WKH DUWLFOH m0RUWDOLW\ )URP 6HSWHPEHU   LQ ZKLFK KH FRQFOXGHG ZLWK mD UHDVRQDEOH GHJUHH RI +HDUW 'LVHDVH LQ &RDO 0LQHUVl SXEOLVKHG E\ 'U &RHVWHOOR HW DO LQ WKH PHGLFDO FHUWDLQW\l s$ DW  WKDW *URYHV GLG QRW VXIIHU IURP MRXUQDO &KHVW DQ DUWLFOH E\ 'U /LQGDUV LQ  sRXUQDO RI 3DWKRORJ\  SQHXPRFRQLRVLV DQG WKDW KLV mGHDWK ZDV GXH WR DWKHURVFOHURWLF KHDUW  D WH[WERRN HQWLWOHG 2FFXSDWLRQDO /XQJ 'LVRUGHUV SXEOLVKHG E\ 'U : GLVHDVH DQG DFXWH P\RFDUGLDO LQIDUFWLRQ &RDO PLQH HPSOR\PHQW GLG QRW 5D\PRQG 3DUNHV WKH 7H[WERRN RI 2FFXSDWLRQDO /XQJ 'LVHDVHV SXEOLVKHG FDXVH FRQWULEXWH WR RU KDVWHQ KLV GHDWKl s$ DW  E\ 0RUJDQ DQG 6HDWRQ DQG D WH[WERRN HQWLWOHG 2FFXSDWLRQDO 5HVSLUDWRU\ 'LVRUGHUV SXEOLVKHG E\ WKH 86 'HSDUWPHQW RI +HDOWK DQG +XPDQ  6HUYLFHV 'U %OXH ZDV QRW WKH DWWHQGLQJ SK\VLFLDQ DW *URYHVjV GHDWK +LV WUHDWPHQW QRWHV WKHUHIRUH GR QRW FRYHU WKH LPPHGLDWH FDXVH RI *URYHVjV  GHDWK +RZHYHU WKH\ ZHUH UHOHYDQW WR WKH $/sjV DQDO\VLV WR WKH H[WHQW 7KH $/s DOVR IDLOHG WR DGGUHVV WKH TXDOLILFDWLRQV RI WKH GRFWRUV 'U WKDW WKH\ DGGUHVVHG WKH IDFWRUV WKDW PD\ KDYH KDVWHQHG *URYHVjV GHDWK )LQR LV D ERDUGFHUWLILHG VSHFLDOLVW LQ LQWHUQDO PHGLFLQH DQG SXOPRQDU\ $00 *ULIILWK Y 'LU 2:&3  )G   WK &LU  m$ GLVHDVH 'U %UDQVFRPE LV D 3URIHVVRU RI 0HGLFLQH DW WKH 8QLYHUVLW\ RI FODLPDQW HVWDEOLVKHV WKDW SQHXPRFRQLRVLV LV D VXEVWDQWLDOO\ FRQWULEXWLQJ $ODEDPD DW %LUPLQJKDP DQG KDV H[SHUWLVH LQ WKH GLDJQRVLV DQG WUHDWPHQW FDXVH RU IDFWRU OHDGLQJ WR WKH PLQHUjV GHDWK LI LW VHUYHV WR KDVWHQ WKDW GHDWK RI SXOPRQDU\ GLVHDVH 'U %OXH KRZHYHU KDV RQO\ D JHQHUDO LQ DQ\ ZD\l TXRWDWLRQ RPLWWHG SUDFWLWLRQHUjV H[SHULHQFH ZLWK SXOPRQDU\ GLVHDVHV  3HDERG\&RDO&RY*URYHVHWDO 1R 1R 3HDERG\&RDO&RY*URYHVHWDO  BBBBBBBBBBBBBB s$ DW   7KH $/s WKHQ TXRWHG YHUEDWLP D UHSRUW VXEPLWWHGE\'U%OXHRQ)HEUXDU\WKDWRSLQHG ',66(17 BBBBBBBBBBBBBB *URYHVZDVDSURGXFWRIPDQ\\HDUVLQWKHPLQHVZLWK WKHSULPDU\ODFNRIR[\JHQDWLRQWRKLVWLVVXHVVSHHGLQJ .(11(' QL@RQWKDWKLVSQHXPRFRQLRVLV WRDVVHVVWKHFUHGLELOLW\RI'U%OXH0\GHFLVLRQWRUHPDQG ZDVSUREDEO\DWKLUGWRDKDOIUHVSRQVLEOHIRUKLVILQDO KRZHYHUZRXOGQRWEHEDVHGRQDQDVVHVVPHQWRI'U%OXHjV GHPLVH FUHGLELOLW\ EXW UDWKHU RQ WKH $/sjV IDLOXUH WR DQDO\]H WKH UHDVRQLQJ RI DQG VXSSRUW IRU 'U %OXHjV FRQFOXVLRQ  7KH s$ DW   7KH $/s VSHFLILFDOO\ IRXQG WKDW 'U %OXHjV $/s DFFHSWHG 'U %OXHjV FRQFOXVLRQ WKDW D ODFN RI mWUHDWPHQWQRWHVZKLFKVKRZWKDW>*URYHVjV@OXQJIXQFWLRQ R[\JHQDWLRQ WR *URYHVj WLVVXHV UHVXOWLQJ IURP ZDVLPSDLUHGVXSSRUW'U%OXHjVOHWWHURI)HEUXDU\ SQHXPRFRQLRVLV FRQWULEXWHG WR *URYHVj DUWHULDO VFOHURWLF DQGEROVWHUKLVFUHGLELOLW\ls$DW,QFRQWUDVWKHIRXQG KHDUWGLVHDVHDQGXOWLPDWHO\WRKLVGHDWK7KH$/sIRXQG WKDWWKHRSLQLRQVRI3HDERG\jVH[SHUWVZHUHHQWLWOHGWROHVV WKDW 'U %OXHjV WUHDWPHQW QRWHV DQG OHWWHU VXSSRUWHG WKLV ZHLJKW EHFDXVH WKH\ mIDLOHG WR ILQG DQ\ HYLGHQFH RI FRQFOXVLRQ,QZHLJKLQJWKHPHGLFDOHYLGHQFHWKH$/sJDYH SQHXPRFRQLRVLVl  s$ DW   2Q 'HFHPEHU   WKH PRVW ZHLJKW WR 'U %OXHjV RSLQLRQ EHFDXVH KH KDG 3HDERG\ILOHGDWLPHO\DSSHDOWRWKH%RDUGIURPWKH$/sjV SHUVRQDOO\H[DPLQHGDQGWUHDWHG*URYHVIRUQHDUO\WZHQW\ GHFLVLRQ ILYH\HDUV *URYHV@ZKHQ UHJDUGWRFDXVDWLRQ$OWKRXJK'U%UDQVFRPEGLGQRWEHOLHYH LQIDFWWKHSUHVHQFHRIWKHGLVHDVHKDGEHHQHVWDEOLVKHGls$ WKDW *URYHV VXIIHUHG IURP SQHXPRFRQLRVLV KH VWDWHG WKDW DW3HDERG\WKHQILOHGDPRWLRQIRUUHFRQVLGHUDWLRQZKLFK HYHQLIKHDVVXPHGKHGLGWKHUHZRXOGEHQRUHDVRQDEOHEDVLV WKH %RDUG GHQLHG RQ 0D\    7KLV WLPHO\ DSSHDO WRFRQFOXGHWKDWLWFRQWULEXWHGWRDJJUDYDWHGRUDFFHOHUDWHG IROORZHG *URYHVjGHDWK'U)LQRDOVRQRWHGWKDW'U%OXHjVFDXVDWLRQ WKHRU\ZDVQRWVXSSRUWHGE\DQ\YDOLGREMHFWLYHHYLGHQFH 'U)LQRjVRSLQLRQWKHQFLWHGWRVHYHUDOVWXGLHVFRQFOXGLQJ  3HDERG\&RDO&RY*URYHVHWDO 1R 1R 3HDERG\&RDO&RY*URYHVHWDO  ,,$1$/ *URYHVjV@GHDWKls$DW $/sjV ILQGLQJV  7HQQHVVHH &RQVRO &RDO &R Y .LUN  )G   WK &LU   7KH $/sjV ILQGLQJV DUH 3HDERG\ QRZ DVNV XV WR UHDFK WKH RSSRVLWH FRQFOXVLRQ FRQFOXVLYHLIWKH\DUHVXSSRUWHGE\VXEVWDQWLDOHYLGHQFHDQG DUJXLQJWKDWWKHIDFWVGRQRWVXSSRUW'U%OXHjVRSLQLRQ6XFK DUHLQDFFRUGDQFHZLWKWKHDSSOLFDEOHODZ,G6XEVWDQWLDO D GHWHUPLQDWLRQ KRZHYHU ZRXOG UHTXLUH XV WR DGGUHVV 'U HYLGHQFH LV mVXFK UHOHYDQW HYLGHQFH DV D UHDVRQDEOH PLQG %OXHjVFUHGLELOLW\ZKLFKZRXOGH[FHHGRXUOLPLWHGVFRSHRI PLJKW DFFHSW DV DGHTXDWH WR VXSSRUW D FRQFOXVLRQl  &URVV UHYLHZRYHUWKH%RDUGjVGHFLVLRQV:HPD\UHYHUVHWKH$/sjV 0RXQWDLQ &RDO ,QF Y :DUG  )G   WK &LU FRQFOXVLRQRQO\LILWLVQRWVXSSRUWHGE\VXEVWDQWLDOHYLGHQFH  TXRWLQJ 5LFKDUGVRQ Y 3HUDOHV  86   $FFHSWLQJWKH$/sjVGHWHUPLQDWLRQRI'U%OXHjVFUHGLELOLW\ m:HGRQRWUHZHLJKWKHHYLGHQFHRUVXEVWLWXWHRXU ZHREVHUYHWKDW'U%OXHDWWULEXWHG*URYHVjVKHDUWGLVHDVH MXGJPHQWIRUWKDWRIWKH$/sl7HQQHVVHH&RQVRO)G ZKLFK FDXVHG *URYHVjV GHDWK ODUJHO\ WR mOXQJ GLVHDVH DW7KXVZHZLOOQRWUHYHUVHWKHFRQFOXVLRQVRIDQ$/s VHFRQGDU\ WR SQHXPRFRQLRVLV DQG D ODFN RI R[\JHQDWLRQl WKDWDUHVXSSRUWHGE\VXEVWDQWLDOHYLGHQFHmHYHQLIWKHIDFWV s$DW'U%OXHjVWUHDWPHQWQRWHVZKLFKLQGLFDWHWKDW SHUPLWDQDOWHUQDWLYHFRQFOXVLRQl,GTXRWLQJ W@KH$/sIRXQGERWK WKH H[LVWHQFH RI SQHXPRFRQLRVLV DQG GHDWK GXH WR LW E\ SUHVXPLQJWKDWWKHRSLQLRQRIDGRFWRUZKRWUHDWHGWKHPLQHU ZDV DXWRPDWLFDOO\ PRUH FUHGLEOH WKDQ DQ\ RWKHU GRFWRUjV RSLQLRQVLPSO\E\YLUWXHRIWKDWWUHDWPHQWl3HWLWLRQHUjV%U DW ,Q7XVVH\Y,VODQG&UHHN&RDO&R)GWK&LU  ZHFRQILUPHGWKDWWKHmRSLQLRQVRIWUHDWLQJSK\VLFLDQV $V WKH $/s QRWHG RQ UHPDQG SQHXPRFRQLRVLV QHHG QRW EH WKH DUH HQWLWOHG WR JUHDWHU ZHLJKW WKDQ WKRVH RI QRQWUHDWLQJ LPPHGLDWH RU SUR[LPDWH FDXVH RI GHDWK 7KHUHIRUH WKH IDFW WKDW *URYHV SK\VLFLDQVl,GDW+RZHYHUZHGLGQRWVXJJHVWWKDW VXIIHUHG IURP KHDUW GLVHDVH DQG RWKHU PHGLFDO SUREOHPV GRHV QRW DIIHFW WKH LPSRUW RI 'U %OXHjV FRQFOXVLRQ WKDW SQHXPRFRQLRVLV FRPSURPLVHG WUHDWLQJSK\VLFLDQVVKRXOGDXWRPDWLFDOO\EHSUHVXPHGWREH WKH IXQFWLRQ RI *URYHVjV OXQJV DQG WKHUHE\ KDVWHQHG KLV GHDWK  3HDERG\&RDO&RY*URYHVHWDO 1R 1R 3HDERG\&RDO&RY*URYHVHWDO  ,W LV WKXV DEXQGDQWO\ FOHDU WKDW WKH $/s GLG QRW JLYH FRUUHFW n ZH LQGLFDWHG WKDW WKHLU RSLQLRQV VKRXOG EH SUHVXPSWLYH ZHLJKW WR WKH RSLQLRQV RI *URYHVjV WUHDWLQJ mSURSHUO\ FUHGLWHG DQG ZHLJKHGl  ,G  ,QGHHG 3HDERG\ SK\VLFLDQV  7KH $/s GLG DFFRUG PRUH ZHLJKW WR WKHVH FRQFHGHV DV PXFK  m,Q SRVW XQSXEOLVKHG GHFLVLRQV RSLQLRQV WKDQ WR WKRVH RI WKH FRQVXOWDQWV IRU WKH '2/ DQG KRZHYHU WKLV &RXUW DOPRVW XQLIRUPO\ KDV UHFRJQL]HG WKDW 3HDERG\EXWKHH[DPLQHGDOORIWKHRSLQLRQVRQWKHLUPHULWV QRWZLWKVWDQGLQJ 7XVVH\ $/sV DUH QRW UHTXLUHG WR FUHGLW DQG PDGH UHDVRQHG MXGJPHQWV DERXW WKH SK\VLFLDQVj WUHDWLQJGRFWRUVjRSLQLRQVHLWKHUVWDQGLQJDORQHRUZKHUHWKHUH FUHGLELOLW\+HDOVRUHYLHZHG*URYHVjVPHGLFDOUHFRUGV:H LVFRQIOLFWLQJSURRILQWKHUHFRUGl3HWLWLRQHUjV%UDW WKXV FRQFOXGH WKDW WKH $/s GLG QRW DSSO\ DQ DXWRPDWLF :H WKHUHIRUH FRQFOXGH WKDW 3HDERG\jV mWUHDWLQJ SK\VLFLDQ SUHIHUHQFHIRURUSUHVXPSWLRQLQIDYRURI*URYHVjVWUHDWLQJ SUHVXPSWLRQl DUJXPHQW ODFNV PHULW DQG GLVDJUHH ZLWK LWV SK\VLFLDQV FKDUDFWHUL]DWLRQRIWKH7XVVH\GHFLVLRQDVDPELJXRXVRULQ FRQIOLFWZLWKWKHHVWDEOLVKHGFDVHODZ %6XEVWDQWLDO(YLGHQFH 7XVVH\UHTXLUHV$/sVLQEODFNOXQJFDVHVWRH[DPLQHWKH 3HDERG\ DUJXHV WKDW WKH $/sjV GHFLVLRQ WR UHO\ RQ WKH PHGLFDORSLQLRQVRIWUHDWLQJSK\VLFLDQVRQWKHLUPHULWVDQGWR RSLQLRQV RI *URYHVjV WUHDWLQJ SK\VLFLDQV ZDV LUUDWLRQDO PDNH D UHDVRQHG MXGJPHQW DERXW WKHLU FUHGLELOLW\  7KHVH EHFDXVHWKHRSLQLRQVGLGQRWFRQVWLWXWHVXEVWDQWLDOHYLGHQFH RSLQLRQVVKRXOGEHm>J@LYHQWKHLUSURSHUGHIHUHQFHl7XVVH\ 7KLVDUJXPHQWLVEDVHGRQWKHIROORZLQJIDFWV'UV%OXH )GDW,QGHWHUPLQLQJWKHOHYHORIGHIHUHQFHWKDW DQGsRKQVRQjVILQGLQJRISQHXPRFRQLRVLVZDVmQRWFRQILUPHG ZRXOGEHSURSHUZHWXUQWR&)5†GZKLFK E\EHWWHUTXDOLILHGUHDGHUVlDQGVKRXOGKDYHFRQIXWHGWKHLU GHOLQHDWHV WKH FULWHULD IRU WKH GHYHORSPHQW RI PHGLFDO FUHGLELOLW\EHFDXVHLWmZDVDWRGGVZLWKWKH$/sjVILQGLQJWKDW HYLGHQFHLQEODFNOXQJSURFHHGLQJV WKH[UD\VGLGQRWHVWDEOLVKWKHGLVHDVHl'UsRKQVRQUHOLHG RQDSXOPRQDU\IXQFWLRQVWXG\WKDWZDVLQYDOLGDWHGRQH[SHUW ,QDSSURSULDWHFDVHVWKHUHODWLRQVKLSEHWZHHQWKHPLQHU UHYLHZ'UV%OXHDQGsRKQVRQIDLOHGWRPHQWLRQ*URYHVjV DQG KLV WUHDWLQJ SK\VLFLDQ PD\ FRQVWLWXWH VXEVWDQWLDO VPRNLQJKLVWRU\DQG'U%OXHjVRSLQLRQRQWKHFDXVHRI HYLGHQFHLQVXSSRUWRIWKHDGMXGLFDWLRQRIILFHUjVGHFLVLRQ *URYHVjVGHDWKZDVmFRQFOXVRU\JUDWXLWRXVDQGVXSSRUWHGE\ WR JLYH WKDW SK\VLFLDQjV RSLQLRQ FRQWUROOLQJ ZHLJKW QRYDOLGPHGLFDOGDWDRULGHQWLILHGREVHUYDWLRQVl3HWLWLRQHUjV SURYLGHG WKDW WKH ZHLJKW JLYHQ WR WKH RSLQLRQ RI D %UDW PLQHUjV WUHDWLQJ SK\VLFLDQ VKDOO DOVR EH EDVHG RQ WKH FUHGLELOLW\ RI WKH SK\VLFLDQjV RSLQLRQ LQ OLJKW RI LWV 3HDERG\FLWHV'LUHFWRU2:&3Y5RZH)GWK UHDVRQLQJ DQG GRFXPHQWDWLRQ RWKHU UHOHYDQW HYLGHQFH &LU  DQG FRQWHQGV WKDW WKH RSLQLRQV RI *URYHVjV DQGWKHUHFRUGDVDZKROH WUHDWLQJSK\VLFLDQVZHUHQRWFUHGLEOH+RZHYHUWKH5RZH FRXUW H[SUHVVO\ REVHUYHG WKDW WKH $/s DV IDFWILQGHU VKRXOG GHFLGH ZKHWKHU D SK\VLFLDQjV UHSRUW LV mVXIILFLHQWO\ GRFXPHQWHGDQGUHDVRQHGlEHFDXVHVXFKDGHWHUPLQDWLRQLV mHVVHQWLDOO\ D FUHGLELOLW\ PDWWHUl  ,G DW   /DFNLQJ WKH  DXWKRULW\WRPDNHFUHGLELOLW\GHWHUPLQDWLRQVZHZLOOGHIHUWR :H REVHUYH WKDW WKH XQSXEOLVKHG GHFLVLRQV WKDW 3HDERG\ FLWHV LQ LWV WKH$/sjVILQGLQJV,QIDFWWKH%RDUGUHPDQGHGWKHFDVHWR EULHI GR QRW VXSSRUW LWV SRVLWLRQ 6HH HJ $UFK RI .HQWXFN\ ,QF Y WKH$/sDIWHUKHGHQLHG:LOPDjVFODLPEHFDXVHWKH$/sKDG +LFNPDQ 1R   :/  DW  WK &LU $XJ   m$OWKRXJK WKH GLDJQRVHV RI WUHDWLQJ SK\VLFLDQV DUH QRW HQWLWOHG WR mQRW VSHFLILFDOO\ DGGUHVV>HG 'U %OXHjV WUHDWPHQW QRWHV@ LQ FRQFOXVLYH ZHLJKW RU HYHQ D SUHVXPSWLRQ LQ IDYRU RI WKH &ODLPDQW FRXUWV PDNLQJKLVFUHGLELOLW\GHWHUPLQDWLRQls$DW7KHLVVXH KDYH QRWHG WKDW WKHLU RSLQLRQV GHVHUYH µVSHFLDO FRQVLGHUDWLRQjl FLWDWLRQ RPLWWHG  3HDERG\&RDO&RY*URYHVHWDO 1R 1R 3HDERG\&RDO&RY*URYHVHWDO  ,G*LYHQWKLVVWDQGDUG3HDERG\jVLQWHUSUHWDWLRQRIWKH$/sjV 7KH $/s JDYH mWKH PRVW ZHLJKWl WR *URYHVjV WUHDWLQJ GHFLVLRQDQGRUGHULQWKLVFDVHLVQRWWHQDEOH,QSDUWLFXODUZH SK\VLFLDQV REVHUYHWKDWWKH$/sLQLWLDOO\GHQLHG:LOPDjVFODLPILQGLQJ WKDW :LOPD KDG IDLOHG WR HVWDEOLVK WKDW SQHXPRFRQLRVLV 7KHLUSURJUHVVUHSRUWVHVWDEOLVKWKDWWKH\WUHDWHG>*URYHV@ KDVWHQHGKHUKXVEDQGjVGHDWK$IWHUWKH%RDUGYDFDWHGWKLV IRUQHDUO\WZHQW\ILYH\HDUV>*URYHV@KDGSUREOHPVZLWK ILQGLQJ DQG UHPDQGHG WKH FDVH IRU IXUWKHU ILQGLQJV ZLWK KLVEUHDWKLQJGXULQJWKLVWLPHDQGZDVGLDJQRV>HG@ZLWK UHVSHFWWRWKHPHGLFDORSLQLRQHYLGHQFHWKH$/sIRXQGWKDW DPRQJ RWKHU WKLQJV FKURQLF REVWUXFWLYH SXOPRQDU\ :LOPDZDVHQWLWOHGWRVXUYLYRUjVEHQHILWV,QKLVGHFLVLRQDQG GLVHDVHEURQFKLWLVDFXWHEURQFKLWLVDQGFRDOZRUNHUVj RUGHURQUHPDQGWKH$/sUHYLHZHG*URYHVjVPHGLFDOUHFRUGV SQHXPRFRQLRVLV7KHVHWUHDWPHQWQRWHVZKLFKVKRZWKDW DVFRPSLOHGE\KLVWUHDWLQJSK\VLFLDQVDQGWKHFRQVXOWDWLYH >*URYHVjV@ OXQJ IXQFWLRQ ZDV LPSDLUHG VXSSRUW 'U UHSRUWV LVVXHG E\ D '2/ H[SHUW DQG WZR 3HDERG\ H[SHUWV %OXHjV OHWWHU RI )HEUXDU\   DQG EROVWHU KLV 7KH$/sGLVFRXQWHGWKHRSLQLRQRIWKH'2/H[SHUWZKRKDG FUHGLELOLW\    7KHUHIRUH , ILQG 'U %OXHjV OHWWHU DQG UHYLHZHGDOLPLWHGDPRXQWRIWKHDYDLODEOHHYLGHQFHDVmQRW WUHDWPHQW QRWHV DUH SHUVXDVLYH LQ HVWDEOLVKLQJ WKDW ZHOOUHDVRQHGl  s$ DW   7KH $/s DOVR DFFRUGHG OHVV >*URYHVjV@GHDWKZDVKDVWHQHGE\SQHXPRFRQLRVLV ZHLJKWWRWKHRSLQLRQVRI'UV%UDQVFRPEDQG)LQRDQGQRWHG WKDWm>Q@HLWKHUSK\VLFLDQHYHUSHUVRQDOO\H[DPLQHGl*URYHV s$ DW   2Q DSSHDO WKH %RDUG DIILUPHG WKH $/sjV s$DW,QDGGLWLRQWKH$/sIRXQGWKDWWKHRSLQLRQVRI ILQGLQJWKDW:LOPDKDGHVWDEOLVKHGWKDWKHUKXVEDQGjVGHDWK WKHVHWZRFRQVXOWDQWVZHUHmOHVVFUHGLEOHlEHFDXVHWKH\GLG ZDV GXH WR SQHXPRFRQLRVLV  6SHFLILFDOO\ WKH %RDUG QRWPDNHDILQGLQJRISQHXPRFRQLRVLVXQOLNHWKHSK\VLFLDQV FRQFOXGHGWKDWWKH$/sjVGHFLVLRQWRDFFRUGJUHDWHUZHLJKWWR ZKRKDGDFWXDOO\H[DPLQHG*URYHVs$DW 'U%OXHjVRSLQLRQZDVUDWLRQDOEHFDXVH'U%OXHKDGWUHDWHG *URYHVIRUPDQ\\HDUV7KH%RDUGDOVRQRWHGWKDWWKH$/s KDGQRWDEXVHGKLVGLVFUHWLRQLQDFFRUGLQJOHVVZHLJKWWRWKH RSLQLRQVRI3HDERG\jVH[SHUWVZKRKDGQHYHUH[DPLQHGRU  WUHDWHG *URYHV DQG KDG mUXOHG RXW WKH H[LVWHQFH RI ,Q ILQGLQJ WKDW *URYHV KDG VXIIHUHG IURP SQHXPRFRQLRVLV ZKLFK 3HDERG\jV H[SHUWV GLVSXWHG WKH $/s VWDWHG SQHXPRFRQLRVLVLQ>*URYHV@ZKHQLQIDFWWKHSUHVHQFHRIWKH , JLYH WKH PRVW ZHLJKW WR WKH RSLQLRQV RI 'UV sRKQVRQ DQG %OXH GLVHDVHKDGEHHQHVWDEOLVKHGls$DW DV EXWWUHVVHG E\ WKH RSLQLRQV RI >IRXU RWKHU SK\VLFLDQV@ DQG VHYHUDO RI >*URYHVjV@ KRVSLWDO UHFRUGV 'UV %OXH DQG sRKQVRQ ZHUH >*URYHVjV@ WUHDWLQJ SK\VLFLDQV 0RUH ZHLJKW PD\ EH DFFRUGHG WR WKH FRQFOXVLRQV RI D WUHDWLQJ SK\VLFLDQ DV KH LV PRUH OLNHO\ WR EH IDPLOLDU ZLWK WKH 0LQHUjV FRQGLWLRQ WKDQ D SK\VLFLDQ ZKR H[DPLQHV KLP HSLVRGLFDOO\    >$@ FRPSDULVRQ RI PHGLFDO  UHSRUWV DQG WHVWV RYHU D ORQJ SHULRG RI WLPH PD\ FRQFHLYDEO\ 7KH 2:&3 DUJXHV WKDW WKH $/sjV mVXPPDU\ GLVPLVVDO RI WKH SURYLGH D SK\VLFLDQ ZLWK D EHWWHU SHUVSHFWLYH WKDQ WK>DW RI@ D RSLQLRQV RI 'UV )LQR DQG %UDQVFRPE IRU ODFN RI SHUVRQDO H[DPLQDWLRQ QRQWUHDWLQJ SK\VLFLDQ    ,W LV SURSHU WR DFFRUG OHVV ZHLJKW WR ZDV VLPSO\ ZURQJl 5HVSRQGHQW 2:&3jV %U DW  +RZHYHU WKH D FRQVXOWLQJ RU QRQH[DPLQLQJ SK\VLFLDQ>@ RQ WKH JURXQG WKDW KH $/s KDG WZR UHDVRQV IRU JLYLQJ OHVV ZHLJKW WR WKH RSLQLRQV RI 3HDERG\jV GRHV QRW KDYH ILUVWKDQG NQRZOHGJH RI WKH PLQHUjV FRQGLWLRQ H[SHUWV  QHLWKHU SK\VLFLDQ KDG SHUVRQDOO\ H[DPLQHG *URYHV DQG  s$ DW  FLWDWLRQV RPLWWHG +RZHYHU LQ ILQGLQJ WKDW WKH HYLGHQFH WKHLU RSLQLRQV DERXW *URYHVjV FDXVH RI GHDWK ZHUH OHVV FUHGLEOH EHFDXVH ZDV LQVXIILFLHQW WR HVWDEOLVK GHDWK GXH WR SQHXPRFRQLRVLV WKH $/s WKH\ KDG IDLOHG WR ILQG DQ\ HYLGHQFH RI SQHXPRFRQLRVLV LQ WKH ILUVW SODFH FRQFOXGHG WKDW 'U %OXHjV RSLQLRQ ZKLFK KH FKDUDFWHUL]HG DV mQRW ZHOO 7KH %RDUG DFNQRZOHGJHG LQ 3HDERG\jV VHFRQG DSSHDO WKDW m'U GRFXPHQWHGl ZDV mRXWZHLJKHG E\ WKH ZHOOUHDVRQHG DQG ZHOO %UDQVFRPE FRQFOXGHG WKDW ZKLOH >*URYHV@ GLG QRW VXIIHU IURP GRFXPHQWHG RSLQLRQV RI 'UV %UDQVFRPE DQG )LQRl s$ DW  7KH $/s SQHXPRFRQLRVLV HYHQ LI KH KDG WKH GLVHDVH LW ZRXOG QRW KDYH KDVWHQHG KLV WKXV GLG QRW DSSO\ D WUHDWLQJ SK\VLFLDQ SUHVXPSWLRQ LQ KLV LQLWLDO GHQLDO RI GHDWKl s$ DW  Q +RZHYHU LW DIILUPHG WKH $/sjV GHFLVLRQ QRWLQJ :LOPDjV FODLP WKDW 'U )LQR KDG UXOHG RXW WKH H[LVWHQFH RI SQHXPRFRQLRVLV